4-Minute Money Ideas

Note: After reading the following true story, try the free Investment Evaluation Tool to determine if you are invested more aggressively than you should be. Details for accessing the tool are below.

When I talk with people about how they should structure their U.S. investment accounts, one of the common questions I ask is how long do they plan to keep the money invested. Folks who see themselves as “long-term” investors can often take on the added risk of the stock market.

What about long-term investors who don’t need growth?

I recently met with a couple who were good earners, solid savers, and on top of it all, had inherited a sizeable amount of money.  They told me that they thought they should invest mostly in the stock market.

“Why do you need to take on the added risk of stocks?” I asked.

They felt that they should invest for growth because “that’s what everyone does.” I told them that even though the media and popular websites might tell people that they must invest in the stock market if they’re long-term investors, it’s not always true. In fact, there might be a much better way for them to invest. Rather than focusing on growing their money in the long term, they could consider improving their life in the short term.

I explained that they could convert some, or all, of their portfolio into investments that would produce regular income and then they could cut down the number of hours they worked. Alternatively, they could use some of that extra income for enjoyable expenses like vacations and renovations.

“I’m surprised you say that, Doug,” the wife said. “I assumed you would tell us to invest in the stock market.” I replied that people should invest not only based on their tolerance for risk, but also on their specific needs.

Is your portfolio invested more aggressively than it should be? Try the free “Investment Evaluation Tool” at www.Profile-Financial.com/investment-evaluation or call (02) 624-2788. Consult with a financial advisor before investing to better evaluate the risks, costs, and potential benefits given your specific situation. An investment suitable for one person may not be suitable for another.

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.

Is Panic the Best Reaction to a Drop in the Market?

By Douglas Goldstein, CFP®

As an investment advisor who helps olim manage their American brokerage accounts, I’m often asked, “Why should I invest in the stock market when it only goes down?”

If you believe that the stock market only goes down, then putting your money in stocks is a big mistake. The people who tend to make money in the stock market aren’t investing for the short term. They realize the market can, and sometimes does, drop, but their long-term time frame allows for plenty of opportunity for the market to recover. If you’re trying to grow your wealth and believe that the economy will strengthen, the stock market offers many possibilities. Remember: “possibilities” does not mean guaranteed gains; it includes the very real chance of loss.

Folks who can’t tolerate volatility should avoid the market. This doesn’t mean that you have to panic, sell everything, and bury your treasure in your backyard. There are investing opportunities that aren’t based on stocks that may be appropriate for those with a lower risk tolerance.

One trick to avoid panic

A well-diversified portfolio is in a better position to weather market drops. If you only invest in a few stocks and those sectors are weak, your losses will be larger than if your investments were spread out among more sectors/stocks. Diversification is a good tool for mitigating risk, and allows those who otherwise may have a lower risk tolerance to stay invested in the market.

The most popular tools

Common investment tools for diversifying risk include using mutual funds, ETFs (Exchange Traded Funds), and money managers. Some of these approaches follow a “low volatility” model that can help to protect you on the downside, though they do not actually eliminating risk. Other tools can actually leverage your investment, making a move even faster than the market. If you bet in the right direction, that can be great. But beware… leveraged funds will drop faster than the market if it falls. Make sure you speak with a qualified investment advisor before doing any investing.

To find out more about some of the different tools that people use to invest both using stocks and other tools (bonds, bond funds, etc.) watch the videos at www.Profile-Financial.com/FAQ-videos.

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.

Is Panic the Best Reaction to a Drop in the Market?

By Douglas Goldstein, CFP®

As an investment advisor who helps olim manage their American brokerage accounts, I’m often asked, “Why should I invest in the stock market when it only goes down?” 

If you believe that the stock market only goes down, then putting your money in stocks is a big mistake. The people who tend to make money in the stock market aren’t investing for the short term. They realize the market can, and sometimes does, drop, but their long-term time frame allows for plenty of opportunity for the market to recover. If you’re trying to grow your wealth and believe that the economy will strengthen, the stock market offers many possibilities. Remember: “possibilities” does not mean guaranteed gains; it includes the very real chance of loss.

