Are you and your siblings united by the need to manage your aging parents’ finances? Sharing and effective communication are key for adult children helping their senior family members.

Watch Out for This Investment Mistake Avoid this investment mistake, by using the financial snapshot tool. Getting a snapshot view of your finances makes investment decisions easier.

Is The Right Company Managing Your Money? Are you getting customized financial advice? How can you tell if the right/wrong company is managing your money?

3 Steps to Stop Your Retirement Nest Egg from Breaking Do you and your spouse have different ideas of how to invest your retirement nest egg? What should you do if one partner wants to invest more aggressively than the other?

Americans and Mutual Funds – What You Need to Know Are you having difficulty buying American mutual funds because you don't have an American address? Learn about your solutions here.

How to Diversify a Million Dollar Portfolio Diversifying a million dollar portfolio can be tricky. Make sure you start by making a plan and analyzing your financial situation.

Are You Worried About Your Stocks and Market Risk? If the market goes up, do you still need to worry about stocks and market risk? Should you rebalance your portfolio in an up market?

Do Mutual Funds Increase the Risk Level of Your Portfolio? Mutual funds can add risk to your portfolio. If you want to limit your risk exposure, pay attention to what mutual funds and ETFs you own.

Do These 4 Things to Have a Financially Successful Retirement To make sure you have a financially successful retirement in Israel, follow these 4 easy tricks.  

4 Times You Should Speak with a Financial Advisor What should motivate you to get financial advice? Learn when you should speak to a financial advisor about your situation, and what he can do to help.

How to Claim an Inheritance from Abroad Claiming an inheritance from abroad can be confus-ing and overwhelming. Learn what steps you need to take so the funds will appear in your account.

Retirees Fired by Their Brokers in America If you were asked to move your money out of your brokerage firm, be reassured you that you aren’t alone. This financial break-up is happening to many people without American addresses. Here’s what you should do.

Do you want steady income from your dollar deposits? Is your investment goal to receive a steady income from dollar deposits? If so, take these 3 steps to help you reach your goal.

Should You Have Bonds in Your Investment Portfolio? Many people love the income and relative safety bonds provide, but other people hate them. It’s important to understand why investors love and hate bonds. Should you have bonds in your investment portfolio?

Are You Getting High Interest Rates on Your Dollar Deposits? The good old days of getting high interest rates on your dollar deposits may be coming back. Consider the pros and cons of investing in bonds as opposed to FDIC insured CDs.  

Want to Boost Your Monthly Investment Income? One way to boost monthly investment income is using bond funds. There are different types of bonds funds, read more to learn if they are appropriate for your financial situation.

How To Squeeze More Dollars Out Of Your Investments Want to increase your investment income. Can using bonds squeeze more dollars out of your investments? Learn why retirees frequently choose to invest in bonds.

How to Invest Your Dollars when You Live in Israel Should olim move their American brokerage accounts to Israel?

Did You Get the “Dear Client, We Can’t Help You Letter”? Many American brokerage companies stopped servicing clients with foreign addresses, including those who made aliya. Don’t liquidate your account, learn what alternatives you have.

Expecting an Inheritance? Here’s What You Need to Know Expecting an inheritance? Here are answers to questions you may have when receiving an inheritance. Excerpt from, and link to The Inheritance Book.

Should You Leave Your Children an Inheritance? If you leave your children an inheritance what will they do with it? Will they save or squander it? Here’s how to teach your heirs to use the lump sum wisely.

What American Expats Need to Know About Foreign Mutual Funds The IRS considers foreign mutual funds Passive Foreign Income Companies (PFIC). These incur extra taxes for U.S. citizens. How can U.S. expats invest in mutual funds?

Want Help Understanding and Organizing your Money? Consolidating your various banks and financial firms can help you understand and organize your money better. Learn how consolidating your accounts can make investing easier.

Why Receiving an Inheritance is Difficult: It’s not “free” money Receiving an inheritance can be an emotionally fraught time. Learn what you should do to facilitate a smooth transfer of assets

Can Mutual Funds or ETFs Improve Your Portfolio’s Performance? Learn how Americans living abroad can use mutual funds or ETFs to improve their portfolio’s performance.  

Here’s a Quick Way to Invest in the Stock Market When you want to invest in the stock market, how do you choose a stock? Peter Lynch invested in L’Eggs because his wife wore stockings. But is that a reason to buy a stock?

The Investment Tool You Need to Invest Your Money Like the Pros Professional money managers are a good investment tool to use if you don’t want to think too much about your investments. Learn how “regular” people can use money managers just like the pros do.

How to Make Money in Your IRA What guidelines should you follow when withdrawing money from an IRA? How do you know if you are withdrawing principal or interest? Is it important?

How to Discuss Money Matters With Your Parents Sometimes aging parents find it hard to discuss money matters with their adult children. How can you talk about finances with your parents more easily?  

What Happens to Your IRA Account When You Make Aliya? What happens to your IRA account when you make aliya? Should you transfer it to Israel, or is there a better way to manage your investments?

How to Avoid Inheritance Anxiety If you get a sudden windfall, how do you avoid inheritance anxiety and make the right decisions? This blogpost explains the steps you need to take.

A 4-minute financial podcast Worrying about your stocks when the market is volatile is only natural. Here are 3 steps to take to minimize your worries and stay in the stock market.

What You Need to Know about Moving Money If you’re thinking of moving money from one account or country to another, here are some tips to help you do it more easily and efficiently.

How Much Money Can You Afford to Lose in a Risky Investment? When looking at a possible investment, consider how much money you might potentially lose. Your risk tolerance needs to be taken into account.

How Memory Loss Can Affect Your Money What happens to your finances if you suffer from memory loss? What can you do to protect yourself and your money?

Here’s When to Stop Supporting Your Children When should you stop supporting your children? What is the difference between monetary gifts that help or encourage bad habits? This tale of two couples explains.

Why Are Dividend-Paying Stocks like a Paycheck? Find out how dividend-paying stocks can help increase cash flow. Can income investors earn higher total returns through dividend reinvestment plans?

How to Protect Someone You Love from Financial Abuse Financial abuse among the elderly is growing. What do you need to know to protect your parents and other people that you love?

Is It Easier to Invest with an American Brokerage Firm or with an Israeli Bank? What do American olim need to know about investing with Israeli banks? Read this article to find out and for a possible solution.

Why Getting an Inheritance Doesn't Always Make You Rich Getting an inheritance will not make you rich unless you use it wisely. Read this to find out about the mistakes you need to avoid.

Why You Shouldn’t Worry about Market Volatility Market volatility affects the risk-return trade-off of your investments. Learn what you should do to protect your money.

The Financial Lesson that I Learned From Chess What financial tactic can you learn from a world chess champion? Why is it important to look at the big picture when making investing decisions?

Is It Easier to Make Money or Lose Money? Why is it harder to make money than to lose money? Find out why it’s better to avoid loss in the first place than trying to recoup lost funds.

Should You Engage in Copycat Trading? Find out why copycat investing vs. copycat trading is the more prudent strategy for growing your retirement portfolio

Is the global economy on the verge of another collapse?

Gambling vs. Investing: Where Are You More Likely to Win? Is there a difference between investing and gambling? Understanding gambling risks can improve your investing performance.

What do you need to know when choosing a financial advisor? Make sure to ask these questions to any potential investment advisor that you are considering.

Are bonds safe as an investment? Explore how they can provide safety and increase diversification in an investment portfolio

Do Market Timers Generate High Returns? Why do market timers think they can outperform the market? Understanding why market timers underperform passive investors can improve your investment performance.

Is There a Difference between Growth and Value Stocks? What is the difference between growth and value stocks? Does one have a better chance of growing your portfolio? 

What Is the Best Way to Teach Children Investing? What’s the best way to teach children investing? How should they learn basic concepts in personal finance? Should you use investment games or real money?

“Over My Dead Body!” Use a Will or Trust to Help Avoid Battles over Your Estate A will or trust can prevent long, expensive court battles over your estate assets. Find out which would be more appropriate for your situation.

Why a Stock’s Price Doesn’t Matter High stock prices may be intimidating, but they do not necessarily reflect the company’s value. Read here to learn why.

Growth vs. Income Investing: Is the Cost of Growth Too High? Retirement portfolio: Learn how to allocate growth vs. income investing, according to your risk profile.

Should Retirees Diversify Globally to Protect Their Savings? If you diversify globally will it improve the risk-adjusted returns on your investment portfolio? Learn how global diversification adds non-correlated assets to a retirement portfolio.

Do Simple Investments Generate Higher Returns? What type of investments yield the higher returns: complicated or simple investments? You may be surprised to learn that simple investments tend to have better, consistent returns. Read to find out why.

Should I Sell Out before Losing Money in a Stock Market Crash? Protect your portfolio from a stock market crash by reducing risk and producing more consistent performance through diversification

Are Emerging Markets’ Potential Returns Worth the Risks? Learn how diversification can help you manage the risks and returns of investing in emerging markets.

Will Dividends or Interest Boost My Retirement Savings More? Can dividends or interest boost your bottom line? Learn why both dividend- and interest-yielding positions have a place in your investment portfolio.

When Does Past Performance in Investments Matter? When analyzing a company, look at past performance and fundamental assets. Profile Investment Service’s most important asset is its dedication to clients.

3 Important Things to Do Before the New Fiscal Year There are 3 steps you should take at the end of every fiscal year. Find out why some calendar dates are important in personal finance.

I Don't Feel Inflation. Is It Hurting My Savings? Understand how inflation affects your buying behavior, spending patterns and savings.

How to Manage a Multicurrency Lifestyle Overseas retires and expat need to use multi-currency strategies to save money, reduce fraud risk, and optimize overseas investing.

Corporate or Treasury Bonds: Which Bonds Are Better? Corporate and Treasury bonds each have advantages. Which should you include in your investment portfolio?

What Is the Best Way to Reduce Risk in Your Portfolio? Learn how to grow your investments at a steady rate by reducing risk in your portfolio.

What Percentage of Your Retirement Portfolio Should Be Bonds? How should you invest your retirement portfolio if you want it to both grow and have little risk? Are bonds appropriate for preparing for retirement?

Does Investor Bias Make You Underperform the Market? By Douglas Goldstein CFP® - helping olim handle their U.S. investments from Israel A friend recently had a losing streak at the casino. Instead of walking away, he played more hands of blackjack. “I was determined to win,” he lamented. In fact, he was playing to recoup his losses. He was a victim of investment biases subconsciously affecting his decision-making. Gambler’s Fallacy – the belief that after a streak of losses his luck would turn – duped him into doubling his losses. A recent study of Major League Baseball umpires showed how biases are at work in all forms of decision-making. In 1.5 million pitches, umpires were less likely to call a strike if the previous pitch was a strike. Investor bias can lead you to make bad investing decisions. Biases are shortcuts in decision-making; you may, for example, increase your position in gold stocks because you have recently made a lot of money in gold, ignoring economic news that suggests gold prices are likely to drop. If you make a bet based on what just happened, you suffer from “Recency Bias,” like the umpire, who is more likely to call a ball after two strikes than one. Passive and automated investment systems (such as dollar cost averaging) outperform active traders because they eliminate such human biases and judgements. Dollar cost averaging – making fixed investments on a regular schedule – improves returns by reducing volatility and human error. Why do investors actively trade stocks? The answer is overconfidence bias. Overconfident investors believe they have an edge over others; they are better stock pickers and market timers. The more humbling reality is that overconfident investors underperform the market. They are more likely to act on gut instinct than on research and analysis. The major obstacle between you and better investment returns is often yourself. By making rational decisions and not letting your emotions dictate your trade orders, you may improve your investment results. To learn more about investor bias, read my blog, ProfilePerspectives.com/investor-bias Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Should You Follow Investment Trends or Bet against the Masses? By Douglas Goldstein CFP® - helping olim handle their U.S. investments from Israel Today, many “investment trend” websites are enticing online traders to join. Investors who follow the trend – also known as “momentum trading” – invest in stocks based on rising market prices rather than company fundamentals. The strategy of following the investment trend performs best in a bull market. However, selling before the trend reverses is a skill that eludes most investors. When many investors buy the same stock, the market price can rise above the underlying value of the company. Eventually, as investors’ emotions stabilize, rationality may return, and prices fall into line with the fundamental value of the company (based on measures of revenues, earnings, etc.). Short-term momentum players who try to time market fluctuations seldom outperform buy-and-hold investors in the long term. The trend can be a false friend Herding behavior, whereby investors irrationally pile into a stock or sector, is behind most stock market bubbles. Two conditions for stock market bubbles are: new money inflows (which sustain the inflated price), and credit expansion (to generate the capital to invest). When credit conditions tighten, capital flows into the investment market slows and stocks start to decline. When to bet against the masses If a company’s fundamentals don’t support the stock price, it may be prudent to bet against the masses. Contrarians are often viewed as the mavericks of the markets. More often than not, their decision to go against the trend is based on thorough fundamental analysis. If you base your investment decisions on sound fundamental security analysis, you may not always be a part of investment trends, but you will hopefully enjoy steadier and better long-term investment performance. For more on the risks of following the trend, see my book review of Ben Bernanke’s book about the 2008 crash at Profile-Financial.com/bernanke Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.  

Do You Look at the Risk-Reward Ratio of Your Stocks and Bonds? By Douglas Goldstein CFP® - helping olim handle their U.S. investments from Israel The risk-reward ratio is an attempt to quantify the amount of risk you need to take in order to get an anticipated return from any investment. If you were to only consider past returns when deciding whether to invest in stocks or bonds, stocks would appear to be the clear winner. From 2007 to 2016, stocks had an average annual return of 9% versus about 5% for 10-year U.S. Treasury bonds. If past returns are your only measurement of performance, then perhaps you should consider high-yield corporate bonds. This year, Harvard University’s endowment fund made its largest allocation to a high-yield corporate bond exchange traded fund (ETF), which had a one-year return (through March 2017) of 13.4%. Risk vs return Prudent investors know that past performance is not a guarantee of future returns, and instead of chasing last year’s returns they start by looking at their own risk profile. Indeed, some would say that Harvard marched farther out on the risk spectrum than a conservative education endowment should wander. Fund managers always look at both the return and risk premium – the risk-adjusted return – of a stock or bond. The risk premium is one of the most important metrics in investing because it indicates how much money you may receive (the return) for the level of risk taken. So, do stocks still make sense? Stocks make a lot of sense on a risk-return basis. Looking over a long investment horizon, from 1967 to 2016, stocks returned over 11% on average compared to about 7% for 10-year U.S. Treasury bonds. Consider too, that stocks’ risk premium was 6.6% and the Treasuries’ 4.4%. By comparing the risk-return metrics, it appears as if investors are taking on added risk in exchange for incremental stock returns. Diversifying an investment portfolio by adding bonds with a lower risk-return ratio may provide a superior risk-adjusted return. Find out why having a diversified portfolio matters at Profile-Financial.com/asset-allocation Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Can Optimism Increase Your Investment Returns? By Douglas Goldstein CFP® - helping olim handle their U.S. investments from Israel Are your investment returns determined by your worldview? Are people hardwired to be pessimists? Millions of years ago, if an optimistic caveman dismissed a rustle in a bush as the wind blowing, our ancestor may have ended up as a tiger’s lunch. As a result of this early conditioning, the part of our brain called the amygdala scans everything we see and hear for negative news. But according to Dr. Peter Diamandis, the founder of the coveted X Prize for Technology Innovation (and guest on The Goldstein On Gelt Show), this bias is more of a short circuit rather than an intelligent system design. He claims that in life and investing, it pays to be an optimist, as humans pay ten times more attention to negative news than positive news. Why optimism outperforms Technology is changing our lives for the better. A cursory list of human accomplishments over the past 100 years shows the future is indeed rosy – per capita income has more than tripled, extreme poverty has declined to less than 10% of the world, and human lifespan has doubled. This is a time of abundance, also the name of Dr. Diamandis’ book, Abundance: The Future is Better Than You Think. The book’s most powerful message is that technology is “resource liberating,” as it makes once inaccessible resources available and abundant. The future is optimistic investing But how does all this optimism affect your investment portfolio? Dr. Diamandis does not mention specific companies but he does mention names, including Bill Gates and Ilan Musk – technologists behind inventions that are addressing scarcity and expanding resources, and the most successful companies in the world. If you believe the world is improving to be a better place, your optimism can find expression in choosing areas of the economy, and the corresponding stocks, in which to invest. For more on optimistic investment opportunities turning science fiction into “science fact,” listen to our discussion at GoldsteinOnGelt.com/Diamandis (The opinions expressed on The Goldstein on Gelt Show are those of the guest, and not necessarily my opinion or the opinion of Portfolio Resources Group, Inc.) Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

How to Safely Boost Returns in a Low Interest Rate Environment By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel To the dismay of yield-seeking investors, interest rates remain at historic lows. Although rates on long-term bonds may begin to inch up, analysts generally expect that we may remain in a low-interest-rate environment for a while longer. So, what are income investors to do? It is important to understand the risks of reaching for higher yields and realize there may be less risky ways to increase income. It’s all about the Risk-Reward Relationship When investing for any purpose, returns always boil down to the risk-reward relationship. The laws of investing dictate that it is very difficult to increase your return without also increasing your risk. While you can increase your yield by investing in lower-grade or longer-term bonds, you also increase your risk should interest rates suddenly rise. To learn more about how bonds react to interest rates, watch a short video at: profile-financial.com/bonds. Income investors, especially retirees, want to generate cash. However, they also need to preserve their capital. By focusing on yield without regard to capital preservation, you increase your overall risk. In a low-interest-rate environment, the better strategy is to broaden your sources of income through total returns. Forget about yields – look to total returns “Total returns” is a strategy that invests in a combination of income and appreciation investments that, when allocated among different asset classes, can increase income while minimizing portfolio volatility. The goal is to generate sufficient current income while growing enough capital to keep up with inflation. A well-diversified portfolio of high-quality dividend stocks and investment-grade bonds can generate higher risk-adjusted returns more safely than a portfolio of the highest yielding, below investment-grade bonds. Income investors do not have to suffer through an extended low-interest-rate environment. However, it does require a strategic approach tied directly to your specific risk-return profile. Working with a well-qualified investment advisor, just about any risk-return profile can be matched with a balanced and diversified total return portfolio strategy. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Secrets to a Financially Strong Marriage By Douglas Goldstein, CFP® - helping you handle your American investments Displayed prominently in our living room is a list titled, “Abba’s Secrets to Success” Now, as my oldest daughter is about to get married, I’ve compiled “Abba’s Secrets to a Financially Secure Marriage” for her and her groom. With their permission, I’d like to share it with you: 1. Be completely honest – Open communication is better than financial infidelity. Hidden spending not only damages your future goals but erodes trust. Discuss money regularly, not just when you have a big bill to pay. 2. Work on joint financial goals – Don’t fall into roles of good cop/bad cop where one of you wants to spend and the other wants to save. You’re merging your lives; now merge your money. There is no such thing as “my” money – no matter who brings home the paycheck, consider it “ours.” 3. Live below your means – Accumulating “stuff” is expensive. Create a budget and stick to it. Review your spending/saving goals regularly. And most importantly, ignore financial peer pressure to spend. 4. Make charity a priority –Get involved in tzedaka and make the world a better place. 5. Pay yourself first – You’ll grow old together; begin planning for it now. Compound interest and time are your new best friends. Make sure your savings is divided into three pots: an emergency fund, short-term, and long-term savings. Having an emergency fund is the best way to ensure that an unexpected problem won’t turn into a crisis. 6. Avoid debt – Make sure you have enough money saved before you buy. Avoid tashlumim! The only exception is taking on a mortgage (and then be careful not to buy a house that is too expensive.) 7. Find a financial advisor that you trust – Though I would be honored if you choose me, read the article at Profile-Financial.com/pick-advisor to make sure you select wisely. 8. Be detail-oriented - Pay your bills on time, file taxes, make sure you have insurance and healthcare directives. Remember money is a tool to help you achieve great things, not an end in and of itself. Use it carefully and build well. And Mazel Tov! Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Do You Have to Stop Working When You Reach Retirement Age? By Douglas Goldstein CFP® - helping olim handle their U.S. investments from Israel Does reaching retirement age mean you have to stop working? In Israel, the official retirement age for a man is 67. For women, it fluctuates between 60 and 62, depending on date of birth. Retirees until the age of 70 (or 69 for a woman born before 1950), are eligible for a state pension, but entitlement is affected by additional sources of income. From 70 onwards, a state pension is given regardless of other income. So what is the best age to retire? Before making a decision, ask yourself the following questions: Are you physically able? As you age, your regular routine may become tiring. You may also develop health issues that make working full time difficult. So before you decide to keep on working, make sure that it’s realistic. In your retirement plan, make provisions for the possibility that future health problems may affect how long you can work. Why do you want to keep working? Do you want to keep working because you fear outliving your savings? If so, working as long as possible lets you amass more savings, and have fewer years of withdrawals. But what if you don’t have to keep working for income? If your desire to keep working is based on factors such as wanting to maintain routine or enjoying the contact with your colleagues, there are other solutions. Perhaps you could work part-time or find a hobby that will provide a social life. It’s not only about money Before making your decision, meet with your financial planner, tax advisor, and pension planner to discuss your estimated streams of retirement income. At the same time take all relevant issues into account, and make your final decision after considering both the financial and emotional factors. For more information about how to decide when to retire, read chapter 5 of The Retirement Planning Book.  Click here for a free download. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.  

