More About Us at Alberty Financial Planning Services, Inc.

I have grown up knowing that the Great Depression left many Americans of that era afraid to trust banks with their money. However, I did not realize that many people of my generation in their 20’s still felt this way. Talking to a few friends that work with me in the service industry led me to find out I am one of the few with either a bank account or a bank account that is used on a regular basis. Some of them do not wish to have a bank account for multiple reasons including to avoid paying taxes, to avoid over-drafting when they do not have the money, or simply because they do not trust the banks with their money. I have heard many stories of people actually over-drafting on their account so much that they simply close out their bank account and walk away. My question is, will the new law requiring banks to get customers’ permission before charging them fees to cover debit card and ATM withdrawals sway the people I know into signing up for a bank account? One person I spoke with thought about it for a minute and decided that she now probably trusted banks less considering they are going to be losing so much money by not charging their customers overdraft fees. All of this simply to gain more business? She doesn’t buy it. Considering the banks made $20 billion in overdraft fees last year, I can definitely see her point. Another person I spoke to was actually in the process of opening up a bank account for the second time in his life because he had recently run across trouble trying to rent out a house due to lack of credit. He realized that he needed not only a bank account but a credit card as well. He was very happy about the new overdraft fee law because he said he had already racked up $2,000 in fees in his life and did not want to go down that road again when he opened up a new account. He did say that the new law did not sway his opinion in the end. Time will only tell if more people will jump in line and sign up for a bank account knowing they won’t be charged overdraft fees. All in all, I just think that people are very sensitive when it comes to their money and only trust themselves to hold onto it.

In March of 2010, Bank of America attempted to gain the trust of their customers by getting rid of the pesky overdraft fees that can be charged by everyday purchases on debit cards or ATM transactions. Many banks, including my own, BB&T, have jumped on board with this idea in an effort to build a stronger relationship with their customers after the recent financial crises. As of July 1st, the Federal Reserve will require that bank’s obtain a customer’s consent before they can charge them overdraft fees for ATM transactions and debit purchases. Last year banks generated about $20 billion from overdraft fees on debit purchases and ATM transactions and $12 billion more by covering checks and recurring bills. Overdraft protection will still be available, typically for a fee of $10, to customers who link their checking accounts to savings accounts or credit cards. Many customers seem to be more content with having overdraft protection on mortgage checks and recurring bills but do not want the coverage for everyday purchases. I was made aware of these changes by a phone call I received from BB&T requesting that I respond to a letter they were sending me regarding my preferences on overdraft protection. Instead of replying by letter I simply logged onto my bank account online, checked a few boxes, and now I am finally free from those pesky $35 overdraft charges that could turn a cup of coffee into a $40 purchase. I have recently become aware of the numerous friends I have in the service industry without bank accounts who deal strictly in cash. I have asked many of them why and a lot of the time the answer lies in the overdraft fees and the trouble they have gotten into with their banks because of them. Tomorrow’s blog will explore if this new-found change in overdraft policy will affect their decision in opening a new hank account.

Children are easy target for so many crimes and that includes identity theft. However, with identity theft, because children do not have jobs or a reason to monitor their credit, it could be many years later before you or your child discover the theft. In that amount of time, the thief can damage your child’s credit and employment history as well as develop a criminal record in your child’s name.

I will admit that my husband and I are both a bit paranoid about identity theft for ourselves – to the point that we maintain a permanent freeze on our credit reports and we check our reports often. But how would a parent know if their child’s identity was in jeopardy or how would a grandparent know if a delinquent parent was using their grandchild’s identity? According to the TransUnion website, one of the three credit reporting companies, you should be suspicious of identity theft for your child if one of the following happens:
• Your child begins to receive suspicious mail, like pre-approved credit cards and other financial offers normally sent to adults, in his/her own name.
• You try to open a financial account for him/her but find one already exists, or the application is denied because of a poor credit history.
• A credit report already exists in his/her name. If the child has one, he/she probably has been targeted already, since only an application for credit starts a report.
To learn more about how to investigate if you suspect that your child’s identity has been stolen, check out this page on the TransUnion website :
https://www.transunion.com/corporate/personal/fraudIdentityTheft/fraudPrevention/childIdTheft.page

Meanwhile, I would advise keeping your child’s social security number secure because that is where identity theft begins.

I caught an article today about bad habits people have that sabotage your retirement planning and I thought the final point about funding your retirement before you fund your child’s education was especially important. As the article states, “your child can borrow his way through college, but you cannot borrow your way through retirement.”

This is such an excellent point. As a parent I find myself consistently putting my children before myself in so many ways. Of course I want to give them the gift of a college education but we make it a rule of thumb to pay ourselves (and our retirement) first and according to our financial plan. If there are times when we need to adjust our savings, the adjustments are made to the educational savings plans before our retirement plans.

