Wealth Management Blog

Equifax Data Breach – Here’s What to Do

By JJ Burns

September 14, 2017

Your financial well-being is our highest priority. In light of the recent security breach at Equifax—which potentially exposed 143 million Social Security numbers, birth dates, and other private information—we have put together some guidelines to help you respond appropriately.

Equifax has set up a website for determining if you were affected. There have been reports of past problems, but it seems to be working properly now. However, whether or not you were impacted this time, protecting yourself against future breaches is still important. We’ve laid out the best options for doing so.

Third-Party Credit Monitoring Services

Third-party monitoring services (like Lifelock or Identity Guard) proactively monitor your credit and alert you to potentially fraudulent activity, for a fee. Many providers will also help you restore your credit if you do become victimized by identity theft. Some offer additional services such as black market website surveillance, address change verifications, checking and savings account application alerts, and consolidated credit bureau monitoring.

If you aren’t utilizing a third-party monitoring service, you should consider taking precautions directly with the three major credit reporting agencies—TransUnion, Equifax, and Experian. You can consult with each of them on your own for little or no cost. However, doing this will require sustained vigilance on your part. With a monitoring agency, you don’t need to constantly review your credit reports. 

Credit Monitoring On Your Own

Fraud Alerts

A first step to consider is placing a fraud alert with the three credit reporting companies.

  • What is a fraud alert? A precaution notifying lenders to contact you and verify your identity before approving any new credit application in your name.
  • How much does it cost? There is no charge for adding fraud alerts to your credit report.
  • How long does it last? An initial fraud alert lasts 90 days, but may be renewed for 90 more. If you have been an identity theft victim, you may apply for a seven-year extended fraud alert. 

When you place a fraud alert with any credit reporting company, they’ll notify the others to add alerts.

Security Freeze

The next level of protection is to request a security freeze, or credit freeze. In order for this to be effective, you must contact each of the nationwide credit reporting companies individually.

  • What is a credit freeze? Only those you authorize can view your credit report. You use a secure code, similar to a PIN number, to allow access. However, companies that do business with you can still access your credit report data.
  • How much does it cost? Equifax has agreed to waive fees for all security freezes initiated by November 21, 2017. They are also offering potential breach victims one free year of their TrustedID Premier service, which provides credit file monitoring and identity theft protection. Otherwise, charges are minimal but depend on your state of residence. Some states also charge for lifting the freeze or providing a replacement PIN.
  • How long does it last? In most cases, freezes are in place until you remove them. In some states, they are only in effect for seven years, with options for renewal. 

When you apply for new credit, you need to request a lift in the security freeze. Loan approval may be delayed, because “thawing” can take several days.

Credit Lock

A credit lock functions like a credit freeze, but offers additional convenience.

  • What is a credit lock? You control access to your data by instantly locking and unlocking your account online when you want to allow a legitimate credit inquiry.
  • How much does it cost? There are service fees, although Equifax is waiving all fees through November 21, 2017.
  • How long does it last? As long as you continue to pay the fee.

Some Final Thoughts

As data breaches become more commonplace, protecting your financial security requires careful consideration. Whether you choose to lock your credit report accounts and manage them yourself, or leave them unlocked and sign up with a third-party credit monitoring service, we strongly advise you to take precautions.

When it comes to cybersecurity, vigilance is our number one weapon. You have the power to protect yourself and your loved ones. Please share this article with friends and family.

If you have questions, or if we can be of service in any way, please contact us.

Two Must-Read Summer Books

By JJ Burns

August 8, 2017

Summer may be a time for light beach reads, but if you’re ready for something a bit more insightful and inspirational, here are a couple books that fit the bill. Both are highly readable and engaging, but they also deliver important takeaways that will stay with you long after you turn the last page.

Consider this a follow up to last month’s blog post about how to have a financially savvy summer!

Back by Popular Demand

Business Adventures: Twelve Classic Tales from the World of Wall Street

How can you resist a read that both Bill Gates and Warren Buffet agree is the best business book ever?

Originally published in 1969, Business Adventures by New Yorker contributor John Brooks went out of print in the 1970s. But after Warren Buffet loaned it to Bill Gates—who publicly called it his favorite business book—it was reprinted in 2014 with an updated title: Business Adventures: Twelve Classic Tales from the World of Wall Street. It’s been wildly popular ever since.

What makes this book so special? Brooks provides detailed stories of 12 defining events in business history and makes them crackle with life and wit. He also reveals plenty of insider information on what went right—or terribly wrong—in each situation.

As entertaining as he is perceptive, Brooks delivers important insights we can all learn from. In fact, his tales are so enjoyable you may even find yourself turning them into educational conversations with your kids.

