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Advertising Supplement to the Sun Journal, Sunday, September 9, 2011


Financing can make your dream project a reality By Dan Marois Feature Writer

much you can borrow and/or the rate that you will pay.”

Do

K e r r y Wo o d , e x e c u t i v e v i c e president at Community Credit Union, agrees that loan applicants should be cautious. “Don’t forget that the collateral that you are putt ing up aga inst t he loa n is your own house. If you can’t make t he pay ments a nd ma ke t hem on time, you could end up losing your home,” warned Wood. “You bor rowed money for t he sole purpose of improving your house and losing your house would be a disastrous situation.”

you have a home improvement project you’d li ke to tackle in the next few months? Are you thinking of renovating a room, adding a garage or updating the overall decor of your home? Is the lack of cash in your savings account the only thing stopping you f rom m a k i ng you r home makeover come true? If so, you are not alone as many homeowners find themselves in the same predicament. However, w it h ca ref u l pla n n i ng a nd financing from your bank or credit union, you may be able to make your project come true much easier than you imagine. According to Mark Samson, senior vice president and senior retail banking manager for Mechanics Savings Bank, there’s good news a nd bad new s i n t he c u r rent economy. “The good news is that interest rates are at their lowest in years and financial institutions are eager to make loans to qualified applicants,” said Samson. “The bad news is that in the economic dow nt u r n home v a lue s h av e dropped significantly and a lack of equity in your home may affect how

According to Matt Delameter, loan orig inator for Nor t heast Ba n k, there are a few important steps to take even before sitting down with a lender. “Determine what you are trying to accomplish for home improvements and obtain estimates for the work to be done,” adv ised Dela meter, i nd icat i ng t hat a project plan and budget are essentia l. “You should a lso gather key financial information including W-2 records, pay stubs a nd b a n k s t a t e m e nt s [ w h e n seeking financing].” Homeowners should estimate the value of their home and see if they can qualify for a home equity loan or line of credit, two of the more popular choices available. These

are no restrictions or potential permitting problems with the home improvement they have in mind. “Find out what they will require for documentation,” said Samson. Too often, even the best of plans can be delayed if permitting or regulations about the project are not in place. A loa n refer ra l website w w w. h om e i m p r o v e m e nt f i n a n c i n g . com, warns of five major pitfalls that homeowners encounter when considering home improvement projects. Bottom line: Plan your project wisely.

Homeowners should estimate the value of their home and see if they can qualify for a home equity loan or line of credit, two of the more popular choices available. choices are generally less expensive than a home improvement loan. “You can typically borrow 80 to 85 percent of the value of your home,” noted Samson. Appraised value of the home x .85 minus first mortgage amount equals equity available to borrow. “Home improvement loans can be either secured or unsecured depending on the products offered at the financial institution.” Typically, total debt on your home should not exceed 30 percent of your gross income. If you earn $3,000 per month, your mortgage payment,

ta xes, i nsu ra nce a nd home improvement loan or equity loan payment should not exceed $900. “Consu lt you r loca l lender to deter m i ne t he best f i na nci ng p r o g r a m f o r y o u ,” a d v i s e d Delameter. “They can help you understand what monthly payment you can afford and the loan process requirements.” A n d e v e n b e f or e c a l l i n g or taking a trip to the bank, Samson recommends that homeow ners check with their local building code officer and make sure there

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Choosing cost over quality. Choosing cost over quality will catch up with you in the long-run, as cheaply-made materials w ill quickly wear out. Scale back your improvements if you have to, but use quality products.

Disregarding the present architectural style of your home. No mat ter how g reat you r improvements are, they will look awkward and out-of-place if they don’t mesh well with your home’s current architecture.

Doing what the neighbors do. Many people fall into the trap of select i ng home i mprovement s si mply because ever yone else has t hem. Ma ke improvements according to your own style and tastes, not your neighbor’s.

Throwing out the basics. It’s easy to get swept up in home i mprovement f i na nci ng to t he point where you forget about the basic f unctions of a home. For example, some people forget about essential issues like storage and maintenance when remodeling.

Designing your project around your fantasy life. The things for which we’d like to use our home and those for which we actually do are sometimes very different. For example, perhaps you want to throw grand, elegant dinner parties every weekend. But, in reality, you and your family most often dine around the breakfast bar. In this case, it would make more sense to redesign or add to your kitchen than to add a lavish dining room.

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Advertising Supplement to the Sun Journal, Lewiston, Maine, Friday, September 9, 2011


Family finances: Turn teens into savers By Tresa Erickson Feature Writer

It’s no secret. Money burns a hole in the pockets of most teens. The list of stuff they want is long, and they tend to spend money as fast they get it. If that is the case at your house, don’t despair. Follow these tips to get your teens to spend less and save more.

