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Women Prioritize Family Needs Over Their Own Financial Security

According to a new "Female Financial Empowerment" survey from Edward Jones, while women have made great strides in gender and income equality in the workplace, one of the biggest challenges they continue to face is their tendency to "prioritize immediate family needs" over saving for their own future.

That certainly helps explain what the financial services firm acknowledged was an inherent conflict in the findings: While seven out of 10 women polled said they felt "confident" about their financial knowledge, all too many have actually done little to nothing to generate their own long-term wealth.

"Only 25 percent of women surveyed consider saving for retirement as their most important goal over the next three to five years," said Nela Richardson, an investment strategist at Edward Jones. "That tells us that female financial empowerment should be next on the list of barriers women have broken over the past few decades."

The two other biggest challenges women need to surmount, according to the national sample of 1,004 adult women ages 18 and older?

They're either waiting for some amorphous "perfect" time to invest - something, in all fairness, men are also guilty of - or they're waiting for … you name it to motivate them.

A big raise or other windfall (49 percent). A financial emergency (20 percent). A significant life event (20 percent). A market correction (12 percent).

None of which, let's be frank, is likely to make you the next Francoise Bettencourt Meyers. (More on that in a minute.)

"Waiting for a raise or a significant life event, by definition, isn't a financial strategy," Richardson said, "and they'll always be competing priorities. The key is to anticipate both tailwinds and headwinds in life, and be flexible enough to adapt to changing situations so you can meet your long-term financial goals."

Edward Jones lays out a female-centric approach to handling your finances on its website. But here's a quick cheat sheet to get you started:

* Make yourself a priority by starting to invest now in order to give your money time to grow - never underestimating the power of a wondrous thing called compound interest.

* Begin small with modest investments.

* Develop a goals-based financial strategy.

As for how much better women are doing financially, here's one notable sign: Forbes' list of the world's 100 richest people featured just four females in 2000 compared to 10 this year. The richest woman - and fifteenth overall - was the aforementioned L'Oréal heiress Francoise Bettencourt Meyers ($49.3 billion), who's chairwoman of the family's holding company.

But she inherited her wealth, you say? Well, the youngest self-made billionaire ever, according to Forbes, is none other than 21-year-old cosmetics wunderkind Kylie Jenner ($1 billion).

 

Surety Bonds Protect Infrastructure Investment

Finding consensus on addressing the question of how to pay for the massive investment needed to fix the problem, however, is another matter entirely.

As federal and state legislators discuss and debate the means by which to fund infrastructure improvements, what has become clear is that funds, whether from public or private sources or a combination of the two, are precious commodities that must be wisely spent and protected.

Mandatory bonding on federal and state public construction projects has been in existence for many decades, protecting and preserving countless projects through prequalification of contractors and providing guarantees of contract performance.

In fact, a recent study conducted by The Canadian Centre for Economic Analysis verified the economic value of surety bond protection.

"One of the conclusions which leapt off the page to us was…that non-bonded construction enterprises are 10 times more likely to become insolvent than bonded companies," states Steve Ness, President of the Surety Association of Canada. Construction projects carried out under the protection of bonded contracts have reduced risk of contractor insolvency, greater protection of economic activity, and better management of economic risk, Ness adds.

"Disastrous consequences for the public can result from instances when mandatory bond requirements are ignored," asserts John Bustard, President of the National Association of Surety Bond Producers, Inc. and Executive Vice President of King & Neel, Inc., an insurance and surety bonding agency in Honolulu, Hawaii.

He cites the example of the city of Harrisburg, PA, which decided to retrofit its trash incinerator plant without requiring the contractor to furnish a bond guaranteeing its work. The work turned out to be deficient, leaving the city with more than $280 million in debt. A grand jury investigation of the situation produced "A Report of the Thirty-Ninth Statewide Investigating Grand Jury" under then Pa. Attorney General Josh Shapiro, in which it was concluded that "the absence of performance bonds which were equal to the contract amounts involved here was the single biggest factor in producing the overwhelming debt now facing the city."

The report further states: "Had performance bonds been in place, they would have shielded the City from the financial fallout from the failed contract to retrofit the incinerator." Subsequently, Pennsylvania legislators have introduced legislation to address this particular issue and to require bonds at 100 percent of the amount.

Even when infrastructure projects are not solely funded with public funds, such as projects undertaken through a combination of public and private financing, as through public-private partnership arrangements, those projects need bond requirements.

