July, 2015wealth of knowledge

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Are You Wealthy?

Are You Wealthy? | To Our Readers | It’s Always Mutual | Economic and Markets

Dictionary.com defines wealth as “a great quantity or store of money, or other riches.” The origin of the word goes back to the Old English word, “weal” meaning “a state of good fortune or happiness.” Around 1250 AD, it was combined with the word health to form the word we have come to know as wealth. The definition has narrowed over time to mean only material wealth, which is perhaps a reflection of what man has become focused on as the barometer of success (we will save that conversation for another day). So we ask, are you wealthy?

How much material wealth must one have to consider himself truly wealthy? The answer seems to be elusive as there are many different statistical measures that are often used today to determine who is wealthy. For example, in the U.S., the average net worth per adult (assets minus liabilities) comes to roughly $347,845, according to a Credit Suisse study from 2014. So, technically speaking, if you have a net worth greater than this, you could consider yourself wealthier than average. This figure doesn’t, however, take into account the government debt that is theoretically owed by each and every U.S. citizen. Incorporating this debt into the equation would significantly reduce this figure. The U.S. aggregate share of the world’s wealth is a staggering 31%, according to Credit Suisse, but the U.S. is not the wealthiest country based on average

net worth per adult. The top position in this category goes to Switzerland with an average net worth of $587,000 per adult. Australia and Norway come in at number two and three with the U.S. in fourth place. So, do you feel wealthy?

How about definitions related to income? According to The World Top Incomes Database, one would need to earn $394,000 annually to be in the top 1% of U.S. income and $113,000 to make the top 10%. Is this the best measure of wealth? Apparently, age/peer group has a lot to do with how wealthy people feel. For example, according to a 2013 survey conducted by the Spectrem Group, 45% of those in the 40 and younger population felt that $1M in assets made one wealthy while only 20% of those in the 60 and older group felt the same way. In a 2013 survey conducted by UBS, when asked if they considered themselves “wealthy,” only 28% of those with $1M-$5M in assets responded affirmatively. Of those with $5M or more in assets, 60% responded that they felt truly wealthy. Perhaps $5M is the defining number then? Interestingly, both the $1M-$5M group and the $5M+

To Our Readers!

Our MutualWealth group takes pride in delivering outstanding service to our clients. After all, helping people live better lives is what we are all about! So, we were delighted to learn that The Star Press recently recognized Muncie Area’s Finest businesses in multiple areas of service and MutualWealth of Muncie was chosen as the winner of Finest in Financial Planning award.

On June 4, business owners and guests attended a reception for Muncie Area’s Finest winners, hosted by The Star Press. The awards ceremony recognized those who won the reader survey of best businesses in the area. Among the recipients, MutualWealth Trust Officer, Torey Cook, was present to receive the award. Congratulations, MutualWealth team of Muncie! We are grateful for this recognition of quality service, delivered by the team in Muncie: Torey Cook, David Riggs and prior to retirement, Bonita Ramirez. These individuals truly believe the Mutual brand of helping others live a better life by offering consistent, high quality service in Investment Management and Trust and Estate Services.

Thank you again to the Muncie community and The Star Press for this wonderful recognition!

Chuck Viater,President, North Region,Director of MutualWealth574-273-7601chuck.viater@bankwithmutual.com

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It’s always Mutual: Exploration Acres

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Tim Fitzgerald scanned his family farm and sighed. His gaze soon fixed on an aging barn with a brand new roof. The combination just didn’t make sense. Why had his father spent so much money to replace the roof when the rest of the structure was fading fast? “I just thought to myself, ‘How do we make this investment worth it?’” Fitzgerald confesses. “The barn had become nothing more than a place to store junk. It was such a challenging time to have a family farm. It still is. We had to come up with the right idea. We needed a way to make it pay.”

