What you believe will influence how you behave – true of many things – including beliefs about the economy and how you respond in your business. Recently an informal survey asked business owners their opinion of the U.S. economy and how it’s affecting them. Approximately one half of people surveyed expect the economy to improve over the next six months. Despite the continuation of the recession, many people feel the panic seems to be over. Improving trends in unemployment, national inventory, manufacturing and housing reports have provided a glimmer of hope for better times. Puzzling, however, is the fact that even though survey respondents feel confident their business will experience stability or small growth over the next twelve months, most of them cited their top priority is cutting costs. It is wise to cut the fat in today’s economy, but business owners should beware of cutting so deep that the business will bleed to death.
This is especially true when it comes to eliminating marketing efforts to save money. Amidst loss of jobs and the dismal economy, many customers choose to postpone or eliminate big purchases. By staying in touch with your customers, the importance of your product can be reinforced. You can stay top of mind with your customers by reaching out to them a minimum of 3 or 4 times a year. Simple contacts can be done inexpensively and will have an impact on customer loyalty and may even generate referrals to help your business grow.
If you’re struggling with cost-effective ways to stay in touch, start with the obvious by sending a hand written message vs. using generic post cards. Extend congratulations to new parents. Send a note to ask customer Jones how he is enjoying retirement. Have your office assistant review the local paper for customers that have made an accomplishment and send a note card with a few sentences to let them know you’re proud of them. Get creative with ways to stay top of mind and deep in the hearts of your customers.
While some businesses may find it counterintuitive to spend money (on marketing) while making less money building a business depends on building a “brand” which is a long-range strategy, not a short-term fix.
And remember…you can’t cut your way to greatness.
Monday, September 28, 2009
Thursday, August 13, 2009
What’s Right and What’s Wrong with Obama’s Regulatory Reform Plan
How can our economy remain competitive and thrive if its businesses, including financial institutions, don’t bear the brunt of their poor actions and decisions? It can’t. But that’s exactly what is happening now as our government props up the Wall Street institutions that created economic calamity. We need not only a return to traditional financial standards and free market discipline but to downsize the Wall Street megabanks to eliminate the threat any one institution can pose to our nation’s entire financial system.
Common sense tells us that no financial institution should ever become so large and powerful that it becomes too big to manage, too big to regulate and too big to face judgment in the marketplace. Nevertheless, for years policymakers have sanctioned and approved too-big-to-fail financial corporations. Now they’re using hardworking Americans’ tax dollars to keep those institutions afloat.
As guardians of Main Street, community bankers nationwide have long urged an end to too-big-to-fail. For years, our pleas to put taxpayers and our nation's financial well-being above the interests of individual entities fell on deaf ears. It was only in the wake of the financial-markets crisis that policymakers could no longer ignore what seemed so obvious to the rest of us. Now the Obama administration and Congress are beginning to address the serious problem of too-big-to-fail institutions through the administration’s financial regulatory reform plan. While parts of the plan provide a good starting point, there is still more that can be done to ensure we don’t repeat this crisis.
Community banks support provisions in the administration’s plan that create a consolidated systemic-risk regulator, impose higher capital and liquidity requirements on too-big-to-fail institutions so they can better absorb losses when they stumble and give the FDIC special resolution authority to unwind and resolve systemic risk firms that fail. However, to protect taxpayers and our economy, we need regulations to downsize the megabanks, require firms that pose systemic risks to pay into a separate systemic-risk reserve fund that can be used to unwind mega-institutions when they fail and impose a special FDIC systemic-risk premium for the extra burden the largest banks place on the Deposit Insurance Fund.
Another part of the plan threatens to undermine the way community banks successfully serve their customers and all of Main Street America. The proposed Consumer Financial Protection Agency would have far-reaching powers over bank products and services provided to customers. Unfortunately, the agency as currently proposed would hurt, not help consumers.
Community bankers agree that we need to close existing regulatory gaps and safeguard consumers from abusive and improper practices. After all, we have always put the best interests of our customers first. In doing so, we pride ourselves in offering our customers the safest and most sound products and services in the marketplace. The proposed agency, by separating consumer policy from safety and soundness supervision conducted by bank regulators, would create more regulatory confusion without improving consumer protections. Those increased regulatory costs would be borne by all consumers, making many financial products and services more expensive for all Americans and perhaps not affordable to some.
Community bankers work with our customers to ensure that they’re well informed about the products and services they choose and that they are capable of managing them. So why should community banks and their customers be punished for the deceptive practices of others?
Instead, a more targeted approach to fixing the real problems of our financial system lies in focusing on too-big-to-fail institutions. By implementing measures to regulate giant financial firms and reduce the risks they pose to our economy, Congress can begin restoring citizens’ faith—and essential free-market discipline—in our nation’s financial system. We must ensure that any new regulatory regime addresses too-big-to-fail institutions while implementing meaningful consumer protections that will not disproportionately affect the community banks that did not contribute to the current economic crisis. We must get it right for the long term—future generations of Americans are counting on us.
Common sense tells us that no financial institution should ever become so large and powerful that it becomes too big to manage, too big to regulate and too big to face judgment in the marketplace. Nevertheless, for years policymakers have sanctioned and approved too-big-to-fail financial corporations. Now they’re using hardworking Americans’ tax dollars to keep those institutions afloat.
As guardians of Main Street, community bankers nationwide have long urged an end to too-big-to-fail. For years, our pleas to put taxpayers and our nation's financial well-being above the interests of individual entities fell on deaf ears. It was only in the wake of the financial-markets crisis that policymakers could no longer ignore what seemed so obvious to the rest of us. Now the Obama administration and Congress are beginning to address the serious problem of too-big-to-fail institutions through the administration’s financial regulatory reform plan. While parts of the plan provide a good starting point, there is still more that can be done to ensure we don’t repeat this crisis.
Community banks support provisions in the administration’s plan that create a consolidated systemic-risk regulator, impose higher capital and liquidity requirements on too-big-to-fail institutions so they can better absorb losses when they stumble and give the FDIC special resolution authority to unwind and resolve systemic risk firms that fail. However, to protect taxpayers and our economy, we need regulations to downsize the megabanks, require firms that pose systemic risks to pay into a separate systemic-risk reserve fund that can be used to unwind mega-institutions when they fail and impose a special FDIC systemic-risk premium for the extra burden the largest banks place on the Deposit Insurance Fund.
Another part of the plan threatens to undermine the way community banks successfully serve their customers and all of Main Street America. The proposed Consumer Financial Protection Agency would have far-reaching powers over bank products and services provided to customers. Unfortunately, the agency as currently proposed would hurt, not help consumers.