Approximately 20 states have already reached that policy conclusion, enacting public-private partnership legislation that also mandates bonding requirements on such projects. Situations have arisen, however, in which bonding has been ignored or reduced on public-private partnership infrastructure projects; and the public has paid a heavy price when problems have arisen with little or no backstop.

As Congress weighs how to address the tremendous infrastructure needs of the country in the coming months, protections in the form of performance and payment bonds will be absolutely necessary to ensure that the precious funds of America's private and public investment are wisely spent and that the public receives the quality of infrastructure that it deserves.

 

One Date Parents Shouldn’t Ignore: 529 College Savings Plan Day

With the cost of a four-year degree rising nearly eight times faster than wages since the 1980s, those two questions are enough to give today's parents a serious case of night sweats. You can argue about the reasons for the disconnect -Administrative costs? Fancy amenities? - but you know there's a problem when a writer at Education Week is incensed.

"Madness," she decried.

Which is all the more reason to mark May 29 down on your calendar.

Otherwise known as National 529 College Savings Plan Day -Get it? 5/29? - it's the perfect time to consider setting up one those tax-advantaged 529 plans, as they're called, to help sock money away to cover tuition, books and other education-related expenses at most accredited two - and four-year colleges, universities and vocational-technical schools.

"It's a way of keeping your son or daughter from being saddled with too much debt when it's time to jump start their careers," explained Melissa Ridolfi, vice president of retirement and college products at Fidelity Investments. "Plus, any investment earnings compound on a tax-deferred basis, and qualified withdrawals are entirely free from federal and state income taxes."

And now to the big question: How much?

Two factors are mainly at play:

* Public vs. private schools. The cost difference can be about as mind-boggling as "Avengers: Endgame's" record $357.1 million opening weekend domestic haul: an average of $21,370 a year at the former, according to the College Board's latest figures, as opposed to $48,510 at the latter.

* The percentage of the bill you plan to foot. If you were counting on scholarships and other grants to pick up all or most of the tab, you should probably rethink that unless your kid is either a bona fide child prodigy or football star. Sallie Mae's "How America Pays for College" 2018 report found that both categories combined paid for just 28 percent of college costs.

One guess where 47 percent of the costs came from. That's right, "family income and savings," with another 24 percent covered by borrowing.

In other words, as Ridolfi said, "any way you look at it, the family is on the hook to pay the lion's share of college expenses." Which probably helps explain why a recent Fidelity study found that parents are increasingly starting to save before their child even reaches the age of two.

To see where you stand, try using what Fidelity calls "the college savings 2K rule of thumb." Simply multiply your child's current age by $2,000 to figure whether your savings to date are generally on track to handle approximately 50 percent of the College Board's $21,370-a-year average cost of attending a four-year public college.

Or, especially if you want a more customized estimate - one that lets you play around with percentages and switch back and forth between public and private schools - the firm's free online college savings calculator takes the angst out of doing the math yourself.

Fidelity provides 12 savings ideas to help reach your own goal, and offers a choice of two different investment strategies in the 529 savings plans it manages - including an age-based portfolio of funds that automatically becomes more conservative as the beneficiary nears college age.

Hopefully, armed with all that info, you'll be sleeping better at night.

The Best-Kept Secret: 529 Education Savings Plans

Yes, we're talking 529 plans. They've been around since 1996 - longer than most Generation Zers have been alive - but a new survey from Edward Jones found that a whopping 67 percent of Americans don't have a clue that they provide a tax-advantaged way to save money for tuition, books and other qualified education-related expenses at most accredited two- and four-year colleges, universities, and vocational-technical schools. Worse still, that 67 percent figure is 5 percent higher than the first time the survey was done in 2012.

"It's a concerning trend," says Tim Burke, a principal at the financial services firm Edward Jones.

"Concerning" because of the current average price tag of a four-year degree, including tuition, room and board: $21,370-a-year at public schools, according to the College Board, and $48,510-a-year at private schools.

And just how do those surveyed think they're going to handle that freight?

* Personal savings accounts (38 percent). Alas, the national average interest rate on such accounts is a measly 0.09 percent. Try covering even the more than $1,200 the average college student spends on books and materials over the course of a year with that.

* Scholarships (35 percent). Is your kid a bona fide child prodigy or football star? Because Sallie Mae's "How America Pays for College" 2018 report found that only 17 percent of college costs were paid this way.

* Federal or state financial aid (33 percent). Pell Grants are the largest source of federally funded grants, and they max out at $6,095 for the 2018-19 academic year. That would cover about 28 percent of one year's $21,370 average cost at a public college - except that, as the College Board explains, "most students receive smaller grants because they are enrolled part time or because their family income and assets reduce their aid eligibility."

