Smart Travel Planning

Ray’s Take: It’s been a long, cold, rainy winter here in the Bluff City, and everyone is looking forward to Spring Break, sunshine, warmer weather and possibly making plans for a summer vacation.


When thinking about a trip, it’s always a good idea to start with your budget before you make any plans. I’ve seen many clients splurge on large, expensive vacations they simply cannot afford. They end up paying them off for years, long after the memories have faded.


If you are a frequent traveler or would like to take a big trip with your family, look for credit cards that offer travel rewards when you make purchases. There are so many credit cards to choose from depending on what kind of traveling you want to do.


Some offer airline miles, others offer discounted hotel stays, domestic and international travel deals, no foreign transaction fees and even customized travel portals to help you plan your trip through their website. But don’t be fooled. Always be sure to read the fine print when signing up for one of these reward credit cards. Many have blackout dates throughout the year and some offer miles that are non-transferable.


When planning a large trip, make a list of the big-ticket items you will be spending money on, such as ski lift tickets, Disney World passes or seats at a Broadway show. Then work your remaining budget around those items. Sometimes it’s fun to live like a local and sample local fare in exchange for a fancy, expensive dinner. But if you have the money, then splurge and don’t feel guilty!


Last year, U.S. News and World Report ranked Memphis No. 6 on the list of the “Top Most Affordable Destinations.” So if an expensive trip is not in your family’s budget this year, visit the Memphis Convention and Visitors Bureau website at for things to do in Memphis that are “off the beaten path.”


Dana’s Take: Everybody splurges on something, whether it’s a golf trip, season tickets to a Grizzlies basketball game or a designer wardrobe. In relationships, trouble emerges when one or both members hide their splurges. The intent of hiding a splurge is to avoid the blame game, but the unfortunate result is usually a loss of trust.


To avoid splurge wars, start a savings fund. If you both agree to splurge on travel, save for a blowout trip. If you have individual whims, establish a fund for each of you. It can be used to splurge without judgment from the partner.


Two people can love each other without sharing the same priorities for spending money. Communicate and allocate money for each of your passions and watch the love grow.


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No Luck Investing

Ray’s Take: A rabbit’s foot on a string. A silver dollar. A four-leaf clover. A lucky penny. These are all lyrics from a 1961 song by our very own Memphis legend, Elvis Presley, titled “Good Luck Charm.”


But the truth is, when it comes to successful investing, it isn’t about good luck or any luck at all. Creating a successful investment plan requires a sound strategy, time, research and, in most cases, guidance from a financial services professional. Investing is not a one-time event.


The key to making wise investment choices starts with matching risk and allocation with your time horizon. For example, if you are 45 and want to retire at age 65, you have 20 years to get there. How much money will you need when that time comes? If the risk required is too high, reduce the goal or extend the working period.


You also need to learn the market and select an investment path. If you are new to investing, start small. A sudden swoon or spike is always possible. It’s not “bad luck” or investment genius. But it can imprint on you for the rest of your investing life.


Always diversify and review performance, but not too often. Quarterly at most. Watch your investments and learn what’s working and what isn’t. If you have more time, risk is your friend. If you have less time, don’t tempt fate. Most asset classes will regress to their mean. Your own greed and fear are your enemies.


Be careful not to get sucked into the latest market craze or seek short-term profits that may be short-lived. Committing to a long-term investment strategy is best.


Warren Buffet, one of the most successful investors ever, once said, “If I cannot understand it, I won’t invest in it.” This may seem simple, but it is sound and effective investment advice.


In the end, making wise investment choices isn’t about luck. And I think even Elvis would agree with me on that.


Dana’s Take: Can luck apply to money or just to love? I was lucky in love when I met Ray, but with money? Not so much. Now that I’ve seen how a financial planner handles money, I realize that it’s more about good habits and financial realities, than luck.


When I was single, I lived in financial denial. I paid all my bills and didn’t run up credit cards, but I wasn’t accumulating for my financial future. Even saving 10 percent of my earnings would have been a good start.


Visit your company’s human resources department and make sure you’re maximizing savings plans and any company matching. Also, visit with a financial planner to plan for a wedding, children, college or retirement. Odds are your financial “luck” will improve.

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Trust Funds 101

Ray’s Take: Most people have heard the expression, “He/she is a trust fund baby.” But what does that mean exactly?


Most people do not understand the basics of a trust and think they are only applicable to children or heirs of high-wealth individuals and businesses. While many times this is true, there are certain situations when a trust might serve as an integral part of your overall planning.


So what is a trust? By definition, a trust allows a third party, or “trustee,” to hold your assets on behalf of a beneficiary or beniciaries. A trust is made up of three parties: the “trustmaker” (you); the “trustee,” which is the person responsible for managing the property or asset until it is transferred; and the last party, the “beneficiary,” which is the person or entity you name as the recipient of the benefits you leave for them.


Before the option of 529 accounts became available, I’ve seen families use trusts to help save for their children’s college and professional education. In addition to professional management, there are a number of estate and income tax advantages. Further, there are asset protection opportunities that are not insignificant in this litigious world.