Set an example Spend every dime you make, and your teens will follow suit. It won’t matter how much you sock away in your retirement and sav ings accounts if they don’t know about it. Be more open about your savings habits and spend whatever you have left over wisely.

Dole out less Buy too much for your teens, and you will reduce their need to save. The less your teens have to pay for, the more money they will be able to save, right? Not exactly. While they could save it, most will spend it. Financial responsibility is a part of life, and the sooner you start making your teens pay for some of their wants and needs, the less they w ill have to spend overall and the more they will value the dollar. Instead of spending money so freely, they will be forced to put back some of it for their “bills” and be less apt to part with the rest.

Encourage wise spending Tr y to d iscuss sav i ng w it hout spending, and you will teach your teens little. It’s hard to become a saver w hen you have lou s y spending habits. Should you go shopping w it h your teens a nd they see something they want, suggest they wait a few days before purchasing it. They may discover they don’t need it after all. To curb impulse purchases, suggest your teens make a list and bring just enough cash to cover what’s on their list. You can’t spend what you don’t have with you at the time.

Set up a savings account Give your teens nowhere to put their savings, and you might as well tell them to spend it. The easier your teens’ savings are to access, the more likely they are to spend

it. Forget the piggybank and open a savings account for each of your teens. Go over the mechanics of the account with them, emphasizing the interest compounded daily. As they become more adept at saving, you can look into other options, like stocks and bonds.

Match their savings Give your teens no incentive to save, and you might as well be talking to a brick wall. Teens need motivation, and money talks. If you can afford it, consider matching a percentage of whatever your teens save. You will help their nest egg grow faster and keep them motivated. Teaching teens to save ta kes time. Don’t expect to turn your spenders into savers overnight. Work with them through the process, and when they are ready, help them find a job.

How to balance work and school Let’s be honest. In today’s teen world, l i fe c a n be ex pen sive. Trendy clothes, concert tickets, car payments, cell phone bills and the latest electronic gadgets can be costly. You could pile on the work hours to afford everything. But is that smart? Do those extra hours at work put your long-term earning power at risk? One thing is clear. It pays to succeed in school (literally). We k now. We sou nd l i ke you r parents (lame). But let’s take a look at some quick facts.

Allowances are fine, but for real savings, teens need a source of income. Encourage them to find a way to supplement their allowance, whether by babysitting, mowing lawns or waiting on tables. money. Some investments let you take your money out more quickly than others – that’s called liquidity. Investments offer different rates of return. You must weigh all of these

factors before put your money in any investment. It’s smart to divide your money among different kinds of investments. This is called d iversi f icat ion. W hen you put

your money in different places, you lessen your risk. W hile one investment may lose value, others may not. For more money tips for teens, visit TheMint.org.

Diplomas = Dollars High school graduates earn about $7,000 more each year on average than those who don’t finish high school. After 40 years, that adds up to more than $200,000 in extra earnings! College graduates with bachelor’s degrees earn $16,000 more each year on average than t hose who ea r n a h ig h school diploma. A f ter 40 yea rs, t hat’s a difference of $900,000. That’s almost a million bucks!

Investing that works As you save money, you’re smart to put some in investments – they can earn more money than a regular savings account. Money you set aside to invest is money that you will not need for emergencies or everyday expenses. Investments are for the long-term – years into the future. As you learn more about each kind of investment, you’ll decide which ones might fit you best. Some are riskier than others. You could lose some or all of your

Advertising Supplement to the Sun Journal, Lewiston, Maine, Friday, September 9, 2011

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Bankruptcy 101 By Craig W. Armstrong Feature Writer

Times are tough, and most people are looking for ways to make extra money. There are several ways to do this, but one way can net you some money and de-clutter your house all at the same time is to have a garage sale. You may not be able to pay off your credit card debt with the proceeds, but it may give you a little extra cash in your pocket. Each year, millions of people file for bankruptcy, usually as a last resort to their financial problems. Ac c ord i ng to one s t ud y, t he average age of someone declaring bankruptcy is 38; and 44 percent file as couples, the rest as singles, 30 percent women and 26 percent men. More than half have lost their job or suffered a serious illness. T here a re t wo ma i n t y pes of bankruptcy: Chapter 7 and Chapter 13. In Chapter 7, the individual has exempt and non-exempt assets. E xempt asser ts a re what t hey are allowed to keep and usually include a certain amount of equity in their home and car, a sma ll amount of clothing and a small amount of persona l items. A ny

