Kids, Parents and Money

The "sandwich generation" are coping with balancing their own needs with the needs and expectations of family. Current research shows that 44% of Americans between the ages of 45 and 55 have living parents or in-laws, as well as children under age 21. Many of these individuals are direct caregivers - with 64% of caregivers also employed full-time or part-time. 

Within the next decade, the population over age 65 will continue to grow, according to U.S. Census reports. Increasing life expectancies also means that more people are likely to have chronic health problems and family involvement in their care. Today, an estimated 7 to 10 million adult children are providing care and assistance for their parents long-distance. And, approximately 92% of boomers financially support an adult child in one or more ways. This sandwich situation calls for open inter-family conversations to help ensure that money is managed thoughtfully and effectively, as well as cooperatively. It also means staying aware of your own financial plan when it comes to the increasing costs of medical care for your parents and college for your children. 

Generous Boomers - Tenuous Retirement 

Exactly how to teach children about money is a dilemma for many parents, according to the Ameriprise Financial New Retirement MindscapeSM study: 52% of those surveyed said it was the advice they needed most. In fact, some baby boomers are concerned about how the support they give their grown children may impact their own golden years, according to Nathan Dungan, president and founder of Share Save Spend, an organization that helps people of all ages develop and maintain healthy financial habits. Although they have these concerns, only 29% of boomers think helping their adult children is slowing down their retirement savings - a key finding of the Ameriprise Financial Money Across GenerationsSM study. One reason they don't see the impact on their retirement savings may be that they are tapping into "day-to-day" spending money and not dipping into retirement accounts to fund their children's needs. But, could some of that money be used to save toward retirement savings? 

Money Talks 

Discussing finances can be complicated because each generation thinks about money and the need to talk about it with other family members in ways that have been shaped by their upbringing and societal norms. An 86-year-old patriarch, for example, probably has a much different view of debt than do boomers or their children. He may question why his 28-year-old grandson uses a credit card to buy new clothes even if he's already deeply in debt. Although talking about money may be a sensitive subject, good things happen when families discuss money. It's important to approach the conversation in an open, non judgmental way. While finances are a taboo subject for many reasons, "harmony can be realised through understanding and communication," Dungan says. In some cases, families may find it helpful to include a neutral third party, such as a financial advisor, to act as a facilitator. 

Key points about families and finances: 

1. Members of the sandwich generation cope with balancing their own needs with the needs of their parents and children. 

2. Generosity to family is only natural but you need to plan for it. 

3. Have conversations about money with family, because open dialogue about money benefits everyone. 

4. It may be helpful to include a neutral third party, to act as a facilitator. 

Take Ruth, for example, a 59-year-old widow who supports her two adult sons. Ruth's financial advisor told her, "Let's deal with this now, or you're going to be making some really tough choices in five or 10 years," Dungan recalls. "You need to tell your children you can't be their sole source of financial support. The best way to avoid these complicated situations is to do what  may seem uncomfortable: Talk honestly about money. According to Dungan, no matter how you do it, what really matters is that you start the conversation and keep it going. "The money thing, from my perspective, is as much, if not more, about communication as it is about money," he says. 

Boomerang Children 

According to Pew Research study in 2021 47% of 18-29 are still living with their parents whilst  usafacts.org states that 16.9% of young adults aged 25-34 live with at least one parent. While many people in this age group may still be in education and have not yet moved out, others have returned home believing they can't afford to live independently because of high housing costs and student debts. 

Tips to help you transition your grown up children into financial independence: 

1. Have an agreement that spells out the living arrangements and household responsibilities. 

2. Be clear about what financial responsibilities children will have when they move back home (e.g., paying rent or a portion of utility expenses). 

3. Require that children make specific progress toward paying down debt and adding to their savings. 

4. Agree on a departure date. 

Making a Better Sandwich 

Your financial advisor can help you determine what financial needs you will have based on your own goals and unique family situation. For instance, you could consider investing in a 529 plan for your children's or grandchildren's college expenses, or purchasing long-term care insurance for your parents. 

You may also need to think about other health-care expenses and estate planning issues with your parents. 

Your advisor can help guide you and your family through these issues and decisions while helping you keep your own retirement planning on the right track. 

