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What can you expect to find in this unique resource for physicians?

Adventures in Medicine is a 212 page results-oriented guidebook written to lead graduating residents through the steps of choosing a position, and includes lots of career advice for resident physicians:

• An engaging, easy-to-read, skimmable format.
• A job search timeline including an action checklist.
• Information on compensation packages including data on where the most lucrative positions are located.
• Position search strategies with a focus on timing.
• Step-by-step guidelines on the interview and hiring process.
• Advice on job selection, including how to choose the best fit and how to prioritize offers.
• Contract negotiation tips including information on working with an attorney.

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“Don’t worry about it. We can always get another one.”  (Or maybe not…)

We live in an increasingly disposable consumer culture. Many products, from razors to writing instruments, are designed to be used and thrown out – refills and maintenance are too much of a hassle. If something breaks, it’s often cheaper to buy a new one rather than fix it.

In the financial services world, more and more products have been adjusted in response to this trend toward disposal and replacement. Where many financial instruments once included either significant up-front fees or surrender charges that encouraged consumers to keep these investments for long holding periods, many financial institutions have altered their products to lower or eliminate these fees. Now you can change your investment allocations as easily as changing your shirt, and sometimes the “substantial interest penalty for early withdrawal” from a Certificate of Deposit isn’t really that significant. If it appears the old product is no longer performing, it’s easy to dispose of what you don’t like, then get what you think you want.

But there are some things that don’t work as well when they are treated as disposable items (marriage comes to mind, as does nuclear waste). In the financial products arena, life insurance is a financial instrument that doesn’t perform well when considered a disposable commodity. This is primarily because of the unique nature of life insurance.

First and foremost, the ability to obtain personally owned life insurance is conditional on your health. For many financial products, the only barrier to acquisition is money; if you have the cash, you can buy it. But obtaining life insurance requires the prospective insured to meet the company’s underwriting standards as well as pay the premiums.

As long as you are in good health, insurability may not seem like a major impediment. But life insurance is a future-oriented product. Both the insurance company and the policyholder expect the life insurance benefit will not be used today, but sometime later (hopefully, much later). If you decide – for whatever reason – to terminate a life insurance policy, you have forfeited the certainty of your insurable status. Any attempt to obtain life insurance in the future will require another underwriting assessment. Who knows what your health status will be in five, ten or twenty years? Since future insurability cannot be guaranteed, disposing of life insurance – for any reason – could be detrimental to your financial well-being because you may not be able to obtain replacement coverage.

Life insurance is unique in another way: It is the only type of insurance where the covered event – one’s death – is 100% certain to occur. And unlike many other types of insurance, the covered event isn’t subject to changeable definitions or adjustable benefit periods. Disability can be defined in many ways, auto insurance can limit exposure through deductibles, and a homeowner’s policy can differentiate between assessed value and replacement costs. But with life insurance, there is no wiggle room for defining what is or isn’t covered – you are either dead or alive.

The only adjustments to a life insurance policy’s terms come during underwriting (when the insurance company may accept, decline or charge a higher-than-normal premium to insure an individual life), or in the premium structure (this applies particularly to term insurance). For the most part, the terms you receive on the day the policy is put in effect will remain for the duration of the policy. If you are a healthy, slim, athletic non-smoker when you obtain the insurance at age 35, your premiums will reflect that status even if 10 years later finds you an overweight, cigarette-smoking diabetic. Since the general trend for everyone is declining health over time, it doesn’t make sense to dispose of a favorable insurability status. If anything, you want to keep it for as long as possible.

This awareness, that life insurance is not a disposable financial product, should prompt you to carefully consider the long-term disposition of your life insurance policies, whether they are cash value policies or level term insurance. If you have obtained a favorable rating classification from a life insurance company, you should consider how this asset (your insurability) can be enhanced or preserved.

This article is prepared by an independent third party for distribution by OmniMed Financial & Insurance.  Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed reliable, please note that individual situations can vary, therefore the information should be relied upon when coordinated with individual professional advice. Links to other sites are for your convenience in locating related information and services. OmniMed Financial & Insurance does not maintain these other sites and has no control over the organizations that maintain the sites or the information, products or services these organizations provide. OmniMed Financial & Insurance expressly disclaims any responsibility for the content, the accuracy of the information or the quality of products or services provided by the organizations that maintain these sites.  OmniMed Financial & Insurance does not recommend or endorse these organizations or their products or services in any way.

