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Personal Finance Mistakes Grads Make on Their First Job

personal finance, recent grads, young adultGraduation season is here and young adults will soon enter the workforce. Now, these professionals will need a strategic plan to stay ahead of their finances. In an interview with Financial Advisor Magazine, wealth management advisor Pearce Landry-Wegner recently shared his insights on common personal finance mistakes new grads make on their first job, and solutions for each. These include:

Not setting up a repayment plan for student loans

Recent grads can forgo student loan payments during a six-month grace period after graduation. During this time, it’s critical they review and set up a repayment plan. Also, there are options for student loan forgiveness through public service. But it is important they know which employers fall within this realm to ensure loan forgiveness.

Not keeping fixed expenses as low as possible (e.g., rent, car, gym, cable/internet)

Additionally, to avoid debt, recent grads should keep living expenses to 25 percent of a paycheck. If necessary, there are ways to negotiate pricing with some cable and internet providers to keep these costs low.

Not saving enough

Recent grads can work with their bank to schedule a recurring payment deposited directly into a savings account. This helps with the overall saving process. To make it easy for the employee, most companies can divide a paycheck and deposit the funds into different accounts. Also, to help build an emergency fund and pay down debt (student loans, credit cards, etc.), it’s important to put half of all bonuses directly into the bank.

Not signing up for the 401k/retirement plan at work

Often times, recent grads don’t understand how to plan for their retirement. As a first step, there are many forms that allocate a percent or fixed dollar amount for retirement from each paycheck. This allows for retirement funds to grow steadily, and the percent option can automatically increase with every raise.

Not reading the benefits package and understanding new medical coverage

By reading the medical coverage thoroughly, recent grads can tell whether their primary doctors are covered and whether they’ll have an increased co-pay. From here, they can take the necessary steps to either switch physicians or explore their options for independent health plans.

Not checking the job’s disability insurance

If disability insurance is offered by the new employer, recent grads should pay the premium after taxes so that the benefits will be tax-free (if they’re needed).

To read about more personal finance mistakes recent grads make, click here.


What You Need to Know About ESG Investing

ESG investing, impact investing, environment, social, governanceOver the past twenty years, there has been a slow but steady trend emerging among financial services: An ESG investing approach where investors seek long-term competitive returns while simultaneously creating positive societal impact.

Being a “socially responsible” investor in previous years meant avoiding investments in companies whose products or services were “unethical.” This includes companies that produced alcohol or tobacco, advocated gambling, manufactured weapons or burned fossil fuels and harmed the environment. Continuing with this trend, investment managers now proactively screen for a wide range of ESG factors for potential long-term advantages. According to a new survey by BNP Paribas, nearly 80 percent of institutional investors incorporate ESG factors into their decision-making. Therefore, “socially responsible” investors increasingly seek opportunities that contribute positively to society to generate sustainable and financial value.

This approach also received a major vote of confidence in October 2015. The Department of Labor issued a bulletin that allowed private sector employers to add ESG fund options to retirement plans. Consequently, this ruling led to an explosion of funds offering such strategies. U.S. assets invested in ESG strategies grew from $6.57 trillion at the start of 2014 to $8.72 trillion at the start of 2016 – an increase of 33 percent.

Given this spike in interest and demand, here’s what investors need to know about ESG investing today:

ESG investing’s primary benefit:

Investors aim to achieve positive impact through corporate engagement or an emphasis on community, sustainability or the advancement of women. Therefore, ESG investing means different things to different people. However, a common thread is investors using a portion of their investments to provide future portfolio growth and to support issues, causes and practices that may lead to a better society.

The risk and limitations:

Many managers incorporate ESG criteria into their investment selections to build portfolios that reflect an impact strategy. While different approaches appeal to different investors, such strategic initiatives include:

  • Positive ESG investing: Here managers invest in a diversified portfolio – with sectors or companies selected for positive ESG performance – relative to industry peers. This approach usually includes avoiding companies or sectors that do not meet certain ESG performance targets. With this option, investors choose a fully diversified portfolio approach for their overall investment strategy. The portfolio does not involve measurably more risk than other fully diversified funds.
  • Impact investing: Here managers use ESG criteria to build focused portfolios, with targeted investments aimed at solving social or environmental problems. The investment funds are more focused and may carry more risk. Choices might include funds that select companies promoting women on boards, or those focusing solely on alternative and clean energy. These will reflect an investors’ personal passions and should be integrated into portfolios by reviewing the specific investment risk of the fund. The rest of the portfolio investments should balance this specific risk.
  • Sustainability investing: Here managers use ESG criteria to select investments specifically related to global sustainability. This approach is a hybrid of the two above. Many of these funds will be fully diversified and fit easily into a total portfolio allocation. Others might emphasize areas that bring a higher level of specific risk that needs to be balanced by other investments.

