Aequus Newsletter Articles

Finding Meaning in the 2nd Half of Life

Individuals in mid-life and beyond are increasingly viewing retirement not as a time to relax, but as a time to explore their potential. It was Abraham Maslow, a psychologist, who gave us the term, “self actualization.” He called it man’s desire for fulfillment, “to become everything that one is capable of becoming.” For many, the path to self-actualization is through their “work”— which should be defined as the productive activities, paid or unpaid, that gives their lives meaning and a sense of purpose.

Is the Market Making You Motion Sick?

Nobody needs to be told that the markets are volatile. The CBOE Volatility Index, known as the “Vix” or Wall Street’s “fear gauge” jumped in the summer of 2011 to its highest level since the financial crisis of 2008. It is not unusual for the Dow Jones to gain 100 or more points in a single day and then fall 100 more points the very next day. Up and down. Down and up.

How Can We Teach Our Children the Value of a Dollar?

Start teaching your children at a young age that money is earned by working and that you should spend less than you earn. To help them understand what it’s like to get paid on a schedule, you may want to begin paying them an allowance. Then help your children set goals for how they spend and save their allowance.

The Psychology of Giving

    Although a number of studies have focused on the effect of income on happiness, Elizabeth Dunn, a social psychologist at the University of British Columbia, also wanted to understand the effect of spending choices on happiness. For example, previous research clearly demonstrated that income has a predictably positive effect on level of happiness, but these levels remain flat over time even as income increased. This finding puzzled Dunn and she wanted to find out why happiness did not increase along with income.

We Depend on Word of Mouth

One of the keys of our success, if not our survival, is word of mouth. Not so much ours…but yours. According to investment firm Charles Schwab, a typical independent advisory firm gets over 88% of its new clients through referrals. Your recommendations and introductions can help Aequus grow it network of valued business associates as well as clients.

Emerging Fraud Trend: Hostile Email Account Takeover

Do you know who is on the other end of that email address? It might not be as apparent as you think. Learn how to identify possible fraudulent requests. Many who have fallen victim to identity theft assumed it could never happen to them.

Surviving Economic Uncertainty

Monitoring what’s happening in the U.S. economy isn’t always easy. Seemingly small events that happen within our borders or overseas can sometimes have a huge impact on the markets and the economy. Adopting the right mindset and following a few common-sense rules may help you survive regardless of short-term events.

Do You Suffer from Decision Fatigue?

By John Tierney
    Three men doing time in Israeli prisons recently appeared before a parole board consisting of a judge, a criminologist and a social worker. The three prisoners had completed at least two-thirds of their sentences, but the parole board granted freedom to only one of them. Guess which one:

Case 1 (heard at 8:50 a.m.): An Arab Israeli serving a 30-month sentence for fraud.
Case 2 (heard at 3:10 p.m.): A Jewish Israeli serving a 16-month sentence for assault.
Case 3 (heard at 4:25 p.m.): An Arab Israeli serving a 30-month sentence for fraud.

How Are ETFs Different From Mutual Funds?

You’ve probably heard of exchange-traded funds (ETFs), but you may not have a clear idea of how they work, how they differ from mutual funds, or how they might fit in your investment portfolio. Here’s your chance to take a closer look at ETFs and examine the characteristics they share with mutual funds as well as those that set them apart.

Magical Thinking: Impact on Financial Distress, Decisions, and Behavior

By Dr. William “Marty” Martin
During times of distress, it is normal and adaptive to believe that you can affect a situation or circumstance even though you know deep inside that you have absolutely no control. Reflect for a moment about high-performing star athletes who go to bat with their “lucky rabbit foot” believing magically that the “lucky rabbit foot” will cause them to hit more baseballs and run to home plate more often. In reality, we all know that the “lucky rabbit foot” does not actually cause the outcome of the game to change. Do investors also engage in magical thinking by believing that if they do or don’t do something that this will influence the randomness in the stock market?

Share Aequus With Others

According to investment firm Charles Schwab, a typical independent advisory firm gets over 88% of its new clients through referrals. Indeed, of the new clients Aequus adds each year, most were introduced to us by current clients. If you know someone who might find our services of value, tell them about Aequus. We offer a full range of services customized to meet each client’s needs.