Life Insurance is not a Disposable Product Joe Capone, ChFC®, LUTCF - Owner

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Extended Family Issue: Financing Independent Living Arrangements

As they have at every juncture in their lives, the demographics of the American Baby Boom generation are once again changing cultural norms. This time, the change is a “silver tsunami” encapsulated in the term “Senior Living.”

Generally classified as the population born between 1946 and 1964, the first of the Baby Boomers turned 65 in 2011. Not only are many of them retiring and collecting Social Security, these Boomers are also looking for long-term residential living options better suited to their lifestyle changes. This swell in demand is creating many different choices, as well as a new financial question: how will we pay for this?

The term “Senior Living” covers the spectrum of living options available to retirees, and can be broadly categorized in three types of facilities:

• Nursing homes;
• Assisted care facilities;
• Independent living communities.

These three facilities reflect differing levels of care and independence.

Nursing homes are more commonly referred to as skilled nursing and rehab centers. Nursing care is typically provided for people who need long-term care, or rehabilitation from surgery or recovery from a severe medical condition like a stroke.

Long-term care in a nursing home is for older adults who need around-the-clock nursing care. These residents need help not only with basic ADLs (activities of daily living) but need the supervision of staff to maintain their safety. Residents typically live in private or shared accommodations, often with bathrooms shared between patients or even between two rooms.

Nursing home care is usually the most expensive type of care due to the personnel and equipment required to maintain patient care. According to Chris Orestis, in an April 2011 article for the Life Care Funding Group, the national average cost for a nursing home is currently around $6,000/mo. For long-term care residents, private funds, Medicaid, and long-term care insurance are the typical methods of payment.

Assisted care facilities are a residential option for seniors who want or need help with some of the activities of daily living, but are still able to manage most aspects of life on their own. A typical assisted living facility will provide three meals a day served in a common dining area, housekeeping services, transportation, access to health and medical services, and security, as well as exercise and wellness programs and social and recreational activities.

The cost for assisted care facilities is a monthly rent, plus additional fees based on the level of individual attention the resident requires. According to the American Elder Care Research Organization, the 2011 national monthly average cost of assisted care was $3,477/mo. with a range of $2,156 to $5,757. Depending on the definition of terms and a resident’s condition, a long-term care insurance policy may cover some or all of the costs, but most long-term residents pay for assisted living from personal assets.

Independent living communities may be retirement communities, retirement homes, senior housing or senior apartments. These housing arrangements, from apartment-style living to freestanding homes, are designed exclusively for seniors, generally those age 55 and over. The physical arrangement is friendlier to older adults, often being more compact, with easier navigation, little or no maintenance responsibilities, and security. While some care services may be available, residents must have the ability to live independently, according to terms defined by the facility.

The costs for independent living facilities will vary, from government-subsidized rental units for low-income seniors to retirement homes requiring an initial investment as well as monthly fees. In some instances, a portion of the initial investment may be refunded to the resident when he/she leaves the facility.

For seniors considering an independent living retirement community, all of the funds will come from personal assets; neither government programs like Medicaid or individual insurance coverage will apply.

Continuing Care Retirement Communities (CCRC) are all-in-one facilities that provide a continuum of care from independent living to assisted living to skilled nursing, typically as a complex of buildings on one campus. CCRCs are designed to enable seniors to remain in a single residential location, which is attractive for seniors with declining health conditions, or couples in mixed health. While CCRCs offer much for seniors, they are the most expensive senior living solution available. The typical CCRC requires a one-time entrance fee and monthly maintenance fees. Entrance fees range from $60,000-$120,000 and monthly maintenance fees from $400 to $2,500. Some facilities offer return-of-capital guarantees and long-term insurance as part of their pricing structures. These options guarantee some assets will be left to the resident’s estate, and make future medical expenses a fixed cost.

