Top 10 rules to a frugal life:

Those that know me well can vouch for the fact that I am a frugal person.  I feel that there is much that is virtuous about living a frugal life.  Learning about delayed gratification and the important limits to set upon our role in a consumption based economy is a great path to happiness and peace.  The famous economist and philosopher John Stuart Mill once said, “I have learned to seek my happiness by limiting my desires, rather than attempting to satisfy them.”  This simple phrase rings true to me.  This is especially evident as you stand witness to the constant bombardment of consumerism in our media and markets.  Take stock of what you have and the blessings of life and you might not fall prey to the treadmill of consumption that will always be tempting you.

Top 10 rules to a frugal life:

  1. Budget – know where your money goes.
  2. Be guarded against lifestyle inflation; try to keep income growing faster than expense growth.
  3. Don’t be wasteful. Consider gently used items when buying cars, and other depreciating assets.
  4. Find discounts whenever possible.
  5. Trips and vacations are about experiences, not necessarily lavish accommodations.
  6. Frugal people rarely eat out, preferring to prepare their own food.  I find it better and healthier, not to mention less costly.
  7. While there are many worthwhile private schools, there is a great value to be found in many of our public schools as well. Consider whether public schools, for both young children and college, may be right for your family.
  8. Frugal people care less about fads and trends; keeping up does not matter to them.
  9. Know the value of a dollar, if there is a lower interest rate find it.
  10. Don’t be cheap, stay generous.  It is ok to part with money to help others.

Richard Manske, CFP®                                                                                                                                      Managing Partner

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What is an Index (and why should you care)?

Recently I was on vacation with a friend, and while enjoying the sunshine she received a CNN alert…

Breaking News: Dow Jones Industrial Average soars to an all time high.

She then asked me what the Dow Jones was exactly … “Should I know what this means?” My response was, “it’s a stock market index, of course.” Seeing the perplexed look on her face, I realized that she had no idea what I was talking about. After having this conversation, I wanted to share with you what I shared with my friend.

  1. What is a market index? – A stock market index is simply a measurement of the value of the market or a section of the market. Let’s break it down into a simple example. Assume ABC index is made up of 6 companies. At the end of trading on Monday the index is at 5,000 points. On Tuesday, three of the companies go up in value, two of the companies go down and the sixth company stays the same. The total value of the stocks change by 3% on Tuesday, so now the index is at 5,150 points. This tells you that this section of the market went up in value from Monday to Tuesday.
  2. Why are market indexes important? Choosing appropriate investments is only the beginning. One of the biggest challenges of an investor is to determine how well your portfolio is performing. Are you lagging behind the market or beating it? You can only know the answer to these questions if you have something to compare your investments to. Indexes allow you to measure the performances of your investments against an appropriate benchmark.
  3. How do you choose the right benchmark? In general, when you are tracking the performance of an investment, you look at a benchmark that is most similar to your investment. For example: If your portfolio is all U.S. large cap stocks you would likely use the S&P 500 as your benchmark. If your portfolio is all fixed income then you would most likely benchmark against the Barclays Aggregate Bond index. If your portfolio is a combination of both large-cap stock and fixed income you would want to use a blended benchmark of the two indexes.
  4. All of this is for naught if you don’t know what indexes track which stocks. Here are some of the most common market indexes and the companies they are comprised of.
  • Dow Jones Industrial Average (DJIA) – This is one of the most popular measures of the market. A.K.A. “The Dow” or “Dow 30” is a price-weighted measure of 30 US blue-chip companies. The index covers all industries with the exception of transportation and utilities, which are covered by other Dow Jones indexes.
  • S&P 500 Index – This index is based on 500 U.S. large cap companies that have common stock listed on the NYSE or NASDAQ. These companies are representative of the industries in the U.S. economy.
  • Russell 2000 – This index tracks 2,000 small-company stocks. It serves as benchmark for the small-cap component of the overall market.
  • Dow Jones Wilshire 5000 – This index covers over 5,000 US companies listed on major stock exchanges. This includes US companies of all sizes across all industries.
  • Barclays Capital Aggregate Bond Index – This is a broad-based benchmark that measures the investment grade, US dollar-denominated fixed-rate taxable bond market.
  • MSCI EAFE Index – This index is designed to measure the equity market performance of developed markets outside of the U.S. and Canada. EAFE is an acronym that stands for Europe, Australasia and Far East. (Check out Sarah DerGarabedian’s blog post from last week to read why it’s important to have an international allocation – http://wp.me/plOKq-oE)  
  1. It’s important to remember when comparing your investment returns to compare your results to the long-term market, not just the past year. Typically analysts look at 3, 5 and 10 year returns. Short-term results can often be misleading due to short-term volatility. A quick Google search should provide you with the long-term returns of any of the major indexes.

