BWM and Children's Restoration Network Toy Drive 2016

For the last several years, Baer Wealth Management has supported Children's Restoration Network (CRN) through a number of initiatives. Through various programs, CRN helps homeless children receive basic necessities from food and school supplies to adult guidance and scholarships. Through this toy drive, Baer Wealth Management was able to aid them with this mission. Over 200 toys were donated to homeless children in Atlanta! 

Thank you to everyone who helped make this possible!

Does Borrow Lead to Sorrow?

Courtesy of David Hultstrom:

As the children get ready to go back to school, I thought I would take the opportunity to go back to basics in this newsletter.  While focusing on highly technical (and sometimes complicated) areas of financial planning is important, some of the basic items are arguably even more important.  Here are a few simple rules (in the interest of brevity I am leaving out a few exceptions that rarely apply, please see us or your financial professional for custom advice):

  1. Never borrow money for a depreciating item.  In other words, the expected value of the purchase in the future must be higher than the current purchase price plus interest and any other expenses.  The only items I think pass this test are prudent outlays for a primary residence, an education, or a business (including real estate investing).  In the “close but no cigar” category is borrowing for second homes for personal use (the appreciation will almost certainly not be high enough to overcome interest, taxes, insurance, maintenance expenses, etc.) and borrowing for majors at expensive colleges that are unlikely to have much-earning power.  If you have cash for the second home or the low-earning, expensive major, you have my blessing, though – assuming you have the rest of this list covered as well.
  1. Maximize tax-advantaged savings vehicles.  Save the maximum allowed in your 401(k), IRA, Roth IRA, etc.  Most people dramatically undersave – a range of 10% minimum to 25% maximum (if starting early) is prudent.  (Lower earners can be on the low end of the range because Social Security will replace more of their income, higher earners and those that are starting late should be on the higher end of the range.)  Not only is this prudent from a tax perspective, but the creditor protection these types of savings provide is important as well.  If you are retired your annual percentage spending from your portfolio should be (roughly) no more than your age minus 25 then divided by ten (so 4.0% at 65, 4.5% at 70, 5.0% at 75, etc.) of your initial portfolio value.
  1. Don’t change your investment strategy.  All too often when returns have been high investors want to increase the risk they are taking and when returns have been abysmal they want to reduce their risk.  Unless a life change (not market movement) has occurred that has materially changed your financial situation, leave your investment strategy intact.
  1. Have the right property and casualty insurance coverage.  For liability coverage, determine how much you could potentially lose in a lawsuit if you were found liable (retirement plans, and in some jurisdictions, a homestead, are exempt for example) and round up to the next million dollars (or two) to determine the amount of umbrella coverage you should carry.  Also, depending on your occupation or volunteer work, purchase D&O (Directors and Officers – if you serve on a board), Malpractice (if you can hurt someone’s body), or E&O (Errors and Omissions – if you can hurt someone’s money) insurance.
  1. Have the right type and amount of life insurance.  If you are still working my general recommendation would be term insurance starting at twenty times your gross income and declining to zero at your expected retirement age (you do this by tiering several policies).
  1. Carry adequate health insurance and disability insurance.  Group plans are better if available, but if not individual plans should be purchased.  Stay away from narrow plans (disease specific for example) and, of course, if you are retired, disability insurance is unnecessary.
  1. Get your estate plans in order.  Make sure you have an up-to-date will, durable powers of attorney (appointing someone to make decision – one for healthcare and one for everything else), living will (end of life care instructions), and letter(s) of instruction (documentation telling your heirs things they need to know).  Also, make sure the property is titled correctly and that beneficiary designations on insurance policies and retirement plans are as you wish (and check this if it has been a few years – people frequently misremember what they did).

How Much Your Passwords Are Worth to Cyber Criminals

Your account information can cost cybercriminals less than a latte — and they’re after more than banking credentials.

The Tokyo-based cybersecurity firm Trend Micro released two reports in December, outlining underground markets where cybercriminals sell illegal products and services. It found that criminal markets hosted in North American countries sell diverse offerings, from music and media account credentials to fake documents, weapons and drugs, and that their German counterparts focus on credit cards and identification documents, and sometimes give away Amazon and Netflix accounts for free.

Underground markets where people can buy and sell stolen information and hacking tools have become so advanced in recent years that even an “entry-level” cybercriminal is “only limited by their imagination and resources,” says Ed Cabrera, vice president of cybersecurity strategy at Trend Micro. A sampling of what’s up for grabs: Malware (complete with technical support services), hosting services, the tools to spam people and services that jam websites with fake traffic to force them offline. “Even the low-levels are able to scale and conduct much more sophisticated attacks than in years past.”

What’s on sale in the North American Underground Price:

Classic U.S.-issued credit card account information $19 to $22 (100 sets)

Gold, platinum or business U.S.-issued credit card account information $36 to $42 (50 sets)

Classic Canada-issued credit card account information $47 to $50 (40 sets)

Gold, platinum or business Canada-issued credit card account information $50 to $65 (35 sets)

Fake U.S.-issued physical credit cards $210 to $874

Netflix account access $5

Hulu Plus account access $4

Spotify account access $2

Beats Music account access $2

Dish Network Anywhere account access $7

Verified PayPal account access $9

Sirius Satellite Radio account access $15

Counterfeit U.S. passport $780

Counterfeit U.K. passport $730

U.S. driver’s license scan$145

Counterfeit U.S. driver’s license $727

Counterfeit CVS, Walgreens or Roland prescription labels $100 per three labels

Why would criminals want victims’ media and entertainment accounts? Cabrera says the crooks may intend to log into those accounts and then access the individual’s payment card information — or they could just be looking for free entertainment. In many cases, these sets of credentials create a complete profile of the user to further scam them or are tied to a financial instrument they can exploit. And people may not notice as quickly that they’ve been exploited, compared with when customers find fraudulent charges on credit card statements.

Criminals purchasing from markets hosted in Germany can buy stolen bank account credentials based on the balances available, and usually also receive associated personal identification numbers or other verification information, according to the report. The report cites an account Trend Micro researchers found on sale for $2,932.33, given that it held a balance of about $8,000.

What’s on sale in the German Underground Price:

Scanned I.D. (male) $10.66

Scanned I.D. (female) $8.53

Online bank account informationAt least $10.66, ranging higher depending on balances

“These sites are competing with each other for these criminal users,” Cabrera says, adding that many goods and services come with “satisfaction-guaranteed” offers.

Baer Wealth Management