Jobs in the New Economy

Come and join executive, leadership and career development coach Danila Székely tomorrow night, Tuesday, October 23 at 7:00 pm at the Newton Free Library for a program titled Reinventing Yourself in Today’s Economy. This program is for people who are considering a career transition, currently engaged in a job search or are interested in re-defining their career.

The interactive session will include tools, suggestions and exercises to help participants take the next step in their careers. Be prepared to share your questions, challenges and successful approaches that have worked for you.

This is the second presentation in the ongoing Job Seekers, Career and Professional Development Series.

Financial Recovery

Financial Literacy at the Library concluded its presentation of the FDIC Money Smart series on Wednesday June 20.   Julie Soforenko from American Consumer Credit Counseling led a discussion on Financial Recovery after a Setback.

Participants who braved the hot temperatures to learn how to develop and implement a financial recovery plan were rewarded with snacks and sweets courtesy of Whole Foods Market.

Julie introduced us to the 4 basic steps in financial recovery:

1. Evaluate Your Current Financial Situation
2. Develop a Financial Recovery Plan
3. Implement Your Plan
4. Evaluate and Adjust Your Plan

To evaluate your current situation, keep count of all your incoming and outgoing items.  To achieve an accurate picture, Julie recommends you track your spending for at least one week and include everything, no matter how small.  Morning cups of coffee, donuts and loans to friends add up over the course of a month.

When developing your recovery plan, first prioritize your bills.  Student loans, rent, utilities and food should be paid before credit card debt.

Cut back on expenses where you can: double up on errands, rent a DVD rather than going out to the movies, enjoy pot luck dinners with friends rather than going to a restaurant. Never go food shopping while hungry or without a list. Review your insurance policies and cable/telephone service plans  annually and shop around for better rates.  If you have been on time with your credit card payments, ask the card issuer for a lower rate. Find cheaper substitutes on entertainment, but do not cut out fun things altogether. Recognize the benefit you experience from an expense, then find a less expensive substitute.

Establish SMART Financial Goals (Specific, Measurable, Attainable/Achievable, Realistic, Timely).

To start rebuilding credit, first order a free copy of your credit report at www.annualcreditreport.com. You may request one copy from each of the three credit bureaus (Equifax, TransUnion and Experian) once a year. Mark your calendar to order one every 4 months.  Check the report for errors and if you find one immediately contact the reporting bureau.  Contact the creditor in writing to dispute the item. Errors on a credit report can be removed but accurate negative histories will remain on the report for seven years.  Bankruptcy will remain on the report for 10 years.  For more information on correcting errors in credit reports including a sample dispute form visit the Federal Trade Commission at  ftc.gov.

Consumers may apply for debt settlement (reduction in total amount due) directly with a creditor.  Julie warned against using a debt settlement company as they are often a cover for scams. For bills that are 3 months overdue or more, call the company yourself and speak with the billing department.  If a debt settlement plan  is negotiated, remember that the amount forgiven will be considered income by the IRS and will be subject to income tax.  Further, it will appear on your credit report as a debt not paid.

Your budget should be dynamic and adjust to changes in circumstance such as:

•   a change in income or expense
•   after accomplishing a financial goal
•   when transitioning to a new life stage

Financial Literacy at the Library would like to acknowledge the contribution of Julie Soforenko whose clear voice and thoughtful explanations over the past two years brought the  FDIC Money Smart curriculum to life for our auditorium and online audience.  Thank you, Julie!

Be a Smart Investor

Joshua S. Grinspoon,  Attorney, U.S. Securities and Exchange Commission, Boston Regional Office, spoke on Investment Fraud and How to Avoid It at our May 16, 2012 Financial Literacy at the Library event.

