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Note: The views and opinions expressed here are those of the authors and do not necessarily reflect the position of the Morris County Chamber of Commerce.
Note: The views and opinions expressed here are those of the authors and do not necessarily reflect the position of the Morris County Chamber of Commerce.
RATE OF SAVINGS VS. RATE OF RETURN
Fact or Fiction? In order to achieve a high reward on your money, you have to accept high levels of risk.
FICTION. The truth is, achieving a high overall reward on your money is possible while taking minimal risks. For years, common investing wisdom has promoted the idea that high risks lead to high returns, but in reality, many people experienced low rewards for taking high risk. It is often assumed that high risk investments will automatically generate high returns, leading you to believe that you will have much more money in your future as a result. When you plan on having a large return you might end up actually saving a much lower percentage of your income than you should be.
High risk doesn’t always equal high reward
It is common to hear a misconception that traditional financial planning offers; in order to achieve a specific financial goal, high risk products are the way to go. Many people build their financial futures based upon the hope that they’ll be in the right place at the right time with their retirement nest egg. There are many factors that affect your future such as rising taxes, life events and stock market fluctuations. All of these things cannot be monetized or computed with a mathematical equation to get an exact number as to how much you should have in retirement. Financial planning need and goal calculations suggest you don’t have to save as much, as long as you’re investing your money. But it’s not just about taking the high risk with your money, it’s also how much that risk is actually costing you. For example, there are factors such as taxes, fees, debt and lifestyle expenses that all have to be considered when determining your actual return. Decisions with your money need to be much more certain in nature and the only thing you can control is how much you save.
So what can you do to get ahead and stay ahead?
Focus more on your rate of savings than on your rate of return. The better you are at putting money away, the less dependent you may be on needing high returns and taking on high levels of risk. If you feel like you are fighting an uphill battle as you build your net worth, and you feel like you aren’t making any progress, ask yourself these questions…How much money did I save/invest last year as a percentage of my income? What is the right amount of money to save? If you find yourself saving a lower percentage of your income, there may be a temptation to turn to higher risk investments to help close the gap as you plan for retirement. By setting a goal to save more, you can be in more control over your financial future. Since rates of return are so unpredictable, saving the right amount each year may actually allow you to lower the amount of risk you take. You work hard for your money and it shouldn’t all be put at risk in hopes of a high payout.
Become a saver before becoming an investor.
Today, it is all too common for people to invest in market based investments before using guaranteed assets. This approach may not only encourage high levels of risk and volatility, but might also leave you without enough accessible money to respond to changing life events. There is no way to predict what may happen tomorrow and you could suddenly be faced with events such as an unexpected job loss, a medical emergency, or an opportunity to start a business. Before taking high risks with your hard earned money, or setting aside funds in illiquid accounts, focus on the following:
• Become a world class saver by setting aside 15-20% of your gross income.
• Accumulate one year of household income in accounts you can easily access.
• Protect your balance sheet and cash flows against life events that could wipe out your ability to save and wipe out the money you’ve already saved.
• Become more efficient by lowering taxes and other expenses that can erode savings and investment returns.
Rather than hoping for an attractive high rate of return on your money, and accepting the high risks that come with it, focus on these steps to lead you toward a more positive road to building wealth. Always remember, your rate of savings is more important than your rate of return.
Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. The Living Balance Sheet® and The Living Balance Sheet® Logo are registered service marks of The Guardian Life Insurance Company of America (Guardian), New York, NY. © Copyright 2005-2018 Guardian
Mikie Sherrill Takes The Stage
There’s a new ofﬁceholder of the 11th Congressional District and she made her Morris County Chamber of Commerce debut this spring at the chamber’s annual Washington Update Breakfast. Mikie Sherrill was elected to ﬁll the seat vacated by Rodney Frelinghuysen, who represented the district for 24 years, and shared her thoughts on infrastructure, taxes, business development, health care and other issues with more than 100 attendees at the breakfast held at the Wyndham Hamilton Park Hotel and Conference Center in Florham Park.
Sherrill, a Democrat, is a former Navy helicopter pilot and assistant U.S. Attorney. She is a graduate of the United States Naval Academy, the London School of Economics and Political Science and Georgetown University Law Center. As pointed out by chamber president Meghan Hunscher, Sherrill was named the most important new woman in Congress by Politico and placed #19 on its Power List.
