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How Financial Planning Has Changed for Same-Sex Couples

How Financial Planning Has Changed for Same-Sex Couples

Retirement & estate planning strategies are being greatly altered.

 

Provided by PlanningWorks

 

When the Supreme Court affirmed the legality of same-sex marriage in June, its ruling profoundly altered the financial planning landscape for gay and lesbian couples – resulting in some “night and day” differences.

 

Yet in looking at the financial “before and after,” same-sex spouses and their advisors must also consider the “when and where” – because the Supreme Court ruling only applies to the 13 states that allow same-sex marriage (and the District of Columbia). Gay and lesbian spouses are still waiting to see if financial benefits will be granted in all 50 states.1,2,3

 

Here is how the landscape has changed for married gay and lesbian couples in states recognizing same-sex marriage.

Market Commentary - Week of 10/14/13

The Markets
Do world stock markets believe Congress is just offering up some Halloween excitement?

Last week, they responded to the government shutdown in the United States and the possibility the U.S. might default on its debt for the first time ever with the bravado of teenagers standing in line for a haunted house. Markets around the globe finished the week higher with some notable exceptions that included Chinese and Mexican markets and America’s NASDAQ.

It’s also possible market performance could be attributed to the lack of economic data available since the government shutdown. Even private economic indicators sometimes rely on federal government information to calculate their numbers, so markets may be weighting signs that America’s elected officials are making progress more heavily than they might if other data were accessible.

The positive progress in U.S. stock markets is particularly interesting since a lot of Americans – many of whom may be investors – have negative feelings about the fiscal policy impasse in Washington, according to a new NBC News/Wall Street Journal poll. Sixty percent of Americans polled said “if they had the chance to vote to defeat and replace every single member of Congress, including their own representative, they would.”

That may go a long way toward explaining the recent deterioration of consumer sentiment in America. The Thomson Reuters/University of Michigan's overall index on consumer sentiment declined for the third month straight in October. The change was relatively small, but sentiment reached its lowest level in nine months.

Data as of 10/11/13
1-Week    Y-T-D    1-Year    3-Year    5-Year    10-Year
Standard & Poor's 500 (Domestic Stocks)    0.8%    19.4%    18.9%    13.5%    11.2%    5.0%
10-year Treasury Note (Yield Only)    2.7    NA    1.7    2.4    3.9    4.3
Gold (per ounce)     -3.4    -25.3    -28.5    -2.2    8.8    13.1
DJ-UBS Commodity Index    0.4    -8.1    -14.1    -4.2    -2.6    -0.1
DJ Equity All REIT TR Index    2.9    5.5    8.7    12.3    10.6    9.5
Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

A FEDERAL RESERVE SYSTEM PRIMER… Last Wednesday, vice chair of the Board of Governors of the Federal Reserve Janet Yellen was nominated to take over as Chairman when Ben Bernanke steps down in January. If confirmed, she’ll take the helm of the institution entrusted with safeguarding our country’s monetary and financial system.
 
Congress established the Federal Reserve System a century ago in response to the financial panic of 1907. According to the Federal Reserve Bank of Boston:

“Financial panics and bank runs were all too common during the 19th and early 20th centuries. Some were more severe than others, but most followed the same general pattern. The misfortunes of a prominent speculator would undermine public confidence in the financial system. Panic stricken investors would then scramble to cut their losses. And, because it wasn’t uncommon for speculators to double as bank officials, worried depositors would rush to withdraw their money from any bank associated with a troubled speculator. If a beleaguered bank couldn’t meet its depositors’ demands for cash, panic would quickly spread to other banks. (Remember! There was no federal deposit insurance until 1933. If a bank failed, depositors had little hope of ever seeing their money again.)

The panic of 1907 ended when J.P. Morgan intervened and set up emergency loans for financial institutions. The clamor for reform led to the passage of the Federal Reserve Act (which created the Federal Reserve System (Fed), which became law in 1913.

Today, the Fed includes a Board of Governors in Washington, D.C. and 12 Federal Reserve Banks. The Board of Governors oversees the Fed. Its members are appointed by the President of the United States and confirmed by the Senate. They serve 14-year terms. The Reserve Banks are responsible for the Fed’s day-to-day operations which include “conducting monetary policy, supervising and regulating banks, and providing payment services all help maintain the stability of the financial system.”