The future of ESG investing:

More investors are understanding that the ways we spend and invest can influence the fabric and consciousness of society. Even millennials are looking for ways to achieve their social impact goals. As society embraces ESG investing, it has the potential to become mainstream and an essential part of investor portfolios.

All in all, ESG investing has a bright future among investors. There are several seasoned approaches to implementing this into portfolios – as a core part of an overall portfolio or a specifically focused allocation. If you’d like to learn more about the benefits of investing to positively impact society, contact us.


The Future of the U.S. Equity Market: Prediction for Investors

prediction for investors on U.S. equity market

There’s one thing investors need to know about the future of the U.S. equity market: Our prediction is that it will likely hold tight to the economic trends that always break through market uncertainty.

While the Trump administration unveils new tax reforms – met with skepticism from lawmakers, economists, government officials, etc. – investors may rest assured that markets can move higher.

In a recent interview with Business News Network, Liz Miller, president of Summit Place Financial Advisors, discussed the future of the equity markets. In her discussion, she emphasized that more volatility is likely as analysts continuously assess the future success of various fiscal initiatives. She also welcomed viewer questions on how to navigate the current investing landscape in U.S. equities.

Check out the full interview – with Liz’s prediction – below:

For more information on the future of U.S. equity markets and advice on your investment strategies, contact us.


Celebrating Literacy Day

Celebrating Literacy Day

5 Steps to Passing on Money Know-How

Contributed today by Robyn Ulrich:


Pass the Cake

Of all the holidays or special interest days to celebrate, Financial Literacy Day is probably not at the top of your list. For many people, money or finance can be an uncomfortable subject to talk about, so it’s really not that surprising people would rather focus on the upcoming Passover and Easter holidays than the fact that taxes are due a few days later.

Do you ever wonder about where you would be in life, if you had been raised with a strong personal finance education underfoot? Or perhaps you were among the fortunate ones to have a solid financial upbringing; do you ever wonder about where the state of our economy would be if more people had a better understanding and plan for their personal finances?


Pass the Kleenex

Like a lot of people, I was not raised in a household that taught me very much about money. To my parent’s credit, their own parents never taught them either and as the saying goes, “You don’t know, what you don’t know”.

I can remember my very first day at college freshman orientation. Booths upon booths of creditors, eager to help students build their credit history by offering a credit card. While good intentioned, I hope, I can’t help but wonder if they ever considered the ramifications of signing up financially clueless teenagers. Needless to say, I fell victim to the wonderful world of “free money” and high interest rates. It was a tough lesson to learn, and had I been given the tools to manage my financial life starting at an earlier age, I might never have found myself with a mountain of debt in addition to my student loans.


  1. Pass the Awareness

The average household debt in America last year, was roughly $134,643. If you couple that with the amount you are paying in interest, it’s kind of a scary number considering the median household income for the US in 2015, was $55,775. From $1.3 trillion in student loan debt, to credit card debt averaging $16,048 per household, it’s clear I’m not the only one who has struggled to manage or understand money.


Although we can’t go back in time to educate our younger selves, we can certainly prevent future generations from repeating our own mistakes and even learn a little something along the way. The basis for a brighter financial future, starts early. It’s important to give our kids the tools to make good choices with their money, long before we launch them on a college campus to roam free with their credit cards.


  1. Pass the Piggy Banks

So, how much earlier than college is the best time to teach your kids how to navigate through the complexities of personal finance? Well, let’s start with the basics like saving and spending:

Some experts suggest as early as age 3, is the perfect time to teach your kids one of the most important financial tools out there: delayed gratification.

If you’re brave enough to get through a toddler temper tantrum in the candy aisle, or are able to forgo that pair of shoes you really want, you’re already familiar with how challenging this concept really is.

A great way to turn the concept of delayed gratification into a positive feeling rather than a restrictive one, is by offering separate piggy banks. One for saving and one for spending and perhaps even a third for charitable giving, will give younger kids a visual way to understand how to separate their money to achieve a future goal without feeling deprived. They can see that by splitting up the money they receive, they can save for a future goal while at the same time having a little bit of money to spend sooner.


  1. Pass the Motivation

Once kids have the ability to generate more than the few dimes they once found in their car seat, it’s time to build beyond the simple concepts of a separating their money into different categories.

