4-Minute Money Ideas

Can Your Israeli Bank Provide Investment Services?      

By Douglas Goldstein, CFP®

Have you found that your Israeli bank no longer provides investment services for Americans living in Israel?

Because if onerous reporting requirements to the American government, many Israeli banks have stopped opening investment accounts for U.S. citizens. While dual American-Israelis can continue with banking and checking services, they need to look elsewhere for their long-term investing.

Where can Americans open investment accounts?

If American firms turn away U.S. citizens with a foreign address and Israeli banks don’t open accounts for Americans, how can Americans living in Israel have investment accounts?

That’s where investment firms with relationships with U.S. brokerage houses and Israeli investment licenses come into play.

Profile Investment Services, Ltd. is one of a select few companies that is able to help, as we work with an American brokerage firm (Portfolio Resources Group, Inc.) that understands there are law-abiding Americans who live and work globally, but want to maintain U.S. brokerage accounts.

In many cases, people denied investing services by their Israeli banks can enjoy the same solution. In particular, if a person wants to buy stocks, bonds, or mutual funds, he can easily transfer funds from an Israeli bank to a U.S. brokerage account.

Can I open a U.S. brokerage account even though I live in Israel? YES!

One reason that investment firms turn away overseas clients is because they do not have the ability to get to know them well and give them appropriate advice. On the other hand, companies that have a presence in Israel can meet their clients face-to-face to help them handle their U.S. brokerage accounts. When I meet new clients, I ask a lot of questions in order to fulfill my obligations under the “know your client” rules so that I can give them the most appropriate advice. In doing so, I am then able to help them open and maintain their U.S. brokerage accounts. Transferring the money to the new account is usually as easy as filling out a form and asking the local bank to move the funds.

If you have assets in Israel that you would like to move to an American brokerage account, see if Profile Investment Services, Ltd. can help by calling 02-624-2788.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Read This Before You Transfer Your Money to Israel

By Douglas Goldstein, CFP®

Making aliya doesn't mean you need to close your American brokerage accounts. In fact, there are many sound reasons for maintaining assets in America even if you move away. Think twice before converting your American retirement accounts to shekels and bringing them to Israel.

Recently, some American brokerage firms asked their non-resident clients to transfer out their accounts. To the shock of many clients in Israel, major firms decided to end long-term relationships with them. If this has happened to you (or you fear it may) don't panic! There are U.S. brokerage firms who realize the benefit in holding accounts for law-abiding and tax-paying citizens who just happen to have a non-U.S. address.

As a licensed financial planner in both Israel and America, I have over two decades experience in counseling American olim on the benefits of maintaining an American brokerage firm while living in Israel. Benefits include:

Tax Reporting Benefits

Keeping an American brokerage account makes tax reporting to America easier. Long and short term gains/losses are reported according to the IRS's requirements. This makes tax filing easier (and cost efficient) on 1099s, FBARs, and other forms that Americans must file.

Tax Deferred Benefits

Keeping an American IRA (Individual Retirement Account, often held through a U.S. brokerage company) or 401(k) account means you can maintain the tax-deferred status of your funds. If you transfer these accounts out of America, you lose the tax benefits and may owe penalties as well.

Safety Benefits

American brokerage accounts have an extremely high level of transparency and government regulation. While SIPC insurance can't guard an investor against regular market volatility, the protection gives millions of investors peace of mind.

You Can Keep American IRAs

Keep in mind that an American brokerage account can't replace your local Israeli bank account for day-to-day services. Nor can it hold Israeli pension and Israeli tax-free savings accounts (which may still be taxable in America).

However, an American IRA account is the most common tool used to maintain the tax-deferred status of retirement funds. For help managing your American brokerage/retirement accounts in Israel, watch the video at www.Profile-Financial.com/USAccounts and call Profile Investment Services, Ltd., (02) 624-2788.

Neither Profile nor PRG provides tax or legal advice. Consult an accountant or an attorney on such matters before taking any action.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates

Read This Before You Transfer Your Money to Israel

By Douglas Goldstein, CFP®

Making aliya doesn’t mean you need to close your American brokerage accounts. In fact, there are many sound reasons for maintaining assets in America even if you move away. Think twice before converting your American retirement accounts to shekels and bringing them to Israel.

Recently, some American brokerage firms asked their non-resident clients to transfer out their accounts. To the shock of many clients in Israel, major firms decided to end long-term relationships with them. If this has happened to you (or you fear it may) don’t panic! There are U.S. brokerage firms who realize the benefit in holding accounts for law-abiding and tax-paying citizens who just happen to have a non-U.S. address.

