Watercolor by Iris Dayoub

1st Quarter 2017 Newsletter

Alpha Financial Management

Here's a collection of news items and some blog posts we've made over the past quarter. We hope you will find these useful in your financial life.  

Please use the "Share" "Tweet" or "Forward" button if there's an article here you'd like family or friends to read.

2016 Year In Review

My blog post says how disciplined investors ignored dire headlines early in 2016 and subsequently enjoyed returns that rewarded long term investing.


Hey did you see me on TV?  WTOC in Savannah.

I missed it.  I think everybody missed it.

Here's the link.  Don't blink or you'll miss it.  (I'm only shown a few seconds!)

I wish they'd given me more time to talk about improving your savings rate and avoiding the pitfalls of easy credit.  Oh well.  I'll be ready for them next time.

Tax Planning In Your Estate Plan    

Of course the main purposes of estate planning are to take care of your heirs, give to charities, and fulfill your wishes.  Tax planing is a part of it too.  

Many people believe the main tax consideration is to avoid the estate tax, and they figure they're exempt as long as their estate is below $5M (or $10Million for married couples).

But another huge part of tax planning in estate planning is to minimize capital gains. With capital gains tax in Georgia effectively 29%, you need to make sure your estate does unnecessarily force your heirs to pay gains at that rate.  Alpha Financial can review your estate plan along with your attorney or recommend one for you, to make sure your estate plan is tax smart.

Are you selling your business?

Price is only one factor.  How you get paid for it is also important.

You will be taxed on the profit you make from selling the business. You may be able to control the timing through the terms of the deal, but the IRS will take its share at some point. 

The amount of tax that you will ultimately have to pay depends upon whether the money you make from the sale is taxed as ordinary income or capital gains. Profit received from the sale of the business assets will most likely be taxed at capital gains rates, whereas amount you receive under a consulting agreement will be ordinary income.

An installment plan and insurance are two tools that can trim your taxes.

We at Alpha Financial can give you a greater understanding of the ways you can be paid for your business and the insurance you can buy to make sure you GET paid for your business.  An educated seller is in a better negotiating position.


I (Michael) attended a lecture by
Assistant District Attorney Maggie Hinchey DeLeon last month, on the topic of elder abuse. She confirmed my belief that financial abuse of elders is a problem we all need to be on the lookout for and report quickly. If their assets are drained -- usually by caretakers -- then their health and longevity suffers.  

If you believe you are witnessing elder abuse, you should report it
  • Savannah Chatham County 
    Metropolitan Police Department: 

  • GA Adult Protective Services
    investigates & responds to suspected elder abuse & neglect
    1 (888) 774-0152
  • Long Term Care Ombudsman
    investigates & responds to abuse & care issues in nursing and personal care home

I've seen the aftermath of a caretaker spending millions on themselves that should have been used to care for someone aging in place.  I've met with a family after a predatory salesman sold an annuity to a 90 year old resident of a nursing home who didn't know what year it was.  

I am passionate about this and believe the best defense is to make sure a family has a team approach to protecting our elders. If communication patterns deteriorate, act quickly to correct. 
Equity Compensation Illustrated

Employee Stock Decisions

Just a reminder I wrote a book about how employees (and job recruits) can evaluate and manage the stock and options offered by their employers.  

If you know someone who has a large part of their portfolio in their employer's stock or options, let me know and I'll send them a complimentary copy of my book, or they can order it themselves on Amazon for a very low price.


You can support Girls On The Run Of Coastal Georgia Inc at AmazonSmile. 
You shop. Amazon gives.
When you shop at AmazonSmile, Amazon donates 0.5% of your AmazonSmile purchase price to the charitable organization of your choice. Who will you support? Choose from almost 1 million eligible 501(c)(3) public charitable organizations and support your favorite charity every time you shop. Learn more
Investment Corner

2016 rewarded our clients.  We try not to focus on returns on a quarterly basis, but our clients' patient approach has been rewarded.
Dimensional Video:
I'm including this video again because investor behavior is often just as important as asset selection.

Yes, many media personalities and commentators are saying markets are overvalued right now.  But nobody knows for sure if markets will go up or down this quarter.  If we knew for sure, then markets would move now to beat the rush! 

Invest for long term rewards, not just this quarter or even this year.
Our new advisor, Wayne Jordan, reminds us to check our policy amounts.


Home Insurance note

As I finish up studying the Insurance portion for the Certified Financial Planner exam I wanted to share one take away with our clients: 

It may be worth taking a second look at your homeowner’s policy. A lot of homeowner’s insurance policies cover your personal property at “Actual Cash Value” and not “Replacement Cost”.

What does this mean for you? 

Actual Cash Value is what you would pay today for a similar item at today’s cost minus depreciation.

Replacement cost is what you would pay for the items at today’s cost

Let’s double check your homeowner’s policy and confirm that your new kitchen or workshop is properly covered.

Military Benefits

Also in February I attended a seminar that touched on many benefits financial advisors need to consider for military personnel and their families.  Speakers were two attorneys from the Legal Assistance and JAG Office at Fort Gordon.

We touched on
  • Survivors benefits
  • Education
  • Divorce
  • Pensions
  • Disability
  • Healthcare
The main message for me: I can contact their office to review each of my clients to ensure they are getting all the benefits they are entitled. If you serve our country, you deserve our support.


Talking To Kids About Money

I’ve been reading ‘The Opposite of Spoiled” (subtitled “Raising kids who are grounded, generous, and smart about money”). Here are 5 of my favorite ideas from that book.

You may already know about the idea of giving kids 3 different containers for money, instead of a single piggy-bank. They’re labeled “Spend”, “Save” and “Give”. We want our kids to see 3 different purposes for money.

The new concept this book introduces is parents paying monthly interest on the “Save” jar. Give kids an incentive to save more. The book’s example says parents can pay a lot of interest as the kids get started on this habit, and on the smaller amounts in the jar, but 50% monthly interest will break parents’ finances once the kid realizes how fast $40 can grow into a million.

2. View questions from kids as an opportunity to talk about money.

I wrote a separate blog post about this. The point is to make sure you understand why the child has asked the question and be open to the opportunity to teach many things about money and its role in your life and theirs.

3. Give middle schoolers a pre-paid debit card for clothing

Let them make some mistakes. If they outgrow their expensive clothes in 3 months and the card was supposed to last them a full school year, introduce them to Goodwill. Kids become savvy shoppers once you give them a budget. They learn to substitute instead of chasing every popular designer label.

4. Let children participate in the family’s charity budget

Prior to the annual family charity meeting, let them sort through the solicitations the family has received in the mail. It’s a chance for them to grow their reasoning for why certain charities deserve support. Gradually turning over a small share of the annual budget gives them additional connections to those efforts.

5. Rituals

Family rituals create good habits and memories. They also focus activities onto the values you want to instill. Example rituals could be...

– Couponing
– Gratitude and prayer
– Thrift stores and yard sales
– Tooth fairy visits (maybe including a gift to a charity)
– Volunteering

What do you think? Good ideas?


Video libraries.

Wayne and Michael have been making videos recently to sharpen our message and make sure our clients understand why Alpha invests the way we do.

Visit our YouTube page and our Facebook page to see all our videos.

Office Hours

No vacation days scheduled this quarter.  Call us any time. We're here from 8am to 5pm most days, but we try to leave at 4 on Fridays. Leave a voicemail if we're in a meeting.

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