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Mark's regular column in the Idaho Statesman's Business Insider tackles local, national, and international financial issues in a thoughtful, approachable way. It has also been a great creative outlet for Mark, who loves to write and share his extensive experience with his fellow Idahoans.
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Business Insider
October 2017

What MONEY Means to You

At Perpetua Group, our clients include savers, couples, retirees, business owners, small endowments, and non-profit organizations — and what we've learned from working with such a diverse group is that myths and misconceptions about finances and investing run rampant. In fact, raising awareness and empowering our clients was one of the reasons we founded our practice in April.

Why is awareness so important? As a population, we are unprepared and under saved for retirement. Everyone will eventually have a final paycheck, so it is vital that you convert at least some of your current income to future income from investments. The government is not equipped to support us all, and ignoring the future is the wrong course.

Average people can move from misinformed about money and finance to highly knowledgeable by learning a few simple concepts, and avoiding some key mistakes revealed by the science of behavioral finance.

Whether you're a novice or a veteran investor, there is a simple guide you can live by to help you prepare for a successful, happy, debt-free retirement. It's called MONEY.

Make a plan and stick to it.

Owe yourself. Begin the savings habit now.

Never stop saving. Use every account type and employer plan.

Educate yourself. Learn the basics about investing or hire a professional.

Yield not to self-doubt and fear. Ignore conflicting messages.

MONEY is a simple — but effective — plan. Following MONEY is the key to a retirement that lets you enjoy your free time and have enough to help your kids and grandkids and support the charitable and non-profit causes you value.

A few final thoughts. We are not against debt and leverage, and if used judiciously borrowing can be a powerful tool to grow your net worth. Overuse and complacency can lead to disaster.

Equities as represented by global diversification in stock markets around the world are essential for proper planning and diversification. Fear mongers who dissuade the public from owning great public companies perform a huge disservice to their audience, and contribute to the epidemic of unpreparedness.

If you follow the MONEY basics, you'll replace fear with a coherent strategy that may lead to financial success, and a happier, healthier relationship with your hard-earned cash.

Mark Daly, CIMA®
Managing Director - Investment Officer
Daly & Vachek Investment Consulting Group
Of Wells Fargo Advisors
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
www.dvicg.com

Wells Fargo Advisors did not assist in the preparation of this article, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of Mark Daly and are not necessarily those of Wells Fargo Advisors or its affiliates.

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Perpetua Group is a separate entity from WFAFN.

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Business Insider
September 2017

The ABCs of Medicare

Most Americans are eligible for Medicare when they turn 65 - in fact, if you already receive Social Security benefits, you'll be automatically enrolled in the program. Medicare is multifaceted, though, and it can be difficult to determine which type of Medicare is right for you. Here's a quick breakdown.

Medicare Part A. This is the hospital insurance portion of Medicare, which can help pay for home health care, hospice care, and inpatient hospital care. It is premium free for most retirees.

Medicare Part B. Part B helps cover medical costs like physicians, lab tests and physical therapy.

Medicare Advantage Part C. Medicare Part C is a private-sector alternative to Part A and Part B. You may choose to enroll in managed care or private fee-for-service plans often resulting in fewer out-of-pocket health care costs.

Medicare Part D. If you lack adequate prescription drug coverage, consider joining a Medicare prescription drug plan under Part D. Drug benefits are offered by a private company or Medicare approved insurer.

Medigap. Medicare won't cover all your health care expenses, such as medical deductibles and co-payments, so many retirees purchase a Medigap policy. Medigap is handy for covering out-of-pocket expenses like annual co-payments and deductibles. There are 10 standard Medigap policies available, which are sold state by state. Each policy offers certain core benefits. Plan A offers the most basic coverage, so educate yourself or call a professional for the plan that best meets your needs and budget.

When you enroll in Medicare Part B at age 65 or older, the open enrollment period for Medigap lasts six months. During this period the Medigap insurance companies cannot reject an application during an open enrollment period - even if the applicant is unhealthy.

Medicare coverage gaps. Medicare does not cover nursing home or assisted living, which is very expensive on a monthly basis. Long-term care insurance can be affordable in your 50s or 60s, but don't wait too long to obtain quotes or purchase coverage. You'll need medical underwriting, which can become more difficult to get as you age.

Going private. Medicare isn't a good option for everyone. Private insurance companies allow for pre-existing health conditions, and they cannot refuse to issue a policy, or charge more than other open enrollment applicants.

Medicaid is an option if neither Medicare nor private insurance works for your health and financial needs. The program has been greatly expanded by certain states under the ACA. More on Medicaid, and its financial solvency, in a future column.

