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Wealth Management Monthly Newsletter

Encouraging a Culture of Philanthropy in Your Business

As a business owner, you are committed to serving the needs of many different stakeholders, including your customers/clients, business partners and investors, employees, vendors, and family members. And like many business owners, you may also be highly motivated to have an impact on the "greater good." The benefits of giving back are both tangible and intangible, but where do you begin? Start by fostering a culture of philanthropy within your business. Understand the "triple bottom line" approach First coined in 1994 by John Elkington, an authority in the area of corporate responsibility, the triple bottom line (TBL) approach is used by many large companies to measure not just their financial impacts but their social and environmental impacts as well. Small businesses can use this triple bottom line philosophy as a guiding framework in meeting their philanthropic and social responsibility goals. Incorporating TBL thinking and language into a written mission statement may help clarify ...

MEDICARE AND YOUR EMPLOYER HEALTH PLAN

If you plan to continue working after you reach age 65, you may be wondering how Medicare coordinates with your employer's group health plan. When you're eligible for both types of coverage, you'll need to consider the benefits and costs, and navigate an array of rules. How does Medicare work with your group health plan? You can generally wait to enroll in Medicare if you have group health insurance through your employer or your spouse's employer. Most employers can't require employees or covered spouses to enroll in Medicare to retain eligibility for their group health benefits. However, some small employers can, so contact your plan's benefits administrator to find out if you're required to sign up for Medicare when you reach age 65. If you have Medicare and group health coverage, both insurers may cover your medical costs, based on "coordination of benefit" rules. The primary insurer pays your claim first, up to the limits of the policy. The secondary insurer ...

Market Month: August 2017

The Markets (as of market close August 31, 2017) Equities in August saw many peaks and valleys throughout the month, finally rallying at the end of the month. Strong second-quarter gross domestic product (GDP) figures, steady job gains, and increased consumer spending sent stocks higher, despite stagnant inflation and heavy personal and financial losses caused by Hurricane Harvey. The large caps of the S&P 500 and Dow posted marginal monthly gains with the tech-heavy Nasdaq leading the way closing August up 1.27%. The small caps of the Russell 2000 continued to lag, falling 1.39% from its July closing value. The Global Dow inched down 0.32% for the month, but is still strong year-to-date, up over 12.50%. The prices of 10-year Treasuries climbed, sending yields lower. By the close of trading on August 31, the price of crude oil (WTI) was $47.07 per barrel, down from the July 31 price of $50.18 per barrel. The national average retail regular gasoline price was $ ...

Social Security and Medicare Trustees Reports: Financial Challenges Continue

Every year, the Trustees of the Social Security and Medicare Trust Funds release reports to Congress on the current financial condition and projected financial outlook of these programs. The newest reports, released on July 13, 2017, discuss the ongoing financial challenges that both programs face, and project a Social Security cost-of-living adjustment (COLA) for 2018.   What are the Social Security and Medicare Trust Funds?   Social Security: The Social Security program consists of two parts. Retired workers, their families, and survivors of workers receive monthly benefits under the Old-Age and Survivors Insurance (OASI) program; disabled workers and their families receive monthly benefits under the Disability Insurance (DI) program. The combined programs are referred to as OASDI. Each program has a financial account (a trust fund) that holds the Social Security payroll taxes that are collected to pay Social Security benefits. Other income (reimbursements from the General Fund of the ...

Family Business: Protecting Your Life’s Work

This year National Small Business week was April 30th to May 6th. The week celebrates over 28 million small businesses across the United States1 highlighting the hardworking local business owner. These individuals are passionate about their business and often pour their heart, sweat, and tears into it. Typically the business is the largest source of wealth and income for family business owners. It takes years to build a business; however, it can take only a moment to put that in jeopardy. We passionately feel everyone should have a strategy around managing risk and protection. Protect Your Earning Power In a recent study conducted of business owners2, it was discovered that many business owners are not adequately protecting their largest asset—the business—and earning power. On average, at least 60% of annual household income is generated from the business. In our experience, this percentage is much higher. Managing risk becomes even more critical for an owner who has their personal and busi ...