Community bankers agree that we need to close existing regulatory gaps and safeguard consumers from abusive and improper practices. After all, we have always put the best interests of our customers first. In doing so, we pride ourselves in offering our customers the safest and most sound products and services in the marketplace. The proposed agency, by separating consumer policy from safety and soundness supervision conducted by bank regulators, would create more regulatory confusion without improving consumer protections. Those increased regulatory costs would be borne by all consumers, making many financial products and services more expensive for all Americans and perhaps not affordable to some.
Community bankers work with our customers to ensure that they’re well informed about the products and services they choose and that they are capable of managing them. So why should community banks and their customers be punished for the deceptive practices of others?
Instead, a more targeted approach to fixing the real problems of our financial system lies in focusing on too-big-to-fail institutions. By implementing measures to regulate giant financial firms and reduce the risks they pose to our economy, Congress can begin restoring citizens’ faith—and essential free-market discipline—in our nation’s financial system. We must ensure that any new regulatory regime addresses too-big-to-fail institutions while implementing meaningful consumer protections that will not disproportionately affect the community banks that did not contribute to the current economic crisis. We must get it right for the long term—future generations of Americans are counting on us.
Thursday, August 6, 2009
Press Release - MileStone Bank issues 20% stock dividend
DOYLESTOWN, PA – August 4, 2009 - The Board of Directors of MileStone Bank of Doylestown has authorized payment of a 20% stock dividend, according to John C. Spier, Chairman of the Board. Shareholders of record on June 30, 2009 will receive one share of common stock for each five shares they own, payable on August 15, 2009. This is the first stock dividend for MileStone Bank, established in November of 2007.
“After careful consideration, the board determined a stock dividend was appropriate based on the bank’s overall positive performance as measured against our business plan and the performance of our peers,” said David Gill, President & CEO. “We’re happy to issue this dividend as delivery on our pledge to provide increased value for our original investors, and proof of our continued commitment to create the well regarded, high performing financial institution promised to our shareholders and clients.”
Capital levels for the bank remain strong with a Tier 1 Capital Ratio of 15.64% and a Total Risk Based Capital Ratio of 21.37%, as of June 30, 2009.
MileStone Bank is a community bank headquartered in Doylestown, PA. MileStone Bank is led by co-founders David Gill, President & CEO, and Elijiah Gray, CFO.
Disclaimer
This report contains certain "forward-looking statements." The Company desires to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and is including this statement for the express purpose of availing itself of the protection of such safe harbor with forward looking statements. These forward-looking statements may describe future plans or strategies and include the Company's expectations of future financial results. Forward-looking statements are subject to a number of risks and uncertainties that might cause actual results to differ materially from stated objectives. These risk factors include but are not limited to the effect of interest rate changes, competition in the financial services market for both deposits and loans as well as regional and general economic conditions. The words "believe," "expect," "anticipate," "estimate," "project," and similar expressions identify forward-looking statements. The Company's ability to predict results or the effect of future plans or strategies is inherently uncertain and undue reliance should not be placed on such statements.
“After careful consideration, the board determined a stock dividend was appropriate based on the bank’s overall positive performance as measured against our business plan and the performance of our peers,” said David Gill, President & CEO. “We’re happy to issue this dividend as delivery on our pledge to provide increased value for our original investors, and proof of our continued commitment to create the well regarded, high performing financial institution promised to our shareholders and clients.”
Capital levels for the bank remain strong with a Tier 1 Capital Ratio of 15.64% and a Total Risk Based Capital Ratio of 21.37%, as of June 30, 2009.
MileStone Bank is a community bank headquartered in Doylestown, PA. MileStone Bank is led by co-founders David Gill, President & CEO, and Elijiah Gray, CFO.
Disclaimer
This report contains certain "forward-looking statements." The Company desires to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and is including this statement for the express purpose of availing itself of the protection of such safe harbor with forward looking statements. These forward-looking statements may describe future plans or strategies and include the Company's expectations of future financial results. Forward-looking statements are subject to a number of risks and uncertainties that might cause actual results to differ materially from stated objectives. These risk factors include but are not limited to the effect of interest rate changes, competition in the financial services market for both deposits and loans as well as regional and general economic conditions. The words "believe," "expect," "anticipate," "estimate," "project," and similar expressions identify forward-looking statements. The Company's ability to predict results or the effect of future plans or strategies is inherently uncertain and undue reliance should not be placed on such statements.
Monday, July 6, 2009
Everything Old is New Again - Back to Banking Basics
Remember the old passbook saving accounts? Did you have one as a kid? Remember Christmas Clubs & Vacation Clubs? Did you save most of your paper route, baby sitting, or lawn mowing money in the hope of some day having enough set aside for a baseball glove, new bicycle or even that first car? There was a time when it was very common to put money away every week especially for specific purposes.
Before banks were able to offer the now ubiquitous money market accounts, if you wanted to segregate some of your money into a rainy day fund the only alternative was a passbook savings account. The use of the passbook by banks in America actually dates back to sometime in the early 19th century. It was a small booklet, similar in size and shape to a passport, and contained a running statement of all credits and debits, including deposits, withdrawals, and interest. I can remember when a teller would update the passbook by writing the entries by hand and administering an official bank stamp underneath.
This type of account and record keeping process was well suited for infrequent transactions; and, by providing a hand held record of the account’s activity there was no need for the bank to produce and mail out a monthly account statement. Obviously, transacting business was difficult if the account holder lost the book or simply forgot to bring it with them to the bank. But, fortunately the bank always maintained an official record of the account and, with proper ID would provide a replacement fully updated and ready for more transactions. The old fashioned passbooks became compatible with printers and enabled transactions to be entered “automatically” and eventually passbooks disappeared completely, replaced by more convenient statement savings accounts.
Well it’s amazing how the more things change the more they stay the same. In the midst of the current economic challenges consumers are becoming much more careful with debt and more serious about finding financial alternatives that guarantee a return and also protect against loss of principle. There is a renewed focus on savings, especially as it helps prepare financially for some of life’s more important milestones. In 2009, the passbook component is a thing of the past, replaced by statement savings accounts – now called purpose driven savings accounts – with customized titles such as “Family Vacation” or “Entertainment Center” or any other specific goal. Purpose driven saving essentially creates baskets into which consumers can segregate funds dedicated to a specific goal, dream or objective.
This concept really works. Segregating funds both mentally and physically from the rest of the household budget ensures that every penny in the account goes to its intended purpose rather than for retirement, your kid’s wedding or college tuition, a new car or anything else.
