Financial Blog For Busy Families & Impact Investors

Linda Rogers 1/23/24 Linda Rogers 1/23/24

Can Money Buy Happiness? Here is the better question.

Can money buy happiness? Here is the better question.

There is still an active debate on whether after meeting basic needs, will more money bring more happiness. But I don’t think that is the most valuable question.

I read a book recently, The Good Life: Lessons from the World's Longest Scientific Study of Happiness, and here is the bottom line - having good relationships and nurturing them is a major key to happiness. “The stronger our relationships, the more likely we are to live happy, satisfying, and healthier lives.”

I think the more productive question is - How can our financial roadmap integrate something we value deeply - making and nurturing relationships? Money isn’t always a factor but it can be a big component. And it doesn’t have to be “more money”. It can simply be a thoughtful reallocation of your current resources.

Here are examples where clients have done exactly that.

The clients did all the hard work – they had ideas on what would make them measurably happier. I just helped them quantify the change and lay out how it would impact their financial goals.

Quitting or taking a lower-paying job to have more time with family.

I have worked with clients looking for a variety of changes in this category. Many are burned out and want to switch to a job that pays less but has a better work-life balance. Running the numbers can provide clarity around whether that is possible.

I have also seen people realize during the planning process that the job they have is fantastic in terms of pay and benefits. Armed with that perspective, they felt motivated to work with their current company to improve their situation in terms of paid time off and reasonable working hours.

There have been clients wanting to move to one income, even if temporarily. One of my most rewarding moments was when I was in the grocery store with my two, unruly toddlers hoping nobody would recognize me and of course, I bumped into a client. She said she had been meaning to reach out to say ‘thank you’. She said that showing her how she could stay home and leave her job a year ago had been so positive in so many aspects of her life that it was hard for her to even put it into words to send an email. She said that I truly made a difference for her and her family. This client ended up eventually doing consulting work – but when she was ready and all on her terms.

Spending on travel to visit loved ones or to have a shared experience.

What are your best memories? I can pretty much guarantee you they were experiences you had – not a thing you purchased. Experiences, such as trips to Hawaii with the family or visiting a grandchild, give you something to talk about for years. Buying gadgets doesn’t have the same effect.

One of my closest friends’ father was amazing at this. If he was anywhere in the vicinity of his daughter for work travel, he wouldn’t hesitate to rent a car or take a short flight to come and see her (once only for 2 hours!) He deeply loved his family and appreciated every moment with them. He died of brain cancer in his 60s before he was able to retire. My friend mentioned how it almost seemed he knew he was going to die young. He didn’t of course, but he is an inspiration for all of us to seize the opportunities to spend with loved ones. We always envision having more time in the future – but there are no guarantees.

Spending to reduce commuting times.

One client reduced his commuting time in half by moving closer to work. The family paid more for a house, but now he has time to take care of his physical health by working out every day and the time to coach his children’s sports teams. Like many of us, he just assumed moving closer and buying that pricier house wouldn’t work financially, but once we explored it a little deeper and ran the numbers, he realized he was wrong and had the confidence to make the change.

originally published 2/22/2015

Let's make a plan for you to do more of what makes you happy

Linda Rogers, CFP®, EA, MSBA is the owner and founder of Planning Within Reach, LLC (PWR). Originally from New Jersey, Linda services clients throughout San Diego county and nationwide. She leads the design of PWR's investment portfolios which utilize broad, low-cost investments that integrate environmentally, socially, and governance (ESG) factors.

Planning Within Reach, LLC (PWR) is a fee-only and fiduciary wealth management firm offering one-time comprehensive financial planning, ongoing impact-focused investment management and tax preparation services in San Diego and nationwide. PWR is a woman-owned firm that specializes in busy professionals and impact investors. Planning Within Reach, LLC and their advisors do not receive commissions and do not hold any insurance licenses or brokerage relationships.

Linda Rogers 1/5/24 Linda Rogers 1/5/24

Credit Card Safety [video]

Credit Card Safety Tips

transcript

(1) Use a credit card over a debit card.

(2) Set up account alerts for that credit card.

(3) Be sure to only buy from reputable sites online.

3 tips - let me go into more detail.

When you have a fraudulent charge on the credit card, that is the credit card company's problem.