A common funding paradigm for independent living communities is to sell one’s existing home, then use the proceeds to pay for the initial buy-in purchase. Monthly facility expenses are structured to equal a retiree’s Social Security income, leaving other needs and wants to be paid from savings. Many facilities will offer the option of financing the initial fee through a short-term bridge loan drawn against the equity in the applicant’s residence. When the house sells, the facility is repaid from the proceeds.

 Navigating the Funding Maze of Senior Living

 The type of senior living arrangements, the amount of the individual’s assets, and the availability of insurance all figure prominently in determining how to pay for senior living arrangements. And many of these decisions can have significant financial ramifications, so each step should be carefully considered, with input from family members and trusted advisers.

While almost all seniors are covered by the federal government’s Medicare and Medicaid programs, one’s eligibility to receive benefits, particularly Medicaid, is dependent on one’s assets, or lack of assets. Attempting to preserve assets for heirs and qualify sooner for Medicaid, some individuals reposition, gift or liquidate assets in anticipation of going to a nursing home. While Medicaid allows a spouse to keep some assets, the agency also has the authority to “claw back” assets it feels were removed or transferred incorrectly. To find out how these rules apply, you or a family member may need to consult an informed counselor or a qualified elder law attorney.

Some of the payment programs offered by Continuing Care Retirement Communities are essentially “housing annuities.” For a lump-sum and a fixed monthly cost, housing (and in some cases, long-term care) are guaranteed for life. Similar to purchasing a regular annuity, the individual is exchanging control over one’s assets for a certain outcome, and must weigh the costs and benefits of surrendering control and receiving a guarantee. And just like an annuity, the options for revoking a senior living agreement are limited once the program has begun.

Other assets may be in play as well. Owners of life insurance policies may have the option of exchanging them for long term care benefit plans. In a January 5, 2011, article (“Funding Long Term Care with Life Insurance,” lifehealthpro.com), Orestis notes that several states have passed laws in which…

“life insurance companies are legally required to inform policy owners older than 60, or if they have a terminal or chronic condition, that they have eight alternative options to consider before lapsing or surrendering a policy – and one of them is converting a life insurance policy into a long term care benefit plan.”

This arrangement is similar to a life settlement, and is brokered by a “senior care company.” Orestis states that this agreement “will convert any form of life insurance to pay directly for the costs of long term care in a nursing home, assisted living facility and home healthcare. (The) option also allows the owner to preserve a portion of the death benefit throughout the spend down period, protecting it from Medicaid Recovery legal action against the estate.”

If you or your parents are considering entering into a senior living arrangement, it is strongly recommended that you seek input from your team of financial professionals. A 2009 paper published by J. Carl Holowaty declared that “moving into an institutional care facility is possibly the single most disruptive event to patterns of social engagement that a person could experience (ranking maybe even higher than the death of a spouse).” Knowing how to best use assets and quantify costs can go a long way toward making a good decision, for you or your extended family.

IF YOU OR AN EXTENDED FAMILY MEMBER ARE CONTEMPLATING A SENIOR LIVING ARRANGEMENT, A GOOD PLACE TO START IS A REVIEW OF YOUR ASSETS, AND HOW THEY MIGHT BE USED FOR MAXIMUM BENEFIT. 

Joe Capone

Financial Advisor, Park Avenue Securities

OmniMed Financial & Insurance, Owner

140 Kendrick Street, C-1 East, Needham, MA02494

Office: 781-292-3285 / Cell: 781-264-1234 / Fax: 781-449-4462

joe_capone@omnimedfinancial.com / www.omnimedfinancial.com

Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS) and a Financial Representative of The Guardian Life Insurance Company of America,

New York, NY. Securities products/services and advisory services offered through PAS, a registered broker-dealer and investment advisor. OmniMed Financial & Insurance is not an affiliate or subsidiary of PAS. Life/Disability/Long Term Care insurance offered through OmniMed Financial & Insurance.  OmniMed Financial is not licensed to sell insurance. Neither Guardian, nor its subsidiaries, agents or employees provide tax or legal advice. You should consult your tax or legal advisor regarding your individual situation.     PAS is a member FINRA, SIPC.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed reliable, please note that individual situations can vary, therefore the information should be relied upon when coordinated with individual professional advice. Links to other sites are for your convenience in locating related information and services.  OmniMed Financial and Joseph Capone do not maintain these other sites and has no control over the organizations that maintain the sites or the information, products or services these organizations provide.  Joe Capone and OmniMed Financial expressly disclaim any responsibility for the content, the accuracy of the information or the quality of products or services provided by the organizations that maintain these sites.  The Representative(s) Joseph Capone does not recommend or endorse these organizations or their products or services in any way.  We have not reviewed or approved the above referenced publications nor recommend or endorse them in any way.