Creating a specialized purpose for which to save helps prioritize the overall budget, creates greater motivation to save, and increases the prospect of actually attaining savings goals. A special benefit not to be overlooked is that savers really enjoy tracking balances online or through monthly statements and actually watching their progress and realizing their dream.
So why not “go back to the future” and start your purpose driven, dream maker savings account right now. That vacation cruise, Harley Motorcycle or in-ground pool will become a reality as you watch the account balance steadily grow and finally accomplish your dreams.
For information on how you can start an FDIC insured savings account with competitive interest earnings and guaranteed principle, contact MileStone Bank by email: support@milestonebank.com or by telephone: 866 - 672 - 2655.
Before banks were able to offer the now ubiquitous money market accounts, if you wanted to segregate some of your money into a rainy day fund the only alternative was a passbook savings account. The use of the passbook by banks in America actually dates back to sometime in the early 19th century. It was a small booklet, similar in size and shape to a passport, and contained a running statement of all credits and debits, including deposits, withdrawals, and interest. I can remember when a teller would update the passbook by writing the entries by hand and administering an official bank stamp underneath.
This type of account and record keeping process was well suited for infrequent transactions; and, by providing a hand held record of the account’s activity there was no need for the bank to produce and mail out a monthly account statement. Obviously, transacting business was difficult if the account holder lost the book or simply forgot to bring it with them to the bank. But, fortunately the bank always maintained an official record of the account and, with proper ID would provide a replacement fully updated and ready for more transactions. The old fashioned passbooks became compatible with printers and enabled transactions to be entered “automatically” and eventually passbooks disappeared completely, replaced by more convenient statement savings accounts.
Well it’s amazing how the more things change the more they stay the same. In the midst of the current economic challenges consumers are becoming much more careful with debt and more serious about finding financial alternatives that guarantee a return and also protect against loss of principle. There is a renewed focus on savings, especially as it helps prepare financially for some of life’s more important milestones. In 2009, the passbook component is a thing of the past, replaced by statement savings accounts – now called purpose driven savings accounts – with customized titles such as “Family Vacation” or “Entertainment Center” or any other specific goal. Purpose driven saving essentially creates baskets into which consumers can segregate funds dedicated to a specific goal, dream or objective.
This concept really works. Segregating funds both mentally and physically from the rest of the household budget ensures that every penny in the account goes to its intended purpose rather than for retirement, your kid’s wedding or college tuition, a new car or anything else.
Creating a specialized purpose for which to save helps prioritize the overall budget, creates greater motivation to save, and increases the prospect of actually attaining savings goals. A special benefit not to be overlooked is that savers really enjoy tracking balances online or through monthly statements and actually watching their progress and realizing their dream.
So why not “go back to the future” and start your purpose driven, dream maker savings account right now. That vacation cruise, Harley Motorcycle or in-ground pool will become a reality as you watch the account balance steadily grow and finally accomplish your dreams.
For information on how you can start an FDIC insured savings account with competitive interest earnings and guaranteed principle, contact MileStone Bank by email: support@milestonebank.com or by telephone: 866 - 672 - 2655.
Monday, June 8, 2009
Marketing your Business
The economy and its impact – the topic that “keeps on giving” literally! But take heart - in the midst of the housing and employment struggles, bailouts and bankruptcies there are absolutely opportunities to sustain and even grow your business. Maximizing those opportunities requires solid marketing efforts. The notion of marketing in a downturn is counterintuitive to many because they view marketing as an expense and are therefore cutting back marketing budgets in search of cost savings. The wiser business professionals, viewing marketing as an investment, have a decided advantage. They proactively and strategically intensify marketing efforts when business slows - not necessarily by spending more money on advertising, but by focusing attention on perhaps the most significant marketing tool available - the customer experience.
Marketing done right is a systemic, company-wide effort that strives to develop lasting relationships by meeting the emotional needs and wants of clients and creating a positive outcome. It’s not about selling more products to clients, it’s about genuinely understanding the client, and providing what they truly need.
And, systemic marketing requires everyone in the office from the bookkeeper, receptionist, sales person, and the business owner to invest in the customer experience. It begins with the initial client contact to schedule an appointment. Both the obvious and the not-so-obvious things leave an impression and influence the client’s desire to do business with you again or refer another person. The professionalism, competence, and interpersonal skills of staff, look of your office, even bathroom cleanliness and office signage have an impact on client satisfaction. Now is the time, while business is slow, to prepare your staff for their role as marketer. As the leader of this effort, make the commitment to clearly define and clearly communicate standards for marketing the comprehensive and ultimate client experience to exceed their expectations.
To get started, here are some basic suggestions:
1. Clients want assurance. Ensure your staff is courteous and competent, treats the client with respect and instills confidence that the quality of their experience is the number one priority
2. Clients want responsiveness. Teach your staff that the client is not an interruption, but rather the reason for the existence of the business and their respective jobs. Help employees understand that the client is the “real boss” and they should be prepared to promptly take care of their needs.
3. Clients want reliability. Make sure you and your staff complete tasks and fulfill requests correctly the first time i.e. calling when you say you’ll call, following-up on unresolved issues, and promptly informing them when you are unable to provide something
4. Clients want a comfortable environment. Assign responsibility to inspect the office regularly to make sure it’s user friendly, organized, clean and professional.
Proactive marketing in the current reality doesn’t have to cost a lot. Simply build awareness and sensitivity within your staff to be attentive to the needs and wants of clients, and then provide the highest levels of service and responsiveness. You will experience improved customer retention, an increased number of referrals, and another surprising perk – a happier workforce that is engaged in process of building success.
Best wishes in your marketing efforts!
Marketing done right is a systemic, company-wide effort that strives to develop lasting relationships by meeting the emotional needs and wants of clients and creating a positive outcome. It’s not about selling more products to clients, it’s about genuinely understanding the client, and providing what they truly need.
And, systemic marketing requires everyone in the office from the bookkeeper, receptionist, sales person, and the business owner to invest in the customer experience. It begins with the initial client contact to schedule an appointment. Both the obvious and the not-so-obvious things leave an impression and influence the client’s desire to do business with you again or refer another person. The professionalism, competence, and interpersonal skills of staff, look of your office, even bathroom cleanliness and office signage have an impact on client satisfaction. Now is the time, while business is slow, to prepare your staff for their role as marketer. As the leader of this effort, make the commitment to clearly define and clearly communicate standards for marketing the comprehensive and ultimate client experience to exceed their expectations.
To get started, here are some basic suggestions:
1. Clients want assurance. Ensure your staff is courteous and competent, treats the client with respect and instills confidence that the quality of their experience is the number one priority
2. Clients want responsiveness. Teach your staff that the client is not an interruption, but rather the reason for the existence of the business and their respective jobs. Help employees understand that the client is the “real boss” and they should be prepared to promptly take care of their needs.
