Keep Your Distance – Socially and From Cyber Fraud

The bear economy is creating a bull market for cyber-crooks. An unfortunate side effect of economic downturns is an increase in cyber fraud. Worldwide cyber fraud has hit an all-time high. For the first time on record, data theft has now surpassed the stealing of physical assets as compared to the past two decades. Given our current global pandemic, cyber fraud has only increased as fraudsters try to take advantage of high demand for information regarding COVID-19.

Due to recent restrictions placed on communities and social distancing, more and more people are spending their time online. Cybercriminals are taking advantage of the increase in online traffic. According to the cybersecurity firm, MonsterCloud, there has been an 800 percent increase in cyber fraud claims since the beginning of the year.

Here are some of the most common cyber frauds as reported by Charles Schwab:

  • Outbreak maps. Malicious actors have begun spreading malware through online maps claiming to track the impact of coronavirus. As users visit the sites or click the links, they are exposing usernames, passwords, credit card numbers, browsing history, or other nonpublic personal information that is then exploited by the attackers or sold to other criminals on the dark web.
  • Email campaigns. Criminals are also leveraging common forms of fraud like spam email campaigns, using infected attachments or downloads to gather information.
  • Charitable giving. Scammers may pose as organizations in need. It is important to verify where your donations are going to before donating. One important resource here:

Fortunately, there are several steps that individuals, businesses, and families can take to prevent a cyber attack. As many continue to work remotely, and as we transfer to a more digital society, please consider the following:

  • Make sure everyone is using a VPN, or a virtual private network, to do office work from home.
  • Require devices to have two-factor authentication, which verifies a person’s identity before logging in.
  • Only use WiFi networks that are password protected.
  • Companies should maintain a reliable back up for their data on a different network.
  • Organizations should make sure their antivirus software is up to date.
  • Everyone should think before they click on links and emails.

“Think before you click” is perhaps the most important measure here. At DWM, we take cybersecurity very seriously. As the majority of us work from home over the next few weeks, we continue to rely on two-factor authentications, virtual private networks through our cloud platform, antivirus software, and secure home WiFi. We also continue to collaborate with our third-party technology providers to stay proactive and increase our security on a daily basis.

At 80, “Successful Ager” Jack Nicklaus Remains As Relevant As Ever

Golfing great Jack Nicklaus turned 80 last week. His drives aren’t as long anymore- Gary Player can now outdrive him.  Jack stepped away in 2018 from day-to-day operations of his companies which build golf courses all over the world.  You might think Mr. Nicklaus is slowing down.  But to hear Jack tell it, he got rid of the things he was tired of doing and is focusing on all the activities he likes; including public speaking engagements, occasional golf exhibitions, course design and fundraising with his wife.

Nicklaus started designing courses in 1969.  He’s completed over 300. He’s become a grandfather to the “kids” on the PGA tour such as Rickie Fowler and Justin Thomas. Rory McIlroy says that Nicklaus “has the best advice on how to play golf- not how to swing but how to play the game.”  Jack’s wife of 60 years, Barbara, is chair of the Nicklaus Children’s Health Care Foundation and together they have raised over $50 million for pediatric care in Ohio and Florida.  They just pledged to raise another $100 million over the next five years.  Yes, Jack Nicklaus remains relevant as ever and, by any definition, is successfully aging.

Much has changed since Social Security was started in 1935.  Back then, the average life expectancy was 61 years old.  In 1947, the poet Dylan Thomas encouraged the elderly: “Do not go gentle into that good night, old age should burn and rage at close of day.” It’s starting to happen. With greater longevity and medical advances, it’s no surprise that the term “successful aging” has grown in popularity over the past few decades.  Back in 1987, John Wallis Rowe and Robert Kahn published a book entitled “Successful Aging.”  They felt there were three key factors: 1) being free of disability or disease, 2) having high cognitive and physical abilities, and 3) interacting with others in meaningful ways.

Now comes a new NYT bestseller; Dr. Daniel Levitin’s “Successful Aging; a neuroscientist explores the power and potential of our lives.”  Today more people who are in the last quarter of their lives are engaged with life as much as they’ve ever been, immersed in social interactions, spiritual pursuits, hiking and nature, charitable work and even starting new professional projects.  Dr. Levitin remarks:  “They may look old, but they feel like the same people they were 50 years ago and this amazes them.”