Monetary policy is set by the Federal Open Market Committee (FOMC) which is composed of 12 voting members and includes the seven members of the Board of Governors and a rotating group of five Reserve Bank presidents. The chairman of the Board of Governors is also the chairman of the FOMC.

Weekly Focus – Think About It
“The greatest thing in family life is to take a hint when a hint is intended – and not to take a hint when a hint isn't intended.”
--Robert Frost, American poet

Value of Key Employee Insurance

The Value of Key Employee Insurance

Can your small business risk not having it?

 

Provided by PlanningWorks

 

What kind of financial loss would your business face without its key employees? They are worth more than their salaries – their performance, professionalism and character make your company what it is, and provide the stability and predictability you need to realize a profit.

 

Because of this reality, wise businesses owners take a look at key employee insurance. 

 

Aren’t the premiums for key employee insurance sizable? Not necessarily. In fact, they may seem profoundly insignificant compared to the financial hit your company could take without a key worker.

Market Commentary - Week of 10/7/13

The Markets
For Sturm und Drang enthusiasts, the third quarter of 2013 held plenty of mayhem and emotion. It began with an overthrow of Egypt’s democratically-elected government and ended with the United States government at risk of defaulting on Treasury and government obligations. In between:

Fed officials had a lot to say. Like background music that manipulates your emotions, the U.S. Federal Reserve’s ongoing commentary about potential changes to U.S. monetary policy affected global stock and bond markets throughout much of the year, and third quarter was no exception. When the Fed didn’t adjust quantitative easing in September, markets celebrated. Apparently, they’d lost sight of the fact that the Fed could decide to taper at its next meeting in October. When reminded of that fact, markets retreated a bit.

Emerging market currencies bounced. Changing expectations for U.S. monetary policy had a profound effect on emerging markets. Many saw their currencies lose value relative to the U.S. dollar early in the quarter; some regained it as the quarter progressed. The most spectacular performance may have been delivered by the Indian rupee which went from being Asia’s worst performing currency to one of the world’s best in just five days.

Shibor Shock startled investors. During the second quarter, China’s GDP grew at the slowest pace in more than two decades. As curtains opened on the third quarter, the world saw Chinese banks staggering as the Shanghai Interbank Offered Rate (Shibor), China’s benchmark interest rate for an overnight bank lending, exceeded 25 percent. Shibor was about 2.5 percent early in 2013. The ensuing cash crunch created concern China’s economy might be in trouble. Apprehension increased when the country’s finance minister, Lou Jiwei, confounded analysts and investors by suggesting China’s Gross Domestic Product (GDP) growth rate for 2013 might be 6.5 or 7 percent rather than the official target of 7.5 percent.

Europe may have turned the corner. In mid-August, the Eurozone’s GDP grew by 1.1 percent annualized. Markets breathed a sigh of relief on the tentative hope positive growth signaled a turning point for the region’s lagging economy which had been in recession for 18-months up to that point.

As the quarter ended, the world’s attention turned to U.S. fiscal policy as Congress battled over budgets and debt ceilings. Last week, Congress reached an impasse and the government shutdown partially. If they are unable to resolve differences, the U.S. government is at risk of defaulting on its debt; an occurrence experts say could send shockwaves through the global economy. Needless to say, the new quarter holds endless potential for storm and stress.

 Data as of 10/4/13
1-Week    Y-T-D    1-Year    3-Year    5-Year    10-Year
Standard & Poor's 500 (Domestic Stocks)    -0.1%    18.5%    15.7%    14.1%    9.9%    5.0%
10-year Treasury Note (Yield Only)    2.7    NA    1.7    2.5    3.4    4.2
Gold (per ounce)     -2.3    -22.7    -27.0    -0.1    8.4    13.4
DJ-UBS Commodity Index    -0.6    -8.5    -14.5    -2.8    -3.4    0.4
DJ Equity All REIT TR Index    -1.8    2.5    5.5    11.8    9.5    9.2
Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

IF YOU’VE BEEN LAMENTING THE STATE OF AMERICA, TAKE HEART… We’re still really good at some things. For example, we have more entrepreneurs – people who organize and operate businesses – than any other country in the world. About one of every 13 Americans is an entrepreneur, according to The Economist. That’s almost 7.5 percent of our population! The Netherlands isn’t too far behind us in the ratio of entrepreneurs to population at large (about 6.5 percent). However, less than 4 percent of Brits are entrepreneurs and less than 3 percent of the citizens of France, Sweden, and Germany are so inclined.

