08/02/2007

What Is A Financial Plan?

Financial plans are comprised of various components representing almost every area of the financial services industry. These components may work together or independently of each other, depending on the level of education and certification attained by the financial services professional who is serving you. Most financial services professionals are diligent in their efforts to help you within their level of expertise. What you need to determine is how you will define a financial plan for you. Let’s discuss some key people to include in developing your personal definition of a financial plan.

If you’re talking to your banker, his financial plan for you might be to help you become debt-free by the time you retire. If you’re talking to your insurance agent, his financial plan might be to help you purchase life, disability and long-term care insurance. If you’re talking to your accountant, his financial plan might be to help you minimize your tax burden during retirement. If your talking to your stock broker, his financial plan might be to help you invest now for astronomical returns in the future. If you’re talking to your attorney, his financial plan might be to prepare your last will and testament. If you’re talking to your preacher, his financial plan might be to persuade you to get some ‘fire insurance’.  If you’re talking to your spouse, he/she might want to know your financial plan will payoff all of your debts and provide ongoing income after retirement. If you’re talking to your children, they might want to know you will be financially self-supporting during retirement and in situations requiring long-term care.

Any one of these financial plans could work for you, but if you’re talking to yourself in the mirror, wouldn’t you want your financial plan to include all of these areas?

Let’s agree to use a comprehensive financial plan. It will come from your financial goals that you set and modify as changes occur, events happen, and you progress through the financial stages of life. It will include sections from all of the experts you talked to above, but these sections will be blended or separated – as need be – in a report that is customized, monitored, and reviewed with you as often as changes occur or as frequently as you desire.

I encourage you to start your comprehensive financial plan now! You’ll be glad you did.

08/02/2007

Saving for College

August has arrived and schools all over the state will be starting soon. From the time your child starts kindergarten until he/she graduates from high school, you will experience all of the happy times and growing pains from childhood to sending your child out into the world. Believe it or not, this time will fly past you! College expenses are increasing every year, so if you plan to assist your child in obtaining his/her higher education, it’s better to start early, project what the costs will be, and invest wisely. Let’s discuss some options for college savings in this column and we will break down some key advantages/disadvantages of each option in future columns.

The 529 college savings plan is generally sponsored by individual states. These plans offer tax advantages to the account owner, high contribution limits, and flexibility in investment alternatives. These accounts can be used at any college or university for higher education expenses.

The 529 prepaid tuition plan can be sponsored by states, individual colleges, or groups of colleges. This account allows you to lock in today’s tuition rates for future college costs. The interest earned on these accounts if free from federal taxes, provided the funds are used for qualified plan expenses.

The education savings account allows investing for children 18 and younger with annual limits of $2,000 per child. The earnings grow federally tax-deferred and can be used at any education level from elementary through graduate school. Full annual contributions are subject to donor income limits.

The uniform gifts to minors act (UGMA) and uniform transfers to minors act (UTMA) provide ways to gift amounts to children. The child becomes the owner of the account when he/she reaches the legal age in their state of residence. These accounts are not limited to education expenses, but can be used in various ways to benefit the child, except for normal food and shelter expenses.

The Series EE and Series I U.S. Savings Bonds offer total or partial exemption from federal income taxes if the funds are used for qualified higher education expenses. The principal amount invested in these bonds is guaranteed.

You can also develop your own investment plan for college expenses that gives you total flexibility in how you invest and leaves account ownership with you. Be sure to use investment calculators to make sure you meet your future college expense goals.

08/30/2007

What Credit Crunch?

Recent headlines would lead you to believe that money for mortgages has dried up. The truth is community banks have money to lend to homeowners for new purchases and to refinance existing mortgages. We offer the same mortgages we always have offered. And there is money available for the construction and development of residential and commercial projects. Community banks are weathering the credit storm because we are well run, highly capitalized and among the most highly regulated financial institutions in the country. Our depositors’ money is safe with us.

Community banks are conservative lenders. While in recent years, some lenders have been more concerned with which loan was best for them, community banks like mine have always been concerned with which loan is best for our customer. We don’t just want to get you into a home, we want to get you into a home that you can afford --- and afford to keep. We want your banking relationship with us to extend beyond the ‘transaction’ of a home mortgage and include other banking and financial services products. We want to partner with our customers in the communities that we serve to help them achieve their goals and dreams.

As a matter of fact, the Independent Community Bankers of America (ICBA), the national association that represents 5,000 community banks of all sizes and charter types throughout the country, reports that nearly 90 percent of mortgages through community banks that do business with ICBA Mortgage (a subsidiary of ICBA) are owner-occupied and have a delinquency rate that is below the national rate for one-to-four-unit residential properties. 

While we currently are hearing a lot about woes of the largest financial institutions on Wall Street and many non-bank lenders, there are 8,600 community banks and savings institutions meeting the credit needs of the typical borrowers on Main Street every day. Despite talk of a potential credit crunch, the truth is community banks are open for business.