How to Prepare for the Next Stock Market Crash By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel Over the past several years, the market has climbed to historic highs, prompting analysts to sound the alarm over the next stock market crash. While I can’t say when the next crash will occur, I can say it’s reasonable to assume that there will be another stock market drop at some point. How can you prepare for it? Market crashes are inevitable Crashes are more about the speed of decline than its depth or duration. The Flash Crash of 2010 saw the market plunge 1,000 points in minutes. In the 2008 crash, the market fell more than 20% within days. The good news is that each time the market crashed, it fully recovered and went on to greater gains. In 2010, it took a couple of days to recover, while in 2008 it took about 17 months. Past performance is no guarantee of future returns. Every bull market (market rally) leads to some sort of correction. Corrections are defined as declines of 10% to 20%, and they are very common during extended stock market rallies. They may last from a few weeks to a few months. A bear market is when stocks decline more than 20%, with a duration of more than 15 months. Patience and discipline beat fear and panic The key takeaway is that crashes, corrections, and bear markets are all parts of market cycles. These events are even healthy for the long-term trajectory of the market. So while it’s scary to watch your portfolio lose a significant portion of its value, keep in mind that these are only paper losses. These losses don’t become real until you sell. (That’s why it is important to move out of the market if you need your money in the short term, and don’t have time to recoup potential paper losses.) If you have a solid, long-term investment strategy, your patience and discipline should pay off over the long-term. A properly diversified portfolio should be able to weather most storms, given enough time. For more on how to prepare your portfolio for a market crash, see: Profile-Financial.com/stocks Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.  

Debunking 3 Myths About Not Needing an Emergency Fund By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel One of the most fundamental principles of financial planning is to prepare for the unexpected by keeping three to six months’ worth of living expenses in an emergency fund. The trouble is many people succumb to the myth that emergency funds aren’t necessary because you can always withdraw from savings. Here are 3 myths about emergency funds and why they are wrong: The best place to keep an emergency fund is in your investment portfolio Yes, an investment account is technically marketable; and it can provide you with access to cash should you need it. However, you can lose real money if you are forced to sell assets at the wrong time. Imagine selling off $5,000 of your equities to cover an emergency expense after the market has declined 25%. It could take you years to gain that back. Better to have that money sitting in a low-yielding money market fund. Read this blog post to learn more about why investing your emergency fund is a bad idea: www.profileperspectives.com/emergencyfund. Once I turn 59½ I can use my retirement plan Yes, once you reach age 59½, the 10% penalty in your Individual Retirement Account (IRA) goes away. However, when you access your retirement account, the withdrawal is taxed as ordinary income. But the real issue is that it could put you into a higher tax bracket, which would be even more costly. Covering a $10,000 expense could require you to withdraw as much as $15,000 to cover taxes. While I do not give tax advice, it is important to keep tax considerations in mind when withdrawing funds. It’s better to pay down debt than to save for an emergency fund While paying down debt may be the best use of your excess cash flow in most situations, few would argue that it should be done at the expense of building an emergency fund. Without an emergency fund, you could end up taking on even more debt, which just compounds the problem. The better approach is to apply a portion of your cash flow to both eliminating debt and building an emergency fund. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Short on Retirement Savings? Here’s What You Need to Do By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel More than 10,000 baby boomers cross the retirement threshold every day, and nearly one in four of them of haven’t saved enough to retire comfortably. If you’ve reached that point and realize your retirement savings won’t last your lifetime, it’s time to have an uncomfortable conversation with a financial advisor because there are several things that need to be done. But it all starts with having a plan. Create a realistic plan Establish realistic goals based on what you expect to happen. That should include a new time line for critical milestones, such as when you expect to stop working, when to start Social Security and Bituach Leumi, and when (or if) you will need to begin digging into your capital. Crunch the numbers to come up with a pre- and post-retirement spending plan as well as an investment strategy to maximize your income and capital growth. Start living like a retiree now By adjusting your lifestyle you can lower spending to make a significant difference in how much you can save. Reducing your budget now can also prepare you for the transition of living with a lower income as you move into retirement. The pre-retirement years may be the ideal time to downsize your home, your car, and your lifestyle. Delay retirement to the “new 65” For many people, regardless of where they stand financially, 70 is the “new 65” when it comes to retirement age. There are several advantages to working longer: • You can maximize your Social Security and Bituach Leumi benefits. • It will reduce the number of years you’ll actually live in retirement. • It will give you more time to build your nest egg. If you delay retirement, reduce your spending, and increase your savings, you gain the huge benefit of time to allow your money to work for you. It may not be the retirement you envisioned, but it doesn’t have to be the disaster many are facing today. Learn more about improving your retirement income by watching a short video here. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

How to Keep Financial Harmony in Your Marriage By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel What’s the best way to achieve financial harmony in a marriage? When two people get married, they don’t only join their lives together, but also their money. If differences in money attitudes and practices are not addressed early on, people can become set in their ways, making it more difficult to overcome any disagreements. However, where there is love, there are also ways to heal the financial divide. Find shared values and purpose Couples need to come together with a shared vision of their future based on joint values. If they share a mission and purpose, their decisions will have greater clarity and conviction and it should be easier to maintain financial harmony. Shared goals can provide the motivation to spend/save according to an agreed-upon plan. Create a plan At the core of any successful enterprise – be it a business or marriage – is a spending plan or budget. With shared goals and purpose, couples can better prioritize their spending and find it easier to agree on financial decisions. Budgets should be created as a couple and tracked together monthly. Keep separate finances When finances are merged, it can sometimes lead to a struggle for control. Make sure that money doesn’t become a power issue. While both partners don’t need to balance the checkbook or pay the bills, everyone needs to be happy with the division of labor. Making joint spending/saving decisions is important. However, not every financial decision needs to be approved by your spouse. Allowing some individual control over a personal spending budget can go a long way to relieving the stress of having to account for every shekel spent as a couple. Decide on an amount where each person can spend without having to “check in” with the other. Read my blog, ProfilePerspectives.com/sharedsavings, for an in-depth discussion of the pros and cons of maintaining a shared savings account. Communicate! As with any other issue in marriage, open and honest communication is the key to finding financial harmony. Couples who make time to discuss money issues regularly usually achieve a financial consensus. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

What You Should Know About Low-Risk Investments By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel Recently, a new client told me that his portfolio mostly contained low-risk investments. When I saw that the majority of his investments were mutual funds, I asked him why he believed mutual funds were “low-risk,” as his funds contained stocks. What he was missing was the mutual funds contained stocks which are risky, so even though the funds were diversified, he was exposed to a lot of risk. What is a low-risk investment? An example of a low-risk investment is a bank deposit, or CD (certificate of deposit). A CD pays a fixed interest rate and matures on a specific date. It is “safer” than a stock, the value of which can fluctuate dramatically, since if the CD investor holds the CD until maturity, he knows he’ll get his principal and interest paid in full. Investors looking for a low-risk investment that produces income choose CDs because they pay interest on the original deposit. Furthermore, CDs are normally insured by the FDIC for up to $250,000 if the bank fails and doesn’t pay back the initial deposit on maturity. However, though a CD carries a low level of risk, you can still lose money if you sell it before its maturity date. Moreover, if rates of inflation are higher than interest rates, the real value of your money diminishes compared to the original purchase. Additionally, CDs also include an element of liquidity risk, especially if you invest in a long-term CD. What to think about if you want to invest in CDs There are many reasons to invest in a CD. It may be worth forfeiting the possibility of higher returns in the stock market for relative peace of mind in preserving your principal. If so, consider buying CDs through your broker, as CDs purchased through a brokerage account can offer higher returns than if you buy them as an individual through a retail bank. To learn more about CDs and other low-risk investments, listen to my podcast at: GoldsteinOnGelt.com/low-risk Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Can I Safely Withdraw My Principal in Retirement? By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel As a cross-border financial advisor, one question I hear nearly every day is, “Can I afford to withdraw my principal in retirement?” For most of my clients, the short answer is, yes, but it is important to know how much and from which accounts you can dip into your principal. When withdrawal is part of a strategy The financial planning industry’s “4 Percent Rule” is commonly applied in determining how much principal you can draw down annually without risking outliving your money. Based on historical worst-case scenarios for a portfolio allocation of 60% stocks and 40% bonds over the last 100 years, 4% is considered a safe withdrawal rate in most situations. However, since each person’s situation is different, don’t rely on a rule of thumb as customized financial plan. A simple calculation to determine how much capital would be needed to generate a desired level of income using the 4% strategy is to multiply your income need by 25. For example, if you need $100,000/year in retirement, you would need $2.5 million of capital at a withdrawal rate of 4%. When withdrawal can be done conservatively According to a survey by AARP, only a quarter of retirees dip into their principal, largely due to their fear of outliving their assets. Many retirees simply adjust their spending to be able to live off their income, even though they may have adequate principal to use. However, if withdrawing principal is done properly, with caution and attention to tax efficiency, retirees should have nothing to fear. Determining how much principal you can safely withdraw each year should be an annual calculation. Factors such as your living needs, interest rates, market performance, inflation, and your general outlook on the future will affect the calculation. Work with your financial advisor to review your retirement income plan throughout your retirement. To learn more about income planning, download the Retirement Planning Book (for free) at Profile-Financial.com/rpb Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

How to Invest When You Can’t Predict Market Direction By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel If you’re thinking of investing in stocks but you’re concerned about which direction the stock market will move, here’s what you need to know: If you are a new investor with a long-term perspective, it shouldn’t matter which direction the stock market moves in the short term. What you should know is that a bull market (up market) generally follows a bear (down) market. On average, bear markets in the United States last about 11 months, while bull markets average 32 months. In the past, the average bear market decline was 27%, while the average bull market gain was 119%, though past performance is no guarantee of future returns. Remember that historically down markets were temporary. More importantly, not only does a bull market erase declines, but in the past, the gains of the previous bull market were extended significantly. Will it always be that way? Unfortunately, no one knows. Diversification is key to long-term performance The key to capturing the upside returns of the stock market while minimizing downside risk is diversification. Diversification is a strategy that recognizes the uncertainty in how stocks from various sectors will perform at any time and it tries to balance your portfolio by spreading out risk among various assets. Instead of buying dozens of individual stocks, you can diversify with index funds and exchange-traded funds (ETFs). With ETFs and index funds, your investments can be allocated among different types of stock indexes to achieve a risk/return profile that matches your own risk tolerance. If you work with a licensed financial advisor who understands your objectives and risk profile, you can create a diversified portfolio that is tailored to your needs. Learn more about investing in stocks by watching this 10-minute video.  Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Why You Need to Talk to Your Adult Children about Your Finances By Douglas Goldstein CFP® - helping olim handle their U.S. investments from Israel Do you find it difficult to discuss with your adult children what should happen with your finances towards the end of your life? If so, you’re not alone. People don’t like thinking about their own mortality or losing control. Moreover, as family relationships aren’t always easy, discussing issues such as power of attorney, healthcare proxies, and estate planning can get very complicated. For these reasons, many families push off this conversation for as long as possible. If you don’t speak with your adult children about your finances, they may have difficulty picking up the pieces and taking care of you and your affairs if you become too infirm to take care of yourself. The emotional and monetary effects of taking care of an elderly parent without any direction can be very hard, especially if your adult children are raising families of their own at the same time. How to have “the talk” The best way to let your adult children into your finances is to talk with them. If you can’t physically do that for any reason, compose a list of all your assets, where they are, what you want to happen when you’re no longer able to look after yourself, who would take care of you, and other important issues. Make sure to sign the appropriate documents so your children have the legal means to make financial decisions on your behalf (Power of Attorney, Trading Authorization, etc.) If you have a financial advisor, invite your adult children to the attend meetings. Let them know who helps you with your finances and who to ask for reliable, objective advice when necessary. While you can’t ever know exactly how long you will live or stay healthy, taking a disciplined approach and sharing your financial situation, goals, and strategies can save a lot of heartache for everyone down the road. For more about why sharing your finances with your adult children is so important, listen to Tim Prosch, author of The Other Talk, on The Goldstein on Gelt Show at here. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Steps You Need to Take 5 Years before Retirement By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel Will you have “enough” money to live comfortably? The months and years before retirement may be filled with trepidation and financial worries. In order to minimize financial concerns before retirement, here are some steps you should take in the five years leading up to it: Organize your assets for tax efficiency Most retirees underestimate the impact taxes will have on their retirement income. If you have an idea of what your retirement tax bracket will be, work with your advisor to arrange your assets in a way to create the greatest tax efficiency when you start withdrawing. Selling assets might trigger large capital gains taxes, and there may be additional taxes on pension payments. Know your pension options For some people, delaying taking Social Security or other pensions until as late as possible might make sense. Learn more about timing claiming benefits at: Profileperspectives.com/social-security. Be sure to check with your Israeli pension advisor in Israel about taking Bituach Leumi and withdrawing your work pension as a lump sum or in monthly payments. Don’t be too conservative While it may be tempting to reduce your exposure to risk-based investments pre-retirement, if you get too conservative, you could inadvertently diminish your portfolio’s capacity to generate enough income to meet your needs. A balanced and diversified portfolio of both stocks and bonds may be your best strategy for maintaining capital growth while reducing portfolio volatility. But beware of taking risks without consulting with a licensed advisor first. Find your retirement ambition Studies show that retirees who stay engaged and productive are happier in all aspects of their lives. Explore new interests that can be enjoyed now and more fully developed as you cross the retirement threshold. These might include volunteering, mentoring, or starting a new hobby or business. The five years before retirement is a critical period for ensuring a smooth transition into your next stage of life. Get in touch if you’re concerned about how to handle your investments for retirement: [email protected].   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

How to Choose the Right Financial Advisor for You By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel Choosing the right financial advisor can be like seeking the right life partner. Your financial advisor needs to be the perfect match for you and your situation. Your advisor must be knowledgeable, honest, reliable, and, most importantly, have your best interests in mind. There are many financial professionals, who all offer a range of services and expertise. How should you choose? When considering whether to work with a prospective advisor, ask yourself these questions: Is this financial advisor qualified? Before you set foot inside a financial advisor’s office, make sure that he is licensed and has expertise with the types of investments that interest you. You can check out his qualifications, background, and experience through the online checking facilities provided by FINRA (Financial Industry Regulatory Authority) in the United States and ISA (Israel Securities Authority) in Israel. Who is the topic of your first meeting? If your prospective financial advisor spends a lot of time talking about himself and his credentials, but doesn’t ask you about your investment goals and current financial situation, then choose someone else. The main subject of your first meeting should be you. A financial advisor needs to learn about you, your specific needs, goals, and the ultimate purpose of your investments. Talking with you or at you? When a financial advisor speaks with you about investments, make sure you understand how these investments work and why he suggested them. Not everyone understands financial jargon, so make sure everything is explained clearly. If you don’t feel comfortable asking questions, interview another advisor. During your conversation (and yes, it should be a conversation and not a monologue!), make sure that you feel comfortable. You should leave the meeting with a sense that your finances are in good hands. What else do you need to know about finding the perfect (financial) match? For more ideas, read this: Profile-Financial.com/pick-advisor Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

What You Need to Know About Rolling Your 401(k) to an IRA By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel When you change jobs, everything you need to take with you can be neatly packed into a box – except your retirement plan. When you leave your job, you need to think about rolling your 401(k) into an IRA (Individual Retirement Account). If you left your job to make aliya, this question becomes even more crucial, as cross-border financial regulations come into play with keeping the tax-beneficial status of American retirement accounts. What are your options? If you leave your American job to move to Israel, you have four options for your 401(k): • Keep the money with your former employer’s 401(k) plan, • Roll your funds into an IRA, • Roll your money into your new employer’s plan if it’s allowed, • Cash out your 401(k) plan by withdrawing all your money (not recommended). The best course of action depends on your financial situation, your attitude about managing your own retirement funds, where you will live, and the specific plan options available to you. What are the pros and cons of rolling your 401(k) plan into an IRA? Advantages of an IRA Rollover There are several reasons why rolling your 401(k) into an IRA may be advantageous. An IRA gives you more control over your specific investments, as they tend to offer more investment options than a typical 401(k) plan. Furthermore, you can easily manage an IRA from overseas. Disadvantages of an IRA Rollover If you want access to your retirement funds before age 59½, you may prefer to keep your funds in your 401(k) or roll them into your new employer’s 401(k) plan (if available). If you are younger, you might want to take advantage of the fact that 401(k) withdrawals are allowed at age 55. Or, if you are happy with your current investments, it may be better to leave them where they are rather than rolling them over to somewhere else. Before changing any retirement plan, make sure to consult with a financial advisor and tax professional to understand the tax consequences of any move you make. To learn more about IRAs, read: ProfilePerspectives.com/401-and-ira Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

How to Make a Good Investment Decision By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel Since one person’s good investment choice may be a huge mistake for someone else, what factors should you consider when deciding upon a potential investment? In investing, the only hard and fast rule is that past performance never guarantees future returns. Though you should try to understand why a security acted in a specific way in the past, the most important thing you can do is make sound decisions based upon your personal situation. To help you make an even clearer decision, use an investment evaluation tool like the one available at Profile-Financial.com/investment-evaluation All too often, folks lose money as a result of not asking the right questions. So, when deciding what to invest in, ask yourself: What is your net worth? Why is knowing your net worth important? Before you invest your money, you need to know how much you really have. This doesn’t only refer to savings, but also to other assets such as real estate and collectibles (if you would ever consider selling them). Knowing your total net worth helps you create an asset allocation model and understand how the new idea would fit in your big picture. What is your tolerance for risk? Risk tolerance is very individual. If you are close to retirement, your risk tolerance level may be lower than that of a younger person because you have less time to recoup any potential loss. Sometimes even younger folks don’t have the stomach for market volatility and they need to choose more conservative investments, too. What is the purpose of the investment? Are you investing for growth, to maintain your principal, or to generate income? Growth investments increase your wealth through long- or short-term appreciation. These investments include mutual funds and various types of stocks. Income investments, on the other hand, generate steady income through interest or dividend payments. Examples include dividend stocks or bonds. An income investment may not be suitable for growth investing, and vice versa. To find out what other questions you should ask before making a financial decision, check out the free investment evaluation tool at: Profile-Financial.com/investment-evaluation Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.  