3. Clients want reliability. Make sure you and your staff complete tasks and fulfill requests correctly the first time i.e. calling when you say you’ll call, following-up on unresolved issues, and promptly informing them when you are unable to provide something
4. Clients want a comfortable environment. Assign responsibility to inspect the office regularly to make sure it’s user friendly, organized, clean and professional.
Proactive marketing in the current reality doesn’t have to cost a lot. Simply build awareness and sensitivity within your staff to be attentive to the needs and wants of clients, and then provide the highest levels of service and responsiveness. You will experience improved customer retention, an increased number of referrals, and another surprising perk – a happier workforce that is engaged in process of building success.
Best wishes in your marketing efforts!
Wednesday, June 3, 2009
Bank Deposit Accounts vs Money Market Funds
Great Article in the Wall Street Journal today about savings rates.
Bank accounts may even be more secure than other options, since bank deposits are insured by the Federal Deposit Insurance Corp. up to $250,000 per depositor, a limit recently extended to 2013. While money-market funds are generally very safe, the insurance program set up after the financial crisis covers only investments that were there as of Sept. 19, 2008 and is set to expire this September. See the full article at: http://online.wsj.com/article_email/SB124398655282979357-lMyQjAxMDI5NDAzMzkwODM2Wj.html#printMode
Bank accounts may even be more secure than other options, since bank deposits are insured by the Federal Deposit Insurance Corp. up to $250,000 per depositor, a limit recently extended to 2013. While money-market funds are generally very safe, the insurance program set up after the financial crisis covers only investments that were there as of Sept. 19, 2008 and is set to expire this September. See the full article at: http://online.wsj.com/article_email/SB124398655282979357-lMyQjAxMDI5NDAzMzkwODM2Wj.html#printMode
Monday, April 27, 2009
Community Banks: Still Safe & Secure
The Independent Community Bankers of America (ICBA) and MileStone Bank are reminding community bank customers of the extraordinary stability of the community banking industry as the troubles of large Wall Street financial institutions and investment firms dominate mainstream headlines.
“Our customers may be watching the news and reading the papers and naturally, they worry about their own banks,” said Dave Gill, President & CEO of MileStone Bank. “We understand their concern, but want to reassure our customers that they need not worry about the stability of their bank and the safety of their money.”
“These are challenging times for our nation’s economy and financial system – one of the most challenging in many, many years. We have seen the failure of some large financial firms and investment banks,” said Cynthia L. Blankenship, ICBA chairman and vice chairman and chief operating officer of Bank of the West, Irving, Texas. “However, the challenges are primarily on Wall Street, not Main Street, and investment banks are not commercial banks or savings institutions. The reality is there are more than 8,400 commercial banks in our country and insured deposits are safe in an FDIC insured institution. No depositor has ever lost a penny of FDIC-insured funds. Investment banks are not FDIC insured.”
Under the Emergency Economic Stabilization Act of 2008 (H.R. 1424) enacted Oct. 3, deposits held in FDIC-insured community banks will be guaranteed by the federal government for up to $250,000 through Dec. 31, 2009. Starting on Jan. 1, 2010, deposits held in FDIC-insured community banks will be guaranteed for up to $100,000 per depositor, and $250,000 for certain retirement accounts.
“When it comes to community banks, the vast majority have been and continue to be some of the safest, soundest and most secure financial institutions in our nation,” said Blankenship. “Community banks follow responsible business practices. Community banks are risk-averse; they are sensible businesses that work every day to support their customers, communities and local markets.”
“We encourage customers to call us if they are concerned,” said Dave Gill of MileStone Bank. “We value our relationship with our customers and our communities, and we want everyone to feel secure—both now and well into the future.”
Learn more about MileStone Bank at www.milestonebank.com
“Our customers may be watching the news and reading the papers and naturally, they worry about their own banks,” said Dave Gill, President & CEO of MileStone Bank. “We understand their concern, but want to reassure our customers that they need not worry about the stability of their bank and the safety of their money.”
“These are challenging times for our nation’s economy and financial system – one of the most challenging in many, many years. We have seen the failure of some large financial firms and investment banks,” said Cynthia L. Blankenship, ICBA chairman and vice chairman and chief operating officer of Bank of the West, Irving, Texas. “However, the challenges are primarily on Wall Street, not Main Street, and investment banks are not commercial banks or savings institutions. The reality is there are more than 8,400 commercial banks in our country and insured deposits are safe in an FDIC insured institution. No depositor has ever lost a penny of FDIC-insured funds. Investment banks are not FDIC insured.”
Under the Emergency Economic Stabilization Act of 2008 (H.R. 1424) enacted Oct. 3, deposits held in FDIC-insured community banks will be guaranteed by the federal government for up to $250,000 through Dec. 31, 2009. Starting on Jan. 1, 2010, deposits held in FDIC-insured community banks will be guaranteed for up to $100,000 per depositor, and $250,000 for certain retirement accounts.
“When it comes to community banks, the vast majority have been and continue to be some of the safest, soundest and most secure financial institutions in our nation,” said Blankenship. “Community banks follow responsible business practices. Community banks are risk-averse; they are sensible businesses that work every day to support their customers, communities and local markets.”
“We encourage customers to call us if they are concerned,” said Dave Gill of MileStone Bank. “We value our relationship with our customers and our communities, and we want everyone to feel secure—both now and well into the future.”
Learn more about MileStone Bank at www.milestonebank.com
Wednesday, April 15, 2009
Hope for tomorrow......
There is hope for a better tomorrow and the banking system (at the local level) can and will be a big part of recovery.
Local level community banks are owned and operated by people you know and trust rather than a foreign country that is far removed from your reality. Community bankers go to the same Little League fields and dance recitals as you and they care about the well being of families, businesses, and the neighborhoods you share. Community banks’ sponsorships and donations to local organizations are generous; and, upstanding bank officers’ volunteer service and leadership have a far-reaching impact on building healthy communities. Beyond their “heart”, community banks, for the most part, are well capitalized and in a strong position to provide a safe place for saving and borrowing money.
As individuals become more fiscally responsible and conservative, good old fashioned savings accounts and certificates of deposit provide a guaranteed principle, safe and secure option. Deposits are insured by FDIC for up to $250,000 or more (depending on account titling). In addition to providing safety, soundness and interest, those same deposits fuel business growth within the local community. Community bankers have wisdom, knowledge, experience, and integrity. They are familiar with their borrowers and the marketplace which enables them to make sound decisions. Community banks connect community people to community businesses by providing loans that fuel the economy, create jobs, and sustain growth.