Cicily’s Prescription for Success

by Cicily Maton
During a recent conversation with a colleague, I told him how well my recovery from knee surgery was going. He asked, “What did you do?” I told him my preparation for my medical procedure was not unlike how one might prepare an investment strategy.

Investing Through Life’s Stages

    Investing is a lifelong process. The sooner you start, the better off you’ll be in the long run. It’s best to start saving and investing as soon as you start earning money, even if it’s only $10 a paycheck. The discipline and skills you learn will benefit you for the rest of your life. But no matter how old you are when you start thinking seriously about saving and investing, it’s never too late to begin.
    The first part of a successful lifelong investment strategy is disciplined savings habits. Regardless of whether you are saving for retirement, a new house, or just that extravagant dining room set, you will need to develop rigid savings habits. Regular contributions to savings or investment accounts are often the most productive; and if you choose to automate them, they are even easier.

Resiliency, Resourcefulness & Renaissance Spirit

  Individuals and retirement planning experts alike are recognizing that a successful and satisfying retirement experience depends on more than a healthy nest egg. In fact, financial reporter John Wasik contends, “Financial security and retirement are not the two peas in the pod they used to be.” 
    Instead, retirement should be thought of as a major life transition that deserves thought and preparation in all areas of life.  For example, one study found that it was the size of a retiree’s social network—and not the size of his or her portfolio—that had the strongest influence on
life satisfaction. 

Tell Others About Aequus

    From time to time, we like to take a moment to reflect on our good fortune and acknowledge the people who have made a difference in our lives. At Aequus, we wish to thank all our clients for letting us share your dreams, goals, hopes, and fears. We are proud to lead our clients on   a voyage of discovery using our own process of life-enhancing financial planning and feel privileged to be a part of your life. Thank you, too, for your referrals.

What Type of Retirement Do You Want for Yourself and Your Loved Ones?

There are at least six types of retirement. In this article, each one is described along with an illustrative example.
1. Traditional
2. Gradual (Phased)
3. Partial (Part-time)
4. Transformational
5. Rapprochement
6. Involuntary

Aequus Stories: Resilience

    When adversity strikes, it is not the burdens we bear that shape us, but our capacity to recover from life’s challenges and misfortunes. Adversity affects all of us at one time or another in our lives. Resilience, defined as the power or ability to recover or return to original form, is what determines whether the difficulties we face in life define us or defeat us.

Maintain A Good Credit Rating

    Installment debt, in itself, is not a bad thing. It enables us to make major purchases that would be nearly impossible to finance up-front. The problem is, in this consumer society, we’re bombarded with advertisements for literally thousands of “must-have” products.
    The result is that while our parents tended to pay with cash and buy only what they could afford, we have the “buy now, pay later” mentality. Unfortunately, our massive appetite for credit may be eroding our financial security, as more Americans continue to rely on borrowed money to maintain their existing lifestyles.

Thank You For Your Referrals

    From time to time, we like to take a moment to reflect on our good fortune and acknowledge the people who have made a difference in our lives. At Aequus, we wish to thank all our clients for letting us share your dreams, goals, hopes, and fears. We are proud to lead our clients on a voyage of discovery using our own process of life-enhancing financial planning and feel privileged to be a part of your life.
    Thank you, too, for your referrals. Referrals are the life’s blood of our business. According to investment firm Charles Schwab, a typical independent advisory firm gets over 88% of its new clients through referrals. Indeed, of the clients Aequus added last year, most were introduced to us by current clients.

Aequus Stories: Ethical Wills

    For years, Aequus has encouraged clients to consider creating an ethical will so their feelings, values, and lessons can live on. An ethical will, generally speaking, is a letter that is intended to share important lessons, advice, and blessings with loved ones. It can be written to family members, friends, and even organizations.
    When a loved one passes away, the most precious thing they leave behind is not their property. It is the legacy of their values and beliefs. A life is, after all, much more than the financial assets that have been accumulated.

Is Your Financial House in Order?

By Dr. William “Marty” Martin
    Since the dot.com bust of 2000 and the most recent financial crisis of 2008, I have learned the importance of getting your financial house in order. This means more than opening a bank account, retirement account, and investment account. It means even more than making sure that you are protected against catastrophic risks and ensuring that your estate planning documents are in order.
    Getting your financial house in order means taking a closer look at the foundation of upon which your house is constructed. Is the foundation steady and weather resistant? Can the foundation withstand the winds of life?

