Your Financial Planning and Investment Firm
Vol 1, Issue 5
Milestones
Financial Planning, LLC

September 2010 Newsletter
Dear Friends,
Teacher at blackboard
   What do you think of when September rolls around? I love the first cool nights as summer draws to a close with a hint of autumn in the air. Football is a must-see and, best of all, children are back in school (woo-hoo!).
   School is all about laying the groundwork for our children's success. Basic understanding about money management is, I think, one of the fundamental tools they all need. But: are students learning about money in school? What can we do if they're not? We are passionate about financial literacy at Milestones and believe you're never too young (or old!) to learn. Read all about it in our feature article!
Feature Article: Reading, Writing, and Reconciling

What will your children probably not learn in school?

  1. how to prevent pregnancy,
  2. best ways to email, or
  3. how to balance a checkbook?
If you chose (3), you get an A+. Assuming that your children will learn financial principles in school is a mistake that could cripple them for life. Do you know only three of our 50 states have anykind of mandatory money skills curriculum? At the same time, while teens report they want to learn money management from their parents, studies show that only 24% of them discuss these concepts regularly. Is it any wonder we see so many grown children scurrying back to the nest as soon as they've gotten their first electric bill? It doesn't have to be this way. Here is how YOU can make a difference:
  1. Lobby for financial education to be taught in your state
  2. Volunteer at school to help explain basic concepts, such as helping a class raise funds for a special project
  3. Teach your children sound money concepts starting as early as possible.
  4. If you're not comfortable with money management yourself, hook them up with a mentor. Your financial advisor should have some good suggestions.


These websites have fantastic resources:
In This Issue
Reading, Writing, and Reconciling
Almost-Famous Recipes
For Pet Lovers!
Understanding Investments
FWIW
Almost-Famous Recipes
I am a fanatic about great food. The rules of our taste-testers (my family) are:
  • It can't be the same dish 20 other people bring to the church potluck,
  • Calories don't count, and, of course,
  • It has to be tasty enough that others beg for the recipe.
Loosen your belts: I'm kicking off this column with my most-ever requested recipe, Buttermilk Chocolate Cake, hot out of the oven and uploaded to our website.
Quick Links: Sites We Like
Financial Planning Association
    Great consumer information
Caring Connections
  State-by-state guide to living wills
Streaming Radio Guide
  Online radio, listed by format
Win a Prize
Do you have a pet that the camera just loves? Our sister firm, Johanna Fox, CPA, Inc. is sponsoring a cutest pet contest on Facebook through 9/9/10.

The pet with the most votes wins a $25 gift certificate to Amazon.com, which can be spent on whatever you and your pet choose! Find out how to upload your darling's picture today by clicking here.
Investment Tip of the Month: Load v. No-Load Funds
You've probably heard the term "no-load fund" before. In investment company language, the word "load" is equivalent to "fee" or "commission". This fee is charged by some funds to compensate people for selling their funds to investors. Supposedly, the funds with a "load" attached have enough value to make that extra charge worth the extra cost. Personally, I've never found this to be true, but that's just my opinion.
   You can tell if a fund has a load added to the cost because it will have an "A", "B", or "C" after the name. American Funds Washington A (AWSHX) is one example of a front-end loaded fund. The "A" indicates that a commission of from 3% to 8.5% (typically around 5%) is deducted from the front-end of each dollar invested. A "B", or back-end loaded, fund indicates that a commission is deducted when you sell the fund.
   Generally,"C" funds are the most expensive because they deduct a sales charge each year that you own the fund! Of course, if you put your money into a load fund and then the fund doesn't perform as well as expected and you change to a new fund, you have to pay the load all over again!
   Milestones is a "Fee-Only" firm so we invest our clients' money strictly in no-load mutual funds.
FWIW: Why I am a Fee-Only Advisor
   Many years ago, I had a dream of helping my clients make investing decisions. While I would occasionally answer their questions about how and where to invest, I shied away from true financial planning because, as a CPA, I believed it would be a conflict of interest.
  
   Now I know better.

   Upon learning about NAPFA, the National Association of Personal Financial Advisors, I realized that I had found a group of like-minded professionals. As a NAPFA member, I am prohibited from charging a commission on any investments that I recommend to clients, and I think that is just the way it should be. Learn more about what it means to be a NAPFA advisor at the FAQ section of their website. You can see me in my very own NAPFA video on the home page of our website (click on the YouTube video tab with the "Home for Sale" sign)!

(PS: Michelle just told me that she didn't know what FWIW stands for, that is, For What It's Worth)
Do you have a question or a topic suggestion for next month? We want to hear from you! Email Johanna or Michelle today.
 
Sincerely,
 

JOHANNA FOX TURNER, CPA, CFP, RLP
MILESTONES FINANCIAL PLANNING, LLC