Giving Kids 'the Talk' About Money

The recession is a perfect time to give children hands-on lessons about how to manage their finances.

David Strauss knew he needed to do a better job teaching his children about money, but the layoff notice he received in January gave it a sense of urgency.

"It made the discussions a lot more real," said Strauss, 43, a Boston-based radio station manager.

Knowing that the downsizing was coming, Strauss had already started talking to 17-year-old Daniel and 12-year-old Alexandra about wants versus needs and discussing how the family expected to cut back.

"The kids are interested in talking about money now," he said. "Daniel is getting his first job. Alexandra is about to have a bat mitzvah. It's pertinent to what's going on in their lives."

The Strauss family is indicative of a trend that's sweeping the country. Whether by want or necessity, parents are taking greater pains to teach their children about such topics as budgeting and investing.

Nearly half of parents said they were using the recession as a catalyst to talk about money to their children, according to a recent survey by T. Rowe Price Group Inc.

"When things are going along fine, you just don't have to think about this," said Karyn Hodgens, co-founder of Kidnexions, a Rocklin, Calif., company that offers software to teach children about money. "But because parents' finances are in such a state, they're coming to the conclusion that now would be a good time to introduce these concepts to their kids."

Experts agree that the recession is an ideal time -- a perfect teachable moment -- to help children learn how to handle money. But parents still say they're flummoxed about what to teach and how to teach it.

"We scare parents by saying that they should teach kids about money," said Laura Levine, executive director of the JumpStart Coalition for Personal Financial Literacy in Washington. "They think they're not qualified. But kids learn most of their money lessons from their parents. You just need to talk about it."

It's not hard, experts agree, if you take it step by step.

The best way to introduce the concept of money management is to give children some money to manage, said Janet Bodnar, editor of Kiplinger's Personal Finance magazine and author of "Raising Money Smart Kids."

Bodnar suggests setting a weekly allowance that equates to half your child's age -- $2 for a 4-year-old and $5 when a child hits 10. Other experts say there's no need to adhere to a formula on the amount. You can simply shift some of the money you're already spending on them for discretionary items -- such as toys and snacks -- and allow them to decide how to spend it.

The important thing is for the children to see that managing money is all about making choices, said Jill Suskind, founder of WealthQuest for Teens. If you buy one thing, you won't have the money to buy another.

"It's like teaching kids about healthy eating. You don't sit them down to look at the food pyramid -- you have them experience it," said Hodgens of Kidnexions. "You make money experiences a part of everyday living."

But children shouldn't spend all the money they earn -- they should also save some and give some to charity.

Michele Brockhum, a certified public accountant in Tampa, gives her daughter Alex $1 a day in quarters.

One quarter is for everyday spending; one is for longer-term purchases -- T-shirts, DVDs and other sundry items she can't afford immediately; one goes to charity; and one goes into long-term savings.

This idea has so many proponents that there are dozens of specialized piggy banks to help promote the concept. The majority offer three-part banks, labeled "spend, save, share." Some, such as Brockhum's, have another category for long-term savings and investing. What Brockhum particularly likes about it is that 12-year-old Alex quickly mastered a lesson that so many adults find difficult.

"She realized really quickly that if she didn't fritter away her everyday spending money buying root beer floats and snacks, she could reach her longer-term goals much more quickly," Brockhum said.

She was going for a simpler goal when she started giving Alex an allowance when she was 4 or 5 years old.

"I originally started this because it seemed like every time I went to the store, it was like gimme, gimme, gimme," Brockhum said. "The allowance ended the whining at the store, and it made her appreciate whether she wanted whatever it was that she was asking for that bad after all."

Alex wanted everything when it was Mom's money, Brockhum said, yet asked for considerably less when it meant spending her own cash.

If a desired toy is too expensive, parents need to hold back on their urge to step in and help out. Children need to learn that when the money is gone, it's gone.

Parents also need to decide what kind of expenditures are appropriate -- and stick to their guns.

Tara Payne started paying her children for chores last year and has had them divvy their money equally to spend, save and share. But because she's new to the money lessons, she hasn't set a lot of limits on what her girls can buy.

When 7-year-old Marissa said she wanted pierced ears, Payne thought she was too young.

"In a moment of weakness, I told her that if she saved the money, she could get them," she said. "I figured it would take forever for her to save the $30, so I didn't need to really worry."

What she didn't count on was that the two younger girls would turn their big sister into their favorite charity.

"They gave her all their 'share' money," Payne said. "Prior to that, they thought their share money was what they put in the 'red bucket' at the holidays."

Payne said she was wiser when Marissa told her that she wanted to buy "shopping Barbie," who came with a shopping bag and a constantly replenished credit card.

"I just kept on thinking about the horrible message we were sending with that doll," she said. "We talked about it and decided on Astronaut Barbie instead."

When children are old enough, it's time to teach them about credit.

Tweens can learn about credit if you charge them interest when they overspend their allowance, deducting the amount from their next payment. But as youths get closer to college, many parents believe it's smart to give them real-life experience with a credit card while they're around to help monitor it.

Carrie Schwab-Pomerantz, president of the Charles Schwab Foundation, for example, said she wanted her boys to get credit cards as soon as they could drive. That ensured they'd have access to cash if they had an emergency on the road, but it also enabled her to sit down with them when they received each monthly statement for a little lesson on the cost of spending more than you have.

"You want to show them on a monthly basis what they spent and what happens if you don't pay the balance in full and on time," she said. "It's similar to teaching them to drive a car. You want them to practice under your watch."