Review Your Money History

    For many of us, managing our finances and building economic security is a nagging concern. We know we should be making greater strides in taking control of our money matters, but nothing changes. What keeps us from achieving the financial peace and satisfaction we desire?
    One of the main obstacles to financial freedom is listening to the wrong money messages. Our attitudes and beliefs about money have their roots in the value-laden messages we have picked up along life’s journey. These money messages are not only clothed in the words of others, but in their behaviors as well.

What Makes Aequus Different From Other Advisors?

    Most people, even professionals, look at the words “financial advisor” as a very generic term. Anyone can call themselves a financial advisor, but very few have the credentials and the disciplines to carry out the tasks that do the best job for the client. A “fiduciary” has a legal duty to work in the best interests of their clients. That means they must put your interests ahead of theirs at all times by providing advice on the investments that will serve you best.

Purposeful Aging

    Life expectancy has increased dramatically since the turn of the 20th century. Our challenge is to make the most of our bonus years—not only to live longer, but to live better as well.

Later Life Potential

“It is never too late to pursue the work that speaks to us from inside ourselves. Let’s look at that idea the other way around as well. We are called to recognize our strengths, and it is never too late to hear that call.”
Deborah P. Block & Lee J. Richmond, Soul Work: Finding the Work You Love, Loving the Work You Have

Making Decisions As If Your Future Depended On It

By Dr. William “Marty” Martin
    Choices…choices…choices. Most would agree that it is good to have choices. Some would acknowledge the challenge of having too many choices too often.
    A choice is a decision. Choices take place under conditions of certainty and uncertainty. In general, making choices under conditions of uncertainty is more difficult than conditions of certainty.

Aequus Stories: The Economic Recession

  This is the first in a series of stories explaining how Aequus strategies and services make a difference in the lives of its clients. The scenarios described in this and future articles are true, but names and other identifying details about the individuals involved have been changed to protect their privacy.
    After a recession, it takes time for investors to rebuild their confidence. Some investors blame the market downturn; others blame themselves for not having made the right financial planning decisions. Bob and Karen came to Aequus after having lost a substantial portion of their portfolio.

Sudden Money & Aequus: Helping You Plan for Life’s Transitions

When life is changing, many people seek professional advice. They go to attorneys, accountants, financial planners and therapists, all of whom have clear protocols for dealing with clients. But if you don’t understand the experience you’re having, and the professional you have enlisted already has a protocol, you can be mismatched.

The Sudden Money® Institute (SMI) is the first organization of professionals to synthesize decades of experience in financial planning with cutting-edge research in neurology, sociology and psychology. SMI has developed a process that transcends those fields of study by integrating their technical aspects with the human experiences of the person in transition.

Embracing Elderhood

    It is not uncommon for individuals to avoid thinking about growing old because it conjures up feelings of dread and anxiety as well as images of inactivity, sadness and decline.  The truth is, however, that life can remain rich, satisfying, and meaningful throughout one’s lifespan. Each life stage offers challenges, but incredible rewards as well.

Financial Hand Up, Not Handout, For Adult Children

    “Boomerang Kids.”  It sounds like a TV reality show: Kids grow up, kids move out, kids get into financial trouble, kids move back in with Mom and Dad. In real life, there’s nothing particularly entertaining about adult children moving in with their parents. The situation is often a response to a financial or life crisis, and it can result in family tension and conflict that is anything but funny.  For anyone considering this option, here are some important points to think about and discuss ahead of time…

Marty Martin Has Arrived

  It is our pleasure to announce that Dr. Wm. “Marty” Martin will be providing on-site financial consulting services at Aequus as of February, 2011. Marty brings with him more than 15 years of experience as a psychologist and financial coach, and serves as an Associate Professor at DePaul’s College of Commerce. Since joining Aequus, he has been an integral part of our team.

Aequus Authors Need Your Help

    Cicily Maton, Michelle Maton, and Marty Martin are collaborating on a new book. The book is an outgrowth of, and a testament to, the numerous lessons they have learned from working with financial planning clients. To complete their research, they need your help.

    The authors would like you to participate in two upcoming online surveys. The collective wisdom gathered in the surveys will be used to create a diagnostic tool to better serve clients like you now and in the future. That is why your input and full participation are so important!

What Is A Cognitive Bias?

