"Better to trust the man who is frequently in error than the one who is never in doubt."
-- Eric Sevareid, New York Times commentator and reporter, (1912-1992)
By JULIA ANDERSON
Let’s say you are leaving your full-time job and taking your 401(k) nest egg with you. Are you going to manage it yourself or will you turn to an investment professional?
If you think you need professional advice, here are questions to ask a financial planner/adviser before giving them your life savings. Treat this process like a research project. Take your time. Don’t be uncomfortable asking the uncomfortable questions. It’s your money, your future and your retirement.
Nine questions to ask when choosing or re-evaluating a financial adviser
- How do you get paid? A commission on product sales, fee per transaction, or both? Ask for details.
- Can you manage my assets for a 1 percent or less management fee?
- What’s your background and experience?
- What’s the strength of the company you work for or with?
- What do your clients say about you? Ask for references.
- What are your checks and balances regarding risk vs. earnings reward?
- Will you put your investment proposals in writing?
- What are the potential pitfalls of the investment products you are offering?
- What do other professionals say about you?
Ask yourself what your gut-level comfort is with this adviser. Do you come away feeling good about what you’ve learned, where you’re headed when you meet with him/her?
Don’t hire or continue to use a financial adviser just because they are nice. Do the math at least a couple of times a year. How are your investments doing in comparison to the performance of the S&P 500 (the 500 largest publicly traded U.S.-based companies)?
If the S&P is up by 15 percent year-over-year but your holdings are up only 7 percent in the same time frame then you need to be asking some tough questions. You might do better on your own or by switching advisers.
Studies show that women, while good at budgeting, bill paying and saving, may be less confident when it comes to investing and managing long-term savings. Get in the game, learn the basics. Make sure you are getting the best performance from your investments --- with or without an advisor.
By JULIA ANDERSON
Because of planned and unplanned travel, I have been away from sixtyandsingle.com. The unplanned trip took me to Thailand for a month earlier in the year because of my younger son’s life-threatening bacterial infection.
It was an emergency mission that ended well with him making a good recovery after three weeks in a Thai hospital hooked to an IV-line pumping antibiotics into his body. We were there to support him emotionally, and financially. It's what parents do when kids are in trouble.
It could easily have ended badly. One in three people who contract these fast-moving bacterial infections die. Because he was young and the bacteria seemed most interested in his outer skin layers rather than muscle, he survived. Once out of the hospital, we stayed with him for another two weeks to make sure his recovery continued. From all this, we learned a great deal about Thailand and appreciate why its beaches, charming people and great cuisine attract travelers from around the globe. Thai restaurants in the states are great, but second best to the fabulous dishes we enjoyed while in-country.
Did anyone say, coconut milkshake?!
Interestingly, Thailand has an excellent health care system, especially if you have the money to pay for it at the higher end. A hospital stay for our son that would have cost a quarter of a million dollars or more in the states, came in at about $20,000. We see why people travel to Thailand for medical and dental procedures. They get excellent health care services at a big discount and have a vacation while at it.
Within a month of returning from Thailand, we launched our long-planned Great Motorcycle Adventure with Ken leaving for a solo ride ocean-to-ocean West to East on his BMW K 1600 GTL touring motorcycle. He made the trip in less than three weeks using a southern route (California, southern Colorado, Oklahoma, Arkansas and Tennessee to North Carolina) with stops along the way to stay with friends and family. A nephew lives in Charlotte, N.C., which made it easy for me to fly east to join Ken there.
After putting his toe in Atlantic, he and I began our journey west. Sitting on the bike behind Ken works great for me. I describe the experience as similar to downhill skiing and riding a horse. As a passenger, you must concentrate on the road ahead, lean into curves. That’s while getting the thrill of speed, of wind in your face and being outdoors.
As the passenger, I could enjoy the countryside in ways that don’t happen in a car – winding leafy country roads in Virginia and Tennessee, gorgeous farmland and attractive small towns in Kentucky, Missouri and Kansas and the wide-open country of the Rockies in Colorado, Wyoming and Idaho.
It was a thrilling trip made better by finding the graveyard head stones of my great-great Crabtree grandparents on my mother’s side in Virginia, findng the birthplace in Tennessee of my great-grandmother Orlena Kyle Anderson on my dad’s side and her husband’s headstone (my great-grandfather Moses Anderson) in the Wills Cemetery outside Peculiar, Mo. (near Kansas City)
As one of my Facebook friends remarked about my trip posts, “You have family and friends (living and dead) all over the country.”
