SW  M     SorensenWealth Management       The (5) Dangers that May Cause you to Lose 50%                 of your Net Worth...
IndexThe (5) Dangers that May Cause you to Lose 50% of your Net Worth in One Dayand (4) of them have nothing to do with th...
Dying Without a Formal                                                                             Estate Plan/Will       ...
Dying Without a Formal                                                                             Estate Plan/Will       ...
Unexpected,                                                                         Unprotected Misfortune      3Unexpecte...
Unexpected,                                                                          Unprotected Misfortune      4Unexpect...
Unexpected,                                                                         Unprotected Misfortune      5Unexpecte...
Unexpected,                                                                         Unprotected Misfortune      6Unexpecte...
Unexpected,                                                                         Unprotected Misfortune      7Unexpecte...
Unexpected,                                                                         Unprotected Misfortune      8Unexpecte...
Untimely Death of a Key                                                                     Person in a Privately Held Bus...
Untimely Death of a Key                                                                     Person in a Privately Held Bus...
Divorce                                                                                                 11Divorce         ...
Divorce                                                                                                 12Divorce         ...
Divorce                                                                                                 13Divorce         ...
Divorce                                                                                                 14Divorce         ...
Upheaval in the                                                                          stock market                15Uph...
Upheaval in the                                                                          stock market                16Uph...
Upheaval in the                                                                          stock market                17Uph...
Upcoming SlideShare
Loading in...5
×

Swm free report

69

Published on

Published in: Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
69
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Swm free report

  1. 1. SW M SorensenWealth Management The (5) Dangers that May Cause you to Lose 50% of your Net Worth in One Day and (4) of them have nothing to do with the Stock Market!
  2. 2. IndexThe (5) Dangers that May Cause you to Lose 50% of your Net Worth in One Dayand (4) of them have nothing to do with the Stock Market!1. Dying Without a Formal Estate Plan/Will . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-2 Index pages2. Unexpected, Unprotected Misfortune . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-83. Untimely Death of a Key Person in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-10 a Privately Held Business4. Divorce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1-145. Upheaval in the Stock Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15-17 ii
  3. 3. Dying Without a Formal Estate Plan/Will 1Dying Withouta Formal EstatePlan/Will Thedate ofway to optimizedoesn’tfinancesthattoway. Ourthe calendar diminish a best death- but it your work is get out and pick birth certificates don’t have expiration dates. Preparing for the inevitable will significantly the stress and challenges your family will most certainly face. If you die without a formal estate of other matters. Most importantly, plan, your estate tax exemption proper estate planning ensures may not be properly applied and that the family and friends of the could result in tax dollars being paid deceased are protected. In order to to the government unnecessarily. understand the urgency of proper Each American has an estate tax estate planning, let’s take a look exemption of $5 million through 2012. at the estate of Elvis Presley after If a surviving spouse files a properly his death. Upon his death in 1977, completed tax return, even when Presley’s estate was worth an no estate tax is due, he or she can estimated $10 million. However, Elvis later use his or her unused estate did not utilize proper estate planning tax exemption, plus the unused methods. After probate, legal exemption of the deceased spouse fees, and estate taxes, his estate decreased by a devastating 70%. Estate planning involves the Consequently, this left his family with process of which an individual or only $3 million. This was an extremely family arranges for the transfer of unfortunate financial loss and could property at death, and a variety have been easily avoided.1 one Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  4. 