asset considered non-exempt is turned over to the trustee and sold. The profits are then used to pay the individual’s creditors. Under Chapter 7 proceeding, debts are considered non-dischargeable or secured. Non-discha rgeable debts must be paid, even though bankruptcy has been filed. Student loans are one example. Secured debts enable creditors to retain an interest in some of the individual’s property until the debts are paid. Credit card debt is paid only after t he sec u red debt s have been resolved. In some cases, nons e c u re d debt s a re d i sm i s s e d due to lack of assets. Individuals should consider filing for Chapter 7 bankruptcy only if there is no hope of repaying any of their debts, there is no co-signer involved or if legal action from a creditor is imminent. Chapter 13 bankruptcy is known as a reorganization bankruptcy. Individuals who file for this type of ba n k r uptcy usua lly wa nt to pay off their debt over a threeto f ive-year period. One of t he motivators in filing for this form of bankruptcy is to keep non-exempt assets. To qualify for Chapter 13, a n i nd iv idua l may not exceed $250,000 in unsecured debt and $750,000 in secured debt.

Reasons to consider Chapter 13 vary. Common ones include being behind on a mortgage, owing the IRS, wa nt i ng to protect a ssets t hat would be liquidated under Chapter 7, obtaining relief from collection proceedings or leaving the option open to file for Chapter 7 at a later date. Ba n k r uptc y does not come w it hout do w n f a l l s . Ne g a t i v e consequences include adversely affecting credit scores for 10 years, hindering the ability to get a job or establish a new credit line and difficulty in getting insurance. Bankruptcy is not the only way to clea r debt. Indiv idua ls may consider dea ling direct ly w it h c r e d itor s a nd w or k i ng out a pay ment pla n. T hey may a lso talk to a credit counselor or debt consolidation company or get a second job. Keeping your financial head above water in these tough economic times can be a challenge. Making ends meet is tough enough, but when you throw in job loss, illness, divorce or any number of other lifealtering events, sometimes the only way out is bankruptcy. Filing for bank ruptcy is a lifecha ng ing decision t hat shou ld be considered from every angle. Ind iv idua ls shou ld spea k to a f i na nc ia l profe s siona l before committing to the process.

What services can a bankruptcy petition preparer provide? Ba n k r uptcy pet it ion prepa rers are permitted to provide services limited to the t y ping of forms.

They may not advise you in any way. Their services are subject to various statutor y requirements and limitations. Please note that although bankruptcy preparers are required to sign all documents prepared for filing, they are not authorized to sign any document on your behalf. Therefore, you and your spouse, and if filing a joint petition, must also sign all documents. Copies of all prepared documents should be furnished to you by the bankruptcy petition preparer at the time they are presented to you for signature. Likewise, bankruptcy petition preparers are prohibited by law from collecting or receiving any court fees connected with the filing of your case. C on s e quent l y, a l l c ou r t fe e s connected with the filing of your case, including the filing fee and m i scel la neou s ad m i n ist rat ive fee, should be paid directly by you to the court. The failure of any bankruptcy petition preparer to comply w it h t he law should immediately be brought to the attention of any trustee appointed in your case and the local Office of the United States Trustee.

What does the Clerk’s Office do? The Clerk’s Office provides a variety of services to the bankruptcy judges, attorneys and the public. Clerk’s Office staff provides clerical and administrative support to the court by filing and maintaining caserelated papers, signing ministerial order s, col lec t i ng aut hor i z ed fees, sending notices, entering judgments and orders, and setting hearings. The services provided by the Clerk’s Office to attorneys

and the public include responding t o r e q u e s t s f or i n f or m a t ion and making copies of papers in bankruptcy court files. Although Clerk’s Office staff cannot give you legal advice, the U.S. Bankruptcy court is a source for many forms and local rules which you will need to file your bankruptcy petition and related documents.

How do I “file” a document with the court? Ef fect ive Ja nua r y 1, 20 04, a l l attorneys must file electronically. For non-elect ron ic f i lers, bankruptcy petitions, pleadings and other papers may be submitted for filing by mail or in person at the Clerk’s Office public counters. Absent ex t raord i na r y ci rcu mstances, all documents must be submitted for filing by mail or at a Clerk’s Off ice public counter du r i ng busi ness hou rs. W hen e x t r a o r d i n a r y, c o m p e l l i n g circumstances require delivery of a document to the Clerk’s Office after hours, an emergency filing can be arranged by contacting t he appropr iate Clerk’s Of f ice during business hours. The Clerk’s Office does not currently accept documents for filing by facsimile. After completing your bankruptcy papers, mail or deliver them to the appropriate divisional Clerk’s Office accompanied by the filing fee payment or a completed application to pay fees in installments. If you want a file stamped copy of your petition, you must bring or mail a copy and the Clerk’s Office will file stamp and return it to you.