I am a lucky woman. My son is on his feet back in the states and working. Our motorcycle ride was a thrilling life-time experience that came off without bad weather or mishap. I am thankful that I have my health and enough resources to pull it all off. Onward!!
By Julia Anderson
Gather the (authentic) family history.
Find the receipts (if they exist).
But ignore the myths and legends about grandma’s favorite table lamp or other long-admired piece of furniture or art.
These are first-step recommendations from Gary Germer, a licensed Portland-Ore. appraiser and recent guest at Smart Money, my public television program. (Smart Money with Gary Germer on YouTube, ( click here)
Germer of Gary Germer & Associates does estate sales, sells items through private brokerage and organizes special events for clients. He evaluates and appraises fine art, antiques and personal property.
He helped us with the basics: How to determine the worth of such possessions as that watercolor that once hung in a favorite aunt’s guest bedroom and is now yours. Whether it’s worth restoring? Or should it (or can it) be sold? And how to do that.
With the vanguard of baby boomers aging into their 70s, many want to do something with their stuff --- either give it to a deserving niece or grandchild or sell it. Or could it be donated to charity with the benefit of a federal tax write-off?
“The first thing is to get together any family history on things,” Germer said. “Where did it come from? Are there receipts for the item stuck in a drawer that could help determine authenticity and real worth? Any information on the piece is important,” he said.
But keep in mind, Germer warns, that family legends may not be reliable when someone says they were offered X dollars in the past for something. Or if a family member is certain that grandma’s lamp was made by Tiffany.
To determine value, use a licensed appraiser, not an estate sales company or an antique dealer, Germer said. And never sell the item to the person who is doing the appraising because of the obvious conflict of interest.
“That’s like laying down in front of a train,” he said. “I am careful to never buy things I appraise. I will represent it but not buy it.”
Contacting a national auction house is another way to get an estimate on value and whether something is worth selling or donating.
Who to contact:
Appraiser: This person should be a certified member of the Appraisers Association of America and a well-established professional, qualified to appraise fine art, jewelry and personal property. Check out the association web site at www.appraisersassociation.org for its code of ethics, history and mission statement. Experience is important. Look for someone who has been doing appraisals for a long time and understands market trends.
Auction houses: Sotheby’s, Christie’s, Heritage and Bonham are national auction houses that buy and sell fine art, antiques, jewelry, coins, furniture, collectible guns, watches, wine and more. Items usually sell on consignment. Typically, an auction house will charge a 10 percent commission to the seller on the sale, called a vendor’s commission. Buyers also may pay a commission known as the vendor’s premium. Some smaller auction houses have specialties. For instance, PBA Galleries in San Francisco, buys and sells rare and fine books, maps and other paper materials.
“Auction houses should be willing to give you the pre-sale estimated value of an item,” Germer said. “Send them your photos and background on the item. Ask them what the estimated bid would be.”
Should you invest in a restoration? This is a matter of personal preference either because of the sentimental value of the item to you or your family or because a careful restoration would greatly increase the value of the item that you intend to sell or donate.
“Grandma painted it is a good enough reason to re-frame her watercolor and upgrade the faded matting,” Germer said. “A restorer will give you an estimated cost for the restoration, if you send a photo and tell them what you want done.”
To recap the process: Gather authentic family information about the item. Include receipts (if available).
Find a reputable appraiser to determine value, then decide if restoration is the next step before selling or donating the item or handing it off to someone.
What’s hot? There's a lot that's not
Meanwhile, families often have wacky ideas about how much something is worth, Germer said.
The Internet, changes in generational tastes and smaller living spaces have combined to roil collectible markets. Big brown furniture, formal dinnerware, glassware and china dishware have longbeen unpopular. A recent New York Times report said that “compared with the heyday of antiques collecting (in the late 90s), prices for average (furniture) pieces are now 80 percent off.” Instead, there’s growing interest in contemporary design, custom creations and pop culture. (Ideal Home)
“The list of items losing value is a lot longer than the list of things gaining in value,” Germer said. “Lately, natural things like rocks, taxidermy and anything to do with science is collectible. Butterfly collections are collectible.” Millennials are into house plants.