Although he’s writing about incidents from the 1950s and ‘60s, Brooks’ observations remain as relevant today as they were back then. As Bill Gates put it in a blog post about the book, “the rules for running a strong business and creating value haven’t changed.”

It was particularly fascinating to read about “The Fate of the Edsel,” a fresh take on Ford’s spectacular failure to listen to and communicate with their customers. It’s a cautionary tale for business leaders today, and at JJ Burns, the story’s lessons have been helping us communicate better with our own clients.

There’s also much to be learned from Brooks’ exploration of the seemingly invincible Xerox Corporation’s downfall, which was primarily due to a massive failure of vision and innovation. This story will resonate with our entrepreneur and executive clients. Continued innovation is essential to continued success.

You’d think such high-profile failures would never happen again. And yet, only recently, Kodak followed a very similar downward trajectory, going from undisputed industry leader to bankruptcy court—mainly because of misguided innovation and strategic management failures.

They say whoever is ignorant of the past is doomed to repeat it. In addition to being a delightful piece of writing, this book helps inoculate you against that ignorance.

Enjoy it like a vintage wine.

From Searing Pain to Soaring Purpose

Option B: Facing Adversity, Building Resilience, and Finding Joy

Before reading any further, stop. Write down the three things you are most grateful for in your life.

If you’re like most of us, your answers will be drawn from the following: health, family, relationships, and the fortunate circumstances life has afforded you. We often take these things for granted as we go about living our everyday lives. 

But for Facebook’s COO Sheryl Sandberg, the ability to take such things for granted came to a crashing halt with her husband’s sudden and untimely death during a family vacation. 

Her answer to this devastating loss was to write about it with help from her friend, psychologist and top-rated Wharton professor Adam Grant. The resulting book, Option B: Facing Adversity, Building Resilience, and Finding Joy, continues to climb bestseller lists around the country.

And for good reason. Both hopeful and heartbreaking, Sandberg’s book is a generous treasure trove of wisdom and inspiration. Her personal grief and isolation in the aftermath of losing her beloved husband is interwoven with many other stories of people triumphing over adversity. It’s a moving testament to the human spirit, as well as a practical guide to building resilience and recovering from life’s inevitable difficulties. 

Sandberg rose above her own experience to bring about workplace change. She recently helped enact a new policy at Facebook that gives employees 20 days of paid bereavement leave—which is two times more than the previous amount.

Using a devastating setback as a springboard to societal change may be out of reach for most of us, but this book will certainly inspire you to a deeper appreciation of all that you have. And it is a book you may find yourself returning to the next time life sweeps away your Option A and leaves you to make the most of Option B.

Navigating Difficult Times

As financial advisors, we’re frequently called upon when clients are going through major life crises, many of which are as devastating as losing a loved one or a business. It’s our privilege to serve in these situations. Our concern goes way beyond simply answering the question, “do I have enough money or resources to get through this?”

While we can’t ease the emotional pain of loss, we can ensure that no additional suffering occurs because of insufficient planning. Making sure you’re prepared for the unexpected is one of the most important things we do.

It’s also one reason we’re very proud of our vocation. We have the opportunity every day to make a difference, to help ease life’s burdens, to provide a safety net when life’s inevitable tragedies occur—and just as importantly, to help families like yours live life to the fullest in the good times.

We consider you, our clients, to be part of the JJ Burns family. We’re here to help with whatever you need.

Six Things to Make the Most of Your Summer Months

By JJ Burns

July 13, 2017

As a kid, you waited all year for summer. It was the time in which getting up early, going to school, doing homework and taking tests, ceased to exist.

Of course, now that we are adults, we don’t get the summer off—nor do our finances.

Cash flow and tax planning play a part in our financial plans for the year. However, with the summer vacation months, those plans can sometimes fall off track.

Keep reading to find out how you can avoid a sharp summer’s hit to your finances, and still maintain a work/life balance that can help you further enjoy the mid-year vacation months.

Know Your Cash Flow

Within reason, your finances shouldn’t get in the way of your enjoyment of the summer vacation months.

Even if you have mortgage and car payment obligations in addition to adhering to your year-long financial plan, this doesn’t mean you can’t have some fun in the summer sun.

Check out your cash flow to see what you can afford to do with your family this summer. Make sure what you plan to spend does not affect your emergency fund (which should be six months’ worth of your yearly salary).

Plan Your Taxes

Next, see if your taxes are in order. For instance, are all your taxes paid? If you’re self-employed, have you made the correct estimated tax payments? Look into what you might owe federally or to the state where you live. Make it a point to also verify your property tax is paid.

Plan ahead for your deductions and credits before the tax year ends. You can maximize your deductions by making charitable donations, contributions to qualifying retirement accounts, or deposits to your health savings account (HSA). Consult your wealth manager for the maximum amounts you can contribute to avoid a tax penalty. Also, be sure to keep good records to make the tax filing process easier.

