Issue: #  74FEBRUARY 2015
Bautis Financial
Dear ,
 

Welcome to the February 2015 issue of The Wealth Chronicle!

 

ARE YOUR ON FINANCIAL TRACK?

 

Do you ever wonder if you are on track financially?  Sure. you can find plenty of websites out there with calculators that will say by age 30, 40, or 50 you should have various amounts saved.  But is it possible to lump everyone together based on a certain age?  What if you want to retire at age 55, and not at 65 years old?  Or what if you want to purchase a retirement home in the Hamptons?

 

Utilizing the KISS protocol I like to take the approach of creating a dashboard that tracks specific goals.  A goal that you track can be anything.  You may want to ensure things like you are on track to retire at a specific age,  see your net worth grow by a percentage each year, generate a certain amount of passive income, or that you will have enough college savings for your kids.  Below is a sample dashboard that shows how you can take different measurements of your health at different times.


 

  

For each of the measurements (Net Worth, Education Savings, Passive Income) the 1, 5, and 10 year goals in the box are generated by doing an analysis on what someone wants to achieve.  For example in the net worth section, this person wants to hit specific net worth goals ($2, $5, and $12 million) over the next 1, 5, and 10 years.

 

In the Education section they said that they wanted to have enough saved by the time their child goes to college to cover 100% of the cost.  In this case we could take a yearly measurement of their college savings and make determinations if they should save more or less, or be more or less aggressive  with their investments.  Or maybe they are on track and they do not have to make any changes.

 

In the Passive Income section usually everyone's initial goal is to achieve financial independence by having enough passive income to cover all of their expenses.  The first step with the analysis would be to  take a look at how much passive income their investments are currently generating and then see what the gap is to get to financial independence.  From there we would see how much every year the would have to save and allocate to income generating investments.

 

Determining and tracking your financial health is not rocket science.  But it does take a system and a discipline to constantly measure and adjust what you are doing so that you stay on track and get to where you want to go.

DOES YOUR FINANCIAL ADVISOR TAKE A FIDUCIARY OATH? 


 

Last month I was critical of President Obama in my newsletter for floating the idea of removing the tax benefit of 529 College savings plan.  This month I have to give him credit for pushing that all financial advisors should take a fiduciary oath with their client relationships.  This would make it harder for brokers to push higher-fee mutual funds or other expensive products on people saving for things like retirement but would be in the best interest of consumers.  Advisors fall into two categories.  Those who take a fiduciary oath and those who are bound by a suitability standard.

 

Fiduciary Financial Advisor - Financial Advisors are fiduciaries only if they are legally obligated to always put the interests of their clients ahead of their own interests, refrain from profiting at the expense of their clients, and treat all clients fairly and equally. 

 

Suitability Standard - Series 7 licensed financial advisors who work for broker/dealers (the big name firms whose commercials you see on the television) are regulated under the Securities Act of 1934.  As such, they are held to the "suitability" standard (they can recommend the investment or product that pays them the largest commission or fee as long as it is suitable given your circumstances)

 

The difference between the two may not sound like a lot, but it has a massive implication on the way clients are treated.  I am proud that I fall on the side that takes the fiduciary oath.  I find it perplexing and sad that there is so much resistance to having all advisors do what is in the best interest of their clients.  

BAUTISFINANCIAL.COM GETS A FACELIFT


 
After not making any major changes to my website for the past couple of years I decided to do a major overhaul on it this year.  Utilizing the help of my brother Dave (bautisIT.com) we designed a new website to take advantage of the new functionality that website technology offers today.  I wanted a site that was mobile accessible as well as easily updated if I wanted to add pages or make any content changes. 

 

Take a look at the new site (http://www.bautisfinancial.com) and let me know what you think



 

 

WATERCOOLER

 

Things to do in March: Drink Beer and Support Veterans

 

  

How much are colleges expected to rise in 2015?  

Can you believe that there is good news on college costs? Although college costs are still increasing, they're increasing at a much lower rate than they have in recent years. Public university rose only by 3% in 2014.  It's higher than inflation but it's the lowest increase in 20 years.  Hopefully schools are finally hitting the wall on how much they can raise tuition each year.