    Have you ever wondered why you can be so perceptive when it comes to other people’s issues and so hapless when it comes to your own? The answer may be that you have a cognitive bias. If so, don’t blame yourself. It’s not your fault. It is the way human brains are wired.

    Cognitive biases are psychological tendencies that cause the human brain to draw incorrect conclusions. Such biases are thought to be a form of a “cognitive shortcut,” often based upon rules of thumb.  They include errors in statistical judgment, social attribution, and memory. These biases are a common outcome of human thought, and often drastically skew the reliability of anecdotal and legal evidence.

The Top 5 Things You Need to Teach Kids about Money

    What if there was mandatory money instruction for every child in America from kindergarten on up and every adult was required to take an annual test confirming those concepts well into their senior years? It’s a nice fantasy. But in reality, the first money lessons a child gets come from their parents, and experts agree that the way parents teach and reinforce those concepts will have a major impact on their kids avoiding major financial problems later in life. So, a question for parents: How equipped are you to teach your kids about money?
    If you don’t feel confident about creating a money curriculum for your child, don’t worry, there’s help. Start by planning your own financial future with a qualified financial planner. You can take a look at where you need to be with your finances, and gather ideas to teach your kids about money as well.

Aequus On The Move

For Cicily Maton, the fall season proved to be a particularly busy one. She was constantly on the move giving presentations, attending conferences, and working to develop a deeper understanding of the issues Aequus clients face. This article details some of the highlights of her travels, presentation topics, and favorite conference sessions. 

A Family Mission Statement Can Help Any Family Manage Assets, Philanthropy & Direction

    A family doesn’t need a surname like Vanderbilt to benefit from a family mission statement. A mission statement is a collaborative document created by one or more generations of family so standards and goals can be set for the handling of all family assets, including businesses and philanthropy in particular.
    While mission statements aren’t legal documents – in fact, many are done both in written form and on videotape as a companion to legal wills and directives— their purpose is to make a record of the family’s values, goals and aspirations and how those sentiments should drive future decisions about family wealth management, business succession plans, and charitable pursuits.  Multi-national companies have mission statements. Non-profit corporations have mission statements. A mission statement for your family, helps identify and clarify specific values and goals, facilitates group decisions, instills confidence, and encourages unity. 

Creating a Personal Disaster Plan

    The idea of a personal disaster plan began circulating in the days after the September 11, 2001 attacks. They got a boost after Hurricane Katrina. Yet even when we experience a fortunate break between natural and man-made crises, it’s still a good idea to have a plan and review it annually.
    Why? Because there is no such thing as a one-size-fits all disaster plan, nor should it begin and end with details on how you and your family would cope in the aftermath of a weather disaster or an attack with worldwide implications. Disaster planning is all about worst-case scenarios that might affect you directly.

The 4% Rule: What is the Right Amount to Withdraw From Your Retirement Fund Each Year?

With stagnant incomes and roller-coaster investment returns over the past decade, individuals on the brink of retirement might wonder what became of all those “rules of thumb” affecting how they handle their nest egg once they walk away from their jobs. They’re still there. But usually rules of thumb are just that — rough approximations that are appropriate in some but not all situations, and the question of how well they work comes down to the individual.

Helping Older Relatives Articulate Their Long-Term Care Wishes

In the best of all situations, helping an older relative or a parent plan for long-term care and other end-of-life issues happens when they’re healthy and various options can be considered with adequate time to do so. Unfortunately, events can sometimes intervene and make an elder’s need for assistance an emergency. This is why it’s so important for adult children and younger relatives to gather up the courage to begin a series of important conversations when elders are healthy.

Kids Need Money Mentors

With the level of consumer debt skyrocketing and the cost of housing, education, and health care increasing at double digit rates, younger generations are facing unprecedented challenges to achieving economic security and financial independence. Therefore, helping our youth to learn effective money management skills, and to adopt good financial habits and attitudes, is more important than ever.

The Newly Updated Aequus Web Site

In case you haven’t noticed, our web site has undergone some major changes. It is now faster, easier, and more fun to read than ever before. After weeks of tweaks and fine-tuning, we are proud to announce the Aequus web site is ready for prime time.