Those under 40, he said, also seem enamored with early 20th Century technology – manual typewriters, old adding machines, stuff with gears, vacuum tubes and push buttons.
In the old days (20 years ago), there was fun in collecting, he noted. “It meant going to antique and collectible shows, browsing vendor tables, making offers and bringing home treasure,” he said. “It’s not a treasure hunt anymore because you can go on eBay and instantly find what you want at a lower price.”
Germer advises that if you decide to sell something on eBay or Craig’s List to do your homework on pricing and avoid using the word antique in writing it up. “Antiques are stuffy. Vintage is a much better word for marketing,” he said. “Vintage is quirky, kitschy and fun.”
Appraisers and restorers
in the Portland, (Ore.)–Vancouver, Wash. area.
Calling for an appointment works best as they are not always in their labs and sometimes are focused on their work.
Appraisers and consignors:
Gary Germer & Associates
407 N Broadway
Portland OR 97227
Soltesz Fine Art
Goodman Appraisal Services
Pacific Gem Lab
Certified Jewelry Appraisal
Painting and frame restoration:
The Cultured Pearl
(Best for cleaning and basic restorations of paintings)
(aka Steve and Harvey)
1110 NW Flanders
Lucas Conservation Lab
(Best for full restoration/conservation work of paintings)
2015 Todd Rd
Vancouver, Wa. 98661
Susan Scott-LaRue (Best for work on paper, watercolor, lithographic prints etc.)
c/o Aurora Gallery
1004 Main St
Vancouver, Wa. 98660
(Lab is at her home, but she meets clients at Aurora Gallery, Vancouver).
Green's Furniture Hospital
916 SE 20th Ave.
Portland, Ore. 97214
503 234 9378
Smart Money shows on YouTube:
Disposing of Guns, Ivory and Gold
IRS Gifting Regulations on Tangible Assets
Smart Money: Trash or Treasure?
American Society of Appraisers
International Society of Appraisers
By JULIA ANDERSON
My first box of clothes from Stitch Fix,
the online clothes styling service, arrived this week.
Of the five items in the box, I kept three, a pair of dark blue Capri pants and two tops, one with quarter-length sleeves with white stripes on black,
he other a tailored, lighter summer blouse. Total cost -- $190.
I signed up in desperation.
Nordstrom abandoned me a couple of years ago when the company closed its mall retail store nearest to my house. To shop Nordstrom, I now must drive an hour, one-way.
The change has been a difficult adjustment. I have been a card-carrying Nordstrom shopper since the ‘70s when I lived in Seattle. Sadly, I care about Nordstrom, which has faced challenges with the shifting online retail environment and its marketing strategy.
I loved the stores. Going to Nordstrom-land always made me feel better. I could usually find something of quality, something in my price-range (my upper price range). Of course, there were the extras – tissue-paper wrapped items, fragrances from the cosmetic counter, accessories and superb customer-service.
As a full-time working baby boomer, Nordstrom was my go-to place for business-dress suits, shoes and blouses. And when I needed the occasional elegant dress for a fund-raiser gala, Nordstrom would come through.
The chain began my abandonment long before the mall store closed. The merchandising mix changed as an attempt to attract younger customers. Prices moved higher. I began to walk out of my favorite store without finding something that “brought me joy.”
An unsettling disappointment.
Then Nordstrom was gone from my town. Since then, my purchases at Nordstrom have dropped to one or two items a year. Stores can still have what I need when I want quality -- a pair of well-made black leather sandals (for $200), for instance, or a black all-occasion wool scarf for travel ($100). A pair of fleece-lined green suede boots caught my eye, but that $230-purchase was more than a year ago.
Honestly, Nordstrom is too expensive for most of us. I've been priced out of its market. The mailed catalog has always been out of reach.
Macy’s, Target and Kohl’s are all I have left. But Macy’s just turned the upper half of its top floor into a junky discount bin. Seems like a race to the bottom. I've never bought much at Target or Kohl’s or J.C. Penny’s. The quality is not there.
I have done better finding what I want at a curated consignment shop called Gather in Seattle’s Columbia City neighborhood when visiting my son. A couple of locally owned women’s shops in my hometown offer some hope.