Article Source: https://EzineArticles.com/expert/Joshua_Ely/256297

Top 10 Keys To Successful Real Estate Investments

When dealing with real estate investments there are many steps to go through before investing. Here are my top 10 keys to a successful real estate investment. 

1) Education 

If you are not experienced in real estate investments the very first thing you should do is to get educated. Take the time to find out what all of the risks are in the investment type you are interested in. Find others that can help educate you on the investment type, which are not involved in the transaction you are doing specifically so there is no conflict of interest. Buy educational material, get connected with online groups and go to multiple seminars in order to continue your education

2) Goal Settings 

If you do not have a goal lined out for your real estate investments how do you plan on getting there? Most investors buy one property, or invest based on emotion rather than having a set goal in mind. For example, you could have a goal of obtaining $30,000 per month in passive rental income from your investments through buying single family rental homes and apartment buildings. Your goals should be clearly defined and should include protections and risk mitigation techniques to make sure it is a stable viable plan that can be obtained

3) Building Your Resources

You WILL NOT become a successful real estate investor without resources. In real estate resources include, capital investors, property leads, team members and much more. For this you must expand your relationship base. Real estate is a team sport so if you do not build your network, you cannot build your team

4) Building Your Team 

In order to make your investments work you must build your team. Some of the team members you need are Real Estate Agents, Brokers and Bankers, Private Lenders, Appraisers, CPA's, Attorney's, Affiliates, Inspectors, Property Managers and Contractors. There are much more but it's pretty impossible to name them all. It takes quite a bit of time to develop your team and make sure they can be relied upon. Building a team is the most important aspect of investing other than your due diligence on the investment itself

 5) Due Diligence

Before investing in any real estate asset your due diligence is crucial. You need to analyse the market your investing in, the market timing relative to that market, the specific neighborhood, the market value of the investment, the cash flow it produces, the rental income it should bring in, all of the expenses related to the investment and much more. 

Inspections should be done as well as review of all of the backup documentation such as leases and contracts. Think like an auditor, review all of the backup information provided by the seller and verify it with an outside source as much as possible. I hear horror stories all the time about how people lost money in real estate. After inquiring as to what happened I can say that 99% of the time the investor did not do or know how to do the right due diligence on the investment in the first place. 

6) Property Management

Property management can make or break your investment. If you do not have a competent property manager that actually cares about your investment and your success you will have a losing investment. 

Most managers are bad at some of the basic management functions such as accounting, rent collection, tenanting, leasing and background checks, repair calls and taking care of the tenant. By far the most important and biggest problem is communication with the owner of the property. 

Communication is crucial because without communication the investor cannot make decisions regarding the investment and lack control. Property management also needs to be structured based on performance, meaning, they get paid if it's occupied only, not when it's vacant and there are incentives in place to optimise performance. 

7) Marketing 

If you do not know how to market for property, capital, property sales, and resources you will not be successful in real estate. Marketing and sales is one of the most important parts of any business. 

During economic problems and recessions most companies cut back on marketing when it's most important to increase your marketing efforts. If there are less investors, buyers, and resources available because of the economy, there is more of your competition going after your resources. So in order to attract those resources before your competition you have to market more. 

Marketing and sales is a business all in itself so getting educated on marketing strategies is imperative to your success. If you do not understand it or start to learn about internet marketing you will not gain the market share you deserve and will not be as successful. 85% of buyers go online first for investments. 

8) Treat Your Investments As a Business 

Most investors buy one real estate investment and do not fully utilise all of its capabilities from a business perspective. If you own one property or 50+ properties you should be treating it as a business. Be sure to keep track of ALL of your expenses related to the investment, the due diligence you did, travel costs you incurred, etc so that you can get a deduction for those items against income from other sources. 

These types of expenses can happen annually and a percentage of your personal expenses can be used as a tax loophole in order to deduct more against your active income from your job. Your biggest expense in life is your taxes. It is the government's job to find more creative ways to tax us. It is our job to find creative ways to legally not pay taxes. If you are not winning against the government, start to educate yourself on key tax saving strategies. 

