Very sad. I met Joan Rivers last April at the Plaza Hotel. She was warm and very gracious to me. RIP Joan Rivers. I was a big fan.

Lee Rawiszer went to the Yale Golf Club Tournament in 8/13

Lee Rawiszer attending the Yale Golf Club Tounament

Lee Rawiszer went to the NFP Conference in Orlando

Lee Rawiszer at the NFP Conference in Orlando

Change in US Economic Growth

The US government has tracked the change in the size of our economy every quarter for the last 67 years (i.e., 268 quarters). The country’s quarterly economic growth has been “as bad as or worse than” a drop of 2.9% only 18 times in the 268 quarters (7% of the time), including the data from 6/25/14 that reported a 2.9% decline during the 1st Q 2014. Assuming that the US is not currently in a recession, then the latest... keep going

Sunni militant group takeover

When US forces removed Saddam Hussein (Sunni) from power in 2003, the resulting Iraqi government put the rival Shiites in power. Although Sunnis make up 80% of the Muslims in the world, they are a minority in Iraq. The Sunni militant group ISIS (Islamic State of Iraq and Greater Syria) is conducting a murderous... read more.

Pencils of Promise with Lee and Eva Rawiszer

Lee and Eva Rawiszer at the Pencils of Promise wall.

Lee Rawiszer and his clients at the alternative investment seminar

Lee Rawiszer and his clients meet up at the alternative investment seminar at the at the Capital Grille in Stamford, CT

The Rule of 72

If you are just beginning to start saving for your future - or you are a novice investor trying to figure out how far you can multiply your savings - this is what you are probably asking yourself “How long will it take to double my money?” It is actually quite simple to figure this one out once you know the right formula to apply.

In financial planning there is something called the Rule of 72 that is commonly used to gauge how your original investment will fare at a given rate of interest. This is how you apply the formula: Just divide the number 72 by the annual return expected on your investment. The answer gives you the number of years you need to double your money. For example, if you invest $10,000 at a 10% rate of interest, you double your money in 72/ 10, that is, 7.2 years time. If you manage to park the same funds, for example in a fixed deposit, such as a bank CD, that pays you a rate of 14%, this may help double the sum sooner, in slightly more than five years.

Is your Interest Compounded Annually?

Before you start planning for what to do after possibly doubling your money, make sure that your savings earn compounded interest, which means that the interest is paid on your principal sum plus interest earned thus far. Compounding can be one of the simplest and more effective ways to let your savings grow optimally. Although the norm is to compound annually, there are investment avenues where this happens at more frequent intervals too.

To understand why compounding can be your best option, compare these two hypothetical scenarios. In the first one simple interest is being computed and in the second interest is compounded on a yearly basis on the same initial savings.

·         Investing $10,000 at 10% simple interest for 5 years: At the end of five (5) years you have a total of $15,000.  ($10,000 x 10% = $1,000 so adding ONLY the interest on the original amount to this each year $1,000 x 5 = $15,000)

·         Investing $10,000 at 10% compound interest (annually compounded) for five (5) years: At the end of five years you have a total of $16,105. ($10,000 + 10% = $11,000 + 10% = $12,100 + 10% = $13,310 + 10% = $14,641 + 10% = $16,105)

In these examples, compound interest is the way to go. Also, it's evident in these examples that compounding yields maximum benefits if you start saving early. If you are working to build your retirement fund, then investing a small amount that yields compound interest every year right from the beginning of your career help provide you with great results.

However simple the rule, discovering the right investment avenues and knowing how much to save to help provide a secure financial future can be a complex and challenging task. Talk to Lee Rawiszer, Managing Principal of Paradigm Financial Partners about options to maximize your retirement.  

The examples included in this posting are hypothetical in nature and do not represent an actual investment. There is no guarantee similar results or rates on investments can be achieved.  If fees had been reflected, the return would have been less.

Estate Planning

In our business, we spend intimate moments with our clients planning for the future and making key decisions. Estate planning is perhaps one of the most intimate topics, because most people tend to shy away from this subject, naturally.

But the fact is, estate planning can actually cushion the blow of your passing for your family members and help them deal with the inevitable financial complexities that arise when the time comes. More than anything else, we at Paradigm Financial Partners view smart estate planning an important part of creating a total wealth management strategy. Why? Estate planning gives you complete control over your assets even after your lifetime, enabling you to distribute the wealth among your heirs as you see fit. Now let's delve a bit further.

A Will or a Trust?

When we talk with our clients about estate planning, one of the first items we address is setting up a trust. Trusts are created when you have significant wealth, physical holdings and intangible/ tangible assets to distribute. This is separate from a will which is a written document that clearly outlines how your property should be distributed after your lifetime. You can change it any time during your lifetime. (Also if you have minor children, you can appoint a guardian through your will to ensure that your wealth is used for their benefit).

A trust is a legal entity that enables property management during and after your lifetime. You can appoint a trustee who will take over the trust after your lifetime or in the event you are incapacitated in any way. One of the biggest advantages of setting up a trust is that you avoid probate on your holdings. However, the cost of setting up a trust can be high and you will also pay recurring administrative fees towards it. Keep in mind that a trust does not preclude the need for a will.

Something else to consider when it comes to deciding how to manage and distribute your wealth is having a power of attorney. This empowers a trustworthy person to make financial decisions on your behalf, should there be other circumstances that leave you mentally or physically incapacitated. Again, not the easiest topic to address, but definitely something we advise our clients to consider as part of their financial strategy.

Estate Planning is not Just for the Uber Wealthy

A common misconception is that only those with substantial wealth need to do their estate planning well in advance. However, each and every one of us needs to pay adequate attention to planning how our wealth is to be distributed after our lifetime. This can prevent confusion, legal issues, unnecessary conflict among family members at a time when they are already facing immense stress and mental anguish. Planning ahead also gives your family easy access to your finances so that they can continue to pay for critical expenses like education or medical care.

It is quite natural to feel overwhelmed by the thought of sorting out your entire lifetime’s worth of savings and wealth, and allocating it in the right ways. I'd be happy to help! Please feel free to ask and I would be happy to share additional advice on estate planning. Remember, as I always say, securing your financial future - and ensuring your wealth management plan is working for you and your loved ones - is invaluable.