To read the other ways you might be sabotaging your retirement savings, check out this article:
http://finance.yahoo.com/news/5-Bad-Habits-Sabotaging-Your-usnews-1034336641.html?x=0

The Shooting Star

I grew up in Cincinnati, Ohio, home of the Big Red Machine, Skyline Chili and Graeter’s Ice Cream. But what I remember most about being a kid in Cincinnati is the Shooting Star roller coaster ride at Coney Island amusement park.

The Shooting Star was one of the fastest, tallest, scariest roller coasters in the Midwest. I can remember getting into a car, the bar coming down on my lap to secure me in the compartment, and then hearing the clanky sounds as we moved to the top of the world. As we approached the top of the platform, our car stopped, and an eerie silence descended on us right before we plunged to the ground. Then the car jerked us back up a long hill at horrific speed before making a sharp right turn and then a left turn…

As I watched the markets during the second quarter, I thought a lot about the Shooting Star. And about the headwinds and tailwinds that were the subject of my last issue of the Peachtree Quarterly. It seems that as the second quarter came to a close, there were a lot more headwinds than tailwinds, especially when compared to the previous few quarters.

In short, the second quarter was virtually the opposite of the first quarter of 2010. The broad equity market had been climbing more or less steadily upward since March 9, 2009, on stronger corporate profits and expectations of future growth. Then we were hit with the fallout from economic issues facing Greece, Portugal, Spain and some of the other European countries, an intraday 10% correction, the end of the housing tax credits, and continued high unemployment. As a result, in the second quarter the market gave up its gains from the first four months of the year and closed down more than 11%. No sector or company escaped the battering.

So what happens now? Certainly we know there are still strong headwinds. We read about them in the business periodicals and hear about them on cable TV. And they are real. The government continues to run up debt and seems unable to make any meaningful changes. And as both parties gear up for the midterm elections, the likelihood that they will work together grows even more remote-at least until the fall. The public lacks confidence, in the government and in the economy. Banks are hoarding cash, worried about what the economy will do, and that makes less money available for companies looking to grow.

But let’s not forget that there are still some tailwinds out there. For example, unlike the government, the private sector has lots of cash. In fact, corporate balance sheets are showing $1.8 trillion in cash. In addition, carload volume growth on rail trains continues to be solid. The International Monetary Fund raised its global growth forecast and now expects the world economy to expand 4.6%, compared to April’s 4.2% projection.

But I believe the most important tailwind is valuation. With S&P 500 corporate profits estimated by Wall Street analysts at $78 per share on a composite basis for 2010 and around $90 for 2011, the market is not overvalued. In fact, the companies in the S&P composite are now selling at around 13 times this year’s earnings and only 11 times next year’s earnings, according to Wall Street analysts. Some very large and very well-known companies are selling at close to single-digit price-earnings ratios on next year’s projected earnings. These include companies like ATT, Alcoa, Bank of America, Chevron Corp, Exxon Mobil, Hewlett Packard, IBM, Intel, Merck, JP Morgan, Pfizer and Travelers. These are much more attractive valuations than we saw a decade ago, when investors could not seem to buy stocks fast enough.

Of course, part of the reason for the difficulties of the last year can be traced to that rush to buy overvalued stocks, but the fact remains that when you look at the financial realities of companies, there is plenty of reason to be optimistic and own their stock.

And don’t forget the ability to make money on dividends, which have comprised approximately 50% of the stock market’s total return since 1930.

So what’s the takeaway from all this? The situation remains serious. Consumers are still struggling, and long-term growth depends on consumers having money to spend and the confidence to spend it. Problems in Europe and elsewhere continue to be a drag on the world economy. The U.S. government seems alternately unable to do anything, then willing to tackle huge reforms that, even if they are needed, will have an unknown impact long-term.

But things are not as dire as the talking heads on TV would have us believe-they rarely are. Especially in challenging times, the best approach continues to be to invest in strong companies that pay a dividend, and to think long-term. In the end, the poor performance in the second quarter is no more important than the strong performance in the first. What matters is what the economy does over many, many quarters.

Just like when I rode the Shooting Star all those years ago in Cincinnati, the ride can be terrifying. But what really matters is getting safely back to where you want to be.

Garry K. Schaefer
Atlanta, Georgia
July 14, 2010

Peachtree Investment Quarterly may offer general financial, insurance, tax and business ideas. However, due to the ever-changing tax laws as well as the complexity of the financial industry, you should seek professional advice before implementing any of the ideas contained in this newsletter. Peachtree Investment Partners, LLC, and Osmosis Digital Marketing, Inc. assume no liability whatsoever in connection with the use of this newsletter.