You notify them, they can take care of it. It does not get deducted from your bank account balance.

With a debit card, that money comes straight out of your bank account, so you've now lost it. You need to fight to get it back and it can lead to other issues, especially if you have a low balance in your account.

The other is to set up account alerts so that you get a text message whenever there is a purchase made with your credit card.

Years ago, we did not have this set up and we happened to be looking at our credit card statement around Christmas time. We weren't the best at looking at it, but my husband noticed a couple of weeks prior, maybe two to three weeks prior, there were thousands of dollars of computer equipment purchased with our credit card. So we were able to take care of that with the credit card company. However, that really scared us that it took us so long to notice and that that could happen.

So we were able to set up account alerts and it's not as much of a pain as I thought it would be. You get the text message. I'm in the habit of just glancing at it, making sure that it is accurate, and then moving on with my day.

The last piece is just being careful where you buy online.

That credit card that was stolen in our case, was from a purchase we made at a discount swimsuit site. So we were preparing for a 10-year anniversary trip to Hawaii. We were buying swimsuits for our 3 girls at the time, went to this discount site, and that is where our credit card information was stolen.

So use a credit card over a debit card, set up account alerts, and be sure to buy from secure sites online.

Create a financial plan with Linda

Linda Rogers 1/4/24 Linda Rogers 1/4/24

Freeze your Credit [video]

Freeze your credit. Here is why and how it is different than a lock.

transcript

Freeze your credit.

This is one of the best ways to prevent against identity theft. It prevents anyone from opening an account in your name or buying a house in your name.

It's completely free to be able to freeze and unfreeze, and you can unfreeze whenever you need someone to check your credit. I got a car loan a year ago. They said they were checking my credit at TransUnion. I went to Transunion, I unfroze it for 24 hours and had it refreeze automatically.

When you go to the credit bureau site, you may find that they are steering you towards a credit lock.

Different service, similar, but different. The credit lock - they do charge a fee in some cases, it depends on the credit bureau. They are saying it's instantaneous. With just a swipe, it's at your fingertips. They can go ahead and lock up your credit and unlock it.

The freeze is already very fast. They are required by law to have your credit frozen within one business day of you requesting it (electronically) and unfrozen within 1 hour. So really sufficient. I found it to even be faster in many cases.

The other thing with the credit lock, that is a contractual agreement with the credit bureau not governed by law like the freeze. So in those contracts, it's what they say according to those contracts, which they can also change and that varies per credit bureau. They can sneak in their mandatory arbitration clauses. They can prevent you from being part of a class action lawsuit if there is a hack or something going on. They can do different things with your data for marketing purposes. These are things that you really need to look through if you are leaning towards the lock.

I recommend the freeze.

That's what I've done for myself and I've got the links below if you are going to go ahead and do that.

Complete a financial plan with Linda

Linda Rogers 12/14/23 Linda Rogers 12/14/23

Venmo Scams [video]

Next up - Venmo scams. This is my series on identity theft prevention and cybersecurity.

transcript

Here are a couple Venmo scams that I hadn't heard of that I thought were worth sharing.

The Overpayment Scam

Someone pays you and they say, I'm so sorry, it was an accident. Can you please give me my money back? Well, you pay them. Turns out they paid you with a stolen credit card. So Venmo figures this out a few days later, cancels the payment, but the scammer gets to keep your real money. So, making sure that you don't transact with anyone that you don't know and don't trust on Venmo is a good way to protect against that.

The Stranger in the Street

The other is the 'stranger in the street' scenario, and I've heard of this happening, but essentially someone pretending that their phone is dead and they need to call someone. Can they please just borrow your phone quickly? Well, you unlock the phone for them, and just within seconds, they can transfer money from your Venmo to their bank account. So a few ways you can protect against this. One, not giving someone your phone ever. If that happens, you can offer to dial the number and call for them, but not ever giving anyone the phone under any circumstances.

How to set up your Venmo Security

The other could be having security protections on your Venmo account. I also did not have this set up. I just figured this out and it was super easy to do. You go to settings, you can add biometric login or a passcode or both, so that Venmo cannot be opened without that additional layer of security. So even if they have your open phone, they can't do anything within there.