Since the Great Recession I've saved money on clothing by buying workout clothes, outdoor zip-up sweatshirts, outer rain wear and stuff for gardening at Goodwill. Why spend $30 on a cotton blouse or $20 an exercise bra when I can find them for $5 each at Goodwill?
Full disclosure: I no longer need business suits or heels for work. I retired from the full-time job nine years ago but continued to work from home (sometimes in my bathrobe). Lately, I have been writing and publicizing my book, “Smart Women Smart Money…..”. When I speak to groups of women about financial literacy or host my monthly Smart Money public television show., I want a look that says I'm on the ball. (click here)
But as the years have ticked by I have found retailers no longer take me seriously. They are missing the boat. Baby boomer women are NOT OLD and do NOT want to look frumpy and old.
Enter Stitch Fix
Clothes shopping was once fun for me, a stress-reliever, a way to find something nice, on sale. I could be in the moment, day-dream about what might look good, give my work-a-day world a lift.
I’ve told Stitch Fix everything about me….my weight, height, hip measurements, bra size, how I like to dress. There was nothing in my first box that knocked my socks off.
My hair stylist (nearly 20 years younger than I) told me last week that she quit Stitch Fix because she found the clothes a bit boring. “They just couldn’t figure out that I wanted more style, a more edgy look.”
Hum, if she can’t find happiness with Stitch Fix, I wonder can I?
A new box of clothes arrives next month.
Meanwhile, I just clicked the buy-now button at Amazon.com to replace the Estee Lauder lipstick I’ve been wearing this year. That’s better than driving into town, searching the cosmetic counter at Macy’s for someone to help me, only to find out that that particular shade of lipstick is not in stock.
The lipstick ships tomorrow!
"Trying to predict the direction of the market over one year, or even two years, is impossible." Peter Lynch, investment fund manager, (1944 - )
BY JULIA ANDERSON
Investor confidence is a must for women if they want to ever stop working, but it is in the area of investing that women say they are least comfortable. A business-owner friend of mine said that she just “can’t get her head around it.”
It being the stock market, stock mutual funds, how publicly owned corporations are required by law to operate and even how quarterly stock dividends are paid and reinvested.
Yet, understanding these the basics of investing is the way to successfully accumulate and grow savings for the long-term. It is especially important for women get in the game since they live longer and need more money in retirement. The only way to accumulate that kind of money is to be an investor. As Warren Buffett says, “this is not rocket science.”
If you are late to the party and interested in becoming an investor, here’s how:
1 Start early, start small. These days there are several online brokerage firms that require zero or low minimum deposits to open an account. Their fees on transactions are usually 45 or less. And they offer zero expense ratios on index mutual funds. And you can move money electronically from your bank account to an investment account with one click. Among those online brokerage firms are: Ally Invest, TD Ameritrade, Fidelity, Vanguard, Charles Schwab Merrill Edge and E-Trade. Nerdwallet says the best online account for beginners is Ally Invest.
2. Do your homework. Read a few books that will give the big picture and not try to sell you anything. My two favorites: Burton Malkiel’s “A Random Walk Down Wall Street” and “One up on Wall Street,” by Peter Lynch. These two books will give you everything you need to know about big-picture, time-tested investing. Written in plain English, you find out how to determine if a stock is worth buying, what to stay away from and how to manage your fear. These books are a bit dated in terms of details, but the fundamentals haven’t changed. Do some reading.
3. Buy something. Inside your new Individual Retirement Account on line fund, buy something. If you are “risk-averse” as brokers like to say, start out with a stock index fund. That means your money (and your risk) is spread over all of the stocks held inside the fund. An S&P 500 index fund owns ALL the 500 largest publicly traded U.S.-based companies. According to historical records from 1928 forward, the S&P 500 has enjoyed an annual average return of about 10 percent. That doesn’t mean we won’t see swings. In 2017, the value of stocks in the S&P increased by 21 percent. In 2018, they dropped an overall 4.3 percent.
But let’s say you want to buy stock in individual companies paying a good dividend of around 3 percent, which is 1 percent more than the average 2 percent a year inflation rate. Online research is at your fingertips, unlike the old says when you had to rely on a financial adviser with an office and all the data. Now you can look up a company, find out everything you need to know to make an informed decision: profitability, dividend rate, share price to earnings ratio, revenue growth and share price track record. All that may take 30 minutes online. Then push the buy button with the idea that you could own this stock for a long time, maybe a life time.