What is the creditor’s meeting? A “meeting of creditors” is the si ng le event t hat A L L debtors must attend in any bankruptcy proceeding. It is held outside the presence of the judge and usually occurs between 20 and 40 days from the date the original petition is filed with the court.

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I n chapter 7, chapter 12, a nd c h a pt er 13 c a s e s t he t r u s t e e assigned by the court on behalf of t he Un it e d St at e s Tr u s t e e conducts the meeting. In chapter 11 cases where t he debtor is in pos s e s sion a nd no t r u ste e i s assigned a representative of the Un ited St ates Tr u stee’s of f ice conducts the hearing. T he U. S. Ba n k r uptc y C ou r t , Distric of Ma ine is located at Portland USBC, District of Maine, 537 Congress Street, 2nd Floor, Portland. Its website is at http:// www.meb.uscourts.gov/index.html.

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Advertising Supplement to the Sun Journal, Lewiston, Maine, Friday, September 9, 2011


Insure yourself wisely By Craig W. Armstrong Feature Writer

Saving money is on everyone’s mind. Cutt i ng cor ners a nd t r y i ng to get the most for your money has become a way of life. One expense that’s costly until you need it is car insurance. If you drive, you need it, but making the right decision about coverage and amounts can save you money in the long run. First, consider your deductible. Some people pay extra for a low deductible and carry the minimum in liability coverage. Think about it this way: Is it easier to pay for a $500 deductible or a $500,000 lawsuit? Instead of taking this risk, raise your deductable and thus lower your premium. Then take the money you saved and apply it to the cost of higher liability coverage. It is simply a matter of shifting your money around to give yourself the most protection and security. Personal injury coverage is another thing to consider. This coverage is also known as medical payments coverage. Do you a lready have health insurance for you and your family? If you have an accident, will that coverage pay your medical expenses? If so, you could be paying twice for the same thing. Ta ke a look at you r l ia bi l it y coverage. You may have up to $ 500,000 in liabi lit y coverage, but the policy may state you have coverage of $100,000 per person. If someone were to file a $200,000 lawsuit, you’d be on the hook for half. Make sure your agent makes the total amount paid per accident and per person the same so that $500,000 means $500,000. Ma ke su re you r i nsu ra nce company will pay for a rental car while your car is being repaired. A week in the body shop may not seem long to your mechanic, but try getting around a week without a car. If you don’t have another car to drive, you’ll have to rent one and that could cost hundreds of dollars. Ta ke t he time to shop around. Start by calling for quotes and then narrow down your search. Once you have the best prices, make appointments and get dow n to brass tacks. Get all of your questions answered and determine prices for the same coverage. You want to compare apples to apples, because some companies will charge more for

the same coverage that is cheaper somewhere else. Look for every discount and take it. There are a plethora of things that qualify you for a discount. They can range from your spotless driving record to your car’s airbags. Find out what discounts are available and make sure your agent knows your qualify. This next one takes some thought and math skills. If you drive an older car, consider dropping your collision coverage. First, determine the car’s value. Say your car is 10 years old iand s worth $2,000. If you total it, you would get $2,000. But is it wor t h t he r isk of not having the coverage and banking the money you would have paid? If you do forgo this coverage, can you get your hands on the money it would take to buy a replacement car tomorrow? Finally, choose the right insurance c ompa ny. Un for t u n atel y, not ever yone has your best interest at hea r t . T here a re plent y of companies that will take advantage of you. Ma ke sure you go w it h someone you trust that will explain your policy to your satisfaction.

Important information about your life insurance policy from the Maine Bureau of Insurance

• Life Settlement : You may be able to sell your life insurance policy to a t hird part y for an amount greater than the cash surrender value or accelerated death benefits under your policy. You pay no f urt her premium. The t hird pa r t y becomes t he policyholder and receives the benefit upon the insured’s death. • Maintain Your Policy: You may be able to ma inta in your life i nsu ra nce pol ic y i n force by paying the premiums directly or using your current policy values to pay the premiums. • Policy Changes: You may be able to reduce or eliminate f uture premium payments by obtaining a paid-up policy, by reducing optional coverages, or through other options available from your life insurer.

may require an assignment of a portion or all of the policy’s death benefits.

to pay the beneficiaries named in the life insurance policy upon the death of the insured.

These options may or may not be available depending on your ci rc u m st a nces a nd t he ter m s of you r l i fe i nsu ra nce pol ic y. Please see your policy or contact you r l i fe i nsu ra nce compa ny, financial advisor, agent or broker to determine your particular options. If you’re a Maine resident and have questions about life insura nce and your rights, contact the Maine Bureau of Insurance at 800-3005000, or go to www.maine.gov/pfr/ insurance. Ask questions if you don’t understand your policy. Here’s a list of commonly used terms:

Lapse: Refers to a life insurance policy ending or expiring when a pol ic y holder stops m a k i ng premium payments.