As a licensed financial planner in both Israel and America, I have over two decades experience in counseling American olim on the benefits of maintaining an American brokerage firm while living in Israel. Benefits include:

Tax Reporting Benefits

Keeping an American brokerage account makes tax reporting to America easier. Long and short term gains/losses are reported according to the IRS’s requirements. This makes tax filing easier (and cost efficient) on 1099s, FBARs, and other forms that Americans must file.

Tax Deferred Benefits

Keeping an American IRA (Individual Retirement Account, often held through a U.S. brokerage company) or 401(k) account means you can maintain the tax-deferred status of your funds. If you transfer these accounts out of America, you lose the tax benefits and may owe penalties as well.

Safety Benefits

American brokerage accounts have an extremely high level of transparency and government regulation. While SIPC insurance can’t guard an investor against regular market volatility, the protection gives millions of investors peace of mind.

You Can Keep American IRAs             

Keep in mind that an American brokerage account can’t replace your local Israeli bank account for day-to-day services. Nor can it hold Israeli pension and Israeli tax-free savings accounts (which may still be taxable in America).

However, an American IRA account is the most common tool used to maintain the tax-deferred status of retirement funds. For help managing your American brokerage/retirement accounts in Israel, watch the video at www.Profile-Financial.com/USAccounts and call Profile Investment Services, Ltd., (02) 624-2788.

Neither Profile nor PRG provides tax or legal advice. Consult an accountant or an attorney on such matters before taking any action.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates

Is Financial Success Just a Matter of Luck?

By Douglas Goldstein, CFP®

Is financial success more about planning or luck?

In the book Rich Kids, Tom Corley discusses three different kinds of luck:

Random luck is the kind of luck we can't control. Random good luck includes winning the lottery or getting an unexpected windfall. Conversely, examples of random bad luck include sudden illness or being struck by lightning.

Opportunity luck is good luck created as a result of your actions. You can create good luck by following positive "rich" habits that enrich your lifestyle and protect you from fiscal harm. An example of this would be getting an unexpected bonus from work, based on your diligent work. If you hadn't worked hard and made yourself indispensable to your company, you may not have received a reward. In other words, your hard work created this piece of good luck. By following good practices, you are able to create your own good fortune.

Detrimental luck is the dark side of opportunity luck. This is when, as a result of following "poverty habits," bad things happen. For example, poor money habits, such as overspending and not saving, can bring you to a financial crisis. If your bad financial habits mean that you don't have an emergency fund, then you can easily find yourself in a financial crisis.

What is the best way to create your own good luck?

Random luck will never be within your control. But you can create better opportunities for yourself and head off potential crises by adopting rich habits. Following a positive lifestyle gives you a positive outlook and the tools to create better opportunities for you.

Acquiring good habits may be easier said than done. To learn how to create habits that really stick, listen to my podcast at www.richasaking.com/61.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Is Financial Success Just a Matter of Luck?

By Douglas Goldstein, CFP®

Is financial success more about planning or luck?

In the book Rich Kids, Tom Corley discusses three different kinds of luck:

Random luck is the kind of luck we can’t control. Random good luck includes winning the lottery or getting an unexpected windfall. Conversely, examples of random bad luck include sudden illness or being struck by lightning.

Opportunity luck is good luck created as a result of your actions. You can create good luck by following positive “rich” habits that enrich your lifestyle and protect you from fiscal harm. An example of this would be getting an unexpected bonus from work, based on your diligent work. If you hadn’t worked hard and made yourself indispensable to your company, you may not have received a reward. In other words, your hard work created this piece of good luck. By following good practices, you are able to create your own good fortune.

Detrimental luck is the dark side of opportunity luck. This is when, as a result of following “poverty habits,” bad things happen. For example, poor money habits, such as overspending and not saving, can bring you to a financial crisis. If your bad financial habits mean that you don’t have an emergency fund, then you can easily find yourself in a financial crisis.

What is the best way to create your own good luck?

Random luck will never be within your control. But you can create better opportunities for yourself and head off potential crises by adopting rich habits. Following a positive lifestyle gives you a positive outlook and the tools to create better opportunities for you.

Acquiring good habits may be easier said than done. To learn how to create habits that really stick, listen to my podcast at www.richasaking.com/61.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

How Modern Portfolio Theory Can Make You a Better Investor

By Douglas Goldstein, CFP®

Can “Modern Portfolio Theory” increase your investment returns?