For Pete Kellison, teaching his 11-year-old son, Chase, about money is something of a balancing act.

Kellison, a Sacramento lobbyist, said virtually everyone he knew had been affected by the recession, and several parents of Chase's friends been so severely hurt that they had moved and pulled their children out of Little League and country clubs, where they used to meet.

"It's caused him some concern," Kellison said. "And it's made us all a little more sober about what we choose to do."

By the same token, Chase is about the same age that Kellison's grandfather was when the Great Depression struck, and Kellison laments the fact that his grandfather became so frugal that he never enjoyed his wealth.

Kellison and his wife, Heidy, want to emphasize that money is a tool that provides both enjoyment and security when used wisely.

"My grandfather grew up poor and was never able to enjoy his money; I grew up affluent and lacked awareness of the cost and the choices that are made," he said. "I want Chase to have respect for money but not love it too much or fear it too much."

Like many parents, they're feeling their way through the lessons by bringing Chase shopping with them and making him aware of the decision-making process when they decide to splurge.

If the family goes to a ballgame, for example, the Kellisons talk to Chase about how much the night out will cost.

"That's money we'll spend having a good time, but it may mean that there are other things we won't do," Kellison said.

Contact Alero Equities at 1-866-354-5125 to schedule an appointment to discuss you and your child's investment plan.

Index Annuity Sales Surged in 2Q on Demand for Stable Retirement Income

Despite carriers' pulling back on sales, index annuity sales rose during the second quarter, hitting $8.3 billion, according to sata from Advantage Group Associates Inc. That's an increase of 21.2% from the year-ago period and a gain of 18.3% from the first quarter's results of $7 billion, according to the Pleasant Hill, Iowa-based research firm.

The boost in sales occurred despite a period in which carriers tried to pull back on sales by reducing commissions, lowering the number of agent appointments and cutting off relationships with distributors -- all in the name of conserving capital.

"The reason sales increased so dramatically is mostly because of folks who are looking for retirement income losing their values in variable annuities and other securities products, as well as the decline of the equities markets," Sheryl Moore, president of Advantage Group Associates, said in an interview. "They want to maintain the value they still have. They want products with safeties and guarantees," Ms. Moore added. "People don't want to lose any money, so they go into fixed annuities to preserve principal."

During the quarter, Aviva USA Corp. of Des Moines, Iowa, held on to its position as the No. 1 seller of index annuities, garnering 20% of the market share.

Meanwhile, Minneapolis-based Allianz Life Insurance Co. of America's MasterDex X is the top-selling index annuity, according to Advantage Group Associates.

On the index life sales side, second-quarter sales were up to $132.4 million, a 26% gain from the past quarter and a 3% rise from the comparable period in 2008.

In this category, Aviva also had a firm foothold in the No. 1 issuer spot, with 21% of the market share. Meanwhile, Pacific Life Insurance Co. of Newport Beach, Calif., was the manufacturer of the No. 1 selling index life product, the Indexed Accumulator III. About 47% of the index life sales involved contracts that spanned nine to 10 years.

Contact Alero Equities at 1-866-354-5125 to schedule an appointment to discuss your child's investment plan and your investment plan.

The 2nd Half of the Recession

The 2nd Half of the Recession

Is it a "V" recovery or is it the dreaded "W"?

While the recovery seems underway many believe that this is just the beginning of a really bad time for the economy. With new home sales increasing 7.7% last month and the stock market up the lure to get back into the market for the average American investor is clear. But is it wise?

We believe that the 2nd half of the recession looms and that the wise investor will put themselves in position to win either way the economy goes. Retirement planning today is complicated but one thing is clear and undeniable which is that not losing money is critical.

The fundamental problems with the economy are not being solved by Washington. Therefore it is paramount that people protect themselves from the next drop in the market.

Contact Alero Equities at 1-866-354-5125 to schedule an appointment to discuss you and your child's investment plan.

How to Raise Your Kids To Be Entrepreneurial

Parents are now realizing more than ever the importance of providing their kids with information about money and business at an early age. In today's economy, we need to raise our kids to be self-reliant. Getting a good job is no longer a guarantee of financial security that it was in the past. Employees, even highly skilled ones, face an uncertain future that is ultimately in the hands of their employer, their geographical area and their industry.

The key concepts that parents should convey ideas that reinforce independence, self-motivation and entrepreneurship. Imagine your child having the freedom to graduate from high school with a secure, passive income source already in place. This lifestyle is possible if you empower them with the necessary tools starting from a very young age.

Here are a few ideas to teach entrepreneurial thinking to your children:

1. Clearly explain basic money facts. The basic ideas about money are simple enough that young children can understand them. You should cover:

* What is money and why do we use it
* How money is earned
* How money should be spent
* The importance of saving money
* Renting versus buying a home
* Assets and Liabilities
* Good and bad debt
* Relevant mathematical concepts like percentages

2. Build good money habits. We all teach our kids habits. We teach them to brush their teeth, to clean up after themselves. We also teach them money habits. Good money habits include providing value in exchange for money, living within your income, saving, investing and managing risk.

3. Require your kids to save a portion of their own pocket money or allowance. Kids learn to save by doing it. If they develop the habit of saving their money and watching it grow while they are young, these skills will extend into their adult lives.

4. Encourage your child pursue activities that they enjoy and have a passion for. Although every child will inevitably have to perform work they do not always like, they should also have work that they are passionate about and consider fun. This will help them develop a strong work ethic and a commitment to their future careers.