4. Dying Without a Formal Estate Plan/Will 2Dying Withouta Formal EstatePlan/Will The lack of a formal estate plan, fees can consume between six regardless of the income level or and ten percent of your estate. net worth of an individual, can Furthermore, that percentage is cause extreme financial loss and calculated prior to any deduction unexpected hardship for surviving or liens deducted from the estate. heirs. Proper estate planning includes In addition, proceedings of probate the following: are considered a matter of public record. Therefore, anyone can » Implementation of tax planning/ go to the county courthouse and tax saving strategies discover every detail of your estate. » Ensuring transfer of wealth and Fortunately, there are effective specific personal property estate planning strategies that may » Appointing guardians for minor be put in place to avoid this probate children process altogether. » Establishing trusts for minor children Durable Power of Attorney for » Naming trustees Health Care » Naming a personal representative to administer your Have you thought of who will estate make medical decisions for you » Planning for disability or on your behalf if you become incapacity incapacitated? You may want to consider a Durable Power of Proper Estate Planning Avoids Attorney for Healthcare. This Probate important legal document authorizes1 the agent you designate to make Probate is a legal process that healthcare decisions for you. occurs after someone passes. It usually consists of proving that the It is critical that you ensure that deceased’s will is valid, identifying you have a proper estate plan in and appraising the deceased’s place to protect your family and property, paying outstanding debt loved ones from the risk of losing and taxes, and distributing the half your net worth in one day. property per the will or state law. One of the benefits of working with our firm is our network of qualified Probate is expensive and takes experienced estate planning a considerable amount of time. The attorneys that can assist in putting one average settlement time frame lasts a new plan in place or updating anywhere from nine months to two your current plan if necessary. Call years! According to the American us today and we will assist you in Bar Association, depending on the determining which professional is state, probate and administrative appropriate for your unique situation. Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  5. 5. Unexpected, Unprotected Misfortune 3Unexpected,UnprotectedMisfortune “The only thing that is constant is change” - Heraclitus W e all know life is constantly changing. Expect the unexpected. You can never be 100% prepared for tragedy, but you can significantly reduce your risk. Here’s how… According to Genworth Financial, Long Term Care 40% of people currently receiving Did you know that recent studies long term care services are under indicate that 70% of people age the age of 65. These people need 65 or older will need long term long term care assistance due to care services at some point in their diseases, disabilities, and critical lifetime? In addition, 40% of people mental conditions. currently receiving long term care 2. My family will take care of me services are between ages 18 to 64 (Genworth Financial). With the The majority of people rely on steady increase of healthcare costs friends or family to care for them and life expectancy, more and more in the unfortunate event that they people are faced with the reality require long term care assistance. of needing long term care at some Unfortunately, people don’t realize point in their lives. It is estimated that providing long term care for that 6 out of 10 people in the United someone is not only exhausting but States will need long term care extremely time consuming. Therefore,2 during their lifetime (longtermcarelink. when planning for long term care, net). However, far too many you must consider if your friends or people still depend on government family members will have the time programs to provide this support and funds available to take care of to them that most likely will not be you. More importantly, you need to there when they need it. ask yourself if you want to place that burden upon your loved ones? Five Common Myths about Long Term Care Insurance: 1. I’m too young to need Long Term Care Insurance two Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  6. 6. Unexpected, Unprotected Misfortune 4Unexpected, Unexpected,Unprotected UnprotectedMisfortune Misfortune 3. Medicare and Medicaid will Homemaker services $48,620 cover the cost of my long term Home health aide $51,480 care bills Private, one bedroom assisted living facility $42,000 Private room nursing Unfortunately, these programs will home care $93,000 supplement a small percent of the cost of long term care, but are not As you can see, the costs of long intended to cover care that assists term care are extensive. Failure to individuals with their activities of plan for this in the future can result daily living for any long period of in great sacrifice from friends and time. family members. Furthermore, it is 4. Health insurance will kick in to help puzzling that people will purchase cover my bills for long term care fire insurance for their home before they purchase long term care when Unfortunately, health insurance rarely research has indicated that long covers ongoing persistent needs. term care is 600 times more likely 5. I have enough money saved to to be used than the fire insurance. provide for my own long term care What about auto insurance? Long assistance term care is 120 times more likely to be used than auto insurance and Before relying on your own personal long term care services are 20 savings as a method of long term times more expensive!!! We do not care planning, it is important to recommend that you go without fire consider the average annual costs or auto insurance. However, we do of long term care in California recommend that you consider long2 according to Genworth Financial: term care insurance as a significant component of your financial plan. two Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  7. 