Recently, on The Goldstein on Gelt Show, I spoke with the inventor of Modern Portfolio Theory, Nobel Prize in Economics winner, Dr. Harry Markowitz.

Dr. Markowitz explained various aspects of Modern Portfolio Theory and its impact on the individual investor. His theory explains how to construct an investment portfolio by optimizing expected returns based on the level of market risk. The goal is to help investors construct portfolios to maximize returns while limiting risk as much as possible. By combining various asset classes in one portfolio, Markowitz explains, the overall account may have a lower volatility and higher return than a portfolio that isn’t properly optimized.

Can theories really help investors?

When investors are faced with market upheaval, they often panic and lose confidence. When I asked Dr. Markowitz how to advise clients during turbulent markets, he spoke about the common mistakes that individual investors make:

“The chief error that the small investor makes is buying when the market has gone up and he assumes it’s going to go up further, and then he sells when the market has gone down and he thinks it’s going to go down more.”

He contrasted this investing model to using Modern Portfolio Theory to rebalance your portfolio to reflect market conditions. If used in the right way, MPT can be effective in turbulent times. When I speak with clients about their U.S. brokerage accounts or their investments in the Individual Retirement Accounts (IRAs), I realize that it’s difficult for them to look objectively at their own money. We all have our emotions tied up in our net worth. But when money managers use MPT to design a portfolio, it can help remove some of the emotional bias that might wrongly influence the way people invest.

To find out more about Modern Portfolio Theory, listen to our discussion at: http://www.goldsteinongelt.com/markowitz

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

How Modern Portfolio Theory Can Make You a Better Investor

By Douglas Goldstein, CFP®

Can “Modern Portfolio Theory” increase your investment returns?

Recently, on The Goldstein on Gelt Show, I spoke with the inventor of Modern Portfolio Theory, Nobel Prize in Economics winner, Dr. Harry Markowitz.

Dr. Markowitz explained various aspects of Modern Portfolio Theory and its impact on the individual investor. His theory explains how to construct an investment portfolio by optimizing expected returns based on the level of market risk. The goal is to help investors construct portfolios to maximize returns while limiting risk as much as possible. By combining various asset classes in one portfolio, Markowitz explains, the overall account may have a lower volatility and higher return than a portfolio that isn’t properly optimized.

Can theories really help investors?

When investors are faced with market upheaval, they often panic and lose confidence. When I asked Dr. Markowitz how to advise clients during turbulent markets, he spoke about the common mistakes that individual investors make:

 “The chief error that the small investor makes is buying when the market has gone up and he assumes it’s going to go up further, and then he sells when the market has gone down and he thinks it’s going to go down more.”

He contrasted this investing model to using Modern Portfolio Theory to rebalance your portfolio to reflect market conditions. If used in the right way, MPT can be effective in turbulent times. When I speak with clients about their U.S. brokerage accounts or their investments in the Individual Retirement Accounts (IRAs), I realize that it’s difficult for them to look objectively at their own money. We all have our emotions tied up in our net worth. But when money managers use MPT to design a portfolio, it can help remove some of the emotional bias that might wrongly influence the way people invest.

To find out more about Modern Portfolio Theory, listen to our discussion at: http://www.goldsteinongelt.com/markowitz

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Avoid Making This Mistake with an Inherited IRA

By Douglas Goldstein, CFP®

If you are the beneficiary of an inherited IRA, avoid immediately withdrawing the money. If you make an immediate withdrawal, you might forfeit the tax-deferred status of the account and be subject to paying taxes. A proper withdrawal strategy for an inherited IRA can minimize your tax bill.

What you need to know when you inherit an IRA

In an effort to encourage savings, America lets the assets inside an IRA account grow tax deferred – owners only pay tax once the funds are withdrawn. If you are the beneficiary of an IRA, depending on how you title the account and withdraw the assets, you too can take advantage of tax-deferred growth. Any mistake made in titling, transferring, or withdrawing funds may not only cause you to lose future tax-deferred growth, but also may make you liable to pay current taxes on the funds. To maintain the tax- deferred status, your new account must be coded as a “beneficiary IRA” by the custodian of the account.

The inherited assets in an IRA can be sold, and other securities bought in accordance with the new owner’s wishes. There is no need to maintain the inheritance in the exact positions as you received it.

What you need when planning your estate

If you have an IRA, make sure you list beneficiaries so that one day, the IRA’s assets are not subject to your estate’s probate. Update your paperwork, especially after a divorce, to ensure that the beneficiaries are the people you actually want to receive the funds. Make sure to mention to your beneficiaries that when the time comes, they should check with their financial advisors about how to best handle the inherited account.

