For Internal Use Only

Seminar Financial Empowerment for

Educators

Alan Sitkoff

First Vice President – Wealth Management

Financial Advisor

2

–D I G N I T YD I G N I T Y

3

What Does a financial Counselor do?

Questions from Young CouplesQuestions from Young Couples– To marry or not to marry?To marry or not to marry?– What are the costs of fertility treatments and adoption?What are the costs of fertility treatments and adoption?– Should spouses have separate accounts?Should spouses have separate accounts?– What’s the cost of divorce?What’s the cost of divorce?– Should I have a prenup if I marry?Should I have a prenup if I marry?

Questions form KidsQuestions form Kids– How much does it cost to raise a childHow much does it cost to raise a child– How much should I pay a babysitter or caregiver:How much should I pay a babysitter or caregiver:– What is the best way to save for college costs?What is the best way to save for college costs?– Should I allow my teen to have a credit card?Should I allow my teen to have a credit card?– How much is auto insurance for a teen?How much is auto insurance for a teen?– How do I choose a guardian for my kids if I die?How do I choose a guardian for my kids if I die?

Questions….. So many Questions!!!

4

What Does a financial Counselor do? Cont’d

Questions about Financial Security?Questions about Financial Security?– Should I pay off my mortgage or save more for my retirement?Should I pay off my mortgage or save more for my retirement?– Is my family spending too much?Is my family spending too much?– How much debt can I afford?How much debt can I afford?– How many credit cards should we have?How many credit cards should we have?– How can I protect my family if I lose my job?How can I protect my family if I lose my job?– How do I keep illness from depleting my assets?How do I keep illness from depleting my assets?

Questions about Estate Planning?Questions about Estate Planning?– How can I talk to my elderly parents about their finances?How can I talk to my elderly parents about their finances?– Do I have enough life insurance?Do I have enough life insurance?– How do I choose my beneficiaries?How do I choose my beneficiaries?– Do I need a will, a trust, proxies?Do I need a will, a trust, proxies?– How can I cut him out of my will?How can I cut him out of my will?– Should I pass my wealth down now or after I die?Should I pass my wealth down now or after I die?

5

Source of Income for Retirees

6

LIFE EXPECTANCY

A Healthy 65-year-old has a:A Healthy 65-year-old has a:

60% chance of living to age 8560% chance of living to age 85

44% chance of living to age 9044% chance of living to age 90

27% chance of living to age 9527% chance of living to age 95

A recent survey quoted in The Wall Street Journal found that 67% of retirees and A recent survey quoted in The Wall Street Journal found that 67% of retirees and 61% of working-age people underestimate the life expectancy of people their 61% of working-age people underestimate the life expectancy of people their age.age.

Source: Estimates based on Annuity 2000 table with Projection G weighted 100% male, 0% female.Source: Estimates based on Annuity 2000 table with Projection G weighted 100% male, 0% female.

7

LESSONS FOR A LESSONS FOR A

LIFETIME OF INVESTINGLIFETIME OF INVESTING

The Value of Sound Advice

• How can investors deploy their investment dollars without costly missteps?

• Part of the solution is to pair with an investment professional.

• Investors’ biggest challenge is adopting an investing discipline and committing to it.

• Rely on your financial representative to provide the insight and wisdom to keep you on track.

• That wisdom is what this presentation is all about.

There can be no assurance that working with a financial advisor will improve investment results. © 2008 Mulberry Communications.

History of Financial Markets (%)

Realistic Expectations

Past performance is no guarantee of future results. Average annualized rates of return. Investors should note that Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest, while corporate bonds and stocks are not. Stocks also tend to be the most volatile, while bonds offer a fixed rate of return. In general, the higher the risk, the higher the potential return. Returns calculated by Mulberry Communications using data provided by Global Financial Data, Inc. Used with permission. Stocks are represented by the Wilshire 5000® Index, bonds by 10-year U.S. Treasury Bonds and Treasury bills by U.S. 90-day Treasury bills. Inflation is represented by the Department of Labor all Urban Consumer Price Index.

This chart is for illustrative purposes only and does not represent the performance of any specific investment.

11.810.6

11.8

6.0

8.0 8.1

4.96.1

4.53.63.7

4.7

3.0 2.7

6.4 6.3

0

2

4

6

8

10

12

14

60 Years 40 Years 20 Years 10 Years

U.S. StocksGov't. Bonds90-Day T-billsInflation

1948-2007 1968-2007 1988-2007 1998-2007

86 mos.

50 mos. 43 mos.

26 mos.

32 mos. 24 mos. 33 mos.

60 mos.

31 mos.

113 mos.

3 mos.

65 mos.

7 mos.18 mos.3 mos.

3 mos.20 mos.18 mos.

21 mos.18 mos.

8 mos.6 mos.15 mos.

S&

P 5

00® C

um

ula

tive

To

tal

Ret

urn

450%

350

250

150

50

0

-50

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2007

Bull and Bear Markets (June 13, 1949 – December 31, 2007)

Waiting Out the Storms Has Been Worth It

Past performance is no guarantee of future results.Bars represent cumulative total returns. All data are monthly averages except for the initial and terminal months of the cycle, which are the S&P 500® close for that date. Source: Security Price Index Record, Statistical Service and S&P Corporation. The S&P 500® Index is an unmanaged index commonly used to measure stock market performance that is not available for direct investment. © 2008 Mulberry Communications.

Waiting Out the Storms Has Been Worth ItDeclines in the S&P 500®

1928 – 2007

5% or more 264 38 3.3 per year

10% or more 87 103 1.1 per year

15% or more 38 198 1 every 2 years

20% or more 23 305 1 every 3 years

AverageLength

Decline # Declines (Days) Frequency

Past performance is no guarantee of future results.Source: Ned Davis Research, Inc.

Time Can Help Heal All Wounds

Past performance is no guarantee of future results. Bar charts represent annualized total returns for the S&P 500® Index, an unmanaged index commonly used to measure stock market performance that is not available for direct investment. © 2008 Mulberry Communications; Global Financial Data, Inc., Ibid.

-6

-11-10 -9 -10

-19

-3 -4-6

-11-11

-21

5

10 10

46

1

5

16

10 11

-5

1

6

-28-30

-20

-10

0

10

20

'46 '57 '62 '66 '69 '73 '74 '77 '81 '90 '00 '01 '02 '49 '60 '65 '69 '72 '76 '77 '80 '84 '93 '03 '04 '05

The 13 Down Years Since the End of WWII...

Where Investors StoodThree Years Later...

What About Bonds?

© 2008 Mulberry Communications.