Introduce Your Kids to Finance

It’s never too early to teach your kids about finance, and summer can be your perfect opportunity to teach them financial value and responsibility.

For instance, for your younger ones, consider giving them a set amount of money for the summer, and then teach them how to budget to make the most of their money until the start of school. Suggest that they perform small odd jobs around the house, such as cleaning the yard or washing the family cars to make money that can further supplement their summer savings.

Your older kids can also learn financial life-long lessons this summer by becoming more independent. For instance, let them grocery shop or cook for themselves as well as their friends instead of going out to a potentially expensive lunch or dinner.

If your son or daughter drive to a job or paid internship this summer, encourage them to pay their fuel expenses, and of course auto insurance. Doing so will help them understand the importance of keeping up with not just their financial responsibilities, but also their real-world responsibilities.

Give your older kids other ideas to help build their financial independence. If your son or daughter has plans to attend music festivals or take summer weekend trips with friends, encourage them to work, save toward their goals. Paying for their own recreation or time away from home can have a monumental financial impression on them that could last a lifetime.

Vacation Within Reason

Okay, so maybe this summer you don’t feel like spending thousands of dollars on that villa in Tuscany. That doesn’t mean you can’t enjoy the summer months while being a bit closer to home.

If the beach or the mountains are near, spend a couple weekends this summer playing in the waves or staring at the majestic high-altitude views. Doing so will be much more cost effective than going on an expensive vacation, especially abroad.

Also, for the fun of it, check out your local paper’s real estate section to find out if any timeshare resorts near you might be offering free weekend stays. If all you have to do in return is attend a seminar for potential timeshare buyers, the cost might be worth it.

Celebrate Smart, Particularly with Summer Weddings

All of us know weddings are expensive, particularly with some nuptials rising into the tens of thousands of dollars.

If someone in your household is getting married this summer, try to be fiscally responsible in spite of the fact that this is a special once-in-a-lifetime event for you, your son or daughter.

For instance, with weddings, budget experts suggest the event not be held on Saturday, but instead on a Sunday, or any other day of the week. Many hotels and resorts charge more for Saturday weddings as opposed to other days of the week.

Try to get married at the end of the season. You can save a good amount if yours’ or your son or daughter’s wedding is held in late August or September, as opposed to June or July.

Budget experts and wedding savers also suggest that you find a venue that doesn’t require you to use “in-house” vendors. Try to find a marriage and/or reception location where you can bring your own catering.

Additional savings can also be realized if the wedding and reception are held in the same location.

A Better Work/Life Balance

Summer is when we recharge ourselves, start new, and strengthen up for the remaining six months of the year.

In order to make the most of your summer, it's important to have a written plan of what you want to accomplish. Keep track of your finances, your taxes as well as any additional expenses this summer, such as a wedding or travel, and you’ll have a better chance to enjoy some quality down time without breaking the bank.

If anything, your work/life balance deserves it.

Negotiating Your Finances When You Divorce

By JJ Burns

March 23, 2017

Whether you have been married for a year, or several years or longer, getting divorced can be difficult—certainly emotionally, but also financially.

With the right mindset and planning, divorce doesn’t have to drain your financial assets. Instead, there can be negotiations that benefit both parties.

For most, divorce is not always easy. There may be property, children, businesses, and debts that need to be addressed. Before the papers are signed, people should know what they want to accomplish when they dissolve a marriage. Is it wealth preservation, child custody, asset protection?

Few people want to think of marriage in business terms. It’s not romantic at all. And when you get married, you hope that it will last forever. For some, relationships can run their course.

Your State of Residence Matters

According to lawyers, the simplest divorces are the ones where it’s simply dividing up property. Nine states are community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. This means that whatever you earn, or property that you acquire during the marriage, is subject to a 50-50 split when you divorce.

In all other states, it’s a bit more complicated. Take the hypothetical case of Katie who was married for 16 years, has two kids, and helped build her husband’s dentistry business by introducing him to key people in the community.

Legally, she is entitled to part of the value she put into the business, as well as some of what the couple both earned and saved during their marriage, and a portion of the house and other assets. This all takes time to sort out.

A Formula for Support

Family courts have a formula to determine an amount of support. In New York, if you have one child, you will receive 17 percent of the salary from the non-custodial parent, two children may receive 25 percent, and three children may receive 29 percent of salary.

Even so, if you’ve been a stay-at-home mom like Katie who has put her career on hold to raise kids who attend private school, suddenly getting a high-paying job to support your family can be a bit unrealistic. How is she going to continue her—and the kids’— lifestyles?

It all comes down to a valuation of Katie’s participation in her former husband’s business and family responsibilities, and then strategic negotiation to give her a desirable result.