Successful aging involves focusing on what is important to you, and being able to do what you want to do in old age. While successful aging may be one way to describe how well we age, the concept of meaningful aging might be another important way to consider how to age well.   Certainly, some of our faculties may have slowed, yet “seniors” are finding strength in compensatory mechanisms that have kicked in – positive changes in mood and outlook, punctuated by the exceptional benefits of experience.  Baby boomers and their elders may process information more slowly than younger generations but they can intuitively synthesize a lifetime of information and make smarter decisions based on decades of learning, often from their mistakes.

Combining recent developments in neuroscience and psychology, “Successful Aging” presents a novel approach to how we think about our final decades. The book demonstrates that aging is not simply a period of decay but a unique time, like infancy or adolescence, which brings forth its own demands, surprises and happiness.

Until about thirty years ago, older people in the workforce were forced/encouraged to retire; a tremendous economic and creative loss.  However, since the 1990s, the tide has been turning for seniors. Employers and organizations are awakening to the eastern idea that the elderly may not only be of some value but may provide superior enhancements to a group.   New medical advances and positive lifestyle changes can help us to find enhanced fulfillment that previous generations may not have been able to do.

Research now shows, for example, that fending off Alzheimer’s disease involves five key components:  1) a diet rich in vegetables, 2) moderate physical exercise, 3) brain training exercise, 4) good sleep hygiene, and 5) an appropriate regimen of supplements.  In addition, research shows that social stress can lead to a compromised immune system. We don’t need to be victims; we just need to take advantage of modern medicine and make some lifestyle changes.

When older people look back on their lives and are asked to pinpoint the age at which they were the happiest, what do you think they say? The age that comes up most often, according to Dr. Levitin, as the happiest time in one’s life is 82. And, that number is rising.

At DWM, we work with clients from 0 to 96.  As total wealth managers, we understand life cycle planning, financial and investment strategies and proactively provide value-added services.  Of course, we focus on making sure our clients have enough money for their entire lives.  In addition, and as important, we pay particular attention to helping them experience the best life possible with the money they have.  Their fulfillment is our fulfillment. Their happiness is our happiness.

Jack Nicklaus’s longtime PR man Scott Tolley says Jack still only operates at two speeds, “go and giddy-up.”  Gary Player calls retirement a death warrant.  It doesn’t need to be.  Successful aging is getting easier and more fun and fulfilling.  C’mon baby boomers- let’s giddy-up.

Yes, Money can Mess up Marriages!

marriage and moneyThis morning as I was returning from my early morning gym routine, I listened to NPR’s Chris Arnold’s report on “How to Keep Money From Messing Up Your Marriage.”  He provided another story of a seemingly successful couple who were on the verge of divorce over money.  The husband was making more than his working wife and since they were splitting expenses down the middle, she always felt broke, frustrated and had developed overwhelming resentment. Quelle Surprise! It’s true- money can mess up marriages of all ages, income and assets.

Certainly, money isn’t the only source of marital conflict.  There can be disagreements about children, chores, communication and work.  But, money is certainly the most difficult to resolve. It’s often very difficult for couples to talk about money issues and resolve them.  Money can represent more than dollars and cents.  It can be used to express feelings and relationships.  It can be given to express love, power and respect. And, it can be withheld to humiliate, punish or control.

First, let’s look at five biggest blunders couples make with money based on a CNBC article a year ago:

  1. Believing that “love conquers all.” It takes hard work, communication and commitment to successfully manage money as a couple. Here’s a quiz you and your spouse can take and discuss:

Couples who enjoy a good relationship with money often have shared values, an appreciation of their partner’s perspective and an ability to find common ground.

  1. Practicing money silence. Often this silence is passed down from generation to generation, leading to miscommunication, misunderstandings and hurt feelings.  It is often the reason marriages end up in divorce and children become financially unprepared adults.
  2. Avoiding financial conflict. One recent survey showed that 80% of spouses admitted to hiding some financial purchases from partners-presumably to avoid a fight over the item. Not a good idea.  When you don’t openly discuss money you miss an opportunity to understand your partner’s viewpoint and resolve a problem in its early stages.
  3. Waiting to be financially rescued. Don’t blindly put your financial future in someone else’s hands.  If they die, become disabled or leave, you may have real problems.  Take adult responsibility for your money even if it is not your strong suit.
  4. Meeting with your financial advisor alone. While it may be more time efficient to delegate certain tasks, this is an important one to perform jointly.  It’s a great opportunity to talk about money together in the midst of your informed, caring, objective wealth manager, to understand and resolve financial differences and to make decisions about your future as a team.  In addition, if something happens to one of you, the other is not in the dark.