7. Unexpected, Unprotected Misfortune 5Unexpected,UnprotectedMisfortune Replacing the loss of personal in a lump sum with the insurance income through life insurance proceeds such as, funeral and estate expenses, tax bills, home mortgage, Have you ever thought about kid’s educational fund, etc.. what would happen to your family » Ongoing financial needs: These if you were to pass away during are needs your family may face in your prime working years? What their immediate future. How much challenges would they face if they money will your family need on an did not have your income to rely ongoing basis to maintain the lifestyle upon? How would their lives be they are accustom to? affected by this tragedy? These are all pertinent questions that need to In addition, it is also important be asked to ensure that your family to plan for the adjustment period is properly protected should a crisis your family will encounter upon arise. your passing. Remember, your spouse may need to take a leave of Life insurance is a simple absence or cut back on his/her job solution to protect your family in the to spend more time with the children unfortunate event of your passing. or deal with the grief of your But what type of life insurance passing. So how do you determine should you purchase and how the appropriate amount of life much? Life insurance is an integral insurance to purchase? One method component of your financial plan is the Multiple of Income Approach – and it is crucial that you purchase Generally, you need to have five to the appropriate amount of coverage seven times your annual income as a2 for your family’s unique needs. good starting point for life insurance The first step in shopping for life coverage. However, this may vary, insurance is to identify the two major depending on your life factors (age, financial needs of your family: income, marital status, children, cost of living, etc.), so it is important to » Large cash needs: These are consult a professional to assist you in items that you would want to be paid this crucial investment. two Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  8. 8. Unexpected, Unprotected Misfortune 6Unexpected,UnprotectedMisfortune If you have not had a life So the question remains, can insurance replacement analysis in parents be financially responsible the past few years, or if you have, for the negligence of their child? and some of your significant life Yes, parents are responsible for the factors have changed, you need to negligence of their children even consult with a professional to ensure if they are over the age of 18. that you have sufficient coverage Furthermore, many parents wonder in force. While you can’t guarantee if they have “full coverage” if that that you will always be around to is enough coverage”. It is important earn an income, you can guarantee to understand the difference financial security for your family in between “full coverage” and the unfortunate event of your passing “enough coverage”, especially in the during your prime income earning circumstance of teenage automobile years. accidents and negligence. Umbrella Policies In order to understand the urgency of purchasing “enough Did you know that according insurance”, consider the following to the National Highway Traffic potential injury claim described by and Safety Administration (NHTSA), William R. Richardson, President of “motor vehicle crashes are the the Teen Victim Impact Program, Inc. leading cause of death for American DBA : Teenagers, with teens involved in three times as many fatal crashes as Your 17-year-old child is driving other drivers. Approximately 3,000 their car and they hit a college-aged teenagers die in car accidents in student head-on. The injured victim2 the United States every year, and requires life flight from the scene of 1 in 5 sixteen-year-old drivers in an the accident to the nearest trauma accident in their first year of driving?” center. Upon arrival, the victim requires intensive care stabilization Parents must be aware of the for 10 days before surgery can be consent they are signing when their conducted to repair a compound teenagers begin to drive. Texting, fracture to her tibia. Doctors also drinking, and passenger distractions have to wait for the brain swelling cause a disturbing amount of to diminish so that they can begin fatalities, and a legal battle is the conducting extensive neurological last thing a parent wants to be testing to determine the extent of a two challenged with. Forbes recently closed-head injury. The victim also reported that “texting while driving has multiple face lacerations as well causes 1 teen deaths every day.” 1 as deep cuts throughout other parts Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  9. 9. Unexpected, Unprotected Misfortune 7Unexpected,UnprotectedMisfortune of her body as a result of hitting the swim as a result of her vision issues windshield prior to being ejected and normal activities of daily living from the vehicle. The cuts require are impaired. Although she can the use of sutures too numerous to move her arms and legs, she has count and, upon healing, will result permanent numbness and tingling in permanent disfiguring to her in her extremities and her doctors face and other body parts. She lost determine that it’s too dangerous to two fingers on her left hand (one operate on her spine as a result of of them being her ring finger) and, concern over severing her already upon discharge, will require home compromised spinal cord. She healthcare and, when able, will will have to learn to live with the require physical therapy at least changed sensations. It’s too bad, too, twice each week for eight months. because the victim was a sophomore Although the victim may walk again, at Georgia Tech with a 3.9 GPA in she will walk with a permanent limp Chemical Engineering and plans to and will require a cane. In addition, enter the military to satisfy her ROTC this may require a hip replacement scholarship obligation. Unfortunately, surgery in 20 years as a result of claims like this are made every day. compensation techniques. Before So what does this mean to her discharge from the hospital, the parents of this 17-year-old the attending physicians ultimately child at fault for this accident? diagnose the extent of her closed- Insurance companies are in most head injury. Testing confirms that the cases, obligated to pay the amount victim has lost all short-term memory. equivalent to the liability limits of the She has also lost her ability to taste2 insurance policy selected. Therefore, as a result of trauma to her head. if the driver responsible only had She also has a permanent double a policy with $50,000 in liability vision that requires special corrective limits, the parents of that driver are lenses. Of course, she can no longer responsible for the remainder of two Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  10. 