Accelerated deat h benef it : A benef it a l low ing termina l ly i l l or chronically ill life insurance pol ic yholders to receive ca sh adva nces of a l l or pa r t of t he e x p e c t e d de at h b enef it . T he accelerated death benefit can be used for health care treatments or any other purpose.

• P olicy Loan: You may be able to ta ke out a loa n f rom your life insurance company using the cash value of your policy as collateral. Loan proceeds can be used to pay the premiums or for other purposes.

Cash surrender value: This term is also called “cash value,” “surrender v a l u e ,” a n d “ p o l i c y h o l d e r ’s equity.” The amount of cash due to a policyholder who requests t he insurance company cancel their life insurance policy before it matures or death occurs.

• T hird-Party Loan: You may be able to get a loan from another p a r t y t o p a y y ou r p ol ic y ’s premiums. In return, the lender

Expected death benefit: The face a mount of t he policy, less a ny polic y loa n a mounts, t hat t he insurance company is expected

Life insurance is a critical part of a broader financial plan. There are many options available, and you have the right to shop around and seek advice from different financial advisers in order to find the option best suited to your needs. You are encouraged to consider the following possible alternatives to [requesting a surrender of your life insurance policy, requesting accelerated death benefits under your life insurance policy, or letting your life insurance policy lapse.*]. These alternatives include, but are not limited to: • Accelerated Death Benefit: Your policy may provide an early or accelerated discounted benefit payment if you have a terminal or chronic illness.

Life settlement: Refers to a contract in which the policyholder sells his or her life insurance policy to a third party for a one-time cash payment which is greater than the cash surrender value, but less than the death benefit of the policy. A life settlement includes a viatical settlement, defined below. Policy loan: A loan issued by an insurance company using the cash value of a person’s life insurance policy as collateral. Viatical settlement: An arrangement in which someone w ith a terminal illness sells his or her life insurance policy at an amount less than the death benefit. The ill person receives cash, and the buyer receives the full amount of the death benefit. This death benefit is payable once the former policyholder dies. FMI, v isit Maine.gov Bureau of Insurance at www.maine.gov/pfr/ insurance/index.shtml * A life insurance company should choose among these three phrases to state the appropriate phrase that fits the situation of the particular policy owner to whom the notice is being sent.

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• Cash Surrender: Your policy may have a cash surrender value your life insurer would pay you if you cancel it. • Gift: You may be able to gift your policy to your beneficiary, who would then assume responsibility for paying premiums.

Advertising Supplement to the Sun Journal, Lewiston, Maine, Friday, September 9, 2011

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Disciplined investing helps keep emotions in check Stay in the market.

Knowing that financial markets are constantly changing, it’s often hard to gauge when the best time would be to jump in.

Some investors attempt to time t he m a r ket . W hen it ’s dow n, they sit on the sidelines waiting for it to ra lly before t hey get in on the action. Conversely, when t he ma rket is up, t hey wa it for a correction so t hey can buy at what t hey see as bargain rates. Moving in and out of the market by timing its ups and downs is a skill not even the most seasoned invest ment professiona ls have mastered. Consistent investment – in both up and down markets – shou ld produce more rel iable results over time.

Trying to time your investments in this way can cause you undue stress and cost you f inancia lly when you try to invest by guessing when the market has hit the “top” or t he “bot tom.” For t u nately, h o w e v e r, t h e r e a r e s e v e r a l timeless strategies that can help you el i m i nate t he emot ion a l component, and get you on the right track to successful investing.

Think long term. While past performance is never a g ua ra ntee of f ut u re resu lt s, t he ma rket s have h istor ic a l ly performed well over the long run. Investors who have developed t he discipline a nd pat ience to stay the course over the long run, de s pit e m a r k e t f luc t u a t ion s , have generally experienced more favorable results.

Watch your asset allocation. Even if you properly d iversi f y your portfolio in the beginning, changing markets will affect the va lue of your investments a nd could alter your actual allocation.

Diversify.

A well-diversified portfolio should include complementary asset classes, so they can cushion each other against the effects of market downturns and lower your portfolio’s overall risk. Consistent reviews will help you identify when your portfolio needs to be reba la nced, helping you maintain a proper asset mix. Bear in mind that asset allocation does not protect against f luctuating prices and uncertain returns.

We work for you, not Wall Street.