5. Talk with your child about your work experiences on a regular basis. Explain to them what you do, how you earn money and the importance of developing a career. Share both the positive and negative aspects of work so that they have a realistic idea of what the professional world is like.

6. Encourage your child to start their own businesses as soon as possible. Lemonade stands, babysitting and lawn maintenance are all great entrepreneurial jobs that your child can start at a young age.

7. Embrace technology with your children. Teach them to use computers, software and the internet as soon as they can walk and talk. There are a wealth of opportunities that technology can offer and the sooner your child has an understanding of technology, the better they will be able to compete.

8. Build a can-do attitude. When you're child says "I Can't", get them to replace this phrase with "I need more practice". When your child is faced with a challenging task, do not complete it for them, even if they ultimately fail. Kids are very good at minimizing the effort the invest in projects, and if they realize that complaining will get somebody else to finish they work for them, they will take advantage of this.

Obama Announces a New Foundation for Growth

8 Ways to Boost Your Income

With less credit available and the economy taking a nose dive, more people are using their savings to supplement their diminishing incomes. In fact, 58% of Young adults are tapping into their reserves to keep their lifestyles afloat.

The most alarming aspect of this developing trend is that most Americans, young and old, do not have much savings in the first place. Making early withdrawals from long-term savings accounts, such as 401k and IRAs can also be very expensive and reduces the benefits of compounded returns.

If you are a young person looking to save money and build or hold on to whatever remaining savings you have, we have 8 ideas to cut costs and save your money.

1. Sell Your Junk: Using tools such as Ebay and Craigslist, it is easier than ever to sell old items that you no longer use. And with gold prices reaching record highs, it's a fantastic time to sell old jewelry.

You can also sell old tech junk, such as computers, printers and audio equipment. For example, Cellforcash.com pays up to $100 for used cell phones, depending on the model. And Hewlett-Packard offers a trade-in program that allows you to trade your old computer or another device for cash -- even if they are not HP products.

2. Get a Job: This may seem like a no-brainer, but in these times of record unemployment, simply finding a job might be the answer to many of your cash woes. Or for those who are already working, getting a second job can alleviate a great deal of cash stress.

Craigslist features hundreds of ads for part-time or short-term gigs, such as stuffing envelopes or helping out with seasonal work.Whether you are employed or in-between jobs, finding a second job is a great way to boost your income.

3. Sell Your Skills: If you have a unique, hard-to-find skill, such as music, art or technical know-how, you might considers teaching or freelancing to supplement your income. Music lessons, tutoring or teaching foreign languages are great ways to earn extra revenue in your spare time.

4. Re-Adjust Your Rent: If are currently living alone, finding a roommate or subletting a room in your house is a great way to bring in extra cash. You might consider renting out other spaces as well, like garage apartments or back guest houses.

Another option is to consider apartment management. Some apartment complexes will offer free rent in exchange for maintaining the facility or helping tenants out with day-to-day problems. You can usually find these opportunities in help wanted classified adds.

5. Claim unclaimed assets: There is a wealth of unclaimed assets out there, in the form of lost bank accounts, misplaced bonds and securities, unchased dividend checks and unclamined life-insurance benefits. Check the free site MissingMoney.com to see if any of the money belongs to you. You can also check Unclaimedassets.com to find assets held by the Federal government, including unchased social security checks, tex refunds and lost pensions.

6. Adjust you Tax Withholding: If you received a tax refund last year and your yearly gross income has not changed, you are paying too much in taxes. Use Kiplinger's Calculator to determine what your correct withholding amount should be. You will need to modify your W-4 with your employer to change your number of exemptions.

7. Get Paid for Stuff You Do Anyway: Most poeple have credit and debit cards tha tgive them rewards and chas bank when you make purchases. Start taking advantage of these benefits when buying everyday necessities. Just make sure you pay off your balances each month so you don't accrue interest charges.

Also, make sure that you're getting as much interest from your savings accounts as possible. Many high-yield online savings accounts are offering as much as 3% these days.

8. Hit Up Mom and Dad: As childish as this might sound, this is often the best way to save money. Moving back in with mom and dad, especially if they live in the same city, for a short period of time is a sure-fire way to increase your cash reserves.

There is also the option of directly asking to borrow money. If you choose this option, you should make it as professional and buinsess-like as possible, such as borrowing money to take a class or pay off debts. Your request should also immediately be followed by your explanation of how you intend to pay it back. You could even offer to pay interest and set it up as a publicly administered loan through CircleLending.com.

Alero Equities FREE Seminar on How Money Works

HOW MONEY WORKS: 1 Day FREE Seminar Educating Children and Parents How to Become Money Smart

Come join us on June 3rd 2009 for a free seminar on education Children and Parents on How to Become Money Smart.

- We will teach your children everything about how money works;

- We will show parents how to set up a bank account and a Roth IRA for their child;

- We will introduce you and your child to ABC Financial Literacy Project, where your child can learn everything about financial independence.

WHERE
Radisson Hotel
6161 Centinela Ave.
Culver City, CA 90230

WHEN
Wednesday, June 3rd, 2009
Starting at 7pm

I'M INTERESTED!
To request more information on this FREE Seminar or about other offers from ABC Financial Literacy Project, please contact us at (877) 4123-ABC. Or you can email us at info@abclearnmoney.org

WHO SHOULD ATTEND
All Parents and their children who want to learn about money and how to become a financially successfully individual.

www.ABCLearnMoney.org

Monday is Clean Your Computer Day

Today with all the viruses and Trojans that come into our systems, it is important to guard against what we can and also be diligent in hunting down invaders, clean up and optimize our computers.