Interest Rates

Interest Rates

BondPrices

BondPrices

Emotions Cost MoneyThe Average Investor Falls Short

Past performance is no guarantee of future results. The Golden Rule of Investing™ does not necessarily mean a 65/35 equity/bond allocation. This example is hypothetical and does not reflect the actual return of any investment. There can be no guarantee that any particular yield or return will be achieved for any investment. Data for the first bar is from a 2007 survey conducted by DALBAR, Inc. The U.S. Stock Market is measured by the Wilshire 5000®. The final bar assumes that the equity segment of the portfolio was composed of the Wilshire 5000®. and the bond portion was composed of 10-year government bonds. © 2008 Mulberry Communications.

™

4.3%

11.6%10.5%

Average Stock MutualFund Investor

U.S. Stock Market Following the GoldenRule of Investing (65% stocks, 35%

Bonds)

15

Risk and Return Results for Stock and Bond BlendsTwenty Years Ending December 2007

100% Stocks50% Stocks

100% Bonds

Source: Citi Smith Barney

9%

10%

11%

12%

6% 8% 10% 12% 14%

Standard Deviation

An

nu

aliz

ed

Re

turn

Taking Enough Risk: The Power of DiversificationGeorge and Martha Prepare for Retirement

These allocations are hypothetical and are not recommendations or predictions of actual results. Assumes $100,000 is invested continuously for 25 years. Martha’s example assumes that $100,000 is divided into four $25,000 segments. Investors should note that diversification does not assure against market loss and there is no guarantee that a diversified portfolio will outperform a nondiversified portfolio. There can be no assurance that the rates of return cited in the example will be attained, and there are greater risks associated with investments that have the potential to provide greater returns. © 2008 Mulberry Communications.

$100,000

$338,635

$25,000

$25,000

$25,000

$25,000

$805,528

5% Return

12% Return

10% Return

5% Return

0% Return

Initial Investment 25 Years Later Initial Investment 25 Years Later

MarthaGeorge

Which Investments Should I Own ?

Investors should note that diversification does not assure against market loss and there is no guarantee that a diversified portfolio will outperform a non-diversified portfolio. These allocations are hypothetical and are not recommendations or predictions of actual results. The eight investment classes cited in the chart above range from lower risk (e.g., Stable Asset) to higher risk (e.g., Aggressive Growth). Overall portfolio risk is determined by the investor’s allocations to specific investment classes. © 2008 Mulberry Communications.

Stable Asset 25% 12% 5% 0% ___%

Intermediate Bonds 25 12 5 0 ___

High Yield 5 12 10 10 ___

Balanced 10 16 10 10 ___

Large-Cap Growth 15 12 20 20 ___

Mid-Cap Value 5 12 20 20 ___

International 10 12 15 20 ___

Aggressive Growth 5 12 15 20 ___

100% 100% 100% 100% 100%

Hypothetical Allocations Moder

ate

Conserv

ativ

e

Aggress

ive

Very

Aggress

ive

Your Allo

catio

n

Investing at the Right Place and Time

Past performance is no guarantee of future results. Foreign investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risks. This example is for illustrative purposes only and is not a prediction or guarantee of actual results or intended to represent the performance of any investment. Average annualized rates of return. Highlighted areas represent the best-performing area for that year. © 2008 Mulberry Communications. Growth stocks: Wilshire 5000 Growth Index. Value stocks: Wilshire 5000 Value Index. U.S. stocks: S&P 500® Index. Foreign stocks: MSCI EAFE Index. These indices are unmanaged and not available for direct investment. Source: Morningstar, Ibid.

Blue indicates the winning style for that particular year

Growth Value U.S. Foreign% Return of Stocks

2.9 18.1 1993 10.1 32.62.7 -2.0 1994 1.3 7.8

37.2 38.4 1995 37.5 11.223.1 21.6 1996 23.0 6.130.5 35.2 1997 33.4 1.838.7 15.6 1998 28.6 20.033.2 7.4 1999 21.0 27.0-22.4 7.0 2000 -9.1 -14.2-20.4 -5.6 2001 -11.9 -21.4-27.9 -15.5 2002 -22.1 -15.929.8 30.0 2003 28.7 38.6

6.3 16.5 2004 10.9 20.35.3 7.1 2005 4.9 13.59.1 22.2 2006 15.8 26.3

11.8 -0.2 2007 5.5 11.2

Rebalancing: A Classic Investment Discipline

This rebalancing example is hypothetical and does not represent the performance of any investment. Rebalancing does not assure a profit nor protect against loss. Investors should bear in mind there are certain tax implications involved when selling funds for rebalancing purposes. Your allocation may be different than four equal 25% allocations, and you may choose to rebalance with a frequency other than annually. © 2008 Mulberry Communications.

December 31 Ending Balances January 1 After Rebalancing

Fund A Fund B Fund C Fund D Fund A Fund B Fund C Fund D

$15,000

12,000

10,0009,000

6,000

3,000

0

Original $10,000 Investment

The Real Story of the Stock Market

1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2007

This example is hypothetical and are not recommendations or predictions of actual results. Calculations assume money is invested in a tax-qualified retirement plan. Chart is based upon total returns for the Wilshire 5000® Index from 1941 to 2007. © 2008 Mulberry Communications.

The Value of Patience Over Panic

$1,731,837Value on 12/31/07

1941Pearl Harbor

$1,000Initial

Investment1/1/41

1993World Trade

Center bombing1987

Stock market crashes1974

President Nixon resigns

1963President Kennedy

assassinated

1950Korean War

1961Berlin Wall

built

1998Asian financial crisis

sends market tumbling

2002 Iraq war

2001World Trade Center attack

What Happens When the Market Corrects?Portfolios

Past performance is no guarantee of future results. Stock market change is represented by the Wilshire 5000®. Bond market change is represented by 10-year government bonds. The indices are unmanaged and not available for direct investment. Source: Global Financial Data, Inc., Ibid. On average, conservative investors would have experienced a positive 1% change during the stock market’s worst years during the past three decades. This chart is for illustrative purposes only. Stock market change is represented by the Dow Jones Industrial Average. Bond market change is represented by the Lehman Brothers Long U.S. Government Index. © 2008Mulberry Communications.

Stock Market Conservative Moderate AggressiveDown Years Stocks Bonds Portfolio Portfolio Portfolio(since 1971) % % Change % Change % Change %

1973 -19 +3 -3 -8 -121974 -28 +4 -6 -12 -191977 -3 0 -1 -1 -21981 -4 +4 +2 0 -11990 -6 +8 +4 +1 -22000 -11 +17 +9 +3 -22001 -11 +6 +1 -3 -62002 -21 +15 +4 -3 -10

Average all down years -13 +7 +1 -3 -7

Stocks

Bonds

30%

70%

Conservative

50%

50%

Moderate

70%

30%

Aggressive

Destroying Returns the Easy WayThe High Cost of Short-Term Investing

Past performance is no guarantee of future results. Daily index values of the S&P 500® from October 1, 2002 to October 21, 2002; Bloomberg. The index is unmanaged and not available for direct investment. This example is for illustrative purposes only. © 2008 Mulberry Communications.

