The Road to financialsuccess 2014

ROAD TO F INANCIA L SUCCESS2

Anyone who earns even a small

amount of money can build his

or her own money generator by

regularly investing in a retirement

account. If a person age 25 were

to hypothetically invest $100 per

month earning an assumed steady

rate of 6% annually, in 480 months

(age 65) the account would be

worth $200,000.

An interesting thing begins hap-

pening by month 140 when the

earnings on the growing balance

exceed the monthly $100 contribu-

tion. The investment takes on a

life of its own, becoming a more

powerful money generator than the

amount deposited by the person. By

month 278 it is three times more

powerful and at the end of the peri-

od almost ten times more powerful.

A person who is now retirement

age called me this week to say she is

amazed that her account has grown

to $162,000 even though she was

not able to contribute every month.

Most people can afford to set

aside $100 per month, particularly

through a company retirement plan

like a low cost SIMPLE or SEP plan

designed for small businesses (in-

cluding sole proprietors). “If you

don’t see it, you don’t spend it.”

Starting early is the key. Amounts

can be increased later. Even $25 per

month is great and some employer

plans will match such contributions,

amounting to free money.

Investment returns are not guar-

anteed and stock markets have up

and down swings, but the concept

is real. I personally have tried to

invest the maximum IRA or com-

pany plan amount every year. Now

I’m age 66 and very happy to have

my own money generator working

for me.

Let’s encourage young people to

start building theirs.

Dr. Stephen R. Hample, CFP, of

Hample & Peck, now owns a trust

/ banking corporation and is a

registered representative of KMS

Financial Services, Inc. Opinions

expressed are his own.

Reference:

http://www.thecalculatorsite.

com/finance/calculators/

compoundinterestcalculator.

php#results

Creating your own Money generator

d r . s t e p h e n r . h a m p l e , c f pProvided by

ROAD TO F INANCIA L SUCCESS 3

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you’re a football fan (and probably even if you aren’t), you are aware that we’re clos-

ing in on the Super Bowl. This year’s event is unique in that it is the first Super Bowl held in an outdoor, cold-weather site — New Jersey, to be spe-cific. However, the 2014 game shares many similarities to past Super Bowls in terms of what it took for the two teams to arrive at this point. And some of these same characteristics apply to successful investors. Here are a few of these shared traits: •Agoodoffense—MostSuperBowl teams are adept at moving up and down the field and crossing the goal line. And good investors know how to choose those investments that can provide them with the gains they need to keep moving toward their own goals, such as a comfortable retirement. That’s why, at every stage of your life, you will need to own a reasonable percentage of growth-ori-ented investments, such as stocks and stock-based vehicles. •Astrongdefense—Evenagoodoffense usually isn’t enough to vault a team into the Super Bowl, which is why most participants in the Big Game also have strong defenses. Similarly, the best investors don’t just put all their money in a single type of aggressive instrument and then forget about it — they know that a downturn affecting this particular as-set class could prove extremely costly. Instead, they “defend” their portfolios by diversifying their holdings among a range of investments: stocks, bonds, government securities, certificates of deposit, and so on. And you can do the same. Keep in mind, however, that although diversification can help reduce the impact of volatility on your portfolio, it can’t guarantee a profit or always protect against loss. •Perseverance—Everyteamthat

makes it to the Super Bowl has had to overcome some type of adversity — injuries to key players, a difficult schedule, bad weather, playoff games against good opponents, etc. Success-ful investors have also had to over-come hurdles, such as bear markets, bad economies, political battles and changing tax laws. Through it all, these investors stay invested, follow a long-term strategy and continue to look for new opportunities — and their perseverance is often rewarded. You can follow their example by not jumping out of the market when the going looks tough and not overreact-ing to scary-sounding headlines. •Goodcoaching—SuperBowlteams contain many fine players, but they still need coaches who can analyze situations and make the right decisions at the right times. Smart, experienced investors also benefit from “coaching — in the form of guidance from financial professionals. It’s not always easy for busy people to study the financial markets, stay current on changing investment-related laws, monitor their own portfolios and make changes as needed. By work-ing with a financial professional who knows your situation, needs, goals and risk tolerance, you will find it much easier to navigate the increasingly complex investment world. As we’ve seen, some of the same factors that go into producing a team capable of reaching the Super Bowl are also relevant to investors who want to reach their own goals. By incorporat-ing these behaviors and attitudes into your own investment strategy, you’ll be following a pretty good “game plan.”