Forbes.com postulates entrepreneurship in America can be attributed, in part, to the fact that our country is a magnet for venture capital. During 2012, the U.S. ranked second overall – ahead of Sweden and behind Israel – in venture-backed capital as a percentage of GDP, according to The Organization for Economic Cooperation and Development (OECD). Also, we value the entrepreneurial spirit. Let’s face it, Americans love the underdog. We don’t see failure as failure when risk-taking is involved. We see it more as daring. As Teddy Roosevelt once said:

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

The Forbes article also pointed to the influence younger generations, specifically Millennials, are having on our economy. According to CMO.com, Millennials buy fewer cars, prefer renting to owning, and eat less fast food. They want transparent workplaces and collaborative work environments. In response to their preferences, car sharing, media sharing, home and vacation sharing, and other types of collaborative businesses have been born. Millennials are creating opportunities for entrepreneurs everywhere!

Weekly Focus – Think About It

“After a storm comes a calm.”
--Matthew Henry, English commentator on the Bible

The Financial Impact of the Affordable Care Act

THE FINANCIAL IMPACT OF THE AFFORDABLE CARE ACT

 

A Study of REAL Real Returns

If you’ve ever wondered, “HOW DO INFLATION AND TAXES AFFECT MY RETURNS?” – Then you will find this article to be eye-opening and thought provoking. There is relative data on every asset class, even municipal bonds
 
Please click below to access “A Study of Real Real Returns” by Thornburg Investment Management, or call our office at 512 498-7526 x.58 for a color hard copy of the article.
                
PlanningWorks’ focus is to get our clients into REAL real returns that meet their individual objectives and overall plan.
 
Click here: http://www.thornburginvestments.com/pdfs/TH1401.pdf

 

Market Commentary - Week of 9/30/13

The Markets
“It’s déjà vu all over again,” Yogi Berra reportedly said as he watched Yankee teammates Mickey Mantle and Roger Maris smack back-to-back home runs for the umpteenth time.

Americans are experiencing déjà vu all over again, too. Sure, the prospect of another fiscal showdown doesn’t electrify a crowd like a couple of major league home runs. All the same, investors’ response to the possibility the U.S. government might partially shut down on October 1 was muted. Some U.S. stock markets gave back a little for the week; others moved higher. All remained up year-to-date.

So, are investors confident America’s elected officials will do the right thing? Or, have they become complacent? Are they so accustomed to debate and delay that it doesn’t faze them? According to The Economist:

“[U.S.] Federal spending comes in two types: discretionary which must be authorized every year; and mandatory which is set in law. These labels are confusing because much discretionary spending is anything but: it includes funding for the justice system and defense. Since 1976 Congress has required itself to pass a dozen appropriations bills annually to cover this stuff. Unfortunately, it has missed its deadline every year since 1994. To keep the lights on it has resorted to temporary resolutions to finance discretionary spending at existing levels until agreement can be reached, sometimes after a brief pause for effect.”

As it turns out, government funding has expired 10 times since 1981, and the government has closed down each time. Nine of the 10 closures occurred over weekends so they had limited impact. The tenth lasted for 21 days during 1995 and 1996. We should learn how this round will turn out pretty quickly.