Don’t forget that you, too, play a role in recovery:
· Choose to fuel the economy by placing your business and personal deposits in a local community bank
· Choose a bank that understands and supports your industry
· Choose a banker that that is qualified to be a business advisor and cares enough to be a partner to help you enhance your practice and your patients’ experiences
· Choose to be part of the solution
Local level community banks are owned and operated by people you know and trust rather than a foreign country that is far removed from your reality. Community bankers go to the same Little League fields and dance recitals as you and they care about the well being of families, businesses, and the neighborhoods you share. Community banks’ sponsorships and donations to local organizations are generous; and, upstanding bank officers’ volunteer service and leadership have a far-reaching impact on building healthy communities. Beyond their “heart”, community banks, for the most part, are well capitalized and in a strong position to provide a safe place for saving and borrowing money.
As individuals become more fiscally responsible and conservative, good old fashioned savings accounts and certificates of deposit provide a guaranteed principle, safe and secure option. Deposits are insured by FDIC for up to $250,000 or more (depending on account titling). In addition to providing safety, soundness and interest, those same deposits fuel business growth within the local community. Community bankers have wisdom, knowledge, experience, and integrity. They are familiar with their borrowers and the marketplace which enables them to make sound decisions. Community banks connect community people to community businesses by providing loans that fuel the economy, create jobs, and sustain growth.
Don’t forget that you, too, play a role in recovery:
· Choose to fuel the economy by placing your business and personal deposits in a local community bank
· Choose a bank that understands and supports your industry
· Choose a banker that that is qualified to be a business advisor and cares enough to be a partner to help you enhance your practice and your patients’ experiences
· Choose to be part of the solution
Monday, March 23, 2009
Make the most of your FDIC guarantee - How to be sure your deposits are fully insured
Your banker should be able to help you determine FDIC insurance, but here is a great link to the FDIC website:
http://www.fdic.gov/consumers/consumer/news/cnwin0809/guarantee.html
http://www.fdic.gov/consumers/consumer/news/cnwin0809/guarantee.html
Monday, March 16, 2009
What you need to know about getting a business loan
Developing and maintaining a relationship with your banker has never been more important. Most businesses rely on their bank for essential services such as checking & savings accounts, equipment loans, working capital lines of credit and commercial mortgages. A business owner’s relationship with their banker should be built on mutual trust and respect and based on value not price. The old adage “you get what you pay for” is applicable to most things in life including a business banking relationship. It may cost a bit more for a banker who is truly a valuable business advisor rather than simply an order taker, but it’s worth it!!!
A specific value that a banker can add to the business relationship, especially today is to educate their clients about what is typically needed when applying for a business loan. Most business owners are unsure what bankers are looking for when evaluating a loan request. That confusion can only be compounded today by all the talk of tight credit. Credit is absolutely available today. In order to avail themselves to it, business owners should be aware of the process that goes into considering a loan request and the type of information and documentation they will be expected to provide.
When a business owner is seeking a loan they should be prepared to discuss:
1. The amount of the loan
2. The purpose of the loan– to purchase assets, payoff old debts, fund operating expenses, buyout a partner, etc
3. The security being offered for the loan – collateral such as real estate, equipment, inventory, accounts receivable, stocks, bonds, etc
4. The term of the loan – how long will it take to repay the loan
5. The company’s financial condition – past, present and future
The banker will typically look for documentation to support the loan request and measure the relative financial health of the business and the principals…documentation such as:
1. Federal tax returns (2-3 years) for both the business and principals
2. Year-end financial statements (2-3 years)for the business
3. Year-to-date and projected financial statements
4. A personal financial statement – listing what the principals own & owe
5. Business bank statements (2-3 months)
Lending money is all about managing risk. To help bankers evaluate risk more completely they will typically test a loan request and accompanying financial data against the following criteria.
1. Character – Does the borrower exhibit character or integrity? Does the business and its owner have a good reputation in the community?
Does the borrower exhibit a good credit history? Does the business and its owner pay their creditors on time?
2. Capacity – Does the borrower exhibit the financial capacity to repay the loan requested? Is sufficient cash flow available to make the payments?
3. Capital – Does the borrower exhibit sufficient capital to support the loan requested? Is there sufficient cash for a down payment and for a cushion in case business gets slow.
4. Collateral – Can the borrower provide sufficient collateral to secure the debt? Are there assets such as real estate, equipment, A/R or inventory that can be pledged to the bank as security for the loan?
5. Conditions – Is the condition of the borrower, the borrower’s industry and the general economy favorable to the repayment of the loan? Are there aspects of the business, the industry or the economy that would negatively impact the ability to repay?
Loans for small businesses are available. Community banks are ready, willing and able to provide that much needed financing. But, now more than ever businesses must be able to provide the information and the documentation necessary for bankers to assess and mitigate the risks inherent in making loans. Being prepared before you apply is an important first step which will accelerate the process and increase your chances for an approval.
A specific value that a banker can add to the business relationship, especially today is to educate their clients about what is typically needed when applying for a business loan. Most business owners are unsure what bankers are looking for when evaluating a loan request. That confusion can only be compounded today by all the talk of tight credit. Credit is absolutely available today. In order to avail themselves to it, business owners should be aware of the process that goes into considering a loan request and the type of information and documentation they will be expected to provide.
When a business owner is seeking a loan they should be prepared to discuss:
1. The amount of the loan
2. The purpose of the loan– to purchase assets, payoff old debts, fund operating expenses, buyout a partner, etc
3. The security being offered for the loan – collateral such as real estate, equipment, inventory, accounts receivable, stocks, bonds, etc
4. The term of the loan – how long will it take to repay the loan
5. The company’s financial condition – past, present and future
The banker will typically look for documentation to support the loan request and measure the relative financial health of the business and the principals…documentation such as:
1. Federal tax returns (2-3 years) for both the business and principals
2. Year-end financial statements (2-3 years)for the business
3. Year-to-date and projected financial statements
4. A personal financial statement – listing what the principals own & owe
5. Business bank statements (2-3 months)
Lending money is all about managing risk. To help bankers evaluate risk more completely they will typically test a loan request and accompanying financial data against the following criteria.
1. Character – Does the borrower exhibit character or integrity? Does the business and its owner have a good reputation in the community?
Does the borrower exhibit a good credit history? Does the business and its owner pay their creditors on time?
2. Capacity – Does the borrower exhibit the financial capacity to repay the loan requested? Is sufficient cash flow available to make the payments?
