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FAIRHAVEN JOURNAL M AY 2 0 1 8 FEEL BETTER NOW talk about money and execute a concrete plan
I TA BL E OF CON TENT S Note from Marc Horner 3 Talking About Money Feel Better with Candid Consistent Communication 4 Team Member Spotlight Meet Kurt Anderson 8 Comfort Wrapped in Comfort Academe Brasserie s Delicious Meatloaf Recipe 12 Avoid Surprise Medical Bills Your Parent s Medicare Supplement Coverage 17 Meet the Fairhaven Team 19 The Joy of Giving Feed My Starving Children 21 Market Outlook 22 Fairhaven in the Media 24 This material has been prepared for informational and educational purposes for our clients and friends Please consult your Fairhaven Wealth Management professional to discuss how this may impact your own financial plan and or investment portfolio This material is not intended to provide and should not be relied upon for accounting legal or tax advice or any other purposes Neither Fairhaven Wealth Management nor its subsidiaries or affiliates provide accounting legal or tax advice Please consult your tax advisor and or attorney for such guidance Advisory services offered through Fairhaven Wealth Management an SEC registered investment advisor Securities offered through Triad Advisors member FINRA SIPC Fairhaven Wealth Management and Triad Advisors are not affiliated For a copy of Fairhaven Wealth Management s ADV Part 2 disclosure document please direct your inquiry to admin fairhavenw com
I NOT E FROM MA RC HORNE R Welcome to the inaugural issue of the Fairhaven Journal More than your typical newsletter through the Journal we plan to share with you perspectives on a wide range of both financial and non financial topics healthcare cooking philanthropy and team member profiles to name just a few We plan to continue building out the library of topics and would love to hear your suggestions We hope you enjoy Sincerely Marc Horner Wealth Advisor President Fairhaven Journal Volume 1 Issue 1 April 2018 Fairhaven Journal is published quarterly for the enjoyment and education of Fairhaven Wealth Management clients 2018 Fairhaven Wealth Management All rights reserved The information contained in this issue of the Fairhaven Journal is correct as of press time 3
I TA L K I NG AB OUT M ONE Y by Dave Wilson O ne of the most important yet often overlooked techniques on the path to success in personal finance is to simply talk about it But as we all know talking about money can be a somewhat taboo topic For many of us money is an extremely personal subject something that we believe should be private and kept under wraps While it is certainly true that some aspects of finance should be kept personal who would want to go out to dinner with someone that constantly talked about how much money they made we also believe that appropriate discussions about money whether with family members or with professionals can be powerful and even liberating Talking about money is something that doesn t come naturally to a lot of people I am not sure exactly why but many people feel awkward or even embarrassed to ask questions or share experiences around the topic of money Almost as if they have self imposed expectations that they should somehow already know about money But no one among us was born with knowledge of personal finance Like any other skill it has to be learned Talking about things is a great way to learn says Marc Horner founder of Fairhaven Wealth It is important to realize that all members of your family can benefit from an open conversation about money especially younger children Kids are naturally curious and it s not just about school or video games Their curiosity flows into money topics and it s never too early to feed that curiosity by talking says Marc Opportunities are all around us to start those conversations When out to eat let the kids calculate the tip and help them determine what amount of tip the server earned It s a great way to help them understand there is compensation associated with value provided and that value differs Birthday money is a great opportunity to talk about the difference between spending and saving Maybe you propose a 0 50 match for every dollar saved in their savings account versus spent at the 7 11 Teaching them early about choices between spending now and saving later might be one of the most powerful lessons you teach your kids about personal finance 5
Here are a few suggestions for more successful family communications about money 1 KEEP IT BRIEF Kids are kids whether they are 5 or 25 Sometimes it can be difficult for them to acknowledge that they can still learn something from their parents No lectures 2 GIVE TO GET Not having all the answers is OK In fact sharing that you don t have all the answers can be a great way to bring others into a conversation Maybe your parents didn t talk much about money they certainly wouldn t kids are slow to follow or don t follow your advice If you demonstrate an ability to hear bad news without being judgmental your child may be more inclined to share information with you before the negatives multiply A candid relationship combined with experiencing missteps on their own might actually help your kids more quickly see the wisdom of Mom and Dad s counsel 5 BE SPECIFIC WHEN ASKED As you and your kids talk more about various money topics their natural curiosity is likely to kick in When it does be prepared to share with them how you make A candid relationship combined with experiencing missteps on their own might actually help your kids more quickly see the