Our Blog

DWM is committed to learning for its team, clients and friends. In this changing world, it’s extremely important to stay current in all areas impacting your financial future.

We encourage all of team members to “drill down” on current topics important to you and contribute to our weekly blogs.  Questions from our clients and their families are often featured in our blogs.  

Financial literacy for clients and their families is very important to us.  We generally hold an annual wealth management seminar for all of our clients.  We encourage regular, at least semi-annual, meetings in person with our clients to review family updates, progress on financial goals, asset allocation and performance of investments.  We’re happy to assist younger members of the family as part of our total wealth management program.

Here’s our latest blog:

 

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“An Ounce of Prevention is Worth a Pound of Cure”- B. Franklin

Written by Les Detterbeck.

download.jpgMillions of Americans are being impacted by two Category 5 disasters- Hurricane Irma and the Equifax data breach!!  Certainly, we’re all watching Irma spread through FL and beyond, and our hearts and prayers are with all those in Irma’s path.  But don’t discount the Equifax high-tech heist as something small.  Last Thursday, Equifax announced that personal and confidential information for 143 million Americans were breached.  This included names, social security numbers, birth dates, addresses and, in some instances, driver’s license numbers and other information.

This epic breach is a really big deal and a great concern.  Equifax, Experian and Transunion warehouse the most intimate details of Americans’ financial lives, from credit cards to medical bills.  Once security is breached, the hackers typically sell the stolen information to sophisticated identity thieves.  Last year, 15.4 million Americans were victims of identity theft, which totaled $16 billion.  In most cases, the money was recovered, but only after a tremendous amount of time, money and stress.  One man said the thieves so ruined his credit that he was unable to secure a needed mortgage refinance.  One lady’s social security number was used by others to file her income taxes and get a refund before she even filed her own return.  It took her over a year to get it straight with the IRS.  In the first half of 2017, there were a record 791 data breaches in the U.S., up 29% from last year.  Victims have recounted what a terrifying experience it is to have your identity stolen.  “You’re worried about the tremendous implications this could have and the possibility of it going on for years.”

Here’s the really bad part of the Equifax breach. We now know that the breach occurred six weeks ago, July 29th.  The hackers probably sold the information shortly thereafter.  We’ve likely all been compromised for six weeks and we didn’t know it.  Equifax is now under investigation for the breach and their lack of transparency by Congress, New York’s attorney general and the Consumer Financial Protection Bureau. If you call Equifax, it’s another frustration.  Their “hot line” is staffed with people who really can’t tell you if your information was taken or not.  You should assume that it was.  Ouch!!

It’s time for us to play defense.  Step one- put a credit freeze on all three reporting services immediately.  It’s your only hope.  A credit freeze prevents existing creditors and new creditors from using your information.  It prevents new accounts being opened in your name.  When you contact the sites listed below you will receive a PIN that allows you to temporarily lift or “thaw” your freeze.  Put that number in a very safe place (see below).  Yes, you may be delayed a day or two to get your information released when you need to apply for new credit, but that’s a small problem compared to potential identity theft.   

Here are the sites:

Equifax - https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp

Experian - https://www.experian.com/freeze/center.html

TransUnion - https://freeze.transunion.com/sf/securityFreeze/landingPage.jsp

I froze Elise's and my accounts yesterday in about 20 minutes.

 

Step two-you need to create strong passwords and store them in a secure spot. The bad guys may have two pieces of information, your social security number (which you don’t want to change) and your address.  Don’t help them with the next step by having weak passwords.

Updating your passwords will take some time.  Focus first on the key ones; your credit cards, financial institutions, and key retailers like Amazon and Apple; anywhere there is money or where thieves could get merchandise or services.  If a site offers additional security with a two-factor authentication, enable it.   Once you’ve got the key sites, start knocking out the others.

You should use a password manager like 1Password or LastPass.  It’s always important to update your password every so often. These sites create a unique random number password for every website you visit and stores them in a database that you create.  This makes it much more difficult for the thieves to decode your password. Further, these are great places for all of your passwords and your PINs.  Of course, you need to keep your master password in a special spot and share that with your spouse and/or another trusted person.

No question, this is a real pain!!  But, the alternative is possible identity theft which could be a 100 times worse.  We live in an age of Big Data.  We have all allowed the emergence of huge detailed databases full of information about us. Technology allows financial companies, tech companies, medical organizations, advertisers, insurers, retailers, the government, and even hackers to maintain and access this information.  Unfortunately, companies like Equifax are only lightly regulated and there’s not much punishment for breaches.  Hence, breaches will keep happening.  Even with new technology, like Apple’s new iPhone8 which includes face recognition to unlock it, the consumer credit bureaus are not going away anytime soon.  

Please do yourself a favor and freeze your credit, change your passwords and store everything securely this week.  The process will certainly feel like more than an “ounce” of prevention, but if it saves you from identity theft, it will be far more than a “pound” of cure.

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My, How Jobs Have Changed

Written by Les Detterbeck.

Hope you had a super Labor Day weekend!  Wonderful to be with family and friends.  It’s amazing how jobs have changed over the years.  The NYT over the weekend illustrated how life is so much different for workers by comparing two janitors working for two top companies then and now.

