Can you trust your financial adviser?

At Carolina Wealth Management, we often find articles online that we feel could be beneficial to our readers.  This week we wanted to share Liz Weston’s article Can Financial Advisers be Trusted?  In this article, Weston points out that not every consultant has their client’s investment needs as his or her top priority.  She explains key problems many face in finding a trustworthy adviser.  We feel that it is important to understand the difference between working with a “fiduciary” and a “non fiduciary” advisor.  To read the full article visit  Can Financial Advisers be Trusted?

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Year End Tax Planning Strategies to Save You Money

Don’t look now because 2012 is right around the corner.  During this time of the year, our firm is busy trying to help our clients minimize taxes for 2011.  I have listed a few of these strategies for you to consider as the end of the year approaches.  Please remember to consult with your professional tax, estate or investment advisor before implementing any of these strategies.


Mutual Fund Distributions – Around this time of the year, I contact mutual fund companies to get estimates of taxable gain distributions and expected distribution dates.  I will then review the non tax-deferred accounts to see if it makes sense to sell a fund before the distribution date.  This strategy can help my clients avoid the tax ramifications associated with the fund.  I am also careful about adding new money to funds that are expecting to pay significant distributions this year.  In this case, I will wait until after the distribution has been paid or invest in another fund that is more tax efficient.

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Retirement Plan Compliance Training Crucial

The Pilot, a local newspaper for the Southern Pines area, has published an article about Carolina Wealth Management’s recent 401(k) workshops.  In this article, written by Ted M. Natt Jr., Derek Pszenny explains the importance of retirement plan compliance training and why it is crucial for small businesses to become educated on the matter.  To read this article and other related articles please visit The Pilot‘s website or click on the link below.

Retirement Plan Compliance Training Crucial

Check our calendar for updates on up coming 401(k) workshops and other Carolina Wealth Management events.

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Choosing the Right Small Business Retirement Plan

Among small employers (1 to 100 workers), most share a variety of critical priorities, such as managing taxes, attracting and rewarding valued employees, and establishing a long-term strategy to ensure their own financial security.  Fortunately, small-business owners also share an option that could help address all of those goals: sponsoring a workplace retirement plan.

A Look at Your Options

There are three broad categories of retirement plans available to small businesses.  The one you choose should reflect your company’s size, financial situation, and ability to comply with regulatory oversight and administrative responsibilities.  You may want to consult a financial professional to help you choose a plan that’s right for you.

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Market Update from Carolina Wealth Management

As you may have heard, the Standard & Poor’s bond rating agency has downgraded our country’s debt from AAA to AA+ with a negative outlook.  A quick look at the following chart will help you understand that the downgrade is a minor adjustment, reflecting the analysts’ beliefs that it is time for the United States to get its fiscal house in order.

The reasons for the adjustment in credit rating stem from the inability of the political parties to reach an agreement on fiscal policies with regard to the growth in public spending (especially entitlements) or on the increase in government revenues.  The report did not reference the country’s inability to meet our current financial obligations. 

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Money Management Tips for Newlyweds

Congratulations on getting married! Your first experience as a newlywed is learning that everything that was “mine” is now “ours”.  This includes sharing your bathroom, your television and yes… your money!  Each of you will now learn the other’s personal habits, (hint for guys:  Don’t use the nice hand towels in the bathroom, they are for decoration).  And you will also discover that one of you may be better at managing your finances than the other.  Studies have shown that the most common reason for divorce is money.  Therefore, I want to start your lifetime journey together by listing a few simple tasks that will help improve your financial future.

1. Agree on Financial Goals and Get Organized

It is very important to discuss financial goals with each other in the beginning of your marriage.  You should discuss both short term and long term goals.  Be specific about your goals and discuss how you can accomplish them together.  Remember, communication is the key to ALL successful relationships.  Determine who will and how to organize your financial records.  You need to come up with a system that you both agree on and can follow.  I recommend using personal financial software like Quicken to track your bills and finances.  DO NOT make financial goals more complicated than they have to be.  Keep it simple and be flexible.  As life changes, you and your partner’s needs will change.

2. Budget and Track Expenses

In the past, many families did not budget their expenses and have encountered too much debt as a result.  There are many unknown factors that you will face as newlyweds and things can quickly get out of hand if you don’t set a budget.  Another good aspect about setting a budget is that it teaches both partners good spending habits early in the relationship.  Remember to put your budget in writing as this will help you accomplish your goals.  As a married couple you will have different spending patterns than you did previously.  Your budget will not be perfect at first.  You will need to figure things out and that is where keeping track of your expenses will come in handy.  Again, you can use personal finance tools for these tasks.  These days, you can even keep track on your smart phone.

3. Plan for a successful retirement future

I cannot stress enough that you and your parnter will need to start saving for retirement as soon as you can.  I understand that you have many short-term goals to think about and it’s hard to start an investment account when you are young.  However, retirement income is not being provided in the same manner as when your parents and grandparents retired.  Today, there are very few pension plans that will offer retirement income and Social Security may not offer you the benefit that you would expect.  Therefore, you will NEED to start saving for yourself in order to be successful.  The sooner you can invest, the less money you will need to save and the greater your chance of having a comfortable savings amount when you retire.  How can you start a savings plan?  If you work, allocate as much as you can afford into a 401(k) plan.  Most companies match up to 3% of your salary if you contribute.   Another great savings account is a Roth IRA.  This is an account which grows tax FREE for your retirement.  There are income restrictions to Roth deposits so check with your advisor before you consider investing.

You will need to educate yourselves about investing and savings for your future.  There are many independent resources (books, magazines, internet sites) to help you.  For example, you can obtain articles and links to educational sites if you go to the ‘s homepage.  Also, make sure that you talk about insurance protection for each of you.  Life insurance policies are very important to own for younger couples.  They cover debts (like a home mortgage) and are will provide much needed protection when you start to have a family.

Congratulations! You should now be well on your way to building your family net worth and working towards your financial goals.  Remember to get your finances organized, set a budget and invest for a successful future.  Finally, remember… communication is the key to success!  Best wishes.

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