Patiently accept volatility. Building on t he last point, it’s important to realize that market h ig hs a nd low s a re a nat u ra l occu r rence, a nd shou ld be

c on sidere d a nor m a l pa r t of investing. Once you accept that fact, you can prepare yourself to resist the emotional urges to jump in and out of the market based solely on its current direction.

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May Lose Value

Possibly one of t he most important investment principles – a nd a t t he s a me t i me mo s t overlooked – is the need for careful asset allocation. The popular adage that tells you not to keep all your eggs in one basket is especially true when it comes to your investments.

Pay yourself first. You may have heard this before, but it’s certainly worth repeating: Save first and then spend what you have left, rather than spending first and saving what you have left. Inevitably, if you attempt to do the latter, you’ll often find there’s nothing left to save.

Reinvest dividends. Ma ny qua lit y compa nies have a histor y of pay ing div idends, regardless of overall stock market performance. Reinvesting these dividends offers you an excellent way to easily build your stock positions.

Set goals. While this may seem like the most basic idea, it’s still one of the most important. When considering your investments, you need to have a clear idea of where you are, a goal in mind of where you want to go, and then put strategies in place to help you get there. By incorporating all of the above-mentioned ideas, you will have a guide to help you in all your important investment decisions. T h is a r t icle wa s written by Wells Fargo advisors and provided courtesy of Adam Dunbar, a financial advisor. He can be reached at 774-5626 or adam. dunbar@wellsfargoadvisors.com Wells Fargo Advisors, LLC, Member SIPC, is a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company.

Advertising Supplement to the Sun Journal, Lewiston, Maine, Friday, September 9, 2011


Lend with caution By Tresa Erickson Feature Writer It’s no secret. W hen people get into financial trouble, they often turn to their families for help. It is much easier to get a loan from someone you know and love than from a bank. W hile occasiona l family loans are f ine, frequent ones can lead to big trouble, for e ver yone i nvolve d . Fi na nc ia l experts generally advise families not to loan money to each other. This is often easier said than done, however. If you have been asked for a loan recently, proceed with caution and follow these tips. Find out what the loan is for. You don’t want to lend a relative a large sum of money, only to discover t hey paid off a sma ll debt and spent the rest on the vacation of a lifetime. Make certain the loan will be put to good use, whether to pay down debt, finish a degree, start a business or for some other reason. Determine how much you ca n a f f or d t o g i v e . Re v ie w y ou r finances to see how much you can realistically lend. If you cannot give any, be honest and offer to help out your relative in some other way. Perhaps you cou ld watch t heir children while t hey work part time in the evenings. Do not go to extreme measures to find the money or overextend yourself. Give what you can, and if it isn’t enough, so be it. There’s always a chance you will not be repaid and you don’t want to put yourself into jeopardy. Draw up a contract for the loan to be repaid. Don’t throw caution to the wind and tell your relative to pay you back whenever. Chances a re t hey won’t. You’re loa ning them your hard-earned money, so arrange for it to be repaid in a timely fashion, perhaps even w ith interest. Depending upon the terms of the loan and how you go about it, there might be some tax implications. Speak to a ta x professional to ensure the right contract between parties. For the best results, you might want to have a third party draw up the contract and arrange for the payments to be deducted from your relative’s bank account automatically. Loans can be tough, particularly among families. Because you’re family, you may feel obligated to help out. If you can afford to do so and you set the right terms, the loan can work out well for everyone involved. If you don’t, there could be tension around the dinner table for some time to come. Lend money to family wisely!

Shakespeare was apparently onto somet hing when he w rote t hat lending money to friends often resulted in the loss of both the friend and the money. Money is an emotionally charged issue that has torn apart many a relationship. “Blo o d m a y b e t h ic k er t h a n water, but money can be the great divider, even in a family,” said Gail Cunningham, spokesperson for the National Foundation for Credit Counseling. “One NFCC Member A ge nc y r e p or t e d a s it u a t ion where a father put up his house as collateral for his son’s business. That business is now failing, and the situation has put a lot of stress on t heir relat ionship a nd may ultimately result in the loss of the home,” Cunningham continued.

Treat t he loa n a s a bu si ne s s arrangement. After all, you’ve now become the banker, and bankers take things seriously. Once you have agreed on the amount of the loan, discuss the interest rate, term, payment due date, and late fees. To figure out monthly payments, including interest, consider using a loan calculator, such as the one available at www.bankrate.com. Put all the terms of the loan in writing. Many web sites offer free promissory note forms. One such

site is Internet Legal Research Group at www.ilrg.com/forms/promisry. html, where you can find promissory note forms for each state. Consider having the documents notarized, as this w ill give you more legal standing if the borrower defaults. While putting it in writing is sma r t because it ma kes t he borrower more accountable, be aware that it won’t guarantee you will be repaid. It’s simply another layer of protection. Be forthcoming about any legal steps you will take

to collect an unpaid loan. Jointly reviewing a worst-case scenario in advance of the situation can go a long way to preserve a relationship if things start going south. For free and affordable confidential advice through a reputable NFCC member, call 800-388-2227 or visit www.nfcc.org.

