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 (doug@profile-financial.com) 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:
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 (doug@profile-financial.com) 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:
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:
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.