5 Things Women Investors Need To Know
Why do some women shy away from investing or feel concerned about their ability to manage their investments? The answers are complex but typically revolve around traditional roles in terms of sharing responsibilities (women run household budgets and men take care of investments), lack of interest, not a priority, lack of knowledge and perhaps most importantly time.
In order to break the mold, move forward and stop procrastinating, here are some key starting points:
- Knowledge is Power
The financial lingo, industry jargon, mixed and emotionally charged messages from the media can be overwhelming for many women. We are bombarded with sophisticated products and strategies like hedge funds, puts, calls, derivatives, that aren’t essential ingredients to a good recipe for a solid knowledge base. Caving and taking the easy road by not believing that you can educate yourself is an excuse to avoid managing your money.
The first step is changing your internal voice that’s convinced you not to take charge. Start by arming yourself with financial knowledge. Consider registering for a seminar about money or investing or reading one of the many books aimed at women and money.
Learning about your money doesn’t have to be daunting and boring. After all it’s your money, you should be informed, engaged and excited about your relationship with it now and for your lifetime.
- Financial Planning
Relying on someone else; spouse / partner, parent, friend, colleague is not a financial plan, it’s self-defeating. Statistically, women live longer than men and they could inherit money twice, once from the partner and again from their parents. It’s not if, it’s when you’ll have to take control and accept responsibility for yourself and that of your family. Start now by developing a written Financial Plan that suits your goals and dreams that includes a budget, net worth statement, projected cash flows and investment strategies.
- Consider Hiring Professional Advisors
The best of plans and intentions are worthless unless executed. In order to ensure that your Financial Plan is put into action and acknowledging your level of sophistication, you may need to seek out trusted accredited professionals. These advisors typically include, Investment, Tax, Estate and Family Lawyers, Insurance Agents, Real Estate Agents.
Ask those whom you trust and respect most for referrals, “who do they use and why?” Don’t rush into hiring someone and don’t be sold to. Ensure that you are getting the answers to your questions and that you are comfortable asking them. And finally rely on your emotional intelligence, if something doesn’t feel right, then it likely isn’t.
- Adapt to Change
Life events happen (marriage, children, divorce, or death of a loved one) so when these events occur, have the financial knowledge, resources and relationships with key advisors to walk into the next phase. Unfortunately, none of us escape these types of events. When emotions run high and decisions need to be made, having a frame work to draw on provides peace of mind and helps ensure that you are financially capable to move forward.
Many women choose to give up their careers to care for children or aging parents but that choice doesn’t have to be financially debilitating if you make the necessary adjustments and understand the outcome.
Allow yourself the appropriate amount of time to gain the knowledge base you need to become involved in your family finances. Women are still doing the double shift, so decide what you can let go or temporarily slide and then set some reasonable time lines that suit your unique schedule. Once you’ve met you goal then re-evaluate yourself and move onto another stage, the rewards are endless.
Don’t delay in starting to invest today by thinking you don’t have enough money. Start saving today. Statistics show that current retirement years have stretched dramatically since we now live longer. That is appealing to most given that we will be out of the work force longer but that also requires a larger nest egg.
No one cares more about you than you, make your goals and dreams come true by taking action today!
— Nikki Earley
Movie Studios Consider Ways to Speed New Films to the Home
Movies studios are again kicking around the idea of releasing new films digitally for at-home viewing only a few weeks after they first appear in theaters—rather than the industry’s traditional months-long wait.
It has been a rough summer for Hollywood, with the season’s box office grosses falling more than 12% short of the same period last year. With in-theater ticket sales slipping in recent years and movie studios also suffering from declining home entertainment revenue (DVDs, Blu-ray, etc.), some entertainment giants are reportedly warming to the idea of shorter theatrical release windows as a means of combating the rise of streaming services like Netflix.