Data as of 9/27/13
1-Week    Y-T-D    1-Year    3-Year    5-Year    10-Year
Standard & Poor's 500 (Domestic Stocks)    -1.1%    18.6%    16.9%    14.0%    8.9%    5.3%
10-year Treasury Note (Yield Only)    2.6    NA    1.6    2.5    3.6    4.0
Gold (per ounce)     -0.6    -20.8    -23.9    1.1    8.2    13.4
DJ-UBS Commodity Index    -0.2    -8.0    -12.9    -2.9    -5.2    0.6
DJ Equity All REIT TR Index    -0.3    4.3    7.3    12.9    7.5    9.9
Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

MERIT-BASED SYSTEMS ARE ALL THE RAGE… One definition for ‘merit’ in the Merriam-Webster Dictionary is: Character or conduct deserving reward, honor, or esteem (also: achievement). If someone performs well, we want to reward them. If they don’t, well, maybe we won’t.

Merit-based systems are everywhere. For companies trying to retain top talent, recognition and rewards systems are essential. Almost 83 percent of employers use merit raises, according to the Compdata BenchmarkPro 2012 survey. In 2012, the average worker pay increase for merit was 2.7 percent. That’s expected to increase to 2.8 percent for 2013.

Corporations aren’t the only ones who tie pay to performance. In some school districts, teachers’ income is linked to student performance, and about 20 percent of state aid for undergraduate students is tied to achievement in the United States. Under the Affordable Care Act, the income of public and private hospitals will be tied to performance measures such as patient outcomes and cost containment. Earlier this year, hospitals in New York City negotiated with physicians unions to link doctors pay to performance, too. A study published in The Journal of the American Medical Association in September found providing financial incentives to clinicians for achieving better health outcomes was effective over the short term.

One tricky thing about merit-based pay systems is deciding how to measure performance. According to The Wall Street Journal, CEO pay may be measured against a variety of benchmarks:

“Compensation awarded to CEOs of 300 U.S. companies rose a median 3.6% to $10.1 million, the analysis found. The total includes salary and annual bonuses, plus the value of restricted stock and stock options at the time they were granted… CEO pay increased slightly faster than profit which rose 2.1% at the companies surveyed. But, it lagged behind the median 14% increase in total shareholder return for those companies which includes share-price movement and dividends.”

The article reported investor influence exercised through ‘say-on-pay’ votes – annual non-binding votes on CEO pay – has inspired greater consistency in CEO pay. In fact, for the first time in the history of the survey cited, the largest piece of the CEO pay puzzle was linked to financial or stock performance.

Weekly Focus – Think About It
“Success consists of going from failure to failure without loss of enthusiasm.”
--Winston Churchill, British Prime Minister

The Hidden Cost of Home Ownership

THE HIDDEN COST OF HOME OWNERSHIP

 

Are you paying more than you should for your new home?

 

Provided by PlanningWorks

 

Here’s a hypothetical situation … Let’s say John Doe wants to buy a new mp3 player for $300 … but he doesn’t have $300 right now. He decides to buy it on credit. Lender A will let him pay it over three months at $115 per month (a final total of $345 with interest). Lender B will let him pay for it over six months, at only $75 per month (a final total of $450 with interest). With Lender B John Doe can make lower monthly payments, but it takes him longer to own his mp3 player and he ends up paying one and a half times what it is actually worth! With Lender A he has to pay more per month, but ends up spending much less on the mp3 player … which he then owns in half the time.

 

What would you do? If you were in John Doe’s shoes, which lender would you borrow from? Which plan would you choose? It’s the same basic principle when it comes to buying your home. When you’re deciding between a 15-year mortgage and a 30-year mortgage, be sure to consider and weigh all the pros and cons before making your decision.

Market Commentary - Week of 9/23/13

The Markets

We’re going to do it…We’re going to do it…We’re not going to do it…Yet.

Last week, the U.S. Federal Open Market Committee gave stock markets a gift that, on a scale of thrills, might have been on par with Marilyn Monroe singing happy birthday to JFK. On Wednesday, the FOMC announced (without a trace of breathiness):

“Taking into account the extent of federal fiscal retrenchment, the Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy. However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases. Accordingly, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month.”

The ensuing euphoria pushed many of the world’s stock markets higher. The Dow Jones Industrial Average set a new record, Germany’s DAX closed at a new high, and Japan's Nikkei delivered its best performance in eight weeks. Emerging markets also reaped positive benefits.