Was Miguel Cervantes’ Don Quixote fighting imaginary windmills or market volatility when he said, “Don’t put all of your eggs in one basket?” Putting all of your assets in one basket doesn’t keep them as safe as you might think because there is always a risk that you might lose them all at once. The way to counter this is the investment strategy of asset allocation. Asset allocation, or diversification, may be even more important than picking the “right” stocks. The idea is to diversify your money among different types of assets, such as equities, fixed income, and cash and its equivalents, rather than putting all your money into one single asset class. Minimize potential losses The main reason for practicing asset allocation and having a diversified portfolio is to minimize potential losses. If you invest in a single asset class, and it does badly, you could sustain a heavy loss. However, if you spread your investments among different asset classes, if one class performs poorly, your losses could be mitigated by holdings in different, hopefully better-performing asset classes. For example, historically, when bonds tend to have low interest rates, stocks rise in value, and in periods of high interest rates, bonds outperform stocks. Of course, past performance is no guarantee of future returns. How to determine your asset allocation How do you choose which asset classes to invest in, and in which proportions? This depends on your personal situation and goals. If you want to save for a specific, short-term goal, you would put more of your money into liquid assets that minimize jeopardizing the principal, such as certificates of deposit (CDs), money markets, or cash. However, if you are investing for the long term, you might include a larger proportion of stocks and other growth investments in your portfolio. As the goal is more long term, you have more time to ride out market fluctuations. To find out more about asset allocation and the importance of having a diversified portfolio, read my blog: Profile-Financial.com/asset-allocation Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Why You Need to Build an Emergency Fund By Douglas Goldstein CFP®- helping olim handle their U.S. investments from Israel What would happen if you had an emergency – like a huge dental bill or unexpected car repair? And even worse, what if you had lost your job a month before and couldn’t even get an interview for a new one? To top it off, you get a call that a close relative in the States is sick and you desperately want to fly in to help. Do you have cash available to pay, or would you need to withdraw from your long-term retirement account or sell investments (possibly incurring a large tax bill)? How to build an effective emergency fund Generally, folks should have three to six months’ worth of essential living expenses as the benchmark, and sometimes as much as twelve months or more, depending on their other assets and job prospects. Your emergency fund money should be in a liquid investment so it can be accessed instantly, when needed, without penalties. It’s true that you won’t earn a lot on it, but that’s the cost of liquidity. Investing in something that yields a higher return usually involves greater risk… risk you shouldn’t take with your emergency fund. Since you may need all of this money, you can’t afford a drop in its value. Additionally, if you put this money into an illiquid investment, you may not be able to sell it quickly enough when faced with a bill. Remember, emergencies don’t wait for a bull market. Review your personal life and work situation. Someone who works in a field with frequent turnover – like technology, or on a commission-based salary, may need a larger emergency fund. Likewise, a single person may face fewer emergencies than a family with many children, and his fund may not need to be as large. If you continually need to call on your emergency fund, you should also reevaluate your budgeting practices. For other advice on saving and investing, download a free copy of The Retirement Planning Book at: Profile-Financial.com/rpb Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

The Things Not to Do With an Inheritance By Douglas Goldstein, CFP® - helping olim handle their U.S. investments from Israel When you get an inheritance, your first question may be, “What should I do now?” But perhaps a better question is “What shouldn’t I do now?” An emotional rollercoaster Getting an inheritance arouses many emotions. Sometimes, people get too excited and they spend all the money without thinking about the best uses for it. Others feel uncertain that they know how to manage the wealth they just received. Their fear paralyzes them, preventing them from making good investment decisions. What are the mistakes to avoid? When you get an inheritance, try not to let the tangle of emotions interfere with making the right choices. Avoid the following: Impulse spending. While you may have always wanted a luxury car, designer jewelry, or the latest technological gadget, step back and ask yourself if these are really the best uses for your new wealth. Sometimes there is an additional cost to an item beyond its price tag – can you afford the ongoing costs of maintaining a new acquisition? Get-rich-quick schemes. While it may be prudent to invest some or all of your inheritance, don’t get blinded by your desire to make as much money as possible. Many offers of “high returns” that sound too good to be true often are. Sometimes preservation of wealth is more important than growth. Consult your financial advisor before making any investment decision, since their objectivity and knowledge can alert you to scams and unrealistic expectations. Fear and anxiety. Don’t be too frightened to take some risks. The problem with conservative investments is that low interest rates may not beat inflation, so in the long run, your money may lose its real value. A financial advisor can help you assess your situation and suggest suitable investments. Greedy/Needy friends or relatives. If you are approached by gift/loan requests, don’t feel pressured into agreeing. First make sure that your own future is financially secure, and only then weigh the merits of the request. What should you do now? There are positive ways to use your inheritance. For some more information on what to do after you receive an inheritance, join my free webinar. Register at Profile-Financial.com/webinar Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

How Can You Increase Your Retirement Income? By Douglas Goldstein, CFP® - helping olim handle their U.S. investments from Israel How can you increase your retirement income and avoid risk? That’s tricky, and a lot of folks simply opt to put their money in the bank. But the good news is that there are other options, aside from the bank, for reducing risk and generating more retirement income. While banks present a lower risk than the markets, bank deposits historically have low yields. This is very significant in retirement because you need sufficient income from your investments to replace your paycheck. Your bank savings may not grow if interest rates are low, and may even lose value over time due to inflation. Income-producing investments These two income-producing investments, while more risky than bank deposits, may be appropriate for some investors, and it’s worth asking a professional, licensed investment advisor if they’re right for you: Bonds – A bond is a loan to a government or company over a set time period. When the bond matures, you get back your original sum (the principal), while during the time that you own the bond, you receive regular interest payments. Even though bonds are lower risk than stocks, they are not risk free. During a bond’s lifetime, market volatility can cause its value to go up or down, and there is the risk of default. You don’t have to invest in individual bonds – a bond fund gives you the opportunity to diversify. These funds are managed for you, and you can also receive a monthly payment instead of the semi-annual payments received from individual bonds. Be sure to read the prospectus before investing in a mutual fund so that you understand the risks and expenses. Dividend-paying stocks – Individual stocks may pay dividends, as well as REITs (real estate investment trusts), ETFs (Exchange Traded Funds), and mutual funds. While the dividend rate isn’t guaranteed (that is up to the board of directors to decide), dividend-producing investments generate income on a regular basis. (Don’t forget that the initial investment does carry risk of principal.) Consult with a financial advisor Before deciding on an income-producing investment, consult a financial advisor to find out which investment strategy is best for you. For more information about increasing your retirement income, watch the 9-minute video at Profile-Financial.com/videos/increase-retirement-income Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

What Happens to Your U.S. Brokerage Account When You Leave America? By Douglas Goldstein, CFP® - helping olim handle their U.S. investments from Israel The good news is that if you are an American expat, or you are not a U.S. citizen at all, you can still benefit from having a U.S. brokerage account. (For more information about managing your American brokerage account from abroad, download the Profile Toolkit.) Why have an American brokerage account? There are many reasons to keep your investments inside a U.S. brokerage account. These include: transparency and efficiency, lower transaction fees, and an opportunity to profit from worldwide markets in both dollars and foreign currencies. You can diversify your holdings inside a U.S. brokerage account, with CDs (certificates of deposit in a bank), mutual bunds, stocks, bonds, and much more. Additionally, if you are an American expat, keeping your investments inside a U.S. brokerage account will make it easier for you to file your U.S. taxes and fill out the FBAR form. By keeping some of your investments in a U.S. brokerage account, your portfolio becomes more diverse as you are not relying on the movements of one single economy. How can you invest in U.S. markets from outside America? While it is still possible to invest in U.S. markets from overseas, the most cost-efficient way to do so may be through a U.S. brokerage account. To do this, you need to enlist the services of an investment company that specializes in cross-border and international clientele. The brokerage company you choose should not only be cross-border friendly, but should also specialize in customer service. It should provide you with clear advice and services for custody and clearing, meaning that it can hold securities for you on your behalf and execute your trade orders. Make sure that whatever firm you choose is properly licensed and experienced. For more about how to open a U.S. brokerage account and invest in U.S. markets from outside America, download the Profile Toolkit. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Are Foreign Investments Good for Your Retirement Plan? By Douglas Goldstein, CFP® - helping olim handle their U.S. investments from Israel Do you want to minimize risk in your retirement accounts? If so, consider diversifying your holdings to include foreign investments. Investing internationally may boost your returns and minimize risk, as you’re “geographically diversified” and not relying on any single country’s economic performance. Geographic diversification can be achieved by buying foreign stocks, ETFs, mutual funds, REITs, and foreign corporate and/governmental bonds. Saving your pension in one country and keeping your assets in another country is another form of geographic diversification. If you want to know more about minimizing risk in retirement planning, download The Retirement Planning Book, at: Profile-Financial.com/rpb Examples of global investment opportunities: Owning Foreign Stocks: Most major stockbrokers can help you buy individual foreign stocks, taking care of any currency conversions if necessary. If you like stocks, also consider buying an “ADR” (American Depository Receipt). These investments trade like stocks in American dollars on U.S. exchanges but represent shares in foreign companies. Exchange-Traded Index Funds: There are many ETFs that follow a variety of different foreign-based markets and sectors. They can be global, regional, or focused on a specific country. International ETFs may carry lower risk than individual stocks in specific foreign companies because they are diversified. Foreign Real Estate: Buying real estate in foreign countries can be considered geographic diversification, but it usually requires a greater amount of investment capital than buying stock or mutual funds (i.e., you have to buy a whole property as opposed to just shares). To avoid the management hassles of owning physical real estate, consider buying international REITs (real estate investment trusts). Unlike owning a physical property, REITs pay dividends, mitigate risks among several properties, and are more liquid investments because they often trade on the stock market. Risks associated with foreign investments While investing some of your retirement portfolio in international assets can hedge your portfolio against swings in your domestic economy, it’s not risk-free. It’s important to remember that the added risks of currency and political uncertainties in other countries can impact your assets. For more strategies about investing for retirement, download (for free) The Retirement Planning Book at Profile-Financial.com/rpb Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.    

Is there a safe investment that carries little risk? Bonds are often described as a “safe investment” since, compared with other investments, they have a smaller risk of losing principal. However, just because some people call them “safe,” that does not mean they cannot lose money. Bonds are popular because they distribute interest payments on a set schedule, providing a reliable source of predictable income. When choosing which bonds to buy, investors can select issues according to their individual risk tolerance – higher yields often correlate with higher risk. This choice gives investors a sense of control, because they can decide how much they are willing to risk to get a particular interest rate in return. There are many different types of bonds on the market: Treasury bonds, municipal bonds, premium bonds, junk bonds, and more. In fact, bonds are so popular that the bond market is larger than the stock market! Bonds, bond funds, and bond ladders can be effective tools in hedging against market volatility. Depending on your specific risk level and financial situation, chances are there is some type of bond program that can meet your needs and goals.   There’s no such thing as a “super safe” investment It’s important to keep in mind that there are no guarantees. Even though bonds may be a “low-risk” investment, they are not risk-free; investing in bonds and bond funds carries a certain element of risk to your principal. In fact, no investment is 100% safe. Remember that no two investors are the same. What’s good for one person may not necessarily be appropriate for another. If you are an oleh, you should note that some types of bonds, such as municipal bonds, are generally not appropriate for cross-border investors. For more specific information about how to begin investing in bonds, and how to determine what type of bonds to buy, download the Profile Bond Toolkit at: Profile-Financial.com/bond-toolkit. It contains a variety of resources that explain how bonds work, and how to determine which bond is right for you.

When you plan for retirement, you must have the right tools. What are the most important things that you need? An emergency fund Before you begin saving for retirement, create an emergency fund for unexpected expenses. This way, you will always have money available in a crisis and you won’t need to withdraw from savings or take a loan. Ideally, your emergency fund should cover at least 3-6 months’ worth of expenses. Keep this money liquid, in a bank account, so that you can withdraw it easily in a time of need. You might not earn much interest on it, but the purpose of this money is to be accessible in an emergency rather than growth. Time It’s never too early to start saving for retirement. Even if you are just beginning your career, you need to put money aside into savings, in addition to maximizing contributions to your pension and other tax-deferred accounts. The earlier you start saving, the more chance you have for compound interest to work its magic. A retirement dream Retirement isn’t only about ending your employment. It’s also about the life you’ll lead when you no longer need to go to the office every day. Do you want to study, travel, or take up a hobby? When you have clear retirement goals in mind, you’ll know approximately how much it costs, and it’s that much easier to plan. Of course, life always throws unexpected surprises your way, so a good retirement plan also takes into account what might happen if your health-related expenses are more than anticipated, or the market doesn’t act as analysts predict. A flexible strategy is critical to retirement success. A financial plan To realize your retirement goals, you need to create a financial plan. Not only can a plan help you assess how much money you’ll need to save, but it can help you determine the proper asset allocation and investment model. Consult with a financial planner to assist you in formulating a strategy. What other tools do you need to plan for retirement? Watch this 9-minute video to find out: Profile-Financial.com/videos/tools

Is your investment account in jeopardy because of your address? If your American brokerage firm no longer wants to hold your account because your legal address is not in the United States, you may find the information contained in the Profile Toolkit useful. (Free download at Profile-Financial.com/toolkit) Financial companies follow strict regulations for all their clients. However, some companies are deterred by the expenses and time involved in managing accounts belonging to U.S. citizens living abroad. American expats in this situation are left wondering what to do with their U.S. assets once they leave the United States. Should you transfer your assets out of the United States? While it is useful having sufficient assets in Israel to cover day-to-day expenses, the question of whether you should move your entire investment portfolio to Israel is complicated. There are points you should consider on both the American and Israeli side. Beware of losing American tax-beneficial status. If you withdraw money from an American retirement savings account (IRA, 401(k), etc.) and bring it to Israel, not only do you lose the tax-deferred appreciation in America, but you may trigger tax bills and other penalties. On the Israeli side, there is the issue of incurring additional American taxes if you invest in Israeli mutual funds. Furthermore, Israeli firms may not want to service American clients since it subjects them to further tax reporting to a foreign government (the IRS has a very long reach). For these reasons, many American expats find it useful to keep their savings accounts in America – for the simple reason that Israel does not have the equivalent of FDIC or SIPC insurance. Once you find a cross-border-friendly brokerage firm (a specialty of Profile Investment Services, Ltd.), you can do a custodian-to-custodian transfer of assets from the old company to the new one to avoid any tax consequences of early withdrawals from retirement accounts. If you want more information about maintaining your U.S. investment accounts while living in Israel, download the Profile Toolkit at Profile-Financial.com/toolkit, which contains a variety of resources and links.

An Exchange Traded Fund (ETF) is a security that owns a basket of assets (like stocks or bonds), the ownership of which is divided into shares. It is often compared with a “mutual fund,” as a mutual fund is also a basket of assets. One of the main differences between the two, however, is that an ETF trades on an exchange (like the New York Stock Exchange) throughout the trading day. A regular (or “open end”) mutual fund, on the other hand, normally only trades once a day. All the investors in a mutual fund will get the same price when the fund trades at the end of the day. Why do people invest in ETFs? Since the ETF encompasses many different assets divided into shares, it has built-in diversification. There are different types of ETFs specializing in different sectors, so you can choose the type of ETF that suits you. As ETFs are a marketable investment, they can be traded throughout the day. ETFs tend to cost less than mutual funds because they aren’t actively managed, and so their fees are lower. What you need to know when considering an ETF ETFs are not risk-free, as they are affected by market volatility. Moreover, if you own an ETF that holds stocks, you are exposed to the stock market. The fact that the ETF is diversified is in no way a guarantee of your principal. If you’re considering an investment in any fund, be sure to read the prospectus before investing. For more information about ETFs, listen to a 9-minute podcast at: www.profile-financial.com/ETF

Why Money Transfers Aren’t as Easy as They Used to Be By Douglas Goldstein, CFP®, - helping olim handle U.S. brokerage accounts, including IRS, from Israel If you attempted a money transfer recently, you may have been surprised at the amount of documentation you were asked to provide. Any financial institution can ask for proof as to why you’re moving money. They do this to make sure that they are in compliance with anti-money-laundering regulations. Even law-abiding citizens may need to submit extra proof when they want to transfer funds from one financial institution to another, especially between banks and brokerage firms. Bank accounts enable you to take care of daily money needs: pay bills, write checks, use credit cards, or make automatic bank transfers. An investment account is geared to long-term growth or, depending on the holdings, steady income payments (bond interest, dividends, etc.). Even if you have liquid investments in such an account, moving money in and out can raise suspicion. Possibly suspicious activities even if they are 100% legit Legitimate money transfers may get flagged as suspicious, so be prepared to show extra documentation in the following cases: Sending money to an account with a different name (even to a child) Receiving funds and sending them out again shortly thereafter – for example, to buy a house. Be prepared to show proof, like a contract. Every bank and brokerage house has its own regulations. Before transferring money, make sure you understand what documentation you need to provide and how long it will take the funds to move. While your money is yours, you may need to follow certain rules to access it. Though we can’t eliminate documentation requests, Profile Investment Services, Ltd. deals with money transfers on a regular basis and can advise you about what you can do to make moving your money go more smoothly. To get help with oversight of your American brokerage account and accessing your money, be in touch with our office for customer-oriented service and professional advice (02-624-2788).   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Can Bonds Increase Income from Your Investment Portfolio? By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel A retired widow met with me last week to discuss how to increase income from her investment portfolio. I reviewed her account and made some suggestions for restructuring her investments to get predictable income. We spoke a lot about bonds. Here’s why:   Bonds pay a set amount on a fixed schedule, so if you are looking for predictable income, bonds may work for you. A bond’s interest rate is often commensurate with the level of risk; if you buy a “high-yield bond” (or “junk bond”) you get a higher interest rate than if you buy a high-quality bond. A well-designed portfolio incorporates different types of bonds in order to diversify risk and maximize returns, and it reflects the risk tolerance of the client.   Build a bond ladder Another way to diversify risk while creating a predictable income stream is to use a technique called “bond laddering.” This means you buy a series of bonds with successive maturities, such as one, two, three, four, and five years. When the first bond matures at the end of the first year, you reinvest the principal in a new five-year bond at the prevailing interest rate. The following year, when the next issues matures, you do the same thing. This way, you have ongoing and dependable returns. You can customize the rungs of your ladder (i.e., the amounts of money you wish to invest), the height (meaning the longer and shorter term investments), and materials (types of bonds, like corporate or government bonds) to suit your own personal needs and risk tolerance. Bonds do have risks, so be sure to speak to your financial advisor, or get in touch with my office, to determine which specific bonds may be right for you.   Two videos on bond ladders Watch two short videos about creating a bond ladder at: www.Profile-Financial.com/bond-ladder. If you have investments in the United States or are interested in receiving dependable income from your portfolio, call my office (02-624-2788).   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

What should you do if you receive a lump sum, such as an inheritance, legal settlement, or pension payment? Should it be invested for growth or for income? Invest for growth A “growth investment” tries to increase the amount of money you have. Growth investments often entail some level of risk, so if you plan on using the money in the short term, you should consider a more conservative investment. If you hope to grow the lump sum to be able to meet a long-term goal, then consider the amount of risk you can take. What would happen if you lost part or all of the principal? Growth investments have the plus of potentially increasing the real value of your money over time, since growth investments – like the stock market – could outpace inflation. If you don’t need the extra funds to live now and can tolerate market volatility (which means you could lose money), growth investments may be the appropriate place for your lump sum. Invest for income An “income investment” usually has a lower risk level and pays regular interest or dividends. Examples are fixed-income securities, such as bonds, bank deposits, and even real estate (or if you want to own property but don’t want the hassle, you could consider REITs – Real Estate Investment Trusts). If you want to increase your current cash flow, income-producing investments may be appropriate for you. How to make a decision If you receive a lump sum, when deciding to invest for growth or income, start by asking yourself: Is your emergency savings fully funded? Is your retirement savings plan on track? Do you need more current income now? Would you like to use the money now? Gift it in the future? How much risk can you handle? What is your investment time-frame? Some people invest part for income and part for growth. To find out what you need to know, join the upcoming webinar, “How to Invest an Inheritance,” by registering at www.Profile-Financial.com/webinar.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

The Best Way to Update Investments in an Inherited IRA By Douglas Goldstein, CFP®, - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel If you inherit an IRA (Individual Retirement Account), you must be aware of the regulations concerning transferring the account to you, the “beneficiary.” Apart from the technical requirements for processing the account, which a financial advisor should be able to handle, some people also feel a moral responsibility. When a client recently called me about an inherited IRA, he said, “I would like to sell some of the stocks in the account. Am I legally allowed? And if I do, am I being disloyal to my father’s memory by getting rid of what he bought?” Personal finance is personal This client is far from unusual in the loyalty he feels to his benefactor. Many beneficiaries feel as if they are betraying the person who left them the account if they change anything in it. But that is far from being the case. When choosing investments, you need to have your own goals in mind, rather than those of the deceased, which may have been quite different. I told my client, “I’m sure your father wanted the best for you, which is why he made you beneficiary. Improving the IRA’s portfolio by acquiring investments that are more appropriate for your situation isn’t being disloyal. It’s actually the best way to make the most of the inheritance.” How should you optimize the investments inside an IRA? If you sell investments inside an inherited IRA, you don’t pay U.S. tax on capital gains until you withdraw the money. Be aware that generally you shouldn’t hold an annuity or other tax-advantaged investments like municipal bonds in an IRA. Furthermore, if you’ve made aliya, if you transfer the funds out of an IRA to an Israeli investment account, the funds immediately become taxable and would lose their U.S. tax benefits. Not sure how to properly protect an IRA that you inherited? Go to Profile-Financial.com/inheritedira. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

What Should You Do With Money in the Bank? By Douglas Goldstein, CFP®, - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel   Recently, a couple asked me what they should do with their money in the bank. I hear this question quite often. However, as every individual investor’s situation and circumstances are different, there is no standard response that fits everyone. To figure out an answer for this particular couple, I asked:   What’s the intended purpose of this money? The couple answered that it was the sum of their retirement savings that they had accumulated over the past 18 years. They had over $650,000 in bank deposits, carefully spread out among several U.S. banks so that they were fully insured by the FDIC (Federal Depository Insurance Corporation). However, they also admitted that they were earning next to nothing in terms of interest.   “So for almost two decades you’ve been keeping money in the bank, and you’re thinking of leaving it there for another fifteen years until you retire?” I asked.   When the husband and wife understood that they were not even beating inflation, and the money wasn’t going to be needed in the short term, we spoke about designing a well-balanced portfolio that balanced their risk tolerance against potential growth.   Is there a chance you’d need the money sooner? If the couple needed the money in the short term to buy a house or pay for a wedding, I would advise keeping it in the bank. For a short-term goal, the money should be liquid, since there might not be time to make up losses if the market dropped.   Are you wondering whether the bank is the best place to keep your assets? To find out more about how to decide to invest for the long or short term, read: www.profile-financial.com/short-term-investing.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