This week you all need to install and run the programs below to get your system working better.

The first is:

www.ccleaner.com
Install and run this daily - it will help clean out all sorts of junk.

www.oibit.com
Fantastic program to boost performance and clean up the hard drive. Scans for spyware and other mailicious files. Load it and then run all the systems scans and fixes. Excellent program that will really speed up and protect your system.

www.freeavg.com
This program kills viruses and spyware and will stop websites that are infected with malware. The scan will take 2-3 hours so set the scan to work overnight.

www.avast.com
Protects your computer from rootkits - nasty viruses that hide on your computer.

How Smart Are You?

The Smart or Stoopid test is purely meant to be a fun quiz to see how your IQ rates alongside the average, based on the scores.

This is a VERY fast test, so be prepared.

You only have 8 seconds for each question.

Click on this link to begin the test -->

A Special Thanks From Barack Obama

Alero --

Thanks in no small part to your incredible work and dedication, we have taken another step towards creating jobs and rebuilding our struggling economy.

Last week, the budget I submitted to Congress passed both the House and the Senate and it embraces our most fundamental priorities: an energy plan that will end our dependence on foreign oil and spur a new clean energy economy; an education system that will give our children the tools to compete in the economy of the 21st century; and health care reform that finally confronts the back-breaking costs plaguing families, businesses and government alike.

Thousands of you signed pledges of support, knocked on doors, made phone calls, and talked to your friends and neighbors about this budget and the investments it makes in our long-term prosperity. You showed Washington that ordinary citizens are demanding change and are willing to work for it.

Our work on the budget isn't finished -- Congress still has to agree on a final version. But your efforts have sent a message that Washington can't ignore.

I'll be counting on you even more in the coming weeks and months. The budget Congress passes will be a critical blueprint for the changes we'll bring about. But that's when the real work begins -- the work that will bring health care to every American, transform our economy to run on clean energy, provide our children with the best education in the world, and bring about a new era of prosperity.

Thank you for everything you've done,

President Barack Obama

Start Early to Help Build Your Child's Financial Security Part 3

"I want my children to have a good start in life."

Don't we all? No, that doesn't mean spoiling them rotten, though we often wish we could. We want to give them a solid leg up so they can achieve their own financial security.

Fortunately, there is much you can do to help bring that about and to help assure that your children, whether still in a high chair or already in high school, can enjoy a lifetime of financial security.

1. Start young to help them understand the concept of money and how it works. When my daughter was four years old, she'd help me pick out toll money when traveling by car. When we'd go shopping, I'd casually explain why I bought one brand versus another. "By getting this one, we can now afford to go out to lunch with the money we saved."

2. Help them cultivate the savings habit by establishing a savings account at your bank or credit union. Set it up in their name and encourage them to make regular deposits. One way is to match their deposits. Let's say your ten year old son saves $5 a week and you match each deposit dollar for dollar, so a total of $10 goes into the account each week, or $520 a year. When he's ready to buy his first car in a few years, the down payment, if not the whole amount, will be waiting for him.

3. Teach them how to spend money. That also means letting them make mistakes. When I was a kid, I blew a whole dollar on penny candy, one hundred pieces. It sounded like a good decision at the time, until the ice cream truck came down the street that evening and I had no money. No, I didn't get ice cream that day, though my parents did explain how I could have had some candy and some ice cream if I had chosen more wisely. The point: Take a proactive approach to educating your children about money and how to use it wisely.

4. Set up a college fund This link will open an external site in a new browser window. and help them save money for college. If you care about your children and want them to have the best possible opportunity for a financially secure future, make sure they have the opportunity to get at least a four-year college education. Every bit of research done on the subject shows that there is a direct correlation between education and income.

More ideas for helping your children achieve financial security:

* Begin their retirement IRA now. This may sound silly at first — setting up a retirement IRA for your ten-year-old — but it's never too early to start. If they earn an income, your children can begin making IRA contributions at any time. (Or, like many parents, you can make the contribution in their name, provided they have verifiable income.)

Let's say your 15-year-old earns $500 this year doing part-time work. Contributing $500 of your own money into his or her IRA may be a good investment in your child's future. This gets the ball rolling. Eventually, your child makes his or her own contributions. Then imagine 50 years from now: Depending on the average return, he or she could potentially be a millionaire several times over. And it all started this year because you helped set up that IRA.

* Update your life insurance program. As long as your children are minors, they are dependent on you for their financial security. If you die prematurely, all your dreams for them could be jeopardized. That's why you should make sure your life insurance program reflects not only your own needs and current income, but your goals and dreams for your children. How much is enough? That's your call. The best bet is to get good information. Discuss your needs — both current and future — with your agent. And don't put it off. Some things are too important to delay.

* Start their life insurance program by purchasing coverage on children as early as possible. Their rates will never be lower. Many will allow them to increase their coverage at certain key times in their life — such as when they turn 21, marry, graduate from college, or have children of their own. In this way, you are helping carry on the legacy by helping your children protect their children.

The bottom line: If you love your children, hugs and kisses are one way to show it. Another way, one that will stay with them and prove itself day after day for the rest of their lives, is to help them build their own financially secure future.

Teaching Your Kids About Money - Part 3

"I want my children to have a good start in life."