Should you link a credit card to your Venmo account?

The other thing I've read about is considering adding a credit card instead of a bank account to Venmo. The reason behind that is just that credit cards have a lot more fraud protection than a bank account or debit card. When that money's gone, it's gone, versus a credit card. You can say that that wasn't a legitimate charge, and they can go ahead and cancel it.

Do what works for you. I mean, for me, I figured. I noticed that the credit cards, there is an additional fee when you use that through Venmo. You also can't transfer money from Venmo to the credit card.

So personally, I've just decided to unlink all accounts with my Venmo. I don't use it that often. When I do use it, I will go ahead and link my bank account, make the payment, and unlink it. Likewise, when I need to transfer money to my checking, I will do that but I just don't use it enough that, for me, that's a viable solution, but I would love to hear if anyone else has any other thoughts on that

Schedule a call with linda

Linda Rogers 12/13/23 Linda Rogers 12/13/23

QR Code Scam [video]

Protect yourself from QR Code Scams

transcript

QR codes are everywhere now it seems like.

They are just so convenient. I've added a QR code to my business cards that will take you right to my LinkedIn page. One of my daughters, who's selling Girl Scout cookies gets her own QR code.

So, of course, scammers are preying on this convenience and our willingness to scan, you know, every QR code that we see. So we have to be really careful here and understand what's going on.

One conference that I went to recently gave this example with parking meters.

Scammers will put a fake QR code on top of the real QR code so that you go to their website, you enter your credit card information.

Everything you're entering there is being stolen. They can also install malware that can steal other information down the road.

So you have to be really vigilant with what website that QR code is taking you to.

It shows you - you need to review the website and make sure that it is as it should be.

Be extra careful when entering personal information at a website that came from a QR code or downloading anything that came from a QR code.

And when possible, just enter the website. So with the parking sample, it should also list the website to pay for the parking.

Go to the site. It takes a little bit more time, but you can go ahead, enter that so that you are positive that it is going to where it needs to be going.

Schedule a Call with Linda

Linda Rogers 11/30/23 Linda Rogers 11/30/23

We're "Official." Now What?

Financial steps to take before the wedding.

Dear PWR Planner,

We are getting married soon and wondering if there are any financial steps we should be taking now.

Congrats! Getting married is an exciting time.

Financial steps to take before the wedding.

Document your Goals

Discuss your financial goals (short, medium, and long-term).
Do you want to buy a home, start planning for a baby, or create an emergency fund? What else?
Document and prioritize the goals with as much detail as possible. List the amount needed, the target date, and if the goal will be jointly or individually funded.

Do a Credit Check

Review your credit scores together.
Pull full reports at annualcreditreport.com. It is good to know in advance if either of you needs to start working on increasing your credit score if needed.

Review your Balance Sheet

Document all of your assets and debts on one page.
Decide if you will combine accounts and money or not. While retirement accounts stay in your own name, you may decide to open a joint checking account, for example, to ease the management of your household finances.

Decide how Household Expenses will be Managed

Who will take the lead on the household bills? While this usually falls to one individual, which is fine, both of you need to review money movement at least monthly.
Create a joint cash flow, showing all income coming in and expenses going out to help both partners visualize how money is moving.
Discuss any purchase limits. For example, many couples set a dollar limit, such as $500, and anything over that amount needs to be discussed before purchase.
Review the 3 common ways couples manage household expenses with a partner and decide what is the best fit.

Investment Strategy

Will you manage your investments jointly or individually? For example, will both of your portfolios be mirrors of each other or will you manage the entire portfolio holistically?
Do you both have the same risk tolerance when it comes to investing? Share how each of you responded to the last market dip.
Review your current investment accounts, the holdings (funds invested in each account), and the overall asset allocation (% stock, bonds, etc) to compare your investing strategies.

Joint Tax Planning

Grab your last two (2) tax returns and review them together to see if there are any questions.
Run a tax projection to see if it will make sense to file as Married Filing Jointly or Married Filing Separate.
Determine if you need to change your tax withholding to reflect the new tax status.
Decide who will prepare your taxes and notify them of the upcoming marriage to see if there are any planning opportunities prior to tying the knot.