Your Life Portfolio

“By ‘how much is enough?’ I mean the amount that will allow you to stop driving so hard professionally should you choose to do so. I mean the amount that will allow you to feel safe, the amount that will compensate for risking hard-won relationships, the amount that will affirm your feeling good, smart, successful, accomplished, in control.” Pamela York Klainer

How Personality Traits Affect Financial Planning

The ancient Greek expression “Know thyself” carries a lot of weight when it comes to investing. Indeed, an investor’s personality can speak volumes to their ability to spot opportunities and avoid risk. If more people truly “knew themselves” when it came to money over the last decade, it’s arguable we would not have seen many of the individual excesses and mistakes that marked the recent economic slowdown.

10 Money Steps to Take When Someone in the Family is Facing a Health Crisis

A June 2009 article in the American Journal of Medicine reported that medical bills are behind more than 60 percent of U.S. personal bankruptcies, adding that more than 75 percent of these bankrupt families had health insurance but still were overwhelmed by their medical debts. The article, based on research from Harvard Law School, Harvard Medical School and Ohio University, underscores how a single health crisis can financially destroy both individuals and families. It is information that underscores the need for adequate planning ahead of any health crisis, particularly when known risk factors exist in a family.

Rediscovering Our Values

In an article titled “The Value of Planning,” financial reporter and futurist Bob Veres wrote:
“The vast majority of people in our advanced, prosperous society have not taken the time to figure out what they really want out of the all-too-brief time they will spend on this planet. And because they don’t know their destination, you know they will never reach it. They are, in a very real sense, doomed unless acted on by a powerful outside force.”  Inside Information, July 2004

10 Ways to Help Your Kid Build a Lifetime Emergency Fund

One of the most effective financial tools you can give a child is an appreciation for an emergency fund and the advice on how to build it themselves. An emergency fund should contain 3-6 months worth of money to cover living expenses – its main focus should cover all loss of income, not just a car payment or a refrigerator repair. With parents losing jobs and college expenses continuing to grow, the younger you can get a person started, the better.

Families and Property Inheritance: A Top Ten List for Decision Making

Everyone seems to agree that family members need to talk about potential changes in health, inheritance, and estate planning issues before there is a crisis or someone is unable to communicate. But quite often, spouses, aging parents/in-laws, siblings, and adult children fail to initiate these important conversations. Communicating and advance planning can reduce feelings of guilt and misunderstandings. It can also lessen the potential for conflict that family members often experience when they are put in the position of making decisions for others.

Life & Learning

Lifelong learning is not only possible, it is essential to our quality of life as we age. The old adage “use it or lose it” is especially relevant to our ability to retain a sharp and inquisitive mind. For many years, scientists thought that the human brain simply deteriorated over time.  But new research from neuroscientists and psychologists reveal that the middle aged brain actually reorganizes itself, improves important functions, and helps us to adopt a more optimistic outlook on life.

The Federal Death Tax Takes A Holiday

In the waning days of 2009, Congress let the federal estate tax die for 2010 as planned by the Bush Administration back in 2001. That’s not expected to stay the case for long – many experts anticipate that Congress will re-apply exemption levels with retroactive legislation sometime this year to help tame rising deficits. But that’s no reason not to keep an eye on your state’s estate and inheritance tax policy.

A Thank You To Our Clients

“Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did. So throw off the bow lines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.”  Mark Twain  
   
From time to time, we like to take a moment to reflect on our good fortune and acknowledge the people who have made a difference our lives.

The Open Books Bookstore Opens Doors to Literacy

Dubbed “the most beautiful bookstore in Chicago” by the press, Open Books is a nonprofit social venture committed to promote literacy in Chicago. The organization’s headquarters is now open for business in its new three-story 15,000 square foot headquarters in River North.

Mastering Cash Flow: The Key to Financial Success

The key to financial success is adopting a cash flow plan that will guide your financial decisions on a day-to-day basis. In addition, understanding and controlling how money flows in and out of your life will free you from financial stress and empower you to achieve your most important life goals. Nonetheless, traditional budgeting methods often lead to a sense of frustration and overwhelm.

The Balancing Act: Retirement vs. College Savings

Even as the economy begins its slow crawl back, college costs are continuing to rise—that means parents are continuing to fight a tough battle between funding college and funding their own retirements.

Why Referrals Matter

Referrals are the life’s blood of a financial planning business. According to investment firm Charles Schwab, a typical independent advisory firm gets over 88% of its new clients through referrals. Yet, some firms are reluctant to ask for referrals for a variety of reasons.