9) Legal Protection And Tax Structuring 

It is crucial that you protect yourself from financial predators. There are people out there that will sue anyone they possibly can. It's really important to obtain insurance or put your assets into a proper entity so that you are not liable in frivolous lawsuits. 

Please consult your individual tax advisor to go over your specific situation. Also be sure to keep yourself separate financially from the investment or entity you hold the investment in so that you do not pierce the corporate veil. If you co-mingle your funds there is a very real possibility that in court your legal entity protection that you worked so hard to setup is worthless. 

10) Investing In Sustainable Investment Types 

Invest in asset types and real estate investments that are sustainable in the long run. Look closely at the cash flow included in the investment. 

Flipping can be much more dangerous than investing for cash flow because you typically have a payment on a flip investment that is not covered fully by the rental income and if you get stuck with the property you find yourself in a negative cash flow situation and can only sustain as long as you have money in the bank that can make that payment. Many people lose a lot of money trying to flip property, not knowing fully what they are doing and the risk they are taking only to lose a significant amount of money. 

On the other side when you are investing for cash flow only invest in quality assets. Typically if you invest in low end assets in your market you get low end tenants also. What I consider a low end tenant is someone that does not pay the rent on time if at all, causes damage to your property and is a nightmare to deal with. This happens quite frequently in low end property for a particular market. 

You want to invest in quality long term assets that are going to produce positive monthly cash flow and make you a great return on investment after you have been conservative with the numbers. I truly believe if you do these things along with increasing your financial IQ you will be successful if you work hard for it. 

Most of the wealthy individuals in the world work hard for their money and are constantly evaluating their financial situation and investment goals. Putting a personal budget together and reviewing it monthly, creating additional income sources, implementing tax savings strategies, protecting your money from financial predators and constantly educating yourself are the keys to becoming wealthy. 

Article Source: https://EzineArticles.com/expert/Mathew_P_Owens/916588 © 2021

Contracts and Agreements - How to Protect Your Finances

This article is about contracts and agreements e.g. rental agreement, mortgage agreement, loan from family member or friend, credit card agreement, hire purchase agreement etc... and what you should be looking for to protect yourself and your assets. 

These are the kinds of agreements that affect most of us whether we have limited funds or a great deal of money. 

Whether we are making these contracts and agreements with people we love and trust or whether we are making them with strangers. There are some simple rules of thumb that we should all be looking at as they apply to most of us. 

Historically, most countries did not recognise women's rights to own property. You could not get a mortgage or credit without your husband's permission. 

If you wanted to know about money, we were told not to worry our pretty little heads - so it became the man's job to worry about money and the woman's job to take care of his personal needs and to be the heart of the house. He worked, he provided for their needs, she took care of the children, the household chores and her husband's needs. Consequently when a husband died or divorced her or just disappeared, she was left not knowing how to balance a chequebook, not knowing what her mortgage rates were, or how responsible she was for paying that mortgage down. She had no knowledge of insurance and was often left without insurance coverage for herself and her family. As far as her car was concerned, she knew how to put the key in the ignition and get to the nearest service station.

 Nowadays, women are in top positions in corporations but many of us still have our husband's making the major decisions on things like insurance, mortgage rates, investments, medical coverage and pension plans. 

It still occurs that when a woman gets into a relationship, she's always given her husband/partner dominion over her assets. 

She could come into a marriage with a house completely in her name and once she gets married and he wants to be put on the title to it, she doesn't question it. 

Women are also known to take the softer view. I love him, everything we have is ours. We share and share alike. I should be putting the house in both of our names. WRONG, wrong, wrong. 

If he wants to be put on the title, or you want him to be put on the title, get 3 evaluations of the house and let him give you his share of the money for that house. After all if you are going into a business partnership and someone wants to buy into your business, you would have your business valued at current prices, and that partner would have to buy in cash at the current value. A house is no different. Once he is on that title, he can do anything with that house, he can take out loans against it, and he can walk out on you, or he can mortgage it to the hilt and die leaving you with debt. 

The same can be true of a man who owns property, but men usually cover themselves with pre-nuptial agreements. Us women, historically have not been that smart. However, we have got smarter in recent years, generally our emotions are engaged so quickly and so deeply, we often have to be reminded to protect our assets. 

