You can't afford to skip exercise

We caught this great blog post on Boomer-Living about fitness, and wanted to share it with you. (You can follow Boomer-Living on Twitter @BoomerLivingNow - and of course we're at @family_finances.)

The basic premise is that sometimes folks cut luxuries when times are tight, as they are right now for a lot of people. But exercise is something you really can't afford to cut - and if you aren't in shape, consider starting an exercise routine.

First of all, fitness doesn't have to cost - walking is free, and great exercise for those who may not have had a previous fitness routine. The options that writer Angelena Craig outlines are low cost, and also good choices for seniors, or anyone, really. You can check out a 75-minute segmented video by Angelena outlining yoga using a chair for free right here: http://www.thenewagingmovement.com/

The truth is, if you neglect your health through a lack of exercise, you'll likely spend a lot more later repairing the damage you've done in earlier years. This is preventive - and something you can't afford not to do.

Read on for the whole post.

http://www.boomer-living.com/2010/08/you-cant-afford-not-to/

Investing in your 40s: Stability is your friend

There's lots and lots of articles out there about saving for retirement. And that's a great focus - and probably the most important savings goal anyone should ever have.

But what's often missing is how investing changes with the decades. We ran across this great piece by Jean Chatzky about investing in your 40s, and wanted to share it with you. She asserts that in your 40s, you're established in your career, probably making a steady, dependable income, and may have passed most of the big financial hurdles people typically face in their 20s and 30s, such as starting a family.

If you'd like to read the full story, go here:

http://www.dailyfinance.com/story/investing-basics/investing-in-your-40s-envisioning-the-future/19604306/

McMansions are over

By Robyn Davis Sekula

For most of the first few years of working as a freelance writer, I penned articles on garish homes for a local magazine. Let's just leave it at that and not name the magazine, shall we?

I'm not writing for them anymore, and I'd like to tell you it's because I grew a conscience and disdained the lifestyle these homes represented. That's not why. I stopped writing for them because they stopped calling me.

The houses were interesting when the owners themselves had collected, arranged and chosen the objects inside. They were dull, lifeless, cavernous palaces when the owners had turned over all decorating tasks to a designer. Ho-hum.

What they all had in common, though, short of just a few I saw, was that they were too darn big. In many cases, the homes were occupied by a couple, maybe a grown child and lots of expensive objects. Many would definitely fall under the heading McMansions, buff brick castles that I liked to call of the Something European or Something Else style. To my mind, it's just wasteful, particularly to build a new home that's 7,500 square feet for just two people.

Financially, such a home makes little sense. Such a house often has a high level of debt, and the energy bills would be predictably high. Don't try to tell me you're building a green McMansion. Ridiculous. Building new is not green. We've grown addicted in America to larger, bigger, and presumably better homes and cars, and it's to our detriment.

CNBC heralded the news recently that the McMansion era is over. Well, thank God. I'm glad to hear it. Read on for the full funeral details.

http://www.cnbc.com/id/38757287//

Columnist warns against college debt; Dan disagrees

By Dan Danford
Family Investment Center

Michelle Singletary's column often preaches against debt. Any kind of debt. She's a product of her upbringing by a conservative grandmother who saw the ravages of the Great Depression.

I sometimes agree with her - but this latest column has me steamed.

She suggests in her column that it is not worth the debt to get a college degree.

Here's what she asserts:

I hate it when people say a student loan is good debt. There is no such thing as good debt. There is only debt. With that in mind, of course I side with the growing number of experts who are boldly arguing that racking up a lot of debt for college isn't such a great investment after all.

Totally absurd and irresponsible. Education is a good value, no matter how you get it. (And, incidentally, not all debt is bad.)

Having said that, you should use your head before borrowing for school or anything else. If you are going to be a teacher (noble, but not necessarily high paying), choose a college you can afford. Many regional or community colleges offer tremendous value and you'll get every penny back from the education investment you make.

On the other hand, an Ivy League school may not be the best choice for an education degree, especially if you have to borrow $200,000 to attend there. Probably shouldn't borrow $200,000 to satisfy your or your parents' ego, either.

This kind of column just makes me cringe. Education isn't a product, it's a life-time process. You don't earn a job along with your diploma, and - even if you did - smart people wouldn't spend $200,000 for a $30,000 per year job. Who makes that kind of decision? Where were the parents and school counselors, and financial aid advisors? And journalists, for that matter?