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

FinanCiaL FoCuSInvestors Can Learn Much

from Super Bowl Teams

If

ROAD TO F INANCIA L SUCCESS4

Since 1946

Our Primary Services Include:Accounting & Auditing • Insurance Planning

Litigation Support • Tax Preparation & PlanningWealth & Investment Planning • Estate Planning • Retirement Planning

714 Stoneridge Dr., Suite 3A • Bozeman, Montana • 406-587-1277

Securities offered through 1st Global Capital Corp., Member FINRA/SIPCInvestment advisory services offered through 1st Global Advisors, Inc.

You’ve probably heard the saying that “cash is king,” and whether you own a business or not, it is a truth that applies. Most discussions of business and personal “financial planning” involve tomorrow’s goals, but those goals may not be realized without attention to cash flow today. ManageMent of available cash flow is a key in any kind of financial planning.Ignore it, and you may inadvertently sabotage your efforts to grow your company or build personal wealth.

cash flow stateMents are iMportant for any sMall business. They can reveal so much to the owner(s) and/or CFO, because as they track inflows and outflows, they bring non-cash items and expen-ditures to light. They denote your sources and uses of cash, per month and per year. Income statements and P&L statements may provide inadequate clues about that, even though they help you forecast cash flow trends.

cash flow stateMents can tell you what p&l stateMents won’t. Are you profitable, but cash-poor? If your company is growing by leaps and bounds, that can happen. Are you personally taking too much cash out of the business and unintention-ally letting your growth company morph into a lifestyle company? Are your receivables getting out of hand? Is inventory growth a concern? If you’ve arranged a loan, how much is your principal payment each month and to what degree is that eating up cash in your business? How much money are you spending on capital equipment?

A good CFS tracks your operating, investing and financing activities. Hopefully, the sum of these activities results in a positive number at the bottom of the CFS. If not, the busi-ness may need to change to survive. in what ways can a sMall business iMprove cash flow ManageMent? There are some fairly simple ways to do it, and your CFS can typically identify the factors that may be sapping your cash flow. You may find that your suppliers or vendors are too costly; maybe you can negotiate (or even barter) with them. Like

CaSh FLow ManageMentm i k e m cc l o s k e y, f i n a n c i a l a d v i s o rj c c s w e a lt h a d v i s o r s , l l cProvided by

An underappreciated fundamental in financial planning.

(continued next page)

ROAD TO F INANCIA L SUCCESS 5

many companies, you may find your cash flow surges during some quarters or seasons of the year and wanes during others. What steps could you take to improve it outside of the peak season or quarter? What kind of recurring, predict-able sales can your business gener-ate? You might want to work on the art of continuity sales – turning your customers into something like subscribers to your services. Perhaps price points need adjusting. As for lingering receivables, swiftly preparing and delivering invoices tends to speed up cash collection. Another way to get clients to pay faster: offer a slight discount if they pay up, say, within a week (and/or a slight penalty to those that don’t). Think about asking for some cash up front, before you go to work for a client or customer (if you don’t do this already). While the Small Business Association states that only about 10% of entre-preneurs draw entirely on their credit cards for startup capital, there is still a temptation for an owner of a new venture to go out and get a high-limit business credit card. It might be better to shop for one with cash back possibilities or business rewards in mind. If your business isn’t set up to receive credit card payments, consider it – the potential for added cash flow could render the processing fees ut-terly trivial.1 how can a household better its cash flow? One quick way to do it is to lessen or reduce your fixed expenses, specifi-cally loan and rent payments. Another step is to impose a ceiling on your variable expenses (ranging from food to entertainment), and you may also save some money in separating some or all those expenses from credit card use. Refinancing – if you can do it – and downsizing can certainly help. There are many, many free cash flow statement tools online where you can track family inflows and outflows. (Your outflows may include bugaboos like long-term service contracts and

installment payment plans.) Selling things you don’t want can make you money in the short term; converting a hobby into an income source or busi-ness venture could help in the long term. better cash flow boosts your potential to reach your financial goals.A positive cash flow can contribute to investment, compounding, savings – all the good things that tend to hap-pen when you pay yourself first.

Mike McCloskey may be reached at 406.761.2820 or mccloskey@jccscpa.com.www.jccscpa.com

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Citations.1 - smallbusinesscomputing.com/tipsforsmallbusiness/5-tips-for-a-smoother-small-business-cash-flow.html [11/19/12]

m i k e m cc l o s k e y, f i n a n c i a l a d v i s o rj c c s w e a lt h a d v i s o r s , l l c

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*Non-depositinvestmentproductsandservicesareofferedthroughCUSOFinancialServices,L.P.(”CFS”),aregisteredbroker-dealer(MemberFINRA/SIPC)andSECRegisteredInvestmentAdvisor.ProductsofferedthroughCFS:arenotNCUA/NCUSIForotherwisefederallyinsured,arenotguaranteesorobligationsofthecreditunion,andmayinvolveinvestmentriskincludingpossiblelossofprinciple.InvestmentRepresentativesareregisteredthroughCFS.RockyMountainCreditUnionhascontracedwithCFStomakenon-depositinvestmentproductsandservicesavailabletocreditunionmembers.

