April 2010
Issue: 80
Sound, visionary stewardship

Welcome
 
Greetings!

Many of you know that for the last five year's I've been teaching homemade mozzarella making around the South Shore. It's been so much fun meeting so many people. Last month I was a panelist at the edible South Shore group meeting about Dairy & Raw. You can check out the photos here, including a glimpse at my favorite socks.
Also, the Patriot Ledger did a great article about my class in March. It got picked up and published nationally! Plus, just taped video of my cheese making last weekend. "Stay tuned."

Old Chatham babiesGreat cheeses are one of life's greatest pleasures. Lately, I've been dragging Bill around the countryside to visit local farms and cheese makers. On Easter we visited the Old Chatham Sheephearding Company. They had all these lambs! Some were so young they still had their umbilical cords attached. If you like Camembert cheese, you'll want to run to the store and buy some. They distribute nationally. Yum!

Cheers,
Paula Signature
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From Bill's Corner...

As a new member of my town's finance committee, I have become fascinated by how towns navigate their financial challenges.  I am especially intrigued by how town's finance certain ventures and/or obligations.  I wanted to take some time this month to introduce you to Build America Bonds.

Investors have a new mechanism for investing in municipal bonds. Created by the American Recovery and Reinvestment Act of 2009, the bill authorized a subsidy for local and state governments that issue what are known as Build America Bonds (BABs)to finance capital expenditures.

Unlike most tax-free municipal bonds issued by a state or local government, the interest payments on a Build America Bond are taxable on your federal income tax return.  The federal government subsidizes 35% of the interest payments on a BAB, which typically have relatively long maturitiesand must be issued before January 1, 2011. Those subsidies enable state and local governments to offer a higher interest rate to attract investors while at the same time reducing the cost of borrowing money to fund construction and infrastructure projects. Because of the subsidies, many muni bonds issued over the next two years are expected to be BABs.

Several types of BABs exist. A Tax Credit BAB offers the bondholder a 35% federal income tax credit on the net coupon interest. A Direct Payment BABpays the 35% subsidy directly to the issuer. A third type, known as a Recovery Zone Economic Development Bond, is a Direct Payment BAB that provides a 45% refundable tax credit to the governmental issuer.

Why would you buy a Build America Bond? A BAB may offer some advantages that ordinary taxable municipal bonds don't. The most obvious benefit comes from a Tax Credit BAB. Even though a BAB is a taxable bond, the 35% tax credit means that your after-tax return could be higher than that of a comparable taxable bond. Your tax bracket will determine the extent to which you benefit from a Tax Credit BAB.

Even a BAB whose federal subsidy is paid to the issuer may provide benefits. The federal subsidy may enable an issuer to offer a higher coupon rate than it might otherwise have been able to afford. And though default is not impossible, munis have traditionally had a lower default rate than corporate bonds.

Before investing, make sure you understand whether a given BAB offers you the 35% tax credit and what that will mean given your tax bracket. Remember that both interest payments and the tax credit will be included as part of your taxable income, unlike most muni bonds. You may want to get assistance in determining whether a BAB makes sense for you.

New-issue BABs may be challenging for individuals to invest in. Some BAB auctions have focused on large institutional investors to the exclusion of individuals; it may be easier to find BABs being resold on the secondary market. As with any bond, BABs are affected by changes in interest rates. If interest rates rise, the value of an existing BAB with a lower coupon rate is likely to drop.

BABs will be in interesting security to keep an eye on over the next few years. Ultimately, the quality of the issuer and the yield will drive purchase decisions.
Bill signature
In This Issue
Time to Share. Create a Buzz.
Save like the rich and famous
7 tools to rebuild your nest egg
Money in your 40s
Should kids pay own college costs?
Why you should hate income tax refunds
About us
Time to Share. Create a Buzz.

We've been in the press quite a bit lately and thought we'd share. Don't miss it! Paula will be speaking on May 6 about how to build your network. Hope to see you there.

Paula Harris quoted in New group encourages people to eat locally
Patriot Ledger, April 6, 2010
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Paula Harris quoted in Lost Your Job? Take a Pink-Slip Trip
Mint.com, April 2, 2010
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INVESTORS, PLANS AND MONEY: It's spring! Time to clean your finances!
Duxbury Reporter, March 27, 2010
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The honorees at the South Shore Community Action Council's 16th annual Local Heroes Award Night
Old Colony Memorial, March 27, 2010
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Bill and Paula Harris named "Local Heros" by the South Shore Community Action Council
Patriot Ledger, March 27/28, 2010
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WH Cornerstone Investments featured in Small Business Growth Tools
| Lessons Learned | What was your greatest fear when it came to starting your own business?
Boston Business Journal, March 26-April 1, 2010
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Paula Harris has been invited to speak at "Join the Communication Revolution: Revitalize your business through Marketing, Networking and Social Media" at the South Shore Women's Business Network's Professional Development Day on May 6, 2010 from 8:00 a.m. to 6:00 p.m.
Information ...

Paula Harris has been invited to speak to the Holy Family Church Women's Club of Duxbury on April 9, 2010 at 7:00 p.m. She'll be talking about money matters for women.

Paula Harris is featured in: Make mozzarella quickly and easily in your own kitchen
Patriot Ledger, March 17, 2010
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INVESTORS, PLANS AND MONEY: Getting your IRA in order
Duxbury Reporter, February 26, 2010
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Save like the rich and famous

In a down economy, how are the wealthy protecting their money? Let the same advice they are receiving guide you through these hazardous financial times.

7 tools to rebuild your nest egg

Investing for retirement can be rough task when you're facing day-to-day struggles in a down economy. These investment vehicles offer simplicity, safety and a decent return.

Read on...

Money in your 40s: It's make or break

The time for mistakes is over. If you haven't begun to build wealth, to control debt, to look toward retirement, then now is the time.

Read on...

Should kids pay own college costs?

Has your child's education fund been drained by the economic downturn? Tempted to let Junior pay his own way? A new survey suggests it's not so easy.

Read on...

Why you should hate income tax refunds

That big, fat tax refund really means you've given the government an interest-free loan. It's far better to keep the money you earned in the first place.

Read on...
About us

WH Cornerstone Investments, LLC provides wealth management services to a select group of clients. Regardless of their background or future vision, all of our clients commit to a plan that targets their long-term financial growth and stability. While some of our clients concentrate on one part of their investment strategy, others opt for a more holistic approach.

WH Cornerstone clients demand customized objective, expert advice, which they know can come only from a firm that is truly independent-a firm not tied to financial institutions. As an independent Registered Investment Advisory firm, we are fee-only and therefore free from any outside institutional influence.

Cheers
,

Paula Harris and Bill Harris, CFP
WH Cornerstone Investments
781.934.9154
www.whcornerstone.com

Sound, visionary stewardship