Can you move an inherited IRA to Israel?

Can you transfer an inherited IRA to Israel? Unfortunately, once the funds leave America they lose the tax-deferred status of beneficiary accounts. Therefore, it is crucial that you open a “beneficiary” IRA account with a U.S. brokerage company or bank.

If you need help opening or dealing with an inherited IRA or opening a U.S. brokerage account, go to: www.Profile-Financial.com/inheritedIRA.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Avoid Making This Mistake with an Inherited IRA

By Douglas Goldstein, CFP®

If you are the beneficiary of an inherited IRA, avoid immediately withdrawing the money. If you make an immediate withdrawal, you might forfeit the tax-deferred status of the account and be subject to paying taxes. A proper withdrawal strategy for an inherited IRA can minimize your tax bill.

What you need to know when you inherit an IRA

In an effort to encourage savings, America lets the assets inside an IRA account grow tax deferred – owners only pay tax once the funds are withdrawn. If you are the beneficiary of an IRA, depending on how you title the account and withdraw the assets, you too can take advantage of tax-deferred growth. Any mistake made in titling, transferring, or withdrawing funds may not only cause you to lose future tax-deferred growth, but also may make you liable to pay current taxes on the funds. To maintain the tax- deferred status, your new account must be coded as a “beneficiary IRA” by the custodian of the account.

The inherited assets in an IRA can be sold, and other securities bought in accordance with the new owner’s wishes. There is no need to maintain the inheritance in the exact positions as you received it.

What you need when planning your estate

If you have an IRA, make sure you list beneficiaries so that one day, the IRA’s assets are not subject to your estate’s probate. Update your paperwork, especially after a divorce, to ensure that the beneficiaries are the people you actually want to receive the funds. Make sure to mention to your beneficiaries that when the time comes, they should check with their financial advisors about how to best handle the inherited account.

Can you move an inherited IRA to Israel?                                                  

Can you transfer an inherited IRA to Israel? Unfortunately, once the funds leave America they lose the tax-deferred status of beneficiary accounts. Therefore, it is crucial that you open a “beneficiary” IRA account with a U.S. brokerage company or bank.

If you need help opening or dealing with an inherited IRA or opening a U.S. brokerage account, go to: www.Profile-Financial.com/inheritedIRA.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

How to Avoid Tax Mistakes When You Receive an Inheritance

By Douglas Goldstein, CFP®

When receiving an inheritance, it’s important to avoid making tax mistakes. Certain tactics, such as opening a U.S. brokerage account (see below for an interactive tool) can help. Watch out for these mistakes:

Mistake #1 – Taking money out of an IRA

To maintain the tax-deferred status of an inherited IRA (Individual Retirement Account), the money must remain in a specially titled account. As an heir, you can transfer the IRA into a “beneficiary IRA” (a.k.a. “stretch IRA”) and not pay taxes on the account’s capital growth until money is withdrawn. Transferring the money overseas jeopardizes the tax beneficial status. As many overseas bankers and investment advisors may not know this crucial piece of information, work with professionals who are well-versed in cross-border investing and tax law.

Mistake #2 – Choosing the wrong investments for an IRA

The IRS allows U.S. citizens not to pay capital gains tax (or tax on interest and dividends) when they sell stocks for a profit inside an IRA. Since you don’t pay capital gains tax on profits, your growth is compounded, because you’re not giving a piece away every year to the government. Generally, annuities, municipal bonds, and other tax-advantageous investments should not be part of an IRA.

Mistake #3 – Not strategizing for estate tax

American citizens who bequeath their estates to their American children are exempt from estate tax if the estate (as of 2015) is under $5.4 million. If you think your future inheritance will be above that amount, strategize with your investment advisor and tax professional to minimize potential taxes. If you live in a different country than your beneficiary, make sure that your strategy includes avoiding tax mistakes.

If you think you might inherit an American IRA, use this free interactive tool to help you realize why opening a U.S. brokerage IRA account may be a good tax saving strategy. Try it at www.Profile-Financial.com/Interactive and then call our office with questions (02-624-2788).

Doug Goldstein, CFP® is the director of Profile Investment Services, Ltd., a firm that specializes in cross-border investing and helping people open U.S. brokerage accounts from overseas. He is a licensed financial advisor both in America and Israel, and does not give tax advice. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Call 02-624-2788 for a consultation about handling your U.S. investments from Israel.