July Newsletter Articles

Cyber Crime is a Growing Threat

If you’re not a technology wonk, you may not realize the Internet and the Worldwide Web is actually two different things. The Internet is a global system of interconnected computer networks. The Worldwide Web is a system of interlinked hypertext documents we access using the Internet. Regardless, the two terms have become almost interchangeable.

Together the Internet and the Worldwide Web have connected hundreds of millions of people around the globe with a wealth of information. According to Pew Research:

• 71 percent of Americans use the Internet on a typical day
• 90 percent access the Internet from home
• 44 percent go online at work
• 68 percent access the Internet via cell phone, tablet, or mobile device

Going online has become so popular more Americans say they would have more trouble giving up the Internet than giving up television (although that may be because they can stream their favorite TV shows via the Internet).

Taking the good with the bad
There is little doubt online communications have changed the world. On the positive side, the Internet allows people to gather and share information, facilitates marketing and sales of goods, supports communication in real time across great distances, and gives people the ability to do much more. On the negative side, the Internet may expose users to bullying, stalking, and privacy violations. In addition, the storage and transfer of electronic data – including personal information, credit card numbers, and other data – led to a cyber crime wave.

According to the U.S. Bureau of Justice, 16.6 million Americans (7 percent of the population age 16 or older) were the victims of identity theft during 2012. The vast majority of incidents involved the theft and fraudulent use of existing account information. Financial losses resulting from personal identity theft totaled almost $25 billion. That’s about $10 billion more than the losses attributed to all other property crimes.

An ounce of protection
Ben Franklin once wrote, “An ounce of prevention is worth a pound of cure.” That is certainly the case when it comes to protecting your personal data. Here are a few suggestions for securing your personal information online:

• Protect your accounts: Choose strong passwords that incorporate letters, numbers, and symbols and, just as importantly, do not use the same password for all of your accounts. If you’re prone to forgetting passwords, keep a password list in your safe or invest in security software that will track passwords for various sites and allow you to access them with a single password.
• Look for security: If you make purchases online, be sure you have a secure connection. Look at the website address. If it starts with ‘https’ or shows a green box with a padlock, typically the connection is secure. It’s also essential to equip your computers and mobile devices with security software.
• Set account alerts: Many banks, financial institutions, and credit monitoring agencies offer alerts to notify consumers when changes occur with their accounts. These alerts often are email notices.
• Be wary: Be wary when using free WiFi. It’s generally not a good idea to access financial accounts or password-protected sites on shared networks (free WiFi is giving you access to a shared network) because it is possible for hackers to track your actions. Kiplinger’s cited an expert who suggested using your phones 3G or 4G mobile phone service to access the Internet may be a better choice than using free WiFi.
• Control your data: Facebook may ask you to complete your profile every time you visit, but you really shouldn’t. It’s smart to limit the personal information – birthdays, pet’s and best friend’s names, addresses, and other data – you share on social media websites. This information can be used to answer security questions and gain access to accounts.
• Read your bills: A lot of people pay their bills electronically and never take time to review the charges. No matter what type of payment option you employ, it’s critical to review every charge. Unexpected charges could be accidental or they could be evidence your data has been stolen. If you find a mistake, report it right away.
• Take action: During 2012, one-in-four consumers who received a letter informing them their data had been breached became the victim of identity fraud. According to Javelin Strategy and Research, “While credit card numbers remain the most popular item revealed in a data breach, in reality, other information can be more useful to fraudsters. Personal information such as online banking login, username, and password were compromised in 10 percent of incidents and 16 percent of incidents included Social Security numbers.” If you receive a letter informing you of a breach, take steps to protect yourself such as setting up account alerts and/or enrolling in an identity protection service.

The Internet and Worldwide Web have become ubiquitous – a necessity for many Americans. As a result, it’s important to be aware of the risks involved when going online and taking appropriate precautions to protect your personal and financial information.