The commitment to work together for financial harmony should start early.  Couples considering marriage and newlyweds need to do the following:

  1. Give Yourself a Financial Checkup. Only about half of couples today know their partner’s credit score before marriage.  You need to know each other’s spending habits and preferences.  Understand your partner’s debt situation, if any, and work together on getting it paid down.
  2. Start to Develop Sound Savings Habits. Consider putting at least 10% of your combined income into savings each month before you are married.  Calculate what your share of the wedding costs will be and how you will fund and attain that goal together.
  3. Create a Budget. Put everything “on the table” including yours bills, obligations, income etc.  Group your expenses into needs, wants and wishes.  Make sure to budget for the wedding and honeymoon. And, agree on an amount of “fun money” each of you can spend each week or month without talking to the other first.
  4. Split up the Task of Finances. Once married, both should be part of the process.  One might pay the bills (pretty easy these days online), one might recap the finances monthly, one might be responsible for income taxes, one for insurance, etc.  You are accountable to each other.
  5. Decide how best to manage your money. Combine your funds into a joint account, use separate accounts, or keep separate accounts that link into a new joint account.
  6. Once married, update beneficiaries, withholdings and other paperwork. This applies to 401(k) s, life insurance, W-4s at work, etc.
  7. Have a Financial Date at least once a month. Talking about money should be a healthy, ongoing conversation.  Talk about your combined progress toward meeting your financial goals, future financial decisions and corrections, if needed, to your plan.

Unfortunately, love does not conquer all.  Our experience at DWM working with couples of all ages, incomes and assets over decades has shown us that hard work, commitment, regular communication, understanding of a partner’s perspective and an ability to find common ground is what is required to keep money from messing up your marriage.   Money can’t buy you happiness.  Yet, working and talking together about money goes a long way.



Women and Money

woman-and-calculatorWe hear so much about a ‘gender gap’ in incomes between women and men. Patricia Arquette received a standing ovation during her Academy Award acceptance speech for her rallying cry for wage equality. But when it comes to women and money, it seems what we really have here is a ‘confidence gap.’ We are all perhaps influenced by the many stereotypes about a female’s approach to money. Women are sometimes characterized conversely as bargain-shoppers or shopping addicts. Maybe this comes from the idea that men are the hunters and women the gatherers, a “Men are from Mars and Women Are from Venus” explanation for different behaviors by the sexes in regards to personal finance. In a Real Simple article by Geraldine Sealey, one quoted survey found that “90% of women identify themselves as the chief bill-payer and shopper for the household”, yet 60% think their investing and financial planning skills are below average. This might be where we need to boost equality!

Many women are identified as anxious and conservative about investing and more concerned with frugality and saving. In a survey, 83% of men are interested in investing while 79 % of women are more interested in saving. Consumer spending is arguably driven by the chief household purchaser. So, in that context, a woman is highly influential in budgeting for the real costs of the goods and services needed for her family – she may be the gatherer, researching purchase decisions carefully and bargain-hunting. Women are the caretakers, generally, and achieving their financial goals may be tailored to consider the needs of others – like children or parents. The other side of that coin is the aggressive and confident hunter. Men tend to be more interested in achieving goals through investing or entrepreneurship, and so focus on macro goals of higher salaries, retirement planning and investment portfolio growth. Again, these are perhaps outdated stereotypes and certainly many women are savvy investors and confident entrepreneurs and many men are care-takers and thorough purchasers. However, as financial planners, we do see some of these issues played out with our clients. Men tend to be more confident that they understand the issues of different investment vehicles, stocks and bonds and retirement planning. Women are sometimes intimidated by Wall Street jargon and tend to be overly risk-averse and cautious with investing.