Many of us shop on the internet but do we always make sure that it is a secure site? Recently my sister had her credit card information stolen because she was not on a secure site. Within a matter of one day, six charges were made on her card and more were pending by the time she closed the account on the next business day.

Any time you are on a website where you are expected to provide secure information – - credit card information, account numbers or passwords, or anything else that someone could use to take your identity – - you should ALWAYS make sure you are on a secure website. To protect yourself, look for the following items when shopping online:

1- A SECURE CONNECTION – Normal web pages start with “http” however, over a secure connection, a website will begin with “https”. Note the “s” at the end.

2- A “LOCK” ICON- It is a standard practice for all web browsers to have a lock icon displayed when you are on a secure connection. I use Internet Explorer so my icon shows up in the far right of the web address bar. If you click on this icon it will display the details of the security of the site. If you are dealing with a merchant that you are not familiar with, you should click on this icon to view the site security because some fraudulent sites may try to imitate the icon. If you log into a PayPal account you can see that it says it is “identified by VeriSign.”

3- VERIFICATION SEAL – Online merchants want their customers to feel safe shopping with them so many will display highly visible but difficult to duplicate verification icons that will display details about the site’s security. With the PayPal example, an icon that says “VeriSign Identity Protection” is displayed.

If you don’t see any or all of these items, pick up the phone and call the merchant before risking your account and private information.

Many families may struggle with the decision of whether to move out of the apartment in the city when they start a family and have kids. Some may want to stay because of the friends they have made and their easy access to work. There are also many positive aspects to moving to the suburbs including easy access to public schools and more space for your children in the house. A study done by the New York Times says that a suburban lifestyle costs about 18 percent more than living in the city. That amazes me because I thought the opposite. When you think about it houses do costs more to keep running than that apartment in the city. There is also the aspect of having to own a car and car insurance and paying for commuting to and from work if one lives in the suburbs. In their study, the deciding factor lied in private schooling. If the parents do decide to stay in the city in an apartment they may have to send their children to private schools and that will definitely change their study and make living in the city more expensive than the suburbs. I have always thought that by living in a house in the suburbs is more affordable but it is nice to know that living in the city has its financial perks as well.

Alberty Financial Planning Services is a full service boutique style firm dedicated to providing customized, comprehensive and convenient financial planning services for our clients. In an effort to simplify the process, our financial planners come to a location of your choice including your home, place of business or any of the nationwide locations provided by our implementation resource members.

I always think it is important to teach my children the value of a dollar and we had an interesting lesson this past weekend. It all started when my husband and my young son started looking at Star Wars items on the internet. That led to them going on Ebay and my son deciding that he simply HAD TO HAVE the custom painted Star Wars Lego mini-figure. There was a little over an hour left in the auction and the current bid was at $12.50 with free shipping. The next thing I know, my son was dumping the money out of his piggy bank and was ready to hand it over to somebody… Anybody so that he could get the Lego. Clearly he did not understand Ebay.

I had to explain the entire auctioning process, the payment through Paypal, and the shipping concepts to him. Within this I asked him how much the figure was worth to him and then I made clear that he might not win the auction. I did not agree with how much he wanted to spend but since he was using his allowance, I agreed to help him. I think one of the biggest mistakes people can make on Ebay is that they get caught up in the auctioning process so I wanted to teach him about not spending more than he thought the figure was worth. To do this, I waited until the last 30 seconds to enter in his maximum bid. As it turns out, he didn’t win it but he already had another one in his sights and using a similar process of bidding at the last minute, he won without paying more than he (or we) wanted to spend.

Although I still think my son spent more on the Lego than I personally thought it was worth, he is very happy and is looking forward to it showing up in the mail this week. Meanwhile, it did turn out to be a good opportunity for us to explain the process to him and to show him a good way to weigh the value of the item against the money in his piggy bank.

And for now, both he and his father are BANNED from Ebay!

Mortgage rates, however, are at a 50 year low so many people are successfully reducing their household expenses by refinancing their loans. Just yesterday I read an article that indicated as many as 79% of the new loan applications in June were for refinancing. If you are considering refinancing your property, ask yourself the following questions to see if it might make sense for you too:

1. THE RATE – - Will refinancing provide you a significantly lower rate? Anything at or above 1% difference from your current rate is significant.

2. THE FEES – - How high are the closing costs and fees? Be sure to check for hidden fees or state/ local costs (attorney fees) that may not be indicated on national websites. How many months will you need of the lower rate to off-set the closing costs and fees?

3. THE DURATION – - How long do you realistically think you will continue to own the property and how does this compare to the number of months you need to off-set the cost of refinancing?

4. THE PRODUCT – - As you think about how long you expect to own the property, you may also want to consider your alternatives when you select which loan fits your needs. Adjustable rate loans have even lower rates but they carry a risk if end up staying in the property long enough for the rates to start adjusting.