Did you know that Financial Advisers are not required to give you their best advice?

The law only requires most advisers to provide “suitable” advice.

That means it doesn’t matter if the adviser benefits more than you do, as long as the advice is generally “okay”, but is suitability really good enough? Did you like the restaurant you went to last night? Meh, it was suitable. How did your surgery go? Okay, the doctor was suitable.

If suitable isn’t good enough for restaurants and doctors, it certainly isn’t good enough for financial planning. Inconsistent standards in the financial services industry have allowed anyone, regardless of their competence or integrity, to claim that they are a “financial advisor” and the lack of differentiation between brokers and investment advisors has resulted in different standards of care by individuals that appear similar.

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The U.S. Budget in Perspective

When we hear talk of trillions, it’s easy for our eyes to glaze over but, if we simply remove a few zeroes (8 to be exact), the U.S. Budget and the current debt situation become a lot more relatable.

The following numbers are based on the estimated figures from the Summer/Fall 2013...

Federal Budget: 
U.S. Tax Revenue: 
New Debt: 
National Debt: 
Recent Budget Cuts: 
$ 3,820,000,000,000.00
$ 2,170,000,000,000.00
$ 1,650,000,000,000.00 
$ 16,271,000,000,000.00
$ 38,500,000,000.00


Subtract the Revenue from the Budget.


Now, remove 8 zeroes and pretend it's a typical household budget…

Family Expenses: 
Family Income: 
New Credit Card Debt: 
Credit Cards Balance: 
Total Budget Cuts: 
$ 38,200.00
$ 21,700.00
$ 16,500.00
$ 162,710.00
$ 38.50


Subtract the Income from the Expenses.


For more information about meeting your personal financial goals, call Tom Roberts, CFP at A New Approach Financial Planning at (941) 927-9590.

What is Beta?

January 4, 2013 by tfroberts

Beta (β) measures the volatility of an investment or portfolio as compared to a benchmark. It indicates how much an investment or portfolio will move based on market forces. This is easier to see through an example. Suppose we are comparing a stock, IBM, to a benchmark such as the S&P 500. IBM has a beta of .83 when compared to the S&P 500. If the S&P 500 increases 1%, IBM would be expected to go up .83% and vice versa. (Actually there is up-market beta and down-market beta. IBM follows the S&P 500 very closely going up, .94, and not as much when declining, .76)

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"After 59 1/2, I can withdraw from my Roth IRA tax & penalty free"

October 7, 2012 by tfroberts

Maybe. It depends on the 5 year rule. If you have a Roth IRA that does not contain any conversions from a Traditional IRA or 401k, the rule is simple. After 59 1/2, you can withdraw your contributions tax and penalty free. For the amount that is investment gains, you must have had the account open at least five (tax) years before you can withdraw gains tax and penalty free. The good news is the 5 year clock doesn't restart every time you make a contribution. This is another good reason to open a Roth IRA now, before you need it.

If all or part of your Roth IRA is from a rollover, you must wait at least five years to escape taxes and penalties. Unfortunately, the clock starts separately for each conversion you make. This means that some of your funds may be available while others are still waiting on the clock. Good record keeping is important! Check out IRS Publication 590 for details.

Why everyone needs to own bonds

Everyone should own bonds or bond-like investments, though you might ask why would anyone want to own bonds at this time? The value in owning bonds is not just for the known rate of income but also to provide a less-volatile rate of return and to provide stability to a portfolio. Providing stability and helping us deal with our instinctual desire to make the wrong moves at the wrong times may have the most value for investors.

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Lakewood Ranch financial planner looks at costs of health care in retirement

It is no secret that health care is expensive. For most of us, annual health-care costs increase as we get older and threaten to become our largest expense item. Fidelity's latest study proclaims that the average 65-year-old will need $245,000 to cover health-care costs in their lifetime.

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Reducing your income risk is crucial when investing

When investing and managing your money, you must consider and deal with a number of potential risks.  Some of these are more important at different times in one’s life. If you are relying on your investments to provide income to pay your expenses, you are rightfully concerned about the stability of income.  Regardless of how you use the income, let’s look at how you can manage these risks and improve the reliability of your overall investment income.

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