Don't we all? No, that doesn't mean spoiling them rotten, though we often wish we could. We want to give them a solid leg up so they can achieve their own financial security.

Fortunately, there is much you can do to help bring that about and to help assure that your children, whether still in a high chair or already in high school, can enjoy a lifetime of financial security.

1. Start young to help them understand the concept of money and how it works. When my daughter was four years old, she'd help me pick out toll money when traveling by car. When we'd go shopping, I'd casually explain why I bought one brand versus another. "By getting this one, we can now afford to go out to lunch with the money we saved."

2. Help them cultivate the savings habit by establishing a savings account at your bank or credit union. Set it up in their name and encourage them to make regular deposits. One way is to match their deposits. Let's say your ten year old son saves $5 a week and you match each deposit dollar for dollar, so a total of $10 goes into the account each week, or $520 a year. When he's ready to buy his first car in a few years, the down payment, if not the whole amount, will be waiting for him.

3. Teach them how to spend money. That also means letting them make mistakes. When I was a kid, I blew a whole dollar on penny candy, one hundred pieces. It sounded like a good decision at the time, until the ice cream truck came down the street that evening and I had no money. No, I didn't get ice cream that day, though my parents did explain how I could have had some candy and some ice cream if I had chosen more wisely. The point: Take a proactive approach to educating your children about money and how to use it wisely.

4. Set up a college fund This link will open an external site in a new browser window. and help them save money for college. If you care about your children and want them to have the best possible opportunity for a financially secure future, make sure they have the opportunity to get at least a four-year college education. Every bit of research done on the subject shows that there is a direct correlation between education and income.

More ideas for helping your children achieve financial security:

• Begin their retirement IRA now. This may sound silly at first — setting up a retirement IRA for your ten-year-old — but it's never too early to start. If they earn an income, your children can begin making IRA contributions at any time. (Or, like many parents, you can make the contribution in their name, provided they have verifiable income.)

Let's say your 15-year-old earns $500 this year doing part-time work. Contributing $500 of your own money into his or her IRA may be a good investment in your child's future. This gets the ball rolling. Eventually, your child makes his or her own contributions. Then imagine 50 years from now: Depending on the average return, he or she could potentially be a millionaire several times over. And it all started this year because you helped set up that IRA.

• Update your life insurance program. As long as your children are minors, they are dependent on you for their financial security. If you die prematurely, all your dreams for them could be jeopardized. That's why you should make sure your life insurance program reflects not only your own needs and current income, but your goals and dreams for your children. How much is enough? That's your call. The best bet is to get good information. Discuss your needs — both current and future — with your agent. And don't put it off. Some things are too important to delay.

• Start their life insurance program by purchasing coverage on children as early as possible. Their rates will never be lower. Many will allow them to increase their coverage at certain key times in their life — such as when they turn 21, marry, graduate from college, or have children of their own. In this way, you are helping carry on the legacy by helping your children protect their children.

The bottom line: If you love your children, hugs and kisses are one way to show it. Another way, one that will stay with them and prove itself day after day for the rest of their lives, is to help them build their own financially secure future.

Teaching Your Kids About Money Part 2

Let's say your child just came into a big chunk of change. Perhaps he or she received it for graduation, as a holiday gift, in celebration of a major birthday, in recognition of a religious rite of passage, or because their parents or grandparents have decided that it's time to learn how to handle more than a few bucks at a time.

Or, for the sake of simplicity, let's just say it came from their favorite aunt. Dear auntie has decided to give your child, little Susie, a check for $2,000. No, she's not nuts, she just likes litte Susie. (All those "Yes, Ma'ams" and "Thank you, Ma'ams" have finally paid off.)

So, what is your child going to do with that cash? One option is to hit the mall running — spend it on new clothes, electronic games, sports equipment, and more. In short, have a ball.

Two grand can buy a lot of fun. Little Susie could be living large for a couple of months, even longer. This unexpected lump sum is called a windfall, and that's what many people would do with it, spend the cash like it was burning a hole in their pockets.

However, why not consider another strategy for your child's newfound wealth? This is an option that can potentially profit them for a lifetime, not just a few weeks or months.

Put that money to work for little Susie. Think of it as seed money. Let's say you "planted" that money in an investment where it earned a good return.

Let's say it grows at a rate of 6%. This means that, at the end of one year, your child's money would grow from $2,000 to $2,120. That's an extra $120.

Big deal, Susie may think. What's $120? Let's put it in perspective. If little Susie gets an allowance of $10 a week, that's 12 weeks worth of allowance you've generated. Or if your child works a part-time job and earns $30 a week, the "seed" money has earned them a month's worth of income — and he or she didn't have to cut one lawn, flip one burger or put up with one thinks-he-knows-it-all boss. Your child has their your money working for them!

Best of all, even if you took the profit, that $120, and spent it, your kid would still have the initial $2,000. But let's not stop there. Let's further say that you kept all that money working. By the end of year two — assuming the same 6% rate of return — the money would now total $2,247.20. Thanks to compound interest — which earns interest on interest — your child has "earned" nearly $250.

Not bad for just sitting back with your arms crossed. Let it sit for 10 years and it has the potential to nearly double, growing to $3,581.70, generating a profit of $1,581.70. (By the way, if you squeeze out another two percentage points, so your money grows at an average rate of 8%, you will have turned your initial $2,000 into $4,237.89 after 10 years. That's because the higher your rate of return, the larger your initial money grows.)