Having the opportunity to earn money, whether that’s from allowance, babysitting or helping the neighbor shovel snow, kids can begin to learn how a little motivation can increase how much they have to contribute towards those different piggy banks.

Not only will they see how a little bit of elbow grease is an option for increasing their earnings, a simple exercise in investing can also put a motivating spin on growing their funds. For example, cash gifts received for birthdays or holidays can take on a whole new meaning, if they are given more choices. Instead of using their allowance or birthday cash to buy something now, offer to match 25% or 50% of what they were given if they wait a month. Get them used to having the choice to either spend right away….or to receive a larger benefit by waiting.  Later in life this lesson can turn into the very real gift of compounding their savings in retirement and investment accounts.


  1. Pass the Responsibility

As kids reach high school, and perhaps their first job, there’s no better time to introduce a checking account with a debit card, and perhaps even a joint credit card with a low credit limit of $200.

You might also consider helping them open a ROTH IRA as long as they have earned income from a job, to prepare them for a future that teens normally find too far in the distance to bother with.

Through teaching them the basics of balancing their new checkbook, monitoring their spending habits by analyzing monthly statements or using a phone app such as Mint, young adults can begin to understand the value of credit and how their choices today will affect the options they have down the road.

Although these steps seem relatively small, they are important building blocks that can create a strong foundation for your child’s financial future.


  1. Pass the Tools

Unfortunately, awareness for a single day of the year won’t be enough to ensure our high school graduates will be equipped with the financial tools they need to be successful adults. Did you know that only 5 states require a finance course as a graduation requirement? If kids do not receive this essential part of education at home or at school, they will continue to be left on their own to figure it out.  Generation after generation will continue to repeat many of the same basic mistakes.

Thankfully, efforts to improve financial literacy are indeed gaining traction. Although we are simply celebrating Financial Literacy Day, it is actually the full month of April and shows that people are starting to pay attention to a long overlooked need.   More and more financial professionals, educators and corporations are filling the void by volunteering their personal time or creating websites, social media pages, and community programs to provide the resources necessary to assist everyone who may be navigating financial challenges.  Other resources are springing up to help jump-start conversations with kids and teens before they learn bad habits.

The earlier we teach our kids about money and the more we talk about financial issues, the less uncomfortable it becomes, and the wiser future generations will be. Then, we will be able to pass them cake instead of Kleenex.


It’s That Time of the Year Again

It’s That Time of the Year Again

It’s that time of year again – tax time. In between recovering from Mardi Gras and celebrating St. Patrick’s, it is a good time to shake your head clear and compile those tax documents. You may think there’s not much left you can do to manage what you might owe for 2016, but after fully reviewing your documents and activities for the year you might still find a savings or two.  While we don’t know how tax rules might change in 2017, here are our top tax planning ideas that you can use now and most likely going forward.

  1. Retirement savings, retirement savings!

The very best tax deduction is the one that helps you personally too!  Everyone qualifies for at least one tax-deductible retirement savings account. By maximizing your contributions to retirement, you are saving for the future while also reducing your taxable income for your next filing.  If you have a qualified retirement plan at work (like a 401k, 403b, or others), employers will often match part of your contributions and sometimes even make a profit sharing contribution too.  These employer contributions can act like a huge immediate return on your investment each year.  Your own contributions come right off your income and reduce your taxes paid throughout the year.  If you don’t have a qualified plan at work or are self-employed, there are other IRA options that also offer tax deductions. All these accounts have contribution limits that you want to review carefully.  If you do have a qualified plan with your employer, your outside IRA contribution is not tax-deductible, but it still might make sense for you.  Your IRA investments grow tax deferred and still may offer you a tax benefit down the road. For any IRA, you have until tax filing date, April 18th this year, to make your IRA contribution and still get a tax benefit. So you still have time to benefit! 

  1. Consider Other Deductible Savings

Another way to reduce your taxable income is by contributing to flexible savings accounts at work for medical expenses or child care.  Money that you put into these accounts also goes in pre-tax, reducing your reported taxable wages.  Later, when you need the money in these accounts for qualified expenses, the withdrawals are completely tax-free.   Depending on what state you live in, a 529 educational savings plan can be a way to save for your child’s college education while reducing your state income taxes.  Over 30 states and the District of Columbia now offer a credit on your state income taxes for contributions to your state’s own plan.

