Transfer on Death or Payable on Death

Quick one today as the markets are moving..

Just a gentle reminder as a real simple way to add a beneficiary designation to checking, savings, brokerage accounts.

On IRA's, 401(k)'s, and other retirement accounts you have to designate beneficiary designations to whom you would like your money to go upon your passing.

Outside of retirement accounts assuming you don't have a revocable/irrevocable trust set up to dictate the direction you should look at something called "Transfer on Death."

This is a free option to add beneficiaries to your checking, savings, brokerage accounts and bypass any potential confusion over where you want your money to go.

As a reminder having a will is only the start of the probate process and it generally does not suffice as as a directive for assets held in accounts.  When you attach an actual beneficiary to something you are leaving no doubt to where things are supposed to go.  Simple estates may not need to create a trust and spend the money.  However, there is no substitute for a trust when it comes to specific instructions and directives.  A Transfer on Death only allows for primary and contingent beneficiaries and nothing else.

Disclaimer:  Please consult with an attorney to determine what is best for your particular situation.



Eric Marvin, CFP®

Buy a Fixer Upper or Move in Ready?

Happy Hump Day to everyone!  A good question I get all the time is whether or not to buy a fixer upper or something that is move in ready.

Well, from personal experience there can be great value and wonderful investment opportunities to buying the "bad apple" in a good neighborhood.  However, you have to weigh some important factors.  First, do you have enough money to not only buy the place, but factor in hiring a contractor, cost of materials and most important of all time!  Buying a fixer upper with a newborn on the way can be challenging to say the least( I can speak from experience!)

In real estate you can force the value creation in a sense by transforming something nobody wants to a dream home that everyone wants.  Now another consideration is acting as your own general contractor in a sense by hiring out all sub-contractors and saving money.  However, if you don't have the experience dealing with all the various trades it can be cumbersome.

At the end of the day you need a roof over your head first and foremost and if that means buying something that is completely ready to move in that is not all bad.  As an investment buying a fixer upper also comes with enormous risks on the back end when/if you go to sell it.  Did you keep all the finishes neutral and appeal to all buyers or did you take chances and customize more to your specific taste?  Did you put high end appliances in a house/condo that you won't get your money out of?  Did you have to spend a lot of money on things that no one sees?  For example, new electrical work, plumbing, sewage, foundation issues, etc.  People don't want to pay up for that stuff, they just expect it especially if you are buying and trying to sell for a profit.

So, bottom line is one may work better for one person over another.  You need a roof over your head, and not everyone wants to commit to doing the repairs.  In hot housing markets you can potentially buy something and do nothing to it and make money as well.  It all comes down to the right opportunity.

Real Estate is another bucket that makes up your total net worth.  If done right you can have equity in your home and stop paying rent to someone else..

Until next time...

Eric Marvin, CFP ®

Personal Net Worth Pilot Blog Post-Portfolio Loan Mortgage

Hello,

This is the first post in a new blog series titled, "Personal Net Worth."  The aim here is pretty simple. I will look to share any topic/topics that are related to your personal net worth.



I wanted to shed light on a different type of mortgage out there that may not be as well known as the traditional types.  As anyone who is self-employed can vouch for obtaining a traditional mortgage can be challenging to say the least.  They want two years of tax returns first and then copies of bank statements, brokerage accounts,etc.  Then they ask for copies of P&L statements and proof of funds for down payment purposes.  Well, if you have the ability to make at least a 20% down payment and/or have had a short sale/ foreclosure recently you may want to look at something out there called a "portfolio loan."  The first thing I would do is a google search for them in your area.  Since these loans are held on the books of the banks they can have a different criteria for lending than a traditional mortgage.  I recently obtained a five-year ARM at 3.5% from a local bank in Fort Myers.  I was able to close in approximately 30 days and was impressed with the process compared to a traditional type of financing.  If this doesn't work for you I would encourage you to call a local mortgage broker in your area as they can usually assess the best option for your specific situation.  If anyone is in the local Fort Myers area I have the best broker who can get deals done.