10. Unexpected, Unprotected Misfortune 8Unexpected,UnprotectedMisfortune what the insurance company does not cover. Therefore, the parents may is full of surprises which is why it is critical that you ensure your family be required to sell property, garnish and your assets are protected wages, or sell off assets to cover the should an unfortunate event arise. remaining expenses to ensure that One of the benefits of working the victim is made whole. Therefore, with our firm is our network of if you don’t ensure that you have qualified experienced insurance “enough insurance” you may be professionals that may evaluate putting your life saving’s and all of your current insurance policies and your hard work at risk. future needs in order to determine the appropriate protection for you Having “enough” insurance in and your family. Call us today and place will protect you from the we will assist you in deciding which possibility of losing half of your net professional is appropriate for your worth in one day. We all know life unique situation.2 two Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  11. 11. Untimely Death of a Key Person in a Privately Held Business 9UntimelyDeath of aKey Personin a Privately B usinesses are really made-up of a network of individuals who provide value to raw resources. In small businesses the web of resources is quite small so when a key person suddenly exits the day-to-day operations, theHeld Business business, the families, the employees and the clients all suffer! Did you know that the value of Death of the Co-Owner a family’s business may be reduced This will affect business operations dramatically by the death of a key as the search for a qualified person? In some cases, it may be replacement begins. In addition, necessary to sell the business to there may be conflicts that arise create the liquidity necessary to pay between the surviving owner and the estate taxes, which generally are the deceased co-owner’s spouse. due in nine months after the owner’s The deceased’s spouse may want/ death. Key man insurance can help need money and if the owner this, consider the scenarios below: does not have the funds to provide Death of the Owner they will have to be taken directly from the business. Furthermore, the Imagine… as the business begins deceased’s spouse may become the to experience the aftermath of this new co-owner. tragic loss, the following will begin to unfold: Loss of income flow to Death of a Key-Person surviving spouse, business assets Many businesses have a key must be liquidated for pennies on employee or person that they the dollar, employees lose their jobs heavily rely on. What if this person3 and their families begin to endure suddenly passes away? Imagine financial challenges. the costs associated with finding a replacement for this loss? Solutions?three Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  12. 12. Untimely Death of a Key Person in a Privately Held Business 10UntimelyDeath of aKey Person Buy-Sell Agreement Key-Employee Insurancein a Privately This agreement involves the sole owner and key-employee and is The cost the key-employees death will inflict on the businessHeld Business funded with life insurance. In the is estimated and life insurance is unfortunate death of the owner, it purchased, in that amount to insure is agreed that the business will then the life of that key-employee. This be sold to the key-employee at a policy is owned by the company stated or formula-based value. This itself and all proceeds upon the purchase price is funded through death of the insured are tax-free. a life insurance policy owned by If you have established a business, the key-employee, insured on the it is highly advised that you take owner’s life. In order to ensure a look at these critical steps in that the employee can afford the protecting yourself, your family, and premiums for this life insurance your business from the danger of policy, they are compensated with a losing 50% of your net worth in a bonus equal to the premium amount. single day. Therefore, in the event of the owner’s If you own a business, it is death, the employee purchases imperative that you review your the business and it continues as is, existing plan should an unfortunate and remains in-tact. The deceased event arise to ensure that you will owner’s spouse then receives a lump not lose 50% of your net worth sum payment for the business and in a single day should yourself, everything is settled. business partner, or key employee3 Cross-Purchase Buy-Sell Agreement unexpectedly pass away. One of This agreement between two the benefits of working with our partners is also funded through firm is our access to a network of proceeds from life insurance. The qualified experienced insurance partners buy life insurance policies professionals that may evaluate your on one another with face amounts current plan in place and provide equal to the value of the other’s recommendations if necessary. Call share of the business. Upon the us today and we will assist you death of one of the partners, the in deciding which professional is business is purchased and a lump appropriate for your unique situation. sum paid to the deceased partner’sthree spouse by the surviving partner from the life insurance proceeds. Again, the business remains in-tact and continues on. Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  13. 13. Divorce 11Divorce W hen you are married, your net worth is the total household assets. Guess what happens to your net worth in a divorce? You only get half - in actuality, one of you ends up with less than half. Then add to the equation the 3rd person in every divorce- your lawyer. Did you know that today in the United States 40-50% of first marriages end in divorce and 60% of second marriages will end in divorce? In an article on marriage and marriage each year. “The average divorce, author Marty Friedman cost of a divorce can cost anywhere reviews some interesting statistics from several hundred to several on married people who reach million dollars. anniversaries: #1 Cause of Divorce » 5th wedding anniversary – 82% Ironically, the number one cause » 10th wedding anniversary – 65% of divorce according to an article » 25th wedding anniversary – 33% by Alex Veiga from the Huffington » 35th wedding anniversary – 20% Post, is money. It is well known that » 50th wedding anniversary – 5% couples need to maintain a close With divorce becoming watch on their own financial habits increasingly more common in the in order to prevent financial troubles United States, it is important to in a relationship. Failure to do so may examine the average costs of result in relationship troubles and divorce and what that means to ultimately divorce. It is imperative couples. According to staff writer that couples uphold consistent open Leah Hoffman for Forbes.com, nearly communication about their finances.4 one million Americans end their four Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  14. 14. Divorce 12Divorce The following are seven steps experts Don’t split costs 50/50 recommend to prevent potential Everyone knows that money is marital financial issues: power. However, splitting costs right down the middle in a marriage Disclose financial records – share can foster feelings of resentment statements for bank accounts, credit when one spouse receives a higher cards, student loans, retirement income than the other. It is important accounts, credit reports, FICO scores that each spouse hold equal say in etc. This affords couples with the money making decisions. opportunity to determine what you own and what your debts are so Talk about spending everything is out in the open. It is important to understand your spending differences. One may count every penny when their Discuss Financial Goals spouse parts easily with money due Ensure that your life goals and to shopping habits. This can prevent necessary financial commitments are future financial related issues. aligned with one another. Discuss short and long-term goals, including Treat your money as “our money” paying off credit card debt, and Anthony Chambers, clinical draft budgets that set you on a clear psychologist at the Family Institute path toward your goals. at Northwestern University, recommends that couples arrange Keep your credit cards separate for their paychecks to be directly In order to avoid potential impact to deposited into a joint account that your credit rating, keep your credit4 is used to pay shared expenses. If a cards in your own name with your spouse feels they need some of their spouse as an authorized user. This own “play” money in a separate also establishes some accountability, account, ensure that the funds come as authorized users are able to from the joint account so that both check account balances and track spouses know where the money is spending on the card. going. four Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  15. 15. Divorce 13Divorce Divorces are expensive! Pre-Nuptial Agreements According to Livestrong.com, a two-day trial can cost as much as Have you ever thought about the $25,000! Furthermore, lawyers idea of a prenuptial agreement? typically cost between $150 and This has often been considered $1,000 an hour. However, there are limited to only the rich and famous, some alternative options: but today this agreement can go beyond the preservation of assets 1. Don’t Get Divorced before the marriage. Furthermore, 2. Plan before you get married according to an article from the Harvard News Office, Beth Potier 3. If you must get divorced, do these explains that this agreement may things: represent an exit agreement far Use a mediator instead of an closer to the couples’ wishes than attorney – using a mediator can the court-ordered divorce. An significantly reduce the cost of a excellent prenuptial agreement can divorce. In comparison to the cost of even exert a positive force on a divorces with an attorney involved, healthy marriage. However, only 5 (around $25,000), a mediation to 10 percent of marrying Americans divorce only costs around $5,000. enter into prenuptial agreements. Request to pay your lawyer a flat Heather Mahar, a fellow at the fee – A flat fee when handling John M. Olin Center for Law, a divorce affords you with the Economics, and Business at Harvard opportunity to control costs. Expect Law School, and 2002 graduate to pay a fee of around $1,000 for of Harvard Law, conducted a each contested issue faced (child study on marriages and prenuptial4 custody, child support, division of agreements. Prior to the study, property, etc.). Heather, in similarity to the majority of Americans, had four Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  16. 