wisdom of Mom and Dad s counsel have been alone and maybe you had to learn by making mistakes you certainly wouldn t be alone Consider starting a conversation by sharing some of the details of one of those mistakes and that you would like to help your kids avoid the same trap 3 AVOID ABSOLUTES Words or phrases like always never or all can cut off conversations Give people space for an opinion leave room for dialogue allow for benefit of the doubt and recognize that your point of view may not always be accurate more difficult said than done for many of us and that sometimes circumstances change 4 STAY PATIENT News flash kids are not perfect and they make mistakes Do your best to limit your frustration when your 6 financial planning decisions Topics such as saving for your first car or house saving enough in your 401k plan at work to make sure you receive the company match or structuring your portfolio with both domestic and international exposure aka asset allocation and diversification will all help them understand the need to be strategic in their decisions and make choices appropriate to their own circumstances IT MATTERS Building trust and confidence takes time and it takes interaction In a recent survey only 22 of young adults age 25 to 35 said their parents were their most trusted source of financial advice and one third said they don t trust anyone on money matters Financial conversations aren t always easy but with openness and honesty they can be made easier Go ahead and start talking
I T EA M MEMB ER SPOT LI GHT Wealth Advisor Kurt Anderson S easoned wealth advisor Kurt Anderson works with many inevitable life shifts and subsequent financial challenges that his diverse clients routinely face This keen adaption enables Kurt to ultimately resolve their critical long term goals and live their lives with clarity and comfort Kurt s big picture understanding acute client awareness precise goal setting and passion for the process importantly enable he and his clients to proceed with ease even as unforeseen circumstances unfold The test of his rich philosophy shows up not just in his work but also at play A few years ago Kurt and his wife Denee brought their three young daughters on what seemed like an everyday hike through the Rocky Mountains As flatlanders from Illinois we mistakenly didn t factor in the elevation gain which was 1 600 feet It was a bigger challenge than what our girls anticipated Despite the steep incline the Andersons pushed on through the hike and were rewarded with a refreshing dip in a waterfall at the summit the payoff through perseverance and preparation Kurt who joined the Fairhaven team in 2017 is fascinated with The beauty vastness and history that he finds on frequent invigorating family vacations like the one in the Rockies He s visited 13 of the 59 national parks and has placed the last 46 on his bucket list This summer the Andersons plan to visit Yosemite Sequoia and Kings Canyon National Parks We re looking forward to hiking amongst the world s largest trees exploring a cave and searching for wildlife Kurt explains Kurt s passion for the great outdoors rivals that for his work as a financial advisor which was stoked in high school when he founded a junior investment club Kurt subsequently developed a strong customer service acumen in his early career contrary to common bottom line trends he sees at work in many other finance 9
The culture and the depth of knowledge at Fairhaven is fantastic This positive and collaborative environment has benefited all of my clients firms Unfortunately our industry has treated too many clients like a number but at Fairhaven I have joined a firm that listens to our clients and puts their best interests and goals first I have discovered over and over again if you serve the client s unique needs if you listen for ways you can assist them success tends to follow At Fairhaven Kurt has integrated seamlessly into an organization founded on intelligence teamwork and a truly unparalleled focus on clients The culture and the depth of knowledge at Fairhaven is fantastic This positive and collaborative environment has benefited all of my clients Our focus on serving a manageable group of clients well and offering a full set of tools and solutions under one umbrella has been an incredible advantage for me in this business It is exciting to work in a firm that primarily expands its clients benefits and does not operate under the headline strategy of 10 Let s Get Bigger for our benefit Kurt says Kurt s career in financial management has uniquely prepared him for his role at Fairhaven I ve been an advisor for 16 years and have the experience of working with clients through two major market downturns but I am still young enough to see clients through their retirements he notes Kurt s unique expertise includes working with clients to maximize their company s retirement and pension plans His focus also includes helping clients determine when to retire and applicable cash flow modeling Kurt s dedication to discovering workable plans for his clients at Fairhaven closely mirrors what he looks for while traversing a new national park I m always trying a new adventure learning a new fact and gaining a new perspective he remarks With this approach the goals of each and every client can not only be made but achieved
