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Regulators Urge Small Investors to Avoid Non-Traded REITs

  • September 21, 2017/
  • Posted By : admin/
  • 0 comments /
  • Under : Scams & Schemes, Seeking Prudent Advice

real-estateREITs stands for Real Estate Investment Trusts.  REITs sell like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate.

Real Estate is historically a good performing  asset class.  Allocating approximately 10% of your stock portfolio is a generally prudent choice.  However, state regulators are seeing more and more trouble with a certain type of real estate investment: non-traded REITs.

Non-Traded REITs
Unlike normal REITs, non-traded REITs do not trade on a securities exchange.  They have several very significant issues:

    1. Non-traded be can very illiquid.
    2. They can be very difficult or impossible to price on a regular basis.
    3. It can be difficult to exit the investment.

Front-end fees can be as much as 15% (much higher than traded REITs due to the limited secondary market)

Non-traded REITs buy office buildings, stores, and other properties.  They are sold directly to private investors by financial advisors and brokers.

State Securities Regulators Worried
Regulators are concerned that small investors are not fully aware nor understand the risks associated with non-trade REITs.  States are on the verge of adopting new restrictions to protect “mom and pop” investors including:

  1. Limit how much an individual’s net worth could be put into any a single REIT
  2. Limit the ability of REITs to pay dividends immediately after raising new money (to avoid a Ponzi-scheme like dynamic of paying old investors with new investors’ money)

The State of Massachusetts has brought enforcement actions against brokerages for improper sales of non-traded REITs including

  • LPL Financial
  • Ameriprise
  • Commonwealth Financial
  • Lincoln Financial

Source: WSJ

 


Equifax Data Breach: What You Need To Know

  • September 14, 2017/
  • Posted By : admin/
  • 0 comments /
  • Under : Personal Finance, Scams & Schemes, Seeking Prudent Advice

Late last week Equifax announced it was hacked and personal information for 143 million Americans was stolen. If you use credit of any kind (credit cards, home mortgages, student loans, etc.) as most people do, there’s a 50% chance your personal information is involved. Here’s a run down on what happened, the risks, and the options you should consider to mitigate the impact to your personal finances.

Who is Equifax?
Equifax is one of the big three credit reporting agencies in the United States. It collects large amounts of personal information about anyone who has received credit through credit cards, mortgages, car loans, and student loans. Companies use credit reports from Equifax (plus TransUnion and Experian) to extend credit to consumers and conduct background checks for employment and housing.

What happened?
Hackers broke into Equifax’s database and stole personal information for 143 million people. The breach lasted from mid-May through July 2017. Equifax revealed the data breach publicly on September 7, 2017. Stolen information includes people’s names, Social Security numbers, birth dates, addresses and, in some cases, driver’s license numbers. Hackers also accessed credit card numbers for some 209,000 people and dispute resolution communications for about 182,000 people.

How could you be at risk?
Hackers have or will very likely sell this personal information to criminals who can then perpetrate identity theft. With that information, they can open bank accounts, new credit cards, or even drivers’ licenses in your name. Criminals could also file fraudulent claims for your tax refund or your Social Security benefits.

What steps should you consider?
Remember there’s a good chance that you’ve been exposed. To mitigate the potential damage, the Federal Trade Commission recommends you take immediate steps to protect your information from being misused:

  • Visit Equifax’s website, www.equifaxsecurity2017.com
  • Find out if your information was exposed. Click on the “Potential Impact” tab and enter your last name and the last six digits of your Social Security number. Your Social Security number is sensitive information, so make sure you’re on a secure computer and an encrypted network connection any time you enter it. The site will tell you if you’ve been affected by this breach.
  • Whether or not your information was exposed, U.S. consumers can get a year of free credit monitoring and other services. The site will give you a date when you can come back to enroll. Write down the date and come back to the site and click “Enroll” on that date. You have until November 21, 2017 to enroll.
  • You also can access frequently asked questions at the site.

Here are some other steps to take to help protect yourself after a data breach:

  • Check your credit reports from Equifax, Experian, and TransUnion — for free — by visiting annualcreditreport.com. Accounts or activity that you don’t recognize could indicate identity theft. Visit IdentityTheft.gov to find out what to do.
  • Consider placing a credit freeze on your files. A credit freeze makes it harder for someone to open a new account in your name. Keep in mind that a credit freeze won’t prevent a thief from making charges to your existing accounts.
  • Monitor your existing credit card and bank accounts closely for charges you don’t recognize.
  • If you decide against a credit freeze, consider placing a fraud alert on your files.A fraud alert warns creditors that you may be an identity theft victim and that they should verify that anyone seeking credit in your name really is you.
  • File your taxes early — as soon as you have the tax information you need, before a scammer can. Tax identity theft happens when someone uses your Social Security number to get a tax refund or a job. Respond right away to letters from the IRS.

Our CEO Chris Mullis visited Equifax’s website to determine if his family’s information was exposed. His information is not involved, but unfortunately his wife is not so lucky. Equifax immediately allowed Chris’ wife to enroll in its TrustedID Premier monitoring program. Their personal experience just underscores the fact that basically one of every two Americans is likely impacted by the Equifax data breach.

Please take steps to protect yourself from this data breach and share this alert with family and friends.

If you have any questions or need any help, please give us a call.


Student Debt Linked to Worse Health and Less Wealth

  • September 7, 2017/
  • Posted By : admin/
  • 0 comments /
  • Under : Personal Finance, Seeking Prudent Advice

student-debtThe negative effects of student debt are significant and persistent according to a Gallop poll.  Those who borrowed more than $25,000 are less likely to enjoy work and are less financially and physically fit than their debt-free peers even 24 years after graduation.

Gallop examined five elements of well-being:

  • Purpose: liking what you do each day and being motivated to achieve your goals
  • Social: having supportive relationships and love in your life
  • Financial: managing your economic life to reduce stress and increase security
  • Community: liking where you live, feeling safe, and having pride in your community
  • Physical: having good health and enough energy to get things done daily

Financial and physical well-being show the strongest relationship with student debt.  Conversely, social well-being appears to have the weakest debt link.

“These results offer a new dimension of how college debt affects the rest of your life and it gives us more cause for concern,” said Brandon Busteed, executive director of Gallup Education.

Source: Gallup


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