Women face some unique challenges as well. 80% of American women will find themselves as the sole keepers of their personal financial situation at some point in their lives. However, most women feel that they are financially insecure, in spite of the fact that they have more education, control more wealth, and are more involved in making financial decisions than ever before. Women’s careers are often interrupted by family needs, both for childcare and eldercare. This can limit their potential for income growth and prevent them from saving adequately for retirement. In fact, many women who leave the family finances up to their husbands may become widows who are in need of financial guidance and someone who they can trust to advise them. For these reasons, it is important for women to take charge of their own financial future.

So how do we close this gap and give women the same confidence in their personal financial situations as men? One very important way is education. At DWM, one of our most critical tasks when working with clients is to help them understand all aspects of their financial plan. Our weekly educational blog last week focused on financial literacy for our kids. Education on successful financial management is a good goal for all of us, adults and kids! There are many great resources to help with this such as seminars, books, and many internet sites. One example is the Women’s Institute for a Secure Retirement (WISER) that specifically addresses women’s issues. We also recommend the National Association of Personal Financial Advisors (NAPFA), to which we belong. NAPFA offers many informative webinars on their website on all financial basics, like Money 101, Investments: The Basics and Women and Money. Let’s close the gap!

Can Money Buy Happiness?

happy moneyThe holidays bring an opportunity to examine many inherent aspects of our lives and assess the quality of our existence. It can be a profound and rather daunting ritual as we prepare for New Year’s resolutions and year-end evaluations. One question that comes to mind is how connected is our happiness to our financial circumstances? Can money buy happiness?

It turns out that how you spend your money is more important than how much you have. “Happy Money: The Science of Happier Spending”, by Elizabeth Dunn and Michael Norton outlines some core principles for spending that shows how to “buy” more happiness in your life. These authors and professors suggest that there are spending strategies and habits that can contribute to your overall happiness. Here is a breakdown:

• Buy experiences

Our human instinct is to acquire possessions and material goods for our comfort and convenience. People tend to believe that the purchase of a tangible item that lasts will bring more value than an experience that is fleeting. However, studies show that experiences might be worth more than you think. Experiences tend to bring a greater sense of connection to others and provide life-long memories that increase in value over time. You will always remember a wonderful birthday dinner at a special restaurant, a fishing trip to Costa Rica, or a family trip to Disney World, and talk about it for years to come.

• Make “luxuries” a treat

The truth is that everything is more enjoyable when consumed on a limited basis and that you CAN have too much of a good thing. The pitfalls of overindulgence are a good thing to remember during the holidays! This concept is also behind many corporate marketing strategies of limiting certain items to occasional offerings, making them more desirable.

• Buy some time

Make time for the things and people you love the most. Slowing down and not rushing allows you the ability to savor small pleasures. Taking that new job with longer hours or living in a bigger house that might require a longer commute may cause stress that makes you unhappy. A university of Zurich study estimated that you would need to earn 40% more to counteract a one-hour daily commute increase! Researchers at Princeton have determined that there is a certain income level of comfortable satisfaction, defined as around $75,000 in the U.S. They concluded that the “beneficial effects of money tapered off entirely after the $75,000 mark.”

• Break the Consumerism pattern

The authors suggest that saving up for something that you really want will increase the value you place on it and your happiness with it. Some studies also show that debt has a detrimental effect on happiness and that married couples in more debt had more marital conflict. As author Professor Elizabeth Dunn notes, “Savings are good for happiness” and incurring short-term debt has a negative impact. Have the money saved before you do something, not after.

• Don’t take things for granted

How many times have you watched a child have tremendous anticipation for and then excitement upon receiving a coveted gift? And then watched as the novelty and thrill of the new object quickly wears off? We tend to adapt to our purchases, so taking time to be grateful for what we have is shown to boost happiness. Studies show that employees tend to do a better job when they feel appreciated by their bosses, too.

• Spend on Others

Many studies have shown that people who spend money on others, or who practice “pro-social” spending behavior are generally happier. One study even suggested that people would be less resentful about paying taxes if they had more choice about how it was spent and felt more like it was a charitable contribution. A 2014 U.S Trust Study showed that 98.4% of high net-worth households make charitable donations and that 75% of these individuals volunteer their time. But what counts is not the dollar amount, but the perceived impact of the donation that increases your overall happiness. Studies show that people are happier when donating to charity, in time or in money, and in poor and rich countries alike.

As this year closes, take some time to give to others, spend time with those you love, show gratitude and don’t overspend. That is a financial plan that will make you happy!