How to Overcome the Challenges of Receiving an Inheritance By Douglas Goldstein, CFP®, - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel What would be your first reaction if you received an inheritance? When a client received an inheritance from her elderly aunt, she told me: “I thought she was going to leave everything to my cousin. I never imagined in my wildest dreams that any of it would come to me. Although the extra money will come in useful, I don’t know what to do with it! I spend my nights worrying about whether I should invest it or if I can spend any of it.” You are not alone This client’s anxiety about what to do with an inheritance is not unusual. Strange as it may sound, many people who receive an inheritance or windfall worry about losing their new assets, and this fear paralyzes them. Other people go to the opposite extreme and spend it all without a second thought. Another common problem that inheritors face is when other people somehow find out about their new wealth and want some of it. In the same conversation, my client told me: “When a distant cousin heard that I’d been included in my aunt’s will, he called me up for the first time in over 20 years and begged me for a sizable loan to start a new business. What do I tell him? It’s hard to say no to family.” Get some answers Since people often ask me questions on what they should do after they receive an inheritance, I created a 20-minute online webinar called, “How to Invest an Inheritance.” The webinar addresses the following points: What should be your initial response when you find out about your sudden windfall? When and how should you invest the money? What to do if you are approached for requests for loans or gifts. Register for the webinar at: Profile-Financial.com/webinar so you’ll know what to do if you receive an inheritance.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Avoid This Portfolio Management Mistake By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel   At an initial meeting, a new retiree told me, “I’m not really sure what stocks I own.” When I asked how he had put together his portfolio, he explained that some of the positions came from an inheritance, while others… “Well, I’m not really sure,” and a couple of stocks were recommendations from “this guy who sits next to me in shul.” When I asked him if that guy still thinks they’re good stocks, the gentleman admitted, “I don't know. I don't go to that shul anymore!”   This conversation is a superb illustration of a huge mistake that people often make with their investments: following a “hands-off approach to investing” – in other words, not having a clear strategy and buying/selling stocks without oversight. They don’t give much thought to important issues, such as setting goals, diversification, and risk management. I understand that not everyone wants to be involved in the details of their portfolio management, but that is not an excuse for your money to go unsupervised.   A great solution to handling money if you don’t like to deal with it There is a way to have a properly managed account without having to do all the work yourself: using money managers and a Separately Managed Account (SMA). You can hire a professional money manager to make the day-to day buy/sell decisions on your account so you can sit back and watch from on high. The simple investment plan No matter how removed you want to be about the details of your finances, you (and your spouse) must be able to answer these basic questions: When will you use your savings? How much risk can you tolerate? How much time do you want to spend dealing with the account? Answering these questions will help you keep your financial focus.   How a money manager may help you If your savings is meant to grow and be used in the long term, and market volatility makes you nervous, consider using an SMA to provide some oversight to your account. To learn more about money managers, watch a 12-minute video at: www.Profile-Financial.com/sma.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates

What Happens to Your Retirement Plans When You Make Aliya? By Douglas Goldstein, CFP®, - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel   As a Certified Financial PlannerTM sitting in Jerusalem, I work mostly with American immigrants who keep the majority of their assets in American investment accounts. When a recent oleh listed the various retirement plans that he held in the United States, he mentioned: Individual Retirement Account (IRA) 401(k) retirement plan from an old employer 403(b) plan from when he taught in a school. Although he had some upcoming financial obligations, most of the money was intended for long-term investment.   He told me that his biggest financial problem was that his investments and money “were all over the place,” and with his busy schedule he was unable to keep track of what was going on. Simplify! Although each of the accounts came from different sources, now that this oleh was no longer working in America and contributing to the retirement plans, he could roll the 401(k) and 403(b) plans to an IRA. This would give him flexibility to choose the types of investments that he wanted and still maintain the tax-deferred status of the retirement plans, as well as avoiding the penalties for early withdrawal. Keeping American accounts when living in Israel When I suggested this option of rolling over his accounts into IRAs, the oleh asked if he could still do this, even though he is now living in Israel. This is a question that many dual citizens ask, often thinking that if they inherit or have an existing IRA in the United States they must cash it out. Cashing out an IRA and moving the money overseas is a taxable event, and often a bad idea.   The good news for this oleh, and also for all Americans living in Israel, is that you can maintain your existing tax-efficient IRAs in American brokerage accounts while living in Israel. To find out more about managing your American assets from overseas, download the “Toolkit for Opening U.S. Accounts from Overseas” for free at www.Profile-Financial.com/toolkit   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

4 Points to Remember at the End of the Financial Year   By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel   The end of the financial year is a good time to conduct an annual review of your financial situation. If your savings plan, or the market as a whole, has swerved off course, now is an opportune time to adjust accordingly.   Saving goals Are your long-term and short-term goals the same as they were last year? If your goals are both time and dollar specific, it’s easy to tell whether you are on target to meeting them.   Does the saving component of your financial plan include tax-deferred pension plans?  Review the details of your pension plan to determine if the division of funds among the saving and insurance components of the plan is still appropriate for your current stage in life.   Asset allocation Once you’ve saved, don’t yet breathe a big sigh of relief. Now comes the hard part – making sure the funds are invested properly. Make sure your investments reflect your risk tolerance, growth objective, and time frame.   As the markets and your needs change, recheck your asset allocation to ensure that everything is in order. Consider, for example, if a stock or fund does extremely well (or extremely poorly) this can also affect the balance of a portfolio.                                                              Review your winners and losers Before selling stocks/funds and actualizing profits/losses, ask your accountant about the tax ramifications of such sales. Depending on your situation, it may be wise to hold onto investments for at least one whole calendar year, to qualify for the long-term capital gains rate (if you are a U.S. taxpayer). While tax ramifications shouldn’t be the only factor in determining when to sell, they should certainly be taken into consideration.   Use it or lose it In America, mandatory IRA distributions must be taken by Dec. 31. If you’re 70½ or older, you must withdraw your minimum required distribution by this date. If you haven’t done so, the IRS can impose a 50% penalty on the required amount you neglected to withdraw.   To learn what the most important variable in your financial review is, read my blogpost: www.richasaking.com/review.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.    

What Happens When You File U.S. Taxes From Abroad? By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel   American citizens living overseas often need to file U.S. taxes from abroad, even if they don’t owe any money. If you live in Israel, gathering the information you need to complete your taxes from Israeli banking and financial institutions can be tricky since foreign institutions don’t produce 1099 forms. So what is an American living abroad to do?   Dangers of investing overseas The IRS requires American citizens to disclose information about their investments, no matter where they are held.   The end-of-year statements from your Israeli bank or investment company don’t provide the same information that appears on a standard 1099 – and probably won’t be in English! This means that when filing your American taxes, you (or your accountant) will need to convert currencies, tax brackets, and other information in order to extrapolate the information the IRS needs. While this may not be a deal-breaker, it certainly adds time and effort to tax reporting, not to mention extra fees for accountants. Consider this issue when you are deciding where you want to invest your money.   YAHOO! You Always Have Other Options. YAHOO isn’t only a search engine, but an acronym for a way to look at life… and investing! One possibility is to invest in Israel – but through the United States! There are many Israeli stocks, as well as exchange traded funds that track the Israeli market, which you can buy on the U.S. exchanges. That way, you can manage an internationally diversified portfolio through an American brokerage firm that issues you a year-end 1099. This would certainly make your American tax filing easier.   What you need to know to open a U.S. brokerage account from Israel Go to www.Profile-Financial.com/interactive for an interactive questionnaire that customizes itself to your personal financial situation and helps you determine if investing with a U.S. brokerage firm is the right move for you.     Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Did You Get an Unpleasant Surprise From Your Stateside Broker? By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel   When your stateside broker sent you a surprise letter, did it contain good news? Many Americans in Israel (and non-Americans, too) have received a letter from their U.S. investment firm or bank informing them that they need to close out their account. In some cases, the brokerage firm does not shut down the account, but limits its services because the client no longer lives in the United States.   10-step solution I recently produced a toolkit, which you can download for free, which answers the most common questions about handling American accounts from Israel. One of the most popular sections of the toolkit is called, “10 Steps to Opening a U.S. Brokerage Account.” Get this great resource at www.Profile-Financial.com/Toolkit.   A quick and easy solution Though some investment problems may be insurmountable, don’t worry if you get a letter from your U.S. brokerage firm about needing to transfer your account. If the firm doesn’t want to work with people who live overseas, it’s probably best for you to avoid keeping your account there. Maybe the firm doesn’t understand some of the basic, yet very critical, regulations that a licensed cross-border financial advisor would know, such as which mutual funds you could buy, which ones you absolutely need to avoid, and how to continue investing like you always have done in a diversified portfolio.   On the other hand, a “cross-border friendly” company can open an account for you in your own name in the United States and simply transfer the assets from your current brokerage firm to one with the know-how and experience to help out. These firms can manage your account because they have taken the time to fully understand the rules and regulations and have designed the systems to help people open and maintain investment accounts in the United States.   Have you received a letter telling you to get out? Let me know the details by calling (02) 624-2788 or emailing me at [email protected], and let’s find the best solution for you.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

How to Grow Your Money Twice as Fast: Save More By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel What’s the best way to save, and how much money should you save?   As a panelist on the “Money Tree Investing Podcast,” I recently answered a question about how to invest monthly savings. Here’s what I advised:   Save more Before discussing specific investment tactics, I suggested doubling the amount of money the listener was saving. My experience as a financial advisor has taught me that many folks don’t save as much as they can. One common rule of thumb is to save 20% of your income. If you reach that level or more, you’re well on your way to building serious wealth.   Choose investments carefully There are two principles that every investor should follow:   Keep in mind your time frame: Long-term investors can be more aggressive than short-term investors because they have time on their side to recover from potential losses. Though past performance is no guarantee of future returns, it makes sense for a growth investor to place assets in growth mutual funds, ETFs (exchange traded funds), or managed stock accounts. Short-term investors and other people who can’t afford or tolerate a potential loss should invest in more conservative investments like highly rated bonds, bank deposits, or money market funds.   Keep in mind your risk tolerance, and invest accordingly. A sound investment portfolio takes into account an investor’s risk tolerance. Only choose investments that correspond to your personal risk threshold. Licensed financial advisors are trained to do risk analysis scenarios with their clients. If you don’t know what your risk tolerance is or whether your current portfolio matches it, meet with a qualified advisor today.   Once you have accumulated savings and determined how you should invest, take the next step and open a U.S. brokerage account to help further your financial goals. For resources on how to do this, download the free Profile Toolkit, a guide to opening U.S. brokerage accounts from overseas. Download the toolkit at www.Profile-Financial.com/toolkit.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

If you worked in America before your move to Israel, chances are you have an IRA account. What should you do with this American account if you live an ocean away?   Should you transfer your retirement accounts to Israel? An IRA is an “Individual Retirement Account.” There are several categories of IRA, including traditional, Roth, Simple, and SEP IRAs. The main differences between them relate to when taxes are paid. (Check with your accountant about your own situation since this article does not constitute tax advice.)   Another common type of retirement account in the United States is the 401(k), which is a “defined contribution” plan. Contributions to the account are deducted from your paycheck and you only pay tax on them when you make a withdrawal. Sometimes contributions are matched by employers, which make it an especially sweet way to save. However, when you work in Israel, you normally cannot continue contributing to the plans (unless you are employed by an American company). However, if you had such a plan in the United States, you can often roll it over into an IRA and easily manage it from Israel.   Useless or useful? Having American retirement accounts when living in Israel can be useful. One reason is because the money invested can continue to grow. If you were to withdraw the savings and deposit them in Israel, depending on your age, you may be hit with penalties and taxes on the amount withdrawn.   A second benefit of having American retirement accounts while living in Israel is that the savings are held in America, and that means easier reporting on American taxes. Your pension plans produce IRS-friendly tax reports so you save yourself (and your accountant) hours of paperwork.   Also, American retirement accounts are already in Uncle Sam’s purview, and therefore don’t need to be reported on FBAR forms.   Everything changes when you move abroad If you made aliya, the incongruity of the tax laws in America and Israel create certain complications that affect how retirement accounts are run and their tax status. Work with an international brokerage firm that understands the regulatory requirements of dealing with cross-border clients. In this way, you get the best of both worlds. You can live in Israel – and still benefit from your American retirement accounts.   To learn more, download the Profile Toolkit, a guide to handling your U.S. investments from Israel at: www.Profile-Financial.com/toolkit     Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates

Should Your American Assets Stay in the United States?  By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel When making aliya, many olim move their American assets to Israel and convert all their dollars to shekels. However, there is a strong case to be made for leaving your dollars in America. Here’s why: Efficiency U.S. securities markets may still be the most efficient, and individual-investor friendly in the world. You can have a diversified basket of global assets within a “regular” U.S. brokerage account, and do it cost effectively. America has an established market, with steady government regulations and investor protection programs like SIPC, protecting the investor and his assets. Diversification A U.S. brokerage account can host a variety of investment vehicles in American or global companies. Furthermore, you can have checks, debit cards, and other instant access to your funds, even if you are an ocean away. Mutual funds Mutual funds are an easy way to spread risk among different stocks and bonds. They are one of the most popular investment vehicles, both for beginning and professional investors, and they come in many forms, including “Exchange Traded Funds” (ETFs). Uncle Sam’s bureaucracy Having the majority of your financial investments in the United States means it might be simpler to file an FBAR, as there will be fewer foreign institutions and accounts to report. Having U.S. compliant accounts makes it easier to meet all your reporting requirements. Cross-border expertise Make sure your advisor is licensed in both the United States and Israel, and has experience dealing with issues that you are facing. Free Toolkit For more about having a U.S. brokerage account from Israel, download the most comprehensive, simple-to-use guide, “Toolkit for Opening U.S. Brokerage Accounts from Overseas” at www.Profile-Financial.com/toolkit. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.    

Why Gender Bias is a Good Thing in Financial Planning By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel One area where gender bias isn’t discussed enough is in financial planning. Financial planning for women must be different than for men. What do women need to know when planning their financial future? Women work fewer years than men Even though men are more involved with domestic duties than in previous generations, typically women take time off after childbirth more often than men take paternity leave. When children are young, mothers are more likely than fathers to work part-time or to stop working entirely for a few years. Women’s pension savings tend to be smaller than men’s, due to fewer and shorter work years.  Compound this with the difficulty of advancing in careers due to working part-time or non-consistently, and the result is that many women have less money saved than their male colleagues. Women live longer Statistically, women tend to live longer than men, meaning they face more years of needing to support themselves after retirement. I often see widowed women who are financially illiterate because their doting husbands handled the finances. Unfortunately, this means that these widows are helpless when their husbands pass away, and may not even know what assets they have at their disposal or what to do with them. Take the reins If you are working, or even if you are a stay-at-home-mom, make sure to put some money aside into savings. Be involved in your family’s financial decisions, rather than leaving it all up to your spouse. Financial communication and knowledge are essential to a good marriage. Although gender equality has come a long way, I have found that women, especially elderly women, often have taken a backseat in handling their finances. If you’re nervous about managing your money, call my office (02-624-2788) to find out what options are available to you. To learn more about financial equality for women, check out the video at www.Profile-Financial.com/women.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.  

Is Risk Management the Best Financial Strategy? By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel What is risk management, and how does it affect your investment decisions? Every investment is risky Every investment carries a chance of making a profit – and a risk of sustaining a loss. However, some investments are riskier than others. Generally speaking, the more profitable investments contain the most risk; if an investment can potentially make a high profit, it can also cause just as much of a loss. So if you’re thinking about an investment that could give a high return, ask yourself if you could handle that level of loss if it doesn’t work out. Is it worth taking a chance? If you’re afraid of risk, you may prefer to play it safe by keeping all your money in a savings account in the bank. You won’t make much profit as interest rates are low, but at least you minimize your chances of losing money. Savings accounts, money markets, and CDs offer protection against risk. However, when the product becomes due, the real value of your money may have decreased if the interest rate didn’t keep up with inflation. Risk management vs. risk avoidance Fortunately, when investing, there are many choices and you don’t need to single-handedly embrace or reject high-risk investments. There’s a middle ground: follow a policy of risk management. For example, if you’re young and have many working years ahead of you, you may be able to withstand more risk than someone nearing retirement since you have time on your side to recoup any market losses. On the other hand, an older worker may be comfortable with some aggressive pieces in his asset allocation, but he might feel the need to have a more conservative portfolio so he doesn’t get a nasty surprise if the market crashes just when he’s entering retirement. Consult with a financial advisor to help determine your risk level and develop a strategy to manage risk in your investment portfolio.  To learn more about investment risk, read: www.RichAsAKing.com/risk. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Estate Planning: What Happens to Your Money After You Die? By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel One of the most important issues in estate planning is what happens to your money after you die. How quickly your heirs receive the inheritance depends largely on your estate planning. (If you’re having any difficulties with an inheritance, please email me at [email protected].) 3 things to consider when planning your estate When setting up U.S. IRA and brokerage accounts for clients who live in Israel, I ask them to consider what will happen when they no longer need their money. Here’s where to start: Provide beneficiaries for your retirement accounts. Individual Retirement Accounts (IRAs), 401(k) plans, and many other retirement and insurance programs can be transferred to heirs via a beneficiary designation, and therefore do not need to be included in a will. When you fill in the new account paperwork, provide details about who should get the money and what percentage they should receive. Consider a trust. If simply dividing up the money amongst the children and grandchildren wouldn’t work for your family, a trust can provide more control, though you should be wary about trying to control your estate from the grave. In cases where children might not have financial skills or where there is a risk of litigation, a trust can protect assets. Israel passed new trust laws recently, so if you already have a trust, or if you’re thinking of establishing one, speak to an attorney to get proper advice. Make a clear will. When my office helps to disburse deceased clients’ accounts to the heirs, we find the process goes smoothly if the clients had written a clear will with the help of an attorney. Folks who try to save on legal fees can end up costing their estate a lot more in the end since problematic documents mean hours of a lawyer’s time to handle. When clients pass away, we work with the family and guide them step by step through the money transfer. If you have questions about handling your estate, send me an email ([email protected]) or call (02-624-2788) and let’s begin a conversation about how to make the right moves. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

Avoid These Common Mistakes When You Receive an Inheritance By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel A new client recently told me, “My late father left me an inheritance of an IRA (Individual Retirement Account) worth $1.5 million, and I’m the sole beneficiary. What should I do with it? If I bring the money to Israel, I’ll have to sell the stocks and wire the money to my account here. But if I do that, I’ll have to pay tax in the United States and maybe Israel, too.” Unfortunately, many beneficiaries make costly money mistakes. Read about the mistakes you should avoid if one day you receive an inheritance, and then check out our free interactive tool at www.profile-financial.com/interactive. Don’t take money out of the IRA If a beneficiary withdraws the funds from the IRA, he’ll lose a fantastic American tax benefit. People with regular IRAs only pay tax on the money they withdraw. Any money remaining in the account can continue to grow untaxed. An inheritor can transfer the original IRA into a “beneficiary IRA” (a.k.a. “stretch IRA”) and this maintains the tax-deferred status of the account until the money is eventually withdrawn. No U.S. capital gains tax on sales inside an IRA According to IRS rules, U.S. citizens holding IRAs don’t pay capital gains tax (or tax on interest and dividends) when they sell stocks for a profit inside their account. This is a huge benefit when compounded over many years. Probably no estate tax U.S. citizens who leave their estates to their American-citizen spouses or children don’t have to pay estate tax as long as they don’t exceed the “federal estate tax exemption,” which is $5.45 million (as of 2016). (Be sure to consult with a qualified tax advisor in case there’s any state or local estate tax.) As I don’t give tax advice to clients, I always tell beneficiaries of an inheritance to consult tax professionals. I often work directly with clients and their accountants to make sure that their investments and tax obligations are handled properly. If you’re getting an inheritance and you live in Israel, make sure to check out www.profile-financial.com/interactive.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.  