3. Capital – Does the borrower exhibit sufficient capital to support the loan requested? Is there sufficient cash for a down payment and for a cushion in case business gets slow.
4. Collateral – Can the borrower provide sufficient collateral to secure the debt? Are there assets such as real estate, equipment, A/R or inventory that can be pledged to the bank as security for the loan?
5. Conditions – Is the condition of the borrower, the borrower’s industry and the general economy favorable to the repayment of the loan? Are there aspects of the business, the industry or the economy that would negatively impact the ability to repay?
Loans for small businesses are available. Community banks are ready, willing and able to provide that much needed financing. But, now more than ever businesses must be able to provide the information and the documentation necessary for bankers to assess and mitigate the risks inherent in making loans. Being prepared before you apply is an important first step which will accelerate the process and increase your chances for an approval.
Monday, March 9, 2009
Will the economy ever recover?
Regardless of where interest rates are, what the value of your home is, how much money the government heaps on the problem or which “too big to fail” financial institution is bailed out next, attaining some level of stability is the key to halting the current downward spiral and getting us on the road to recovery. That is a certainty. What is currently uncertain and being debated daily is how we bring back that stability, how we promote public confidence, how we get banks lending and consumers spending. Is the current stimulus package the answer? Solving a credit crisis with massive amounts of additional debt seems counterintuitive, but there is no question something has to be done. Is nationalization of some banks the answer? Maybe. As the nation’s largest banks continue to seek and receive federal capital injections Uncle Sam is slowly becoming a majority shareholder. But, there are strings attached to government ownership. For instance, restrictions are being placed on the payment of dividends by those banks accepting TARP funds. Will that make it more difficult for those banks to attract and retain capital and will they ultimately be challenged to repay TARP? Is the creation of a “Bad Bank” or “Aggregator Bank” similar to the old Resolution Trust Corporation the solution for moving toxic assets off of bank’s balance sheets? This strategy, while expensive to tax payers, worked in the 1980’s with failed S & L’s. There are troubling differences today, though. The assets taken over from failed S&L’s were relatively easy to price and sell. The toxic assets affecting bank performance today are substantially different--countless types of credit derivatives—which are dizzyingly complex. What’s more, today the proposed agency would be taking over failed assets of existing banks rather than simply selling off the assets of failed institutions. A protracted negotiation process between the proposed agency and the banks whose troubled assets it is attempting to buy could lead to endless delays. Finally, are auto makers, investment bankers and mortgage lenders really too big to fail or is it time to endure the pain of an overall economic adjustment rather than masking the problems with massive debt that may have much larger, more long lasting effects on our economy a few years from now?
Given these issues and the uncertainty about what will work, attempting to predict exactly where the banking industry and the national economy are headed is impossible. Exacerbating the effort is the fact that besides all of the unanswered issues and questions in order to know where it is we are going, we really need to know where we are, and where the economy and the financial industry are changes almost daily. Obviously, then we need to find a point of stabilization, we need to identify the “bottom” of the market and apparently we aren’t there yet. And no one is speaking out to venture a guess about when we will be.
To the contrary, the closest we seem to get in terms of defining the end of the problems and the beginning of recovery are daily comments such as those offered by Newt Gingrich in his remarks recently at a breakfast with reporters and columnists organized by the Christian Science Monitor in which the former House Speaker suggested we are “going to go off a cliff”. “This is a much more profound problem than people think” said Mr. Gingrich. He went on to reference sources who predicted $4 trillion in bailouts before it’s all over and…another three to five years, at a minimum, of working our way through this”.
Whether a cliff or $4 trillion in bailouts is in our future remains to be seen. (It feels too many people that we leapt off the cliff months ago) The more important issue now is where is the bottom of this crisis? Clearly, creating confidence and stability is the key to finding the bottom and moving toward a recovery. Some analysts are clear about the importance of restoring faith in the system but very careful about predicting when it will happen. George Van Horn a senior analyst with IBIS World (a market research organization specializing in long range forecasting of industries and the business environment at large) was quoted in Chief Learning Officer Magazine saying, “Stability is the first issue…”. He went on to say “If the stimulus plan does help add stability, maybe you’ll see it by the second half of this year. [And] with stability will come confidence, and the economy will start to recover as we go through 2010”. As with most predictions today stability is the answer but when and how this will happen is filled with “if’s” and “maybe’s”. We will have to wait and see.
Stability, though, is the key and an industry that has continually contributed to that stability and holds the financial answers for most small businesses is community banking. Community banking has expanded even in this recessionary economy. Unfortunately, the negative headlines lump all banks together. Many of the troubled “banks” are actually not insured depository institutions, but rather Investment Banks, or Mortgage Banks. And those insured depository institutions that are failing comprise a small segment of the industry usually made up of “too big to fail” megabanks. What isn’t reported enough is that community banks make up 98% of all banking institutions, that these banks are locally owned and operated and that they are well capitalized. "Community banks are locally owned, and their assets are being put to use in the community in such products as loans to small business and consumer loans," explains Aleis Stokes, director of public relations for the Independent Community Bankers of America (ICBA). "They are competitive in rates.., understanding [of] the marketplace, and willing to support the local community in challenging times."
So, if you want more detailed information about the state of our economy and the prospects for and timing of a recovery stay tuned. But, if you are looking for a place to conduct your personal and business banking and for banking professionals who care more about relationships than simply accepting financial transactions look to community banks.
Given these issues and the uncertainty about what will work, attempting to predict exactly where the banking industry and the national economy are headed is impossible. Exacerbating the effort is the fact that besides all of the unanswered issues and questions in order to know where it is we are going, we really need to know where we are, and where the economy and the financial industry are changes almost daily. Obviously, then we need to find a point of stabilization, we need to identify the “bottom” of the market and apparently we aren’t there yet. And no one is speaking out to venture a guess about when we will be.
To the contrary, the closest we seem to get in terms of defining the end of the problems and the beginning of recovery are daily comments such as those offered by Newt Gingrich in his remarks recently at a breakfast with reporters and columnists organized by the Christian Science Monitor in which the former House Speaker suggested we are “going to go off a cliff”. “This is a much more profound problem than people think” said Mr. Gingrich. He went on to reference sources who predicted $4 trillion in bailouts before it’s all over and…another three to five years, at a minimum, of working our way through this”.