DO YOUR FINANCIAL PLANS EXTEND BEYOND YOUR NUCLEAR FAMILY? Joe Capone, ChFC®, LUTCF - Owner

Maximizing Client Wealth Through Tax Deductible Qualified & Non-Qualified Tax Planning

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THE BEST FINANCIAL STRATEGY: IT’S ALL ABOUT INCOME

So many choices, so many voices, so little clarity

21s century technology offers infinite financial possibilities. With a single click from their home computers, individuals can buy shares on a foreign exchange, get competitive quotes for insurance, analyze years of financial data, receive up-to-the-minute reports or on-the-spot prices of precious metals, and execute hundreds of other financial transactions – all by themselves. For those with an Internet connection, there are no restricted areas, no products that can’t be purchased, no places that can’t be reached.

However, expanded choices also necessitate more decision-making. With so many financial products and strategies available, how does the consumer determine which ones fit their objectives and circumstances? In this open access environment for financial products, institutions recognize they must differentiate themselves from their competitors; companies can’t simply present and explain their products and services, they must market them. Thus, unlimited choices are accompanied by advertising that features attention-grabbing curiosities like talking-baby stock traders, animated green lines for retirement, and profound (yet utterly fictional) e-mail conversations about the financial future.

While this type of advertising may help consumers remember the name of the company or its products, it is questionable if marketing actually provides consumers with any clarity regarding their financial decisions. Instead, they are inundated with a combination of emotional images and conflicting financial perspectives, which offer little guidance or education. In the end, most mainstream financial “information” delivered by mass-media outlets does little more than add new voices to the cacophony of opinion and hype. Infinite choices and multiple messages equal consumer confusion.

One approach that always makes sense

Making sense of the multitude of messages and endless array of financial products requires a unifying financial objective, one that provides a context for evaluating all the possibilities available. To that end, here is arguably the best financial strategy, one that addresses the most pressing financial challenges, yet allows room for opportunities:

It’s all about income.

It is not about total return, or net worth, or risk tolerance, or financial ratios – it’s all about income. With this strategy, most financial issues can easily be filtered, understood and resolved by answering one question:

“How will this decision affect my income?”

Perhaps this sounds too simplistic. But try it.

How will buying a new car affect your income? (If the monthly payment is more than what you were paying, your income will be negatively affected. Is it worth it, or would you be better off finding reliable transportation for a lower price?)

How will investing in a qualified plan affect my income? Long-term the hope is your investment will compound greatly to increase future income. On the other hand, money set aside in an account meant to remain untouched until age 59 1/2 reduces your current income. Considering your personal circumstances, which is more important, income now or income later?

If you make good decisions based on increasing your income benefits, your financial life will make steady progress.

The compelling case for income.

Most Americans do not function in a closed, self-sufficient economic system where we meet our material needs and desires by growing our own food, making our own clothes, generating our own electricity, etc. In order to acquire both the necessities and luxuries of life, we use money. Since maintaining our material world is a daily, weekly, monthly and never-ending task, the need for spendable money (i.e., income) is daily, weekly, monthly and never-ending, providing income is the essential and foremost financial priority in everyone’s life.

The financial priority of income cannot be overstated. A major portion of our tax structure centers on income. With every election cycle, politicians of every stripe inevitably tout “jobs creation” as one of their legislative priorities. (Is this because more people want to work? No, it is because people want – and need – the income that comes from having a job.) Similarly, the debates about Social Security, Medicare and health insurance are ultimately concerns about providing and preserving income, and the costs of doing so. As a nation, we are obsessed with income.

Income defined

For our discussion, income is any financial gain that puts spendable dollars in your hand. A paycheck is income, as are payments received from loans and rental agreements. Interest and dividends are also income. A stock that grows in value to $10/share from $5 has experienced appreciation, but there is no income until the stock has been sold at a profit. Similarly, homes and other real assets, while they might be listed on your net worth statement, are not income until their value has been converted to spendable dollars.