Bloomberg cites anonymous sources in reporting that some of Hollywood’s biggest studios, including Time Warner’s Warner Bros. and Comcast’s Universal Pictures, are having ongoing discussions with potential distributors Apple and Comcast about how to offer earlier digital rentals of new films, even if theater chains refuse to approve the idea. The report claims that the various sides have been negotiating for two months, but they do not yet agree on “a mutually beneficial way” to offer a premium streaming movie service that would cost customers $30 to $50 per film.
Part of the remaining disconnect seems to have to do with the exact timing of home releases, with the earliest online releases (17 days after a film is released in theaters) costing more, while those that are delayed four to six weeks for download falling on the lower end of the price range, Bloomberg notes.
Earlier this year, the Wall Street Journal reported on similar rumors in Hollywood, though at the time the major studios were in talks with movie theater operators about finding a way to release new movies at home in under 45 days without significantly damaging anyone’s business models. Not surprisingly, movie theater chains are wary about the idea of a premium product aimed at replacing (to some extent) the movie going experience. Theaters are already at odds with the increasingly powerful streaming entertainment players, including Netflix, which famously eschews giving its original feature films any significant theatrical releases.
Theater chain owners have been skeptical that the industry needs to develop a premium video-on-demand in order to catch the rising tide of streaming media while offsetting declining DVD sales. Last year, cinema owners were among those opposed to the idea of a startup by Napster co-founder Sean Parker, called Screening Room, which has not yet debuted—though, it would seem that major players like Apple, Comcast, and Time Warner could have more luck developing a finished product, should they be so inclined.
Meanwhile, movie theater operators recently faced another possible disruption in the form of MoviePass, the startup that now offers monthly subscriptions that allow members to watch one film daily for a monthly fee of only $9.95. AMC Entertainment, the country’s largest movie theater operator, dismissed MoviePass’ model, calling the price level “unsustainable” while accusing the company of trying to “turn lead into gold.”
The Good News Is . . .
• July retail sales climbed by 0.6%. The report not only exceeded expectations but also included sizable upward revisions. Leading the gain were non-store retailers, vehicle dealers, and building materials stores. The June retail sales numbers were also revised to a 0.3% gain from an initial 0.2% decline. And retail sales for May also was revised upward to unchanged from its initial -0.1%.reading. Retail sales are now better aligned with other indications on consumer spending, which are positive and in line with full employment. The upward revisions to June and May retail sales should be positive for second-quarter GDP revisions.
• Ssysco, Corp., a global leader in selling, marketing and distributing food products to restaurants, healthcare organizations, educational facilities, and lodging establishments, reported earnings of $0.72 per share, an increase of 12.5% over year-earlier earnings of $0.64 per share. The firm’s earnings topped the consensus estimate of analysts by $0.01. The company reported revenues of $14.4 billion, an increase of 5.7%. Management attributed the results to strong growth in its International Foodservices segment and improved operational efficiencies.
• Two institutional landlords, Invitation Homes, a rental business spun out of the private equity giant the Blackstone Group, and Starwood Waypoint Homes said they would combine to create an entity with about 82,000 homes in more than a dozen big markets. The planned merger is an indication that the housing market has recovered much of the ground it lost in the financial crisis. And as home prices rise in many areas, affordable housing, for deep-pocketed investors and young first-time buyers alike, is becoming harder to find. The deal could set the stage for other institutional investors to join forces. With fewer opportunities to buy homes at a discount, the keys to growth will be reducing operating costs, gaining market share and potentially increasing rent. Under the terms of the deal, each Starwood Waypoint share will be converted into 1.614 Invitation Homes shares.
Guide to Understanding Reverse Mortgages as a Retirement Tool
If you own your own home and are at least 62 years of age, a reverse mortgage provides an opportunity to convert your home equity into cash. In the most basic terms, the reverse mortgage allows you to take out a loan against the equity in your home, but you do not have to repay the loan during your lifetime as long as you are living in the home and have not sold it. If you want to increase the amount of money available to fund your retirement, but do not like the idea of making payments on a loan, a reverse mortgage is an option worth considering. Below is a brief guide to help you better understand reverse mortgages as a retirement tool. Be sure to consult with your financial advisor to determine if a reverse mortgage is appropriate for your situation.
