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.