Excitement

Fear

Anxiety

Euphoria

10-21-02

10-09-02Panic

Emotional investors sell here when they are pessimistic

Emotional investors buy here when they are optimistic again

10-01-02

900

875

850

825

800

775

Why Down Years Are “Good”

Past performance is no guarantee of future results. Figures shown are annual total returns. Source: Dow Jones & Company, Inc. © 2008 Mulberry Communications.

1933 73.6%

1928 55.4

1954 51.3

1975 44.7

1935 43.8

1958 39.3

1995 36.8

1985 33.5

1938 33.2

2000 - 4.9%

1960 - 6.1

1962 - 7.4

1940 - 7.9

1957 - 8.6

1941 - 9.9

1969 -11.8

2001 -11.9

1977 -12.8

1973 - 13.3%

1929 - 13.6

2002 - 15.0

1966 - 15.8

1932 - 16.8

1974 - 23.6

1937 - 28.9

1930 - 30.3

1931 - 49.0

Dow Jones Industrial Average (Best to Worst)

1989 32.2%

1945 31.6

1936 30.3

1996 28.8

2003 28.3

1999 27.2

1982 27.1

1986 27.1

1955 26.6

18 Best Years 18 Worst Years

What You Must Know About Market Timing Average Annual Return S&P 500® 1/88 – 12/07

Past performance is no guarantee of future results. Returns cited exclude dividends. © 2008 Mulberry Communications.

9.3%

-1.2%

5,043 TradingDays

Without the 60Best Days

5,043 TradingDays

Without the 60Best Days

Combating Inflation1/1/26 – 12/31/07

Past performance is no guarantee of future results. Data since 1926. Stocks: Wilshire 5000®. Bonds: 10-year government bonds. Cash: 90-Day T-bills. This chart is for illustrative purposes only and is not indicative of any specific investment and is not a prediction of actual results. Investors should note that Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest. Stocks tend to be most volatile while bonds offer a fixed rate of return. In general, the higher the risk, the higher the potential return. There can be no assurance that the rates of return cited in the example will be attained, and there are greater risks associated with investments that have the potential to provide greater returns. The Global Financial Data, Inc., Ibid.

10.1%

5.3%

3.8%

Historically, stocks have always stood tall . . .

. . . but after inflation theytower over bonds and cash

U.S. Stocks Gov’t Bonds 90-Day T-bills

7.1%

2.3%

0.8%

U.S. Stocks Gov’t Bonds 90-Day T-bills

2.0x 2.5x

3.0x 9.0x

The Retirement Equation

© 2008 Mulberry Communications

The kitchen remodeling and a new fishing boat come before saving any more right now.

How much will you save and invest?11I will pay myself first. What I save I won’t spend.

Your answer to these four questions will determine the quality of your retirement.

The Retirement Equation

How long will you let your money grow?22I will start now. Time, not timing, is my strategy.

I have a million projects. When I’m done, I’ll start putting more money away. What’s another year?

© 2008 Mulberry Communications

The Retirement Equation

© 2008 Mulberry Communications

What will you invest in?33I invest in stocks. I don’t time the market. I see myself as a long-term owner of many quality businesses.

I don’t understand the stock market. So, I’ll keep my money in the stable asset or money market fund.

The Retirement Equation

© 2008 Mulberry Communications. Investors should note that systematic investing does not assure against a profit or protect against losses in a declining market. There are greater risks associated with investments that have the potential to provide greater returns.

I stay disciplined.I buy quality investments, diversify, patiently hold and rebalance when necessary.”

I don’t consider myself a hotshot investor. I just play it by ear. What else can you do?

How disciplined will you be?44

Plan for a Comfortable Retirement?

No Plan

for Retirement?

The Rule of 72The Power of Compounding

This hypothetical example assumes you will hold this investment posture during the entire 40 years and does not represent the actual return of any investment. Please note that volatility, including fluctuating prices and the uncertainty of rates of return inherent in investing in stocks and bonds (as used in this example) over extended periods of time will affect the actual return received. Calculations assume money was invested in a tax-qualified plan. We assumed a portfolio of 75% stocks averaging 10% growth annually and 25% bonds averaging 6% annually for an average annual total return for the portfolio of 9%. With a 9% growth rate, the portfolio would double approximately every 8 years. © 2008 Mulberry Communications.

0100,000200,000300,000400,000500,000600,000700,000800,000900,000

1,000,000

Today 8 Yrs 16 Yrs 24 Yrs 32 Yrs 40 Yrs

$31,250 $62,500$125,000

$250,000

$500,000

$1,000,000

Today 8 16 24 32 40

Years

Based on historical investment returns, how long will it take your money to double?

The High Cost of Waiting

This example is hypothetical and are not recommendations or predictions of actual results. There can be no guarantee that any particular yield or return will be achieved from any investment. The assumed rate of return is a constant 8% annual growth rate in this hypothetical example. © 2008 Mulberry Communications.

$63,138

$0.00

And retire after 40 years with the same amount.

Or

You can put off saving

for 8 years, save a little,

then save $2,000 each year for the

next 31 years.

You can begin early, and save

$2,000 for 8 years, save a bit more, then nothing for the next 31 years.

$279,781 $279,781

$16,862

$16,862

$0.00

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2007 Top Investment Scams cont.

Most Common Investment ScamsMost Common Investment Scams

Members of the North American Securities Administrators Association’s (Members of the North American Securities Administrators Association’s (NASAANASAA) and the Washington ) and the Washington State Department of Financial Institutions (DFI) identified the most common investment scams for 2007. State Department of Financial Institutions (DFI) identified the most common investment scams for 2007. The list is in no order of prevalence or seriousness. The list is in no order of prevalence or seriousness.

Affinity FraudAffinity Fraud

Members of closely knit religious, political, or ethnic groups are targeted frequently by con artists. Their Members of closely knit religious, political, or ethnic groups are targeted frequently by con artists. Their pitch is essentially, “since I am like you and believe like you, you can believe in me and in what I say.” pitch is essentially, “since I am like you and believe like you, you can believe in me and in what I say.” When an investment is presented in this context, the potential investor should be extremely wary. This When an investment is presented in this context, the potential investor should be extremely wary. This pitch seeks to substitute an emotional appeal for careful analysis and critical thought. pitch seeks to substitute an emotional appeal for careful analysis and critical thought. More informationMore information on on Affinity Fraud. Affinity Fraud.

