4-Minute Money Ideas

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.

Do All Married Couples Need to Share Their Money?

By Douglas Goldstein, CFP®

What’s the ideal way to handle your money?

In a perfect world, married couples merge their lives as well as their finances, and have joint accounts. However, sometimes a couple can be connected at the heart but have separate bank accounts. While partners should look at their overall assets together, depending on the circumstances, sometimes having separate accounts is more appropriate.

A second marriage

Most people enter second marriages with financial baggage from their first marriage. Either partners may be supporting children, or they may have debts incurred by the cost of a divorce. This creates a delicate situation, balancing the financial needs of merged families. To resolve issues such as making sure that children from the first marriage are supported or that one spouse is not responsible for the other spouse’s debts, separate accounts may be a wise idea. It creates clarity and makes sure that each side is discharging his/her financial obligations. There is also the option of keeping some accounts separate and having a joint account for mutual household needs.

Should both names be on your U.S. brokerage accounts?

Similarly, with regard to U.S. brokerage accounts, in the situation of a second marriage both partners may consider having an individual account or an account that is called "joint tenants with right to survivorship." For retirement accounts, anyone who is concerned about the rights of children from a first marriage may want to name specific beneficiaries, as well as contingent beneficiaries who would receive the money upon their death. It’s important to review these different possibilities when opening an account because once it is set up, changing account titles is cumbersome and may have tax implications.

If you or your spouse have financial baggage, it is crucial to make sure your financial planning identifies the various issues involved and is set up properly. If you have questions whether your investment accounts should be held jointly or separately from your spouse, it’s time for an open conversation with both your spouse and financial advisor.

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.

Do All Married Couples Need to Share Their Money?

By Douglas Goldstein, CFP®          

What’s the ideal way to handle your money?

In a perfect world, married couples merge their lives as well as their finances, and have joint accounts. However, sometimes a couple can be connected at the heart but have separate bank accounts. While partners should look at their overall assets together, depending on the circumstances, sometimes having separate accounts is more appropriate.

A second marriage

Most people enter second marriages with financial baggage from their first marriage. Either partners may be supporting children, or they may have debts incurred by the cost of a divorce. This creates a delicate situation, balancing the financial needs of merged families. To resolve issues such as making sure that children from the first marriage are supported or that one spouse is not responsible for the other spouse’s debts, separate accounts may be a wise idea. It creates clarity and makes sure that each side is discharging his/her financial obligations. There is also the option of keeping some accounts separate and having a joint account for mutual household needs.

Should both names be on your U.S. brokerage accounts?

Similarly, with regard to U.S. brokerage accounts, in the situation of a second marriage both partners may consider having an individual account or an account that is called "joint tenants with right to survivorship." For retirement accounts, anyone who is concerned about the rights of children from a first marriage may want to name specific beneficiaries, as well as contingent beneficiaries who would receive the money upon their death. It’s important to review these different possibilities when opening an account because once it is set up, changing account titles is cumbersome and may have tax implications.

If you or your spouse have financial baggage, it is crucial to make sure your financial planning identifies the various issues involved and is set up properly. If you have questions whether your investment accounts should be held jointly or separately from your spouse, it’s time for an open conversation with both your spouse and financial advisor.

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 Make the Most Out of Your Parents’ Stocks

By Douglas Goldstein, CFP®

What should you do if you inherit a portfolio of stocks from your parents?

Should you sell them?

To answer the question of whether you should sell the stocks, start by asking yourself whether you would buy these stocks if you had extra cash.

You have no moral or legal obligation to keep the positions just because your parents owned them. I’ve had people come into my office with stocks that their parents bought decades earlier, and they said, “My father said this was such a great company that I should never sell the stock.” But how could anyone have known whether a company that was in business 10 or 20 years ago would still be a good investment today? Remember Pan Am, Blockbuster, or Enron? Even though your father’s research many years ago suggested that a company would be a good buy, times have probably changed.

What about the tax I’ll have to pay?

Everyone is in a different tax situation, but people who live and die in the United States benefit from an IRS rule called the “cost-basis step-up.” That means that if your father invested $1,000 in the stock and the value of that position grew to $100,000 on the day of his death, if you sold it the following day for $100,000, the IRS would not consider the transaction as if you had just profited by $99,000. Instead, they reset the purchase price of the stock to the value at which you inherited it ($100,000) so you would not have to pay capital gains tax. [This is an overly simplified example, and depending where you live, there could be other taxes associated. Be sure you get proper tax advice before making any trades.]

If you receive the stocks in a U.S. brokerage account or Individual Retirement Account (IRA), you may need to follow certain specific steps in order to take control of them. Feel free to contact our office if you have questions about dealing with an inheritance (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. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. 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.