The 4 facets of income planning

As the number one financial priority in everyone’s life, income activities can be categorized in four distinct actions.

1. Generating Income

The foundation of every good financial program is the ability to manage assets to generate income. If you are employed, your ability to work is one of the assets you manage. Interest from a savings account, certificate of deposit or other financial instrument is income. The profits from a rental property can be considered income. (In contrast, a personal residence, while a financial asset, is not usually a source of income; the house may appreciate in value, but that appreciation doesn’t deliver spendable dollars.)

For most, the default option for income generation is a job, i.e., getting paid for services rendered. While this is undoubtedly the predominant form of income generation, it is not the only method. A narrow focus on employment for income generation is a shortcoming of many financial strategies. Many people could benefit from using financial assets under their control to generate more immediate income, instead of focusing exclusively on accumulating for retirement.

2. Accumulating Future Income

In the simplest sense, “accumulating future income” is simply saving today to provide income in the future. But just as income generation may mistakenly overemphasize just getting a good job, saving can also be over-simplified to amassing the largest possible number on a balance sheet. As Barry J. Dyke puts it, “a major problem in financial planning today is that 401(k) and mutual fund marketers have successfully blurred the difference between ‘saving’ and ‘investing.’ When one saves, money is safe and liquid. When one invests, 100 percent of your money is at risk 100 percent of the time.” Some assets, while highly valued, are not always good sources of income. For example, a rare collectible may be appraised at $1 million, but this asset only becomes income when it is sold, which requires finding a buyer and relinquishing the asset.

3. Protecting Income

Since most income generation comes through work and employment, it makes sense to protect both the generating asset (i.e., the individual) and its income potential. One of the reasons health insurance is such a prominent political issue is because almost everyone’s income is affected by their health, and the cost of maintaining it. The same rationale extends to obtaining both disability insurance and life insurance: when individuals stop generating income, everything else usually grinds to a halt.

Income protection is more than protecting the individual’s ability to earn income. As recent history shows, sudden changes in markets can turn profitable investments into sizable losses. Given this volatility, individuals may consider it prudent to “move” accumulated future income to various insured accounts to “lock in” their income-producing potential.

4. Distributing Income

In industrialized Western economies of the late 20th century, the template for income success was long-term employment during one’s working years, followed by pension incomes (from government and private plans), supplemented by personal accumulation.

In this model, the emphasis in personal accumulation was on maximizing valuation because all assets were assumed to be easily convertible to income at a later date. If you owned a home, it was assumed you could sell it for a profit. If you held stocks, future share prices were projected to be higher, and dividends consistent.

In considering employment and pensions, recent experience suggests the 20th century model for income may be outdated. In the Information Age, lifetime employment is less likely, private pensions are disappearing and government programs appear statistically unsustainable in their current formats. This puts a greater income burden on personal accumulation. Since much of the guaranteed income sources of previous generations are either disappearing or diminishing, individuals must place a greater emphasis in income generation from their personal savings.

________________________________________

Financial professionals, such as attorneys, accountants, insurance agents, and stockbrokers, may have knowledge in tax law, estate planning, portfolio selection, risk management, and other specialized areas. These specialties are important and necessary, but the overarching purpose of these professionals and their specialties should be to enhance the income positions of their clients. If the four aspects of income planning are properly addressed, financial success will inevitably follow.

Do your financial actions improve your income, both now and in the future?

Are you working with someone who understands why it’s all about income?

Providing income is the essential and foremost financial priority in everyone’s life.

Joe Capone, LUTCF

Financial Advisor, Park Avenue Securities

OmniMed Financial & Insurance, Owner

140 Kendrick Street, C-1 East, Needham, MA02494

Office: 781-292-3285 / Cell: 781-264-1234 / Fax: 781-449-4462

joe_capone@omnimedfinancial.com / www.omnimedfinancial.com

Joseph Capone is a Representative and a Financial Advisor of Park Avenue Securities LLC (PAS) and a Financial Representative of The Guardian Life Insurance Company of America, New York, NY. Securities products/services and advisory services offered through PAS, a registered broker-dealer and investment advisor. OmniMed Financial & Insurance is not an affiliate or subsidiary of PAS. Life/Disability/Long Term Care insurance offered through OmniMed Financial & Insurance.  OmniMed Financial is not licensed to sell insurance.  Neither Guardian, nor its subsidiaries, agents or employees provide tax or legal advice. You should consult your tax or legal advisor regarding your individual situation.