Sherrill said she is pursuing a policy of consensus as a new member of the House of Representatives. She is a member of the Blue Dog Coalition, who identify themselves as ﬁscally-responsible, centrist Democrats, and the New Democrats Coalition, centrist Democrats who support a moderate and pro-growth agenda and support a balanced budget.
Yet within that policy of consensus remains a focus on the interests of Morris County, she added.
With a $53 billion economy that is the state’s most economically diverse, Morris County plays an essential role in the state economy, according to Hunscher. The county also can serve as a model for the nation, Sherrill added. “Over the last 100 days I have put this district ﬁrst and fought for its interests in Congress,” Sherrill said, citing infrastructure, taxes and health care among those interests.
Sherrill said the Gateway Project under the Hudson River can be a symbol of the beneﬁts of investment in infrastructure for the entire nation. More generally, she said the county’s and state’s failing bridges and roads hurts recruitment of new talent by businesses and there also is an exodus of young people from the state – she noted 85 percent of people leaving New Jersey are between ages 18 and 25 – which impedes business development. “Infrastructure is, without a doubt, an area (on which) Democrats and Republicans can come together on behalf of the American people,” she said.
The Congresswoman told the audience the Tax Cuts and Jobs Act of 2017 is hurting New Jersey residents, particularly the cap on state and local tax (SALT) deductions that is leading many state residents to pay more taxes than in past years. She noted 60 percent of the responding members of the New Jersey Association of Certiﬁed Public Accountants are advising their clients to leave the state. Sherrill said she is proposing raising the SALT cap and eliminating the SALT marriage penalty. “We must make all possible inroads on SALT and I can assure you we are working on a ﬁx,” she said. Sherrill noted the importance of Picatinny Arsenal economically, contributing $13 billion the New Jersey’s economy. “I will continue to advocate for the continued success of Picatinny Arsenal, even though I am a Navy girl,” she said to laughter.
Sherrill said all Americans having access to affordable health care is critical and said she is working to cut the costs of prescription drugs. She also said laws need to change to adapt to an evolving society and allow health care coverage to follow workers from one job to another. In response to the opioid epidemic, Sherrill co-sponsored the State Opioid Response Grant Authorization Act to get more federal funding to the states to ﬁght the spread of opioid addiction.
During the question and answer period, Sherrill said New Jersey’s Congressional delegation – all but one are Democrats – is working well together for the state’s interest. ”We’re all aligned in what we need to do,” she said. “I think the 11th District can and should lead the way for the rest of the country,” she added. In responding to a question on border security, Sherrill said she felt the more pressing issue is stopping the ﬂ ow of people and illegal goods through legal ports of entry, of which New Jersey has many, and that more money needs to be spent on improving technology at these points.
Questioned about additional federal funding for the Morris County Economic Development Corp. and local economic development in general, Sherrill said her ofﬁce is working on tracking all federal money coming into New Jersey through programs and grants in an effort to help New Jersey businesses apply for that funding. Finally, when asked about assistance for lower-income and ALICE (Asset Limited, Income Constrained, Employed) families, Sherrill said she believed the nation needs to adopt regional minimum wages to assist these families while also protecting small businesses.
When I meet with members about how the chamber can help grow their business, the topics of talent and human resources are at the top of the list. Accordingly, I am proud to announce we kicked off our new Human Resource and Talent Committee this spring, led by co-chairs Christy Harper, president of Launchpad Talent Group, and Michael A. Shadiack, Esq. of Connell Foley LLP. Christy has extensive background in talent recruitment, on-boarding and retention and brings many years of experience helping businesses succeed through the identiﬁcation of top talent and effective programs to develop employees. Michael is a partner in and serves as chair of the employment law practice group at Connell Foley. He has extensive experience providing employment law compliance counseling to businesses of all sizes, conducts practical training programs and drafts employee handbooks, all with a perspective gained from defending businesses in litigation during the last two decades.
The committee is collaboration between the chamber and the Morris County Economic Development Corporation (MCEDC), a division of the chamber. The mission of the committee is to provide members with the opportunity to discuss timely topics related to talent. It also provides the opportunity to plan and present at forums and seminars that provide valuable information to members and the business community about best practices in human resources, up-to-date information regarding laws and regulations, and strategies for attracting, on-boarding and retaining talent.
While the committee will comprise primarily individuals who have primary responsibility for hiring, ﬁring, providing day-to-day direction to employees and are responsible to address any employee conﬂict or inquiries by government agencies, any chamber member that is interested in human resources as it applies to their business is welcome to attend.
