Category Archives: Opinion
By Nathaniel Sillin
Getting Your Home Ready to Sell
As the economy improves, today’s sellers are facing a very different environment than they were before the housing market stumbled in 2006.
Today’s housing market features new procedures and standards, not the least of which are continuing borrowing hurdles for prospective buyers. If you are thinking about a home sale in the coming months, it pays to do a thorough overview of your personal finances and local real estate environment before you put up the “for sale” sign. Here are some general issues to consider:
Make sure you’re not underwater. You may want to buy a new home, but can you afford to sell? The term “underwater” refers to the amount of money a seller owes on a house in excess of final sales proceeds. If what you owe on the home – including all selling costs due at closing – exceeds the agreed-upon sale price, then you will have to pay the difference out of pocket. If you’re not in a situation where you absolutely have to sell now, you may want to wait until your financial circumstances and the real estate market improves.
Evaluate your finances. Before you sell, make sure you are ready to buy or rent. Making sure all three of your credit reports (https://www.annualcreditreport.com/index.action) are accurate is an important part of that process.
Consider “for sale by owner” vs. “for sale by broker.” “For Sale by Owner” (FSBO) signs were a common sight in many neighborhoods during the housing crisis. Shrunken home values convinced many sellers to sell their property themselves rather than pay 5-6 percent of profit in broker commission. However, consider what a licensed real estate broker could accomplish in your specific situation. Many experienced brokers have market knowledge and negotiating skills that could potentially get a better price for your property. Deciding which route to take shouldn’t be an overnight decision. Check leading FSBO and broker sites and talk with knowledgeable friends, attorneys and real estate professionals to learn as much as you can.
Think twice before spending on improvements. Not every home construction project pays off at sale time. Remodeling magazine’s annual Cost vs. Value Report (http://www.remodeling.hw.net/cost-vs-value/2015/) tracks both pricing and cost recovery for leading remodeling projects. Before fixing up a bathroom, kitchen or any other area of your home, research whether the work will actually pay for itself at sale. For many sellers, it might be advantageous to hire a licensed home inspector to identify any structural, mechanical or major appliance repair issues that could delay or compromise a sale.
Don’t forget moving costs. According to the American Moving and Storage Association, a leading industry trade group, the average professional interstate move of 1,220 miles costs an average of $5,630; in state, the average moving cost is $1,170. After all the costs involved in selling a home, don’t forget how much it costs to relocate.
Bottom line: Selling your home requires planning. Before putting it on the market, get solid, qualified advice on how to sell smart in a still-recovering housing market.
It’s that time of year again. In a few short weeks, students will return to the classroom, and back-to-school preparations are in full swing. Readying your child for a successful school year involves more than simply purchasing the trendiest clothes and supplies.
One of the first steps in ensuring students have a safe and healthy start to the year is taking them to get a back-to-school physical examination. These exams, also known as well-checks, are especially important because they are often the only time a child visits the doctor each year. Physical exams not only detect potential health problems before they arise, but they can also provide an assurance of good health.
Back-to-school physicals typically consist of:
Routine Physical: During a routine physical, the physician will record your child’s height and weight, blood pressure and pulse. In addition, the physician will perform a comprehensive check of your child’s heart and lungs, abdomen, skin, eyes and ears, nose, mouth, teeth and throat to ensure that no abnormalities exist.
Medical History Review: The doctor will review the medical history of your child and any close relatives to detect illnesses or diseases which might run in the family. This portion of the exam will also include listing any medications your child is taking, as well as previous or current illnesses.
Preventative Screenings: Through routine examinations and blood tests, doctors have the opportunity to monitor a child’s overall wellness and screen for problems such as high cholesterol, diabetes and lead poisoning.
Immunizations: Children are required to receive certain immunizations before entering public schools. Back-to-school physicals are the perfect time to make sure that your child is up-to-date on all necessary vaccinations.