Folks who can’t tolerate volatility should avoid the market. This doesn’t mean that you have to panic, sell everything, and bury your treasure in your backyard. There are investing opportunities that aren’t based on stocks that may be appropriate for those with a lower risk tolerance.

One trick to avoid panic

A well-diversified portfolio is in a better position to weather market drops. If you only invest in a few stocks and those sectors are weak, your losses will be larger than if your investments were spread out among more sectors/stocks. Diversification is a good tool for mitigating risk, and allows those who otherwise may have a lower risk tolerance to stay invested in the market.

The most popular tools

Common investment tools for diversifying risk include using mutual funds, ETFs (Exchange Traded Funds), and money managers. Some of these approaches follow a “low volatility” model that can help to protect you on the downside, though they do not actually eliminating risk. Other tools can actually leverage your investment, making a move even faster than the market. If you bet in the right direction, that can be great. But beware… leveraged funds will drop faster than the market if it falls. Make sure you speak with a qualified investment advisor before doing any investing.

To find out more about some of the different tools that people use to invest both using stocks and other tools (bonds, bond funds, etc.) watch the videos at www.Profile-Financial.com/FAQ-videos.

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 to Solve this Common Problem with American Brokerage Accounts

By Douglas Goldstein, CFP®

I often receive calls at my office from people who say that their U.S. investment advisor asked them to change firms. It’s not because they don’t meet the minimum balance requirements. Rather, it’s just because they have chosen to live overseas.

For various regulatory reasons, several large investment companies in the United States have decided to stop servicing clients who live abroad, many American olim included. Stringent legislation designed to prevent terrorism, money-laundering, and other criminal activities has made it much harder for U.S. brokerage firms to deal with cross-border finance. For this reason, some firms that used to work with U.S. citizens living overseas have decided that it is no longer worth their while to do so. Despite the legislators’ intentions to hurt terrorists, many law-abiding citizens who live overseas are also feeling a negative effect from the war on terror.

If you’ve recently gotten a phone call or a letter from your mutual fund company or brokerage firm in America, don’t worry. There is a solution (other than selling your assets and transferring to Israel – an especially tax-disadvantageous move if you own American tax-deferred accounts like IRAs).

How to easily transfer your account to another American brokerage firm

Not every American brokerage firm rejects multi-nationals. Indeed, some major companies embrace the potential of overseas business. You can easily transfer your account to a company who welcomes Americans with foreign addresses. Just fill out an “account transfer form.” Within a short period of time, your old firm can simply transfer the assets to the new firm and you can continue with all of the same types of investments (and tax-beneficial accounts like IRAs) that you’ve always done. In any case, it is a good opportunity to review your investment portfolio.

If you’re not sure why your current advisor has said goodbye to you or if you want to find out how easy it would be to transfer your account to a more Israel-friendly firm, use this interactive form at www.profile-financial.com/interactive.

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 to Solve this Common Problem with American Brokerage Accounts

By Douglas Goldstein, CFP®

I often receive calls at my office from people who say that their U.S. investment advisor asked them to change firms. It’s not because they don’t meet the minimum balance requirements. Rather, it’s just because they have chosen to live overseas.

For various regulatory reasons, several large investment companies in the United States have decided to stop servicing clients who live abroad, many American olim included. Stringent legislation designed to prevent terrorism, money-laundering, and other criminal activities has made it much harder for U.S. brokerage firms to deal with cross-border finance. For this reason, some firms that used to work with U.S. citizens living overseas have decided that it is no longer worth their while to do so. Despite the legislators’ intentions to hurt terrorists, many law-abiding citizens who live overseas are also feeling a negative effect from the war on terror.

If you’ve recently gotten a phone call or a letter from your mutual fund company or brokerage firm in America, don’t worry. There is a solution (other than selling your assets and transferring to Israel – an especially tax-disadvantageous move if you own American tax-deferred accounts like IRAs).

How to easily transfer your account to another American brokerage firm

Not every American brokerage firm rejects multi-nationals. Indeed, some major companies embrace the potential of overseas business. You can easily transfer your account to a company who welcomes Americans with foreign addresses.  Just fill out an “account transfer form.” Within a short period of time, your old firm can simply transfer the assets to the new firm and you can continue with all of the same types of investments (and tax-beneficial accounts like IRAs) that you’ve always done. In any case, it is a good opportunity to review your investment portfolio.