Align your Insurance Policies

Document all life insurance policies.
Determine if you are holding enough life insurance.
If you both have great benefits at work, analyze who has better coverage.
Call your property and casualty insurance providers to see if it will benefit you to consolidate your Auto, Home/Renters, Umbrella and Earthquake Insurance under one carrier.
Consider insuring the engagement/wedding rings on a separate rider.

Estate Planning

Discuss who you want to inherit your assets if something were to happen to one or both of you.
Obtain your most recent estate planning document to review with your partner. Decide how to go about getting them updated now given the recent marriage.
Document any separate property. Assets acquired before marriage are separate property, but if commingled with joint funds, they may become marital property depending on the state. This is extremely important to understand before you start moving money around.
Update the beneficiary designations on all retirement accounts and life insurance as needed.
Update the titling of your non-retirement assets. An estate planning attorney can help you decide which is best given your situation and goals.

Commit to communicating actively and openly about any money issues.

Set up regularly scheduled meetings to review your finances and any financial issues you may be having.
Seek help from a professional if you need help.

Schedule a call with a fee-only, fiduciary advisor.

originally published 10/26/2018

Linda Rogers 11/29/23 Linda Rogers 11/29/23

Ask Linda: Gifting Stock to my Child

I want to gift some of the concentrated stock in my brokerage account to my adult child. I am tired of managing the stock and feeling like I need to stay on top of the earnings reports, news, etc. I would rather gift it to him and have the rest of my portfolio in low-cost, diversified positions. The stock has a very low basis and will incur a large amount of long-term capital gains upon selling. What are your thoughts?

Dear Linda,

Here are a couple of options:

Option 1 - Gift the Asset

If your son receives the stock as a gift then he will also receive your cost basis (purchase price plus other costs like commissions and fees). Therefore, when he goes to sell the position, he will pay tax on the large gain.

This will meet your objective of getting rid of the concentrated position, which you presumably don't need to fund your spending needs, but it may not be the most tax-efficient strategy.

Option 2 - Bequeath the Asset

If your son inherits the stock upon your passing, he will receive a step-up in cost basis. That means the cost basis of the asset will equal the fair market value at the date of your death. In other words, if he waits and inherits the stock, he can turn around and sell it immediately with minimal, if any, taxes due and invest the proceeds in a diversified portfolio.

Conduct a thorough analysis of options 1 & 2 with your financial and tax advisor to confirm which strategy makes the most sense given your and your son's ages, health situation, tax rates, stock value, and unrealized gain. You should also include an estate planning attorney in the discussion to see if there are any estate or gift tax issues. For example, there is an annual, per-recipient gifting limit ($17K for individuals in 2023) and an estate tax exemption ($12.92M for individuals in 2023).

If you decide Option 2 is the best choice, speak with your financial planner about other ways to help reduce your concentration in the stock. Here are some examples:

1) Stop re-investing interest and dividends so you do not further the concentration issue.

2) Consider donating some of the highly appreciated stock instead of donating cash. The potential charitable deduction equals the fair market value of the stock and an IRS-qualified charity can sell the asset without having to pay tax on the gain. It may also be advantageous to utilize a Donor Advised Fund (DAF).

3) Harvest losses elsewhere in your portfolio to offset the capital gains realized when selling some of the highly appreciated stock.

originally published 3/21/2018

Schedule a call with Linda to learn more

Linda Rogers 11/28/23 Linda Rogers 11/28/23

Do you need a Living Trust?

More Privacy. More Control. Quicker distribution to beneficiaries.

transcript

Do you need a Living Trust?

3 things to consider:

1) More privacy,

2) More control, and a

3) Quicker distribution to beneficiaries.

A Living Trust offers more Privacy.

Let's talk privacy. If you die without estate planning documents, your estate will be distributed through probate. Probate is a court process, meaning it is completely public. So even though you may not be famous or in the public eye, you still probably don't want anyone who's curious to be able to obtain that information. Having a Trust can avoid that.

You have more control with a Trust.

It also can give you more options than just a plain beneficiary form. So let's say you want to be more detailed and specific, and you've got young adults or minor children. You can still list them as a beneficiary, but you can list the amount, whether in percentage or dollar amount, that you want them to receive at certain ages. Having exceptions for medical care or education can also be written into there, so it just has more flexibility and more options that might fit your needs better.

