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PresidentsCornerPresident's Corner
A recent survey published by Standard & Poor's Rating Services found that two in three adults worldwide, about 3.4 billion, are considered financially illiterate.

Wow. That's a big number. The good news is that 57% of American adults are a little more financially literate. Still, there appears to be a major education gap when it comes to saving and borrowing. Among the survey topics of risk and diversification, inflation, interest, and compound interest, the least understood topic among Americans was interest, even though we have some of the highest credit card usage and student loan debt in the world.

Financially literacy (or illiteracy) comes in more than one form. Most of us will agree that our schools do a poor job of teaching practical skills like budgeting and balancing a checking account and that the majority of financial institutions do not even reinforce the basics when they have the consumer's attention.

What is alarming appears to be individuals in denial about their spending habits. This phenomenon came to the forefront in 2007 when homeowners were using their homes as their personal ATM by spending the home's equity on big-screen TVs and expensive vacations. Unfortunately, this method of financing a household is being recycled today, especially in Northern California which is reliving the 2007 overheating of the real estate market.

American households lost $16 trillion in net worth, most of it from home equity, from its peak in early 2007 to the nadir of the Great Recession in early 2009. $8 trillion has been recovered, which leaves a net $8 trillion that is gone, probably forever. Economists lay the blame at the feet of many entities and even some corporate CEOs, but Americans' financial illiteracy is also a factor.

My wife is currently training to be a volunteer docent at a local museum. She is finding it is hard work to learn what is required for her new position. Learning some financial basics is hard work and can be painful at times. However, it can help consumers navigate through the sometimes complex world of finance and avoid the mistakes many individuals made before the recession.

Credit unions were originally created in part to educate people of modest means about making smarter financial decisions. In order to fulfill our mission, your Credit Union will be sponsoring a series of financial literacy workshops targeted to specific age groups, presenting a far-reaching array of topics. If you have any ideas for topics you would like to hear, please contact me, and we'll include them. I urge all members to take advantage of these free workshops, free credit counseling with a member of our senior staff, or just a phone call for a few minutes of free advice. Of course, that's the easy part. The hard part is making the sacrifices necessary to be financially successful. I wish for that outcome for 2016 and beyond.

David M. Green
(925) 335-3802
For some perspective on all-important long-term interest rates, this chart illustrates the 44-year trend of 30-year mortgage rates (thick blue line). Ongoing concerns over a sluggish global economy in addition to a potential deflationary environment have encouraged investors, institutions and governments alike to move a portion of their investment dollars to the relative safety of US bonds. This has resulted in a significant decline in the yield of long-term debt instruments. This decline has brought 30-year mortgage rates down to a level rarely seen over the past four decades.
tipsforteensTips for Teens - New Year Shopping 
With the holidays behind us, we're left with a lot of gifts and cash. If you hurry and head to the stores, you may be able to take advantage of great discounts and put your holiday gift cards or cash to good use. Here are some tips to consider when shopping at this time of the year.
  • Winter Season Sales - Can't wait for spring?! Neither can stores. Right now you can find ridiculous discounts on holiday related items. Whether its lights, decorations, candles, wrapping paper, gift boxes, or trees, chances are you'll find these items at up to 75% off right now. Save them for next year and you can rock the halls with new decor and gift wrap. Not interested in decorations, you say? Well, how about your closet? You can save big on winter season apparel. If you're looking for warm, chic clothing at a price that won't break your wallet, head to the mall with the holiday money your grandparents gave you and get yourself into this season's greatest styles.
  • Holiday Food - You need to get into your car RIGHT NOW if you want to have one last Pumpkin Spice Latte or another box of Joe Joe's. Hurry, these will not last long.
  • Gym Memberships - If you're looking to get your beach body back, fine-tune your abs, or simply lose the holiday weight, now is the time to get your gym membership. Many gyms offer discounted rates for the New Year and some even offer free trials to get you started.
  • Cell Phones - Whatever you do, DO NOT BUY A PHONE RIGHT NOW!!! Sell one instead. Whenever a major phone manufacturer announces a new phone, the prices of the previous phones drop significantly. Spring has proven in recent years to be a time in which new phones are in full bloom (except for iPhones, they bloom in the fall). If you want a great deal on any phone, buy used. Used phones do not mean they are broken and they can run as well as new phones.
  • Televisions - Unless you accidentally broke your TV using a Wiimote over the holidays, you don't need to buy a new TV, no matter how bad the resolution is. 4K televisions are the future and are expected to become more affordable throughout the year. Black Friday is, hands down, the best time to buy any television. In the meantime, your phone or tablet probably has more pixels than your TV will ever have and chances are, you already watch Netflix on it anyway. Buy a phone or tablet stand (I think tablet floor stands are the best since you get a bigger screen) and Bluetooth headphones (I think the Photive BTH3 are really great sounding headphones, with an affordable price tag on Amazon) and you've got a great personal portable TV. If you can't wait a year for the next season of your favorite show to be added on Netflix, consider subscribing to Hulu. If you don't want to pay extra, you can sign up for Bing Rewards and redeem your earned credits for a "Free month of Hulu" gift card.
  • Do Nothing! - You can always save your money and not spend it all at once.
If you need financial advice, Shelley Murphy, our Vice President of Lending, offers FREE Financial Advice and would be happy to help you! You may contact Shelley at (925) 335-3824.

