February 2005 Newsletter
February 9, 2005: Investing on a Shoestring
You don't have to be a Gates or Buffett to start investing for your financial goals. Learn how to start investing now with small amounts of money. Bring a friend!
Financial Planning for Women (FPW) is a monthly educational seminar that meets the second Wednesday of each month at two times: 12:30-1:30 p.m. in Family Life room 318 on the USU campus. Bring your lunch. The same program is repeated in the evening: 7-8:30 p.m. at the Family Life Center, 493 North 700 East, Logan (at bottom of Old Main Hill). The longer evening time slot allows for more discussion. Programs are free and registration is not required. For further information: (435) 797-1569; firstname.lastname@example.org
Upcoming programs: I need to hear from you!
March 9 Investing for College
April 13 Getting Ready for Estate Planning
Please email me with your requests.
NEW this year from FPW.
Would you like a speaker on a personal finance topic for a group? Would you like help organizing a personal finance club? This is different from an investment club that buys individual stocks. A PF club can be a group of friends that meets once a month to discuss a book on investing, to study a topic and share ideas. It's a way to get together with friends who share an interest (or want to develop expertise) in personal finance and investing. Contact Jean at: 797-1569 or email@example.com
MoneyWi$e, a financial education project of Consumer Action and Capital One, is a series of consumer publications and leaders guides focused on basic financial literacy skills. Titles include "?Making Your Money Work for You: Saving to Build Wealth,"? "?Talking to Teens About Money,"? "?Your Right to a Financial Fresh Start-Bankruptcy,"? "?Building and Keeping Good Credit,"? and "?Manage Your Money Wisely: Tracking Your Money."? Most titles include a leader'?s guide and are available in Spanish as well as Chinese and several other languages. Available at http://www.money-wise.org/English/library/moneywise/
66 ways to Save Money: Practical ways to cut everyday costs on transportation, insurance, banking, credit, housing, utilities, food, and more.
Tip of the month:
New Years Resolutions in February? According to an article in the January Money magazine "I resolve to..." the resolutions least likely to succeed are those made between Dec 28 and Jan1. So we are safely past those treacherous days. According to research by a U of Scranton psychologist, "those who make resolutions are 10 times more likely to alter their lives than those who don't even if the nonresolvers want to change)." So what is your resolution for improving your financial security?"Every step you take today to get your finances in order is a gift to your future self."
Make it smart, specific and serious. Set small goals you know you can reach (and build in modest rewards). If you slip up; repeat your resolution. Those who succeed don't do so on the first try but they keep trying. Don't dwell on your failures. Be practical. Be forgiving (of slip ups) and Commit yourself.
Quote of the month: "It's easier to spend two dollars than to save one." Woody Allen
Ensure your resolve by signing up for automatic deposits to your savings or investment accounts.
"Planning for retirement always outperforms worrying about it."
Follow up on January meeting on asset allocation for retirement:
To those who attended: have you DONE anything as a result of the meeting? Did you review your asset allocation? If you decide to change your allocation, you can change both future contributions and current balances.
For those of you who participate in TIAA-CREF and did not attend the January meeting. There are 9 new retirement accounts available as of 2003. I want to draw your attention to two of these accounts because they truly offer new opportunities in areas in which you should be invested. These are the Small Cap fund (stocks of U.S. companies valued at less than $1 billion) and the International Equity fund. To those of you who are invested in the Global equity fund- you need to understand that 'global" includes both U.S. and foreign companies whereas "international" invests only in foreign companies. So if you want 10% of your retirement account in international stocks and had 10% of TIAA-CREF allocated to the global fund, you might have had only 5% invested overseas. Because international stocks are not closely correlated with U.S. stocks, one should have some exposure to the international markets to dampen volatility. Regarding small stocks: typically these stocks produce a higher return than the large company stocks, but with more volatility n the short run... but your retirement is a long term investment.
Website of the month: Estimate your Life Expectancy
In order to plan how much money you will need in retirement, you need to estimate your life expectancy. Use these on-line calculators:
1. The Longevity Game (Northwestern Mutual Life)
2. Life Expectancy Calculator (MSN MoneyCentral)
Both are available at: Planning for a Secure Retirement Module 1B
Social Security full retirement age is increasing. When will you be able to collect full benefits? Only about 18% of Americans know the answer to this question for themselves. Lots of peole still think the age is 65.
No longer are you eligible for full benefits at age 65. As longevity has increased, so has the age for receiving full SS benefits. The age for receiving early (reduced benefits remains at 62).
1941-43: 65 + 8 months
1943-1954: 66 years
1955: 66 + 2 months
1956: 66 + 4 months
1957: 66 + 6 months
1958: 66 + 8 months
1959: 66 + 10 months
1960 +: 67 years
These changes were enacted by Congress in 1983 and started taking effect in 2003, so there was a 20 year warning. One simple way to alleviate the funding problem for Social Security is to raise the age for full benefits. Longevity has far outpaced the original full retirement age of 65.
Topics suggested for future FPW meetings:
Generally we do NOT cover basic money management, setting up a budget, debt repayment, buying a house because the Family Life Center offers free individual counseling on these topics. (See FLC info below). FPW does not want to overlap with FLC services.
Buying a home is one topic that was requested recently that we will not cover because the Family Life Center offers a First Time Homebuyer workshop on the last Saturday of each month. These workshops are free but registration is required.
The USU Community Credit Union offers a free monthly workshop "Smart Money Financial Services" for teens and their parents. Upcoming workshops are scheduled for Feb. 16 and March 16. Info and registration at: http://www.usuccu.org/students/index.html
A number of people have asked for help reading an understanding their financial statements from investment and retirement accounts. This is hard to do with a group.
The USU Family Life Center, 797-7224, 493 N 700 East (bottom of Old Main Hill), provides free financial counseling and occasional workshops. This is the best source for basic money management and getting out of debt. They offer the PowerPay computer debt analysis for free.