Mr. Grinspoon began by introducing a primer on the basic financial instruments:

• Stocks – owning stock is like having a piece of a company;  you share in the revenue and are eligible to vote on corporate matters.  Generally considered a risky investment because the company could fail to make money or could commit fraudulent acts.  An extreme example is of the 1929 stock market crash.  It took until 1954 for the market to return to its pre-depression value. Risk cannot be completely eliminated but can be minimized by researching the company and diversifying stock ownership among several companies, industries and geographical locations.
• Bonds – are long-term debt instruments issued by companies (corporate bonds) and governments (municipal bonds) with a fixed interest rate.  They are riskier than people realize.  If the institution goes bankrupt, the bond will not be repaid and both bond income and principal will be lost.  Further, their value is tied to prevailing interest rates.  If rates go up, the value of the bond decreases and will be difficult to sell. If the investor has no plans to sell the bond, then the interest rate volatility is not a great concern.
• Mutual Funds – are a basket of stocks alone or with bonds, normally diversified both by industry and geographically.  Theoretically, this makes them less risky, but one still needs to be careful.  In some downturns, all asset classes can lose value, as they did in 2007.  Mutual Funds often require fees, perhaps 1% to 1 1/2% per year plus load fees.
• CDs – are bank deposits.  If invested with an FDIC member institution in amounts lower than the covered maximum (currently $250,000 per depositor, per insured bank, for each account ownership category), they are a low risk investment. Although the principal is insured against loss, the interest rate can be lower than the inflation rate, resulting in a net decrease in economic value.

When employing a Broker who will act as your conduit to the market, be sure to research the Broker’s credentials.

• Begin by looking them up on the FINRA Broker Check.  You may also want to check their status with the Massachusetts Securities Division  or the Massachusetts Attorney General.
• Ask about their commission structure.  Is there a financial incentive for recommending a particular investment?
• Ask for references.
• Ask if they have frequently switched companies.
• Be wary of unsolicited offers and attractive glossy mailers.
• Be wary of “Senior Advisors”

Other important tips:

• Don’t invest too much in any one stock.
• Don’t lose sight of your investments – Periodically review your portfolio.
• Brokers have a responsibility to put you in “suitable” investments

Remember the Basic Rule of Finance: If you don’t understand the investment, avoid it.

Free Money Conference

Conferences on finances and investing are a dime a dozen in the Boston area, but they often charge entrance fees or are led by sales people.  Here’s a conference that will boost your financial expertise with no cost and less bias.

The 2012 Money Conference, sponsored by the State Treasury and the Massachusetts Financial Literacy Trust Fund, will be held on Saturday, May 19th at Bristol Community College in Fall River, MA from 8:30 a.m. to 3:00 p.m.

“The Money Conference is a FREE one-day event presented by The Office of Massachusetts State Treasury and the Massachusetts Financial Literacy Trust Fund, and in conjunction with local cities and community partners to help households build their financial knowledge and improve their financial behavior through quality financial education.”

This year’s conference is on “Financial Empowerment for Individuals & Families”.

To register or to find more information, go to www.themoneyconference.com.

April is Financial Literacy Month

In recognition of the 12th annual Financial Literacy Month, the Newton Free Library will hold a series of events for adults and children to “educate patrons about finances and help them make better decisions about their money.”

• Wednesday, April 18, 7:00 p.m. – Financial Literacy at the Library FDIC Money Smart series with Julie Soforenko. The program titled Financing Fundamentals: Car Loans, Home Loans and Equity Lines of Credit will include lease vs. buy options for cars and homes;  fixed, variable, reverse and second mortgages.

• Monday, April 23, 7:00 pm, Dr. Kate Levinson will speak about her book Emotional Currency: a Woman’s Guide to Building a Healthy Relationship with Money; an insightful and empowering book that relishes a female viewpoint and a healthy, proactive approach to finances with specific steps for changing attitudes that impede financial success.

• Wednesday, April 25, 4:00 pm. In a program titled Mixing in Math: Pocket Change, children ages 6 and up will explore math concepts through stories and activities with a focus on learning about different types of coins. (Space is limited. Tickets will be available the morning of the program.)

For more information call the Newton Free Library at 617-796-1360.

National Consumer Protection Week

In connection with National Consumer Protection Week (NCPW), March 4-10, the FDIC has published a Quick Guide for Consumers on Credit, Debit, and Prepaid Cards to “help consumers, who routinely use cards to pay for goods and services but who don’t always understand the differences in how these cards work or the applicable consumer protections”.

The Massachusetts Attorney General’s Office is participating in NCPW by holding a series of “informational workshops in a number of high schools, local community centers, senior centers, and colleges and universities throughout the Commonwealth. These workshops are designed to help residents make informed financial decisions, avoid becoming the victims of fraud and safeguard their finances”.

For a schedule and list of locations, go to Mass.gov or click here.