The Quantitative Easing  or QE-sugar buzz abated when St. Louis Fed President James Bullard told Bloomberg the Fed may decide to begin buying fewer bonds at its next meeting in October. This surprised some as analysts already had predicted it wouldn’t happen until December which caused markets to slump a bit last Friday.

It’s possible that, by mid-October, the Fed’s ‘lather-rinse-repeat’ commentary on quantitative easing may have become background music for another event that has the potential to deliver a macroeconomic jolt: the U.S. congressional debate over the debt ceiling.

Data as of 9/20/13
1-Week    Y-T-D    1-Year    3-Year    5-Year    10-Year
Standard & Poor's 500 (Domestic Stocks)    1.3%    19.9%    17.1%    14.4%    7.2%    5.3%
10-year Treasury Note (Yield Only)    2.7    NA    1.8    2.7    3.8    4.2
Gold (per ounce)     2.3    -20.3    -23.3    1.8    8.7    13.4
DJ-UBS Commodity Index    -0.8    -7.7    -12.3    -2.5    -6.7    0.8
DJ Equity All REIT TR Index    2.3    6.5    8.4    12.3    7.2    10.2
Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

THERE’S SOME GOOD NEWS AND THERE’S SOME BAD NEWS… The good news is the rate of global gross domestic product (GDP) growth increased during the second quarter, according to The Economist. Greater economic strength in developed countries helped push the world’s GDP 2.4 percent higher during the second quarter of 2013 as compared to the second quarter of 2012. That’s only the third time that has happened in three years. The bad news, according to The Economist, is:

“The world is dangerously dependent on China… Since the beginning of 2010 it alone has contributed over one-third of global GDP growth, with another 40% coming from the rest of the emerging world. Weighed down by debt since the financial crisis, the rich world’s growth has been sclerotic. Excluding America, it has provided just 10% of global growth since 2010; America has contributed another 12.5%.”

China’s GDP has been growing at a pretty fair pace although the rate of growth has slowed. Forbes reported China’s GDP grew at an annualized rate of 7.5 percent during the second quarter of 2013, falling just short of first quarter’s 7.7 percent growth. The slowdown was expected. China is rejiggering its economy in an effort to stimulate domestic demand and consumer spending rather than continuing to rely on investment-driven growth.

Here’s another tidbit to consider. Forty percent of the world’s growth has been attributable to emerging markets (ex-China). Changing expectations for U.S. monetary policy have interrupted the flow of capital into those markets. The Economist’s Capital Freeze Index, which assesses the vulnerability of emerging markets to a freeze in capital inflows, found that nine of 26 emerging countries examined are at relatively high risk of this happening. That has the potential to affect the world’s GDP growth rate, too.

Weekly Focus – Think About It
“Our prime purpose in this life is to help others. And if you can't help them, at least don't hurt them.”
--Dalai Lama, spiritual leader of Tibet

Market Commentary - Week of 9/16/13

The Markets
Baseball great Yogi Berra once said, “In theory there is no difference between theory and practice. In practice there is.” He may have been on to something.

Last May, Fed Chairman Ben Bernanke introduced the idea the Fed's economic stimulus program, known as Quantitative Easing (QE), might be ratcheted down sooner rather than later. The concept, that easy money – the Fed has injected about $2.75 trillion into financial markets during the past five years – could soon be behind us, threw global markets into a tizzy.

Expectations that interest rates in more developed economies would move higher as QE tapered off caused investors to pull money from emerging markets (where many had sought higher returns). This created challenges in emerging countries with large current account deficits (deficits that occur when total imports exceed total exports, making a country a debtor nation).

So, what will happen when the Fed actually begins to buy fewer bonds? Pundits are mixed in their opinions. Some believe markets may become more volatile; others believe markets have already factored in the effects of tapering. In August, the Financial Times described it this way:

“The beginning of the end for QE matters greatly as for the past five years central banks led by the Fed have actively encouraged investors to pile into risky assets. With QE suppressing interest rates and more importantly, the volatility of prices, investors duly obliged and sought risky assets. Now with the Fed thinking about reversing some support, this summer’s turmoil may be a taste of what is coming in the form of higher long-term bond yields and market volatility. Some will argue the Fed’s taper is pretty much reflected by the sharp rise we have seen in long-term Treasury yields since May.”