PAS is a member FINRA, SIPC.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed reliable, please note that individual situations can vary, therefore the information should be relied upon when coordinated with individual professional advice. Links to other sites are for your convenience in locating related information and services.  OmniMed Financial and Joseph Capone do not maintain these other sites and has no control over the organizations that maintain the sites or the information, products or services these organizations provide.  Joe Capone and OmniMed Financial expressly disclaim any responsibility for the content, the accuracy of the information or the quality of products or services provided by the organizations that maintain these sites.  The Representative(s) Joseph Capone does not recommend or endorse these organizations or their products or services in any way.  We have not reviewed or approved the above referenced publications nor recommend or endorse them in any way.

THE BEST FINANCIAL STRATEGY: IT’S ALL ABOUT INCOME Joe Capone, ChFC®, LUTCF - Owner

In the Internet age, it’s easy for everyone to have a voice, but only a few people have figured out how to get paid for speaking. Those brilliant postings on politics, incisive critiques of entertainment, passionate rants about your favorite sports teams, or hilarious links to stupid human tricks may be great outlets for your creativity, but how much time can you devote to these activities if you’re not getting paid? This process of converting something (in this case, one’s blog content) into money is called monetization. Monetization strategies are an essential part of financial decision-making for both businesses and individuals because monetization makes valuable assets spendable. The writer of Ecclesiastes stated that “money answers all things,” because even ancient societies understood that money has a superlative advantage over all other assets because it could be used to buy almost anything. Thus, anytime value is created, a follow-up question almost immediately follows:  “Can we monetize it?”

Monetization can be accomplished in an almost infinite number of ways, but all monetization is a variation on two basic transactions: selling or borrowing. Several examples:

•    An individual monetizes his time and abilities by selling them to an employer
or customer.
•    A property owner could monetize a property by charging a fee for a parking space.
•    Businesses can monetize their value by selling bonds to provide cash for new opportunities.
•    A shareholder monetizes her investment when she sells her stock certificates.
•    A homeowner monetizes a residence by taking a home equity loan.

More creative instances of monetization might be: a recording artist recycling previously released material as a “greatest hits” album, or railroad companies selling their right-of-way privileges to fiber optic cable companies. (In regard to Internet blogs, there are a surprising number of ways to monetize a website venture, including charging members a fee for content or services, establishing a referral/partner network, selling e-mail lists and attracting advertisers.)

Consequences of Non-Monetized Assets
The concept of monetization is simple, and this simplicity may lead us to overlook its importance. But when we have valuable assets that are not monetized, we begin to see how crucial monetization is to financial success. For example, retirement – the most prominent issue for many Americans – is really a monetization issue: i.e., “How do I turn the assets I
have into an ongoing income?”  Consider the following instances where non-monetized assets may severely impact one’s financial options:

The Non-Monetized Business Owner
A business owner has invested a lifetime of work to develop a going concern to provide wealth and security for his family. Suppose that in addition to delivering a high six-figure annual income, the business owns real assets such as land, buildings, equipment, and licenses valued at $5 million.
As age 70 approaches, the business owner realizes he may not want to continue working, or that his declining health may not allow him to. Yet, if he simply stops working tomorrow and closes the business, what happens to all the value he has created? The annual income stops, and although he still owns the real assets, they aren’t money – they aren’t liquid, they can’t be spent. It might be possible to sell the business assets piecemeal, but the money received will probably be far less than the value of the assets if the business were still in operation. If the owner doesn’t find a way to profitably monetize his business, he may be forced to continue working, or forfeit much of the material value he has developed.