As the first day of school approaches, finding time for a visit to the doctor may become difficult. Therefore, it’s important to schedule your child’s physical exam as soon as possible. Wellmark Blue Cross and Blue Shield makes it easy to locate a physician in your area with its online “Find a Doctor” search tool. Searches can be filtered based upon a doctor’s location, specialty and health insurance plans accepted. To access this tool, and to learn more about health insurance, visit www.wellmark.com.
By Nathaniel Sillin
10 Reasons Why You Might Be Financially Stressed
Stress can come from everywhere – career, school, family, relationships, health – and especially money.
The American Psychological Association (APA) recently reported that money remains the number one stressor for 72 percent of Americans. In fact, money has led the APA’s annual stress survey since its debut in 2007, the year before the financial crash that took the U.S. economy into its worst slump since the Great Depression.
Are you financially stressed? Here are 10 major signs of financial stress and ways to take action.
1. You wonder if your job is secure. Even though the economy has improved in recent years, employers still cut and reassign workers and make occasional adjustments in pay and benefits. If you’ve spotted changes in other departments or news accounts suggest a shift in your industry, start thinking ahead. Action Plan: Build up your emergency fund to cover six months or more of basic living expenses, update your resume and get organized for a potential job search.
2. There’s no money to save or invest. If meeting basic expenses is a struggle and you have no savings or investments at all, it’s time for a serious review of where your money is going. Action plan: Making a basic budget is the first step to tracking every penny spent. Figure out extras you can cut and set more aside for savings and debt payoff.
3. You have disagreements with a spouse or partner about money. A 2013 University of Kansas study noted that arguments about money are the top predictor of divorce. Action plan: Share information about all debt and legal issues and exchange respective credit reports and credit score data as you plan to solve all money problems together.
4. You are paying bills late. Late payments can hurt your credit score (http://www.myfico.com). Action plan: Set up a physical or digital calendar to keep track of payment dates and budget in order to put more money toward debt and eventually savings.
5. You imagine a windfall. Waiting for a bonus, an inheritance or even a winning lotto ticket to ease your financial stress indicates you have a tendency toward financial denial. Action plan: If your current efforts at budgeting, saving money or paying off debt aren’t working, consider a reality check with a qualified financial advisor.
6. You use your home equity like a cash register. Home equity loans or lines of credit can provide an interest-deductible solution for a variety of important needs, but a down housing market can wipe out your equity. Action plan: Either refinance if you qualify or stop using the line entirely until you can pay down the balance.
7. You’re considering drawing from retirement funds to solve money problems. Think twice before taking out loans against these funds. Interrupting your retirement planning, particularly over the age of 50, can have significant financial consequences. Action plan: Re-budget your finances and seek qualified advice to help you find another solution.
8. Late and overdraft fees are piling up. According to the Pew Charitable Trusts, the average bank overdraft fee is $35; credit card late fees are similar. Action plan: Schedule bill payments and opt for online billing when possible to save time on mailing. If you have to pay additional late fees, ask your bank or credit card company if it might forgive the fee; many will remove one fee a year.
9. You’re late on student loan payments. It is difficult to have student loans (https://studentaid.ed.gov/sa/) forgiven, cancelled or discharged (eliminated) in bankruptcy if you can’t pay. Paying late can also hurt your credit score. Action Plan: Seek qualified financial advice that specifically addresses the type of student debt you have and resolve to pay bills on time.
10. Your accounts are disorganized. It’s difficult to reach important financial goals when you really can’t track your finances. Action plan: Get some advice from a trusted friend or a qualified financial professional about how to best organize your accounts and whether online account management may be right for you.
Bottom line: Reducing your financial stress is a healthy decision. Review your money habits and get qualified help if necessary to lessen this burden.
By Nathaniel Sillin
Over 50? Supersize Your Retirement Savings
If you’re over age 50 and not sure whether you’re going to be able to retire, it’s time to focus, get advice and build a realistic plan.