Mark Daly, CIMA®
Managing Director - Investment Officer
Daly & Vachek Investment Consulting Group
Of Wells Fargo Advisors
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
www.dvicg.com

Wells Fargo Advisors did not assist in the preparation of this article, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of Mark Daly and are not necessarily those of Wells Fargo Advisors or its affiliates.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC. Member SIPC

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August 2017 Edition

Waiting for Growth

"What do we want? Growth! When do we want it? Now!"

With apologies to all you hippies of the 1960s and 1970s, this old protest chant encapsulates the frustration felt by many Americans in response to today's sluggish economy. But higher growth may be coming sooner than we think

When Donald Trump introduced his 2018 budget proposal in May, his projected 3 percent GDP increase (gross domestic product is the sum of all goods and services produced in the United States) was widely criticized by experts and the news media as unrealistic and overly optimistic.

Growth frequently exceeded 3 percent prior to the 2008 global financial crisis. What's surprising about the current recovery is the lack of growth compared to past recoveries—an anemic 1-2 percent. Many economists predict this trend will continue, even though 3.3 percent annual growth was the norm from the 1970s to 1990s.

There's a lot of speculation about the cause of these slow growth rates. Most economists agree that lack of aggregate demand is the culprit. Aggregate demand is the sum of consumer spending, private investment, government spending and net exports.

Besides low growth, the current recovery is characterized by persistent low interest rates and low inflation. This may partially explain the incredible performance of public equities this year, particularly in Europe, Asia and emerging markets – some economies are growing faster than the United States,

According to NPR.org, the U.S. economy grew at a 2.6 percent annual rate in the second quarter, which ended June 30, 2017—up from 1.2 percent annual growth in the first quarter. Consumer spending, which makes up 70 percent of the total U.S. economy, was up nicely. We've now entered the 96th month of economic expansion since the Great Recession, the third-longest expansion on record.

Economic growth is essential for creating investment opportunities and higher living standards around the world. The driver of future economic expansion may be found in financially healthy consumers. Technology advances in the cloud, cyber security, data analytics, mobile computing and robotics may increase productivity. Creation of a new middle class in developing countries should contribute to higher growth as well.

Current conditions point to more growth. A strong labor market, low borrowing costs and modest inflation could prolong the economy's expansion for many months or quarters. This will be positive for asset prices, including stocks and real estate.

Keep an eye on growth for the next few quarters and into 2018. You may be surprised to see the return of the elusive 3 percent after all.

Mark Daly, CIMA®
Partner
Perpetua Group
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
mark@theperpetuagroup.com

Wells Fargo Advisors did not assist in the preparation of this article, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of Mark Daly and are not necessarily those of Wells Fargo Advisors or its affiliates.

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Perpetua Group is a separate entity from WFAFN.

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July 2017 Edition

National Debt Time Bomb

Like a giant time bomb, ticking away in reverse, the United States national debt marches upward, with no ceiling in sight and no credible solution to slow its skyrocketing trajectory. You will see and hear news commentary about this event in the next few weeks as we add $1 million to the total 77 seconds. The media's obsession with big, round numbers will trumpet the dubious milestone "U.S. National Debt Reaches $20,000,000,000,000." That's 20 trillion, with a "t", a number so big one can barely wrap the brain around it.

Politicians talk about reducing the annual deficit, or the difference between what the government spends and takes in each fiscal year. That amount runs $670,000,000,000; that's $670 billion, with a "b."

The national debt is the cumulative total of all the annual deficits added together. Both numbers are expected to rise as more baby boomers retire and apply for Social Security and Medicare benefits, the largest slices of the government spending pie besides defense.

When I travelled to New York in April 2014, the National Debt Clock on the corner of 44th Street and 6th Avenue listed the debt at a bit more than $17.5 trillion. Since then, our nation has racked up another $2.5 trillion in just over three years. I keep a picture of the debt clock near my desk to remind me how far and how fast these numbers are growing.

Possible solutions include raising taxes, removing the Social Security earnings limit, raising the retirement age, changing the payroll formula for current earners, and allowing investment choice so beneficiaries may earn a higher return. The real answer might require a Constitutional convention, called by the states, to amend the Constitution and require a balanced federal budget.

Our slow-growth "Goldilocks" economy is supporting our burgeoning debt load--for now. Interest rates remain low and stock prices are high. Running big deficits and growing the national debt seems like the thing to do. This will continue until financial markets, in their collective wisdom, deem this practice unacceptable, and then it will not be OK. We will then discover the solution to a very real problem, and it may not be pretty.

The United States just celebrated 241 years as a representative democracy, with a remarkable track record of solving difficult problems. Let's hope we're up to the task on this one.