After explaining all of this information to my friend, I think she had a better grasp on market indexes and hopefully this information is helpful to you too. One realization that came from our conversation is that sometimes financial advisors (nerds) forget that things that seem so common to us aren’t as familiar to those not in the industry. We never want a client to leave a meeting or conversation feeling confused or uncertain. If you have questions, please ask! We may just write a blog post about it.

Ashley Woodring, CFP®

Financial Advisor

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Kit Kats, Blow Pops, and the Benefits of Diversification

“But international stocks are underperforming the S&P 500! Why are you buying international mutual funds in my account?”

We hear this question a lot. People often wonder why we include various sectors and asset classes in our portfolios, but the one that tends to get the most scrutiny is international equity. Many investors exhibit what is known as “home bias,” or the tendency to invest primarily in domestic securities, whether it stems from a nationalistic desire to “buy local” or simply the belief that international investing carries additional costs and complexities. Often, investors eschew international diversification to their detriment, as many studies have shown that the inclusion of international equities lowers portfolio volatility while increasing risk-adjusted return. However, these metrics are not what investors see – they see performance. They see that the return on their international fund is lower than the return on the S&P 500 and fear that it will be a drag on their returns forever. So why don’t we sell it?

Quite simply, we keep it for the diversification benefits. With Halloween just around the corner, perhaps an analogy will help. When you’re trick-or-treating, you knock on the door of every lighted house and collect as much candy as you can carry home. Then you dump it out on the floor and sort through it to revel in the spoils. Hopefully you’ll come home with lots of chocolate candy bars, M&Ms, Milk Duds, Junior Mints, and Reese’s cups. Then there might be a smattering of Smarties, Starburst, and Skittles, which are fine. Invariably there will be a few of those orange and black-wrapped peanut butter taffies, some chalky Dubble Bubble and a handful of Dum Dums – but that’s OK. A few crummy candies won’t ruin the night, since you have so much more of the good stuff. And you never know which houses are going to hand out what candy, so you have to hit them all. (And to the person handing out raisins, just stop. Don’t be that guy.)

Now imagine that your portfolio is a bag of Halloween candy. Even if you love Snickers, it would be pretty disappointing if your entire haul was nothing but Snickers – that would defeat the purpose of trick-or-treating, because you could simply go to the store and buy a bag. No, you want a wide variety from which to choose, based on changing moods and cravings! In a similar way, you need to diversify your investments so that the mood of the day doesn’t destroy your savings in one fell swoop. If your entire portfolio consists of the stock of one bank and the bank goes under, you lose all of your money. If you buy the stock of 5 different banks, but the entire banking industry hits a rough patch, your portfolio plummets…so you buy the stock of 40 different companies in different sectors and industries to spread the risk. But what if they’re all domestic companies and the domestic economy tanks? I think you see where this is going. Different investments zig and zag, moving in opposite directions simultaneously, which dampens the overall volatility of the portfolio.

You may not be a huge fan of Blow-Pops, but what happens if you fill your bag with Kit Kats and you’re suddenly in the mood for Sour Apple? What if you leave your bag in the sun and all the Kit Kats melt? It’s true that if particular sector (such as international equity) underperforms and you have it in your portfolio, you might get a lower return on your portfolio for that period. But when that sector rallies, you’ll be happy you had a couple of Blow-Pops in your bag.

Sarah DerGarabedian, CFA

Portfolio Manager

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Why not Short the Market?

A “short sale” refers to selling stock that you do not own with the hope of repurchasing it at a lower price later. It is a way for an investor to try and profit from their view that a particular investment is overvalued and likely to fall in price. This technique can be used on individual stocks, or on Exchange Traded Funds (“ETFs”) that represent anything from individual sectors to the overall market. While there are many successful investors who have done well on the short side, for most people this strategy doesn’t make a lot of sense due to the risks involved.