This, by the way, is how many wealthy people get to be wealthy people. But remember, as with all investments it is possible to lose money as well.

Okay, now let's be realistic. Your child needs to have some fun, right? Accumulating money for its own sake is boring. So, when does little Susie get to spend at least some of her money? Here's one smart-money strategy: Why not take half of your child's profit every year for fun, leaving the rest to work for them? That way, the money has the potential to grow, but your child also get to spend some of it.

For example, take $60 — that's half the first year's profit of $120 — and use it to buy something special, such as holiday gifts for your family or a new gotta-have gizmo for your child. Keep the rest slaving away for you. At the end of the second year, you will have $2,183.60. Once again, if you take half the profit above the original $2,000 gift, that gives you $91.80 to spend. After year three, you will have $108.66 pocket money, and so on.

Keep doing this year after year and... well, you get the picture. So, now you know one good way to build wealth for your kids. Your big challenge now is to just figure out how to get little Susie's aunt to give her that money to get started.

Teaching Your Kids About Money - Part 1

If 14-year-old Damon Williams can become an investor, and accumulate $50,000, so can you. Williams, a member of a junior investment club in Chicago, has been learning about stocks, mutual funds and other investments since he was six. Currently he is featured on an episode of the public television series, MoneyTrack, entitled “Kids and Investing."

He is an excellent example that when it comes to teaching your chidlren about money. Kids are never too young to start learning about the importance of money and how to start saving for their futures.

Talking to your kids about money requires that you explain the concepts in ways that they can understand. When they realize that money decisions determine 90% of the decisions they make in life, such as whether or not they can afford to spend time with their friends; where they buy their clothes; whether they can purchase one music CD this week or two, the concept of saving and having money will become very important.

Here is a simple overview of how to begin the conversation with your kids.

Explain That There Are Two Ways to Make Money
People at work and money at work

• People at work — that's when you work at a part-time job, cut the lawn, earn money. We all do it. Most adults work about 40 hours a week, 50 weeks a year, for 30 or 40 years.

• Money at work — that's when you put aside a portion of every dollar you earn or receive. If you invest it wisely, this money can make money for you.

Kids can start learning about stocks, mutual funds and other investment vehicles, from the following sources:

• Parents

• Talk to your school about setting up an investment club

• Visit Web sites about investing for minors

• Have a goal - Perhaps it is to retire at age 30; to take the pressure off your folks and pay at least a portion of your own college education; or to sock away enough money for your first car. Decide the amount you need and the date you want the money to be available.

Include Your Children in Saving for their Future
You have a number of options

• Develop a system for you and your child to put money aside on a regular basis. Let's say your child has a job and a goal to have $500 for a new _________ (you fill in the blank here) two years from today. That means (ignoring interest your money may earn) you need to set aside just under $4.81 a week (4.81 x 104 weeks = $500.24).

• Figure out where the money will come from. Some minors take a percentage of everything they earn or receive (such as 20%) and put it toward their wealth-building goal. Others talk to their parents or grandparents about "seed" money (an initial amount of money invested to build wealth).

• Select investments that interest your child, whether it is shares of their favorite apparel store at the mall, electronic game manufacturer, computer, etc. When an individual buys ten shares of, say, Dell Computers, explain that this makes your child a part owner in the company. That's also why some minors put companies such as Disney, Nike, The Gap and McDonald's on their stocks-to-study list.

• Stick with quality. That goes back to doing your homework. Remember, the goal is to make money, not lose it. Find a company you and your child likes AND that looks to be a quality investment. Please keep in mind that with any investment, there is the risk of losing money. Steer clear of hunches or companies that simply have names that sound intriguing.

• Get good advice. There are a lot of people who can help you learn and made good decisions. One place to start is with a company like Alero Equities. Together with your parent or grandparent, our representatives can discuss your goals and offer direction and guidance.

Remember This: Money Begets Money
Take advantage of compound interest.

Put the money into a reliable vehicle and let it work for you. Slow but steady won the race between the tortoise and the hare. In other words, don't expect to make a fortune overnight. Successful investing takes time and patience. Forget stories about instant riches. Set up a plan and stick to it. That's the best way to help assure your long-term success.

The bottom line: Now is the time to begin teaching your children about the ins and outs of investing and wealth building. This helps you lay the foundation today for your child's long-term financial security. Contact Alero Equities at 1-866-354-5125 to schedule an appointment to discuss you and your child's investment plan.

Life Insurance Facts

All life insurance policies have one thing in common: They provide a tax-free death benefit to your beneficiary when you die. But that’s where the similarities stop. Here, the Maryland Association of CPAs offers an overview of the most common types of life insurance to assist you in determining which best meets your needs.

Term insurance

Term life insurance policies offer death benefits only. Term insurance is simple to understand and it allows you to purchase the most coverage for the least amount of money. You buy a policy for a specific amount and term -- 15 years, for example. If you die during that term, the policy pays the death benefit to your beneficiaries. If you outlive the term of the policy, you get nothing. However, you can renew the policy at much higher rates or convert the policy to a permanent form of life insurance.

The two key types of term insurance are level term life insurance (in which the premiums remain the same over a specified period of time) and yearly renewable, which starts out with a lower initial premium, but the premium rises each year.

Whole life insurance

Rather than insuring you for just a part or a “term” of your life, a whole life policy is designed to cover you for your entire life.