How to Make the Most Out of Your Parents’ Stocks

By Douglas Goldstein, CFP®

What should you do if you inherit a portfolio of stocks from your parents?

Should you sell them?

To answer the question of whether you should sell the stocks, start by asking yourself whether you would buy these stocks if you had extra cash.

You have no moral or legal obligation to keep the positions just because your parents owned them. I’ve had people come into my office with stocks that their parents bought decades earlier, and they said, “My father said this was such a great company that I should never sell the stock.”  But how could anyone have known whether a company that was in business 10 or 20 years ago would still be a good investment today? Remember Pan Am, Blockbuster, or Enron?  Even though your father’s research many years ago suggested that a company would be a good buy, times have probably changed.

What about the tax I’ll have to pay?

Everyone is in a different tax situation, but people who live and die in the United States benefit from an IRS rule called the “cost-basis step-up.”  That means that if your father invested $1,000 in the stock and the value of that position grew to $100,000 on the day of his death, if you sold it the following day for $100,000, the IRS would not consider the transaction as if you had just profited by $99,000. Instead, they reset the purchase price of the stock to the value at which you inherited it ($100,000) so you would not have to pay capital gains tax. [This is an overly simplified example, and depending where you live, there could be other taxes associated. Be sure you get proper tax advice before making any trades.]

If you receive the stocks in a U.S. brokerage account or Individual Retirement Account (IRA), you may need to follow certain specific steps in order to take control of them. Feel free to contact our office if you have questions about dealing with an inheritance (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. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. 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.

What You Need to Know About Start-Up Investing

By Douglas Goldstein, CFP®

In a dramatic repeat of what I saw many times in the late 1990s-2000, another start-up company just collapsed, taking with it millions of dollars from investors’ pockets. Not only are the founders’ dream shattered, but its investors’ profits are destroyed and cash lost.

As a financial advisor, I review many new companies from the investor’s viewpoint. In almost every case, the story ends badly.

Don’t invest unless you know how

The main cause of these disastrous results stems from investors putting their money into an idea instead of into a team. Many great ideas fail because of bad management, but lots of new concepts – even mediocre ones – turn into solid businesses when handled properly. Venture capital professionals won’t even consider investing in a company unless they’re convinced that the team running it is qualified and has a robust business plan.

How to analyze a business plan

If this article is your only lesson on how to evaluate a business plan, then you certainly aren’t a candidate to be an “angel” or venture capital investor. People spend years refining their skills in how to analyze business plans and offering documents.

VC pros never start by reading about the anticipated profits of the start-up, since these projections lack real substance. Instead, they look at the salaries that the team hopes to make (all taken from the investors’ money) and how the money will be spent. The case I recently witnessed showed how the investor didn’t consider those two most important factors before dedicating his money. The failed company significantly overpaid all of the team members and blew large sums of money on new offices and unnecessary state-of-art equipment (when other cost-efficient equipment would have been satisfactory in producing the same product).

Still want to invest in a start-up company?

In my weekly podcast about how the strategies of chess can be applied to investing, I have dedicated Episode 85 to start-up investing. Check it out at www.RichAsAKing.com/85.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. 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.

What You Need to Know About Start-Up Investing

By Douglas Goldstein, CFP®

In a dramatic repeat of what I saw many times in the late 1990s-2000, another start-up company just collapsed, taking with it millions of dollars from investors’ pockets. Not only are the founders’ dream shattered, but its investors’ profits are destroyed and cash lost.

As a financial advisor, I review many new companies from the investor’s viewpoint. In almost every case, the story ends badly.

Don’t invest unless you know how

The main cause of these disastrous results stems from investors putting their money into an idea instead of into a team. Many great ideas fail because of bad management, but lots of new concepts – even mediocre ones – turn into solid businesses when handled properly. Venture capital professionals won’t even consider investing in a company unless they’re convinced that the team running it is qualified and has a robust business plan.

How to analyze a business plan

If this article is your only lesson on how to evaluate a business plan, then you certainly aren’t a candidate to be an “angel” or venture capital investor. People spend years refining their skills in how to analyze business plans and offering documents.

VC pros never start by reading about the anticipated profits of the start-up, since these  projections lack real substance. Instead, they look at the salaries that the team hopes to make (all taken from the investors’ money) and how the money will be spent. The case I recently witnessed showed how the investor didn’t consider those two most important factors before dedicating his money. The failed company significantly overpaid all of the team members and blew large sums of money on new offices and unnecessary state-of-art equipment (when other cost-efficient equipment would have been satisfactory in producing the same product).