The mechanics of a short sale are as follows: An investor goes to their broker, borrows shares of a stock and sells them. The short sale proceeds are credited to the short seller’s account, less a fee for borrowing the stock. You must have a margin account in order to short stock. If the price of the shorted stock rises, the short seller will need eventually to borrow on margin to keep the position open.

The short seller receives interest on the short sale proceeds, although this is minimal currently since interest rates are low. In practice, this interest is often split with the buyer of the shares or the brokerage firm that is facilitating the short sale. The short seller must pay any dividends on the borrowed stock to the purchaser of the shares.

Risks of Short Selling:

Swimming Against the Tide –Since 1926, about 7 out of 10 years have been positive for the overall market. If you are short the overall market, chances are you will be in a losing position after a year.

Timing is Critical—Stocks can move quickly in either direction, and it is difficult to predict the future. If the event that you are betting on fails to materialize, or if the opposite happens, your losses can mount quickly. For this reason, short selling is more common among professional and institutional investors.

It can be Expensive to Maintain a Short Position— With today’s low interest rates, the combination of the borrowing cost and the dividends the short must pay to the long far outweighs the interest on the short sale proceeds that the seller is earning. For example, say you short 100 shares on Johnson and Johnson at $108 because you think Band-Aid sales are going to decline sharply. You receive proceeds of $10,800 and earn money market interest at 0.01%, or $10.80 per year. Your annual cost to carry the position is the 2.8% dividend, or $302.40 plus any borrowing costs charged by your broker. These additional costs can be quite high for stocks that are hard to borrow.

Limited Profits but Potentially Unlimited Losses–At most, any stock can go down 100% in value. However, there is no limit to how far a stock or the overall market can go up. If it goes up by enough to wipe out the equity in your margin account, the brokerage firm will buy-in the security at a loss and close the trade. Say you short a stock at $8/share. The most you can make is $8 if the company goes out of business and you are able to buy back the borrowed shares at $0. But what if good news comes out and the stock goes from $8 to $18? You just lost $10/share when your maximum theoretical profit was $8. In reality, few companies go out of business so your maximum profit is even more limited.

We believe that, rather than trying to profit on short-term price movements, our clients should place the equity portion of their investments in a diversified portfolio of quality companies with the potential for rising earnings and rising dividend income.

Bill Hansen, CFA

Managing Partner

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A Real World Retirement Story

My father was ready for retirement. We had several discussions about picking the right time. Choosing when to retire is always a big decision. Conventional wisdom suggests the longer you wait, the better. You have more time to save and eliminate debt. Your Social Security benefit could be higher. On the other hand, how many people do you know who died before they could retire? There is something to be said for “getting out of the game” and enjoying your life.

We discussed a myriad of items. In the interest of brevity, let’s talk about two of them: finding the right insurance coverage and managing your time.

Health care is a big ticket item. No matter how well we take care of ourselves, our bodies will need more attention as we get older. Finding the right coverage is vital. Individuals over age 65 have Medicare Part A. Most people obtain supplemental insurance coverage since Part A does not pay for everything. Some plans are very expensive. Some plans provide minimal coverage at a reduced cost. Penalties can be incurred if one does not sign up for Medicare when required. And, if someone retires before age 65, coverage must be found to bridge the gap between the retirement date and Medicare eligibility.

I was overwhelmed. I arranged for my parents to meet with an insurance agent who specializes in Medicare plans.

Thanks to the draft, my dad spent a few years in the Army. His service gave him a permanent distaste for peeling potatoes. More importantly, it provided him with access to health care benefits. His previous employer’s insurance plan was awful, so he used the VA coverage as a supplement for years. He said the prescription drug discounts are good.

The agent found appropriate policies for both of my parents. My father’s supplemental policy needs were reduced by the VA coverage, whereas my mother needed increased coverage. It helped to have someone with Medicare knowledge guide them through the process. I highly recommend seeking help instead of trying to research it on your own.

She could not help us with the other problem: occupying my dad’s time. He is not a “lounge around the house” kind of guy. He must stay busy. He made a plan for the first year of retirement. He wanted to remodel the kitchen – build cabinets, replace the countertop himself, install new flooring, et cetera. He planned to tackle some home improvement projects at my house (yeah!). He wanted to get a dog which would give him a buddy and an excuse to get outdoors. Then, in about a year, he hoped to get a part-time job at a nearby home improvement store. He would be perfect for the job, and the store employs a lot of older workers.

