January 2003 “The only people with whom you should try to get even are those who have helped you.” ~ John E. Southard ~ Tax and Tax, Spend and Spend! You know, if you look over across the ocean ATTENTI ON FRIENDS!! at Great Britain, and you see how that country's financial condition is right now, its hard to believe PG FINANCIAL IS HOSTING FR EE COLLEGE that as recently as a century ago, there was a saying FUNDING DINNER SEMINARS. DO NOT that was quite true...The sun never set on the British MISS THIS OPPORT UNITY!!! See page 5 for Empire! more details. I want to make it perfectly clear, that we do You see, at one time, Britain was the most not have any opinion on whether the Republicans or powerful country on the planet. As time went by, the Democrats are better…because, quite honestly, it government decided that the people needed more and doesn't make a whole lot of difference. We only look more help from the government. at FACTS, and pay no attention to partisan politics. The people decided the government should And one FACT we can share is that as each provide more and more help. As time went by the year goes by, no matter who’s in control, Democrats people kept electing people who voted for tax or Republicans…we have a bigger government, a increases, and more power to the more powerful government, higher overall taxes, more government...thereby, letting the government take social entitlement programs, more government control of the people's lives. agencies…with the government expanding at a mind blowing, never-ending rate! As that happened, the British Empire started shrinking. Taxes kept going up, and the population Our nation’s surplus from just a few years ago kept being more reliant on the government. is gone. We’re running deficits in the $75 billion range this year…and climbing. Social Security is once And the more reliant they became on the again totally broke. All the money’s been used to pay government, the worse the economy got. And the for the bigger government. Now, with the War on worse the economy got, the more reliant they became Terrorism, the Homeland Security Act, the potential on the government. of more and so forth…government spending is continuing its dizzying spiral upwards. And that downward spiral turned a once great nation, into the pitiful welfare state that it is today - a At some point, we are going to have to wake country where taxes have been as high as 90% of income. (We think we have it bad here). up and realize that if we continue to expand our debt and government, that we will see America's power and With this new-year coming upon us, it is time freedom as the greatest country ever placed on this to reflect upon what is going on in the United States. earth decline and decline. America could continue to slide until we reach the point of being a replica of Great Britain...unless our politicians take action As you may know, the recent election pushed the Republicans into control in the Senate, adding to NOW! their control of the House and the White House. All Next year our social entitlements are going to kinds of blame have been handed out to the heads of take over $1 trillion in cash! And that’s without the the Democratic Party. Leadership has changed. People proposals to increase benefits for prescription drugs are either happy or upset at this turn of events. and Medicare. Now please understand that we don’t disagree kind of place that we abandoned over 200 years ago - we have to take care of our seniors and others on fixed a welfare state, hopelessly buried in debt. None of us incomes, because we do. We don’t disagree with the want to return to being like Great Britain. Let's all immediate need to spend whatever is necessary to stick together and use common sense. Let's make sure protect our homeland, and to ferret out and destroy that we vote for the people who want to cut the terrorists. We know we have to spend large amounts government and increase the private stimulation of our of dollars to take care of these problems. economy...as our forefathers had intended. What really has to happen is getting What does this all mean to you? politicians in office who will have the guts to cut the waste in hundreds of other areas of government, cut Well, as an individual, the answer to your out needless duplication of government, and make all own problems is going to be planning. Planning for government agencies to be held accountable for their yourself, planning for your family, both now and in actions and existence. the future is the only weapon you have to fight this out-of-control government spending. See, if they cut out the hideous waste, that alone would allow the country to take care of our retirees and seniors, defeat terrorism, and to stimulate If you haven't started or reviewed your job creation, which is the single most important aspect financial planning for 2003, DO IT NOW! Don't to America’s economy. delay. Call us up for a review, RIGHT NOW, while this is fresh on your mind. We'll take care of the rest! Lots of jobs equal lots of consumer PLANNING IN JANUARY IS THE