A Guide to the Tax Implications of a Legal Settlement By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel This is a two-part article addressing questions that arise when people receive lump sums. For the entire article, go to: www.profile-financial.com/settlement. I recently helped a number of people who are in the midst of receiving a cash settlement from a lawsuit, and had to point out that winning a lawsuit is not “free money.” In addition to having survived personal injury and a long-drawn out legal case, there may be tax implications to a legal settlement. Lost wages or profits If you are unfairly dismissed from employment, you may receive a settlement for lost wages, benefits, severance, back pay, or other income. According to the IRS, this settlement is considered regular income, even though severance pay is often tax free in Israel. This kind of settlement is also subject to the Social Security wage base table and Medicare tax rates for the year in which you were paid. Reporting legal compensation for lost wages is similar to reporting income for regular pay when you were employed. Interest payments Interest on any settlement, as with any income, is taxable and should be reported as “interest income.” Punitive damages Punitive damages are taxable and therefore must be reported, even if received in a settlement for personal or physical illness or injuries. Estimate tax Make estimated tax payments early if you know you’re going to owe at least $1,000 in income tax from having to report receipt of a legal settlement amount.   Taxation on settlements is complicated. Remember to speak with a qualified tax advisor to get advice since this article is just for general information. We help people manage their U.S. investment account, not file their tax returns. Free information To get this complete article along with the IRS’s information about what you need to report to the IRS regarding a legal settlement, go to: www.profile-financial.com/settlement   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.  

A Guide to the Tax Implications of a Legal Settlement By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel   This is a two-part article addressing questions that arise when people receive lump sums. For the entire article, go to: www.profile-financial.com/settlement.   I recently helped a number of people who are in the midst of receiving a cash settlement from a lawsuit, and had to point out that winning a lawsuit is not “free money.” In addition to having survived personal injury and a long-drawn out legal case, there may be tax implications to a legal settlement. Lost wages or profits If you are unfairly dismissed from employment, you may receive a settlement for lost wages, benefits, severance, back pay, or other income. According to the IRS, this settlement is considered regular income, even though severance pay is often tax free in Israel. This kind of settlement is also subject to the Social Security wage base table and Medicare tax rates for the year in which you were paid. Reporting legal compensation for lost wages is similar to reporting income for regular pay when you were employed. Interest payments Interest on any settlement, as with any income, is taxable and should be reported as “interest income.” Punitive damages Punitive damages are taxable and therefore must be reported, even if received in a settlement for personal or physical illness or injuries. Estimate tax Make estimated tax payments early if you know you’re going to owe at least $1,000 in income tax from having to report receipt of a legal settlement amount.   Taxation on settlements is complicated. Remember to speak with a qualified tax advisor to get advice since this article is just for general information. We help people manage their U.S. investment account, not file their tax returns. Free information To get this complete article along with the IRS’s information about what you need to report to the IRS regarding a legal settlement, go to: www.profile-financial.com/settlement Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.    

Did You Make a Mistake When You Opened Your Bank Account? By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel What happened when you opened your first Israeli bank account after making aliya? A new oleh recently told me: “I just tried your online tool [www.profile-financial.com/olim] to find out what I need to know about having a U.S. brokerage account now that I’ve made aliya. But I think I made a mistake when I opened my new Israeli bank account.” He had gone to a local bank and told them that he wanted to bring some money over to Israel. The clerk there answered that as there is now an information exchange agreement between Israel and the United States (true), he needs to sign an IRS form called a W8 (false). The mistake was the form number, not the fact that the details of the Israeli bank account would be available to the IRS.  What forms do I sign? If you open an Israeli bank account, you need to sign a W9 form (not W8), which tells the bank that you are a U.S. citizen. It provides the bank with your Social Security number to allow for easy reporting to the IRS. The W8 form is used for non-U.S. citizens. You might be familiar with the W9 form from opening accounts in the States. In fact, when we help American olim with their IRA (Individual Retirement Account), brokerage, or other investment accounts, we have them sign a W9. Are there restrictions on my investments from Israel? Now that you live overseas, you may find that some companies, banks, and mutual funds won’t want to work with you. But don't worry. Even if your old firm has a problem with overseas clients, it’s easy to set up a U.S. brokerage account while you live in Israel. You can find answers to many common questions on this subject at www.profile-financial.com/olim . If you’d like to discuss your situation, call 02-624-2788. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

What You Need to Know About Premium Bonds By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel Premium bonds may be a good investment choice for retirees looking to increase their income. (For solutions to other problems retirees face, download a free copy of The Retirement Planning Book at www.profile-financial.com/rpb.) Consider premium bonds In today’s low interest rate environment, if you park your money in bank deposits or money markets, the interest you receive generally will not be enough to pay your bills. Even leaving a million dollars in Certificates of Deposit (CDs) in a bank will only generate a few thousand dollars a year of spending money. So how can retirees supplement their income without too much risk to their principal? A solution may be to purchase bonds, especially “premium bonds.” Buying a bond means lending money to a country or a company. In return using your money for a set period of time, they pay you interest. Since bonds are not as safe as bank deposits, they generally pay a higher yield. Some bonds issued previously offer high “coupon rates.” They may be higher than what newly-issued bonds pay today. Since everyone wants to get a higher interest rate, these high-coupon bonds sell at a premium price. By buying a premium bond, you get more cash flow from your investments than if you buy a bond at par or at a discount. When the premium bond matures, you won’t get the same amount back that you paid. But you will have received more cash flow every year, which means that you have effectively achieved your goal. Premium bonds are not for everyone, and they carry risks, but anyone who is looking for income should consider if they are appropriate for their individual situation. For more information about how to have a financially stronger retirement, download a free copy of The Retirement Planning Book at www.profile-financial.com/rpb. Alternatively, call me on 02-624-2788 and let’s start talking about the best way to get income from your investments. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

The Best Way to Invest When You Want to Gift Money By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel Recently, a couple with four children of various ages asked me for advice on how to invest funds that they had just inherited. They didn’t need the inheritance for themselves, and they wanted to pass it along to their children. The couple’s oldest child was married and wanted to buy a house, so getting her share of the funds now made a lot of sense. “What stocks should we invest in for her?” the clients asked. “None,” I said. “Money that you want to use in the short term should be in cash or short-term bank deposits because it needs to be safe. The stock market carries risk.” As the next two children wouldn’t need the money for the next four or five years, they could afford to take some risk and try to grow their gift. A broadly diversified portfolio that included stock and bond funds could increase their odds of growth. Before getting started, though, I explained the level of the risk and tried to give the clients a sense of what to expect with regard to volatility. Should you invest aggressively? The couple’s youngest child was only 14 and would not need the money for some time. So the clients thought that they could afford to take more risk with his portion and put it all into stocks. I warned them that even though the stock market has traditionally offered stronger returns than other asset classes, growth is not guaranteed and they could lose money. In the end, the couple chose to use a “money manager” to handle that portfolio as they felt that this would be the best way to diversify and manage these funds. To find out more about using a money manager, watch the 12-minute video at www.profile-financial.com/videos/SMA. To start a conversation about handling your investments, call my office (02-624-2788). Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

Why Interest Rate Risk is Important By Douglas Goldstein, CFP® Conservative investors who buy bonds to avoid high risk might inadvertently be exposing themselves to a potentially devastating risk: interest rate risk. If you are concerned that you may have interest rate risk or other hidden risks in your investments, call my office at 02-624-2788 to discuss your portfolio. Are bonds safe? When you buy a bond, you lock in a specific interest rate that you'll earn until the bond matures. Assuming the issuer of the bond remains solvent, you’ll receive your interest payments (usually every six months), and on the "maturity date" you’ll get the principal value of the bond. That’s what happens in most cases. But… When interest rates rise, people who have locked in a lower yield discover that their bonds decrease in value. For example, let's say you own a $50,000 bond that pays 3%. After you have bought the bond, if rates for similar issues rise, say to 5%, the principal value of your investment drops. It drops, since a 3% return pales in comparison to a 5% yield. If you hold your 3% bond to maturity, you will get your principal paid back, but if you need to sell it beforehand, you will likely lose money.  That is interest rate risk – the fear that if you have to sell your bonds before maturity you’ll potentially lose out on regaining your full principal. Longer term bonds and preferred stocks If the bonds you own will reach maturity relatively soon, the rise in interest rates will have a limited effect on their price. But longer term bonds and preferred stocks (which often act like long-term bonds) can drop in value significantly if interest rates rise. If you own bonds and would like to discuss the risks, please call (02-624-2788). If you see yourself as a conservative investor but worry that you might be exposed to interest rate risk, be in touch right away.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates

What You Need to Know About Financial News By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel Should financial news and media reports affect the way you make your investment decisions? Recently, a client said: “I just read about _________ (fill in Israeli company name) in The Jerusalem Post, and I’d like to buy 1000 shares.” I hear comments like this fairly often. Since I help people who live in Israel with their U.S.-based IRA and brokerage accounts, I am able to help them trade stocks. However, before putting in an order, I recommend that they ask a few questions before considering buying an investment. How accurate is the news? The media frequently misrepresents information. News reports are only as accurate as the journalist’s orientation. Therefore, it may be reasonable to assume you are not getting the complete story.   Is the information fresh? Once “hot” news reaches the general media outlets, it probably isn’t hot any longer. It might be warm at best. Some types of news items about long-term company strategies might give you an indication of where the firm wants to focus its growth. Such reports (e.g., that the company wants to enter the self-driving automobile market) may not have an immediate impact on its stock price. However, if you believe in the future of the product/company then it may be appropriate to invest. However, if short-term news breaks, for instance, a drug company receives FDA approval, and you think the stock will shoot up in value as a result of the new information, be aware that you’re possibly already too late for the party. Does news make you a better investor? Studies have compared investors who have made decisions with the input of news versus those who made decisions in a news vacuum. Interestingly, those folks who weren’t distracted by the media hype outperformed their well-informed peers. I wrote about this, along with many other behavioral finance facts, in Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing. Check it out, and sign up for the free articles and podcast at www.RichAsAKing.com.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

How to Increase Your Retirement Cash Flow By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel When you retire, your cash flow changes. Since most pensions won’t replace 100% of your pre-retirement income, you need other ways to increase your monthly cash flow. A bank may not meet your needs If you put your money in a regular savings account in the bank, you have little risk of losing your principal. But, you also will receive relatively low interest, as banks normally pay the lowest yields in the world of fixed income. This prevents you from “growing” your money. Whatever money you have may lose value due to inflation. If you have the tolerance to take on some level of risk, consider adding bonds to your portfolio. (Watch a 12-minute video on bonds at www.profile-financial.com/bonds.) Bond coupons are usually higher than bank rates A bond is a loan that you make to a country or company. You lend them money, they pay you interest on a set schedule, and at some point in the future, on the “maturity date,” they return your principal. The main risk of bonds is that the issuer of the bond will default. However, default in the quality bond market is not common. Bonds are rated according to their risk level, and more conservative investors choose high-rated quality bonds to generate income from their portfolio. An easy tool to buy bonds Depending on the amount of money you want to invest, you may buy a portfolio of individual bonds yourself, or you might find a bond mutual fund (or exchange traded fund - “ETF”). These investment vehicles own lots of different bonds and you own a piece of the whole pie, which gives you instant diversification. Make sure to check with an investment advisor and read the prospectus before investing, though, since there are real risks. If you are worried about cash flow during retirement, email me ([email protected]) to start a conversation about whether bonds make sense for you.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

What to Do When You Inherit an IRA? By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel If you inherit an IRA (Individual Retirement Account), you may be tempted to simply withdraw the funds and put them into your own name. But if you do, you would possibly be making a big mistake. Instead, you should transfer the money into a “beneficiary IRA” account. Money in an IRA is tax deferred in America, meaning that any interest, dividends, and capital gains inside the account are not subject to U.S. taxation. Once you withdraw the money, or move it overseas, you’ll probably owe money to the IRS. So by asking the brokerage firm to set up a beneficiary IRA for you, and moving the assets directly from the deceased’s IRA account into a beneficiary IRA in your name, you can continue to benefit from the tax-deferred status. Can I open a beneficiary IRA from Israel? Many Americans living outside the United States find that brokerage firms are not willing to set up an account for them, due to restrictions imposed by strict anti-money laundering legislation. But this does not apply to all companies. Besides keeping the American tax-deferred status of your inheritance, there are many advantages to having an American brokerage account. For example, U.S. markets are among the most efficient and investor-friendly in the world. You can also diversify easily through the various investment vehicles that a U.S. brokerage account offers, and having this type of account makes U.S. tax reporting a lot easier. If you are interested in finding out more about opening a beneficiary IRA account to deal with an inheritance or any other issue concerning American brokerage accounts, check out www.Profile-Financial.com/10-Steps, or call 02-624-2788 and let’s review your situation. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Do You Need to Worry About a Market Crash? By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel No one knows if or when there will be another market crash. Anyone who could accurately predict the ups and downs of the market on a consistent basis would make an absolute fortune. Even if the market’s exact moves can’t be predicted, you can be sure that the market will take a hit sometime in the future. In fact, if you’re planning to hold investments for the next few decades, get ready for many crashes, of varying degrees. That’s the way the market works. Successful investors, by and large, are those who are well prepared to ride out volatility. Smooth out the ride Naturally, you don’t want your account to nosedive. So what should you do?  If you are the kind of person who would sell out in the event of a huge collapse in the stock market, maybe it is better if you don’t get in at all. On the other hand, if you have the tolerance to take on some level of risk, there are tools that can help to minimize the risk inherent in market volatility. One tool to minimize market risk is diversification. By spreading your investments among different sectors, you minimize the chance of all your investments dropping in value simultaneously. Own some positions in equities (a.k.a. “stocks”) and some in bonds, cash, or funds that invest in other areas, like real estate. By diversifying, you can lessen risk. Some money managers try limiting volatility in their investments by adjusting the amount of cash in their portfolios in line with macro-economic trends. Do you have an investment account in the United States? If you are worried about its risk level or that it might lose value, call the office (02-624-2788) to discuss the risk level in your account. Also, subscribe to our free newsletter for tips on handling your money and managing risk at www.profile-financial.com.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

What Really Happened in the 2008 Market Meltdown: A book review and analysis of Ben Bernanke’s book, The Courage to Act: A Memoir of a Crisis and Its Aftermath Douglas Goldstein, CFP® As a financial advisor who worked with clients throughout the 2008 market meltdown, I was particularly interested in understanding the Chairman of Federal Reserve Bank’s perspective of that period. Ben Bernanke’s book The Courage to Act: A Memoir of a Crisis and Its Aftermath is an exceptionally well-written autobiography that explains the background of the banking crisis, the crisis itself, and its aftermath. The perspective that Bernanke shares, however, does more than put another page in the history textbook of the world economy; it raises a number of fundamental questions about how the mess began, why many innocent bystanders were injured, and whether we have made appropriate structural changes to avoid such catastrophes in the future. Who’s in Charge? By learning about the inner workings of the Fed’s decision-making system, I couldn’t help but wonder: Is it smart to have the largest and most influential economy in the free world dependent on one man? The Chairperson of the Fed wields incredible influence over money supply and employment levels that even if it’s run by the sharpest mind, it might be better to have the free market control the level of interest rates and employment. The central bank and other government offices should enforce transparency and encourage better financial education, but ultimately the combined interests and wisdom of the millions of market participants would ultimately dictate the rate at which money is lent as well as the regulations that could promote full employment. Why should the law of supply and demand that governs all other commerce be suspended for money supply? Although Bernanke credits his Fed comrades and Treasury associates for their involvement, it’s clear that he, much like his predecessor Alan Greenspan, figured out the required policy and then usually succeeded in persuading others to join him. Is the Fed a Giant Investment Company? When describing the AIG bailout, which put $182 billion of taxpayer money at risk, Bernanke notes that the Fed demanded an 80% ownership stake in the insurance company’s core business “to ensure that taxpayers shared in the gains if the company recovered.” Though the Fed’s goal to protect the investment interests of those who had entrusted their tax money to the Federal Government may seem noble, I can’t understand what gives the government the right to act as a mutual fund. We, the people, don’t give our money to Washington so it can make investment decisions for us. Congress is a legislative body, not an investment company. If we want risky investments, we can pick our own funds and investment managers. Frankly, if I had to invest $182 billion, I would prefer to diversify it among several money managers rather than to politicians and their appointees. It’s not the government’s job to confiscate funds of private citizens, which are what taxes really are (“Give us your money or go to jail.”), and then select stocks to buy. Ultimately, the theme of the Fed’s conversation in dealing with the crisis was, “Let’s make a huge bet on AIG, even though the private markets are unwilling to make that bet because they think it’s a bad idea and don’t want to risk their own money. Luckily, we have taxpayer money to throw at this idea.” Compare the amount of time that private investment companies spend researching and making investment decisions to the fast pace at which the Fed invested our money, and under great pressure to do so. Interestingly, Bernanke notes that when Congressman Barney Frank asked where the Fed would get the money, Bernanke said that the Fed had $800 billion, so this was only around 11% of its balance sheet. It’s incredible that anyone would put such a huge percentage of a portfolio into a deal with “little time for careful reflection.” It’s as if your investment advisor told you, “Look, I am really busy now and I don’t have time to research the details, but I’ve decided to take ten percent of your portfolio and invest it all in one company that is on the verge of bankruptcy. And even if you don’t make money on the deal, at least your investment will help the country... so it’s a patriotic investment if nothing else.” Would you still want to invest with him if he did? Just Because it Worked, It Doesn’t Make it Right Ultimately, it’s true that the bet paid off. But should we be happy? Even Bernanke himself wasn’t sure the deal would work, and he continues to question the wisdom of the move. But the worst part of the whole situation is that rather than saying, “Phew, we really dodged a bullet that time. Now we have to make fundamental changes in the way the government, the economy, and these banks are so intertwined,” it’s back to business as usual. The lack of transparency and inability to understand the depth of the financial complications that Wall Street players create under the permissive oversight of the regulators should frighten everyone. This risk cannot be solved by more regulation, since writing thousands of more pages of law will not contain the peril. Indeed, the crisis surfaced even though there already were thousands of pages of rules and regulations. Those with large profit incentives will always be more creative and wily than the government workers tasked with reining them in. Instead, the government should announce that it absolutely will not backstop the firms, and it should demand transparency of the financial tools that are created and traded. Then the risk will fall back where it belongs – on the owners of the companies (the shareholders) and anyone who lends them money. Complexity is the enemy of the consumer, and without better transparency, consumers are at a distinct disadvantage. The Government Had Encouraged Toxic Loans When describing the TARP program, wherein Congress authorized taxpayer money to be lent to banks and possibly other companies too, at the Fed’s discretion, Bernanke says, “...while we wanted banks to lend [to consumers and businesses], we didn’t want them to make bad loans. Bad loans had gotten us into this mess in the first place.” What he should have stressed was that the banks had made all of those bad loans at the behest of a Congress that made legislation that forced the banks to originate loans that had a poor chance of success, with the alleged goal of helping low-income families fulfill the American Dream of home ownership. It is the government’s obligation to fund its citizens to build the white picket fence, or should it only create a favorable opportunity and environment? The Truth about a Government for the People Bernanke explains a great deal about the political machinations of Washington. He admits the depressing reality that he had to contort his ideas in order to fit into the political restrictions that stopped him from pursuing more responsible plans. For example, he talks about the importance of regulatory reform. He notes any significant reform would not make it through Congress because, “The congressional oversight committees jealously guarded their turf because the market players regulated by the two agencies could be counted on to provide lucrative campaign contributions.” Could there be a more clear admission that good policy is trumped by campaign contributions? Regardless of whether Bernanke’s massive overhauls would make sense, the big money interests are the ones who come out winning. So much for free markets and protecting consumers! More and More and More Government In order to fend off future bubbles and crashes, Bernanke established yet another taxpayer-funded office, the Office of Financial Stability, Policy, and Research. This multi-disciplinary team unites great minds in an attempt to monitor and oversee financial institutions and create programs whenever it looks like trouble is brewing. Though I respect the brilliance of the team members of the new Office of Financial Stability, I wonder how the public can continue to put so much trust in more banking bureaucracy. What steps were taken to allow the public to clearly see the inner workings of their banks so that folks could make up their own minds about whether to trust the institutions? Worse, however, was the backstopping by the FDIC that allowed, and continues to allow, banks to take inappropriate risks with their deposits since they know the FDIC will bail them out if necessary. I am all for having some insurance on bank deposits, but not if it means greater risk-taking by the banks themselves. Why not have the banks actually pay a market-level premium to buy FDIC coverage? Maybe allow other governments to sell bank deposit insurance to the banks, too? During the 2008 crash, Main Streeters questioned the ongoing ability of the FDIC to deliver on its guarantees. When clients were running scared and I told them they could put their money into the FDIC-backed CDs, they said they weren’t sure that this was a safe option. Regardless of the fact that not a single penny of FDIC-insured money was ever lost, the fact of the matter is that the public didn’t have faith in the agency. That makes sense. The government’s coffers are limited and should not be used to bail out the excesses and unreasonable risks that banks take. If no private insurance company would cover those risks, then the government should realize that there is a problem with putting taxpayers’ money at risk. The Fed’s and the Taxpayer’s Interests Aren’t Aligned Bernanke helps financial advisors like me to realize an inherent conflict of interest between the Fed and the people. Many regular folks got a wake-up call in 2008 and decided to slow their borrowing and spending, and increase their savings. That was a responsible choice for them. The Fed, on the other hand, wanted them to pull out their credit cards and spend. Using debt to buy things allows people to spend more than they really have, which can supercharge the economy. But responsible advisors encouraged their clients not to spend what they don’t have. Bernanke notes that lack of consumer spending made the downturn “deeper and more protracted,” which caused the Fed a problem. However, the spending slowdown helped those individuals who chose to pay down their debt rather than dig themselves deeper into a hole. This was a particularly prudent move since no one knew what financial surprise was lurking in the shadows. Retirees Took a Beating During Bernanke’s battle to save the economy, he and his team leveraged their main tool, control of interest rates. They did this by lowering the Federal Funds rate and also by buying longer term bonds in order to push rates down further, a practice called “quantitative easing.” One of the goals of this strategy was to assist people to keep or buy homes by lowering mortgage rates. But a consequence of low rates is the income destruction of people living on fixed income, mainly the elderly. Ordinary folks who had saved responsibly for decades, and deposited their hard-earned money into savings accounts were not getting the 4% or more that they had expected. Instead, they found themselves praying to get half of that. Bernanke, in fact, points out even more extreme figures, noting that bank CDs paid only half a percent, one-tenth of what savers expected. Pensioners and others living on fixed income had to radically cut their lifestyle or else invest in riskier securities with the hope of higher returns. In effect, the Fed’s policies injured the financial prospects of retirees in order to rescue people who had voluntarily chosen to take out mortgages that they could not maintain. Nothing like giving a slap in the face to those who loyally paid their taxes for decades! Though I feel sorry for the people who lost their homes, as a financial planner who has had to explain to retirees with battered returns and shattered dreams, I am not too sympathetic to the decisions of the Fed that led to the older generation’s suffering. Bernanke justifies his decision by saying that low rates were necessary to stimulate the economy, and that this would help the retirees because it would “prevent their twenty- and thirty-something children from moving back home.” In my decades of advising retirees, I haven’t met any who feared their adult children would move back with them. What I did here, though, was their worry that they wouldn’t have enough to pay the cost of a retirement home and they could not count on their kids to help them. I’ve heard retirees worry about the cost of health care and finding competent help. I’ve heard retirees worry about low interest rates and having to adjust their lifestyle accordingly. But, the fear of adult children moving back in is not at the top of their concerns. Bernanke seems a little out of touch with the reality of the low interest rate environment. Low Taxes and Buying Decisions in the Hands of the People Several mentions throughout the book of encouraging lending to small businesses and lowering taxes reminded me of the importance of getting cash into the hands of the consumers and business owners so that they can make their own spending and savings decisions. Having government puppeteers pull the strings of the economy requires god-like omniscience, which is impossible. Even the former Fed Chairman, Alan Greenspan, known as “The Maestro,” could not control all aspects of the economy to avoid every pitfall. After all, it was under his watch that the real estate market expanded until he passed the reins of the ready-to-pop bubble to his successor, Ben Bernanke. The reality is that no centralized government can take into account all aspects of the economy, nor make truly objective decisions. Rather than letting special interests dictate the government’s monetary and fiscal policies, the marketplace is a much more effective tool for stabilizing the economy than the government. Bernanke’s own comments about getting cash into the hands of the people seem to support this theory. This proposal doesn’t mean supporting a system of financial anarchy. The government certainly has a role to play in overseeing the economy. Specifically the regulators and lawmakers need to ensure a level playing field with a solid judiciary to back it up, extreme transparency, and quality education for people to make them capable to make their own decisions. In order to create a nation that can handle that level of self-responsibility, however, the education system needs reform so that high school graduates understand how the world of money works. Reforming the education system? That’s for a different essay (I recommend reading Seth Godin’s book, Stop Stealing Dreams: What is school for?, which you can download for free .) Finally, although I am a financial advisor associated with a broker/dealer, the opinions in this piece are mine alone. Take the time to read Bernanke’s book and judge for yourself if you think the system is better now than it was eight years ago.