We’ll know more when the Federal Open Market Committee announcement is made. Over time, however, it may not be all that easy to quantify the effects of more accommodative monetary policy in the United States, if that’s what the Fed chooses to do this week. There are other flashpoints that could affect markets, as well, including economic stressors in emerging markets, decisions on Syria, and upcoming Washington budget battles.

 Data as of 9/13/13
1-Week    Y-T-D    1-Year    3-Year    5-Year    10-Year
Standard & Poor's 500 (Domestic Stocks)    2.0%    18.4%    15.6%    14.6%    7.2%    5.2%
10-year Treasury Note (Yield Only)    2.9    NA    1.8    2.7    3.5    4.2
Gold (per ounce)     -5.0    -22.2    -23.9    2.0    11.2    13.4
DJ-UBS Commodity Index    -1.1    -7.0    -14.1    -1.9    -5.6    0.8
DJ Equity All REIT TR Index    2.3    2.3    1.3    11.8    7.1    9.8

Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

EXPLORING THE INTERNET OF EVERYTHING… Before you read further, you may want to cue the music to Hanna Barbera’s space age cartoon, The Jetsons. The Internet of Everything (a.k.a. The Internet of Things) seems to be bringing the world closer to a reality where your refrigerator can order groceries, your smartphone can start your car, and tattoos only show when you want them to be seen. Two of the keys to connecting everyday things to each other and to the Internet are radio frequency identification (RFID) chips and Near Field Communication (NFC) systems.

RFID chips are all around us. Companies use them to manage inventories, farmers use them to track livestock and, in Boston, commuters use 3D-printed, chip-embedded rings to pay for mass transit. If you’ve traveled overseas recently, you probably used an RFID chip. Newer American passports have chips embedded to make it easier for Homeland Security to read them. In addition, contactless smart credit cards, which rely on chips and pin codes, are the standard across most of Europe and much of South America and Asia. As a result, Americans who try to use credit cards that have magnetic stripes and require signatures sometimes face challenges when trying to pay for goods abroad.

NFC is short-range wireless communications technology that may be best known for making it easier to pay for things with your smartphone or tablet. According to Venture Beat, an online magazine that focuses on the role of technology in daily life, one of the most powerful applications of NFC technology may be tag writing and reading. How does it work? Imagine this:

“When you arrive at home you will hold your phone up to the NFC tag embedded in the door. This will turn the electronic lock, opening the door, but it will also switch your phones to “home mode,” enabling it to use your home Wi-Fi network and launching an app that connects to your home server to turn on the lights. Heading to the kitchen, you might then put your tablet next to the stovetop to begin cooking the evening meal. NFC tags in the tablet and stovetop recognize each other, the tablet starts up the recipe app with instructions on cooking tonight’s dinner. At the end of the evening, you’ll place your device on the bedside table and the proximity to another tag will bring up the clock/alarm app.”

Just think. Someday, the Internet of Everything may even include Jetsons-style flying cars.

Weekly Focus – Think About It
Ideas are like rabbits. You get a couple and learn how to handle them, and pretty soon you have a dozen. 
--John Steinbeck, American writer

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Investment Advisory services offered through, Waterloo Capital, L.P. a SEC Registered Investment Advisor. Securities offered through Calton & Associates, Inc. Member FINRA/SIPC OSJ 2701 N. Rocky Point Dr., Suite 1000, Tampa, FL 33607 (813) 605-0918 Waterloo Capital, L.P., PlanningWorks, Inc. and Calton & Associates, Inc. are separate entities.

A Registered Representative may only transact business in states where they are registered, or exempt from registration. Currently we have Representatives registered in CA, CO, FL, GA, IL, MN, MO, NE, NM, OH, PA, SC, and TX. If your resident state is not listed, please contact us at info@planningworks.biz. Under normal circumstances, securities licensing procedures for additional states may take 24-72 hours. We will not effect or attempt to effect securities transactions, or provide personalized investment advice to, or communicate directly with residents in a state in which a Representative is not registered.

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