* Private student loans (20 percent). According to the Brookings Institution, parents who take out loans - not the financially strapped Millennials we've heard so much about it - do so to the tune of $16,000 a year on average, and nearly 10 percent are on the hook for $100,000. "College debt is increasingly becoming a parent problem, too," ConsumerReports.com just warned.

Given all that, you can see why Kyle Andersen, another principal at Edward Jones, says that "by relying on scholarships or federal or state financial aid that a student may or may not receive, Americans leave themselves vulnerable."

Which brings us back to 529 plans.

Kudos to the 18 percent of those surveyed who said they'd implemented this strategy, which Edward Jones and others call "an attractive and practical way to save." How so? Remember when we said they're tax-advantaged? That means that (unlike personal savings accounts) the earnings in these plans - typically comprised of a portfolio of funds - accumulate tax-free, and that qualified withdrawals are exempt from both federal and state income taxes.

The federal gift tax exclusion allows a contributor to give up to $15,000 per year, per beneficiary, or $30,000 for married couples. Though almost every state has its own 529 plan - with total limits sometimes reaching more than $500,000 - there's no "home-town restriction," so you might want to work with a local Edward Jones financial advisor to compare plans and review your situation.

Oh, one other thing less than half of those surveyed knew: 529 plans can also be used to pay for qualified K-12 tuition.

 

ICO Offers Investors a Chance to Cash in on Green Energy Plan

The project involves the creation of a wind power farm and the installation of up to 52 wind turbines to produce green energy.

During the 15-day, pre-sale period, 10 percent of the Renewable Energy Tokens (RETs) will be sold at a 50-percent discount via a cryptocurrency system. The discount will not be available after the pre-sale period. "Ownership of one RET is equivalent to owning one asset in Eco Smart Energies," according to a company press release.

"These turbines are capable of producing mechanical energy that can be transformed into electrical energy, using wind energy converters linked to power distributors," according to a company white paper.

Cryptocurrency, an internet-based system for financial transactions, has the advantages of minimal processing fees, decentralization, and blockchain to confirm and provide security. The exchanges are quick and can be conducted on a global scale, which makes life easier for investors. According to a recent opinion piece on the Bloomberg website by former risk manager Aaron Brown, cryptocurrency is not without risk, but neither is investing, and "there are plausible scenarios in which crypto grows to become a significant part of the economy."

Investors are seeing the potential of green energy companies and the convenience of cryptocurrency. Wind energy is one of the most strongly recommended alternatives to the use of fossil fuels, and Eco Smart gets investors involved in the environmental angle with an application that will allow the token owners not only to send or receive tokens, but also to view how much wind power is being produced from the turbines. "The token holders can also actively participate in issues that are related to the future of the wind farm," according to the company.

Visit renbdo.io for more information about how cryptocurrency will shape the future and for investment opportunities.

 

A Desire to Live Debt-Free Spurs Many New Year’s Resolutions

According to Fidelity Investments' 2020 New Year Financial Resolutions Study, 82 percent of respondents said they're in a similar or better financial position than last year. Perhaps surprisingly, most credited their success to their own good habits - saving more (47 percent) and budgeting (29 percent) - rather than their investment gains (18 percent) from a stock market that made one high after another. Less than 25 percent put it down to having been able to work more hours in a strong economy.

And, as the study makes clear, they want to keep the momentum going.

Of the 67 percent considering making a financial resolution, "saving more" and "paying down debt" topped the list, respectively, at 53 percent and 51 percent.

"Living a debt-free life was the biggest motivator for them," said Melissa Ridolfi, Fidelity's vice president of retirement and college products.

Heck, given the choice between the classic New Year's resolution of losing five pounds or socking away $5,000, a resounding 84 percent in the national survey of 3,012 adults opted for savings.

But you want to know some of the biggest and smallest mistakes or setbacks they fessed up to, right? See if you can relate to any of these:

* Dining out too much (36 percent).

* Spending too much on non-essentials like unused apps, streaming media services, and subscription retail boxes (29 percent).

* Taking on debt or adding to existing debt (28 percent).

*Splurging on something they couldn't really afford (28 percent).

* Unexpected medical expenses (24 percent).

* Failing to save as much for retirement as they should (18 percent).

So with all the interest in getting a grip on debt, who seems to be faring the best at it?

Boomers, the study found, with 29 percent crediting being better off financially at year's end to having refinanced, paid off, or reduced debts or loans. Generation X, the next oldest, trailed at 21 percent, followed by 19 percent of millennials, and just 6 percent of Generation Z.