3. Give yourself permission to make (a few, small) mistakes. Those mistakes include selling too soon. I made that mistake when I sold O’Reilly Automotive (ORLY), retail automotive parts chain, because I saw that an analyst had “down-graded” the company’s stock rating. After I sold, the O’Reilly share price jumped. Despite a downturn, the share price is still up 31 percent from a year ago, when I sold. I should have looked at the company fundamentals and made my own informed decision. Mistakes are part of the learning process. I have learned to buy blue-chip (nationally recognized, well-established and financially sound) company.
In my blue-chip portfolio, among others, are a couple of drug companies, an oil company, several big banks, utility companies, a coffee retailer and a consumer products company. All pay a good (3 percent) dividend. My losers include a capital venture company, a start-up computer chip company and an international drug company hurt by the changing currency values between Europe and the U.S.
4. Don’t panic when markets go down. I rolled my 401(k) into an Individual Retirement Account at the bottom of the 2008-2010 Great Recession. Since then I’ve doubled the value of my nest egg even though I’ve been withdrawing some of the earnings in that account. Fear is all around us all the time in this 24/7 world. Just remember the long-term nearly 100-year track record of the U.S. economy. When markets go down, stocks are on sale. Your reinvested dividends buy more shares at the cheaper price.
How did I become a confident investor? Easy, no one ever told me that investing was complicated. I learned from my mother who was an enthusiastic investor. A child of the Great Depression, she was careful with money, paid off debt including the farm mortgage and lived with my father within her means.
With just a high school education, you might think she would be intimidated by the investment world. Not so.
She only bought shares in companies that she understood…utilities, consumer companies, businesses that made sense to her. She had me investing when I was in my 30s because she wanted to share her interest in the economy, in successful businesses. She loved McDonald’s hamburgers, so she bought shares in the company and let the dividends reinvest. She bought, Exxon and Merck and let the dividends reinvest. At the end of her 40 years of investing she had a $1 million portfolio. This is not rocket science.
5. Look into management fees and upfront trading commissions. It’s one thing to put money into the stock market, it is another to find out what management fees and upfront commissions are being charged against your investments. If you are in a 401(k), find out what the management fees are for those funds. Anything more than 1 percent is too high. You would do better with your own IRA at an online brokerage firm in a zero-fee index fund. The same goes for commissions on specific products sold by financial advisers where an upfront commission may be as high a 5 percent or more on the money you are investing with them.
That’s it. Investing 101. As my readers know, I am passionate about financial literacy for women. Movies such as “The Big Short,” (2015) and “Wall Street,” (1987), “The Wolf of Wall Street,” (2013) and even “Trading Places,” (1983) give us the idea that the stock market is one big game for crooks.
Meanwhile, with the fall of the Iron Curtain, the villain in move after movie is the corrupt and evil corporate tycoon who is either poisoning the world or stealing us blind. Why wouldn’t we be afraid to invest. Let’s not forget the Tulip Bulb Craze in Holland in 1593 that really happened or the Enron market manipulation disaster in 2000 that really happened.
It's OK to be realistic and maybe a bit scared but not scared out of the market.
In reality, modern markets, while still driven by the basic human emotions of fear and greed and occasionally abused by real crooks, are governed by rules, by reporting requirements and by the incentives of regulated capitalism. A sensible investing strategy means understanding risk-return trade-offs. Remember, the more glittery the investment, the higher the risk. I’ve learned that lesson more than once. Remember that past records are a good indicator of future performance. and remember that there’s a difference between investing and trading.
“If you know you will either win or at least not lose too much, and if you index at least the core of your portfolio, you will be able to play the game with more satisfaction,” says Burton Malkiel, in “A Random Walk Down Wall Street.”
My mother, the investor, stuck with blue chips, put money into businesses that she understood, reinvested the dividends and never lost her resolve. Her investing philosophy continues to guide my thinking.
U.S. NEWS. Stock market 101: Everything you need to know about buying, selling and trading,
Stocks for Beginners, Motley Fool.
5 Easy Ways to Start Investing with Little Money, Money Under 30.
I meet women all the time who face job and money transitions and who want to do them right. It’s about building confidence and taking charge of the future. This is your money. No one cares more than you do!
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