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ROAD TO F INANCIA L SUCCESS6

2014 tax ChangeS t y l e n e v i t t, c par u d d & c o m pa n y, p l l cBy

awmakers allowed many tax provisions to expire in 2013. Tax planning for

2014 will be a challenge, as Con-gress may not take action on expired tax provisions retroactively until later this year. Here are some current tax changes.

Health Reform: The business mandate was deferred until 2015. Starting in 2014, the individual mandate requires individuals to have health insurance for themselves and their dependents or owe a tax/pen-alty.

A refundable tax credit is avail-able to assist individuals in obtaining affordable health coverage. Health insurance must be obtained through the exchange/marketplace. The credit may be sent directly to the

exchange/marketplace to decrease premiums throughout the year or taken on their tax return.

The small business health care credit increased to 50% (35% for tax-exempt groups). The business must obtain the insurance coverage through the Small business Health Options Program marketplace and pay at least 50% of the health insur-ance premiums for the employees.

Montana has the Health Insurance for Uninsured Montanans Credit available to eligible businesses.

expired individual tax provisions

•Exclusionfordischargeofquali-fied principal residence indebted-ness

•Mortgageinsurancepremiumsas

qualified residence interest

•Qualifiedenergyimprovementstotaxpayer’s home

•Energy-efficientappliancescredit•Deductionforstatesalestaxinlieu

of income tax.•Tuitionandfeesdeduction

business tax provision changes•Qualifiedleaseholdimprovements,

restaurant property, retail improve-ments recovered over 39 years

•Section179deductionislimitedto $25,000 and $200,000 of property placed in service during 2014

•Creditfornewenergy-efficient

homes-expired•R&Dcredit

Montana tax opportunities to take advantage of:

•ContributionstoMontanaANDnon-Montana 529 education plans

•Energycreditfornewandexistinghomes

•Alternativeenergyproductionandgeothermal systems credits

•Qualifiedendowmentcredit

•Montanafirst-timehomebuyerssavings account

•PurchasesofMontanaproducedorganic fertilizer

L

ROAD TO F INANCIA L SUCCESS 7

Using Your Smart Phone As a Budgeting Tool

Today, we use our phones in ways we would never have dreamed pos-sible just a decade ago. Below you will find a list of just a few of the apps and websites designed to help us organize our financial lives – and hopefully help us save some money.

GoodBudget (formerly EEBA) is an app version of carrying around envelopes of cash for various budget categories. You create your virtual envelopes and physically record your transactions. It is a simple, straight-forward, and free (there is a more robust version for $5/month) way to monitor one account. You can sync two devices so you and some-one else can work together to moni-tor spending. This mobile system helps avoid the problem of having a paper grocery envelope at home on the kitchen counter while you are at the grocery store. Android and iOS.

Mint.com offers a concise way to monitor all your bank, credit card, investment and loan accounts. It does not offer the ability to move money from one account to another. However, it does track expenses automatically, meaning users don’t have the pain of manually entering expenses and none of those little trips to the gas station or coffee shop slip through the cracks. Mint can also suggest ways for you to save and will send automatic alerts and bill reminders. Mint is free. Android and iOS.

An alternative to Mint is Accounts 2 Checkbook. It doesn’t have a catchy name, but it does allow you to do more than simply track your accounts. You can transfer funds, use and store photo receipts, schedule transactions, split transactions, ex-port reports, and more. In addition, it has a large number pad for data entry (yes, I’m over 40 and can’t always see the little buttons). The “lite” version is free, so you can take

it for a test run, but the full version costs $1.99. iOS.

Finally, you may want to check out Toshl. Toshl automatically syncs to multiple devices as well as toshl.com and touts itself as having greater exportoptions(PDF,GoogleDocs,Excel, etc) than Mint. It allows you to manually track expenses, organize bills, and create a budget, and it functions on Android, iOS, Meego, and Windows Phone. Toshl Finance is free, but Toshl Pro is $1.99 per month. You’ll have to decide for yourself if the little cartoon mon-sters are fun or annoying.