Whether a cliff or $4 trillion in bailouts is in our future remains to be seen. (It feels too many people that we leapt off the cliff months ago) The more important issue now is where is the bottom of this crisis? Clearly, creating confidence and stability is the key to finding the bottom and moving toward a recovery. Some analysts are clear about the importance of restoring faith in the system but very careful about predicting when it will happen. George Van Horn a senior analyst with IBIS World (a market research organization specializing in long range forecasting of industries and the business environment at large) was quoted in Chief Learning Officer Magazine saying, “Stability is the first issue…”. He went on to say “If the stimulus plan does help add stability, maybe you’ll see it by the second half of this year. [And] with stability will come confidence, and the economy will start to recover as we go through 2010”. As with most predictions today stability is the answer but when and how this will happen is filled with “if’s” and “maybe’s”. We will have to wait and see.
Stability, though, is the key and an industry that has continually contributed to that stability and holds the financial answers for most small businesses is community banking. Community banking has expanded even in this recessionary economy. Unfortunately, the negative headlines lump all banks together. Many of the troubled “banks” are actually not insured depository institutions, but rather Investment Banks, or Mortgage Banks. And those insured depository institutions that are failing comprise a small segment of the industry usually made up of “too big to fail” megabanks. What isn’t reported enough is that community banks make up 98% of all banking institutions, that these banks are locally owned and operated and that they are well capitalized. "Community banks are locally owned, and their assets are being put to use in the community in such products as loans to small business and consumer loans," explains Aleis Stokes, director of public relations for the Independent Community Bankers of America (ICBA). "They are competitive in rates.., understanding [of] the marketplace, and willing to support the local community in challenging times."
So, if you want more detailed information about the state of our economy and the prospects for and timing of a recovery stay tuned. But, if you are looking for a place to conduct your personal and business banking and for banking professionals who care more about relationships than simply accepting financial transactions look to community banks.
Wednesday, February 11, 2009
Banking During Turbulent Economic Times
Exclusive Interview with Dave Gill, President and CEO of MileStone Bank headquartered in Doylestown, Pa.
Introduction:
In 2007, David W. Gill (President and CEO) and Elijiah Gray (CFO) co-founded MileStone Bank in response to industry consolidation that resulted in larger, more impersonal financial institutions. They saw an unmet need in the market and had a vision to provide target client segments (including dental professionals) with a new kind of banking that combines the highest level of personalized service with the latest in cutting-edge banking technology. They assembled a hand-selected team of experienced, knowledgeable bankers along with exceptional products and the results have been rewarding for both the client and the organization.
The Doctor of Dentistry editor was curious about a new kind of banking during these turbulent economic times and conducted the following interview to learn more:
Doctor of Dentistry: The current economic environment poses a unique set of challenges within the financial industry. How is MileStone weathering the storm?
Dave Gill: We agree with a recent Business Week special report that cited “This may be the ideal time to start a bank…startups hold a key advantage: a clean slate…they can deal with customers instead of dealing with problems.” Many larger banks are overwhelmed with managing TARP (troubled asset recovery program) and the operational details of resulting mergers. MileStone Bank is able to focus on meeting the loan and deposit needs of clients with agility not bureaucracy and red tape. Our clients find it refreshing.
Doctor of Dentistry: What geographic markets does MileStone serve?
Dave Gill: Because of our business model and innovative delivery systems, we are not restricted to a specific geographic territory. We can offer clients “banking without boundaries”. In fact we have over 100 locations throughout Pennsylvania and bordering states. In essence, we provide a banker on your doorstep for personalized service when you need it; and, we supplement that with a branch on your desktop - Remote Control banking system. The system enables checks to be deposited electronically using a scanner and secure online banking. Clients love the convenience, are delighted with the financial benefits of having next-day access to deposited funds, and appreciate that the package is FREE.
Doctor of Dentistry: What qualifies MileStone to be specialists in the dental industry segment?
Dave Gill: We have been serving the dental industry for the past 20 years with everything from loans to start their practice or buy new equipment to the state of the art Remote Control banking technology. Understanding the unique needs of dental professionals, we have responded with services distinctively designed to help the office run more efficiently so doctors can build their practices more effectively.
Doctor of Dentistry: I can see that you offer benefits to the industry, what’s in it for you?
Dave Gill: It’s rewarding to meet the needs of our clients and receive their endorsement through referred business. And, our client focus pays high dividends…we are the fastest growing bank in suburban Philadelphia. MileStone Bank is well capitalized, and has a strong and healthy balance sheet. It’s especially fulfilling to see the successes of clients like Dr. Gary Nack recently voted 2008 Best of Bucks County in the dentistry category. We look forward to building relationships with dental professionals for years to come.
Dr. Gary Nack:
“Their service is the best and they will bend over backwards to make things work for you- they are cutting edge, tech savvy people. The check deposit machine is a flawless way of doing banking. I cannot say enough good things of their bank,” says Dr. Nack a dentist from Bucks County.
For more information about MileStone bank, call 866-672-2655 or go to www.milestonebank.com
Introduction:
In 2007, David W. Gill (President and CEO) and Elijiah Gray (CFO) co-founded MileStone Bank in response to industry consolidation that resulted in larger, more impersonal financial institutions. They saw an unmet need in the market and had a vision to provide target client segments (including dental professionals) with a new kind of banking that combines the highest level of personalized service with the latest in cutting-edge banking technology. They assembled a hand-selected team of experienced, knowledgeable bankers along with exceptional products and the results have been rewarding for both the client and the organization.
The Doctor of Dentistry editor was curious about a new kind of banking during these turbulent economic times and conducted the following interview to learn more:
Doctor of Dentistry: The current economic environment poses a unique set of challenges within the financial industry. How is MileStone weathering the storm?
Dave Gill: We agree with a recent Business Week special report that cited “This may be the ideal time to start a bank…startups hold a key advantage: a clean slate…they can deal with customers instead of dealing with problems.” Many larger banks are overwhelmed with managing TARP (troubled asset recovery program) and the operational details of resulting mergers. MileStone Bank is able to focus on meeting the loan and deposit needs of clients with agility not bureaucracy and red tape. Our clients find it refreshing.
Doctor of Dentistry: What geographic markets does MileStone serve?
Dave Gill: Because of our business model and innovative delivery systems, we are not restricted to a specific geographic territory. We can offer clients “banking without boundaries”. In fact we have over 100 locations throughout Pennsylvania and bordering states. In essence, we provide a banker on your doorstep for personalized service when you need it; and, we supplement that with a branch on your desktop - Remote Control banking system. The system enables checks to be deposited electronically using a scanner and secure online banking. Clients love the convenience, are delighted with the financial benefits of having next-day access to deposited funds, and appreciate that the package is FREE.
Doctor of Dentistry: What qualifies MileStone to be specialists in the dental industry segment?
Dave Gill: We have been serving the dental industry for the past 20 years with everything from loans to start their practice or buy new equipment to the state of the art Remote Control banking technology. Understanding the unique needs of dental professionals, we have responded with services distinctively designed to help the office run more efficiently so doctors can build their practices more effectively.