Mark Daly, CIMA®
Partner
Perpetua Group
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
mark@theperpetuagroup.com

Wells Fargo Advisors did not assist in the preparation of this article, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of Mark Daly and are not necessarily those of Wells Fargo Advisors or its affiliates.

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Perpetua Group is a separate entity from WFAFN.

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June 2017 Edition

Hidden Inflation

There's no inflation, right?

That's what statistics would have us believe, but take a look at the cost of the goods you buy. My wife brought home a case of sparkling water the other day. The quantity inside is now eight cans, compared to the previous 12. The price did reflect a $1 decrease, but the product count went down by a third. That is real inflation, but the traditional methods of measurement don't seem to pick it up.

The Consumer Price Index (CPI) — also known as the cost of living index — is a widely quoted measure of inflation that tracks the changes in prices of goods and services over time. Idaho uses the CPI-U index, which covers a range of goods and services for urban consumers. The U.S. City Average is up 2.2 percent since April 2016, but even at 2.25 percent inflation, consumer prices in Idaho have increased two and a half fold since the mid-1980s!

The fact is, Idaho's cities are growing, and the cost of living in the Treasure Valley is going up. And, just like that sparkling water, it's easy to think that nothing much has changed.

According to the Bank of New York, household debt reached a milestone in the first quarter of 2017: $149 billion in the first three months of this year, for a total of $12.725 trillion, a new record. Household debt includes student loans, credit cards, auto loans, traditional mortgages, and home equity lines of credit.

The Statesman reported on May 25 that home values in Ada County were up 8.1 percent, surpassing the pre-recession peak in 2008. Median residential assessed value is $223,100 compared to $211,000 a year ago. That's on top of 8 percent in 2016, which we call compounding, and describes increases on previous increases.

Although many of the excess behaviors and financial engineering from the 2007 credit bubble are gone, the law of supply and demand remains. It does not prevent someone from over paying for an asset, or the possibility that the asset will decline in value. We've learned real estate values can — and do — decline. Careful planning, combined with inflation friendly investing, will provide the best defense to meet the rising cost of living in Boise, an Idaho city of the future.

The summer of 2007 suggested runaway inflation with record prices for stocks, commodities and real estate, yet all of that masked one of the greatest deflationary events since the Great Depression.

Don't always believe the "official" inflation statistics. Look at the receipt in your grocery bag.

Mark Daly, CIMA®
Partner
Perpetua Group
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
mark@theperpetuagroup.com

Wells Fargo Advisors did not assist in the preparation of this article, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of Mark Daly and are not necessarily those of Wells Fargo Advisors or its affiliates. The Perpetua Group is a separate entity from Wells Fargo Advisors Financial Network.

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May 2017 Edition

People Who Shaped the Treasure Valley

Richard Z. Johnson – One of Idaho's First Citizens

This column focuses mainly on business and investing, but I'd like to digress a little bit and talk about one of the other people who shaped the Treasure Valley. My family legacy in the brokerage business, going back several generations, is well documented. It turns out the maternal side of the family has several interesting legal and professional branches as well, with none more prominent than the Hon. Richard Z. Johnson.

Richard Z. Johnson was born in Akron, Ohio, in 1837, graduated from Yale University in 1859, and was admitted to the Territorial Bar in 1867. He moved to Silver City, Idaho, to open a law practice following a stint in the rough-and-tumble mining camp of Virginia City, Nevada. He practiced mining and general law for 14 years before moving to Boise. His original law building remains today near the corner of 6th and Main streets in downtown Boise, and is listed in the National Register of Historic Places.

He was elected to the territorial Legislature for two terms in 1880 and 1882. He served as attorney general for the Idaho Territory and held that office when Idaho was admitted to statehood in 1890. He authored many statutes of the Idaho Code during this period.

Richard's first love and concern was student education and public schools. He authored the law creating the independent school district, ushered the Boise School Charter through the Legislature, and served as a school board member for fifteen years.

The Idaho Daily Statesman wrote in 1913 upon the news of his death in Germany, "Mr. Johnson devoted much time to promotion of public affairs which he made a personal matter and prosecuted energetically."

The Statesman goes on to say, "he defended a man on trial for murder who was his enemy." The accused was cleared of the charge, but Johnson stated he was "proud of the fact that even my enemies employee me."

John succeeded in having a corrupt judge disbarred and referred to him as an "ignoramus," and "considered that I was doing a public duty in exposing and undoing him."

Those of us with deep Idaho roots are grateful to know about the many individuals who shaped our state and the Treasure Valley. Our challenge today is to step up to the high standards set by these remarkable men and women, and keep our state and Boise the gem we all know and love, through contributions of our time, treasure and talent.