Back to President's Articles

08/02/2007

What Is A Financial Plan?

Financial plans are comprised of various components representing almost every area of the financial services industry. These components may work together or independently of each other, depending on the level of education and certification attained by the financial services professional who is serving you. Most financial services professionals are diligent in their efforts to help you within their level of expertise. What you need to determine is how you will define a financial plan for you. Let’s discuss some key people to include in developing your personal definition of a financial plan.

If you’re talking to your banker, his financial plan for you might be to help you become debt-free by the time you retire. If you’re talking to your insurance agent, his financial plan might be to help you purchase life, disability and long-term care insurance. If you’re talking to your accountant, his financial plan might be to help you minimize your tax burden during retirement. If your talking to your stock broker, his financial plan might be to help you invest now for astronomical returns in the future. If you’re talking to your attorney, his financial plan might be to prepare your last will and testament. If you’re talking to your preacher, his financial plan might be to persuade you to get some ‘fire insurance’.  If you’re talking to your spouse, he/she might want to know your financial plan will payoff all of your debts and provide ongoing income after retirement. If you’re talking to your children, they might want to know you will be financially self-supporting during retirement and in situations requiring long-term care.

Any one of these financial plans could work for you, but if you’re talking to yourself in the mirror, wouldn’t you want your financial plan to include all of these areas?

Let’s agree to use a comprehensive financial plan. It will come from your financial goals that you set and modify as changes occur, events happen, and you progress through the financial stages of life. It will include sections from all of the experts you talked to above, but these sections will be blended or separated – as need be – in a report that is customized, monitored, and reviewed with you as often as changes occur or as frequently as you desire.

I encourage you to start your comprehensive financial plan now! You’ll be glad you did.

08/02/2007

Saving for College

August has arrived and schools all over the state will be starting soon. From the time your child starts kindergarten until he/she graduates from high school, you will experience all of the happy times and growing pains from childhood to sending your child out into the world. Believe it or not, this time will fly past you! College expenses are increasing every year, so if you plan to assist your child in obtaining his/her higher education, it’s better to start early, project what the costs will be, and invest wisely. Let’s discuss some options for college savings in this column and we will break down some key advantages/disadvantages of each option in future columns.

The 529 college savings plan is generally sponsored by individual states. These plans offer tax advantages to the account owner, high contribution limits, and flexibility in investment alternatives. These accounts can be used at any college or university for higher education expenses.

The 529 prepaid tuition plan can be sponsored by states, individual colleges, or groups of colleges. This account allows you to lock in today’s tuition rates for future college costs. The interest earned on these accounts if free from federal taxes, provided the funds are used for qualified plan expenses.

The education savings account allows investing for children 18 and younger with annual limits of $2,000 per child. The earnings grow federally tax-deferred and can be used at any education level from elementary through graduate school. Full annual contributions are subject to donor income limits.

The uniform gifts to minors act (UGMA) and uniform transfers to minors act (UTMA) provide ways to gift amounts to children. The child becomes the owner of the account when he/she reaches the legal age in their state of residence. These accounts are not limited to education expenses, but can be used in various ways to benefit the child, except for normal food and shelter expenses.

The Series EE and Series I U.S. Savings Bonds offer total or partial exemption from federal income taxes if the funds are used for qualified higher education expenses. The principal amount invested in these bonds is guaranteed.

You can also develop your own investment plan for college expenses that gives you total flexibility in how you invest and leaves account ownership with you. Be sure to use investment calculators to make sure you meet your future college expense goals.

08/30/2007

What Credit Crunch?

Recent headlines would lead you to believe that money for mortgages has dried up. The truth is community banks have money to lend to homeowners for new purchases and to refinance existing mortgages. We offer the same mortgages we always have offered. And there is money available for the construction and development of residential and commercial projects. Community banks are weathering the credit storm because we are well run, highly capitalized and among the most highly regulated financial institutions in the country. Our depositors’ money is safe with us.

Community banks are conservative lenders. While in recent years, some lenders have been more concerned with which loan was best for them, community banks like mine have always been concerned with which loan is best for our customer. We don’t just want to get you into a home, we want to get you into a home that you can afford --- and afford to keep. We want your banking relationship with us to extend beyond the ‘transaction’ of a home mortgage and include other banking and financial services products. We want to partner with our customers in the communities that we serve to help them achieve their goals and dreams.

As a matter of fact, the Independent Community Bankers of America (ICBA), the national association that represents 5,000 community banks of all sizes and charter types throughout the country, reports that nearly 90 percent of mortgages through community banks that do business with ICBA Mortgage (a subsidiary of ICBA) are owner-occupied and have a delinquency rate that is below the national rate for one-to-four-unit residential properties. 

While we currently are hearing a lot about woes of the largest financial institutions on Wall Street and many non-bank lenders, there are 8,600 community banks and savings institutions meeting the credit needs of the typical borrowers on Main Street every day. Despite talk of a potential credit crunch, the truth is community banks are open for business.

Back to President's Articles