You’re not alone. The U.S. Government Accountability Office recently reported that most households approaching retirement have low savings, adding that nearly half of households led by individuals or couples aged 55 and older having no retirement savings accounts at all.
The first step is to define where you really stand financially. Consider speaking with a qualified financial and tax advisor to define your present financial circumstances. Such a conversation should take into account your household income, tax situation, debt and retirement assets in any form. Reviewing these factors can help shape your decisions about supersizing your retirement plan for maximum safe returns. While a customized plan is generally the best way to approach shortfalls, here are some general approaches.
Take time to reevaluate your budget (www.practicalmoneyskills.com/budgeting). To accelerate retirement saving and investing, you need to find the money first. Non-mortgage debt is a major retirement savings obstacle. Better budgeting can help you find the money to pay off debt quicker. Adjust your spending across the board so you can accomplish this while adding more money to savings over time.
Know that you’re going to need to accelerate your savings. Estimates vary, but generally, after age 50, it’s best to direct at least 10 percent of your gross income in savings and investments to cover living expenses when you stop working. If you are employed, review your contribution and income limits for the most popular self-directed and tax-advantaged retirement savings vehicles. Those include:
401(k), 403(b) and most 457 plans, which will have a maximum annual contribution limit of $18,000 in 2015
Individual Retirement Accounts (IRAs) – both Traditional and Roth – which will have maximum “catch-up” contribution limits of $6,500 (the regular $5,500 limit plus $1,000 for taxpayers aged 50 or over by yearend 2015)
If after all this effort you’re still not able to find enough money to put away, consider making a greater effort on the income side. Many individuals boost their savings through a second job or freelancing from home. Consult qualified financial and tax professionals to make sure you’re handling this extra income correctly from a tax perspective and putting it in investments that make sense for you.
Downsizing to a smaller home or an apartment in a lower cost-of-living destination or deciding to move in with friends or family at minimal costs may also provide additional savings for retirement. But first, consider what you might get for your home. If you are able to sell a primary residence at a significant profit over your purchase price – above $250,000 for a single taxpayer and above $500,000 for married taxpayers filing jointly –speak to a tax professional about ways to avert a significant tax liability.
Finally, put proper financial safety nets in place. Make sure you have an emergency fund (www.practicalmoneyskills.com/emergencycalc) set up so you won’t be forced to dip into savings to cover unexpected expenses. And don’t forget insurance – having the right amount of property and casualty, health and disability insurance can protect your retirement nest egg from significant risk.
Bottom line: Building a retirement fund after age 50 is challenging, but not impossible. Get solid tax and financial advice, start downsizing immediately and don’t forget critical financial safety nets.
By Mike Whittlesey
The fifth and final installment of Dave Stueve’s narrative about his recent safari experience in South Africa is published this week as the sport of trophy hunting in Africa remains under fire following the killing of Cecil the lion in Zimbabwe last month.
I am not a hunter. My enjoyment of the great outdoors is devoted primarily to riding a bicycle on the abundance of nature trails our little corner of the world has to offer. The last arrow I shot was probably in a junior high physical education class and I’ve since been pardoned for the arrow that somehow wound up on the roof. With the exception of my dad’s air rifle some 35 years ago, I’ve never shot a gun and have no desire to own one.
When Dave Stueve opened Double Lung Archery in La Porte City in 2007, he quickly developed a full-service Archery Pro Shop with a loyal following of customers who willingly come from near and far to support a business that caters to hunters. And make no mistake, hunting is big business in Iowa. The Iowa Department of Natural Resources estimates the economic impact hunters, anglers and wildlife viewers amounts to $1.5 billion each year, supporting more than 17,800 jobs statewide.