He knew he could not be happy unless he was busy doing something. When considering retirement, it is very important to think about how one will occupy time previously spent working. We all have fantasies about what we would do. When faced with the reality of filling those hours, though, it can be a daunting task.

In the end, my father did retire. I saw an immediate “lightness.” He smiles and laughs easily. Plagued with ulcers and wicked reflux most of his life, his gastro issues have greatly improved. Retirement definitely agrees with him.

Someday, you may have the same conversations with your parents. My advice is to get help from people who know more than you – financial advisors, insurance experts, estate planning attorneys – whenever you encounter unfamiliar issues.

The same advice applies if you are considering retirement. There is more to the issue than whether or not you will have enough money. My parents and I spent almost a year talking about it. Just as you took time to find the right career or the right house, care should be taken with retirement planning too.

Of course, Parsec is here to guide you. Retirement matters are too complex to tackle alone.

Cristy Freeman, AAMS®
Senior Operations Associate

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The Rational Investor… or Not?

This is the last post in a series of six blog entries focused on topics that might be of interest to the Millennial generation. If you would like to see our attempt at making these subject matters entertaining, visit our YouTube page to see a video version of this article.

 

So here’s the setup: you have two large pizzas. One is cut into four pieces, the other is cut into eight pieces. Would you rather have one piece from the former, or two pieces from the latter? If you asked a hungry four-year-old that question, he’d probably be totally confused because you used the words “former” and “latter.” But then he’d go for the 2 pieces because in his mind, two pieces are more than one. Of course, anyone with a basic knowledge of fractions knows this is a trick question, because it’s the same amount.

Let’s imagine now that the pizzas are companies, and the pieces are shares of stock in those companies. You have $1000 to invest. Company A’s stock price is $50, and company B’s stock price is $100. Assuming that there are no trading costs, you can purchase 20 shares of company A and 10 shares of company B. All else equal, which would you buy? Answer: it doesn’t matter – your investment in either company is the same. You’d be surprised at how many people would choose company A because you get “more” shares of stock or because they think the shares are a better “value” by virtue of having a lower price per share. The thing you have to realize is this – a company can issue any number of shares it wants to. If the price per share is $100 they can issue a 2-for-1 split, and now you’ll have 2 shares worth $50 each for every one you had before. Your total dollar investment in the company doesn’t change, though.

We all want to believe we are rational and that emotions are only something that affect other people, but it just isn’t true. We all have made mistakes like the investor in the example above and that’s why behavioral finance is one of the fastest-growing branches of psychology. This is just one example of common investor misconceptions but there are many more – click on the link above for a lighthearted look at a few that we see from time to time. Remember to always discuss your investment decisions with your advisor, so that he or she can lead you in the direction of the logical and unbiased choice.

Sarah DerGarabedian, CFA
Portfolio Manager

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Interest Rates and How They Impact You

This is the fifth post in a series of six blog entries focused on topics that might be of interest to the Millennial generation.

Today I’m going to touch on the exciting topic of interest rates. Okay, let’s be honest, most of us consider the subject boring and highly technical at best, and pure financial torture at worst. But hear me out. I’d like to explain why interest rates are in fact pretty fascinating, surprisingly straightforward, and worth learning about. The truth is that interest rates can have a massive impact on your current and future financial situation.

So what are interest rates? And how do they affect your financial well-being? If you think about it, everything in our modern society has a cost. You pay for a good meal at a nice restaurant, there’s a charge for staying at a hotel, and an education certainly isn’t free. The same holds true for money. It has a cost and that cost is interest rates. In order to get your hands on some money, say for a car loan, a mortgage, even groceries, you pay for that money in the form of an interest rate. When you have a good credit history, i.e. you consistently pay back other people’s money in a timely manner, you’re considered a good credit risk and it becomes cheaper for you to borrow money in the future. In other words, the interest rate you’ll get charged on loans will be lower than the average person. This is a good thing for your financial well-being. On the flip side, if you are even occasionally late on a credit card, car loan, or any other debt payment, you become a less desirable credit risk and the rate at which you’re charged to borrow money in the future goes up. In other words, the interest rate on the next loan you take out will be higher and you’ll pay out more money over the course of the loan, all else being equal.