How Non-Americans Can Benefit from American Brokerage Accounts By Douglas Goldstein, CFP®, helping people in Israel with their U.S. IRA and investment accounts This past week, my office phone rang several times with non-Americans inquiring about opening American brokerage accounts. Given the hassles of dealing in some of the more popular offshore jurisdictions, and given the many benefits of keeping investments in the United States, these people were happy to see how they could easily invest through a U.S. brokerage firm. Why non-Americans have American investment accounts There are two parts to having a brokerage account: the specific investments and the “custodian” of the funds.  The specific investments include what stocks and shares you own, or which mutual funds or bank deposits you choose. The “custodian” of the assets is normally a major bank or brokerage firm that is responsible for safeguarding the securities, executing the trades, printing the statements, arranging for checkbooks and credit/debit cards for the clients, and other back-office services. Before investing money you must choose both a custodian of your account (the firm) and the individual investments (stocks, bonds, etc.) Non-Americans frequently use a U.S. brokerage firm to custody their assets. Here’s why: The unrivaled transparency of the financial system in America The huge number of investment choices The potential for good returns The relatively lower fees The ability to geographically diversify their investments in one account America’s political stability Send me an email ([email protected]) for a detailed report on the additional benefits of non-Americans having American brokerage accounts. Is it legal for non-Americans to open U.S. accounts? Not only are NRAs (non-resident aliens) allowed to hold their assets in America, they are actively encouraged to do so. From the standpoint of the American government, having foreign investors maintain accounts in the United States helps to keep the U.S. markets as the top trading locations in the world. In fact, the United States doesn’t tax the interest and capital gains that foreigners make on their U.S. assets (This is a general discussion. Be sure to speak to your own tax advisor before investing.) If you would like to learn about the advantages of global investments through a U.S. investment firm, please call my office at 02-624-2788. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

What Should You Do About the FBAR? By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel Whenever I mention the acronym FBAR, Americans often say one of two things: “F what??” or “I don’t need to do that.”   What’s an FBAR? The “Report of Foreign Bank Accounts” (FBAR) is a required U.S. government form, which is important in the post-9/11 world. The purpose of the form is to alert the authorities about accounts held outside the United States with a total value of $10,000 or more at any time during the year.   Can I just skip it? Bad idea. If you have reportable FBAR assets that you don’t disclose, the fines can be severe. If you neglect to file or file incorrectly, you can face fines that are greater than the value of the accounts that you didn’t include on the form.   The FBAR is due on June 30 for the preceding year. It provides a list of accounts that you have signature authority on, interest in, or are named as a holder, so the American government can track the path of money transfers in the hope of reducing money laundering.   Is there a legal workaround? The only legal workaround is to have the sum of foreign assets below the reporting threshold. Since that is difficult if you have pension and/or savings accounts in Israel, another option is to minimize the number of accounts you must report. If you keep the majority of your assets in an American bank or brokerage account, you don’t need to list those funds on an FBAR. Why? Because the government only requires reports on foreign accounts.   If you want to review your investment accounts to see whether they’re considered to be in the U.S. or abroad, send me an email with the details ([email protected]) or call (02-624-2788) and let’s begin a conversation.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Is Your Brokerage Account in Danger of Being Sold Out? By Douglas Goldstein, CFP® Imagine if your brokerage firm called you up and told you that they were going to sell out all of the positions in your brokerage account within the next 60 days. “Why?” you ask them. They respond that due to increasing regulatory restrictions they will no longer service your account. They give you two options: Transfer your assets to another financial institution, Distribute the assets directly to you. Believe it or not, many people in Israel are receiving such a call. This is because they are U.S. citizens, and due to tough regulations regarding Americans living abroad originally intended to prevent money laundering, many U.S. financial institutions no longer want to work with any non-resident Americans. Though it may be disconcerting to receive notification that a long-standing relationship with a brokerage firm is about to end, there is no need to panic. Americans living in Israel who have U.S. brokerage accounts have a solution to this issue. If you know anyone in this situation, it is important that they speak with a financial advisor well-versed in cross-border financial issues before they sell out their accounts and transfer the funds to Israel. That is because, if securities are sold, people might inadvertently trigger an unwanted tax bill. Don’t cash out your American account Instead of cashing out your American account, find a cross-border-friendly firm that specializes in opening brokerage accounts for U.S. citizens who have a foreign address. Then you can transfer your assets “in kind” to the new account. This new account can even be an exact replica of the old one, unless you specifically want to change your investment structure. Best of all, by moving everything over in kind (without selling), there are no tax consequences or reporting requirements. At the same time, take this opportunity to update and review your financial plan and investments with an investment advisor who is licensed in both the United States and Israel. To find out more about opening a U.S. brokerage account from outside the United States, go to www.Profile-Financial.com/Account.  Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Can Your Israeli Bank Provide Investment Services?       By Douglas Goldstein, CFP® Have you found that your Israeli bank no longer provides investment services for Americans living in Israel? Because if onerous reporting requirements to the American government, many Israeli banks have stopped opening investment accounts for U.S. citizens. While dual American-Israelis can continue with banking and checking services, they need to look elsewhere for their long-term investing. Where can Americans open investment accounts? If American firms turn away U.S. citizens with a foreign address and Israeli banks don’t open accounts for Americans, how can Americans living in Israel have investment accounts? That’s where investment firms with relationships with U.S. brokerage houses and Israeli investment licenses come into play. Profile Investment Services, Ltd. is one of a select few companies that is able to help, as we work with an American brokerage firm (Portfolio Resources Group, Inc.) that understands there are law-abiding Americans who live and work globally, but want to maintain U.S. brokerage accounts. In many cases, people denied investing services by their Israeli banks can enjoy the same solution. In particular, if a person wants to buy stocks, bonds, or mutual funds, he can easily transfer funds from an Israeli bank to a U.S. brokerage account. Can I open a U.S. brokerage account even though I live in Israel? YES! One reason that investment firms turn away overseas clients is because they do not have the ability to get to know them well and give them appropriate advice. On the other hand, companies that have a presence in Israel can meet their clients face-to-face to help them handle their U.S. brokerage accounts. When I meet new clients, I ask a lot of questions in order to fulfill my obligations under the “know your client” rules so that I can give them the most appropriate advice. In doing so, I am then able to help them open and maintain their U.S. brokerage accounts. Transferring the money to the new account is usually as easy as filling out a form and asking the local bank to move the funds. If you have assets in Israel that you would like to move to an American brokerage account, see if Profile Investment Services, Ltd. can help by calling 02-624-2788.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Read This Before You Transfer Your Money to Israel By Douglas Goldstein, CFP® Making aliya doesn’t mean you need to close your American brokerage accounts. In fact, there are many sound reasons for maintaining assets in America even if you move away. Think twice before converting your American retirement accounts to shekels and bringing them to Israel. Recently, some American brokerage firms asked their non-resident clients to transfer out their accounts. To the shock of many clients in Israel, major firms decided to end long-term relationships with them. If this has happened to you (or you fear it may) don’t panic! There are U.S. brokerage firms who realize the benefit in holding accounts for law-abiding and tax-paying citizens who just happen to have a non-U.S. address. As a licensed financial planner in both Israel and America, I have over two decades experience in counseling American olim on the benefits of maintaining an American brokerage firm while living in Israel. Benefits include: Tax Reporting Benefits Keeping an American brokerage account makes tax reporting to America easier. Long and short term gains/losses are reported according to the IRS’s requirements. This makes tax filing easier (and cost efficient) on 1099s, FBARs, and other forms that Americans must file. Tax Deferred Benefits Keeping an American IRA (Individual Retirement Account, often held through a U.S. brokerage company) or 401(k) account means you can maintain the tax-deferred status of your funds. If you transfer these accounts out of America, you lose the tax benefits and may owe penalties as well. Safety Benefits American brokerage accounts have an extremely high level of transparency and government regulation. While SIPC insurance can’t guard an investor against regular market volatility, the protection gives millions of investors peace of mind. You Can Keep American IRAs              Keep in mind that an American brokerage account can’t replace your local Israeli bank account for day-to-day services. Nor can it hold Israeli pension and Israeli tax-free savings accounts (which may still be taxable in America). However, an American IRA account is the most common tool used to maintain the tax-deferred status of retirement funds. For help managing your American brokerage/retirement accounts in Israel, watch the video at www.Profile-Financial.com/USAccounts and call Profile Investment Services, Ltd., (02) 624-2788. Neither Profile nor PRG provides tax or legal advice. Consult an accountant or an attorney on such matters before taking any action.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates

Is Financial Success Just a Matter of Luck? By Douglas Goldstein, CFP® Is financial success more about planning or luck? In the book Rich Kids, Tom Corley discusses three different kinds of luck: Random luck is the kind of luck we can’t control. Random good luck includes winning the lottery or getting an unexpected windfall. Conversely, examples of random bad luck include sudden illness or being struck by lightning. Opportunity luck is good luck created as a result of your actions. You can create good luck by following positive “rich” habits that enrich your lifestyle and protect you from fiscal harm. An example of this would be getting an unexpected bonus from work, based on your diligent work. If you hadn’t worked hard and made yourself indispensable to your company, you may not have received a reward. In other words, your hard work created this piece of good luck. By following good practices, you are able to create your own good fortune. Detrimental luck is the dark side of opportunity luck. This is when, as a result of following “poverty habits,” bad things happen. For example, poor money habits, such as overspending and not saving, can bring you to a financial crisis. If your bad financial habits mean that you don’t have an emergency fund, then you can easily find yourself in a financial crisis. What is the best way to create your own good luck? Random luck will never be within your control. But you can create better opportunities for yourself and head off potential crises by adopting rich habits. Following a positive lifestyle gives you a positive outlook and the tools to create better opportunities for you. Acquiring good habits may be easier said than done. To learn how to create habits that really stick, listen to my podcast at www.richasaking.com/61. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

How Modern Portfolio Theory Can Make You a Better Investor By Douglas Goldstein, CFP® Can “Modern Portfolio Theory” increase your investment returns? Recently, on The Goldstein on Gelt Show, I spoke with the inventor of Modern Portfolio Theory, Nobel Prize in Economics winner, Dr. Harry Markowitz. Dr. Markowitz explained various aspects of Modern Portfolio Theory and its impact on the individual investor. His theory explains how to construct an investment portfolio by optimizing expected returns based on the level of market risk. The goal is to help investors construct portfolios to maximize returns while limiting risk as much as possible. By combining various asset classes in one portfolio, Markowitz explains, the overall account may have a lower volatility and higher return than a portfolio that isn’t properly optimized. Can theories really help investors? When investors are faced with market upheaval, they often panic and lose confidence. When I asked Dr. Markowitz how to advise clients during turbulent markets, he spoke about the common mistakes that individual investors make:  “The chief error that the small investor makes is buying when the market has gone up and he assumes it’s going to go up further, and then he sells when the market has gone down and he thinks it’s going to go down more.” He contrasted this investing model to using Modern Portfolio Theory to rebalance your portfolio to reflect market conditions. If used in the right way, MPT can be effective in turbulent times. When I speak with clients about their U.S. brokerage accounts or their investments in the Individual Retirement Accounts (IRAs), I realize that it’s difficult for them to look objectively at their own money. We all have our emotions tied up in our net worth. But when money managers use MPT to design a portfolio, it can help remove some of the emotional bias that might wrongly influence the way people invest. To find out more about Modern Portfolio Theory, listen to our discussion at: http://www.goldsteinongelt.com/markowitz   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Avoid Making This Mistake with an Inherited IRA By Douglas Goldstein, CFP® If you are the beneficiary of an inherited IRA, avoid immediately withdrawing the money. If you make an immediate withdrawal, you might forfeit the tax-deferred status of the account and be subject to paying taxes. A proper withdrawal strategy for an inherited IRA can minimize your tax bill. What you need to know when you inherit an IRA In an effort to encourage savings, America lets the assets inside an IRA account grow tax deferred – owners only pay tax once the funds are withdrawn. If you are the beneficiary of an IRA, depending on how you title the account and withdraw the assets, you too can take advantage of tax-deferred growth. Any mistake made in titling, transferring, or withdrawing funds may not only cause you to lose future tax-deferred growth, but also may make you liable to pay current taxes on the funds. To maintain the tax- deferred status, your new account must be coded as a “beneficiary IRA” by the custodian of the account. The inherited assets in an IRA can be sold, and other securities bought in accordance with the new owner’s wishes. There is no need to maintain the inheritance in the exact positions as you received it. What you need when planning your estate If you have an IRA, make sure you list beneficiaries so that one day, the IRA’s assets are not subject to your estate’s probate. Update your paperwork, especially after a divorce, to ensure that the beneficiaries are the people you actually want to receive the funds. Make sure to mention to your beneficiaries that when the time comes, they should check with their financial advisors about how to best handle the inherited account. Can you move an inherited IRA to Israel?                                                   Can you transfer an inherited IRA to Israel? Unfortunately, once the funds leave America they lose the tax-deferred status of beneficiary accounts. Therefore, it is crucial that you open a “beneficiary” IRA account with a U.S. brokerage company or bank. If you need help opening or dealing with an inherited IRA or opening a U.S. brokerage account, go to: www.Profile-Financial.com/inheritedIRA. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

How to Avoid Tax Mistakes When You Receive an Inheritance By Douglas Goldstein, CFP® When receiving an inheritance, it’s important to avoid making tax mistakes. Certain tactics, such as opening a U.S. brokerage account (see below for an interactive tool) can help. Watch out for these mistakes: Mistake #1 – Taking money out of an IRA To maintain the tax-deferred status of an inherited IRA (Individual Retirement Account), the money must remain in a specially titled account. As an heir, you can transfer the IRA into a “beneficiary IRA” (a.k.a. “stretch IRA”) and not pay taxes on the account’s capital growth until money is withdrawn. Transferring the money overseas jeopardizes the tax beneficial status. As many overseas bankers and investment advisors may not know this crucial piece of information, work with professionals who are well-versed in cross-border investing and tax law. Mistake #2 – Choosing the wrong investments for an IRA The IRS allows U.S. citizens not to pay capital gains tax (or tax on interest and dividends) when they sell stocks for a profit inside an IRA. Since you don’t pay capital gains tax on profits, your growth is compounded, because you’re not giving a piece away every year to the government. Generally, annuities, municipal bonds, and other tax-advantageous investments should not be part of an IRA. Mistake #3 – Not strategizing for estate tax American citizens who bequeath their estates to their American children are exempt from estate tax if the estate (as of 2015) is under $5.4 million. If you think your future inheritance will be above that amount, strategize with your investment advisor and tax professional to minimize potential taxes. If you live in a different country than your beneficiary, make sure that your strategy includes avoiding tax mistakes. If you think you might inherit an American IRA, use this free interactive tool to help you realize why opening a U.S. brokerage IRA account may be a good tax saving strategy. Try it at www.Profile-Financial.com/Interactive and then call our office with questions (02-624-2788).   Doug Goldstein, CFP® is the director of Profile Investment Services, Ltd., a firm that specializes in cross-border investing and helping people open U.S. brokerage accounts from overseas. He is a licensed financial advisor both in America and Israel, and does not give tax advice. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Call 02-624-2788 for a consultation about handling your U.S. investments from Israel.  