ChurningChurning

An abusive sales practice in which unethical securities professionals make unnecessary and/or excessive An abusive sales practice in which unethical securities professionals make unnecessary and/or excessive trades in order to generate commissions. Most churning occurs where a broker has discretion to trade the trades in order to generate commissions. Most churning occurs where a broker has discretion to trade the account. In such cases, it is not necessary that the broker receive prior approval from the client to complete account. In such cases, it is not necessary that the broker receive prior approval from the client to complete a transaction. a transaction.

Equity Indexed Certificates of DepositEquity Indexed Certificates of Deposit

Remember the days of FDIC-insured, bank-issued certificates of deposit with guaranteed principal and Remember the days of FDIC-insured, bank-issued certificates of deposit with guaranteed principal and interest? Equity Indexed CDs are not the same product. These hybrid securities products offer an interest interest? Equity Indexed CDs are not the same product. These hybrid securities products offer an interest coupon payment or return that is based on a stock market index, usually the S&P 500. Returns are not FDIC coupon payment or return that is based on a stock market index, usually the S&P 500. Returns are not FDIC insured. They are dependent on the performance of the stock market. These are complex securities that insured. They are dependent on the performance of the stock market. These are complex securities that promise a rate of return calculated over a defined period of time based upon some form of securities promise a rate of return calculated over a defined period of time based upon some form of securities market index. A declining stock market means the possibility of no return on your investment. As a result, market index. A declining stock market means the possibility of no return on your investment. As a result, these products pose liquidity problems and are therefore, not suitable for seniors who may need the money these products pose liquidity problems and are therefore, not suitable for seniors who may need the money for retirement living. for retirement living.

Oil and Gas Investment FraudOil and Gas Investment Fraud

High oil prices mean oil and gas scams will continue to attract victims. Oil and gas deals are complicated High oil prices mean oil and gas scams will continue to attract victims. Oil and gas deals are complicated investments that generally require a significant investment, often requiring a minimum deposit of investments that generally require a significant investment, often requiring a minimum deposit of thousands of dollars. Increasingly, these deals are being promoted via the Internet with claims of attractive thousands of dollars. Increasingly, these deals are being promoted via the Internet with claims of attractive tax advantages. Sales materials with “official-looking” surveyor maps and “geologist” opinion letters tax advantages. Sales materials with “official-looking” surveyor maps and “geologist” opinion letters touting the likelihood that the “managers” of the drilling enterprise will hit pay dirt are sent regularly to touting the likelihood that the “managers” of the drilling enterprise will hit pay dirt are sent regularly to prospective investors more than 1,000 miles from the region being “prospected.” Overall, these deals are prospective investors more than 1,000 miles from the region being “prospected.” Overall, these deals are highly risky, but the lure of high profits often proves irresistible to investors. highly risky, but the lure of high profits often proves irresistible to investors.

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2007 To Investment Scams Cont’d

Personal Information ScamsPersonal Information Scams

The first step in separating a victim from his or her money is convincing the victim to divulge personal The first step in separating a victim from his or her money is convincing the victim to divulge personal financial information. When the sales agent is a local tax preparer or unaffiliated insurance agent, he or she financial information. When the sales agent is a local tax preparer or unaffiliated insurance agent, he or she enjoys a position of trust in the community. Con artists not enjoying such a position of trust frequently enjoys a position of trust in the community. Con artists not enjoying such a position of trust frequently style themselves as “senior specialists” or adopt a pretext of preparing “living will” or a “living trust.” A style themselves as “senior specialists” or adopt a pretext of preparing “living will” or a “living trust.” A pretext that is of current concern to insurance and securities regulators is the offer to help senior citizens pretext that is of current concern to insurance and securities regulators is the offer to help senior citizens qualify for prescription benefits by preparing forms. In the guise of filling out forms, the scamster may ask qualify for prescription benefits by preparing forms. In the guise of filling out forms, the scamster may ask unnecessary questions about personal financial assets. To the con artist, this information provides a unnecessary questions about personal financial assets. To the con artist, this information provides a comprehensive laundry list of what is available for the taking. comprehensive laundry list of what is available for the taking.

Prime Bank SchemesPrime Bank Schemes

These schemes often promise high-yield, tax-free returns that are said to result from “off-shore trades of These schemes often promise high-yield, tax-free returns that are said to result from “off-shore trades of bank debentures.” Investors are told that only very wealthy people can get the benefit of these programs bank debentures.” Investors are told that only very wealthy people can get the benefit of these programs but the promoter is able to make it available to the victim. Sometimes the victim is required to execute a but the promoter is able to make it available to the victim. Sometimes the victim is required to execute a “confidentiality agreement” in order to invest and is told not to consult an attorney, accountant or financial “confidentiality agreement” in order to invest and is told not to consult an attorney, accountant or financial planner because they keep these programs for the “big boys” and will deny that they exist. There are no planner because they keep these programs for the “big boys” and will deny that they exist. There are no such programs, no such debentures and no such high-yield trades. These prime bank schemes are the such programs, no such debentures and no such high-yield trades. These prime bank schemes are the securities equivalent of a purse snatch. Once the seller has your money, it’s gone “off shore” forever. securities equivalent of a purse snatch. Once the seller has your money, it’s gone “off shore” forever.

Pump and Dump SchemesPump and Dump Schemes

Unethical broker-dealers frequently “pump” up the value of low-priced securities traded on the NASDAQ Unethical broker-dealers frequently “pump” up the value of low-priced securities traded on the NASDAQ “pink sheets” and then “dump” the stock after naïve investors have purchased the stock at inflated prices. “pink sheets” and then “dump” the stock after naïve investors have purchased the stock at inflated prices. The balloon breaks when the promoters no longer maintain the myth that there is value in the shares and The balloon breaks when the promoters no longer maintain the myth that there is value in the shares and investors are left holding worthless shares. These schemes frequently appear through unsolicited e-mail investors are left holding worthless shares. These schemes frequently appear through unsolicited e-mail messages. messages.

