Teaching Children Financial Responsibility Carries Through Adulthood

Image courtesy of freedigitalphotos.net by junpinzon

During my teenage years, I was given responsibilities and chores around our home and at some of the rental properties my father owned. It was hard work and I remembered eagerly looking forward to Sunday afternoon, when I would receive my allowance for the week. My father would always tell me, “Scott, you better save that money for your college education”. At the time, I had no idea what college cost, but I did get the idea that saving was important. On other occasions, Dad would often encourage me to save “because you never know when you’ll need it”. That consistent message of financial responsibility given to me at an early age was the foundation I needed as I grew older and began making a regular full-time salary. One of my best friends from childhood, on the other hand, was not taught financial responsibility as a child and I have watched him live beyond his means for many years and he is paying the price today.

I share this with you because if we are honest with ourselves, most of our spending habits today are influenced heavily by the spending habits of our parents and the lifestyle we experienced growing up. As a result of our collective experiences, saving money comes easy for some, but harder for others. Regardless of our experiences, however, saving is a discipline that can be learned through practice. When I first married, my wife knew very little when it came to being financially responsible because she never learned it at home. It’s a work in progress, but after ten years of marriage, I’m proud to say that she is a very smart shopper and won’t buy hardly anything unless it’s on sale. Her challenge isn’t buying items on sale, it’s buying too many items that are on sale. Just like my wife, I search for bargains too, but my personal spending challenge isn’t in purchasing a lot of small ticket items, it’s in buying the larger ticket items like sporting goods, lawn/garden equipment, home improvements, etc. We see this spending pattern with many clients where one spouse typically makes purchasing decisions on smaller ticket items while the other spouse makes purchasing decisions on the larger ticket items.

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There’s More to Estate Planning Than Just the Will

Article Credits: The New York Times | September 6, 2014 | By Alina Tugend | Courtesy of Ed Slott and Company

More to Estate Planning Than Just the WillWILLS, health care directives, lists of passwords to online accounts. By now, most people know they should prepare these items in their estate planning — even if they haven’t yet — and make them available to trusted family members before the unthinkable, yet inevitable, happens.

But the information family and friends will need when a loved one dies goes far beyond those much-talked-about documents, and having them can make the end of life just a little less painful for those who remain behind.

Consider the experience of John J. Scroggin, who runs a tax business and estate-planning firm in Atlanta. His father, who died in 2001, wanted to be buried in Arlington National Cemetery in Washington.

“I called Arlington and they told me I needed his DD 214 to bury him at the cemetery.” Mr. Scroggin recalled. “I had never heard of a DD 214, but they told me if I could not find it, they would put him in cold storage for six months while they found it.”

After a frantic search, “I found Dad’s DD 214 as a bookmark in a book,” he said. The Arlington burial took place. The lesson: Add military discharge papers to the documents you hand over to family members or trusted friends.

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Buffett hoards cash, individuals’ holdings hit 14-year low

C&J Wealth Advisors are big fans of the long-term strategic value that cash offers investors when it is deployed at advantageous prices. As markets continue to make new highs, it’s natural that more individual investors want to participate in these gains and disdain the role that cash plays within their investment portfolio. As this article illustrates, Warren Buffett is doing the opposite and letting cash accumulate to all-time highs. Investors should look beyond the fact that cash is earning nothing today and recognize that it holds future value when it’s invested intelligently. The hardest part in holding cash is maintaining the patience & discipline to wait until an opportunity arises.

Scott Smith
C&J Wealth Advisors
Article Credits: CNBC Business News | James Saft; a Reuters columnist. The opinions expressed are his own.

Buffett hoards cash, individuals’ holdings hit 14-year low

cash in portfoliosIndividual investors have been cutting back on cash in portfolios, the exact reverse of what Warren Buffett has been doing at Berkshire Hathaway.

Who do you think has got it right?

Cash at Berkshire Hathaway stood at just over $55 billion as of June 30, an all-time high and two and a half times the level he’s in the past said he likes to keep on tap to meet extraordinary claims at his insurance businesses. That’s also up more than 50 percent from a year ago.

Buffett’s green pile is in sharp contrast to individual investors, who’ve cut cash in portfolios to 15.8 percent, a 14-year low, according to the July asset allocation survey from the American Association of Individual Investors.

To be sure, businesses and individuals hold cash for different reasons, but Buffett has used Berkshire, in part, as an investment vehicle through which we can interpret his views on markets, or at least the prices of some assets in them.

Berkshire, of course, has some difficulties in putting cash to work not faced by your average dentist or lawyer, in that it tends to make very large investments and as such may need to be more patient than smaller fry. So it is quite possible Berkshire Hathaway is waiting for the right acquisition to come along.

It is also similarly possible that Buffett is not happy with the prices, and is biding his time against a day when prices have been marked down. One thing not influencing Berkshire is tax policy, as all of its cash is generated in the U.S., making it not one of the legion of corporations holding money offshore to avoid a repatriation tax.

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