Mark Daly, CIMA®
Partner
Perpetua Group
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
mark@theperpetuagroup.com

Wells Fargo Advisors did not assist in the preparation of this article, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of Mark Daly and are not necessarily those of Wells Fargo Advisors or its affiliates.

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Perpetua Group is a separate entity from WFAFN.

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April 2017 Edition

HSAs, Part II

Last month we discussed the benefits of Health Savings Accounts (HSAs) to reduce taxes and pay for qualified medical expenses. But have you thought about putting your HSA to work as an investment tool?

Your HSA can supplement other forms of long-term savings and allow you to self-direct your investments. Your pre-tax HSA contributions reduce your taxable income, and your payments on qualified medical expenses are not subject to tax. Retirement distributions for non-medical expenses are taxed as ordinary income, but distributions continue tax-free for medical costs into retirement.

An increasing number of people are discovering that HSAs can be an important tool: According to Devinir Research, the average HSA account balance increased from $1,400 to just over $1,900 in 2014.

A small percentage of HSAs offer mutual funds to participants as an investment option. Mutual fund supplements are underutilized, but they can help your HSA balance potentially grow faster than the rate of inflation or health care costs. Like a 401(k), the investment fund lineup is determined by the employer, and may limit the number of choices or incur higher fees than average.

Target-date funds might be an appropriate long-term investment if you're a person in good health who is using an HSA. TDFs typically allocate more conservatively as retirement approaches and health bills tend to pile up. It's safe to assume a diversified approach is best with some mix of diversified stocks, bonds and cash.

There are several risks to using investments other than cash in an HSA. You may need to sell growth assets when prices are down, creating a nondeductible loss. Contribution limits might cover just a fraction of out-of-pocket medical costs, and the entire account might require liquidation during a market decline. Finally, a cash or principal protection option most certainly won't keep up with inflation or rising health costs with today's low interest rate.

Clients and advisors need to understand the short- and long-term benefits of HSAs. Research investment choices and fee structure to find what works best for your particular situation. You may find this account option adds to your savings while covering medical bills, now and in retirement.

Mark Daly, CIMA®
Partner
Perpetua Group
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
mark@theperpetuagroup.com

Target date funds are mutual funds that periodically rebalance or modify the asset mix (stocks, bonds, and cash alternatives) of the fund's portfolio and change the underlying fund investments with an increased emphasis on income and conservation of capital as they approach the target date. Different funds will have varying degrees of exposure to equities as they approach and pass the target date. As such, the fund's objectives and investment strategies may change over time. The target date is the approximate date when investors plan to start withdrawing their money, such as retirement. The principal value of the funds is not guaranteed at any time, including at the target date. More complete information can be found in the prospectus for the fund.

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Perpetua Group is a separate entity from WFAFN. WFAFN uses the trade name Wells Fargo Advisors.

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March 2017 Edition

Consider an HSA

Since the general election in November, there's been a lot of discussion about modifying the Affordable Care Act (ACA), and expanding Health Savings Accounts (HSAs). So what does that mean to you? Here's the executive overview for your consideration.

An HSA has the potential to reduce federal income taxes. HSA contributions are deducted against income and may reduce the amount of tax you owe. Qualified withdrawals are tax free for health related expenses. You may use the money in your account as payment for medical expenses (paid with an HSA specific credit or debit card), or as an investment account to be used during retirement.

You might be eligible to participate. You may contribute to an HSA if you enrolled in an HSA qualified health plan, are not covered by any other health plan, and can't be claimed as a dependent on another person's tax return. Those on Medicare can't participate, so start one now while you're working!

HSAs work best with high deductible health plans. HSA qualified health plans require a minimum deductible of $1,300 for single coverage, with maximum out of pocket expenses of $6,550. For families the minimum deductible is $2,600 with maximum out of pocket expenses of $13,100. Your HSA account must be paired with a high deductible plan that meets the above requirements.

You can contribute a significant amount. HSA accounts are unique in that you own the account, contributions may exceed your earned income, you may contribute on another's behalf, and balances may carry over to the following year.

Maximum contribution limits for 2017 are $3,400 for an individual and $6,750 for families. A catch up contribution of $1000 is allowed for ages 55 and up. Employers may also use HSA accounts as part of a benefits package for employees. Contributions are due by the tax filing deadline, and your CPA should file a Form 8889 with your tax return.

Know the details before you fund. Earnings on the money within the HSA are tax deferred, and qualified distributions for qualified medical expenses are tax free. Non-qualified distributions are subject to income tax and penalty, with exceptions for death, disability, and people over 65.