Whole life policies cost more than term policies because, in addition to providing a death benefit, a whole life policy builds up what is referred to as "cash value." This is essentially an investment component that, after a certain number of years, you can withdraw or borrow against. (Unpaid loans against the policy are subtracted from the death benefit.)

The investment return on a whole life policy is likely to be lower than what you might earn investing on your own, because insurance companies typically invest conservatively.

Universal life insurance

Flexibility is the key selling point of universal life insurance.
With this type of whole life insurance, you can increase or decrease the death benefit as your insurance needs change. You can, within limits, determine how much of your premium is used for insurance and how much goes toward the policy’s investment component. You can also increase or decrease the amount of premium payments and how often you pay them.

Variable life insurance

Variable life insurance differs from whole life insurance in that it allows you to invest the cash value of the policy in stocks, bonds or money market funds within the insurance company’s portfolios.

With a variable life policy, both the death benefit and the cash value depend on the performance of the investments you choose, but most policies guarantee that the death benefit will not fall below a specified minimum.

A variable life policy is considered a security and sold only by prospectus.

Making the decision

The type of life insurance you buy will depend on your individual needs and what you hope to get out of your policy. It’s important to consider how much protection your family needs, how long you need coverage and how much you can afford to pay in premiums.

If what you need is strictly income protection for a set amount of time, term insurance is the more appropriate and cost effective option. Term insurance works out particularly well if you follow the principle of “buy term and invest the difference.” This means you set aside and invest on your own the money you would have spent on a more costly whole life policy.

For people with more complicated or long-term needs, whole life insurance or one of its variations may make sense. For example, if you have contributed the maximum to your retirement savings and other tax-sheltered plans, you might consider whole life insurance because the cash value in the policy builds up tax-free.

As is the case with most important financial decisions, your life insurance choice should be made within the context of your overall financial plan and circumstances. A Financial Advisor can help you determine the type of policy that works best for you.

Financial Advisers are equipped to address your full range of financial needs with integrity and insight. In California Financial Advisers must pass a rigorous two-day examination, and adhere to strict ethical and professional standards, and, beyond college, complete 80 hours of continuing education every two years to be certified by the state.

Housing and the Obama Stimulus Package

Dear Fellow Consumer, here is our take on the Stimulus Bill and Treasury announcements made this week. We look at the Stimulus package AND the Treasury's package holistically, in compliment with each other - mostly because that's how the Obama team is looking at it.

The National Association Realtors Board of Directors, asked in November to do 4 things (with an unspoken but clearly understood mandate to PRESERVE what we already have). Here they are:

• - Get loan limits raised for high cost areas,

• - Make the $7,500 tax credit NOT a loan,

• - Try to find ways to push interest rates down (which are higher than they should be due to systemic risk right now) by 200 basis points, and

• - Help provide solutions to the foreclosure/short sale problem.

So here's what was achieved:

• - The loan limits will be raised to $727,000 in high cost areas,

• - The tax credit will be raised to $8,000 with NO payback [a true credit],

• - Interest rates have come down 125-150 basis points, and

• - The bill has over $50 billion in it for foreclosure mitigation, with Geitner's Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES's thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

In addition, we preserved what we have - which some tend to forget is always on the table when these negotiations start up again - mortgage interest deductibility, real estate tax deduct ability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).

We did make a run at the $15,000 credit -- and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carry back deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of 'what we are willing to give up to get a $15,000 tax credit' and kept the debate again, on how much it should be. It's pretty hard to complain when they give you what you ask for and you lose something you never had.

While we study the Treasury specifics on their major role in providing the rest of the housing solution -- there is much more to come and we are working diligently with the Administration to help 'unclog the pipeline' and get capital flowing into housing again.

Alero Equities is Moving to the Flynt Building

We Got It!

Alero Equities, the Financial Professionals, is bringing Wall Street to Los Angeles. We are the Only Firm in the City that has a Trading Floor connected directly to the New York Stock exchange, the nation's financial head quarters. Look for our Grand opening e-flyer coming soon.











The luxurious Flynt Building is located at 8484 Wilshire boulevard in Beverly Hills.

Our new facilities features:

- 24 hour security on site

- Valet parking for visitors

- Underground 3/1000 + parking for Tenants

- Beautifully appointed lobby 15.5% load factor on multi-tenant floors

- Walking distance to La Cienega's Restaurant row, Starbucks, and Coffee Bean

- Walking distance from Washington Mutual, Bank of America, Wells Fargo, and CitiBank

Contact us at 866-354-5125 to schedule an appointment and visit our new flagship location!

Retire in Style

Human beings are distinguished from other species by our ability to think ahead and to plan ahead. However, most of us have great trouble thinking about the long term and preparing for it. We're too caught up in the hectic schedules of our day-to-day lives. Heck, it's difficult enough to plan something just six months ahead, like a summer vacation. How on earth are we supposed to be able to think about something in the distant future -- like retirement?

Thinking in advance, though, and acting on those thoughts, are keys to preparing for the future. The younger you are, the more distant is retirement -- and the more power you have at your fingertips in the form of compounded returns over time. That is why now is the time to start investing in your future so that you can benefit from these compounded returns in your retirement years.

Alero Mack, of Alero Equities, is a specialist in retirement planning, and can lend lend his insight to help us answer the important questions on retirement planning.

• How much will I need for my retirement in order to live comfortably?

• What are my goals?

• When should I start?

• What should I do?
  

• How much can I count on from Social Security?

• What costs might I run into once I've actually retired?