“Three generations of Louis Beelers lived and worked here,” adds Donna Beeler, whose late husband followed in the farming footsteps of his father and grandfather. “It started in 1920. We didn’t want to let it go.”So, the imagination of Tim Fitzgerald, the dreamer and the experience of

Tim Fitzgerald, the industrial design engineer began to merge. The result is Exploration Acres, an agritourism attraction near Lafayette built around northwest Indiana’s largest corn maze and much, much more.

“A couple of family members had been to corn mazes around the state,” Fitzgerald explains. “We thought the concept could work here, too. Then, the ideas just kept coming. We had so many things we wanted to accomplish. First, we wanted to keep it on a grass roots level. We wanted the farm to stay true to its origins. We also wanted to emphasize agricultural education. Most important, we stay focused on creating a great experience for families.”

Looking for fun? The options at Exploration Acres are as boundless as Fitzgerald’s creativity. The centerpiece, of

course, is an 18-acre corn maze. There is a 10-acre pumpkin patch and 10 acres of woods filled with activity. The pony swings are popular. So are the straw mound, straw bale tunnel, shelled corn bin, sand pile and tube slide. There are ducky races and a pumpkin race track.

“We really emphasize the learning experience,” explains Fitzgerald, who has younger sister, Mary Branstetter, as one of his biggest cheerleaders. She is a teacher in the Frankfort school system. “We want to educate people about modern agriculture while we entertain them. We talk about the life cycle of a pumpkin plant. We talk about how corn grows and how it gets through the food chain.”

Meanwhile, the once-dilapidated, little red barn has been historically refurbished. It has become an attraction as well, hosting everything from corporate retreats and school field trips to weddings, family reunions and group outings.

Illustration, approved by Purdue University’s Davis Wilson, depicts this year’s Purdue- themed corn maze.

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Economic and Markets: First Half of 2015

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Reminiscent of 2014, the advance of the U.S. economy was halted in the first quarter of 2015, due in part to harsh winter weather in some areas of the country. Nevertheless, the decline of -0.2% in U.S. Gross Domestic Product (GDP), a measure of economic output, in the first quarter of 2015 was not as severe as in 2014. While activity appears to be picking up, most estimates for full-year GDP growth have been revised downward to the historically-modest range of 2.3% to 2.7% from more robust projections made at the beginning of the year.

Asset CategoriesFirst Half of 2015

Stock Market Indexes - Total Return

S&P 500 1.23%

Europe-Australia- Far East 5.52%

Emerging Markets 2.95%

SmallCap 4.75%

Market Neutral Funds 0.29%

Bear Market Funds -7.29%

Long/Short Equity Funds 0.58%

Bond Market Indexes - Total Return

U.S. Aggregate -0.10%

U. S. Treasury 7-10 Year 0.04%

U.S. Credit -0.78%

U.S. Corp High Yield 2.53%

U.S. Mortgage Backed 0.31%

Municipal Bond 0.11%

Emerging Market Gov. (local currency) -3.29%

Other

Gold -1.05%

Commodities Index 1.97%

U.S. Real Estate Index -5.70%

Oil 11.64%

The stock market, as represented by the widely-followed S&P 500 Index, tumbled early in the year, but quickly recovered and since then, has traded in a range of down 1% to up to 3.5%. It finished the first half of 2015 up 0.2% plus dividends for a total return of 1.23%.

About 68% of the companies included in the S&P 500 Index reported first quarter earnings that were better than analysts’ estimates. This is typical because corporate executives tend to give guidance that sets the bar low and enables them to exceed expectations. Nonetheless, it demonstrated reasonably good results thus far in 2015.

The Federal Reserve continues to indicate that it will begin to raise short-term rates sometime later this year or in early 2016. As a result, interest rates have risen sharply since the end of January and in turn, fixed income investments have declined in value. The total return for the year-to-date on the Barclays U.S. Aggregate bond market index was -0.1% after posting a 5.97% increase in 2014.

International stocks have rebounded after a disappointing 2014. Through the first half of 2015, the MSCI Europe-Asia-Far East Index of stocks, in developed economies outside the

U.S., has risen 5.52% besting all theother asset categories listed except oil. The MSCI Emerging Markets stock index is up 2.95% as of June 30, 2015.