If you’re not sure why your current advisor has said goodbye to you or if you want to find out how easy it would be to transfer your account to a more Israel-friendly firm, use this interactive form at www.profile-financial.com/interactive.

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.

What You Need to Know When Blending Two Families

By Douglas Goldstein, CFP®

Many second marriages are the blending of two families, not just two people. This situation raises various questions about child support, how to divide household bills, and inheritance issues. To ensure a smooth financial union, make sure to discuss these issues before the actual ceremony takes place.

Sign on the dotted line

A financial prenuptial agreement detailing which assets belong to whom and which funds will be used for specific purposes such as children’s college funds and weddings is critical in second marriages. Both spouses should use their own lawyer and the couple should meet with a financial advisor who has experience with blended families to discuss the fairest ways to protect their financial responsibilities and their children.

Joint and separate accounts

Sometimes it makes sense to keep three separate bank accounts in second marriages: his, hers, and joint. Individual accounts can continue to support previous financial commitments (child support, tuition, etc.) and a joint bank account can cover the shared expenses of your new joint life.

Plan your endgame carefully

Some of the most difficult family disputes are between children and stepchildren over a deceased parent’s assets. Should the children from the first marriage share an inheritance with step-children from the second marriage? Obviously these issues need to be handled on a case-by-case basis, depending both on the financial status of both sides pre- and post-second marriage, and the ages of separate and shared children.

To avoid bickering over assets and family heirlooms, estate planning is crucial. There are various ways to make sure that everyone is taken care of, from stating specific beneficiaries on your life insurance policy to creating a trust with a lifetime clause for the surviving spouse, but with your children as heirs. Titling investment accounts properly can ease inheritance (as well as tax) issues.

If you are in your second marriage and haven’t yet discussed these issues with your spouse, now is the time. Consider updating your adult children as to the result of the conversation, so there will be no surprises. Contact your financial advisor today to see if there are any changes that need to be made with titling bank accounts or updating beneficiaries.

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.

What You Need to Know When Blending Two Families

By Douglas Goldstein, CFP®

Many second marriages are the blending of two families, not just two people. This situation raises various questions about child support, how to divide household bills, and inheritance issues. To ensure a smooth financial union, make sure to discuss these issues before the actual ceremony takes place.

Sign on the dotted line

A financial prenuptial agreement detailing which assets belong to whom and which funds will be used for specific purposes such as children’s college funds and weddings is critical in second marriages. Both spouses should use their own lawyer and the couple should meet with a financial advisor who has experience with blended families to discuss the fairest ways to protect their financial responsibilities and their children.

Joint and separate accounts

Sometimes it makes sense to keep three separate bank accounts in second marriages: his, hers, and joint. Individual accounts can continue to support previous financial commitments (child support, tuition, etc.) and a joint bank account can cover the shared expenses of your new joint life.

Plan your endgame carefully

Some of the most difficult family disputes are between children and stepchildren over a deceased parent’s assets. Should the children from the first marriage share an inheritance with step-children from the second marriage? Obviously these issues need to be handled on a case-by-case  basis, depending both on the financial status of both sides pre- and post-second marriage, and the ages of separate and shared children. 

To avoid bickering over assets and family heirlooms, estate planning is crucial. There are various ways to make sure that everyone is taken care of, from stating specific beneficiaries on your life insurance policy to creating a trust with a lifetime clause for the surviving spouse, but with your children as heirs. Titling investment accounts properly can ease inheritance (as well as tax) issues.

If you are in your second marriage and haven’t yet discussed these issues with your spouse, now is the time. Consider updating your adult children as to the result of the conversation, so there will be no surprises. Contact your financial advisor today to see if there are any changes that need to be made with titling bank accounts or updating beneficiaries.

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.