Recovery RoomsRecovery Rooms

Scam artists buy and sell the names and financial information of victims who have lost money to “recovery Scam artists buy and sell the names and financial information of victims who have lost money to “recovery room” operators who promise, in return for a fee that the victim must pay in advance, to recover the money room” operators who promise, in return for a fee that the victim must pay in advance, to recover the money lost in a worthless investment. These “sucker lists” are bought by crooks who know that people who have lost in a worthless investment. These “sucker lists” are bought by crooks who know that people who have been deceived once are vulnerable to additional scams; especially scams that give hope of recovering lost been deceived once are vulnerable to additional scams; especially scams that give hope of recovering lost money. If you have been the victim of a fraud, never give out your credit card or other personal information money. If you have been the victim of a fraud, never give out your credit card or other personal information to someone who contacts you with a promise to recover your money. Remember, in the scam world this to someone who contacts you with a promise to recover your money. Remember, in the scam world this caller is known as a “reloader” and he is setting you up for a second bite at the apple. caller is known as a “reloader” and he is setting you up for a second bite at the apple.

34

2007 Top Investment Scams Cont’d

Registered High-Interest Promissory Notes Publicly AdvertisedRegistered High-Interest Promissory Notes Publicly Advertised

Generally, the higher the return promised, the greater the risk to your money. A track record of paying high interest and Generally, the higher the return promised, the greater the risk to your money. A track record of paying high interest and repaying principal is not an assurance that you will get your money back if the company fails. These notes are not repaying principal is not an assurance that you will get your money back if the company fails. These notes are not suitable for retirement funds. suitable for retirement funds.

Sale and Leaseback ContractsSale and Leaseback Contracts

In an attempt to avoid the investor protections of securities laws, some investments are structured to resemble the sale In an attempt to avoid the investor protections of securities laws, some investments are structured to resemble the sale of a piece of equipment such as a payphone, ATM machine or Internet booth located at a remote venue where the of a piece of equipment such as a payphone, ATM machine or Internet booth located at a remote venue where the investor cannot service and maintain the equipment and must enter into a servicing agreement. In order to make the investor cannot service and maintain the equipment and must enter into a servicing agreement. In order to make the deal more attractive, investors are told that after a given period the equipment can be sold back to the seller at the deal more attractive, investors are told that after a given period the equipment can be sold back to the seller at the investor’s original purchase price. The investor is also promised a specific rate of return. In a variant of this scheme, a investor’s original purchase price. The investor is also promised a specific rate of return. In a variant of this scheme, a real estate interest such as a long-term lease in a resort community is sold instead of physical equipment. Frequently real estate interest such as a long-term lease in a resort community is sold instead of physical equipment. Frequently the equipment or property does not exist and the seller lacks the financial capacity to keep the promise of repurchase. the equipment or property does not exist and the seller lacks the financial capacity to keep the promise of repurchase.

Self-Directed Pension PlansSelf-Directed Pension Plans

Many types of securities fraud require the victim to remove funds from legitimate investments such as stock brokerage Many types of securities fraud require the victim to remove funds from legitimate investments such as stock brokerage accounts, mutual funds, insurance policies, deferred compensation plans and mutual funds so that they can be accounts, mutual funds, insurance policies, deferred compensation plans and mutual funds so that they can be invested in a worthless scam. This scam may begin with advice to convert an employer-sponsored pension into a self-invested in a worthless scam. This scam may begin with advice to convert an employer-sponsored pension into a self-directed pension plan. While these plans may serve legitimate investment purposes, all too often they only serve to directed pension plan. While these plans may serve legitimate investment purposes, all too often they only serve to benefit the scam artist. benefit the scam artist.

Unsuitable RecommendationsUnsuitable Recommendations

Just as every investor is different, so too are investments. What may be a suitable investment for one investor may not Just as every investor is different, so too are investments. What may be a suitable investment for one investor may not be right for another. Securities professionals must know their customers’ financial situation and refrain from making be right for another. Securities professionals must know their customers’ financial situation and refrain from making recommendations of securities that they have reason to believe are unsuitable. When securities professionals fail to recommendations of securities that they have reason to believe are unsuitable. When securities professionals fail to live up to applicable ethical standards, great harm can be done to individual investors. live up to applicable ethical standards, great harm can be done to individual investors.

Variable AnnuitiesVariable Annuities

Variable annuities are tax-deferred investments that typically place mutual funds inside of an insurance wrapper for tax Variable annuities are tax-deferred investments that typically place mutual funds inside of an insurance wrapper for tax deferred potential investment growth. While these products are legitimate investments, regulators are concerned about deferred potential investment growth. While these products are legitimate investments, regulators are concerned about their popularity in the sales community. Commissions to those who sell variable annuities are very high, which their popularity in the sales community. Commissions to those who sell variable annuities are very high, which provides incentive for sellers to engage in inappropriate sales. Variable annuities are only suitable for a very small provides incentive for sellers to engage in inappropriate sales. Variable annuities are only suitable for a very small percentage of the investing public and generally are not appropriate for most seniors. The steep penalties for early percentage of the investing public and generally are not appropriate for most seniors. The steep penalties for early withdrawals also make variable annuities unsuitable for short-term investors. Be especially wary of any broker who withdrawals also make variable annuities unsuitable for short-term investors. Be especially wary of any broker who wants to sell you a variable annuity to hold inside a 401(k) or IRA. You are already getting tax-deferred growth in an IRA wants to sell you a variable annuity to hold inside a 401(k) or IRA. You are already getting tax-deferred growth in an IRA or a 401(k), and the variable annuity simply adds a layer of cost with no additional tax benefit. or a 401(k), and the variable annuity simply adds a layer of cost with no additional tax benefit.

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The Millionaire Next Door

The Surprising secrets of The Surprising secrets of

America’s WealthyAmerica’s Wealthy

By

Thomas J. Stanley, Ph.D.

William D. Danko, Ph.D.

36

Who is the prototypical American millionaire? What would he tell you about himself?Who is the prototypical American millionaire? What would he tell you about himself?

– I am a fifty-seven year old man, married with three children. About 70 percent of I am a fifty-seven year old man, married with three children. About 70 percent of us earn 80 percent or more of our household’s income.us earn 80 percent or more of our household’s income.

– Many of the types of businesses we are in could be classified as dull-normal. We Many of the types of businesses we are in could be classified as dull-normal. We are welding contractors, auctioneers, rice farmers, owner of mobile-home parks, are welding contractors, auctioneers, rice farmers, owner of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractorspest controllers, coin and stamp dealers, and paving contractors

– About half of our wives do not work outside the home. The number one About half of our wives do not work outside the home. The number one occupation for those wives who do work is teacher.occupation for those wives who do work is teacher.

– On average, our total annual realized income is less than 7 percent of our wealth. On average, our total annual realized income is less than 7 percent of our wealth. In other words, we live on less than 7 percent of our wealthIn other words, we live on less than 7 percent of our wealth

– Most of us (97 percent) are homeowners. We live in homes currently valued at an Most of us (97 percent) are homeowners. We live in homes currently valued at an average $320,000. About half of us have occupied the same home for more than average $320,000. About half of us have occupied the same home for more than twenty years. Thus, we have enjoyed significant increases in the value of our twenty years. Thus, we have enjoyed significant increases in the value of our homes.homes.