SMARTEST confidence, which equals consumer spending, which THING TO DO, ESPECIALLY SINCE WE CAN equals a strong, independent and vibrant America! HELP YOU SAVE MAXIMUM MONEY IN But, we cannot afford to take the actions necessary to INCOME TAXES THE EARLIER IN THE YEAR create and incentivize job creation when we have YOU START! billions upon billions of dollar wasted on pork projects and continued lackadaisical management . REMEMBER- WE WANT YOU TO CONTACT US WITH YOUR "HERE'S WHAT WE'RE THINKING We better find people who have the guts to ABOUT DOING QUESTIONS", NOT YOUR cut needless spending, and we’d better have the guts "GUESS WHAT WE JUST DID!" COMMENTS! to vote for these people. Or, our children and grandchildren are going to end up living in the same Financial Tip Of The Month… That Great Resolution: Save More Money! The stock market has hammered our 401k’s because it has been out of control. But so has our spending. Instead of limiting the damage by saving more, some Americans are spending more. With a disciplined savings program, you can increase the amount you save and offset some of your stock- market losses. If you think you don't spend too much, you're wrong. There's plenty of room to cut costs if you just look. The Labor Department's Consumer Expenditure Survey shows that households spend about $38,000 a year. They spent $319 on tobacco, $372 on alcohol, and $1,863 on entertainment, including pets (tobacco and liquor figures are probably much higher than people report). Gambling took an average of $600 a year, and short trips cost families $463 each not counting travel expenses. Cars were a big item at $7,000 a year. Households spent $5,158 on food, of which a big 41 percent went toward eating out. Economists at the University of Chicago say middle-class Americans save only two ways. The first is by paying off their mortgage. The second is by contributing to their pension plan. Outside of that, Americans don't have much money. If you want to do better than that, consider an automatic investment plan where money comes out of your bank account every month and is invested in a safe, diversified investment portfolio! If you have trouble with saving money, we can certainly help! Please keep in mind that this is designed to be of help for you, but is not to be relied upon as advice. It is merely a reminder that there are many choices you have available to you, and that planning is the only way to find the right answers for your situation! As with any financial issues, make sure you get the right information before making a decision! If you have any questions, we'll be glad to help you! Interesting fact of the month! First Number! The U.S. government issued the first social security check Jan. 31, 1940. The check went to Ida Fuller of Brattleboro, VT. Her check number was 00-000-001 and was for $22.54. SUCCESS STORY OF THE MONTH! (Note: The details of these stories have been changed to maintain confidentiality, and some compilations are used to accomplish anonymity.) “Success in life is truly a do-it-yourself project.” ~ Bob Rodale ~ Sometimes You Can Go Home! This is one of those stories that gets you kind of sick - makes you feel kind of bad when you hear it. At least in the beginning, but it does have a happy ending. The story starts out actually quite some time ago, twenty-two years ago to be exact. John and Carol's son, Art, was 18 years old and entering college as a freshman. Art was sort of a goof-off in high school, but didn't get into a whole lot of trouble. As far as John and Carol knew, Art stayed away from drinking and drugs and other problems that teenagers have these days. Anyway, Art was able to enroll in college, and John and Carol had scrimped and saved for many years to be able to afford to send him. They didn't want him to stay home, and thought he'd do much better if he had a chance to be on his own, grow up, get to know himself as a person, and take the responsibility of earning good grades at college. Then of course, he'd be looking forward to a bright future with a college degree. When asked how his grades were going, Art replied, "Oh, fine." So of course John and Carol thought that things were OK. When Art got back for Christmas break, the mail came and Carol opened an envelope from the college. It turned out to be Art's report card, which showed that he had 4 D's and an F. You could have knocked Carol over with a feather. She called John up at work, all upset. He even came home early that night to see the report card with his own eyes. Now John is sort of an old school kind of guy. His parents came from the old country, worked their way up from nothing, and John never had a chance to go to college. He had been working at the same company, now as a dispatcher on the loading dock. Just your basic American family. Well, when John saw the report card and when Art came home that night, John went ballistic. Carol kept trying to calm John down, but John just wouldn't hear of it. It got to the point where John threw Art out of the house, told him he was on his own, and he didn't want to talk