Security is always a concern when we talk about storing our financial data “out there.” According to PCMag.com, “the apps don’t store any personal financial data on their servers or even your mobile device itself,” meaning that if you lose your phone you are not providing some-one with the key to your finances. Additionally, you can remotely de-activate your accounts. Lastly, again according to PCMag.com, “most of the name brand apps we recommend are probably as secure as carrying a credit card in your wallet.” Noneth-less, make certain that “the apps use 128-bit bank level, or 256-bit military-level, encryption and are verified by TRUSTe, VeriSign, or MacAfee.”

If you’re looking for financial advice, talk to your financial advisor! But if you are trying to rein in your expenses or just simply keep an eye on them, call on your phone.

Annie Beaver is an Associate Financial Advisor with D.A. Davidson & Co. in Liv-ingston, MT. This information is not intended as specific advice. Information from sources deemed reliable include http://www.nytimes.com/2013/01/31/technology/personaltech/using-a-smartphone-to-look-after-the-pennies.html?ref=technology&_r=0; http://www.pcmag.com/article2/0,2817,2407617,00.asp; and D. A. Davidson & Co., member SIPC.

uSing your SMartphone aS a budgeting tooL

a n n i e B e av e r a s s o c i at e f i n a n c i a l a d v i s o r w i t h d . a . d av i d s o n & c o .Provided by

‘Twas the Season for Giving $182,557

In December, D.A. Davidson & Co. (Bozeman) announced a special program to encourage gifts of securities to charitable organizations in our community. Through this program D.A. Davidson & Co. offered to sell donated securities at no commision, in effect donating these normal costs to the non-profits.

We are pleased to report that this program assisted in the donation of $182,557 to these worthy organizations in the Bozeman area.

The employees of D.A. Davidson & Co. are privileged to have been able to demonstrate our commitment to our community through this program.

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Financial Advisor

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Financial Advisor

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Financial Advisor

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Investing in our community.

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not pictured:

BreAnna BentleyClient Associate

ROAD TO F INANCIA L SUCCESS8

NEW YORK (AP) — New Year’s

resolutions often involve eating

better and exercising, but you can

also use the start of the year to get

financially fit.

Making resolutions is easier than

keeping them, however. The

Associated Press talked to a few

financial experts about what you

should be doing to keep your

money goals for the year on track.

Here’s five money resolutions to

consider for 2014:

1. know where you stand

Begin 2014 with an overall view of

your finances. Figure out your net

worth: Write down your assets —

bank balances, retirement accounts

and the value of your home. Next

list your debts, such as car loans,

mortgages or credit-card balances.

Subtract your debts from your

assets. Save it, and do this exercise

annually or twice a year. Writing

the numbers down will help you

see how your net worth is changing

over the years, says Ernst & Young’s

EldaDiRe,whoisapartneratthe

accounting firm’s personal financial

services group.

2. think sMall

Aiming to save a big pot of money

can be overwhelming and set you

up for failure. Instead of resolving

to save $1,200 over the year, for

example, break that amount into

smaller goals, says Jerry Love,

an independent certified public

accountant and a member of the

National CPA Financial Literacy

Commission, which aims to educate

Americans on personal finances. For

a figure like $1,200, focus on saving

$100 a month instead. Pulling

together smaller amounts may be

more manageable. Once you see

that you’re able to meet that goal

after a few months, you’re more

likely to stay on track for the rest of

the year, says Love.

3. pay yourself first

Make any savings automatic. Ask

your employer to send a certain

amount of your paycheck to a

savings account. If you manually

move money to your savings

account, you’re likelier to forget.

“You should invest in yourself

before having a chance to spend

the money,” says Lisa Featherngill,

a CPA and managing director

ofAbbotDowning,themoney

management business of Wells

Fargo.

4. pay down debt

Tackle credit-card debt this year

by writing down all the cards

you have, their balances and the

interest rate you pay. You should

increase payments on the card

with the highest rate, says Ken

Hevert, Fidelity’s vice president of

retirement products. Paying $100

more than the minimum amount

due every month will help you pay

it back faster and save money in

interest payments, says Hevert.

5. save More for retireMent

No matter your age, most people

should be putting 10 percent to

15 percent of their income toward

retirement, says Hevert, who

works for a company that manages

retirement accounts. That could be

in a 401(k) account, a retirement

savings plan provided by employers,

or an individual retirement account.

People are living longer and

pensions from employers, which

used to help fund retirements,

are disappearing, says Hevert.

“Retirement has become a do-it

yourself project,” he says.

5 Money reSoLutionS For the new yeard r . s t e p h e n r . h a m p l e , c f pProvided by