Portrait of a Millionaire (courtesy of The Millionaire Next Door)

37

Portrait of a Millionaire cont.

Most of us have never felt at a disadvantage because we did not receive any Most of us have never felt at a disadvantage because we did not receive any inheritance. About 80 percent of us are first generation affluent.inheritance. About 80 percent of us are first generation affluent.

We live well below our means. We wear inexpensive suits and drive American-We live well below our means. We wear inexpensive suits and drive American-made cars. Only a minority of us drive the current-model-year automobile. made cars. Only a minority of us drive the current-model-year automobile. Only a minority ever lease our motor vehicles.Only a minority ever lease our motor vehicles.

Most of our wives are planners and meticulous budgeters. In fact, only 18 Most of our wives are planners and meticulous budgeters. In fact, only 18 percent of us disagreed with the statement “Charity begins at home.” Most of percent of us disagreed with the statement “Charity begins at home.” Most of us will tell you that our wives are a lot more conservative with money than we us will tell you that our wives are a lot more conservative with money than we are.are.

We have a “go-to-hell fund.” In other words, we have accumulated enough We have a “go-to-hell fund.” In other words, we have accumulated enough wealth to live without working for ten years. Thus, those of us with a new wealth to live without working for ten years. Thus, those of us with a new worth of $1.6 million could live longer than that, since we save at least 15 worth of $1.6 million could live longer than that, since we save at least 15 percent of our earned income.percent of our earned income.

We have more than six and one half time the wealth of our nonmillionaire We have more than six and one half time the wealth of our nonmillionaire neighbors, but in our neighborhood, these nonmillionaires out number us neighbors, but in our neighborhood, these nonmillionaires out number us better than three to one. Could it be that they have chosen to trade wealth for better than three to one. Could it be that they have chosen to trade wealth for acquiring high-status material possessions?acquiring high-status material possessions?

As a group, we are fairly well educated. Only about one in five are not college As a group, we are fairly well educated. Only about one in five are not college graduates. Many of us hold advanced degrees. Eighteen percent have graduates. Many of us hold advanced degrees. Eighteen percent have master’s degrees, 8 percent have law degrees, 6 percent have medical degrees master’s degrees, 8 percent have law degrees, 6 percent have medical degrees and 6 percent PHD.s.and 6 percent PHD.s.

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Portrait of a Millionaire cont’d

As a group, we believe that education is extremely important for ourselves, our As a group, we believe that education is extremely important for ourselves, our children, and our grandchildren. We spend heavily for the educations of our children, and our grandchildren. We spend heavily for the educations of our offspring.offspring.

About two-thirds of us work between forty-five and fifty-five hours per week.About two-thirds of us work between forty-five and fifty-five hours per week.

We are fastidious investors. On average, we invest nearly 20 percent of our We are fastidious investors. On average, we invest nearly 20 percent of our household realized income each year. Most of us invest at least 15 percent. household realized income each year. Most of us invest at least 15 percent. Seventy-nine percent of us have a least one account with a brokerage Seventy-nine percent of us have a least one account with a brokerage company. But we make our own investment decisions.company. But we make our own investment decisions.

We hold nearly 20 percent of our household’s wealth in transaction securities We hold nearly 20 percent of our household’s wealth in transaction securities such as publicly traded stocks and mutual funds. But we rarely sell our equity such as publicly traded stocks and mutual funds. But we rarely sell our equity investments. We hold even more in our pension plans. On average, 21 percent investments. We hold even more in our pension plans. On average, 21 percent of our household’s wealth is in our private businesses.of our household’s wealth is in our private businesses.

What would be the ideal occupations for our sons and daughters. There are What would be the ideal occupations for our sons and daughters. There are about 3.5 millionaire households like ours. Our numbers are growing much about 3.5 millionaire households like ours. Our numbers are growing much faster than the general population. Our kids should consider providing affluent faster than the general population. Our kids should consider providing affluent people with some valuable service. Overall, our most trusted financial advisors people with some valuable service. Overall, our most trusted financial advisors are our accountants. Our attorneys are also very important. So we are our accountants. Our attorneys are also very important. So we recommend account and law to our children. Tax advisors and estate recommend account and law to our children. Tax advisors and estate planning experts will be in big demand over the next fifteen years.planning experts will be in big demand over the next fifteen years.

39

Companies?

Acme Brick CompanyAcme Brick Company

Benjamin Moore & CoBenjamin Moore & Co

Borsheims Fine JewelryBorsheims Fine Jewelry

Buffalo NEWS, Buffalo NYBuffalo NEWS, Buffalo NY

Clayton HomesClayton Homes

Cort Business ServicesCort Business Services

Flight SafetyFlight Safety

General RdGeneral Rd

Homeservices of Am, a subsidiary ofHomeservices of Am, a subsidiary of

MidAmerican Energy Holdings CoMidAmerican Energy Holdings Co

Johns ManvilleJohns Manville

Shaw IndustriesShaw Industries

GeicoGeico

Coca ColaCoca Cola

American ExpressAmerican Express

Wells FargoWells Fargo

BudweiserBudweiser

Dairy QueenDairy Queen

Fruit of the LoomFruit of the Loom

See’s CandiesSee’s Candies

Net JetNet Jet

Washington PostWashington Post

Jordan’s Furniture MartJordan’s Furniture Mart

Justin BrandsJustin Brands

Nebraska Furniture MartNebraska Furniture Mart

NetJetsNetJets

The Pampered ChefThe Pampered Chef

Shaw IndustriesShaw Industries

40

Warren Buffet Quotes

BE HONESTBE HONEST– Buffett told his son Howard:Buffett told his son Howard:– ““It takes 20 years to build a reputation and five minutes to ruin It takes 20 years to build a reputation and five minutes to ruin

it. If you thing about that, you’ll do things differently.” it. If you thing about that, you’ll do things differently.” 4646

– ““Money, to some extent, sometimes lets you be in more Money, to some extent, sometimes lets you be in more interesting environments. But it can’t change how many interesting environments. But it can’t change how many people love you or how healthy you are.”people love you or how healthy you are.”4040

– ““I don’t try to jump over 7-foot bars: I look around for 1-foot I don’t try to jump over 7-foot bars: I look around for 1-foot bars that I can stop over.”bars that I can stop over.” 23 23

– People would rather be promised a (presumable) winning People would rather be promised a (presumable) winning lottery ticket next week than an opportunity to get rich lottery ticket next week than an opportunity to get rich slowly.”slowly.”315315