 

I have always considered Charles Barkley a blowhard.  Maybe it is his disdain of New York sports.  But there is one thing he got right - the importance of a financial advisor.  Read his thoughts on what his financial advisor did for him.  It's no surprise that his advisor is an independent advisor.

 


 

Usually you hear that to maximize your home value you want to live in a town with a good school system or good transportation options.  You may want to consider living near a Starbucks.  In Zillow Talk, a new book that's being described as the Freakonomics of the real-estate market, the real-estate database company's CEO Spencer Rascoff and chief economist Stan Humphries spend a whole chapter talking about something they call the "Starbucks Effect." Their rule is that living close to one "equates with venti-sized home-value appreciation." They crunch the numbers and say that houses near Starbucks appreciated 96 percent between 1997 and 2014, while less Frappuccino-adjacent homes only went up 65 percent, a pretty sizable gap.


 

FREE ESTATE PLANNING WORKSHOP


 

On May 7th I am hosting a free workshop on estate planning at the Cresskill Library.  I am partnering with Mark Ballian, an estate attorney with the firm Wells, Jaworski & Liebman, LLP.  Here are details on the workshop.  You can register by clicking on the link below.


Topic: "The Big Three: What You Need to Know."  Generally, every estate plan will include a Last Will and Testament, Power of Attorney, and Healthcare Directive.  Our discussion will cover the types of assets that are covered under the Will and why you should have one, the characteristics of a comprehensive Power of Attorney, and the importance of a Healthcare Directive or "Living Will".

 

Guest Speaker: MARK S. BALIAN, ESQ., MBA, LL.M. is an attorney with the firm Wells, Jaworski & Liebman, LLP, practicing in the fields of Tax, Trusts, and Estates, and Business and Commercial Law.  His focus is in the fields of estate planning, estate administration, and estate litigation as well as business and commercial tax planning and transactions of commercial real estate, leases, acquisitions, mergers, dissolutions, and private business compliance and guidance.  Mark is a member of the Greater New Jersey Estate Planning Council, the Hudson-Bergen Inn of Transactional Counsel, Bergen County Bar Associations, the 200 Club of Bergen County, an organization which supports local public servicemen and women, and a supporter of the Newark Fraternal Order of Police.  Mark has an undergraduate degree in accounting, law degree, Masters in Administration, and Legal Masters in Taxation.

 

Date: 
Thursday, May 7th at 7PM

Location:
Cresskill Public Library
53 Union Ave
Cresskill, NJ 07626

Register Now



Please contact me if you have any questions about the articles above or about your personal or business finances.

  

Sincerely,

Marc Bautis
Wealth Manager

 

office:  201-842-7655
cell:     201-221-6895
fax:      201-754-9760
Disclaimer:The information contained in this newsletter is for information purposes only and may not be suitable for your specific financial situation.  You should consult a financial advisor before making any investment decisions relating to the information contained in this newsletter

What's Inside?
Are you on financial track?
Fiduciary Oath
New website
Watercooler
Estate Planning Workshop
Marc Headshow w Skyline, 9-2011
MEET MARC  

Marc Bautis is a Wealth Manager specializing in working with young families as well as retirees and those nearing retirement. He understands that everyone wants to not only protect their principal, but also be sure that their money lasts.  He is committed and proud to deliver independent advice, always in the interest of his clients.

Marc is the creator of the Retirement Fitness Challenge™,  a program designed to be sure his clients enjoy the retirement years as they have always envisioned them.  Marc's program is designed to prevent outliving your money but also to minimize expenses during retirement and find the best time to start taking Social Security benefits.   Marc is also the author of a recent book The Retirement Fitness Challenge: Shape Up Your Finances and Make Your Money Last a Lifetime, which is available on Amazon.com.

Marc is a graduate of Seton Hall University.  He is a Bergen County native, from Lyndhurst, where much of his extended family still resides. He currently lives in Glen Ridge with his wife Katie, new daughter Charlotte and Old English Bulldog, Winnie.

 

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