16. Divorce 14Divorce very negative feelings in regards Prenuptial agreements also to prenuptial agreements and may help identify irreconcilable was actually against them. Upon differences prior to the couple completion of her study, Heather being married. If a couple can’t had an entirely different outlook on agree on important things prior to prenuptial agreements: their marriage, maybe they should reconsider. Furthermore, This may be “prenuptial agreements are a a possible solution to decrease the state-enforceable way of ensuring increasing divorce rate in America. that couples talk about things, talk through what kind of marriage These are just a few of the they want and – it may be harsh possibilities of preventing a 50% to say, but make there be legal decline in your net worth from ramifications if you veer off that divorce. We leave the rest up to you! course, to me, it’s premarital Call us today so we can assist you counseling.” before you need the services of an attorney or divorce mediator.4four Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  17. 17. Upheaval in the stock market 15Upheavalin the StockMarket T he game of investing has changed. In recent years, we have witnessed the roller coaster experience of investing. Dramatic highs and lows have called for a new playbook. Did you know that the greatest single decline in the value of the stock market, as measured by the Dow Jones 30 Industrials Average (DJIA), was October 19th, 1987? On that day, the market lost 22.6 percent, according 1 to the Wall Street Journal. Keeping your eye on long-term goals may help overcome the feeling of panic that market volatility can inspire. We’ve just witnessed the lost decade for investors: Imagine if you were planning on the market nearly seven years to retiring at the beginning of 2000. recover those losses! By late 2007, Could you have retired? Where we were feeling pretty great as the would you be today? Many wonder stock market soared to new heights if the roller coaster will ever calm (O’Neil, 2007). But alas, we crash down… again in 2008! The 18 month period from October 2007 to March5 The decade began with the dot 2009, saw the DJIA plummet over com meltdown in the spring of 2000, 50%. Over $16.3 Trillion in household where 80 million Americans lost 50% wealth was to 80% of their life savings. It took five Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  18. 18. Upheaval in the stock market 16Upheavalin the StockMarket lost in the 2008 recession, and we Do you know anyone still driving are still $8.3 trillion down from the a 1952 Packard? Probably not. peak (Bloomberg, 2012). When it debuted in 1952, the Packard was a fantastic car. But Many investment advisors it pales in comparison to today’s still utilize the Modern Portfolio auto amenities and safety features. Theory (MPT) of Investing when Similarly, MPT relies on assumptions managing their portfolio. This theory that were created in a very different was developed in 1952 by Harry world than exists today and over Markowitz and won him a Nobel time, have proven inconsistent Prize in economics. This theory is with real-life investor and market essentially an asset allocation theory behavior. To put it simply, the old on constructing optimal portfolios rules of investing just don’t seem to offering the maximum possible return work anymore. Yet, many financial for a given level of risk (investopedia, advisors still adhere to the classic 2012). In practice, this theory leads “buy-and-hold” strategy espoused to buy and hold, where investors buy by MPT. This theory claims that large assets with the intent to hold them swings in the DJIA should be few for a long period of time (several and far between. However, this is years) in order to ride out the ups far from the devastating realities in and downs of the market. This leads recent years. to the biggest question, has the financial world changed since the 1950s (The Brandes Institute)?5 five Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771
  19. 19. Upheaval in the stock market 17Upheavalin the StockMarket MPT states that the odds of the Dow Call us today to schedule a falling 7.7% in one day are 1 in 50 complimentary Portfolio Stress Test. billion. Let’s put that in perspective: We have identified seven economic » That equates to once every 13.7 scenarios that we believe have million years some chance of occurring over the » Dinosaurs became extinct next few years. Based on these roughly 65 million years ago scenarios, we “stress test” your » Man arrived on the scene in portfolio to indentify where it may his earliest form approximately 5 be vulnerable. Based on this analysis million and our investment process, we years ago then offer suggestions on how to restructure your portfolio so it has So, essentially, MPT predicts that an opportunity to profit regardless the devastating Dow plunge of 7.7% of whether the market goes up or in one day would happen once in a down. The world is changing fast world’s existence – yes, only once in and this test can help highlight where all of mankind! your portfolio may need to change. It actually happened 4 times in Now that you’ve taken the time 2008 alone, for a grand total of to assess the 5 biggest dangers that 12 times in the last century (Short III, can cut your net worth in half, call us 2009)! today to schedule a comprehensive review of your current strategies. Unfortunately, there is no crystal We will evaluate your needs for ball for investing. Of course, the short updating or creating the following:5 answer is nobody knows what the • Estate plan/will market has in store for us. We see • Proper insurance it in every single financial product • Buy-Sell agreement, Cross-Purchase disclaimer: “Past performance is no Buy-Sell Agreement, Key-Employee guarantee of future results”. In these insurance as applicable challenging markets, fear has now • Wealth Building Blueprint – 4 Step paralyzed many investors. Yet making Investment Process the wrong decision (or not making • Preservation strategies to protect one at all) can cost more than just your assets from disaster investment losses, it can cost your retirement. five Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771

×