  1. Charitable donations

Donations are a great way to give back to the organizations and causes close to your heart while also reducing your taxable income. Donations of cash or investments may even help lower your estate. If you donate appreciated securities you can deduct the full market value of the security and you also avoid paying capital gains taxes on any accumulated gains. You can also deduct goods and services donated as long as you keep the correct records. Although you can’t write off the time you’ve given to an organization, mileage and purchases made for it are deductible. Be sure to have the charity give you a receipt for anything you plan to deduct, because the IRS requires full documentation in order for you take charitable deductions. 

  1. Manage Your Investment Gains and Income

Another source of potential tax management can be found in your investment portfolio.  Dividends, interest income and capital gains/losses are all part of your annual tax calculations.  To help minimize taxable dividend and interest income, emphasize these investments in your IRAs and other tax-deferred accounts.  Your annual gains on appreciated securities that are sold fall into two categories.  Those owned less than a year are short-term gains and are taxed as your ordinary income tax rate.  Investments that are held longer than a year are taxed at a lower capital gains rate.  You can save substantial taxes by keeping track of how long a security has been held.  If you bought the security at different times, you can even specify which purchase date you want counted in the sale to further minimize your capital gains tax.

We don’t know how tax laws still might change this year, but it is always best to start managing your taxes early in the year and throughout.  These are just a few strategies that are likely to benefit you even with potential changes to the tax code.  This year, more than ever, check in with your professional advisors often and early for the best strategies in your circumstances.


WSJ and Liz discuss her optimism in the stock market


John Wordock from Your Money Matters discussed how much longer the stock market rally can last with Liz who is cautiously optimistic. She says most believe this is due to changing leadership in the capital but it is really about economics that are improving and corporate earnings. To hear her whole interview follow the link below.

Click here:

WSJ Your Money Matters 2017-02-17


Summit Place Launches Learning Center for those Getting Started

Summit Place Launches Learning Center for those Getting Started

We know that the internet is full of information to help you with saving, investing, budgeting and a whole range of financial planning. But like so much free information on the web, it’s not all directed to your personal circumstances. You have been doing a great job getting started and we know that you are on your way to great financial success. That is why we are launching a new Learning Center with resources written specifically for you. These articles contain the information you seek; there are specific ideas that not only will help you get started now but will still fit you as your success grows.

We recommend you start with our 2017 Tax Tips. There is still time before April to do a few things to potentially reduce your taxes. We also offer a few ideas to get started now so that next year’s income taxes can be your best managed yet.

Our other initial learning papers include:

Understanding IRAs: An IRA can be a powerful investment account. Make sure you understand all your options and how everybody can take advantage in some way.

Getting Started with Your Estate Plan: As soon as you consider a family, it is time to create the basic documents of an estate plan so that both you and your loved ones can be taken care of.

Your Top Insurance Priorities: If you think IRA’s are confusing, how about all those insurance categories. We could never cover it all in a single learning paper, but this introduction to will help you navigate the many offers that are likely to come your way. Our goal is to make sure you understand the most important insurance products and stay clear of those that are unlikely to fit your current or future needs.

We hope you enjoy this new resource. We will be adding new and updated information over time and we welcome your requests for topics you would like to learn about.


Liz spoke to WSJ about corporate earnings and executive orders


Liz joined Charlie Turner of Your Money Matters to discuss how the immigration ban is overshadowing the recent stock market halt. She says that although the market hates uncertainty, it had an optimistic rally after the election and it’s healthy for it to pause. To hear her whole interview follow the link below.

Click here:

WSJ Your Money Matters 2016-11-31


Financial Planning interviewed Liz about investing under Trump changes


With the Trump presidency underway, Financial Planning asked investors about their concerns regarding the possible repeal of Obamacare and the elimination of the fiduciary rule. Liz says that Summit Place is currently encouraging patience because the underlying economy is strong and the market could move higher.

Read Article Here


Liz Honored With Fiver Star Wealth Manager Award

We are excited to share that Liz has been honored by Five Star Professional with the 2017 Five Star Wealth Manager Award for exceptional client satisfaction and service. Liz was recognized for the success of the firm’s goal-oriented approach to providing comprehensive and personalized financial solutions.

Administered by Crescendo Business Services, LLC, the Five Star Professional Award identifies and promotes professional excellence. Wealth Manager award winners are chosen based on an in-depth research process incorporating peer and firm feedback with objective criteria such as client retention rates, client assets administered, industry experience and regulatory and complaint history. The wealth managers in the state who were honored for their demonstrated excellence were showcased in New Jersey Monthly’s January issue.

Read the full article here

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18 Bank Street, Suite 200
Summit, NJ 07901

Ph. 908.517.5880