You may have heard about the compounding power of interest and how it can help you significantly grow your wealth. This is a very true financial tenant when it comes to investing your money. However, this same principle also works against you when you step into the role of a borrower. As an example, consider that the median price of a home in 2013 was about $200,000. Now assume you take out a 30-year fixed mortgage to purchase a home. You’ve worked hard and have 10% in cash to put down. This leaves you with a $180,000 mortgage. Going interest rates for borrowers with good credit are around 4.25%. Even though these are still historically low rates, at 4.25% you can expect to pay approximately $138,960 in interest alone over the life of the loan! That’s in addition to the $200,000 cost of the house. Now let’s pretend that your credit is a little below average, making you a slightly higher-risk in the eyes of a bank. You’re still able to secure a loan, but the bank wants to charge you a 5.00% interest rate in order to compensate for the risk they take on by lending to you. At a 5.00% rate, you can expect to pay $167,760 in interest over the course of the loan, or almost $30,000 more than you would pay with a better credit score. That is some serious money.

On top of the impact interest rates have on our personal investments and debt payments they also affect our spending and saving behavior. Imagine that your bank was offering a savings account with a 10% interest rate. All else being equal, would you be more or less inclined to save? That’s right. Most people would choose to direct more of their personal income towards savings when interest rates are higher. If millions of people were forgoing spending in favor of savings, this would have a significant effect on the overall economy. Interest rates matter. What about high interest rates when you’re the borrower? As we saw above, even a small increase in an interest rate can lead to much larger debt payments. Generally speaking then, higher interest rates tend to depress credit growth and in the end can muddle economic activity as consumers take out fewer loans.

As you can see, interest rates can have a very direct and often significant effect on our personal financial situation, not to mention our saving and spending patterns, and the broader economy. Although we’ve only skimmed the surface, suffice it to say that interest rates are worth understanding, if for no other reason than to help you make smarter decisions with your money.

Carrie Tallman, CFA
Director of Research

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Roth vs. Traditional IRA – Do You Know the Difference?

This is the third post in a series of six blog entries focused on topics that might be of interest to the Millennial generation. If you would like to see our attempt at making these subject matters entertaining, visit our YouTube page to see a video version of this article.

 

“Roth IRA” and “traditional IRA” – these are terms that are bandied about willy-nilly by financial advisors and others in the business. You’ve often wondered what the difference is but haven’t asked, because you feel like you should know already. You nod along, meaning to Google it when you get home but of course you forget as soon as you step through the door and directly into a pile of something your loving pet left for you to clean up. Allow me to help! With the IRA definitions, I mean – not the mess. That’s all you.

First, the similarities – both are types of retirement accounts that allow the investments within them to grow without requiring you to pay taxes on any realized gains. So if you buy a stock for $500 and sell it for $1000, you don’t have to pay capital gains taxes on the $500 you made. Awesome, right? Another bonus – you don’t have to pay taxes on any dividend or interest income that you earn within either type of IRA. In a regular brokerage account you would have to pay taxes on realized gains, dividends, and interest income, which would cut into your portfolio return.

So what are the differences? Both traditional and Roth IRAs feature tax advantages on either contributions or withdrawals, but not both. A traditional IRA allows you to make tax-deductible contributions (so the funds you put in there are not being taxed as income). However, when you withdraw the money after age 59 ½, it will be taxed as ordinary income at your marginal tax rate.

Conversely, contributions to a Roth IRA are not tax-deductible (so this is income that has already been taxed). But when you withdraw the money (assuming you’ve had the account for at least 5 years and are older than 59 ½) it’s all tax-free! That’s why traditional IRAs are called “tax-deferred” accounts and Roth IRAs are called “tax-exempt” accounts.

Now, as with anything the IRS gets its hands on, there are all kinds of rules, guidelines, exceptions and so forth when it comes to how much a person can contribute to either type of account, how much is tax-deductible, what types of early withdrawals are allowed without a penalty, etc. Rest assured that all of this information is available on the internet, so I will spare you the details. Better yet, call your financial advisor and ask him or her how the rules affect your unique situation. There are so many different scenarios that, if I were to attempt to address them all, it would completely defeat the purpose of this blog, which is to simply explain the main difference between a Roth and a traditional IRA.

Because your situation is unique, you should talk to your financial advisor about the different account types and which ones are best for you. But now, when you hear phrases like “tax-deferred” or “tax-exempt,” “Roth” and “traditional IRA,” you can nod along knowledgeably.