Luis Dominguez
Student Social Media Intern
1st Nor Cal Credit Union

RetirementSolutionsAre You Underprepared for Retirement?
A university study serves as a wake-up call.

By Jason Vitucci, CFP & Gene A Schnabel
Financially speaking, how many Americans are truly on track to retire? A recently published white paper suggests that about half of us are approaching our "third acts" with faulty assumptions.

Perception differs from reality.
Researchers from the University of Alabama and Ohio State University looked at the Federal Reserve's Survey of Consumer Finances and assessed the retirement readiness of its 2,300-odd respondents. They determined that 58% of these workers (age 35-60) were saving too little for the future, with a near-majority of that 58% failing to recognize the gravity of their situation. Only 42% of households were sufficiently prepared for retirement, but 46% of households believed they were.2,3

The researchers discovered two other interesting disconnects. One, a slight majority of those who were saving adequately for retirement believed they were not saving enough. Two, the insufficiently prepared workers who were in line to receive old-school pensions were more likely to have flawed assumptions about their retirement readiness than workers without future pensions.2

Just how much money do you really need for retirement?
The answer to that question varies per household, but many households could stand to save more. One old rule of thumb says you should save the equivalent of 12 times your end salary for a comfortable retirement. If you retire earning $150,000 a year, that means $1.8 million.4

Very few IRAs or workplace retirement plan accounts contain that much - so if your retirement nest egg needs to be that large, other sources of funding for your retirement probably need to emerge.

A household with either or both spouses earning $150,000 may have those resources.
A middle class household may need to dedicate 10% or more of its income to retirement savings accounts. Saving 5% of your salary for retirement probably means saving too little.

If you save and invest ably over 30 or 40 years, you might end up a millionaire with the help of strong yields and compounding. You may need to be a millionaire to retire.

What if interruptions mar your retirement savings effort?
They may mar it, but they should never halt it. Divorce, medical issues, prolonged joblessness - these and other events may impede your progress toward your savings goals, but the effort to save must still be made as you want time on your side.

If you are able to anticipate such an interruption, there are ways to plan to possibly make up the slack. You could explore investing more aggressively during that time period - but you invite greater market risk. You could cut back on household expenses (or inessential expenses) to free up more money to sustain your pace of retirement saving. Or, you could determine potential strategies far ahead of such disruptions by sitting down with a financial professional to run some scenarios (laid off at 60, taking three years out of the workforce at age 35 or 40 to be a stay-at-home mom or dad, and so forth).

You should strive to be financially prepared for your retirement, and for the unexpected life events or financial surprises that may occur before it arrives.
As a valued credit union member, we invite you to contact us for a complimentary financial plan review. We also invite you to attend any of our Retirement Planning workshops that we hold. For more information about our practice, our workshops, or to make an appointment, please call us at (925) 370-3750 or visit our website

Bay Area Retirement Solutions
1330 Arnold Drive, Suite 249
Martinez, CA 94553

Securities through First Allied Securities, a registered broker dealer, member FINRA/SIPC. Advisory services offered through First Allied Advisory Services, Inc. Registered Investment Advisor. Investments not FDIC or NCUA/NCUSIF insured, not insured by Credit Union, may lose value. Products offered are not guarantees or obligations of the Credit Union, and may involve investment risk including possible loss of principal. 1st Northern California Credit Union, Bay Area Retirement Solutions and First Allied are all separate entities.Gene A. Schnabel CA Insurance Lic.: 0663016, Jason Vitucci CA Insurance Lic.: 0F59894 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

2 - [4/1/15]
3 - [2/20/15]
4 - [1/12/15]
11% cash back on all purchases when using a 1st Northern California Visa Credit Card. Excludes cash advances and balance transfers. Rebate applied monthly to Visa Credit Card account balance. Rebate cannot exceed $10 per month and/or $120 per year. Terms are subject to change without notice.
aggettaFREE Insurance Review 
As we launch into a New Year, it is a great time to evaluate your coverage, because auto, home, life and other insurance needs change over time. Insurance professionals recommend that you review your policies at least once a year. Are you currently paying too much? Do you have adequate coverage or would a loss be financially devastating? Being underinsured could leave you with huge bills, while being overinsured means you are throwing money away.

Insurance is a very simple is there to protect you when something unplanned happens.  If you unexpectedly lose your house or belongings to a catastrophe or theft, insurance will help you get back to normal.  Same thing with your car, boat, vacation home, motorcycle or anything else that you would choose to insure.

As an added benefit of your 1st Nor Cal membership, we at Lou Aggetta Insurance will help you review the things that are important to you and provide you with options for reducing risk in your life. We are an independent insurance agent and can provide you with home, auto, life, health, business and many other types of insurance coverage.
Contact me today to schedule your free review.
Denia Aggetta Shields
Lou Aggetta Insurance
2637 Pleasant Hill Road
Pleasant Hill, CA 94523
(925) 945-6161
Like us on Facebook at Lou Aggetta Insurance  
Follow us on Twitter @LouAggetta
FinancialCounselingFREE Financial Counseling
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Make your appointment TODAY!

Just a reminder, you can annually request FREE Credit Reports from all 3 credit reporting agencies online by going to:
For FREE Financial Counseling, don't hesitate to contact:

Shelley Murphy
Senior Vice President of Lending & Collections
(925) 228-7550 Ext.824

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