to him again. Art, being young, and just as stubborn as his father, left the house, moved in with a friend, and eventually left the state to take a job as a laborer. And the years went by. Art never contacted John or Carol. Carol of course tried to keep in contact and find out where he was, and from time to time might get some feedback from people who had seen him, or who might have had some contact with him. Carol was just destroyed by this situation. All these years go by, no contact with their only son, because of a fight one night about bad grades in college. John wouldn't talk to anybody about his son. In fact, when people asked him how his son was, John would reply, "I don't have a son anymore. My son is gone." Carol of course was always heartbroken, always melancholy. She couldn't watch a TV show that had a young boy on it without getting all choked up and crying. Twenty-two years passed. All of a sudden, one day the phone rang. Carol answered the phone and it was Art on the other end of the phone - the first time he had called home in 22 years. Carol couldn't believe it, but she instantly recognized her son's voice. "Hi, Mom. How are you doing?" Carol almost collapsed onto the kitchen chair next to the phone and said, "Art honey, how are you?" All the emotions inside her welled up like an oil well ready to explode. Her hands and knees were shaking. She listened to Art explain how one of his friend’s father had just died of a heart attack. Art told Carol this really disturbed him, and when Art talked to his wife about it, she said, "You have to call your parents and you have to reconcile with your Dad. This is ridiculous. All these years, you two stubborn mules, not even having a relationship. Your parents don't even know their grandchildren. It is time to move on. Be a man, and call your folks now." And Art did. It turned out that Art had a business trip in a couple of weeks that would take him close to home. Art wanted to know if he could stop by and see Carol and John, and try to reconcile their lives. Carol was of course thrilled, but scared of what John would say. When he got home from work, she broke the news to him. At first he kept his, "I don't have a son" routine going, but in less than a couple of minutes, he broke down himself. He sobbed a deeper cry than Carol had ever seen John do. When Art finally showed up at the house, Carol opened the door. They stared at each other for a second, not speaking a word. Art moved inside the door, grabbed his Mom and hugged her, tears rolling down both of their cheeks. They pushed back and looked at each other, and all he could say was, "Hi Mom. I'm home." Standing behind Art was his wife, Linda, and their two boys, Sammy and Robby, ages 9 and 13 respectively. John was scared, and sort of stood back by the couch in front of the TV. After Art pushed back from Carol, he turned around and looked at his Dad. All he could say was, "Hi Dad." John responded, "Hi, son. How are you?" They moved forward with their hands extended as if to shake hands. When they got close enough to shake hands, Art somehow went right by John's hand, grabbed his dad and gave him a hug. John said quietly, "Son, I'm so sorry. I'm so sorry. Please forgive me." Art turned to his boys, and said, “Hey guys, come here and say hi to your other grandpa.” Tears were flowing like a fountain, but they were definitely tears of joy. As I told you, the story had a happy ending! It turns out that Art had a business that required a lot of subcontracting work. John, who was going to be retiring in a year, was actually quite worried about how he was going to make it, because the pension from his union wasn't really that great, his Social Security checks were not exactly stellar…and since Carol had stayed at home all these years, she had only a small amount of Social Security coming to her. Art was thinking he could bring his dad into the business somehow, if their reconciliation went OK. When everyone saw that the family was once again a family, Carol told Art that they had heard about financial advisors who could figure out how to do things like get businesses set up properly, get the right insurance in place, figure out how to reduce taxes and deal with subcontractor vs. employee issues, Social Security payments, and so on. Carol was referred to us by her attorney, and they all came in to see us. We were able to lay out a plan so that Art could employ his parents part time, and not affect the Social Security income they would get...also reducing the parents’ income taxes by about $200 a month. The combination of reducing their taxes and the extra income from Art's business would add about $800 a month net to their monthly income, which made the difference between being scared and living poorly...to living nicely and enjoying their retirement years! Art's business had all kinds of tax, insurance and financial problems he didn't know he had until we pointed them out to him. For example, he had purchased an incredibly expensive life insurance policy that was literally over $5,000 a year higher than it should