Archive for June, 2011

Vacation Preparation

When packing up for summer travel, remember to keep your personal information and valuables safe.

Practical Money Matters offers some helpful suggestions on how to protect your finances and identity while you are away from home.

  • Do not post your itinerary on social networking sites.
  • Reduce the contents of your wallet.  Carry only essentials such as two credit or debit cards, insurance information,  ID and not too much cash.
  • Protect your home: suspend mail, newspaper and all deliveries.

Read the transcript or listen to the podcast here.


Trick$ of the Trade

Financial Literacy at the Library welcomed Christine Kieffer, Senior Director of the FINRA Investor Education Foundation, to our June meeting.

Christine introduced the FINRA documentary, TRICK$ OF THE TRADE: Outsmarting Investment Fraud, which was followed by an audience Q and A.

The film introduced several of the persuasion tactics that criminals often use to con investors.  Many of these strategies are also common marketing tools.

  • Phantom Riches – also known as empty promises.
  • Source Credibility – using the names of respected individuals or organizations to lend authority and legitimacy. Can easily be faked.
  • Social Consensus – using a social group or religious affiliation to increase your level of comfort.
  • Scarcity – a pressure tactic that this is a short term or rare opportunity.  If we do not act now, our chance for riches will be lost. Similar to tactics used on home shopping channels and department store “one-day sales”.
  • Reciprocity – those “free” luncheon seminars take advantage of our value system which encourages us to give back.  Non-profits that include pre-printed address labels or personalized note pads are using a similar psychology.

To combat persuasion tactics, defend your hard earned money with the following tools:

  • Remember that there is no such thing as a free lunch.
  • Avoid high-risk investments
  • Register for the do not call list.
  • Develop a Refusal Script.  Have a standard response to solicitors such as “I always wait 48 hours (or other longer time frame) before I make financial decisions”. Ask lots of questions and think what is in it for them, not what’s in it for you.
  • Know the details of an investment.  If you can not explain how it works and how it makes money, do not invest in it.
  • Ask and Check.    Always ask “Is this a registered investment and are you licensed to sell this product?  What is your registration number and your phone number?  I will call you back if I am interested”.  Conduct a Broker Check with FINRA or contact the Massachusetts Securities Division at the phone numbers listed on this online directory of licensed finance and insurance professionals.

Try these tools out from to test yourself and your investments.  The Risk Meter  tests your vulnerability to investment fraud and the Scam Meter tests the likelihood that the investment you are considering may be a scam.

Don’t know the difference between a financial planner and an investment adviser?  Read this helpful brochure on Working with a Financial Professional produced by AARP.

Make a Million Bucks

Wonder how long it would take to make your first million?  Young Money has created a savings calculator to help you with your financial planning.

Just plug in your current age, targeted retirement age, savings amount and anticipated rate of return and the calculator will do the rest.

For more calculators, visit our Resources page.

Financial Planning Event Tonight

A free financial planning seminar is scheduled for tonight, June 7,  from  7:00pm–8:30pm at the Newton Cultural Center, 225 Nevada St, Newton, MA 02460.  This event is being sponsored by Discovering What’s Next® and The Freedman Center at MSPP.

Explore six key areas of financial planning, including:
• Your current financial position–budgeting, cash flow, debt management
• Protection Planning–life insurance, disability insurance and long-term care
• Investment Planning
• Income Tax Planning
• Retirement Planning–saving for retirement and managing distributions once in       retirement
• Estate Planning

For registration information, email or call 617-467-5438.

Understanding Disability Insurance

This week’s The Savings Game column in The Boston Globe reminds us to plan ahead for long term disability coverage as nearly 20% of Americans will need it sometime during their working life.

Social Security benefits come with eligibility criteria that may be difficult to meet.  Approximately 2/3 of all applications are initially rejected.   Further, employers are cutting back on the number of workers covered under corporate plans.

Individual insurance is an option, though it can be costly, and premiums vary depending on age, health and gender. Yes, women pay more.

The Savings Game recommends that before you purchase insurance, first determine how much income per month is needed.  Know the difference between “non-cancellable and guaranteed renewable” and “guaranteed renewable”.  The latter can be cheaper but also may be more likely to change terms and benefits.

Money Magazine compiled this list of five things to know about disability insurance.

For more information on the topic, see the Consumer Guide to Disability Income Insurance from the National Association of Health Underwriters (NAHU) Education Foundation.

Free Classes at AAA

AAA Southern New England offers free informational sessions on financial topics.  This month’s schedule:

Reverse Mortgage Seminars

  • June 14 at 6-8 p.m. at the Waltham office
  • June 28 at 6-8 p.m. at the Peabody Office

Homebuyer’s Seminar

  • June 15 at 7-9 p.m. at the Newton office

College Financial Aid webinars  are also being offered. Visit to register and for more information.