The Small Business Administration (SBA) cites 10 reasons why small businesses are "the heart of the
American economy."
1. Small businesses make up more than 99.7% of all employers.
2. Small businesses create more than 50% of the nonfarm private gross domestic
product (GDP).
3. Small patenting firms produce 13 to 14 times more patents per employee than
large patenting firms.
4. The 22.9 million small businesses in the United States are located in virtually
every neighborhood.
5. Small businesses employ about 50% of all private sector workers.
6. Home-based businesses account for 53% of all small businesses.
7. Small businesses make up 97% of exporters and produce 29% of all export value.
8. Small businesses with employees start-up at a rate of over 500,000 per year.
9. Four years after start-up, half of all small businesses with employees remain open.
10. Small businesses create 75% of the net new jobs in our economy.
An investing and financial strategies blog offered by Gary Partoyan, veteran financial advisor and owner of Potomac Wealth Strategies, LLC.
Tuesday, March 27, 2012
Monday, March 26, 2012
Financial Priorities Checklist
Here is a list of items to consider when organizing your personal financial matters, in order of priority that applies to most people. If you want to know more, please contact me.
--Gary Partoyan
- Life Insurance
- Term—create necessary nest egg for your survivors if you die too soon
- Permanent (optional)—to ensure additional buy-up despite health; to maintain coverage throughout lifetime
- Disability Insurance
- Long-term
- Short-term
- Pay for it yourself and have the income benefit tax-free (this is the better choice), or have employer pay for it and have income benefit taxed
- Cash-flow Positive Monthly Budget
- Debt
- Mortgage, car, and student loans are usually okay
- Revolving credit card debt, personal loans, home equity lines of credit, etc., are usually not okay—get rid of them
- Emergency Reserves Fund
- 3 to 12 months of necessary living expenses, in case of income interruption, etc.
- Keep liquid in money markets or the bank, or low-risk investments with easy liquidity
- Retirement Investments (order of funding priority)
1) Employer-sponsored Retirement Plan—contribute the minimum necessary to get the maximum matching contribution from employer
2) Roth IRA, if eligible
3) Employer-sponsored Retirement Plan—top-off up to the IRS maximum allowable contribution
4) Traditional IRA
5) (If you still have more to invest for retirement after 401k and IRA contributions) Variable Universal Life Ins and Variable and/or Fixed Annuities for tax-advantaged savings
- Secondary Investment and Savings Priorities
- Education
- Early-retirement
- Private schools
- Charity
- Luxury items
- Investment speculation
- Other Considerations
- Use a professional to file your taxes!
- Use a patient and flexible but expert lawyer to prepare your estate planning documents, which should probably include:
- Pour-over Will
- Revocable Living Trust
- Irrevocable and Marital A-B trusts, if estate taxes are part of your picture
- Durable (financial) Power-of-Attorney
- Advance Medical Directive (in VA, this combines Healthcare Power of Atty and Living Will)
- Childcare provisions
Friday, March 23, 2012
Flex Portfolio Performance Through February 2012
| US and Foreign Stocks | 1 mo | 3 mo | YTD | 1 yr | 2 yr | 3 yr | 5 yr | 10 yr |
| S&P 500 | 4.3% | 10.0% | 8.9% | 5.0% | 13.3% | 25.3% | 1.5% | 4.1% |
| MSCI EAFE | 5.7% | 10.2% | 11.3% | -7.5% | 5.3% | 19.6% | -3.0% | 6.2% |
| Barclays Aggregate Bond--US | 0.0% | 2.0% | 0.9% | 8.4% | 6.6% | 7.5% | 6.4% | 5.7% |
| Barclays Aggregate Bond--Global | -0.1% | 2.3% | 1.6% | 6.5% | 6.2% | 8.6% | 6.6% | 7.4% |
| Moderately Aggressive Benchmark | 4.0% | 8.5% | 8.3% | 0.8% | 9.2% | 19.7% | 1.1% | 5.8% |
| 80 Flex III | 2.2% | 5.1% | 6.5% | 1.9% | 9.2% | |||
| 80 Flex II | 2.6% | 6.0% | 7.7% | 4.5% | 10.5% | 19.0% | 8.3% | 11.3% |
| 80 Fidelity | 3.8% | 8.0% | 8.3% | 0.0% | 9.0% | 20.0% | 1.0% | 5.8% |
| Moderate Benchmark | 2.9% | 6.7% | 6.3% | 2.8% | 8.7% | 16.6% | 2.7% | 6.2% |
| 60 Flex III | 2.0% | 5.3% | 6.2% | 2.8% | 8.7% | |||
| 60 Flex II | 2.3% | 6.0% | 7.1% | 4.7% | 9.6% | 17.1% | 8.6% | 10.7% |
| 60 Fidelity | 2.8% | 6.3% | 6.4% | 1.7% | 8.2% | 16.5% | 2.2% | 5.7% |
| Moderately Conservative Benchmark | 1.8% | 5.0% | 4.4% | 4.7% | 8.1% | 13.4% | 4.2% | 6.4% |
| 40 Flex III | 1.8% | 5.6% | 5.8% | 3.6% | 8.1% | |||
| 40 Flex II | 2.0% | 6.0% | 6.4% | 4.9% | 8.7% | 15.2% | 8.8% | 10.1% |
| 40 Fidelity | 1.9% | 4.8% | 4.5% | 3.7% | 7.6% | 13.3% | 3.4% | 5.6% |
| Asset Allocation | Cash | Stock | Bond | Other | ||||
| 80 Flex II | 23% | 54% | 12% | 11% | ||||
| 60 Flex II | 30% | 41% | 21% | 9% | ||||
| 40 Flex II | 37% | 27% | 29% | 7% |
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