The Non-Monetized Homeowner
Thirty years ago, a couple found a great deal on a beach house in an exclusive area. Over the years, the property has been a sanctuary and gathering place for the couple, their children and grandchildren, a place of great times and wonderful memories. Even with the recent downturn in home prices, the beach home is valued far in excess of the initial purchase price. It is a prized family asset.
But Mom and Dad are looking to retire, and while the beach house looks great on their balance sheet, the couple’s primary concern is income. The children would like to keep the property in the family, but don’t have the ability to monetize the house (i.e., buy it from the parents), so the prized family asset may have to be sold.

The Non-Monetized Accumulation Plan
Over her working lifetime, a book editor has acquired some interesting assets: The rights to a percentage of ongoing royalties from the works of several authors, as well as stock ownership in a privately held publishing company. While both of these assets provide a modest income stream (from book sales and dividends), the editor wants to relocate and needs a large down payment to invest in a condo development.
Because of the unique nature of these assets, the editor’s assets cannot be easily liquidated like a publicly traded stock, bond or mutual fund. Even though they may have a history of profitability and provide some steady income, she faces a challenge in monetizing them for their total value.

Optimal Retirement Planning: Coordinated Selling and Borrowing
As you can see, non-monetized assets can be a detriment to fully maximizing your financial options, both now and in retirement. A conventional response within the financial services industry to this dilemma has been: If you are focused on retirement, don’t hold non-monetizeable assets! Instead, accumulate paper assets like stocks, bonds and mutual funds, ones that can be easily converted to cash. Simplify your planning by segregating your retirement into specific tax-favored vehicles like IRAs, 401(k)s, etc.
But consider the examples above. Would the business owner think he was better off if he had not developed his business? Would the couple rather not have purchased the beach house? Should the editor have refused the royalty and ownership assets? No. These assets, while not fully monetized, are valuable. Rather than abandoning or ignoring these assets, a better approach is to find creative ways to combine and integrate both monetized and non-monetized assets, both now and in the future.
Competent financial professionals can provide concepts and procedures to determine when and how to monetize assets, whether they should be sold, or what type of collateral they could provide if used for borrowing. This paradigm of asset coordination is the basis for business transfer strategies, such as buy-sell agreements and stock purchase plans. It’s also a key element in estate planning, determining which assets should be liquidated while others are preserved for heirs. And it’s also essential for individuals who want to maximize their lifestyle opportunities in retirement.
Some of these monetization strategies may appear complex; they may require the establishment of separate legal entities (like a trust or corporation), contain special agreements, and include the repositioning of assets into new vehicles (such as annuities or life insurance). Evaluated as individual transactions, some might wonder if these items are necessary, and whether they are worth the cost. But the key is to evaluate the big picture for the benefits, because a coordinated plan is designed to deliver results greater than the sum of the individual pieces.
For example, suppose that distributions from a simple accumulation plan containing $1 million project an annual income of $50,000. In comparison, suppose $100,000 of the $1 million was allocated to obtain a life insurance policy equal to an amount of $200,000 received in a reverse mortgage. When combined, the remaining accumulation and home equity can provide a greater retirement income, while the life insurance ensures the home equity due to the bank will be repaid, allowing the heirs to inherit the house. In this instance, coordinating three items (the accumulation account, home equity and life insurance) results in a better monetization of the home and greater income.
Personal discipline is probably the key element in acquiring assets. Anyone who develop their skills, works responsibly and lives within their means can save for retirement. But to fully realize – and enjoy – your efforts, you may want to consider working with professionals to help you fully monetize your financial potential.

AS AN INDIVIDUAL…

DOES YOUR FINANCIAL SITUATION INCLUDE NON-MONETIZED ASSETS? DO YOU HAVE A PLAN TO MONETIZE THEM?

IF YOU ARE A BUSINESS OWNER…
DO YOU KNOW HOW YOU WILL YOU MONETIZE THE VALUE OF YOUR BUSINESS IN THE FUTURE?

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“CAN WE ‘MONETIZE’ IT?” Joe Capone, ChFC®, LUTCF - Owner

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The dentists that we meet commonly wonder how they should budget their money when they sign a contract and start a new job. We also hear residents and dental students talking about what they should do with student loans, disability insurance, and other things. Should I wait? Should I do it now? If you would like some insight, please feel free to take us up on the offer to help.  We know that dental professionals value quality resources.  This report is meant to help to answer some questions that dentists have.  Enjoy!

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