Why You Might Benefit from Having a U.S. Brokerage Account By Douglas Goldstein, CFP® Unsure of the benefits of a U.S. brokerage account? Use a free interactive form to find why it may be helpful to keep some of your investments in America even though you live in Israel. See the URL below. One of the most common financial problems Americans living in Israel face is when their U.S. investment company closes their account because of their Israeli address. There is no legal reason why you can’t have an Israeli address on American brokerage and IRA accounts. In fact, while some investment companies balk at your foreign address, others have no problem. (My company, Profile Investment Services, Ltd., specializes in dealing with people who live outside the United States but still want to have their investments held in America.) This issue can affect you even if you don’t have an American investment account Often, clients initially call my office when they receive an inheritance from a family member in America. American brokerage houses are used to domestic business, and dealing with foreign addresses is difficult for them. Other than the time difference, there’s often a difference of culture. Most American financial advisors don’t have foreign clients and aren’t familiar with the basics of cross-border investing, dual tax codes, and international retirement planning. I’ve even seen cases where foreign clients are given incorrect forms, which can create all sorts of problems. For example, American citizens living abroad should sign a W-9 form, not a W-8BEN, even if they have a foreign address. What forms are needed? As a cross-border investment advisor who specializes in helping people living in Israel with American brokerage accounts, I recognize the need for easy-to-understand information on how to manage U.S. investments from Israel.  I created an interactive tool to clarify the forms you need to sign when opening an account and which investments you can buy. The form takes less than five minutes to fill out, and can save hours down the line: Try the form at www.Profile-Financial.com/interactive, and then watch a few videos on the topic that you’ll find there. Call (02) 624-2788 if you have any questions about managing a U.S. investment account from Israel. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

The Best Way to Pay for a Wedding By Douglas Goldstein, CFP® After accepting all the good wishes and mazal tovs, the first thing parents of a newly engaged couple need to think about is the best way to pay for a wedding. Making a wedding can be costly. If you have savings to cover the cost, great. That’s the topic of today’s article. If you haven’t saved for the big day, however, you’ll need to adjust your child’s expectations since you should certainly not take on debt to cover a four-hour party (no matter how much your bank – or children – encourage you). From which account should you withdraw? If you have retirement accounts, don’t use those funds to pay for a wedding. Those funds were earmarked to pay for your retirement, and will likely be subject to onerous taxes and fines if you withdraw them before retirement age. If you have some well-performing assets and some under-performing assets, which ones should you sell? Though it’s not written in stone, analysis of stock portfolios often shows that winning stocks tend to outperform losing stocks going forward. So all else being equal, sell the stocks that are at a loss. Another benefit of selling positions that have declined is that you won’t have to pay capital gains tax. Sometimes people accumulate a large cash position in their savings or investment account. Although cash is a safer investment than stocks and bonds, today’s interest rates won’t make you rich, so depending on your other investments, it may be wise to withdraw the cash. Just make sure you don’t use your emergency fund to pay for the wedding. A pre-nup? Before writing any checks to pay for the wedding, make sure the bride and groom sign a halachic prenuptial agreement. Not sure why? Send me an email ([email protected]) and I’ll send you a copy of the article I wrote about it. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

Should You Have a Shared Savings Account With Your Spouse? By Douglas Goldstein, CFP® What’s the best way to invest with your spouse? Should you have a shared savings account or separate accounts? Whenever I help a couple set up U.S.-based brokerage and investment accounts, I ask whether they want a “joint” account, or whether they want to keep their money separate. Shouldn’t couples always invest together? In an ideal world, spouses would combine both their personal and their financial affairs. But given the complexities of today’s family structure, one account type doesn’t meet everyone’s needs. Some couples enter matrimony on equal financial footing, while others have children from previous marriages, and debts from the past. Before deciding on the structure of the account, therefore, consider each party’s assets, obligations, and needs. Money should not become a power tool in a marriage. Benefits of a joint account A joint account often makes sense as either owner can give trade orders in a joint brokerage account and write checks to withdraw money. On the other hand, bank-to-bank wire transfers require both signatories on the account to sign. In the event that one party dies, there is paperwork that the surviving spouse must sign before accessing the money. Depending on how quickly the forms are filed, and how fast a proper “release” comes, it could take quite some time before the money becomes available. A good trick, therefore, is to make sure that each spouse has access to enough funds to pay the bills for several months in the event that the joint account gets frozen. Should second marriages set up a joint account? Consider important factors like prenuptial agreements and the need for financial independence (which doesn’t mean financial secrets) when deciding whether to combine funds in a second marriage. Many times, spouses agree to each keep a separate account for personal investing but also a shared account for household expenses. If you’re in this situation, listen to a financial podcast on the topic of shared savings accounts: www.GoldsteinOnGelt.com/2-Marriage. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

  Some people say the next best thing to being personally financially successful is having rich kids. However, teaching children good financial habits can be challenging. Here’s where Tom Corley and his book Rich Kids comes in handy. This is a great resource for teaching children (of all ages) about money. The three paths to wealth There are three paths to wealth: Live below your means. If you put 20% of your monthly salary into savings, as well as save all raises and bonuses, you are setting yourself up for a safer future. This is because not only do your savings increase with compound interest, but you avoid increasing your lifestyle beyond your means. Expand your means. Find efficient ways for generating more income, such as a side job. Use both strategies together. By saving properly and increasing your earnings you can effectively build your wealth. Starting young While these paths sound like they may only apply to adults, children can - and should - acquire these habits. If you give your children an allowance or if they have a job, they should save part of their income. Your wallet shouldn’t be the sole source of your kids’ income; encourage them to work and learn the powerful life lesson of self-reliance. Whether your child babysits, walks the neighbor’s dog, or gets a regular part-time job with a tlush (paystub), he or she learns personal and financial responsibility. Children who internalize these lessons are less likely to grow into dependent adults… who expect their parents to pay off their debts. To find out more about rich habits and how to teach them to your children, listen to my discussion with Tom Corley on The Goldstein on Gelt Show at: www.GoldsteinOnGelt.com/RichKids.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.    

Note: After reading the following true story, try the free Investment Evaluation Tool to determine if you are invested more aggressively than you should be. Details for accessing the tool are below. When I talk with people about how they should structure their U.S. investment accounts, one of the common questions I ask is how long do they plan to keep the money invested. Folks who see themselves as “long-term” investors can often take on the added risk of the stock market. What about long-term investors who don’t need growth? I recently met with a couple who were good earners, solid savers, and on top of it all, had inherited a sizeable amount of money.  They told me that they thought they should invest mostly in the stock market. “Why do you need to take on the added risk of stocks?” I asked. They felt that they should invest for growth because “that’s what everyone does.” I told them that even though the media and popular websites might tell people that they must invest in the stock market if they’re long-term investors, it’s not always true. In fact, there might be a much better way for them to invest. Rather than focusing on growing their money in the long term, they could consider improving their life in the short term. I explained that they could convert some, or all, of their portfolio into investments that would produce regular income and then they could cut down the number of hours they worked. Alternatively, they could use some of that extra income for enjoyable expenses like vacations and renovations. “I’m surprised you say that, Doug,” the wife said. “I assumed you would tell us to invest in the stock market.” I replied that people should invest not only based on their tolerance for risk, but also on their specific needs. Is your portfolio invested more aggressively than it should be? Try the free “Investment Evaluation Tool” at www.Profile-Financial.com/investment-evaluation or call (02) 624-2788. Consult with a financial advisor before investing to better evaluate the risks, costs, and potential benefits given your specific situation. An investment suitable for one person may not be suitable for another.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.Profile-Financial.com. He is a licensed financial professional both in the U.S, and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

Is Panic the Best Reaction to a Drop in the Market? By Douglas Goldstein, CFP® As an investment advisor who helps olim manage their American brokerage accounts, I’m often asked, “Why should I invest in the stock market when it only goes down?”  If you believe that the stock market only goes down, then putting your money in stocks is a big mistake. The people who tend to make money in the stock market aren’t investing for the short term. They realize the market can, and sometimes does, drop, but their long-term time frame allows for plenty of opportunity for the market to recover. If you’re trying to grow your wealth and believe that the economy will strengthen, the stock market offers many possibilities. Remember: “possibilities” does not mean guaranteed gains; it includes the very real chance of loss. Folks who can’t tolerate volatility should avoid the market. This doesn’t mean that you have to panic, sell everything, and bury your treasure in your backyard. There are investing opportunities that aren’t based on stocks that may be appropriate for those with a lower risk tolerance. One trick to avoid panic A well-diversified portfolio is in a better position to weather market drops. If you only invest in a few stocks and those sectors are weak, your losses will be larger than if your investments were spread out among more sectors/stocks. Diversification is a good tool for mitigating risk, and allows those who otherwise may have a lower risk tolerance to stay invested in the market. The most popular tools Common investment tools for diversifying risk include using mutual funds, ETFs (Exchange Traded Funds), and money managers. Some of these approaches follow a “low volatility” model that can help to protect you on the downside, though they do not actually eliminating risk. Other tools can actually leverage your investment, making a move even faster than the market. If you bet in the right direction, that can be great. But beware… leveraged funds will drop faster than the market if it falls. Make sure you speak with a qualified investment advisor before doing any investing. To find out more about some of the different tools that people use to invest both using stocks and other tools (bonds, bond funds, etc.) watch the videos at www.Profile-Financial.com/FAQ-videos.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S, and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

How to Solve this Common Problem with American Brokerage Accounts By Douglas Goldstein, CFP® I often receive calls at my office from people who say that their U.S. investment advisor asked them to change firms. It’s not because they don’t meet the minimum balance requirements. Rather, it’s just because they have chosen to live overseas. For various regulatory reasons, several large investment companies in the United States have decided to stop servicing clients who live abroad, many American olim included. Stringent legislation designed to prevent terrorism, money-laundering, and other criminal activities has made it much harder for U.S. brokerage firms to deal with cross-border finance. For this reason, some firms that used to work with U.S. citizens living overseas have decided that it is no longer worth their while to do so. Despite the legislators’ intentions to hurt terrorists, many law-abiding citizens who live overseas are also feeling a negative effect from the war on terror. If you’ve recently gotten a phone call or a letter from your mutual fund company or brokerage firm in America, don’t worry. There is a solution (other than selling your assets and transferring to Israel – an especially tax-disadvantageous move if you own American tax-deferred accounts like IRAs). How to easily transfer your account to another American brokerage firm Not every American brokerage firm rejects multi-nationals. Indeed, some major companies embrace the potential of overseas business. You can easily transfer your account to a company who welcomes Americans with foreign addresses.  Just fill out an “account transfer form.” Within a short period of time, your old firm can simply transfer the assets to the new firm and you can continue with all of the same types of investments (and tax-beneficial accounts like IRAs) that you’ve always done. In any case, it is a good opportunity to review your investment portfolio. If you’re not sure why your current advisor has said goodbye to you or if you want to find out how easy it would be to transfer your account to a more Israel-friendly firm, use this interactive form at www.profile-financial.com/interactive.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S, and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

What You Need to Know When Blending Two Families By Douglas Goldstein, CFP® Many second marriages are the blending of two families, not just two people. This situation raises various questions about child support, how to divide household bills, and inheritance issues. To ensure a smooth financial union, make sure to discuss these issues before the actual ceremony takes place. Sign on the dotted line A financial prenuptial agreement detailing which assets belong to whom and which funds will be used for specific purposes such as children’s college funds and weddings is critical in second marriages. Both spouses should use their own lawyer and the couple should meet with a financial advisor who has experience with blended families to discuss the fairest ways to protect their financial responsibilities and their children. Joint and separate accounts Sometimes it makes sense to keep three separate bank accounts in second marriages: his, hers, and joint. Individual accounts can continue to support previous financial commitments (child support, tuition, etc.) and a joint bank account can cover the shared expenses of your new joint life. Plan your endgame carefully Some of the most difficult family disputes are between children and stepchildren over a deceased parent’s assets. Should the children from the first marriage share an inheritance with step-children from the second marriage? Obviously these issues need to be handled on a case-by-case  basis, depending both on the financial status of both sides pre- and post-second marriage, and the ages of separate and shared children.  To avoid bickering over assets and family heirlooms, estate planning is crucial. There are various ways to make sure that everyone is taken care of, from stating specific beneficiaries on your life insurance policy to creating a trust with a lifetime clause for the surviving spouse, but with your children as heirs. Titling investment accounts properly can ease inheritance (as well as tax) issues. If you are in your second marriage and haven’t yet discussed these issues with your spouse, now is the time. Consider updating your adult children as to the result of the conversation, so there will be no surprises. Contact your financial advisor today to see if there are any changes that need to be made with titling bank accounts or updating beneficiaries. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S, and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

Why You Need to Think Big and Start Small to Get Rich By Douglas Goldstein, CFP®  One of the most effective ways to achieve your financial goal is to develop good habits. Here’s what you need to know: Rome wasn’t built in a day Acquiring good financial habits does not happen overnight. First, you need to decide what you want to change, such as your spending or saving habits, budgets, etc. Whatever you decide to change, make sure you are beginning with a small step. Habits built on small, but steady, steps take hold quicker and last longer than sudden drastic changes. One small target at a time If you want to become less extravagant and more careful about spending your money, start by writing down what you spend every day for a week. When you have done that, think of which of your regular purchases are unnecessary. Rather than dropping them all at once, gradually phase them out of your shopping list, one item at a time, week by week. At first this may be difficult for you, but each time you successfully save some money and reduce your spending you will find it easier to progress. Similarly with saving, start by saving a small amount monthly, and then increase it until you are saving a sizeable amount on a yearly basis. To make sure you actually implement your savings plan, make sure to implement the habit of paying yourself first, before other bills. That way, putting money into savings will become as much of a habit as paying your electric bill. For more about changing your habits, listen to my interview with James Clear, author of Transform Your Habits at www.GoldsteinOnGelt.com/james-clear.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

What is the Best Way to Transfer Dollars to Israel? By Douglas Goldstein, CFP® When clients ask to transfer dollars from their U.S. investment account to their Israeli bank, the details they must provide sometimes take them by surprise. Living in a different country from your assets means that money transfers are necessary to meet your cash-flow needs. Following procedures properly can expedite the process. The easy system of transferring funds Although we help people choose investments for their U.S. brokerage, IRA, and 401(k) accounts, many clients seek more than advice on what to buy/sell. They are looking for service and attention to details. When transferring funds, you must pay meticulous attention to details. Even if all the account numbers, names, and addresses match up, the clearing firm often asks additional questions. Because of regulatory concerns and anti-money-laundering policies, compliance officers can require documentation related to the purpose of the funds. This means that what you might have expected to be a quick wire ends up taking longer. (Typically it can take two or three business days for a routine dollar wire to settle. And, if you then need to convert the dollars to shekels it can be even longer until you have access to your money.) Timing is crucial if you plan to transfer your American assets to Israel. If you leave adequate time for the inevitable back-and-forth, you should be fine.  On the other hand, waiting until the last minute to request a money transfer could create a ripple effect of difficulties. Be prepared, and begin the transfer process well in advance. Remember money doesn’t move in America on Sunday or on bank holidays. Is service important with bank transfers? Moving money is more complicated than simply pushing a button. Having a good relationship with your bank or money transfer company is crucial, especially if they need to hunt down a lost wire. Make sure that any company you use to transfer funds is legal and properly qualified to handle your money. Following money-transfer instructions carefully is crucial to make sure your money lands in the right spot in a timely fashion. For more strategies to best manage a multi-currency lifestyle, go to www.profile-financial.com/multicurrency.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S, and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.    

Do All Married Couples Need to Share Their Money? By Douglas Goldstein, CFP®           What’s the ideal way to handle your money? In a perfect world, married couples merge their lives as well as their finances, and have joint accounts. However, sometimes a couple can be connected at the heart but have separate bank accounts. While partners should look at their overall assets together, depending on the circumstances, sometimes having separate accounts is more appropriate. A second marriage Most people enter second marriages with financial baggage from their first marriage. Either partners may be supporting children, or they may have debts incurred by the cost of a divorce. This creates a delicate situation, balancing the financial needs of merged families. To resolve issues such as making sure that children from the first marriage are supported or that one spouse is not responsible for the other spouse’s debts, separate accounts may be a wise idea. It creates clarity and makes sure that each side is discharging his/her financial obligations. There is also the option of keeping some accounts separate and having a joint account for mutual household needs. Should both names be on your U.S. brokerage accounts? Similarly, with regard to U.S. brokerage accounts, in the situation of a second marriage both partners may consider having an individual account or an account that is called "joint tenants with right to survivorship." For retirement accounts, anyone who is concerned about the rights of children from a first marriage may want to name specific beneficiaries, as well as contingent beneficiaries who would receive the money upon their death. It’s important to review these different possibilities when opening an account because once it is set up, changing account titles is cumbersome and may have tax implications. If you or your spouse have financial baggage, it is crucial to make sure your financial planning identifies the various issues involved and is set up properly. If you have questions whether your investment accounts should be held jointly or separately from your spouse, it’s time for an open conversation with both your spouse and financial advisor.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S, and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.    

How to Make the Most Out of Your Parents’ Stocks By Douglas Goldstein, CFP® What should you do if you inherit a portfolio of stocks from your parents? Should you sell them? To answer the question of whether you should sell the stocks, start by asking yourself whether you would buy these stocks if you had extra cash. You have no moral or legal obligation to keep the positions just because your parents owned them. I’ve had people come into my office with stocks that their parents bought decades earlier, and they said, “My father said this was such a great company that I should never sell the stock.”  But how could anyone have known whether a company that was in business 10 or 20 years ago would still be a good investment today? Remember Pan Am, Blockbuster, or Enron?  Even though your father’s research many years ago suggested that a company would be a good buy, times have probably changed. What about the tax I’ll have to pay? Everyone is in a different tax situation, but people who live and die in the United States benefit from an IRS rule called the “cost-basis step-up.”  That means that if your father invested $1,000 in the stock and the value of that position grew to $100,000 on the day of his death, if you sold it the following day for $100,000, the IRS would not consider the transaction as if you had just profited by $99,000. Instead, they reset the purchase price of the stock to the value at which you inherited it ($100,000) so you would not have to pay capital gains tax. [This is an overly simplified example, and depending where you live, there could be other taxes associated. Be sure you get proper tax advice before making any trades.] If you receive the stocks in a U.S. brokerage account or Individual Retirement Account (IRA), you may need to follow certain specific steps in order to take control of them. Feel free to contact our office if you have questions about dealing with an inheritance (02-624-2788).   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.  

What You Need to Know About Start-Up Investing By Douglas Goldstein, CFP® In a dramatic repeat of what I saw many times in the late 1990s-2000, another start-up company just collapsed, taking with it millions of dollars from investors’ pockets. Not only are the founders’ dream shattered, but its investors’ profits are destroyed and cash lost. As a financial advisor, I review many new companies from the investor’s viewpoint. In almost every case, the story ends badly. Don’t invest unless you know how The main cause of these disastrous results stems from investors putting their money into an idea instead of into a team. Many great ideas fail because of bad management, but lots of new concepts – even mediocre ones – turn into solid businesses when handled properly. Venture capital professionals won’t even consider investing in a company unless they’re convinced that the team running it is qualified and has a robust business plan. How to analyze a business plan If this article is your only lesson on how to evaluate a business plan, then you certainly aren’t a candidate to be an “angel” or venture capital investor. People spend years refining their skills in how to analyze business plans and offering documents. VC pros never start by reading about the anticipated profits of the start-up, since these  projections lack real substance. Instead, they look at the salaries that the team hopes to make (all taken from the investors’ money) and how the money will be spent. The case I recently witnessed showed how the investor didn’t consider those two most important factors before dedicating his money. The failed company significantly overpaid all of the team members and blew large sums of money on new offices and unnecessary state-of-art equipment (when other cost-efficient equipment would have been satisfactory in producing the same product). Still want to invest in a start-up company? In my weekly podcast about how the strategies of chess can be applied to investing, I have dedicated Episode 85 to start-up investing. Check it out at www.RichAsAKing.com/85. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

What to Do With Your Money at the End of the Year By Douglas Goldstein, CFP® As the fiscal year draws to a close, it’s time to review your financial plan. Here are three important aspects that you need to look at: Savings goals What are your long-term and short-term goals? Are they the same as they were last year? If your goals are both time and dollar specific, it’s easy to tell whether you are on target to meeting them. Take a look at your pension plan. Is the division of funds among its saving and insurance component still relevant to your current stage in life? Asset allocation Apart from saving your money, you also need to grow it. So let’s look at your investments. Are your funds properly invested? Your investments should reflect your risk tolerance, growth objective, and time frame. Recheck your asset allocation to ensure that everything is in order following the movements of the markets over the past year. Often funds can change focus, requiring you to rebalance your portfolio. Furthermore, if a stock or other security does extremely well (or extremely poorly), this can also affect the balance of a portfolio. It may be time to buy/sell. Review Your Winners and Losers Before selling weak stocks/funds and actualizing profits, discuss the potential tax ramifications of the sale with your accountant. Depending on your situation, it may be wise to hold onto investments for at least one whole calendar year to qualify for the long-term capital gains rate (if you are a U.S. tax payer). While tax ramifications shouldn’t be the only factor in determining when to sell, they should certainly be taken into consideration. Don’t let the end of the year pass you by. Call your financial advisor for an appointment today to review your financial plan. Make sure your finances are in the best shape to enable you to realize your dreams.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing is available at www.richasaking.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, SIFMA, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Do You Suffer from “Inheritance Loyalty Syndrome?” by Douglas Goldstein, CFP ® It is common to feel emotional angst after receiving an inheritance. Inheritors may have doubts as to whether they are “allowed” to use the assets as they wish, or whether they somehow have to use them in a way the benefactor would have chosen to use them. There are two ways to approach a sudden influx of money into your control: Spend it on things you would never have been able to afford otherwise. The downside of this is the risk of increasing your overall cost of living and finding yourself none the richer. For example, if you choose to upgrade your car, would you be able to afford higher insurance payments, gas, and upkeep in the future? Incorporate the assets into your overall financial plan. You could use the inheritance to pay off debt (including your mortgage), fund your emergency account, or increase your savings. Other factors to consider are whether you should use the funds for charitable projects or earmark them for an inheritance for your own children. Selling inherited assets is not being disloyal Some beneficiaries feel an emotional attachment to the inherited assets that prevents them from making logical decisions. A widow may feel that she is disputing her late husband’s judgment by selling stocks he carefully chose years ago. Yet what was good for your benefactor is not necessarily good for you, as everyone’s financial situation is unique. It is important to realize that inherited funds are yours, and proper use of the funds means making them jive with the rest of your financial plan. Your benefactor gave you a legacy to use as you wish; s/he can’t control the assets from the grave.    Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates      

Don’t Leave Tax-Loss Harvesting to the End of the Year By Douglas Goldstein, CFP® Many investors optimize their portfolio to minimize capital-gains tax. One popular strategy is to do tax-loss harvesting. What is tax-loss harvesting? Tax-loss harvesting is the practice of selling a position at a loss, and matching the loss against a gain of different stock that you sold. By offsetting losses against gains, capital growth taxes are only paid on the net profits. While this may be a tempting tax-savings strategy, there are three reasons to avoid the end-of-the-year market selling frenzy. The wash sale If you sell a security and buy it (or a substantially similar one) back within 30 days of selling it is called a “wash sale.” Wash sales negate any tax-loss selling strategies, and your attempt to harvest a tax-loss would be disallowed by the IRS. Don’t be the short-sighted individual who sells at a loss, and then, the next day when the stock begins creeping up, wants a piece of the action and buys it again. This scenario nullifies any potential benefit of tax-loss harvesting, and causes further losses by increasing commission costs. Impending tax law changes Selling a position at a loss allows you to offset taxes on potential capital gains in a given tax year. However, since the tax codes are constantly changing you can’t know what your future tax situation will be. If the government raises capital gains tax next year, you may have been better off saving your tax-loss harvesting to use in a year with a higher capital gains tax. Also, for American tax-payers, capital gains tax is different on long- and short-term investments, so the time you originally purchased the security may affect its potential taxes. Market uncertainty The uncertainty of knowing when a declining position may reverse itself adds further ambiguity to tax-loss selling. An unrealized loss might actually turn around. But if you sell just to capture the loss, you can’t benefit from the recovery. While tax considerations should come into play when making buy/sell decisions, tax considerations should never be the only reason behind a transaction. Always ask first If you are considering tax-loss harvesting, consult both your tax and financial advisors. You should always ask a tax professional before making any decisions that can affect your taxes. Call my office (02-624-2788) if you have any questions about your portfolio.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.  