A trust may be useful when a family has a special needs or grown adult child that may not be able to handle a large sum of money if given to them through a traditional will.


Putting money into a trust allows the trustee to distribute the funds within your selected timeframe and parameters. It also protects those assets from judgments should the beneficiary be liable for damages or divorce settlements. Money in a trust does not go through the court system, allowing access to it more efficiently.


It’s important to understand that once you place assets into the trust, they are no longer yours. But since they are not yours, you will not pay income taxes on the money. It’s a useful tool that can help reduce your estate taxes.


Don’t be afraid of trusts; just know when it’s appropriate to use one. And always consult with your financial adviser or attorney when trying to decide if a trust is right for you.


Dana’s Take: Think of people you know who have inherited wealth. Did it bring them happiness or problems? A gift of money might sap a child’s drive to work and could even cause friction in their relationships. Inherited money often becomes “my” money in a marriage, while earned money is usually “ours.” However, leaving money to worthy causes, instead of family, can breed resentment.


Experienced financial planners and estate planning attorneys have seen every variation and can advise you of options that may achieve a balance that reflects your wishes and values.


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Revisiting Your Will

Ray’s Take: The start of a new year is a great time to get out your will and really read it. If you don’t have one, call your attorney today and get one. I do not recommend that you try and do this yourself or through an online program. Most people do not have financial situations that are so specific that you won’t need a lawyer. And oftentimes self-prepared wills are not executed correctly. I have lived through too many disasters of flawed wills to go there.


If you do have a will, make it a priority to read it annually. You will be amazed at what might need attention. Things change in our lives and estate planning should not be static.


Most people find creating and reviewing their will to be an uncomfortable task, but in actuality you are creating an invaluable resource for your friends and family should something happen to you. Having an updated and comprehensive plan upon death saves those closest to you lots of time and energy during an already difficult time.


When reviewing your will, double-check your beneficiaries. Have you had a birth or death in your family? Did you get married or divorced and need to add or remove a spouse or other family member? Re-evaluate your executor, guardian and trustee. Are these still the people you want in charge of making important decisions about your estate?


At the same time you are reviewing your will, you should also think about other essential estate planning documents like financial and health care-related powers of attorney. These ensure your wishes are carried out while you are still alive but unable to speak for yourself.


Keep in mind that some insurance and retirement policies are not included under your will, so you will want to review the beneficiaries on those documents separately. Beneficiary designations in these areas will override what’s outlined in your will.


Dana’s Take: I think we can all agree that thinking about death, especially our own, is an unpleasant topic that we would all like to avoid. But death is a natural part of life. And having an up-to-date, clear and concise will should give everyone peace of mind, especially you.


Don’t be afraid to communicate your wishes with your loved ones. While it can be scary and uncomfortable to discuss this topic with friends and family, it’s important that those closest to you know what their role is and what to expect.


Your children should know who will take care of them should something happen to you. Creating open dialogue in your home around this topic, may even help you in your decision-making process. Communication provides security and peace of mind that everyone will be taken care of and supported both emotionally and financially should the unthinkable happen.


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Living By Giving

Ray’s Take: “We make a living by what we get. We make a life by what we give.” This was the wisdom of Winston S. Churchill, but living a life of generosity is beneficial for you, your family and your community. Some of the most successful and powerful people in the world have tapped into the power of giving.


Since our kids were young, Dana and I have tried to model the importance of giving back. We have been blessed in many ways. Tuesdays have always been Rotary Day, and at dinner I try to share what happened that day at the meeting and the important things our club is doing both locally and internationally. Creating a charitable culture in your family should be a fun bonding experience. Even the youngest members of your family play an important role and you should listen to them. Having buy-in from each member of your family is crucial to creating a family-giving plan.


Start by meeting once a year to determine what causes are important to each member of your family. Then start creating a plan to help you support those causes financially and with your time.


The causes you support may change from year to year as kids grow and life takes different directions. Be sure to have an annual report from each charity you are considering at your family meeting. This will help determine what resources they need and where your money can make the most difference.


Typically, people donate anywhere from 3 percent to 10 percent of their taxed income. However you decide to divide up your donations, charitable giving requires forethought. You may want to single out one charity and make a sizable donation through a monthly pledge or you may choose to shotgun money to different charities if your income fluctuates each month.


The Community Foundation of Greater Memphis is an invaluable resource in the Memphis area. For more information about the organization, visit


Dana’s Take: I have chronic guilt that I’m not giving enough money to all the great causes in Memphis. What I need is a phone app to automate giving a gift every day of the year to my favorite charitable organizations. I would like to be able to check off organizations from a list and have a fixed amount gifted daily from my bank account. Is that so much to ask?


Perhaps every Sunday a gift would be sent to our church, but Mondays to a health care organization like the Church Health Center, St. Jude or Le Bonheur. Tuesdays could be homeless and food scarcity missions. Wednesday could be women’s causes like YWCA women’s shelters, Women’s Foundation of Greater Memphis or Dress for Success. Thursdays could be blanket organizations like the Community Foundation of Greater Memphis and United Way. Fridays could be for schools and youth programs like Streets Ministries and Youth Villages. You get the idea.


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