It is clear that that Morris County will only remain a “top 10” county and continue to grow if we can successfully attract, retain and develop talent. We encourage all members who are involved with hiring decisions or interested in learning more about how labor regulations affect their business to attend the committee, which meets on the second Tuesday of every month from 8:30 a.m. to 10:00 a.m. at the chamber ofﬁces. If you are interested in learning more or being a presenter, please e-mail Michael Shadiack at MShadiack@connellfoley.com
I am excited to announce that the MCEDC also is investing in a new database, Hometown Opportunities, to provide improved connectivity between employers and prospective employees that will be developed this year. Employers will be able to list local job opportunities and residents, students and volunteers will be able to ﬁnd opportunities in their hometown or within Morris County. You will realize the beneﬁt of this resource by having a tool to attract talent in a competitive labor market through your business proﬁle.
In the antithesis of today’s hyper-partisan political acrimony of Washington, New Jersey Senate President Stephen Sweeney (D-3) and Senate Minority Leader Tom Kean, Jr. (R-21) sat down together for an amicable discussion of the issues at the 2019 Legislative Luncheon hosted by the Morris County Chamber of Commerce at the Park Savoy in Florham Park. Sweeney and Kean clearly like each other and agreed as often as not during the hour-long discussion moderated by Alan Zakin of Alan Zakin Associates and chairman of the chamber’s Government Affairs Committee. Both agreed New Jersey is in fiscal trouble and cited various solutions. “We need to rescue the state from (its) financial crisis,” Sweeney said, citing unsustainable public pension and health care obligations and over-taxation of businesses. “The state has problems and if we don’t solve them quickly we’ll lose our edge…To achieve anything important, we have to work together.” Kean agreed. “People are risking a lot to stay in New Jersey,” he said. “People are working a lot of hours, sometimes working two jobs…Families are being torn apart because kids can’t afford to stay in New Jersey.” The question-and-answer format allowed members of the audience to delve into areas of concern to them. Sweeney and Kean were asked how to ease property taxes in New Jersey and about shared services. Both agreed the 2 percent cap was a good start and had achieved real progress.
Kean called for a restructuring of the school funding formula to create tax stability but stopped short of embracing shared services as a solution, noting regional education does not always work because people want more say in their kids’ education. Sweeney disagreed. “I think county government plays a key role in facilitating shared services,” he said, noting that small school districts pay 17 percent more for education than larger districts. The problem, he added, is resistance. “You don’t want a shared police department. You don’t want a regional school district…It’s called home rule and people like it.” However, by fixing the state’s pension plan, New Jersey could save $3 billion per year, $2 billion at the local level, and all those savings could go toward property tax relief, Sweeney added. Sweeney and Kean were asked about increased funding for New Jersey Transit and both agreed it was necessary. “We need to make it possible for people to get to work,” Kean said. Sweeney called for improved communication to commuters and better contingency plans to help them modify their plans. When asked about legalized marijuana and the impact on employers, neither senator seemed enthused with the plan even though it would bring additional revenues. Kean claimed other states with legalized marijuana showed increased cost demands on the health care and education systems and no drop in black market sales and said reducing the cost of government was better than raising revenue this way. Sweeney said employers’ rights, for example on testing, would always prevail, although legalized medical marijuana adds other issues. He also pointed to a 29 percent drop in opioid use in Colorado as a favorable outcome of legalized marijuana.
He predicted it would eventually take place in New Jersey and wanted it done statutorily to maintain control over the process. The senators parted ways on the issue of the state’s minimum wage increase and its impact on businesses. “We had some concerns and we’re going to watch it to make sure we don’t lose too many jobs,” Sweeney said, citing exemptions, a circuit breaker in the case of a recession and a rolled out approach. Kean countered the exemptions were simply delayed and that the Murphy administration had failed to consider the impact of the increase on the cost of operating state government. When asked about rising health care costs for employers, Kean said no issue had generated more calls to his office than this one and called for tort reform and continued coverage for pre-existing conditions. Sweeney lamented the approach of President Trump and the Republicans in Washington of simply attacking the Affordable Care Act rather than looking for solutions. “Rather than trying to fix what was wrong, they tried to destroy it,” he said. “And they made things worse.”
Please Note: The views and opinions expressed here are those of the authors and do not necessarily reflect the position of the Morris County Chamber of Commerce.
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