A Trust offers a quicker distribution to your beneficiaries.

Probate, again, is a court process, and the length that it will take to complete and the cost varies per state. In some cases, it could take months, if not years, before the beneficiaries receive their assets. Having a Trust will be quicker and more efficient. So if that is also a goal of yours, then having a Trust makes sense.

A Trust is not the only way to avoid probate.

But of course, a Trust is not the only way to avoid probate. It doesn't make sense in every case. You might have a really simple situation where proper titling and completing the beneficiary forms can accomplish just what you need. So you do need to talk to your advisors just to make sure you're on the right path. I will also put a link to an article below about proper titling and you can reach out with any questions.

How to Title your Assets

My name is Linda Rogers, Owner of Planning Within Reach.

originally published 12/8/2020

Linda Rogers 11/22/23 Linda Rogers 11/22/23

How to Title your Assets

How should you title your assets? This guide will help you understand your options,

Estate planning is the process of determining how your assets will be managed and distributed upon death. While touching on this during the financial planning process, we discuss the importance of titling assets properly to avoid probate.

Probate is a court process that is public, expensive, and can take months, if not years, to complete. In order to make things as smooth as possible for family and friends, you must name beneficiary designations (primary and contingent) for retirement accounts and life insurance. Your remaining assets need to be titled properly. This guide will help you understand your options.

Individual

Individually titled assets are in your name only. Upon death, the asset will be subject to probate and distributed according to your Will.

Subject to Probate: Yes

Distribution After Death: Passes according to the instructions outlined in your Will.

Note: Individually held accounts are not typically recommended. There are better ways to title your assets that avoid probate and offer more control over the distribution of your assets.

Payable-on-Death (POD) or Transfer-on-Death (TOD)

POD and TOD are similar but POD is typically used for bank assets and TOD for brokerage assets. Like an Individual account, TOD / POD accounts are in your name only until death. After death, the beneficiary you listed on the POD / TOD form inherits the account directly, bypassing probate and superseding your Will (even if your Will has different instructions). The beneficiary listed does not have access to the account while you are alive.

Subject to Probate: No

Distribution After Death: Named beneficiary on the POD or TOD form.

Note: Perhaps you have a separate property account that is in your name only (such as an inheritance), but you want your spouse to receive the money upon your death. You should remain the sole account owner and complete a POD or TOD form with your spouse as the beneficiary.

This is not a good option for people who have a minor child listed as the beneficiary. If the child is still a minor when the parents die, a financial guardian would be appointed by the court. The guardian would need to report back to the court periodically to justify that every transaction in the account was for the benefit of the child. This is time-consuming and expensive. Therefore, it is recommended that those with minor children as beneficiaries have assets flow to a Trust instead, with a Trustee (named by the parents versus the court) to oversee the asset distribution.

Joint Tenants with Rights of Survivorship (JTWROS) or Community Property with Rights of Survivorship (CPWROS)

This is a joint (50/50) account with the two owners listed. Upon the death of the first owner, the account passes automatically to the second owner. The transfer avoids probate and supersedes the Will (even if the Will has different instructions). Check with your estate planning attorney, but for married couples or registered domestic partners living in a community property state, such as California, you may consider CPWROS versus JTWROS. With CPWROS, the asset receives a “step-up” in cost basis, whereas only the decedent’s portion (50%) would receive a “step-up” in cost basis when held as JTWROS.

A “step-up” in cost basis means that if your account value is $100K and the cost basis is $50K at death, the cost basis would be adjusted to $100K and the surviving account owner can sell the asset for no taxable gain (versus $50K taxable gain if you sold prior to death).

Subject to Probate: No

Distribution After Death: Transfers directly to the second account owner.

Note: Similar to the TOD / POD, this could be a good option for those that have no plans to create a Trust. It is NOT recommended to be joint on an account with someone whom you do not trust completely. For example, if you are a parent and list your adult child as joint on the account, your child can distribute money at any time and if their assets become subject to creditors, the joint account could be in jeopardy. In that situation, having the parent remain the sole account owner with the adult child listed as the beneficiary on a TOD / POD form is more appropriate.