Sources:
_{http://www.pewinternet.org/2014/02/27/the-web-at-25-in-the-u-s/
_{http://www.pewinternet.org/2014/02/27/part-1-how-the-internet-has-woven-itself-into-american-life/}}
http://www.pewinternet.org/2014/03/11/15-theses-about-the-digital-future/
http://www.pewresearch.org/fact-tank/2014/04/14/more-online-americans-say-theyve-experienced-a-personal-data-breach/
http://www.bjs.gov/index.cfm?ty=pbdetail&iid=4821
https://www.javelinstrategy.com/news/1387/92/1http://www.kiplinger.com/article/credit/T048-C011-S001-6-ways-you-invite-hackers-to-steal-your-personal-i.html#ATTith8eBTzLpdOI.99.
http://www.consumer.ftc.gov/blog/it-pays-read-your-bills The above material was prepared by Peak Advisor Alliance.

TAKE A PAGE FROM WARREN BUFFETT

A well-designed plan is necessary for successful investing, but you must also have the discipline to stay on course, rebalance, and tax-manage, as needed. Unfortunately, most investors do not have a written plan. And, emotions such as greed and envy in bull markets, and fear and panic in bear markets, can cause investors to discard even well-designed plans.

Here are some of the best quotes by Warren Buffett, arguably the best investor of our generation, from Thoughts of Chairman Buffett: Thirty Years of Unconventional Wisdom from the Sage of Omaha by Simon Reynolds:

On hiring: “Somebody once said that in looking for people to hire, you look for the three qualities: integrity, intelligence, and energy. And, if they don’t have the first, the other two will kill you.”
On market predictions: “I have never met a man who could forecast the market.”
On choosing investments: “It’s like when you marry a girl. Is it her eyes? Her personality? It’s a whole bunch of things you can’t separate.”
On giving your kids a big inheritance: “The idea that you get a lifetime supply of food stamps based on coming out of the right womb strikes at my idea of fairness.”
On stocks with good histories: “The investor of today does not profit from yesterday’s growth.”
On how to view stocks: “Look at stocks as businesses. Look for businesses you understand, run by people you trust and are comfortable with, and leave them alone for a long time.”
On ethical investment management: “The investment manager must put his client first in everything he does.”
On thinking long term: “I wouldn’t buy any stocks I would not be happy owning if they stopped trading it for three years.”
On predicting markets: “The fact that people will be full of greed, fear, or folly is predictable. The sequence is not predictable.”
On the limitations of wealth: “Money, to some extent, sometimes lets you be in more interesting environments. But, it can’t change how many people love you or how healthy you are.”
On the ideal investor personality: “The most important quality for an investor is temperament, not intellect. You don’t need tons of IQ in this business. You don’t have to be able to play three-dimensional chess or duplicate bridge. You need a temperament that derives great pleasure neither from being with the crowd nor against the crowd. You know you’re right, not because of the position of others, but because your facts and your reasoning are right.”
On inheritance: “Children should be given enough to do what they want to do, but not enough to be idle.”
On risk: “Risk is not knowing what you’re doing.”
On long-term thinking: “Our favorite holding period is forever.”

All of these thoughts are good places to start when developing your investing plan. Use what you’ve read, create an approach which fits your needs, and execute. This disciplined process will guide you to make sound decisions.

_{The above material was prepared by Peak Advisor Alliance.}

_{Teaching Your Children Good Money Values}

The book The Financially Intelligent Parent: 8 Steps to Raising Successful, Generous, Responsible Children, by Eileen and Jon Gallo, focuses on the idea that the way in which parents spend money sends messages to their children about their values and priorities. It helps you become more aware of the values communicated to children through your spending. It provides some great ideas about how to give children the messages you want them to receive. If you are traveling down this road, here are a few ideas from the book and the Gallos’ blog:

Become a charitable family: Teach your children to be generous through your volunteer activities. If you do service work individually, talk about what you are doing and the people for whom you are doing it. If you can, find opportunities to volunteer as a family. Also, when you get requests for charitable donations, discuss the goals of each charity, and have your children help you decide where to give. By introducing the ideas of service and giving, you can teach your children that they have the power to make life better for others.
Encourage self-motivation: On their blog, the Gallos refer to the book, Flow: The Psychology of Optimal Experience. Its author suggests that internally motivated people are happier than those who rely on external motivations. As a result, the Gallos suggest that parents can help their children become happier adults by relying less on external motivators, like paying children to do chores, and more on internal motivators, like using chores as a means of helping children gain self-respect and take pride in their work.
Develop a work ethic: The primary work of most children is school. It is important to encourage them to ‘do their best’ as opposed to ‘be the best.’ In addition to taking responsibility for their schoolwork, children should be assigned age-appropriate chores, and encouraged to take on part-time employment when they get older. A good work ethic is learned behavior, and parents are the best role models.

Your behavior sends clear messages to your children. They learn values by seeing what you spend money on and how you treat others. It’s important to teach children that money is something they have and not something they are. Their net worth and their self-worth are entirely different things.

_{The above material was prepared by Peak Advisor Alliance.}

Delaying Retirement May Provide the Financial Boost You Need

Whether you look forward to staying active in your later years or simply need the income, delaying retirement has many perks worth considering.

Americans are living longer, healthier lives, and this trend is affecting how they think about and plan for retirement. For instance, according to the Employee Benefit Research Institute, the age at which workers expect to retire has been rising slowly over the past couple of decades. In 1991, just 11% of workers expected to retire after age 65. Fast forward to 2014, and that percentage has tripled to 33% -- and 10% don't plan to retire at all.¹

Working later in life can offer a number of advantages. Many people welcome the opportunity to extend an enjoyable career, maintain professional contacts, and continue to learn new skills.

A Financial Boost

In addition to personal rewards, the financial benefits can go a long way toward helping you live in comfort during your later years. For starters, staying on the job provides the opportunity to continue contributing to your employer-sponsored retirement plan. And if your employer allows you to make catch-up contributions, just a few extra years of saving through your workplace plan could give your retirement nest egg a considerable boost, as the table below indicates.

A Few Extra Years Could Add Up

Year	Maximum Annual Contribution	Catch-Up Contribution for Workers Age 50 and Older	Total Annual Contributions
2015	$18,000	$6,000	$24,000
2016-2020	Indexed to inflation	Indexed to inflation	$??,???

Delaying Distributions

In addition to enabling you to continue making contributions to your employer's plan, delaying retirement may allow you to put off taking distributions until you do hang up your hat. Typically, required minimum distributions (RMDs) are mandated when you reach age 70½, but your employer may permit you to delay withdrawals if you work past that age.

Keep in mind that if you have a traditional IRA, you are required to begin RMDs by age 70½, while a Roth IRA has no distribution requirements during the account holder's lifetime -- a feature that can prove very attractive to individuals who want to keep their IRA intact for a few added years of tax-deferred investment growth or for those who intend to pass the Roth IRA on to beneficiaries.

A Look at Social Security

Your retirement age also has a significant bearing on your Social Security benefit. Although most individuals are eligible for Social Security at age 62, taking benefits at this age permanently reduces your payout by 20% to 30% or more. Waiting until your full retirement age -- between 66 and 67 -- would allow you to claim your full unreduced benefit. And for each year past your full retirement age you wait to claim benefits, you earn a delayed retirement credit worth 8% annually up until age 70.² Consider researching your options to continue working past the traditional retirement age. By remaining on the job, your later years may be more secure financially and more rewarding personally.

Source/Disclaimer:

¹Employee Benefit Research Institute, 2014 Retirement Confidence Survey, March 18, 2014.

²Social Security Administration. The benefit increase no longer applies when you reach age 70, even if you continue to delay taking benefits.

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