I C OM FORT WR APPED I N C OMFORT Chef Owners Academe Brasserie Shanna and Brian O Hea W hen braving an uncharacteristically cool spring nothing can be more heartwarming than comfort food Our bacon wrapped meatloaf has been a staple on Academe Brasserie s menu for over 12 years and is a frequent recipe request The fattiness of the bacon essentially bastes the meatloaf during the cooking process which is why it stays so juicy We make individual meatloaf in silicone loaf pans for a personalized plate but baking family style also makes a great table presentation Serve with mashed potatoes green beans and BBQ sauce or a chili spiced ketchup Do not worry if you have leftovers as it makes an excellent meatloaf Panini sandwich with Swiss cheese sauerkraut caramelized onions and Russian dressing Bon appetit Shanna and Brian O Hea are the Chef Owners of Academe Brasserie and The Kennebunk Inn in Kennebunk Maine This 1799 property with 23 guest rooms and a 100 seat restaurant anchors Main Street in one of Maine s most popular tourist destinations The O Heas have gained international recognition by participating in cooking programs around the world including The Walt Disney World Epcot International Food and Wine Festival and Holland America Cruise Line Shanna has appeared on Food Network s Chopped Beat Bobby Flay and winner of Rewrapped Brian and Shanna will both appear on a new Food Network show in the spring of 2018 called Best in Seafood Academe s signature Lobster Pot Pie has been featured in Oprah Magazine as one of Gayle King s favorites on Food Network s The Best Thing I Ever Ate Travel Channel s Food Paradise and 2014 Travel and Leisure Holiday Gift Guide Their Lobster White Truffle Pizza has appeared on the O List in Oprah Magazine and was also featured on Travel Channel s Food Paradise Both products are available on MaineLobsterPotPie com a website the O Heas developed to ship fresh Maine seafood overnight across the United States 13
I BA C ON WR APPED ME AT LOA F Servings 8 METHOD 2 Pounds 1 Each 1 Tablespoon 2 Tablespoons Ground Beef Spanish Onion Olive Oil Fresh Parsley minced 3 Each Eggs 1 Cup V 8 Tomato Juice 1 Tablespoon Worcestershire Sauce 2 Cups Panko Bread Crumbs 1 Teaspoon Teaspoon 1 Pound Applewood Kosher Salt Fresh Crushed Black Pepper Smoked Bacon Pre heat convection oven to 375 degrees 400 degrees for regular oven Peel and rough chop onion into medium dice Put chopped onion in food processer or high speed blender and process until smooth paste and releasing all the water from vegetable Cook down the onion puree in a non stick pan with olive oil over medium heat The goal is to cook out the water of the onion and lightly brown puree reserve In a large mixing bowl combine ground beef cooked onion parsley eggs V 8 Worcestershire sauce bread crumbs salt and pepper and mix together by hand until all ingredients are thoroughly combined Mold meat into a loaf shape on a oiled sheet tray with sides Wrap the bacon around the loaf and tucking underneath the meat and overlap the bacon pieces to make a well wrapped meatloaf Bake in oven for 40 50 minutes or until an internal temperature 160F and bacon has become crispy Let meatloaf rest for five minutes before slicing SUBSTITUTION NOTES If using dried parsley instead of fresh change to 1 Tablespoon If using fine bread crumbs vs panko increase to 2 cups 14
I AV OI D SUR PR ISE ME DI C A L BI LLS Your parent s Medicare supplement coverage CPA and Financial Planner James Sullivan MS CPA PFS D oug s 93 year old mother Miriam had a tough January and February 2018 After a nasty fall in her apartment she spent 4 days in the local hospital From the hospital her doctor ordered her sent to a skilled nursing facility SNF She spent 43 days recovering in the SNF She was finally discharged but would require the use of a walker for several more months When Doug picked her up they both were in for a surprise Miriam owed 3 852 50 as her share of the cost for her stay in the SNF Doug had assumed the total bill would be paid for by Medicare or by his Mother s Medicare Supplement policy Doug was wrong His mother could not afford to pay the full amount of what she owed so Doug helped pay the bill What was Doug s error He never asked his Mom exactly what type of Medicare Supplement policy she owned He knew she had a Medicare Supplement policy but not the type of policy nor the type of coverage it provided As it turned out Miriam was covered by a Plan A Medicare Supplement plan In Illinois the monthly premium was 169 The more popular Plan F which provided more comprehensive coverage would cost her 343 per month for a monthly savings of 174 Miriam is on a fixed income and purchased Plan A to save money Unfortunately the insurance agent did not do a good job of explaining the differences between Plan A and the other Medicare Supplement plans One big difference between Plan A and Plan F is the coverage provided for a SNF stay Medicare Part A does pay a limited amount for a SNF stay As long as the stay at the SNF is preceded by a 3 day stay at a hospital Medicare pays 100 of the cost of the stay for days 1 through 20 For days 21 through 100 Medicare pays the cost minus a daily co payment paid by the beneficiary of 167 50 Miriam s 43 day stay at the SNF included 23 days that she was responsible for the co payment or 23 days times 167 50 equals 3 852 50 Note that after 100 17