What it also means is for her to take herself out of the emotional equation of the divorce, and assemble a team of financial specialists, lawyers, and mediators who can work with her best interests in mind. It also gives Katie the resources to communicate “individually” with each team member, “checking and balancing” the advice given to minimize or eliminate conflicts of interest, so she gets the results she desires. 

It’s a smart move for both sides. Depending on the situation, a collaborative team can cost much less than a litigious divorce lawyer.

Getting Wise Counsel

Most of us take out insurance to protect ourselves in case something happens. A review with a financial professional in the case of a divorce is the same thing—protection. To learn more, download our divorce toolkit "Suddenly Single: What to Do When You’re On Your Own Financially" and get the proper guidance on how to protect your assets and financial future.

The One Rule Many Advisors Don’t Follow

By JJ Burns

March 9, 2017

What is the “Fiduciary Rule”?

You might have heard in the news about the new “fiduciary rule.” Although it might seem confusing, basically, the Department of Labor created a new retirement investing rule that’s supposed to go in to effect on April 10, 2017.

“Fiduciary” is defined as the relationship between a trustee and the person or body for whom the trustee acts. In other words, it’s an individual who holds a legal or ethical relationship of trust, and has an obligation to act in the best interest of the beneficiary.

The rule was created after a government report determined that U.S. retirees lose a total of $17 billion each year because of conflicts of interest. Since the Department of Labor oversees regulations for 401(k)s, they decided in step in.

The rule is designed to help average investors save more money for retirement and spend less on commissions and fees.

Using Celebrities as Examples

What about the not-so-average investor? Their stories are fascinating because of the person’s fame.

We can all learn from the high-profile mistakes of a celebrity, such as the recent case of Johnny Depp. He is out of money. Now the courts will decide if it was his fault for living a lavish lifestyle, or if it might have been the fault of those giving him financial advice.

Despite tales of large monthly wine budgets, and purchases of a village in France and islands in the Bahamas, this is yet another celebrity example for everyone. The bottom line: the lesson to learn here is whether your financial advisor is serving your needs or not.

Fiduciaries and You

What does this mean? Right now, although many financial advisors give sound advice, some may recommend investments because of the commission they will get—not what will make the wisest choice for the client.

The new fiduciary rule applies only to 401(k) and retirement investment vehicles. The Department of Labor does not have jurisdiction over other types of investments.

Some of the larger firms have been scrambling to make changes and determine how they can adjust their practices to serve their clients under the new regulation. Plans may be changing. Accounts may be restructured. Clients are being called in for meetings to explain what this means to them.

Fee structures and investment offerings are now being scrutinized and retooled. Portfolios are being rearranged.

Obligation or Choice?

Many people assume their advisor is behaving as a “loyal fiduciary and prudent steward,” as Johnny Depp’s lawsuit describes. Until the Department of Labor started placing the spotlight on “fiduciary,” many clients did not realize the extent of possible conflict of interest.

Celebrities can hire expensive advisors of all kinds to help them understand the myriad of legal disclosures and fine print. But what about ordinary people? No matter who you are and how much money you have, you hire people to help you make decisions and manage your affairs in a beneficial way.

How do you know if your financial advisor is a fiduciary? Ask. Take a look at your statements. Know what you are paying for. You should feel comfortable with the answers you receive.

Who Has Responsibility?

You might be able to do your own taxes, but you hire an accountant to do it for you to save time and leverage their expertise. You even hire someone to take care of your yard, not because you don’t know how to mow the lawn, but because it allows you to do other things.

There is a battle waging over the Fiduciary Rule. One camp says investors should understand where they are putting their money and not blindly take advice from their financial advisors. The other side believes clients don’t always know the full picture. They hire an expert for advice to help save for retirement, not to invest in funds with the highest commissions.

In the movies, everything usually works out. In real life, it’s not always so simple. For the busy professional, and even the seasoned investor, the best path can be terribly confusing. Your advisor should be able to help.

The Future of Fiduciary

The Obama administration began the Fiduciary Rule implementation, but it was very complicated and many details were not ironed out. The Trump administration has voiced opposition to the regulation, ordering a six-month delay in the rule’s implementation.

Despite uncertainty among politicians and firms, JJ Burns & Company has always and will continue to act as a fiduciary for clients. It is one of the reasons our clients trust us. It is one of the qualities setting us apart from other advisors.

We are here to talk with you anytime.

Your Whole Picture

The new rule applies only to retirement investments and 401(k)s, but we feel that your financial advisor should treat your entire portfolio as a fiduciary would. Why should they serve your best interests for retirement accounts, but not your other investments?

JJ Burns has always felt that taking the role of a fiduciary—someone who serves the best interest of the client—is important. We are happy to sit down with our clients to review investments, portfolios and personal financial plans. We always want you to understand where your money is and why it is there.