The NFCC of fers t he follow ing sug gest ions when decid i ng whether to lend or not to lend: Do not dip into your retirement account. Loaning money is not a good idea if it means that you have to risk your retirement savings. Protect this nest-egg as though you were the mother hen, and don’t let any of your chickens touch it. Involve your spouse/partner in t he decision. Com mu n icat ion could not only save you money, but could save your marriage or relationship. If you and your spouse don’t agree on making the loan, it could result in significant stress on your relationship. Evaluate the impact the loan will have on other family members. If you loan money to one child, y o u’r e s e t t i n g a p r e c e d e n t . What if other children are not as responsible, thus the risk of them repay ing a loa n is g reater? Be prepared to deal with the potential strife such a situation could create within the family.

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Consider the reason the borrower needs the money. Do they want the loan because of an emergency like loss of job or unexpected medical bills, or because they made poor spending decisions? Will it be used for something that will improve their life, like a down payment on a home or education? Don’t be an enabler. If the borrower is engaged in a destructive lifestyle, and is habitually in financial hot water, be emotionally supportive rather than financially supportive. A b e t t er u s e of y ou r mone y would be to pay for professional counseling to get to the root of the problem, as bailing them out of their current crisis won’t address the underlying issues.

Advertising Supplement to the Sun Journal, Lewiston, Maine, Friday, September 9, 2011

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Money for college By Craig W. Armstrong Feature Writer Now more t han ever, a college education is essential to career s uc c e s s . A c ol le ge de g r e e i s something that can never be taken away and something that instills pride in those who earn it. Young or old, education is the goal of many and a financial challenge for most. A person may have the drive and desire for higher education, but no way to fund it. However, there is “free money” available. You just have to know where to look. M i l l ion s of s c hol a r s h ip s a r e awarded each year. Some of the areas in which scholarships can be obta ined include at h let ics, a c a d e m i c s , d i s a b i l i t y, r a c e , nationality and hardship, just to name a few. Start by researching w h ic h s c hol a r s h ip s a ppl y t o you r sit uat ion. T h is w i l l ta ke time and patience, but you may be surprised where you can find scholarship money. Another way to fund your college educat ion is t h roug h a g ra nt. Again, it’s just a matter of doing you r homework. T here a re t housa nds of t y pes of g ra nts ; you just have to find them. One com mon g ra nt is t he Federa l Pell Grant. This federal grant is nor ma l ly awa rded to st udents w h o h a v e n ot y e t e a r n e d a bachelor’s degree. It is needs based and awarded based on income level. Awards c a n r a nge f rom hu nd re d s to

finding a way to fund it will pay off for a lifetime.

thousands of dollars. Some grants are available based on the year you graduated high school, some are based on your year in college and many are based on financial need. Another type of grant to research is the Institutional Grant. This grant is offered by the university you attend and is usually merit based. It can be used to cover the costs of education not funded by federal assistance money. Research this type of grant by talking to your university’s financial aid offices. Ot her sources of “free money” include the Federal Work Study Prog ra m (F WS Prog ra m). This program provides jobs to students w i t h f i n a n c i a l n e e d . I f y ou currently have a job, check with your company to see if they have an tutition reimbursement plan. In some case, companies will assist in paying tuition for a commitment to work for them for a determined amount of time. Money for college AND job security? Sounds like a pretty good deal. If you don’t currently have a job, see if your parent’s employers have any tuition reimbursement programs available for employees’ children. See what your state has available. You may be eligible for money just because you live there. Check with your university and see if they will reimburse you for your skills. Can you tutor or give music lessons? There is money available. You just have to talk to the right people and look in the right places. An education will last a lifetime and