Though not a hunter myself, a large portion of The Progress Review’s readers actively participate in outdoor related activities and have an interest in reading about the exploits of their fellow hunters. It is also important to acknowledge that hunter-generated revenue makes it possible for non-hunters like myself to enjoy the bike trails and state parks funded by the hunting industry. Not only do hunters account for $100 million in state and federal taxes annually, they also help fund the state’s fisheries, law enforcement activities related to wildlife, habitat/wetland restoration, as well as outdoor education and safety training. Without these dollars, many of the outdoor recreational activities enjoyed by non-hunters would not exist as they do in their present form.
Having said that, luring a lion out of its protected sanctuary for the purpose of killing it and cutting off its head cannot be explained away as animal conservation. That Cecil’s tracking collar went missing after the kill was made suggests the hunting party knew their actions were unethical, even if the subsequent investigation determines the hunt was not illegal. As this issue of The Progress Review goes to press, the investigation surrounding the hunter, his guide and the Zimbabwe landowner has not yet been completed.
In the meantime, the moral indignation expressed by those who have vandalized the property of the hunter responsible for the deed does nothing to address the problem of protecting endangered wildlife. While spewing pigs’ feet on the grounds of a hunter’s vacation home may make for dramatic television, it certainly is not a convincing statement about the sanctity of animal life. I can think of at least one pig who would have objected to such an argument.
Those morally opposed to hunting certainly deserve to express their feelings and have their voices heard. To label all trophy hunters as evil, though, is an oversimplification of the issue and does a disservice to the legitimate conservation efforts many hunters passionately pursue. As the debate rages on, many outdoor enthusiasts make the claim that banning hunting in Africa is actually more harmful to the animals there. Hard to believe, yes. The historical numbers, though, would seem to support such a claim.
In a 2006 research piece published in Conservation Biology entitled “Trophy Hunting and Conservation in Africa: Problems and One Potential Solution, the authors state, “The greatest threat to the sustainability of trophy hunting on communal land is the failure of governments and hunting operators to devolve adequate benefits to local communities, which reduces incentives for rural people to conserve wildlife.”
In other words, when the hunters and the money they spend in Africa disappears, so to does the natives’ motivation to maintain conservation efforts that previously protected the wildlife there.
In a 2011 research piece published in Environment, author Nicolas Jordan Deere noted that following the ban of trophy hunting in Kenya (1977), Tanzania (1973–78) and Zambia (2000-03), there was an accelerated loss of wildlife in each of those countries.
Kenya, for example, has lost some 60%-70% of its wildlife after initiating a ban on hunting. Faced with the prospect of literally starving to death as African wildlife consume the vegetation dirt-poor resident farmers ordinarily feed their livestock, it should not be surprising that poaching remains rampant in Kenya. Food on the table will trump animal conservation every time these conditions are in conflict.
The low socioeconomic conditions present in many African countries, coupled with hunters who are willing to pay five figures for the opportunity to hunt in Africa, places some African governments in the difficult position of publicly condemning an activity they routinely accept big dollars to allow. A recent news report from Zimbabwe noted that local officials were hopeful the furor over Cecil’s death would soon dissipate so the business of legal hunting could resume.
How long the topic of trophy hunting in Africa remains a top story in the news remains to be seen. Instead of Africa, it’s an issue that could just as easily be focused on our very own backyard. For many years, the Iowa Department of Natural Resources has issued permits to conduct deer management hunts at designated times during the year. Designed to thin the excess deer population, these hunts address concerns related to the damage deer inflict on crops and ornamental gardens, as well as the number of motor vehicle accidents involving deer. Over a 25 year period, managing the deer population in this manner has become accepted practice, much like trophy hunting is today in many African countries. If Iowans and their state government view large numbers of deer as a nuisance and a danger, is it surprising that African landowners view the excess number of giraffes threatening the food supply of other animals much in the same way?
The ethical treatment of animals, regardless their country of origin, is not a high contrast, black and white problem. As we navigate the muddy waters of this complex social issue, let us hope that civil public discourse will be the rule of the day. Without it, we lack the clarity needed to help find the answers we seek.