These are the questions that we all need to ask; questions that we often wait too long to ask. However, now is the best time to make these choices to ensure that you and your family are taken care in the years ahead.

Please contact us at 866-354-5125 or by email to discuss your retirement goals in person.

Take a moment to watch these instructional videos on

• "Click Here --> Watch a Video on How to Create Wealth" and

• "Click Here --> Watch a Video on How to Eliminate Debt"

Women and Retirement

Nearly twice as many women as men will face poverty in retirement, according to the incoming president of the American Association of Retired Persons.

Prospects for financial security in old age is starkly more bleak for minorities, said Jennie Chin Hanson, formerly the executive director of an elder care agency in San Francisco.

Women must learn details of their family finances and begin planning for retirement early in life, said Hansen, a former nurse.

Speaking to an audience of elder care providers at the City Club of Cleveland, Hansen cited several AARP sponsored studies and reports that suggest an emerging risk of poverty for females.

The poverty rate in retirement for African-American women is nearly three times the rate for white women.

Nearly 2/3 of white women who are poor in old age were not poor in earlier years.

Women face challenges in preparing for retirement because they often earn less than male counterparts, often must periodically leave the workforce to provide family care and often have not adequately planned for retirement, she said.

Hansen, who becomes AARP president in May, offered several tips for retirement planning.

Women should become financially literate. "People who understand compound interest are must more likely to plan for retirement, " she said.

Existing Social Security benefits frequently provide only about 40 percent of financial needs, estimates show. Today, many retired females qualify for only about $1,100 per month in Social Security, she said.

Retirees will need about 70 percent of the pre-retirement income to maintain their lifestyle, she said.

Workers should participate in company subsidized retirement savings plan, like 401 programs. Employees should contribute enough to gain the maximum contribution from their employer, she said.

AARP was organized 50 years ago as a method to provide health insurance to retirees. The nonprofit organization has nearly 40 million members and annual revenues and expenses of about $1 billion.

The group is often cited as one of the nation's most powerful political lobbies.

Life Insurance Facts

All life insurance policies have one thing in common: They provide a tax-free death benefit to your beneficiary when you die. But that’s where the similarities stop.

Here, the Maryland Association of CPAs offers an overview of the most common types of life insurance to assist you in determining which best meets your needs.
Term insurance

Term life insurance policies offer death benefits only. Term insurance is simple to understand and it allows you to purchase the most coverage for the least amount of money. You buy a policy for a specific amount and term -- 15 years, for example. If you die during that term, the policy pays the death benefit to your beneficiaries. If you outlive the term of the policy, you get nothing. However, you can renew the policy at much higher rates or convert the policy to a permanent form of life insurance.

The two key types of term insurance are level term life insurance (in which the premiums remain the same over a specified period of time) and yearly renewable, which starts out with a lower initial premium, but the premium rises each year.
Whole life insurance

Rather than insuring you for just a part or a “term” of your life, a whole life policy is designed to cover you for your entire life.

Whole life policies cost more than term policies because, in addition to providing a death benefit, a whole life policy builds up what is referred to as "cash value." This is essentially an investment component that, after a certain number of years, you can withdraw or borrow against. (Unpaid loans against the policy are subtracted from the death benefit.)

The investment return on a whole life policy is likely to be lower than what you might earn investing on your own, because insurance companies typically invest conservatively.
Universal life insurance

Flexibility is the key selling point of universal life insurance.
With this type of whole life insurance, you can increase or decrease the death benefit as your insurance needs change. You can, within limits, determine how much of your premium is used for insurance and how much goes toward the policy’s investment component. You can also increase or decrease the amount of premium payments and how often you pay them.
Variable life insurance

Variable life insurance differs from whole life insurance in that it allows you to invest the cash value of the policy in stocks, bonds or money market funds within the insurance company’s portfolios.

With a variable life policy, both the death benefit and the cash value depend on the performance of the investments you choose, but most policies guarantee that the death benefit will not fall below a specified minimum.

A variable life policy is considered a security and sold only by prospectus.
Making the decision

The type of life insurance you buy will depend on your individual needs and what you hope to get out of your policy. It’s important to consider how much protection your family needs, how long you need coverage and how much you can afford to pay in premiums.

If what you need is strictly income protection for a set amount of time, term insurance is the more appropriate and cost effective option. Term insurance works out particularly well if you follow the principle of “buy term and invest the difference.” This means you set aside and invest on your own the money you would have spent on a more costly whole life policy.

For people with more complicated or long-term needs, whole life insurance or one of its variations may make sense. For example, if you have contributed the maximum to your retirement savings and other tax-sheltered plans, you might consider whole life insurance because the cash value in the policy builds up tax-free.

As is the case with most important financial decisions, your life insurance choice should be made within the context of your overall financial plan and circumstances. A CPA can help you determine the type of policy that works best for you.

Only CPAs are equipped to address your full range of financial needs with integrity and insight. In california Financial Advisors must pass a rigorous examination, adhere to strict ethical and Professional standards. CPAs must pass a rigorous two-day examination, and adhere to strict ethical and professional standards, and, beyond college, complete 80 hours of continuing education every two years to be certified by the state — accountants do not.

Your doctor is certified; your lawyer is certified. Make sure your accountant is a certified public accountant.

______________________________________________

Alero Equities has the plan you can REALLY Retire in 5-7 years. Retire and stay Retired. Only 2% of Americans can Retire and Stay Retired. Live the American Dream in your later years.

Call 1-866-354-5125 for dates and times of our weekly Financial Workshops.