Most col leges a nd universit ies of fer mer it or non-need-based schola r sh ips to ac adem ic a l l y talented students. Students should check with each school in which they're interested for the criteria for merit scholarships. The National Merit Scholarship Program awards scholarships to students based upon academic merit. The awards can be applied to any college or universit y to meet educationa l expenses at that school. Ma ny states of fer schola rsh ip assistance to academically talented students. Students should obtain the eligibility criteria from their state's educat ion of f ice. Some col leges a nd universit ies of fer special grants or scholarships to students with particular talents. Music, journalism, and drama are a few categories for which these awards are made. Some students choose to attend a community college for 1 or 2 years, and then transfer to a 4-year school. Tuit ion costs a re substa ntia lly lower at community colleges than at 4-year institutions. Some parents may be financially able to purchase a house while their child is in school. If other students rent rooms in the house, the income may offset monthly mor tgage pay ment s. Fa m i l ies should make certain, however, that the property they purchase meets all of the requirements of rental property. If you have any questions, consult a tax professional. Commuting is anot her way for students to reduce college costs. A student living at home can save

as much as $6,000 per year. Many schools provide lists of housing opportunities that prov ide free room and board to students in exchange for a certain number of hours of work each week. Cooperative education programs allow students to alternate between working full time and studying full time. This type of employment pr o g r a m i s n ot b a s e d u p on financial need, and students can earn as much as $7,000 per year. Another way to reduce college costs is to take fewer credits. Students should find out their school's policy regarding the Advanced Placement P r og r a m ( A PP), t he C ol le ge Level Examination Program, and t he P roven ience E x a m i nat ion Program. Under these programs, a student takes an examination in a particular subject and, if the score is high enough, receives college credit. Some colleges give credit for life experiences, thereby reducing t he nu mber of cred its needed for graduation. Students should check with the college for further information. You can also write to Distance Education and Training Council at 1601 18th(eighteenth) Street, NW, Washington, DC 20009, or call (202) 234-5100. Most schools charge one price for a specific number of credits taken in a semester. If academica l ly possible, students shou ld ta ke the maximum number of credits allowed. This strategy reduces the amount of time needed to graduate. In many cases, summer college courses ca n be ta ken at a less expensive school and the credits transferred to the full-time school. Students should check with their academic advisor, however, to be certain that any course taken at another school is transferable. Most schools have placement of f ices t hat help students f ind employ ment, a nd a l l school s have personnel offices that hire

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Most colleges and universities offer their employees a tuition reduction plan or tuition waiver program. Under this type of arrangement, the school employee and family members can attend classes at a reduced cost or no cost at all. This type of program is based not upon financial need, but rather on college employment. Most colleges a nd universit ies sponsor resident advisor programs that offer financial assistance to students in the form of reduced tuition or reduced room and board costs in excha nge for work in resident halls. One of t he most obv ious ways of reducing col lege costs is to attend a low-cost school, either public or private. There are many col leges a nd u n iversit ies w it h affordable tuition and generous f i na ncia l assista nce. St udents shou ld i nvest igate a l l schools t hat meet t hei r academ ic a nd f ina ncia l needs. Some schools offer combined degree programs or 3-yea r prog ra ms t hat a l low students to take all of the courses needed for graduation in 3 years, instead of 4, thereby eliminating 1 year's educational expenses. Partial tuition remission for the children of alumni is a common practice. Pa rents a nd students shou ld i nvest igate t hei r a l ma mater's tuition discount policy for graduates. Some colleges and universities offer special discounts if more than one child from the sa me fa mily is enrolled. Some schools offer a tuition discount to student government leaders or to the editors of college newspapers or yearbooks. For more information about saving money for college, go to Student Aid on the Web at www. ed.gov.

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students to work on campus. These employ ment prog ra ms a re not based upon financial need, and working is an excellent way to meet college expenses.

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Joseph R. Poirier Financial Professional Joseph.Poirier@axa–advisors.com Tel: (207) 786-0651 www.poirierassociates.biz

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Poirier Associates 541 Lisbon St., 2nd floor Lewiston, ME 04240

www.axa-equitable.com All guarantees provided by annuities are based on the claims-paying ability of the issuing life insurance company. Annuities issued by AXA Equitable Life Insurance Company (AXA Equitable). AXA Advisors, AXA Network and AXA Equitable are affiliated companies, all located at 1290 Avenue of the Americas, New York, NY 10104, (212) 554-1234. © 2010 AXA Equitable. Securities offered through AXA Advisors, LLC (NY 212-314-4600), member FINRA, SIPC. Investment advisory products and services offered through AXA Advisors, LLC, an investment advisor registered with the SEC. Annuity and insurance products offered through AXA Network, LLC and its insurance agency subsidiaries. AXA Network, LLC does business in California as AXA Network Insurance Agency of California, LLC and, in Utah, as AXA Network Insurance Agency of Utah, LLC. AXA Advisors and its affiliates do not provide tax or legal advice. Poirier Associates is not owned and operated by AXA Advisors or AXA Network. Retirement Planning Specialist title awarded by AXA Advisors, based upon receipt of a Certificate in Retirement Planning from The Wharton School, University of Pennsylvania. GE-55118Ga (5/10)

Advertising Supplement to the Sun Journal, Lewiston, Maine, Friday, September 9, 2011


Money 2011