Until next time...

Eric Marvin, CFP®

Elevator Down Escalator Up?

With October now finished we are heading into a period of strong seasonality to finish the year.  Just three weeks ago stocks looked like they were on a broken elevator down and nothing could stop it.  However, we finally found support at one of the critical moving averages and sure enough stocks rebounded as the buyers flocked in to support the markets.  Since the bottom the markets are up almost 10% in a little over three weeks!  This would qualify as an impressive snap back rally!

With the market having rebounded so strongly in such a short period of time it is important to be more specific in your approach to stocks.  Focus on the sectors that may not have rebounded as much and still provide decent valuations.  For those of you that want to dip your toes into the energy names it is impossible to know when they will bottom.  Stick to your own investment game plan and use times like the middle of October as days to accumulate your favorites.


Eric Marvin


Past Performance is no guarantee of future results.  Please consult with your own financial advisor before embarking on any investment plan.

The end of QE3...

Well, yesterday marked an important milestone as QE 3 was put to rest by Janet Yellen as she eliminated the final 15 billion per month in bond buying.  One would have thought that Treasury yields would have spiked dramatically after the announcement, but quite the opposite happened.  In fact, longer dated yields actually fell quite noticeably.  Even today, longer dated yields are continuing to go down.  With all the bond buying over the coarse of the last several years the supply has been diminished quite substantially.  So, even though the Fed for the better part of this year has been reducing there buying almost regularly it seems that due to supply and demand issues the prices have held firm.  It would have been very hard to predict that the 10-Year Treasury would touch 2.20% this year and never come close to 3%.  In addition, who would have thought that long term treasuries would be one of the best performing asset classes YTD.

A lot of people see the latest Fed statement yesterday as Hawkish, but I think Janet Yellen left her self enough wiggle room that if the data does not continue on an upward path she has the tools to step right back into some form of quantitative easing.  Also, the European Central Bank has firmly pledged to continue to support global markets and step up there efforts should they be needed.

As we finish the year markets have strong traditional seasonality on there side.  Where will we go from here now that the perception of the FED being out of the markets is here?  Well, that is a question not many people can answer.

Eric Marvin


Past Performance is no guarantee of future results.  Please consult with your own financial advisor before embarking on any investment plan.

More Volatility

What a week in the world of volatility!  The intraday moves in the Dow coming in as high as 600 points over the past several days.  Yesterday, there were some signs of capitulation as major selling took over from the open.  Certain sectors such as energy actually staged a late day comeback and is seeing some follow throw at the moment.  One thing that I took from yesterday is that the Russell 2000 held up quite well considering the move in the S&P 500.  During this pullback we have seen the small caps lead us to the downside, so it is important to take notice that they appear to be bottoming before the S&P 500.  If we can get a sustained bounce in energy we may be able to see a retest of around 1905 on the S&P, which would be at or around the 200 Day moving average.  What we would do from here might determine the short term direction of the market.  However, we may not even come close to getting back to this level assuming this is a head fake.


Eric Marvin


Past Performance is no guarantee of future results.  Please consult with your own financial advisor before embarking on any investment plan.

Monday Morning

Good Monday morning to everyone out there.  We are setting up a nice battleground today between the bulls and the bears in terms of who will be right vs. wrong.  The bears feel like they have to hold stocks below there 200 day Moving Average or else they might lose control back to the upside.  The bulls are still tentative to step in as last week was pretty brutal out there.  Usually, this leads to a tug-of-war price action in which we might trend sideways until there is a piece of news to give us that final push in either direction.  Historically, Options Expiration Week for the month of October is fairly bullish, but that is just one seasonal study.

My advice is to stay nimble in either direction and look for the 200 Day Moving Average to either hold or give way.  Volatility creates opportunities for those willing to take advantage.


Eric Marvin


Past performance is no guarantee of future results.  Please always consult your financial advisor with questions pertaining to your specific situation.