Why You Need to Think Big and Start Small to Get Rich

By Douglas Goldstein, CFP®

One of the most effective ways to achieve your financial goal is to develop good habits. Here’s what you need to know:

Rome wasn’t built in a day

Acquiring good financial habits does not happen overnight. First, you need to decide what you want to change, such as your spending or saving habits, budgets, etc. Whatever you decide to change, make sure you are beginning with a small step. Habits built on small, but steady, steps take hold quicker and last longer than sudden drastic changes.

One small target at a time

If you want to become less extravagant and more careful about spending your money, start by writing down what you spend every day for a week. When you have done that, think of which of your regular purchases are unnecessary. Rather than dropping them all at once, gradually phase them out of your shopping list, one item at a time, week by week. At first this may be difficult for you, but each time you successfully save some money and reduce your spending you will find it easier to progress.

Similarly with saving, start by saving a small amount monthly, and then increase it until you are saving a sizeable amount on a yearly basis. To make sure you actually implement your savings plan, make sure to implement the habit of paying yourself first, before other bills. That way, putting money into savings will become as much of a habit as paying your electric bill.

For more about changing your habits, listen to my interview with James Clear, author of Transform Your Habits at www.GoldsteinOnGelt.com/james-clear.

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.

Why You Need to Think Big and Start Small to Get Rich

By Douglas Goldstein, CFP® 

One of the most effective ways to achieve your financial goal is to develop good habits. Here’s what you need to know:

Rome wasn’t built in a day

Acquiring good financial habits does not happen overnight. First, you need to decide what you want to change, such as your spending or saving habits, budgets, etc. Whatever you decide to change, make sure you are beginning with a small step. Habits built on small, but steady, steps take hold quicker and last longer than sudden drastic changes.

One small target at a time

If you want to become less extravagant and more careful about spending your money, start by writing down what you spend every day for a week. When you have done that, think of which of your regular purchases are unnecessary. Rather than dropping them all at once, gradually phase them out of your shopping list, one item at a time, week by week. At first this may be difficult for you, but each time you successfully save some money and reduce your spending you will find it easier to progress.

Similarly with saving, start by saving a small amount monthly, and then increase it until you are saving a sizeable amount on a yearly basis. To make sure you actually implement your savings plan, make sure to implement the habit of paying yourself first, before other bills. That way, putting money into savings will become as much of a habit as paying your electric bill.

For more about changing your habits, listen to my interview with James Clear, author of Transform Your Habits at www.GoldsteinOnGelt.com/james-clear.

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.

What is the Best Way to Transfer Dollars to Israel?

By Douglas Goldstein, CFP®

When clients ask to transfer dollars from their U.S. investment account to their Israeli bank, the details they must provide sometimes take them by surprise.

Living in a different country from your assets means that money transfers are necessary to meet your cash-flow needs. Following procedures properly can expedite the process.

The easy system of transferring funds

Although we help people choose investments for their U.S. brokerage, IRA, and 401(k) accounts, many clients seek more than advice on what to buy/sell. They are looking for service and attention to details.

When transferring funds, you must pay meticulous attention to details. Even if all the account numbers, names, and addresses match up, the clearing firm often asks additional questions. Because of regulatory concerns and anti-money-laundering policies, compliance officers can require documentation related to the purpose of the funds. This means that what you might have expected to be a quick wire ends up taking longer. (Typically it can take two or three business days for a routine dollar wire to settle. And, if you then need to convert the dollars to shekels it can be even longer until you have access to your money.)

Timing is crucial if you plan to transfer your American assets to Israel. If you leave adequate time for the inevitable back-and-forth, you should be fine. On the other hand, waiting until the last minute to request a money transfer could create a ripple effect of difficulties. Be prepared, and begin the transfer process well in advance. Remember money doesn’t move in America on Sunday or on bank holidays.

Is service important with bank transfers?

Moving money is more complicated than simply pushing a button. Having a good relationship with your bank or money transfer company is crucial, especially if they need to hunt down a lost wire. Make sure that any company you use to transfer funds is legal and properly qualified to handle your money. Following money-transfer instructions carefully is crucial to make sure your money lands in the right spot in a timely fashion.

For more strategies to best manage a multi-currency lifestyle, go to www.profile-financial.com/multicurrency.

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.