Sarah DerGarabedian, CFA Portfolio Manager

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Student Loans vs. Saving

This is the second post in a series of six blog entries focused on topics that might be of interest to the Millennial generation. If you would like to see our attempt at making these subject matters entertaining, visit our YouTube page to see a video version of this article.

 

You’ve recently graduated from college and you have a load of student debt. It can be overwhelming. You think it will take forever to pay it off. To make matters worse, you know you are supposed to be saving for retirement but you feel like you can’t because you need to pay off your student loans first.

To make the best financial decision it is important to remove the psychological barriers that often accompany the ‘saving versus paying down debt’ trade-off. The millennial generation is particularly opposed to debt – more so than older generations, so they tend to pay their student loans off before they start saving. Unfortunately, this could be the wrong choice.

The long run average of large company stocks is 11.3% (1950-2013). If your student loans are at an 8% interest rate, you would be better off investing money over and above your minimum loan payment if you have the risk tolerance for investing the money in equities.

Maybe an 11.3% return sounds unrealistic. It’s common for this historical return to seem disconnected from the present. A common psychological condition causes us to take recent past experiences and extrapolate them into the future, creating a false sense of predictive ability on what the future holds. If the good times are rolling, they will always roll. If we are in crisis, we will be in crisis for the foreseeable future. But the truth is that things change. Our economy is cyclical in nature and that’s why we use long-term historical observations to make long-term decisions.

Even with the worst recession since the Great Depression the average return of large company stocks in the 10-year period from 2004 -2013 was 7.4%. And while that’s not huge, you may be willing to take the chance that we won’t soon see a repeat of the worst stock market period in history. Those loans will get paid off eventually and you’ll have more money in retirement simply by saving more and saving earlier.

Don’t forget about your employer match on your 401k. If you have a 401k match, by all means take it! Even if your student loan interest rate is 12%, you’d be better off (after paying the minimum) putting enough money into your 401k to get the free money. That’s a 100% return, guaranteed.

Harli Palme, CFA, CFP®
Partner

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7 Reasons to Consider a Prenup

This is the first in a series of six blog entries focused on topics that might be of interest to the Millennial generation. If you would like to see our attempt at making these subject matters entertaining, visit our YouTube page to see a video version of this article.

I believe Kanye West said it best when he said, “We want prenup!”

There is nothing that can kill the romance of upcoming nuptials more quickly than your partner asking you to sign a prenuptial agreement (aka prenup). But do you know what can really kill the romance? Divorce! Perhaps you are thinking, “our relationship is going to last… we’d never get a divorce.” Well let’s face it, I don’t think anyone goes into a marriage thinking that in 5-10 years they are going to split. Other people may think that the agreement is only for the rich… this is actually a misconception. While it’s true, a prenuptial agreement may not be right for everyone, the following are a few scenarios in which it will make a lot of sense:

1: One partner earns the majority of the income. If you know going into a marriage that one person will be the primary “bread winner,” a prenup can be used to determine the amount of alimony that will need to be paid upon a divorce.

2. What about the partner that doesn’t make a lot of money? The prenup can also be used to make sure that the partner who is less financially set is protected in the event of a divorce.

3. For the spouse with substantial assets. If you own a home or other substantial assets prior to a marriage, you can use a prenup toestablish that those assets that came with you, will leave with you.

4. For the stay-at-home parent: This will obviously affect your income. If it is decided prior to marriage that one parent will stay at home with the children, a prenup can be used to make sure that each parent shares in the responsibility of taking care of the children financially.

5. One partner has a significant amount of debt. A prenup can establish who will be responsible for paying off debt in the event of a divorce. This can prevent you from getting straddled with debt that the other spouse created prior to marriage.

6. Children from a previous marriage. When entering into another marriage you need to make sure that you kids are protected from another divorce. This can ensure that in the event of your death/divorce that assets that should be going to your children won’t go to your disgruntled spouse.

7. You own a business. It is possible that in the event of a divorce your spouse will end up owning part of the business. Your partner will then go from being an unwanted spouse, to an unwanted business partner. Establishing that the business is off limits in a prenup can prevent this from happening.

It’s understandable that many couples don’t even want to entertain the idea of a prenuptial agreement. The important thing to remember is that this is a document used to protect all parties. Communicate openly and listen to the concerns of your partner. Even if you do live “happily ever after,” there will always be a peace of mind involved with foresight and deliberate planning.

Ashley Woodring, CFP®

Financial Advisor

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