have been! We found 11 other financial planning items that Art was doing in his business that were big mistakes. In fact, this coming year, we expect Art will save close to $15,000 in income taxes and other needless expenses from implementing the different strategies we recommended! So all is well that ends well, as we told you before. The family has a second chance to be a family again, and Art and his folks have thousands of dollars they would have otherwise been paying to Uncle Sam and greedy companies...needlessly! If you are interested in learning more about how you can save money in taxes, or other expenses you might be overpaying for...or want to sit down with us and have your plan reviewed or updated, give us a call! We're here to help you, and to help you keep on track with your planning. Don't be a stranger. Call us, and we'll assist you in having the best shot possible of reaching your goals, and having peace of mind! Don't wait until it's too late! FREE Dinner Seminars Show Parents How They Can Send Their Children to Any College They Choose Without Going Broke…GUARANTEED!! College Funding Advisors, a division of PG Financial, is presenting 3 FREE dinner seminars on “The Little Known Secrets on How to Get Maximum Money for College” in February. You will learn how to… Get Thousands of FREE Dollars from your college of choice, even if you make a good living! Pick colleges that give the best financial aid packages…more free money, fewer loans! Finance your child’s college education even if you do not qualify for “need-based” financial aid! Send your child to an expensive private school for less than the cost of a state school! And much, much more! DINNER DINNER DINNER Tuesday Thursday Wednesday February 18, 2003 February 20, 2003 February 26, 2003 6:30 PM OR 6:30 PM OR 6:30 PM LOCATION LOCATION LOCATION Cambridge Inn Cranbury Inn Battleground 19 Summerhill Road 21 S. Main Street NW Country Club Spotswood, NJ Cranbury, NJ Route 527 Manalapan, NJ Seating is limited! To make your reservations, or for more information, please call us at: (732) 521-8299. Did You Know… (Our monthly feature of tidbits of news and info to make your life easier, your money work harder and so you’re healthy all the time!) Did you know… 1. 85% Of Tax Payers Will Pay Alternative Minimum Tax! If you are one of the millions of taxpayers with two or more children, you may find yourself being forced to pay even MORE income tax by getting stuck with a hideous beast of a tax called the “Alternative Minimum Tax (AMT)! Each year, between now and 2010, more and more families are getting nailed with this AMT, potentially wiping out any regular tax cuts you may have enjoyed from the new tax cut laws. The Brookings Institution Tax Policy Center says that the AMT was originally enacted to trap sophisticated, very high-income taxpayers into paying more tax even though they had taken advantage of legal loopholes in the laws. Now, the new way the AMT is calculated, it’s not just the high-income folks who will get hit with this higher tax. Now, millions of middle, and upper- middle- income families will find the AMT pushing up their tax bills. The WORST part of the new AMT laws, is that its burden falls most heavily on married couples, who are 25-30 times likely than singles to have to pay this tax! 2. Housing Debt Explained! Consumer mortgage debt has soared about 70 percent since 1995, according to the Federal Reserve and a study by National City Corp of Cleveland shows that the percentage of Americans who own their homes is rising. As people go from paying rent to paying a mortgage, it increases the national-debt burden. People who buy a home don't pay rent. When you account for the fact that more people own homes, the average share of household income dedicated to mortgage payments in 2002 was almost exactly the same percentage of disposable income as it was in 1995. William Natcher of National City says credit-card debt is also exaggerated because convenient credit cards have replaced cash. People who pay their cards in full still show a big balance during the month. And that accounts for much of the increase in debt levels. 3. Fight These Health Wreckers Of Winter! Skipping your workouts. * If you started skipping exercise in December, it's even more important to start exercising again now so you can get back into shape. Not eating right. * Drink water often. (Indoor heat is dehydrating.) Drink a glass of water after each mixed drink at a party. * Start meals with chicken soup. It has disease-fighting chemicals, and you eat less of the main course. * Choose nuts at gatherings and parties and eat them slowly. Skip the baked goods, candies and chips. Getting sick. * Wash your hands often, especially if you touch your eyes, nose, or mouth, and after touching sick people. * Increase your immunity by eating squash, carrots, or pumpkin, which the USDA says will increase your immune-cell count by a third. * Do moderate exercise. Doctors say those who do seem to have fewer colds. * Get enough sleep. Maintain your routine. Don't eat heavy food or drink