Doctor of Dentistry: I can see that you offer benefits to the industry, what’s in it for you?
Dave Gill: It’s rewarding to meet the needs of our clients and receive their endorsement through referred business. And, our client focus pays high dividends…we are the fastest growing bank in suburban Philadelphia. MileStone Bank is well capitalized, and has a strong and healthy balance sheet. It’s especially fulfilling to see the successes of clients like Dr. Gary Nack recently voted 2008 Best of Bucks County in the dentistry category. We look forward to building relationships with dental professionals for years to come.
Dr. Gary Nack:
“Their service is the best and they will bend over backwards to make things work for you- they are cutting edge, tech savvy people. The check deposit machine is a flawless way of doing banking. I cannot say enough good things of their bank,” says Dr. Nack a dentist from Bucks County.
For more information about MileStone bank, call 866-672-2655 or go to www.milestonebank.com
Wednesday, February 4, 2009
Financial Empowerment for Women
(Things I wish my mother had taught me about money)
Men & Women are different. Did you know:
•Women leave the work force for an average of 11.5 years, compared to 16 months for men?
•A woman who leaves the work force for only seven years early in her career may receive half the retirement benefits of her male counterpart?
•Women are still paid an average of 20% less than their male counterparts?
•Only 49% of women have savings and investments greater than the total amount they owe on any consumer debt?
•Women live longer than men — an average of seven years?
•50% of women over age 65 outlive their husbands by 15 years?
•Three in four women are single when they die?
•Women leave the work force for an average of 11.5 years, compared to 16 months for men?
•A woman who leaves the work force for only seven years early in her career may receive half the retirement benefits of her male counterpart?
•Women are still paid an average of 20% less than their male counterparts?
•Only 49% of women have savings and investments greater than the total amount they owe on any consumer debt?
•Women live longer than men — an average of seven years?
•50% of women over age 65 outlive their husbands by 15 years?
•Three in four women are single when they die?
Due to these statistics, women need to be more in control of their financial future. Women tend to make the following financial mistakes: 1) Women invest later in life and more conservatively than men. Since women live longer and usually outlive their husbands, women need to invest earlier in life and make it a priority. 2) Women participate less often in 401(k) programs than their male counterparts. Partipating in company's 401(k) programs or IRAs are tax deferred investments. If you are in the 28% tax bracket, one out of every four dollars you put into a 401(k) or IRA is a reduction in your taxes not in your net paycheck. 3) Women are more likely to invest in their children’s college education than in their own retirement. Investing in your children's education is good but only after you have maxed out what you can invest in your retirement. You or your child can get a loan for their education but you can not get a loan for your retirement. In addition, your retirement savings are not counted against you (or towards what you can pay for tuition) when colleges are figuring out your financial aid. However, money you have set aside for your children's education will be deducted from the amount of financial aid you will receive.
Things I Wish My Mom Taught Me About…. Managing My Cash
•Spend less than you earn. This seems like common sense but many people spend more than they earn. Women need to take an inventory of what income they have coming in per month and what their expenses are. While creating a budget is a good tool, most people don't follow them or even look at them once they are done. If you have trouble controlling money in just a few categories, such as clothing or entertainment, create and adhere to a detailed budget for just these categories.
•Pay yourself first. Have your retirement taken out of your paycheck before you do anything else. This forces you to save and not have that money available to spend
Things I Wish My Mom Taught Me About…. Managing My Cash
•Spend less than you earn. This seems like common sense but many people spend more than they earn. Women need to take an inventory of what income they have coming in per month and what their expenses are. While creating a budget is a good tool, most people don't follow them or even look at them once they are done. If you have trouble controlling money in just a few categories, such as clothing or entertainment, create and adhere to a detailed budget for just these categories.
•Pay yourself first. Have your retirement taken out of your paycheck before you do anything else. This forces you to save and not have that money available to spend
Things I Wish My Mom Taught Me About….Savings
•Create an emergency fund equal to 3 - 6 months pay. Prepare for unexpected illness, accident or becoming a victim of corporate downsizing. Keep funds liquid and easy to access.
• Teach your children to save. You can accomplish this with young children by taking their birthday or holiday money and putting it into a savings account. Show them how much they have a few times a year. If you child wants a toy that is too expensive, have them save up their money to purchase it. If you have teenagers, force them to save a percentage of their paycheck that can't be touched by them, but offer an incentive. For example, I will pay for $100 per month of your gas expense if you save 50% of your paycheck.
Things I Wish My Mom Taught Me About ….Retirement
•Don’t count on social security. Depending on how old you are, social security might not be available when you retire.
•Saving for retirement is similar to an exercise program. The more you put into it, the more you will get out, and regular investing is key.
•If your employer matches 401K investments, get the entire match. I am amazed at how many people don't put enough into their 401k to get the employer match. It is FREE money for retirement.
•Don’t cash out your 401K. Pretend that your hard-earned, 401K-money was never yours to begin with. Otherwise, you will have to pay taxes & penalties, and work forever.
Things I Wish My Mom Taught Me About ….Credit Scores
•Factors that affect your credit score: Delinquencies, accounts opened during the last year, balances on revolving credit that are near limits, tax liens, bankruptcies, recent credit inquiries, too few (or too many) revolving accounts.
•Pay your mortgage on time. Too many people when they are short of money pay other bills before their mortgage. You need a place to live, if you don't pay your mortgage the bank is going to take your home.
•Always pay bills on time. Late payments negatively effect your credit score.
You can get a free copy of your credit report at http://www.annualcreditreport.com/
Things I Wish My Mom Taught Me About ….investments
•Choose the right Financial Advisor. Ask people you trust for a referral to a good financial advisor. In your initial meeting ask how they are paid, some are fee-based, meaning you pay a flat fee for them to manage your money and some are commission based, they get a percentage of your portfolio (i.e. 1%) or they get a commission on each trade. You need to know how they get paid and feel comfortable with that. Trust your instincts, if you don't like the person, don't trust them with your money. A good financial planner should find out about your lifestyle, when you expect to retire, what you want to do when you retire, where you will live, etc.
•Join a Club. An investment club will teach you about stocks and bonds. Money Club is a FREE service from WIFE.org, a non-profit organization co-founded more than twenty years ago. Find out more at www. MoneyClubs.com.
Managing your finances can be scary so ask for help from people you trust. As Marie Curie says:
“Nothing in life is to be feared. It is only to be understood.”
This article was written by Ms. Elijiah Gray, CFO of MileStone Bank.
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