"Boomers are getting the message that the closer they get to retirement, the more essential it becomes to get their debt under control to make the most out of retirement savings," Ridolfi said.

Certainly there's no law that says you have to make a New Year's resolution - financial or otherwise - but even a huge chunk of those surveyed who weren't contemplating explicitly doing so still said they were planning on, say, building up emergency funds. As for what you might call the "traditionalists" out there? Fidelity has some tried-and-true tips that can help ensure your financial vows don't wind up being among the 80 percent of all resolutions that U.S. News says, alas, fail by the second week of February.

The firm also has an impressive, free online "Moments" tool designed to help you plan for lifestyle changes or react to a myriad of curveballs - i.e., the unexpected medical expenses cited as a big setback in the study - that life throws at you. And accessing the Fidelity Retirement Score gives you a quick look at where you stand with your savings.

Oh, and here's one last thing to see if you can relate to: Seventy-eight percent of those surveyed predicted they'd be even better off financially in 2020.

Finances During A Pandemic

Even if you have not yet been financially impacted by the current state of events, it is vital to either reassess your household budget or create one if you have not already. Involve your family in this as much as you can. Just letting your family know you are thinking about the crisis and how you will respond can be enough to help ease some of the anxiety around the unknown. When you are looking at your crisis budget, identify which expenses are absolutely necessary and which are not. It is best to make the hard decisions now, even if you have a savings account built up, rather than wait until you are forced to make those decisions.

Focus on your rent or mortgage first. You need to keep a roof over your head if at all possible. With a situation as fluid as this, it is important to realize that there are resources available to help if needed and that those resources could change. If you are ever in a situation in which you are unable to pay your rent or mortgage, contact your landlord or mortgage provider right away. Once you have the rent and mortgage covered, then move on to food, utilities, and down on to the more non-essential items.

In the event you are unable to make a debt payment, make sure you contact the creditor as soon as you know you will miss the payment. During this difficult time, many creditors are expanding the options available to those unable to make their monthly payments.

If you feel lost when it comes to making a budget, as many do, please reach out to a Certified Credit Counselor at Family Credit Management. Family Credit Management is a nonprofit credit counseling agency that has been helping consumers in difficult financial situations for more than 23 years. Reach out for a no-strings attached budget review from an objective professional by calling 1-800-994-3328 and selecting option 1.

For more in-depth tips and resources, please visit www.familycredit.org/covid19.

 

Evaluating Your Debt

Money concerns can lead to many issues, including, but not limited to, relationship strain, health problems, and even depression. Some of the most common debts are credit cards, student loans, auto loans, mortgages, and medical debt. Assessing your financial situation is important, and while it may not always be pleasant, it can give you a good starting point for paying off your debt and improving your quality of life.

While it is ideal to be completely debt-free, it is important to be aware that there are good debts and bad debts.

Good debts are debts that can potentially increase your net worth and benefit you in the long run.

Mortgages are a great example. As you pay down your mortgage, there comes a time when your home is worth more than you owe. This allows you to sell your home for a profit or even refinance your home at a lower interest rate, which could potentially save you a great deal of money in the long run.

"Bad debt" is money owed that will not improve your net worth. Credit card debt, new car loans, debt for jewelry, or installment-based payment plans for goods are all examples of bad debt.

Many people struggle with bad debt. So what do you do if you are one of them?

The first step is to take a step back and breathe. There are legitimate solutions to your money problems. It may be difficult, but it will be worth it once your bad debt is gone forever.

Now that you know there are solutions out there, the next step is to assess your situation.

Family Credit Management is a non-profit credit counseling agency that has great, free, tools that you can use to help assess your situation.

The "How Serious is my Debt" quiz, at www.familycredit.org/how-serious-is-my-debt, can help you assess your situation from an objective point of view.

The certified credit counselors at Family Credit Management will be able to analyze the results of the quiz and help you come up with a plan of attack, even if the debt management program would not be the right fit for your situation.

You can find additional resources, such as a personal finance course, savings tips, a personal spending plan outline, and even a children's book created to help talk to your children about finances, at www.familycredit.org/resources.

 

Book Reveals How to Have 300 Percent More Retirement Income

SmartWealth is a coaching and training organization that teaches people how to retire safely by in- vesting wisely.

The key to financial security and success, according to Jeffrey D. Sokol, the founder of SmartWealth who predicted the current market collapse, is locking in stock market gains, without risking the client's money in the market, a proposition that many people find risky even at the best of times.

"Investing in the stock market directly with 401(k)s and mutual funds has proven to be a massive risk to the retirement accounts of millions. There is a simple way to lock in stock market gains, without having to suffer losses," says Sokol.