The same thing holds true if you own your own house and your spouse wants you to sell it so that you can move into a larger place - once again, that partner should be compensating you with the value of his or her share of the house before you sell it. Because if the marriage falls apart, either way you would lose out because when it comes to a division of assets - you only own half of the new house and none of the house that you had in your own name before the partnership. 

For example, I knew someone who had her own home that she had bought with her own money and had been living there for a number of years and that house was almost paid off. Then she got married. The new husband moved in. A few months later, he decided he didn't want to live in that house. He wanted them to sell it and live in another house. After their divorce 15 years later, all she was able to get was half of the new house and nothing of the house that she had originally. When you are dealing with monies, even if you are in a deep relationship, with a family member, a friendship, your spouse and you trust the other person deeply. You have had a lot of experience over the years and you think to yourself that you don't need a written agreement - think again. You can never tell if or when the other person is going to back off and leave you with the debts and responsibilities or if the other person is going to sell off their half of the partnership leaving you unprotected. 

You may trust this person wholeheartedly and may never had cause to doubt them - but circumstances can and often do change. For example, I knew a guy who had been having marital problems with his wife. All his money was tied up with hers and in their house. He was advised by a counsellor to start saving money in a different bank account from where he and his wife had an account, a bank she knew nothing about. On New Years Day after everyone had left after a party, she threw him out of the house and would not allow him to come back. Luckily, he had put some money aside in a separate bank account. Had he not done this, he would not have had the money for a month's deposit on a lease and he would have been out in the street. 

If you have a quote from a builder with materials included, their suppliers could go out of business, the builders costs could go up and your costs could go up accordingly. If you want to protect yourself on materials, open up an account at a builder's merchant so that you can buy the materials yourself and you can get the most competitive prices. That way, when your builder is quoting you prices for labour, you know you are just paying for labour and you can negotiate his labour costs, especially now when construction work is in such short supply.

So as you can see, on a personal and a professional level, you always need a written agreement. 

You can be in a romantic relationship or a marriage and all of a sudden your partner goes to the bank and draws all your money and you are left with all the debts. And no matter how much you love someone, where there is money involved, make sure everything is spelled out really well. Make sure your lawyer has covered everything and you are not leaving any loopholes. 

For example, I knew someone who had been married for 25 years and their only daughter was getting married. The wedding was very expensive and as soon as they got home from their daughter's wedding, she started preparing for bed. She sees her husband has a suitcase and he is emptying his drawers out into the suitcase. What are you doing? I am packing, I'm leaving you. I just wanted to wait until our daughter got married and was out of the house so I could leave you. I have found someone else. After 25 years of marriage, he just walked out and left her with a pile of debts. 

If you being asked to sign anything e.g. a husband of 30 years - make sure a lawyer checks the paperwork. Ensure that someone can explain it to you and don't be led like a lamb to the slaughter. In the end that partner may leave you, divorce you or die and may leave you with a lot of debt. You need to know what you are going to be responsible for. 

Another important point to remember is that if anyone wants you to sign papers quickly, your answer has to be NO. Don't ever allow yourself to be rushed into a financial agreement. No matter how good the deal might sound, you need time to assess whether it is right for you.

If you are ever asked to sign a lease, or a mortgage with your partner or spouse, make sure you understand it thoroughly. Make sure you can afford it. People have a tendency when they sign a lease or a mortgage to figure out how much they can afford to spend each month. What they DON'T calculate into these costs is a failing economy, or one or both of the partners being laid off or fired and they are out of work for an extended period of time and cannot find other employment. 

So if you are contemplating signing a lease or a mortgage with a partner, make sure you calculate it for just one income, because if you are basing it on two incomes in this economy you may find that you do not have enough money to cover the rent or the mortgage. 

Don't be embarrassed to tell your spouse or business partner that you want to speak to a lawyer to have him go over the fine print with you. When signing a legal document, many people don't bother to read the fine print - or if they do bother to read the fine print, they don't understand all the details. Wherever your money is being spent, that's where you need to be very vigilant about your role in protecting it. 

Article Source: https://EzineArticles.com/expert/Barbara_Goldsmith/416795