days in a SNF Medicare nor the Medicare Supplement Plan does not pay any portion of the cost What could Doug or any adult child of a Medicare enrolled parent have done to avoid the unexpected bill from the SNF Ask your Mom or Dad if they have a Medicare Supplement plan and if so what plan is it Is it Plan A or Plan B Neither of these plans cover the SNF co payments that Miriam owed when she was discharged All the other plans cover the co payments due after a SNF either at 100 Plans C D F G M and N or at 50 Plan K or 75 Plan L The monthly premium savings from selecting Plan A quickly disappeared with just one stay in the SNF C O N F U S IO N WA R N IN G Note that Medicare itself is divided into four distinct parts Part A covers hospitalization Part B covers doctor bills and durable medical equipment for example Miriam s walker Part C is often referred to as Medicare Advantage which is an alternative way for Medicare beneficiaries to be covered under Medicare and Part D which covers prescription drugs In Miriam s case she is covered by what is often referred to as traditional Medicare Part A Part B Part D and a Medicare Supplement plan Medicare Supplement plans are offered by private insurance companies Medicare beneficiaries are not required to purchase Medicare Supplement plans The plans offered are regulated by the Centers for Medicare and Medicaid Services CMS and by the state insurance departments There are ten Medicare Supplement plans each designated by a letter A B C D F High Deductible Plan F HDF G K L M and N Coverage under each plan is standardized When someone says he or she is covered by Medicare Part A the reference is to Medicare itself Miriam is covered by Medicare Part A and a Medicare Supplement Part A To understand the differences among the policies a good source is 2017 Choosing a Medigap Policy A Guide to Health Insurance for People with Medicare available at www medicare gov Pubs pdf 02110 Medicare Medigap guide pdf Your parents can change their Medicare Supplement plans anytime during the year They do not have to wait until the Annual Enrollment Period AEP that lasts from October 15 through December 7 Keep in mind that applying for a Medicare Supplement plan can be a problem if your parent has a preexisting health condition The insurance company can refuse to issue a policy if your parent is not in either their Initial Enrollment Period IEP or Special Enrollment Period SEP The IEP lasts for seven months the three months before your mom or dad turn age 65 the month in which they turn age 65 and the three months after the month in which they turn age 65 The SEP lasts for eight months after health insurance coverage provided by an employer is lost In some states such as New York Medicare Supplement policies are year round open enrollment or offer additional open enrollment periods California In other states some insurance companies will issue a Medicare Supplement policy without asking health questions A good insurance agent can help you find the right policy and the right company in the state in which your mom or dad live It is best to work with an agent that represents several companies not just one Proper planning for Medicare coverage is no longer a one and done process it is a dynamic process The coverage decision your parents made when they turned age 65 may not be the best choice now There are opportunities during the year to make changes to your parent s or to your Medicare coverage A good financial adviser can be a resource as health and coverage needs change Jim is a CPA and financial planner Jim s practice focuses on helping his clients think about and plan for the costs of health care in retirement He has written over 100 articles on health care costs in retirement and a book on Medicare for the American Institute of Certified Public Accountants the AICPA He is currently writing a book for the AICPA on the impact of chronic and terminal illness on retirement plans He lives in Glen Ellyn with his wife 3 children and 2 Beagles
I M E E T TH E FAIR H AVE N T E A M The best people carefully chosen for service and results Marc Horner Wealth Advisor and Founder Gerald King Wealth Advisor Kurt Anderson Wealth Advisor Gina Hornbogen Executive Assistant Trent Warren Wealth Advisor Heidi Orth Administrative Assistant Paul Mardoian Wealth Advisor Denise Jahns Administrative Assistant Susan Kostecki Administrative Assistant Michael Kronk Emeritus Joseph Guest Head of Operations Barb Schrage Administrative Assistant Blair Fuchs Wealth Advisor Amy Christenson Media Consultant 19
I T H E J OY OF GIV IN G T he Fairhaven Wealth Management team recently spent an afternoon hand packing rice soy vegetables and other nutritionally nourishing materials into bags that were then shipped off to the neediest kids in the world via Feed My Starving Children At Feed My Starving Children organizations of all kinds from schools and churches to companies like Fairhaven participate in a volunteer experience that engages them by uniting their employees With the selfless benefit of feeding the world s starving children Malnourished Filipino child Angel before and after Feed My Starving Children provided her with proper nutrition Fairhaven is proud to align ourselves with organizations like Feed My Starving Children which provides meals to the young people that need it the most said Fairhaven founder Marc Horner We can t emphasize enough the importance of philanthropy in general especially with groups like Feed My Starving Children that make a difference where it s needed the most in the world To learn more about Feed My Starving Children visit https www fmsc org or call 763 504 2919 The Fairhaven Wealth Management team and their families packing meals for needy children 21