Commodities have continued to demonstrate weakness after a very poor showing in 2014; however, oil is bucking that trend having gained 11.6% during the first half. This represents a modest recovery however, as oil declined over 45% in 2014. Gold is off 1.05% thus far in 2015.

In alternative investments, Real Estate Investment Trusts are down -5.7% so far this year coming off of a 28% increase last year; Bear Market Funds declined -7.3% while Market Neutral Funds and Long/Short Funds were flat to slightly positive.

As we suggested in our January issue, often times the worst performing asset classes from one period become the best performers in the next. This certainly appears to be the case thus far in 2015 with the outperformance by International, Small Caps and Oil as these were three of the poorest performers in the prior calendar year.

David RiggsVice President, Trust Investment Officer765-213-2702david.riggs@bankwithmutual.com

Past index performance and returns are historical and do not guarantee or predict future results. This information may not be relied upon as investment advice.

A Word to the Wise

“Through the first half of 2015, the MSCI Europe-Asia-Far East Index of stocks...has risen 5.52% besting all the other asset categories listed except oil.”

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“We have 5,000 Facebook followers and many of them kept asking, ‘Will you rent us the barn?’” Tim laughs. “So, we started doing it. Now, we have couples who came here on their first date. We’ve had proposals made here. (The Exploration team will hide the engagement ring in a pumpkin, if you like.) Then, they bring the wedding here and get married under the rafters.”

There will be more. Fitzgerald’s dream machine runs in high gear every waking minute. The man who once designed elaborate, trade show displays and award-winning TV studios is always looking for the next step. An educational center might be next if he can find the right corporate partner.

Meanwhile, Donna flashes a smile only a deeply-proud mother can wear. The family farm has succeeded beyond her own wildest dreams.

The smile remains when she talks about her relationship with MutualWealth. She enjoys a strong relationship with Susan Smith in the Crawfordsville office and trust officer, Shayne Nagy. “They have been extremely helpful, especially after I lost my husband,” Mrs. Beeler says. I love working with Shayne and Susan. They are wonderful listeners.”

Exploration Acres is located on Newcastle Road, just west of I-65 near Lafayette. It opens in mid-September and operates through the end of October. Visit explorationacres.com, for more information.

Excerpts taken from the June 4 interview with Donna Beeler and Tim Fitzgerald, conducted by Vice President, Regional Manager, Vince Turner.

It’s always Mutual: Exploration Acres (continued)

Are You Wealthy? (continued)

group felt somewhat equally confident (62% and 64%, respectively) that they would meet their financial goals in the future.

At MutualWealth, we believe this question cannot be answered by a survey or series of statistical measures, but rather only by the individual involved. Perceptions about wealth are relative and dependent on many variables such as preferences for luxury goods, geography, friendship circles, amount of debt, etcetera. Does the individual with $2M and no debt who lives in Warsaw, Indiana feel less wealthy than the individual with $5M in assets and $5M in liabilities living in San Francisco, California? We believe that true wealth is having peace of mind and little to no financial

impediments in achieving the quality of life desired. We will always strive to help our clients clearly define the resources necessary to achieve this financial security we call wealth.

At MutualWealth, we are committed to helping each and every one of our clients achieve their personal definition of wealth.

Shayne Nagy, CTFA, Vice President, Trust574-273-7612shayne.nagy@bankwithmutual.com

Credit Suisee.Retrieved from https://publications.credit-suisse.com/tasks/render/file/?fileID=5521F296-D460-2B88-081889DB12817E02

Dictionary.Retrieved from dictionary.com

Make Wealth History. Retrieved from makewealthhistory.org

The World Top Incomes Database.Retrieved from http://topincomes.parisschoolofeconomics.eu/

UBS Investment Bank. Retrieved from http://www.ubs.com/content/dam/WealthManagementAmericas/documents/investor-watch-3Q2013-report.pdf

A Word to the Wise

“Perceptions about wealth are relative and dependent on many variables...”