What Should You Do When You Get An Inheritance? By Douglas Goldstein, CFP® Many of my client relationships began as a result of receiving an inheritance. The sudden infusion of money is a good impetus for a review of one’s goals. The first thing to do when you get an inheritance is – nothing. There’s usually no rush to spend or invest the money. Let the pain you may feel at losing a loved one and the excitement of “coming into money” die down. Before you make any decisions about what to do, make sure you’re in a calm frame of mind. Explore your options Once you are ready to make some decisions, the next step is to figure out what you really want. Some people immediately use an inheritance to realize a material dream and buy a house, car, or go on a luxury vacation. The problem is that many of those who rush into spending an inheritance often find that in the flurry of excitement, they end up spending more money than the original bequest. While there may be nothing wrong with spending an inheritance, be wary of compartmentalizing your finances. Look at your overall financial picture. Should you use the funds to pay off existing debt? Create an emergency fund? Save for anticipated future expenses like tuition, weddings, and retirement? And if the answer is “yes,” how will you do it? Be realistic as to what the lump sum you received can actually do.  Even a six-figure infusion of funds may not stretch as far as you think it will. And Americans who inherit IRAs need to be aware of tax regulations affecting the way they can withdraw funds. Maybe the most important thing you can do when you receive an inheritance is assure your children that it may or may not be passed on, so they should work hard and secure their own financial house.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

How to Help Your Children Become Financially Independent By Douglas Goldstein, CFP® A client told me about her married daughter who is in a financially dysfunctional marriage. The young couple finds it hard to make ends meet, and often applies for help from charitable organizations. Yet despite their lack of funds, they still live a fairly extravagant lifestyle. Occasionally, the daughter asks her mother for money, but the mother refuses. My client realizes that she doesn’t have the means to bail them out – and even if she did, they would never learn to stand on their own two feet. Teaching financial responsibility is one of the toughest lessons a parent faces. Close the Parental Bank Saying no to a child in fiscal trouble is difficult. I know many parents who support an adult child still living at home, or married children who can’t quite make the month. These parents tell me, “What can I do? They’ll starve without my help!” Sadly, these well-intentioned parents don’t realize that rather than helping their children become financially independent, they are perpetuating the situation. Acting as the Parental Bank on a regular basis doesn’t give children any incentive to become financially independent. Why should they live within a budget, if they know their parents will bail them out? Let go of your child’s hand When a toddler learns to walk, you have to let go of his hand, even though you know there’s a high chance that he’ll fall and skin his knee. Similarly, when adult children ask you for help after they’ve failed financially, don’t automatically write a check. Offer them your sympathy and explain to them the necessity of budgeting and planning their finances. Give them the number of a budget counselor or financial advisor and let them know you are interested in encouraging them to become financially stable. Never help my children? This article is not meant to say never help out. Rather, make sure you understand the difference between helping your kids get a start in life with a gift for education or buying a home versus enabling them live beyond their means. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. Call (02) 624-2788 for a consultation about

How To Break Your Bad Habits And Get Rich By Douglas Goldstein, CFP® Money woes are generally not due to a market gone awry or a low salary. The number one cause of most money problems is bad financial habits. Do you spend without tracking what is leaving your wallet, neglect to make regular deposits in savings, and overlook regular financial reviews and discussion of financial goals with your partner? If so, you may be guilty of harboring negative financial habits. Bad financial habits can be as deadly as smoking. Some habits are so ingrained that it seems impossible to break them… but it can be done! I spoke with James Clear, an expert in habit creation, on The Goldstein on Gelt Show about how people could improve their finances by replacing negative habits with positive ones. Why stopping cold turkey doesn’t work Stopping a bad habit by simply not doing it anymore doesn’t tend to work since nature hates a void. Instead of just stopping your bad habit, find a good habit to substitute for the negative one. For example, instead of “retail therapy” to improve your spirits by going out shopping try exercise or chatting with a friend. Or replace your credit card in your wallet with a picture of your saving goal to provide a constant reminder of what you are working towards. Join forces with a friend One of the best ways to improve your financial habits is to team up with a partner. Read self-help books together, or attend an online financial education class (ask me for recommendations). When two people work together, you can both support each other through the inevitable ups-and-downs of creating a positive habit. The key to success When you launch a new habit, start with a positive attitude. If you believe you can succeed, you are more likely to do so than if you set yourself up for a negative outcome. For more concrete tips on improving financial habits, listen to my discussion with James Clear at: http://www.goldsteinongelt.com/james-clear. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.      

Are Bonds a Good Investment for You? By Douglas Goldstein, CFP® Bonds are a very popular investment, but before you buy any, let me tell you what I share with my clients about them. Think of a bond as a loan between you and a company or government. Assuming all goes normally, here’s how it looks: You lend them a sum of money They pay you interest periodically until “maturity.” They return the principal of the loan on a specified date. Why buy bonds? Investors looking for steady current income (perhaps to supplement a pension) and wanting to diversify their portfolios often purchase “fixed income” securities (as bonds are often called). Owning bonds may give the investor a sense of security because the issuer guarantees to pay back the principal of the bond. However, bear in mind that the “guarantee” is only as solid as the guarantor, so if the issuer defaults you could lose money. Government bonds are generally considered to be safe investments, since the government has the ability to raise taxes and print money in order to generate enough revenue to repay bondholders. But nothing is guaranteed. Even governments occasionally default on bond payments. Indeed, in August 2015 Puerto Rico defaulted on some of its bond payments. Nonetheless, government bonds are still considered relatively secure, with American treasury bonds at the top of the list. What bond is right for you? There are many types of bonds and bond funds, each meeting different investor needs. While U.S. Treasury bonds and some municipal bonds may be tax free in certain circumstances, they are still subject to Israeli taxes. Corporate bonds can provide dependable income, as well as a somewhat liquid market if you want to sell a bond you own. A more risky sector is high-yield, or “junk bonds.” While these bonds can provide a higher potential return, they also carry a higher risk of default. In addition to buying a specific bond, there are bond funds that mitigate the risk of owning specifics by creating a broadly diversified portfolio. These funds, though, have their own risks, so be sure to read the prospectus before investing. To learn which bonds may be appropriate investments for you, watch this 15-minute video I made: www.Profile-Financial.com/Bonds. Then, call my office to review or to consider adding to your bond holdings. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Problems With Your U.S. Brokerage Account? By Douglas Goldstein, CFP®   Many readers have recently contacted me because they received a letter from their U.S. brokerage firm informing them that either “You can no longer purchase additional shares of mutual funds in your account,” or “We will no longer provide investment advisory services to you and/or you may only enter liquidating orders or non-solicited orders in your account.”   This letter is not a result of new American legislation; rather it means the brokerage firm handling your portfolio is no longer interested in working with clients living outside the United States. Don’t despair. There are solutions that can possibly even improve your situation.   What action step you should take Even if you can’t continue to work with your existing brokerage firm, you do not need to cash out your American account.  Rather, work with a firm that specializes in opening brokerage accounts for clients who have an Israeli address (see www.profile-financial.com/faq for details). Then, transfer over assets “in kind” to the new account. The new account (whether a joint account, individual account, IRA, or other type) can be an exact replica of the old account, unless you wish to change your investment structure. By moving everything over in kind (without selling) there are no tax consequences or reporting requirements.   Basically, after signing new account paperwork, a client’s assets are easily transferred over to the “cross-border-friendly” U.S. brokerage firm. Within one month, clients get a brokerage statement from their old brokerage firm, and the next month they get the statements from the new firm (which they could also choose to get online for free).   If you receive a letter inviting you to leave your existing company, look at this as an opportunity to review your financial plan as well as your investments with an investment advisor who is licensed both in the United States and in Israel.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, SIFMA. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. His newest book, The Retirement Planning Book, is available at www.profile-financial.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. The opinions expressed are those of the author and not necessarily those of Portfolio Resources Group, Inc. or its affiliates.

How Quickly Should You Invest The Money You Inherit? By Douglas Goldstein, CFP® Though I often advise people to wait before investing an inheritance, sometimes you must take quick action. When do you need to act quickly? If you inherited a risky position, you should consider liquidating it. For example, the grandfather who always managed the stock portfolio passes away, leaving large amounts of money invested in a few individual stocks. Unable to live on her own, the grandmother who now owns the stock portfolio needs to move to a nursing facility. What would happen if she waited 12 - 18 months to deal with the account and then, just before she sold in order to pay her bills, the stock market crashed? How much money do you need now? If you inherit a portfolio of stocks, ask yourself if you are in a position to wait (possibly for years) to use the money. A fancy car or a luxurious vacation is not an emergency expense. On the other hand, paying for home health care or other medical procedures may very well be a question of life and death and cannot be delayed. Any money needed for the near future, regardless of the type of investment it was in when you inherited it, should be converted to liquid assets like short-term bank deposits, money market funds, and savings accounts. If that means selling Grandpa’s stocks, it’s the right choice. After all, wealth should first and foremost be used for your family’s health and well-being. How to get the money quickly Depending on the account’s structure, you may or may not have easy access to the funds. Even if an account is titled “joint account” or “transfer on death,” there may be a drawn out procedure to follow before the money is fully available. Your investment advisor should be able to walk you through the process. Nonetheless, make sure money is available to each spouse separately so that the survivor does not face undue financial pressure caused by bad planning.  Not sure how to structure your accounts? If you have assets, especially money in different countries, contact a cross-border investment advisor who can help you determine the best way to structure your portfolio. Learn more at www.Profile-Financial.com.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Are You Getting The Social Security You Deserve? By Douglas Goldstein, CFP® The “Greenberg Settlement,” the resolution of a class-action lawsuit brought against the Social Security Administration (SSA), changes the way American olim receive their American Social Security payments. Under the SSA’s Windfall Elimination Provision, if you receive a foreign earnings-based pension, your American benefits are reduced. Until now, claimants of Social Security living in Israel who also received Bituach Leumi old age pension had their payments from Social Security reduced under the Windfall Elimination Provision (WEP).  This was because Bituach Leumi was considered as an extra pension and counted as a “windfall.” In 2013, Ephraim Greenberg, a U.S. citizen living in Israel, brought a class action to change this situation because Bituach Leumi pensions are not dependent on earnings and therefore don’t fall within the criteria of the WEP. Now you can claim your money back In July 2015, U.S. District Judge Rosemary Collyer determined that the Social Security Administration was wrong in reducing payments to U.S. citizens who receive Bituach Leumi. This is because Bituach Leumi payments aren’t considered earnings-based in the same way as a private work-related pension is. Bituach Leumi payments are considered more of a social benefit for the elderly than a “windfall,” and therefore do not affect Social Security payments. (However, if you receive a work-related pension in addition to Bituach Leumi, your work pension would trigger the WEP reduction in Social Security benefits.) If your Social Security payments were reduced under the previous erroneous application of WEP, you can claim back the funds that are owed to you from September 2004. Furthermore, if someone who was unfairly penalized under the WEP has passed away, his heirs can apply for the funds retroactively. This is good news for the many American olim eligible for Social Security payments. Here’s how I discussed the Greenberg Decision with the lawyers involved in the case, Ira Kasdan and Beth Johnson. We discussed the specifics of how to claim money that may be owed to you. To learn the specific steps involved in claiming withheld WEP as well as learning more about the provisions concerning with private pensions, listen to our 15-minute discussion at www.GoldsteinOnGelt.com/Kasdan. (The opinions expressed on The Goldstein on Gelt Show are those of the guest, and not necessarily my opinion or the opinion of Portfolio Resources Groups, Inc.) Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com.  He is a licensed financial professional both in the U.S. and Israel.  Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

When Should You Give Trading Authority to Your Children? By Douglas Goldstein, CFP® Recently, one of my clients had a serious fall at home, breaking his hip, and ended up in the hospital. As a result of his injuries, it was clear that he could not deal with his finances for the foreseeable future and had to hand over trading authority to his daughter.  As this all happened suddenly, decisions had to be made in a hurry, leading to mediocre results. If my client, who is over 80, had agreed to hand over trading authority earlier, he and his daughter would have been better prepared for a scenario where he could no longer make financial decisions. What is trading authority? A trading authority form is a legal document that allows someone else to act as your agent over your account. Your agent can have limited trading authority, which means that he can make transactions on your behalf but not withdraw any money, or full trading authority, which means he can make withdrawals from your account. A trading authority is similar to power of attorney. However, whereas power of attorney can be applied to all of your assets or to different aspects of your life, such as health care, trading authority only relates to your investment account. Why should I give anyone trading authority? Advanced age is not the only reason for granting someone else trading authority. What if you were going away on a sabbatical or a long vacation? Handling your account on a day-to-day basis may not be practical, so you would ask someone trustworthy to do it for you. As you get older, even if you are in perfect health, it may be wise to give trading to someone you trust to keep your best interests in mind. Then you can work together with him, handing over the reins gradually, before the time comes when you may no longer be able to be in full control. At the same time, if you are thinking of handing trading authority over to a friend or relative, make sure that it is only someone whom you can trust implicitly because a wrong decision can put your finances at serious risk. For more information about trading authority or power of attorney, watch a 3-minute video that I made called, “Should I give someone power of attorney?” at: http://profile-financial.com/poa.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com.  He is a licensed financial professional both in the U.S. and Israel.  Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

What You Need to Do After You Inherit an IRA By Douglas Goldstein, CFP® If you receive an inheritance, it might come in the form of property, a bank account, or brokerage account. But what if you receive an inheritance from someone’s individual retirement account (often called an “IRA”)? IRAs are different from regular brokerage accounts A regular brokerage account is normally structured as either an “individual” or a “joint” account, and a person’s will determines how the assets will be distributed upon his death. An IRA, on the other hand, is normally distributed via a “beneficiary designation.” That’s actually much easier because when a person sets up his IRA, he instructs the brokerage firm or bank to list the names of primary beneficiaries (and contingent beneficiaries if one of the original ones has died). It’s a comparatively easy procedure to move the money from an IRA to the proper beneficiary. Make sure you read this before receiving an inheritance from an IRA One of the great benefits that the United States gives the recipients of an IRA is that the assets inside the account may continue to grow tax deferred if they are transferred in a certain way. The recipient can transfer the money from the deceased’s IRA to a “beneficiary IRA” and continue to have it grow tax-deferred. The inherited assets in an IRA can be sold (in the IRA) and other securities (like stocks, bonds, and mutual funds) can be bought in accordance with the new owner’s wishes. There is no need to maintain the inheritance in the exact positions as you received it. Except for mandatory distributions, the assets themselves aren’t subject to U.S. tax as long as they remain in the beneficiary IRA. The mistake many people make is that they: Withdraw the money from the IRA immediately upon receipt of the inheritance Pay a large tax, and then Reinvest the money in something else. Wouldn’t you rather skip step #2? If you are designated as a beneficiary of someone else’s IRA, or if you have an IRA account that you plan to leave your kids one day, make sure everyone understands the importance of maintaining the tax-deferred status as long as possible. If you’re not sure how this affects you, send an e-mail to [email protected] and type “IRA” in the subject line.   Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

By Douglas Goldstein, CFP® Regardless of the more modern way people look at gender, there are significant differences in how men and women should invest their money. Here’s why: Women’s pensions tend to be smaller Women’s pension payouts tend to be lower than men’s payouts, because most women work fewer hours and have lower salaries than their male counterparts. Even though “paternity leave” is becoming more common, most women still take additional non-paid time after having a baby. And, when they return to work, they may return to a part-time position. All this means a lower salary, and a proportionately lower contribution to a pension fund. Women live longer than men In Israel, the average lifespan of a man is 81 years, while a woman’s life expectancy is 84. In the United States, average life expectancy for a man is 76 and for a woman 81. As women generally retire earlier than men and live longer, this means a lengthier retirement and more bills. Furthermore, if a pension doesn’t increase with inflation, then the real value of the pension may not be the same towards the end of retirement as during the beginning of retirement. Essentially, this means that women have fewer resources to cover a longer time period. Since women tend to outlive their spouses, they need to master enough financial skills so they can take care of themselves, and need to be even more careful than men about financial planning. If nothing else, women need to be sure that regular savings are an integral part of their monthly budget during their working years. Start planning for retirement now If you have not yet started planning for retirement, call your financial advisor today and start working on a plan. If you are a woman and have any questions about personal finance, send me an email at: [email protected]. If you are a man, give this article to the women (spouse, mother, daughter) in your life to read. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S, and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

Non-Americans who want to invest internationally often use U.S. brokerage accounts. While it may seem counter-intuitive for a non-American to open an American brokerage account from overseas, there are several reasons why this is a good move. 2 reasons why non-U.S. folks use American accounts Efficiency – U.S. securities markets may be the most efficient and individual-investor friendly in the world. American regulations place customer protection and transparency at the top of their concerns. You can have a diversified basket of global assets within a “regular” U.S. brokerage account, and do it cost effectively. Diversification – A U.S. brokerage account can host a variety of investment vehicles, such as stocks, bonds, mutual funds, and bank deposits (CDs). American brokerage portfolios can hold investments in both American and global companies. Do non-American heirs need to pay U.S. Inheritance Tax? One of the issues that non-Americans face by opening an American brokerage account is the possibility of their estate having to pay an inheritance tax to the United States when they die. There are a few solutions to this problem; the most common of which is to buy “offshore” mutual funds in an American brokerage account. Those mutual funds are not considered “U.S. assets” when determining U.S. estate tax, even if the funds themselves invest in U.S. stocks. So if a non-American buys an offshore mutual fund with a name like, “ABC Offshore U.S. Equity Fund,” or the “XYZ Offshore European Bond Fund,” and then passes away, that fund will not be subject to U.S. estate tax. In order to prevent tax bills, the account needs to be set up and handled properly. There are many details related to opening a U.S. brokerage account, so make sure you work with a company that is experienced in handling cross-border investments for both American and non-American citizens. To learn more watch the ten-minute video that over 3,000 people have viewed, “U.S. Brokerage Accounts for Non U.S. Residents” at www.Profile-Financial.com/videos. If you have other questions, call 02-624-2788. Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.

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