I M A R K ET OUTL OOK A mong the advantages of being an independent wealth management firm is the freedom to draw from a variety of sources as we craft our own investment views and analysis Those sources include institutional asset manager Wellington Management a firm that traces its roots back to 1928 when it established the first balanced mutual fund in the United States At our annual Market Outlook event earlier this year we invited Tom Spicer of Wellington to share with us the firm s thoughts on the coming year many of which line up with our own opinions Highlights of our opinions Tom s comments and the lively Q A follow While the overall economic environment is favorable many investors remain concerned about valuations and complacency Central banks around the world are beginning the process of raising interest rates and tightening an atmosphere of easy money after years of monetary accommodation While this may sound like the end of the party the general take is that central banks will be careful and gradual in their withdrawal of support thanks to an economy strong enough to withstand a bit less punch in the bowl An expectation of moderately higher interest rates means an environment that supports balanced boldness Despite record setting equity markets in the US international and emerging markets edged higher in 2017 This equity market leadership transition is expected to continue into 2018 Within the equity allocation of diversified portfolios the change in leadership in 2017 from US based to international markets including emerging markets is expected to continue Solid global demand and a stable China should continue as tailwinds for continued global economic growth The strength of emerging markets signals a continuing favorable market for both equity and bond investments Growth is expanding and inflation is falling Europe is the fastest growing economy among major developed markets both consumer and business confidence stand at multi year highs After nearly a decade of Wall Street prognostications higher interest rates finally seem to be on the horizon that common Wall Street phrase never wrong just early comes to mind The global economy is signaling it can handle higher interest rates because it is robust enough Inflationary pressures should remain modest due to a positive combination of improving productivity and the combined forces of technology globalization and demographic trends The US economy continues to expand at a steady clip Thanks to a strong job market reasonable wage gains and rising homes prices consumer confidence is high Business investment is also starting to rebound and capital expenditure forecasts are increasing Against this backdrop some combination of deregulation tax relief and infrastructure spending should likely add to growth in 2018 These positives may be slightly offset by higher than average valuations Overall the wild card is inflation An unexpected rise in inflation could force central banks hands toward more aggressive tightening and that raises the risk of recession Global trade is another risk Severe trade restrictions enacted by the US coupled with a rise in inflation could cause a stagflationary dynamic which is a fancy word meaning a combination of rising inflation slowing economic growth and increasing unemployment Lastly geopolitics remains a concern However any market disruptions associated with geopolitical events are likely to be temporary think back to the markets negative reaction to Brexit followed by a relatively quick recovery The risk of a recession appears low while the risk of a market correction seems higher and normal So what does all this mean for you As always the beginning of a New Year is a good time to revisit portfolios to ensure they include broadly diversified pools of assets from both the equity and fixed income buckets After years of US market leadership making sure there is adequate portfolio exposure outside of US borders seems prudent as non US market leadership that began in 2017 may continue Of course any investment strategy should be constructed with the unique goals and circumstances of the individual investors for whom the strategy is designed 23
I FA I R H AV EN IN THE ME DI A Besides sharing valuable financial knowledge and education on social media we re also a frequent presence on radio and TV Follow us on Facebook and LinkedIn and see all of our media appearances at www fairhavenwealth com media A B OUT FAIRH AVEN Fairhaven Wealth Management is an independent privately owned investment and wealth management firm serving select families and small to mid sized businesses At Fairhaven our commitment is simple we exist to serve our clients period Our culture of service and accountability combined with prudent risk management and tax efficiency are the cornerstones of our client commitment www fairhavenwealth com This material has been prepared for informational and educational purposes for our clients and friends Please consult your Fairhaven Wealth Management professional to discuss how this may impact your own financial plan and or investment portfolio This material is not intended to provide and should not be relied upon for accounting legal or tax advice or any other purposes Neither Fairhaven Wealth Management nor its subsidiaries or affiliates provide accounting legal or tax advice Please consult your tax advisor and or attorney for such guidance Advisory services offered through Fairhaven Wealth Management an SEC registered investment advisor Securities offered through Triad Advisors member FINRA SIPC Fairhaven Wealth Management and Triad Advisors are not affiliated For a copy of Fairhaven Wealth Management s ADV Part 2 disclosure document please direct your inquiry to admin fairhavenw com