– ““Someone’s sitting in the shade today because Someone’s sitting in the shade today because someone planted a tree a long time ago.”someone planted a tree a long time ago.”5353

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Warren Buffet Quotes cont’d

ONLY BUY SECURITIES THAT YOU UNDERSTANDONLY BUY SECURITIES THAT YOU UNDERSTAND– ““Investment must be rational; if you can’t understand it, Investment must be rational; if you can’t understand it,

don’t do it.” don’t do it.” 347347

STICK WITH QUALITYSTICK WITH QUALITY– It’s far better to own a portion of the Hope diamond than It’s far better to own a portion of the Hope diamond than

100 percent of a rhinestone.” 100 percent of a rhinestone.” 451451

““The definition of a great company is one that will be The definition of a great company is one that will be great for 25 or 30 years.” great for 25 or 30 years.” 448448

42

About Credit Scores

Save the Smart Way

As you improve your FICO scores, you pay less when you buy on credit –

whether purchasing a home loan, cell phone, a car loan, or signing up

for credit cards. For example, on a $150,000 30 year, fixed-rate mortgage:

Your Your YourFICO interest monthlyScore rate payment

720-850 5.84% $883700-719 5.96% $895675-699 6.50% $948620-674 7.65% $1,064560-619 8.53% $1,157500-559 9.29% $1,238

43

44

10 Most Common Estate Planning Mistakesby Thomas E. Gould

Mistake #1: Assuming you do not need an estate plan. Estate planning is not just saving Mistake #1: Assuming you do not need an estate plan. Estate planning is not just saving taxes. It is also ensuring that your estate is administered quickly, that your family is taxes. It is also ensuring that your estate is administered quickly, that your family is protected, and special assets such as businesses and real estate are kept in the family. protected, and special assets such as businesses and real estate are kept in the family. Further, proper estate planning should take into consideration special circumstances Further, proper estate planning should take into consideration special circumstances such as a second marriage or a troublesome child or spouse of a child and especially such as a second marriage or a troublesome child or spouse of a child and especially minor children.minor children.

Mistake #2: Jointly titling too many assets. Many people do not realize that all assets Mistake #2: Jointly titling too many assets. Many people do not realize that all assets titled as joint tenants with right of survivorship (JTWROS) automatically pass to the titled as joint tenants with right of survivorship (JTWROS) automatically pass to the surviving joint tenant, not under the terms of your Will. Valuable tax benefits and asset surviving joint tenant, not under the terms of your Will. Valuable tax benefits and asset protection can be lost both during life and at death if too many of your assets are jointly protection can be lost both during life and at death if too many of your assets are jointly titled.titled.

Mistake #3: Assuming that life insurance is not included in your estate. Not only is all Mistake #3: Assuming that life insurance is not included in your estate. Not only is all life insurance you own included in your estate (even if it is paid to a spouse) but it also life insurance you own included in your estate (even if it is paid to a spouse) but it also generates potential estate tax liability. Fortunately, it is the easiest asset to remove from generates potential estate tax liability. Fortunately, it is the easiest asset to remove from your estate while you are alive thereby bypassing all estate taxes. Finally, many life your estate while you are alive thereby bypassing all estate taxes. Finally, many life insurance policies are very outdated and may lapse inadvertently if not reviewed insurance policies are very outdated and may lapse inadvertently if not reviewed regularly.regularly.

Mistake #4: Not reviewing beneficiary designations on life insurance, annuities, IRA’s, Mistake #4: Not reviewing beneficiary designations on life insurance, annuities, IRA’s, 401K’s and deferred compensation plans. Over the last several years, there have been 401K’s and deferred compensation plans. Over the last several years, there have been significant changes in the requirements for beneficiary designations on IRA’s. For significant changes in the requirements for beneficiary designations on IRA’s. For instance, having an incorrect designation could lead to taxes amounting to almost 70% instance, having an incorrect designation could lead to taxes amounting to almost 70% of the value of an IRA. Most of those taxes can be deferred for generations if of the value of an IRA. Most of those taxes can be deferred for generations if designations are planned correctly.designations are planned correctly.

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10 Most Common Estate Planning Mistakes, cont’d

Mistake #4: Not reviewing beneficiary designations on life insurance, annuities, Mistake #4: Not reviewing beneficiary designations on life insurance, annuities, IRA’s, 4019K)’s and deferred compensation plans. Over the last several years, there IRA’s, 4019K)’s and deferred compensation plans. Over the last several years, there have been significant changes in the requirements for beneficiary designations on have been significant changes in the requirements for beneficiary designations on IRA’s. For instance, having an incorrect designation could lead to taxes amounting IRA’s. For instance, having an incorrect designation could lead to taxes amounting to almost 70% of the value of an IRA. Most of those taxes can be deferred for to almost 70% of the value of an IRA. Most of those taxes can be deferred for generations if designations are planned correctly.generations if designations are planned correctly.

Mistake #5: Not reviewing your Will every three years. Significant personal changes Mistake #5: Not reviewing your Will every three years. Significant personal changes such as death, divorce, births or changes in family circumstances, as well as the such as death, divorce, births or changes in family circumstances, as well as the size and composition of your assets and liabilities will probably have changed within size and composition of your assets and liabilities will probably have changed within three years since you last prepared your Will. Often existing Wills and Trusts do not three years since you last prepared your Will. Often existing Wills and Trusts do not anticipate such significant changes. Only an overall estate planning review can anticipate such significant changes. Only an overall estate planning review can identify potential challenges and the options available to meet them.identify potential challenges and the options available to meet them.

Mistake #6: Gifting when you should not or not gifting when you should. Under the Mistake #6: Gifting when you should not or not gifting when you should. Under the current revision of the tax code, each of us can gift $12,000 to an individual each current revision of the tax code, each of us can gift $12,000 to an individual each year tax-free. That means a married couple can give away $24,000 a year to any year tax-free. That means a married couple can give away $24,000 a year to any individual. Do you want to benefit a grandchild or child? Are you giving away individual. Do you want to benefit a grandchild or child? Are you giving away appreciated stock each year thereby reducing that gift by about 20% because of appreciated stock each year thereby reducing that gift by about 20% because of capital gains taxes (federal and state) the recipient would have to pay? Are you capital gains taxes (federal and state) the recipient would have to pay? Are you overlooking opportunities to gift assets at a reduced value? These are but a few of a overlooking opportunities to gift assets at a reduced value? These are but a few of a multitude of issues that need to be addressed when gifting away assets as port of multitude of issues that need to be addressed when gifting away assets as port of your overall estate planning.your overall estate planning.