Holistic Wealth Management Offers Comprehensive Guidance for Busy Executives

Successful executives have mastered the art of surrounding themselves with trusted advisors for their business and personal needs. These trusted consultants are often their attorney, CPA, and financial advisor, skilled at providing specialized advice guiding them toward making informed financial decisions. Even with this “dream team” of advisors, there are critical areas of wealth that often aren’t addressed, leaving the executive vulnerable to unnecessary risk, higher taxes, and lost financial opportunities. Thus, enters the importance of “holistic” wealth management. What does holistic wealth management look like? It’s a wealth advisor that works with an executive and their team to provide comprehensive management of the executive’s financial goals. In short, it’s an ongoing review of all the individual pieces as they relate to the overall big picture. This process begins with an initial review to understand the individual’s current situation, need ...

The Uncertainty Paradox

Doubt is not a pleasant condition, but certainty is an absurd one. —Voltaire “The market hates uncertainty” has been a common enough saying in recent years, but how logical is it? There are many different aspects to uncertainty, some that can be measured and some that cannot. Uncertainty is an unchangeable condition of existence. As individuals, we can feel more or less uncertain, but that is a distinctly human phenomenon. Rather than ebbing and flowing with investor sentiment, uncertainty is an inherent and ever-present part of investing in markets. Any investment that has an expected return above the prevailing “risk-free rate” (think T-Bills for US investors) involves trading off certainty for a potentially increased return. Consider this concept through the lens of stock vs. bond investments. Stocks have higher expected returns than bonds largely because there is more uncertainty about the future state of the world for equity investors than bond investors. Bonds, for t ...

Capital Markets Update - June 2017

May turned out to be an interesting month for the stock market. In mid-May, we had the biggest one-day drop in 8 months following headlines of potential obstruction of justice by President Trump as the S&P 500 fell by 1.7%. Yet despite this “mini-correction, the S&P 500 was still up 1.4% for the month and is now up 8.7% through the end of May. Towards the end of May, the S&P 500 finished with three consecutive all-time highs. So far this year, the S&P 500 has set 20 new all-time closing highs, which is already above the average number of new highs per year (16) since 1954. At the same time, volatility this year has been extremely low with only 4 days of movements more than 1% up or down. The average daily moves of more than 1% in any year since the 1950’s has been 50. For instance, last year there were 48 days of moves greater than 1% and in calendar year 2015 there were 72 such days. Yet despite the good gains domestically, returns outside the U.S. have been even better. Fo ...

Family Business: Protecting Your Life’s Work

This year National Small Business week was April 30th to May 6th. The week celebrates over 28 million small businesses across the United States1 highlighting the hardworking local business owner. These individuals are passionate about their business and often pour their heart, sweat, and tears into it. Typically the business is the largest source of wealth and income for family business owners. It takes years to build a business; however, it can take only a moment to put that in jeopardy. We passionately feel everyone should have a strategy around managing risk and protection. Protect Your Earning Power In a recent study conducted of business owners2, it was discovered that many business owners are not adequately protecting their largest asset—the business—and earning power. On average, at least 60% of annual household income is generated from the business. In our experience, this percentage is much higher. Managing risk becomes even more critical for an owner who has their personal and busine ...

Donating Appreciated Securities for Charity

With the global stock markets near or at all-time highs, we thought it might be appropriate to re-visit this topic. The following is a reprint from last year’s newsletter. Tax deductions are a major benefit of charitable giving. Before cashing out of a profitable investment, consider making efficient use of its full value by donating it directly to charity. Charitable giving provides donors with tax relief every tax season in the form of deductions. In an effort to encourage positive social action, the IRS provides incentives for all kinds of charitable contributions, from monetary donations to used cars. You can even donate your appreciated securities (stocks, bonds, mutual funds, etc. that have risen in value) to the charity of your choice. Long-term appreciated securities are the most common non-cash donations, and they can be the best way for donors to give more to their chosen charities. The tax advantages to donating stocks are such that both the donor and the charity benefit. What are the b ...

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All First Bank blog information and content is strictly informational. It is not intended to be specific investment, tax, or legal advice. If you need detailed financial, investment, or tax advice, please contact a First Bank qualified professional. Please note, First Bank occasionally shares third-party content we find to be relevant and helpful to our audiences.