alcohol for a few hours before bed. Client News And Tidbits! We would love to hear from you, sharing your news of births, purchasing new homes, new jobs, etc. Please contact our office with the good news!!! Welcome To New Clients And Thank You For Referring! Here are the new clients that recently became members of the PG Financial family! We'd like to welcome you publicly, and wish you all the best! Linda Kolb from South River Michael & Jo-Anne Brown from Spotswood Frank & Donna Jones from South River Samuel & Francine Braun from East Windsor Rolly & Gigi Sanidad from East Brunswick Frank & Donna Fielder from East Windsor Cheryl Regis from Plainsboro Michael & Lori Tobin from East Brunswick Sumit & Sumita Pal from Plainsboro Janice & Edward Muller from Jamesburg We love giving well-deserved recognition to our new friends, and our wonderful existing clients, who are kind enough to refer their friends and relatives to us! We’re all helping each other, which is the whole point of all this! Right? Health Tip Of The Month… (These tips are not for everybody and should not be taken as specific recommendations. Before you take any action regarding yours or anyone’s health, we strongly suggest you consult a qualified physician!) Seasonal Affective Disorder: Good Health Minimizes The Winter Blues! Researchers say less sunlight can throw off your body clock and put you into the doldrums of winter. It can leave some people in a condition called seasonal affective disorder or SAD. It appears to be more common in creative people. The letters and work of Emily Dickinson, for example, show seasonal changes of mood and productivity. She produced far less in winter. Researchers are learning why some people are affected more than others. A report in the Archives of General Psychiatry indicates that 10 million Americans suffer with SAD, and 35 million have milder symptoms. Doctors say people with this condition generate a signal that the season is changing. The signal is similar to the one that cues bears to hibernate. Paying attention to general health can minimize the effects of SAD. This includes taking vitamin supplements, exercising regularly, eating a balanced diet, and having a more positive attitude. Light therapy is an effective treatment. Bright lights can shift the internal circadian clock, but proper timing is critical. Doctors leading the winter depression program at Columbia Presbyterian Medical Center in New York say the ideal time is about 2.5 to 4 hours after the midpoint of sleep. This timing can double the antidepressant response. If a severe case of winter blues is affecting you, see your doctor for a treatment that will help you see the light. Client Quiz! Here’s The November 2002 Quiz Questions And Answers! Question: What’s the origin of these common expressions we all use: “He saw the handwriting on the wall”, “Rock solid”, and “Gone with the wind”? Answer: The bible has all three of these expressions as their source! Bonus Question: A Living Trust will save you income taxes? Answer: False, they do nothing to save income taxes. This information is solely advisory and should not be substituted for legal, financial or tax advice. Any and all financial decisions and actions must be done through the advice and counsel of a qualified attorney, financial advisor and/or CPA! We cannot be held responsible for actions you may take without proper financial, legal or tax advice! How Here’s The January 2003 Quiz Question! Question: (From a reader) “I'm attending college full time and working nights and weekends as a custodian at a small manufacturing company. I hope that when I get my degree I can interview for a management position at that same company. A college degree is necessary for that position. Is the cost of my tuition deductible on my income taxes?” Sincerely, If you would like any additional free reports, or would like some of your friends, coworkers, relatives, business acquaintances, etc. to receive a FREE subscription to this newsletter, please fill out the info on this reply form, and we'll ad them to the mailing list. We'll also send them a note with their first issue telling them that you had suggested they receive the newsletter, and to contact us if they would like to stop at any time. If you enjoy this newsletter, why not share it for FREE with people you know, with no hassle for you! PG Financial Advisory Services, Inc. 16 W. Railroad Avenue Jamesburg, NJ 08831 Tel: 732-521-8299 Fax: 732-521-8298 FREE Reports Available! To get any of these FREE Reports, check off the ones you want and mail or fax us the form! “ 9 New Ways To Beat The High Cost Of College!” “The Secret Alternatives To Lousy, Low Yielding CD’s…What the Banks Don’t Want You To Know!” “The 11 Biggest Mistakes People Make Before Or After Retiring…And How You Can Avoid Them!” “The 10 Questions You Must Ask BEFORE You Hire A Financial Advisor!” “Mistakes in Selecting Mutual Funds” “Annuity Owner Mistakes” Please contact me to set up a FREE consultation to discuss my financial situation. 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