Gail Evans was a janitor for Eastman Kodak in Rochester, NY almost forty years ago.  She was a full-time employee, received 4 weeks paid vacation, reimbursement for some tuition costs to go to college and bonuses. And, when the Kodak facility was temporarily closed, the company kept paying her and had her perform other work.  Ms. Evans took computer classes at night, got her college degree in 1987 and ultimately became chief technology officer for Kodak.

Marta Ramos cleans floors for Apple in Cupertino, CA.  She isn’t on Apple’s payroll. She works for one of Apple’s contractors.  Ms. Ramos hasn’t had a vacation in years-she can’t afford the lost wages.  Going back to school is out of the question. There are no bonuses and no opportunities for some other role at Apple.  Ms. Ramos earns $16.60 per hour, about the same as Ms. Evans did in inflation-adjusted terms.  But her only hope for advancement is to become a “team leader”, which pays an extra $.50 per hour.

Over the last 35 years, American corporations have increasingly focused on improving their bottom line by focusing on their core competency and outsourcing the rest. Part of the success of the Silicon Valley giants of today has come from their ability to attain huge revenues and profits with relatively few workers.  It’s led to huge profits for shareholders, helped grow the U.S. economy, but also has fueled inequality. 

In 1993, three of the then tech giants - Kodak, IBM and AT&T - employed 675,000 employees to produce $243 billion of revenue in inflation-adjusted dollars.  Today, Apple, Alphabet and Google produce $333 billion in annual revenue with less than 1/3 of that number, employing only 205,000 employees.

Apple is quick to point out that its products generate many jobs beyond those who receive an Apple paycheck.  It estimates that 1.5 million people work in the “app economy.” However, research shows that the shift to a contracting economy has put downward pressure on compensation.  Many corporations hire full-time employees only for the most important jobs and outsource the rest; obtaining contractors at the time and place needed for the lowest price possible. It’s not just janitors and security guards that are outsourced.  There are also people who test operating systems, review social media posts and screen job applicants, for example.  It’s understandable: companies face really tough competition and if they don’t keep their work force lean, they risk losing out to a competitor that does.

In addition, outsourcing often results in a culture of transience.  Contracted workers are often changing jobs every 12 to 18 months, which obviously can be stressful to them and their family.  Contractors generally don’t receive stock options nor robust health insurance.  Also, retirement plans, even for full-time employees, have changed considerably in the last 35 years. In 1979, 28% of workers were covered by a company paid pension program and 7% had a 401(k). In 2014, only 2% of workers were covered by a pension plan and 34% had a 401(k) plan, which of course, means that most of the funding now is coming from the worker.

Here’s what’s really amazing.  With all these changes, job satisfaction has gone up.  For the first time since 2005, more than half of U.S. workers say they’re satisfied with their jobs.  This optimism has led to consumer spending increasing every month this year and a strong economy.  Apparently, after a decade of job cuts, minimal raises and reduced benefits, workers have lowered their expectations.  Rick Wartzman, author of “The End of Loyalty: The Rise and Fall of Good Jobs in America,” feels that young workers today “don’t even know what they are missing.”

On Monday, we celebrated Labor Day, honoring working people.  That’s particularly important these days as many workers don’t have it nearly good as it was 30-40 years ago.  Even so, American values, spirit and resiliency continue to be very evident in these ever-changing times. Perhaps we need another holiday, “Resilience Day.”  Time to get the grill heated up again!

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How Much Do you Know About Labor Day?

Written by Grant Maddox.

FlagWe are all aware that Labor Day signifies the end of a summer filled with backyard BBQs, family and sunshine. It is the one long weekend of the year when families come together to say goodbye to summer, unwind and prepare for the changing seasons ahead. However, many of us don’t take the time to consider the true origin of Labor Day.

The concept of Labor Day dates back all the way to the Industrial Revolution in the U.S. during the late 1800s. The typical work day was 12 hours long, and the typical work week was seven days. Working conditions were far from ideal, and even children as young as four or five years old were commonly seen working in mills and factories to help their struggling families scrape by.

Many workers began organizing protests and strikes across the U.S. Unfortunately, many of these demonstrations turned violent and, in some cases, deadly. In 1894, Eugene V. Debs, with the support of the American Railroad Union, organized a strike and boycott of the Pullman Palace Car Company in Chicago. This strike effectively crippled all railroad traffic in the U.S., leading then President Grover Cleveland to deploy 12,000 troops to the area to dissolve the strike.

The use of military force on behalf of the U.S. government essentially poured gasoline on the already burning fire of discontent with current labor wages and conditions. Several people were killed during the Pullman strike altercation, and although the strike did come to an end, American workers were still unhappy and began to condemn President Cleveland’s aggressive response.

Meanwhile, union workers in New York City had been organizing and going on strike one day of the year in support of the idea of a national Labor Day that had been circulating around the U.S.

Later in 1894, which happened to be an important election year, President Cleveland decided to implement a nationally recognized annual celebration of American workers to appease his critics – and thus Labor Day as we know it was born.

Fast forward to 2017, where we at Detterbeck Wealth Management are fortunate enough to do what we are passionate about everday in a constructive and collaborative environment. We choose to use this year’s Labor Day as an opportunity to reflect on and appreciate how far the U.S. economy and workforce has come since those historic strikes in 1892.

From everyone here at DWM, have a great Labor Day Weekend and enjoy some time with the family!

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