FDIC has also prepared a list of “10 things to know about credit, debit and prepaid cards ” which includes:

• Be aware of overdraft fees
• Your liability on unauthorized use of credit cards is usually limited to $50
• Your liability on unauthorized use of debit cards can vary
• Make sure you know all the fees associated with your prepaid card
• Some prepaid cards are covered by consumer protection laws and others are not

For more on FDIC NCPW resources, click here.

Stocks, Bonds and More!

David P. Simon, Stanton Professor of Finance, Bentley University, provided our audience with an introduction to securities and financial markets at the February 15, 2012 Financial Literacy at the Library event.

The major markets (money, bond and stock) and Mutual Funds were explained  along with their specific risk and return characteristics.

Money market: Treasury Bills are extremely safe but offer the lowest return.  Certificates of Deposit are issued by banks and Commercial Paper is issued by highly-rated companies.

Bonds: Treasury, Corporate and Municipal are the three main types.  Typically, bond prices fluctuate as interest rates rise and fall.  As prevailing interest rates increase, bond prices decrease, and vise versa.

Treasuries have little default risk (even with the recent ratings downgrade), but long-term bonds have substantial interest rate risk.

Corporate Bonds come in a wide spectrum of risk, from AAA “investment grade” to “high yield or junk” bonds which carry a significantly higher default risk.

Municipal Bonds are issued by state and local governments and normally are exempt from Federal taxes, an important feature when considering the after-tax return.

Common Stock:  represents a piece of ownership in a corporation and are valued on the basis of current earnings, expected future earnings and dividends.  The most common metric used in stock evaluation is the price/earnings ratio.

Mutual Funds:  may be actively or passively managed.  Active management requires deep knowledge of the markets and the ability to select undervalued securities.  Funds that are actively managed tend to charge higher fees. Funds under passive management (index funds) normally offer a highly diversified portfolio with broad exposure among asset classes.  Fees are generally lower as they are not selling market expertise.

The Take Away:

• Higher returns come from taking on higher risk
• Diversification is extremely important for lowering risk
• Investments in passive or index funds often do as well as actively managed funds because of the lower fees

Simon said “Diversification is the only free lunch available in finance”.

FAFSA Day

Sunday January 29th is FAFSA Day in Massachusetts!

Get free help with completing the FAFSA (the Free Application for Federal Student Aid).  Trained volunteers will be offering expert assistance at several locations.

What to Bring

Students and parents* should EACH bring the following:

• FAFSA PIN (sign up online to receive your individual PIN before you go)
• Social Security Number
• Driver’s License number
• Most recent federal tax return
• Most recent W-2 or year-end pay stub
• Untaxed income records
• Bank statement(s)
• Business and investment records
• Alien Registration Card (if not a U.S. Citizen)

*Students who were born before January 1, 1989 do not need to bring parental information.

For a complete list of times and locations, click here.  Pre-registration is recommended.

Marketing with Social Media

On Thursday, January 12 at 7:30 pm, Newton Free Library will host Growing Your Business with Social Media and Online Content.

Kevin Gulley, social media strategist and Melissa Gulley, interior designer will share their social media strategies and practical real world tips that helped  them succeed in today’s competitive marketplace.

Learn how to:

• get found online by your target audience
• generate more activity and leads
• establish yourself as a leading voice

This event is free and open to the public.  No registration is required.

Newton Free Library is located at 330 Homer St. Newton, MA 02459.   Call 617-796-1360 for more information.

FDIC Open Meeting Webcast Tomorrow

Want to know what the Washington wonks are planning on doing or not doing about prepaid cards and mobile financial services?

On Thursday, December 1 from 8:45 a.m. to 3:45 p.m. the FDIC Advisory Committee on Economic Inclusion (ComE-IN) will be holding an open meeting to:

“discuss  developments and innovations in the delivery of financial services, including mobile financial services and prepaid cards. …  it will be important for us to understand their actual capabilities as well as the risks they may present to all consumers, including the unbanked and underbanked.”

The meeting will be held in the 6th floor Board Room at the FDIC headquarters, 550 17th St., NW, Washington, DC

Can’t make it to Washington?  The meeting agenda and a link to the webcast can be found here.  Read the full press release by visiting http://www.fdic.gov or click here.