"Our methods are proven and efficient ... the wealthiest billionaires in the world have the same rule book you do, they just had a better coach."

Mr. Sokol is also the author of two books, "Get in the Game" and "Smart Wealth Secrets," that focus on investing.

Many financial advisors push clients to load up 401K accounts as a retirement strategy, but such accounts are more susceptible to the ups and downs of the stock market, Sokol says.

However, there are other options: SmartWealth offers a range of online training courses developed by industry experts that are designed to increase income and boost financial confidence. Courses include the SmartWealth series, which focuses on actions to keep and grow your retirement savings; and the Daily Passive Income Video series, which features sys- tematic strategies for asset creation.

"Our goal is to provide a safe haven for investors and have them retire with 300 percent more in- come than they would if they invested conventionally," Sokol explains.

For those looking to obtain funding to start or expand a busi- ness, the SmartWealth OPM (Oth- er People's Money) online acade- my, addresses topics of obtaining funds for a business, expanding your business, and even repairing a damaged credit score.

Finally, to help get your head into a new way of investing, check out SmartWealth's Get in the Game Mindset Mastery video course and book, which are geared to get people comfortable with generating passive cash flow?rather than being concerned over a single asset. In addition, SmartWealth offers personalized retirement planning services through its companion company, Beneshield Financial. In addition to retirement solutions, Beneshield Financial also provides consulting for life insurance, health care coverage, and small business startup funding.

Visit beneshieldfinancial.com to find out more.

For more information about SmartWealth's fresh take on smart money management, as well as the latest financial wisdom from the SmartWealth podcast, visit smartwealth.co.

Surprisingly, Older Americans Are Coping Best During the Pandemic

The Edward Jones and Age Wave Study goes where few have ventured before in focusing exclusively on how different generations have held up emotionally and financially in the months since all the lockdowns began. And some of its findings are at least as startling as how quickly even 70-year-olds came to love Zoom.

"COVID-19's impact forever changed the reality of many Americans, yet we've observed a resilience among U.S. retirees in contrast to younger generations," said Ken Dychtwald, Ph.D., the founder and CEO of Age Wave, a leading research think tank on aging, retirement and longevity issues.

While acknowledging upfront that the virus itself disproportionally struck aging adults, the five-generational sampling of 9,000 people age 18 and over revealed more than a few surprises. Among them:

* While 37 percent of Gen Zers, 27 percent of Millennials, and 25 percent of Gen Xers said they'd suffered "mental health declines" since the virus hit, only 15 percent of Baby Boomers responded likewise.

* Faring the best were those 75 and over - the Silent Generation that followed the so-called "Greatest Generation" - with a mere 8 percent of those respondents reporting any mental health deterioration. That would seem to run counter, as does the results for Boomers (age 56 to 74), to early dire warnings that prolonged social isolation made older adults especially vulnerable to depression, anxiety and cognitive decline.

* Nearly 68 million Americans have altered the timing of their retirement due to the pandemic, and 20 million stopped making regular retirement savings contributions.

Dychtwald attributed the two older generations' resilience to their having "a greater perspective on life."

"They've seen wars and other major disruptions before," he said, "and they know that this, too, will pass. Younger generations feel like, 'What happened to my life? I mean, I was supposed to go to college or I was starting a new job, and now everything has changed.'"

Most retired Boomers and Silent Gens also had monthly Social Security checks to fall back on. Which explains why - though the pandemic has significantly reduced the financial security of a quarter of Americans - younger generations were slammed the hardest: Nearly one-third of Millennial and Gen Z respondents characterized the impact as "very or extremely negative," compared to 16 percent of Boomers and 6 percent of Silent Gens who admitted to similar hardship.

Looking for any silver lining that's come out of the COVID-19 crisis?

Well, 67 percent of respondents did say it's brought their families closer together.

"The pandemic has certainly thrown into sharp relief what matters most in our lives," said Ken Cella, Edward Jones's client services group principal. "And important discussions have taken place about planning earlier for retirement, saving more for emergencies, and even talking through end-of-life plans and long-term care costs."

And with the study also showing that an overwhelming percentage of retirees yearn for more ways to use their talents to benefit society, financial services firm Edward Jones believes it's time to redefine retirement more "holistically" to encompass what it calls "the four pillars" of health, family, purpose and finance.

Successfully addressing most of those pillars admittedly takes more financial savvy than many of us have, though, especially given ever-rising costs. But a financial advisor, like a local one at Edward Jones, has the perspective, experience and empathy to help.

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