Of course, it's worth borrowing to get an education if that's the only way your can afford it. All the studies say so and millions of us prove the case. Don't let a few anecdotal stories lead you astray. Just use your head.


http://www.washingtonpost.com/wp-dyn/content/article/2010/08/19/AR2010081902753.html

Bankruptcy filings rising

Bankruptcy filings are up - but this isn't necessarily dire economic news. The Economist used this chart to show the trend. See the spike in 2005? That was right before bankruptcy reforms were introduced. Many people rushed to file prior to that in anticipation that they would not be able to file later. Well, it's taken some time, but we're really just right back where we used to be. It takes any industry - and in this case, the bankruptcy industry - time to recover from reforms. Believe me, bankruptcy attorneys and businesses have spent the past five years researching ways around the new reforms, and it's taken five years, but they've apparently found them.

Here's what The Economist says about this:

BANKRUPTCY filings rose 20% in the year to June 30th compared with the previous 12-month period, according to statistics released on August 17th by the Administrative Office of the US Courts. This takes quarterly filings to their highest point since tougher bankruptcy laws were introduced at the end of 2005. That change brought a spike of bankruptcies, as companies and individuals rushed to declare themselves broke under the more lenient old regime. The data suggest that an older trend is reasserting itself. This could be more bad news for America—or it could just mean that creative destruction is alive and well.

We're agreeing with that last part of The Economist's post: creative destruction is alive and well.

And, as always, let this serve as a reminder not to amass too much debt, even when times are good.

http://www.economist.com/node/16843119?story_id=16843119&fsrc=rss

Identity theft targets children

If you have children or grandchildren, particularly of a young age, you need to think about guarding their financial information. Increasingly, those who steal Social Security numbers and other identifying information are targeting information from children, since it will likely be years before they ever access a credit report.

GOOD NEWS, though, according to Kiplinger.com's Cameron Huddleston: you CAN protect that information, and their latest article outlines how to do it.

Here's a statistic that will likely shock you - and hopefully prompt you to take some action:

About 400,000 children a year are victims of identity theft... They become victims when criminals get their Social Security numbers from medical records, mail tampering, computer searches or a stolen wallet with the child's card in it.

Click here to read more:

http://www.kiplinger.com/columns/kiptips/archives/protect-your-kids-from-id-theft.html

Partnership Agreements: Necessity in Small Business

By Dr. Jason White
Director of Investments, Family Investment Center

Many of us at one time or another during our careers are bitten by the entrepreneurship bug. Some will be successful, while others will not. Nationally, the sobering statistics are more than 60 percent of small business start-ups fail within the first five years of operation. The most common reason for failure is that the firm/owner runs out of working capital (money) before the business begins to make a profit.

Forming a partnership can help ease the individual burden of working capital contribution, as two or more partners can fund a business start-up with less personal financial pain than a single owner.

That said, anytime a business partnership is being contemplated, prospective partners should never go into business together until the details of their partnership have been hammered out. The document to accomplish this is commonly know as a partnership agreement.

Most attorneys with business law experience are easily able to provide prospective partners with a template outlining their rights and responsibilities to the business, and one another, for a reasonable fee. In my experience, you should NEVER enter a business partnership without first making such an agreement. Unfortunately, this is something I have learned from the school of hard knocks. The following is a list of basic items that should be covered in most every general partnership agreement.

Of course, the agreement should list all the “particulars” about the owners of the prospective business, including spousal information. The document should list the name, address and social security number for each partner, along with any other aliases, maiden names, etc.

The partnership agreement should discuss generally the purpose of the business partnership; the date of formation of the partnership; and the anticipated duration of the partnership, especially if it is to be for a finite period.

The agreement should nail down exactly how profits and losses will be shared by the partners, and how much capital each partner is contributing to the enterprise. It is a good idea to also codify how additional capital contributions will be treated. Will these be treated as loans from partners, or will additional contributions change the ownership structure of the firm?

The agreement should address what happens in the event of major changes to the partners, such as death, divorce and disability. What if one partner wants to sell his/her interest a few years down the road? What is the method for calculating the value of that interest, and do the remaining partners have first rights to buy the exiting partner’s interest before it is offered to an outside party?

The agreement should also be as clear as possible regarding the duties of each partner to the partnership, and how business disputes are to be resolved in the event of disagreement.

Dealing with these sorts of issues is much easier to do before a new partnership is formed than somewhere down the road when a pitfall occurs. I have seen, and been involved in, partnerships where the partners began the business as the best of friends and ended up as mortal enemies. A solid up-front partnership agreement can provide a road map to partners having to navigate these sorts of trying times.