Still want to invest in a start-up company?

In my weekly podcast about how the strategies of chess can be applied to investing, I have dedicated Episode 85 to start-up investing. Check it out at www.RichAsAKing.com/85.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. 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.

What to Do With Your Money at the End of the Year

By Douglas Goldstein, CFP®

As the fiscal year draws to a close, it’s time to review your financial plan. Here are three important aspects that you need to look at:

Savings goals

What are your long-term and short-term goals? Are they the same as they were last year? If your goals are both time and dollar specific, it’s easy to tell whether you are on target to meeting them. Take a look at your pension plan. Is the division of funds among its saving and insurance component still relevant to your current stage in life?

Asset allocation

Apart from saving your money, you also need to grow it. So let’s look at your investments. Are your funds properly invested? Your investments should reflect your risk tolerance, growth objective, and time frame. Recheck your asset allocation to ensure that everything is in order following the movements of the markets over the past year. Often funds can change focus, requiring you to rebalance your portfolio. Furthermore, if a stock or other security does extremely well (or extremely poorly), this can also affect the balance of a portfolio. It may be time to buy/sell.

Review Your Winners and Losers

Before selling weak stocks/funds and actualizing profits, discuss the potential tax ramifications of the sale with your accountant. Depending on your situation, it may be wise to hold onto investments for at least one whole calendar year to qualify for the long-term capital gains rate (if you are a U.S. tax payer). While tax ramifications shouldn’t be the only factor in determining when to sell, they should certainly be taken into consideration.

Don’t let the end of the year pass you by. Call your financial advisor for an appointment today to review your financial plan. Make sure your finances are in the best shape to enable you to realize your dreams.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing is available at www.richasaking.com. 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, SIFMA, 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.

What to Do With Your Money at the End of the Year

By Douglas Goldstein, CFP®

As the fiscal year draws to a close, it’s time to review your financial plan. Here are three important aspects that you need to look at:

Savings goals

What are your long-term and short-term goals? Are they the same as they were last year? If your goals are both time and dollar specific, it’s easy to tell whether you are on target to meeting them. Take a look at your pension plan. Is the division of funds among its saving and insurance component still relevant to your current stage in life?

Asset allocation

Apart from saving your money, you also need to grow it. So let’s look at your investments. Are your funds properly invested? Your investments should reflect your risk tolerance, growth objective, and time frame. Recheck your asset allocation to ensure that everything is in order following the movements of the markets over the past year. Often funds can change focus, requiring you to rebalance your portfolio. Furthermore, if a stock or other security does extremely well (or extremely poorly), this can also affect the balance of a portfolio. It may be time to buy/sell.

Review Your Winners and Losers

Before selling weak stocks/funds and actualizing profits, discuss the potential tax ramifications of the sale with your accountant. Depending on your situation, it may be wise to hold onto investments for at least one whole calendar year to qualify for the long-term capital gains rate (if you are a U.S. tax payer). While tax ramifications shouldn’t be the only factor in determining when to sell, they should certainly be taken into consideration.

Don’t let the end of the year pass you by. Call your financial advisor for an appointment today to review your financial plan. Make sure your finances are in the best shape to enable you to realize your dreams.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing is available at www.richasaking.com. 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, SIFMA, 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.

Do You Suffer from “Inheritance Loyalty Syndrome?”

by Douglas Goldstein, CFP ®

It is common to feel emotional angst after receiving an inheritance. Inheritors may have doubts as to whether they are “allowed” to use the assets as they wish, or whether they somehow have to use them in a way the benefactor would have chosen to use them.

There are two ways to approach a sudden influx of money into your control:

• Spend it on things you would never have been able to afford otherwise. The downside of this is the risk of increasing your overall cost of living and finding yourself none the richer. For example, if you choose to upgrade your car, would you be able to afford higher insurance payments, gas, and upkeep in the future?
• Incorporate the assets into your overall financial plan. You could use the inheritance to pay off debt (including your mortgage), fund your emergency account, or increase your savings. Other factors to consider are whether you should use the funds for charitable projects or earmark them for an inheritance for your own children.

Selling inherited assets is not being disloyal

Some beneficiaries feel an emotional attachment to the inherited assets that prevents them from making logical decisions. A widow may feel that she is disputing her late husband’s judgment by selling stocks he carefully chose years ago.

Yet what was good for your benefactor is not necessarily good for you, as everyone’s financial situation is unique. It is important to realize that inherited funds are yours, and proper use of the funds means making them jive with the rest of your financial plan. Your benefactor gave you a legacy to use as you wish; s/he can’t control the assets from the grave.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. 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