Trust

Once you have a Trust created by an attorney, you will be recommended to title your non-retirement and non-life insurance accounts, including your home, into the name of the Trust. Typically, an attorney will create a “Pour Over Will” to catch any accounts that weren’t named in the Trust, but don’t be entirely dependent on this. For example, pour-over assets over $184,500 can still be subject to probate in California (this changes periodically and varies by state).

Subject to Probate: No

Distribution After Death: Follows the instructions outlined in the Trust

Note: This is ideal for people who want more efficiency, privacy, and control over the distribution of their assets. For larger and more complicated estates, a Trust will also save heirs money on estate taxes and probate fees.

Putting it all together

Work with your financial planner and estate planning attorney to be clear on how you want your assets to flow after death. Ensure that your assets are titled appropriately to meet those goals. I organize this for my financial planning clients in a simple Excel spreadsheet to make it clear how everything would flow after death. This also makes it easier to spot errors, such as new accounts that are opened without the correct titling or beneficiaries that need to be changed.

Schedule a call to learn how PWR can help you organize your financial life

originally published 6/22/2021

Linda Rogers 11/17/23 Linda Rogers 11/17/23

If Something Happens to You, What Happens to Your Pet?

Many people expect that a family member or friend will care for their pet if something happens to them. While that would be an ideal situation, sometimes the owner has reasons to believe that will not be possible.

The pet is a parrot that is expected to outlive the owner by decades. Taking in a parrot is a big commitment that many people are not willing to do.
The owner has multiple pets, such as 4 dogs. They don’t want the dogs to be separated, but it is difficult to find someone willing and able to care for them together.
The owner has horses and no family or friends would have the ability to take them in given their space requirements and maintenance cost. (Horses are very expensive!)
The person in mind to take care of the pet is on a very tight budget. Pet food and veterinary costs would further tighten their money situation.

Estate Planning For Your Pet

As with all estate planning, simply documenting your preferred wishes is an enormous help to your executor (the person who will be distributing your estate). In the absence of your written wishes, the executor will have to decide what to do with your pet, and it might not be what you would have wanted.

Informal Instructions

At the simplest level, send your executor the top 2 people that you would want to care for your pet after you are gone, in priority order. Notify the named caregivers to secure their approval. This is the best option for most of my clients. It is flexible and it takes very little time to modify the instructions if the pet dies or the named caregiver’s circumstances change.

Semi-Formal Instructions

More formality may be necessary if you have someone who you want to care for your pet, but they do not have the financial resources to take on the additional burden. You can document in your will that you want the named person to take care of your pet and that you are leaving them $X, in the hope that they use it towards caring for the pet. Since the pet is not a person, you cannot leave money to them - only the caregiver. With this arrangement, nobody is enforcing that the caregiver actually spends the money on the pet. Therefore, this would not be a good option for a spendthrift but for someone who you trust would use the funds appropriately.

Formal Instructions

A “Pet Trust” is a legal document. You set up the Trust and name a Trustee. The Trustee is required to ensure that your instructions are followed with regards to the care of your pet. If the caregiver uses the money designed for the pet on something else, they can be sued. This is the most expensive option because it requires a lawyer and provides more structure and accountability.

Organizations That Can Care For Your Pet After You Die

If you do not have a named caregiver, there are a variety of organizations that can work with you to provide care for your pet once you are gone.

The Stevenson Center

Part of Texas A&M University’s Veterinary School, The Stevenson Center lists their prices here, which will depend on the age of the youngest owner at time of enrollment.

The Gabriel Foundation

The Gabriel Foundation is specifically for birds. You can view their prices by pulling up their contract. For example, 1 large Amazon Macaw will cost $120 per month or $1,400 per year.

Peace of Mind Program

This program is run by Purdue University’s Veterinary School and it requires a minimum bequest of $25,000 per pet.

Perpetual Pet Care Program

This program is run by Kansas State University’s Veterinary School and it also requires a minimum bequest of $25,000 per pet.

Identify Gaps In Your Financial Plan

While it seems obvious that people need to have an estate plan to list how they want their assets split upon their death and who they want to care for their children, it may seem less obvious to consider what would happen to their pets if they died. Reach out with questions specific to your situation and let us know how we can help.

originally published 9/21/2020

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