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10 Most Common Estate Planning MistakesCont’d

Mistake #7: Failing to plan for incapacity. Over seventy percent (70%) of us will Mistake #7: Failing to plan for incapacity. Over seventy percent (70%) of us will have a disability before we die. How will the bills be paid? Who will make medical have a disability before we die. How will the bills be paid? Who will make medical decisions for you? Do you want your life extended artificially? By planning for decisions for you? Do you want your life extended artificially? By planning for incapacity and signing proper written documentation you can ensure bills will be incapacity and signing proper written documentation you can ensure bills will be paid, medical decisions made and other similar items will be handled efficiently for paid, medical decisions made and other similar items will be handled efficiently for you and your family in the event of your incapacity.you and your family in the event of your incapacity.

Mistake #8: Not getting expert help from a specialist. Estate planning is complex. Mistake #8: Not getting expert help from a specialist. Estate planning is complex. Families are complex. Life goals are complex. Experience help is needed just to be Families are complex. Life goals are complex. Experience help is needed just to be sure you are not creating traps for you and your family. Do not try to do your sure you are not creating traps for you and your family. Do not try to do your planning yourself or rely on an attorney that is a generalist for such important planning yourself or rely on an attorney that is a generalist for such important decisions. decisions.

Mistake #9: Forgetting charitable gifting. If you have been regularly giving to your Mistake #9: Forgetting charitable gifting. If you have been regularly giving to your church or your favorite charity, be sure to consider including them in your estate church or your favorite charity, be sure to consider including them in your estate plan as well. Most people would rather gift to the charity of their choice and get a plan as well. Most people would rather gift to the charity of their choice and get a tax deduction for their estate than to rely on government to take their tax dollars and tax deduction for their estate than to rely on government to take their tax dollars and apply them as it sees fit.apply them as it sees fit.

Mistake #10: Procrastinating. Estate planning is easy to put off. However, the Mistake #10: Procrastinating. Estate planning is easy to put off. However, the negative consequences of not reviewing your plan while you are capable are huge. negative consequences of not reviewing your plan while you are capable are huge. Do not let your family find out your plan is woefully out of date following your Do not let your family find out your plan is woefully out of date following your incapacity of death. Call your Estate Planning Specialist Now!incapacity of death. Call your Estate Planning Specialist Now!

47

GET PROFESSIONAL HELPGET PROFESSIONAL HELP

48

Did you know?

49

Choosing a Financial Advisor

The first question from the The first question from the advisoradvisor should be: should be: What do you want to What do you want to achieve?”achieve?”

Clients Should Ask:Clients Should Ask:– What is your investment philosophy?What is your investment philosophy?– What is your experience level?What is your experience level?– Is he/she a goal communicator?Is he/she a goal communicator?– Does he/she work for a company that you recognize and is strong?Does he/she work for a company that you recognize and is strong?– What are the products and services you focus on?What are the products and services you focus on?– Do you have specific credentials?Do you have specific credentials?– How are you compensated?How are you compensated?– How often should I expect to hear from you?How often should I expect to hear from you?– Do you have any complaintsDo you have any complaints

50

Five Steps of Financial Planning

1. Where are you today?1. Where are you today?

2. Do you have a cash reserve?2. Do you have a cash reserve?

3. Where do you want to be 3. Where do you want to be tomorrow?tomorrow?

4. How do you allocate assets?4. How do you allocate assets?

5. How do you monitor and adjust 5. How do you monitor and adjust your portfolio your portfolio

51

A Financial Review Checklist for 2007 Year End

A FINANCIAL REVIEW CHECKLIST FOR THE 2007 YEAR ENDA FINANCIAL REVIEW CHECKLIST FOR THE 2007 YEAR END

Name Name

Have your goals changed?Have your goals changed?

RetirementRetirement Yes Yes No No Not Sure Not Sure

EducationEducation Yes Yes No No Not Sure Not Sure

Estate PlanningEstate Planning Yes Yes No No Not Sure Not Sure

Retirement InformationRetirement Information

Have you fully funded your 2006 IRA contribution?Have you fully funded your 2006 IRA contribution?

Have you fully funded your company sponsored retirement plan, such as a 401(k), for 2007?Have you fully funded your company sponsored retirement plan, such as a 401(k), for 2007?

Are you eligible for “catch-up” contributions? (Ask your benefits administrator if you’re not sure)Are you eligible for “catch-up” contributions? (Ask your benefits administrator if you’re not sure)

Education planningEducation planning

Do you want to gift education money through a section 529 plan?Do you want to gift education money through a section 529 plan?

InsuranceInsurance

Do you have enough insurance for the following:Do you have enough insurance for the following:

Income replacementIncome replacement Home/RentHome/Rent EducationEducation

DebtsDebts EmergencyEmergency Estate SettlementEstate Settlement

Estate PlanningEstate Planning

Do you have a current will?Do you have a current will?

Do you have a living will?Do you have a living will?

Have you arranged for medical Power of Attorney?Have you arranged for medical Power of Attorney?

Have you stored your will and other important documents in a safe place?Have you stored your will and other important documents in a safe place?

Does somebody else know where your important documents are located?Does somebody else know where your important documents are located?

GiftingGifting

Are there people you want to give money to?Are there people you want to give money to?

Are there charities you want to give to?Are there charities you want to give to?

Do you have appreciated stock you might want to give to charities?Do you have appreciated stock you might want to give to charities?

Portfolio ReviewPortfolio Review

Do you believe your current portfolio is best suited for meeting your current goals?Do you believe your current portfolio is best suited for meeting your current goals?

Tax PlanningTax Planning

Are your capital losses greater than your capital gains for 2007?Are your capital losses greater than your capital gains for 2007?

Do you have 2007 capital losses, especially short-term losses, that you can use to offset capital gains?Do you have 2007 capital losses, especially short-term losses, that you can use to offset capital gains?

ALAN SITKOFFALAN SITKOFF

FIRST VICE PRESIDENT-WEALTH MANAGEMENT AND FINANCIAL ADVISORFIRST VICE PRESIDENT-WEALTH MANAGEMENT AND FINANCIAL ADVISOR

52

Letter from Frank & Sarah

53

54

Resources

Alan SitkoffAlan SitkoffFirst Vice President of Wealth ManagementFirst Vice President of Wealth ManagementFinancial AdvisorFinancial AdvisorSmith BarneySmith Barney5565 Glenridge Connector5565 Glenridge ConnectorSuite 1900Suite 1900Atlanta, GA 30342Atlanta, GA 30342404-459-3854 - Direct404-459-3854 - Direct800-825-7171800-825-7171404-459-3838 – FAX404-459-3838 – FAX

NSAD WebsiteNSAD Website