How Reverse Mortgages Work – With a reverse mortgage, a lender makes payments to the homeowner based on a percentage of the value in the home. When the homeowner dies or moves out of the property, one of three things can happen: (1) The homeowner or his/her heirs can sell the home to pay off the loan’ (2) the homeowner or heirs can refinance the existing loan to keep the home; or (3) the lender can be authorized to sell the home to settle the loan balance. While there are several types of reverse mortgages, including those offered by private lenders, they generally share the following features:
• Older homeowners are offered larger loan amounts than younger homeowners. More expensive homes qualify for larger loans.
• A reverse mortgage must be the primary debt against the house. Other lenders must be repaid or agree to subordinate their loans to the primary mortgage holder.
• Financing fees can be included in the cost of the loan.
• The lender can request repayment in the event that the homeowner fails to maintain the property, fails to keep the property insured, fails to pay its property taxes, declares bankruptcy, abandons the property, or commits fraud. The lender may also request repayment if the home is condemned or if the homeowner adds a new owner to the property’s title, sublets all or part of the property, changes the property’s zoning classification, or takes out additional loans against the property.
Types of Reverse Mortgage Loans – Reverse mortgages have been around since the 1960s, but the most common reverse mortgage is a federally-insured home equity conversion mortgage (HECM). These mortgages were first offered in 1989 and are provided by the U.S. Department of Housing and Urban Development (HUD). HECMs are the only reverse mortgages issued by the federal government, which limits the costs to borrowers and guarantees that lenders will meet the obligations. The primary drawback to HECMs is that the maximum loan amount is limited. Non-HECM reverse mortgages are available from a variety of lending institutions. The primary advantage of these reverse mortgages is that they offer loans in amounts that are higher than the HEMC limit. One of the drawbacks of non-HECM loans is that they are not federally insured and can be significantly more expensive than HECM loans.
Total Annual Loan Cost – Although the interest rate on an HECM mortgage is set by the government, and the origination cost of an HECM loan is limited to 2% of the value of the home, the total cost of the loan can still vary by lender. Furthermore, in looking for a lender, borrowers must consider third-party closing costs, mortgage insurance and the servicing fee. To assist borrowers in comparing mortgage costs, the federal Truth in Lending Act requires mortgage providers to present borrowers with a cost disclosure in the form of the total annual loan cost (TALC). Use this number when comparing loans from different vendors; just keep in mind that the actual costs of a reverse mortgage will depend largely on the income options selected.
Income Options – HECM reverse mortgages provide the widest variety of income-generating options, including lump-sum payouts, credit lines, monthly cash advances, or any combination of these. The credit line is perhaps the most interesting feature of an HECM loan because the amount of money available to the borrower increases over time by the amount of interest. Non-HECM loans offer fewer income options.
Interest Rates – The interest rate on HECM reverse mortgages is tied to the one-year U.S. Treasury security rate. Borrowers have the option to select an interest rate that can change every year or one that can change every month. A yearly adjustable rate changes by the same rate as any increase or decrease in the one-year U.S. Treasury security rate. This annual adjustable rate is capped at 2% per year or 5% over the life of the loan. A monthly adjustable rate mortgage (ARM) begins with a lower interest rate than the ARM and adjusts each month. It can move up or down 10% over the life of the loan.
1. http://ti.me/1ZdYwjs – Time
2. http://bit.ly/2woQBtO – Forbes
3. http://bit.ly/2ade0Tz – Investopedia
4. http://bit.ly/2vQnE7T – AmericanAdvisoryGroup.com
5. http://on.mktw.net/2v97gx6 – MarketWatch.com