Next month we'll explore HSA accounts as an investment opportunity, which could offer the flexibility to supplement your income during retirement.

Mark Daly, CIMA®
Managing Director - Investment Officer
Daly & Vachek Investment Consulting Group
Of Wells Fargo Advisors
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
www.dvicg.com

Wells Fargo Advisors did not assist in the preparation of this article, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of Mark Daly and are not necessarily those of Wells Fargo Advisors or its affiliates.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC. Member SIPC

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February 2017

Clients Must Do Their Part to Avoid Fraud, Identity Theft

Identity theft and account fraud occur with alarming regularity. Clients and customers must do their part to protect themselves from ever increasing attempts to steal your money or identity electronically. Start with an examination of your financial institution's policies and protections to determine your liability.

Please follow the link that describes the policy for Wells Fargo Advisors clients and bank customers here

Financial institutions are under constant pressure from regulators, auditors and compliance officers to prevent fraud when you use a tablet, phone or computer to access your accounts. Federal laws, including Reg. "E", limit client liability for unauthorized electronic access. Consider these simple steps to protect you and your family.

1. Never disclose personal account information. Be wary of marketers who ask for your information over e-mail or telephone. Don't reply by voice to a random robot call.

2. Ask your financial institution about its protection policies. Would you be covered in the event of a breach? Are you protected if you inadvertently divulge your login, pin or password?

3. Use enhanced sign-on protocols. Besides your unique username and password, take advantage of two-factor authentication for added security. Two step authorization uses a key fob with changing pass codes, or a text message to your mobile device to verify login

4. Make sure your web browser is up to date. Outdated web browsers may be blocked by your financial institution when you try to log in. Make sure you have the latest version.

5. Look for the extra "S". A URL containing an "s" as in https:// indicates a secure browser

6. Remember to log off. Automatic logoff can prevent inadvertent viewing.

7. Promptly report suspicious activity to your advisor or financial institution. If you open a fraud claim, cooperate fully with the representative and law enforcement. Write down your claim or tracking number to inquire about your case.

The battle with cyber criminals rages on. Finger prints and retina scans may replace annoying questions about your car, first date, or mother's maiden name. Convenience and ease of access are wonderful achievements as the paper account statement rides into the sunset. Common sense and a few simple steps can help protect your account, and avoid a lengthy frustrating process to recover your funds- assuming they can be recovered at all.

Mark Daly, CIMA®
Managing Director - Investment Officer
Daly & Vachek Investment Consulting Group
Of Wells Fargo Advisors
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
www.dvicg.com

Wells Fargo Advisors did not assist in the preparation of this article, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of Mark Daly and are not necessarily those of Wells Fargo Advisors or its affiliates.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC. Member SIPC

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January 2017

Resolve to Make 2017 A Year of "Financial Fitness"

I pulled into the gym parking lot at 5:30 AM the day after New Year's and guess what- it was packed! All those resolute folks were there to fulfill their annual pledge to exercise, lose weight, or buff their muscles.

It made me think about financial fitness- the regular, habitual actions that lead to fiscal serenity. Can we apply that same New Year enthusiasm to achieve monetary fitness goals in 2017?

The list of opportunities for fiscal improvement is long, but don't be intimidated by limited cash flow that prevents trying. As my group cycling instructor reminds me, small daily improvements in diet and exercise lead to life changing results, so get started! The miracle of compounding, prudently invested in growth assets, is by far your best friend.

Start by paying down debt, the most productive investment you can make. Debt is not inherently bad, but it does divert cash flow from the individual to the lender which could be used for other things, like saving.

How about funding a Roth IRA, or converting a traditional IRA to a Roth? Think about saving after tax so you'll have an already taxed pot of money when you retire. Begin with a simple budget that matches income with expenses, and carve out enough to fund your retirement plan.

Fund a 529 college savings plan for a child or grandchild. Most states offer tax advantages to the donor, and the money grows tax free if eventually used for qualified education expenses.

Assess insurance needs, including life and health, to make sure you have the correct coverage for your needs, but don't over pay for coverage you may not need. Price competition, especially for term life, is intense, and you may be over paying on that old policy. The same could be said of some annuity contracts.

Ipsos Public Affairs just conducted a survey for a major insurance company. The study reveals that 43% of Americans are optimistic about their financial situation, compared to 31% of those surveyed in 2011.

Let's all resolve to accomplish one or two financial fitness goals in 2017, what Dave Ramsey refers to as the "baby steps". In the meantime, I'm late for spin class, hoping to grab that last broken bike in the back row. Fortunately this will not be a problem in a few weeks or months!

Mark Daly, CIMA®
Managing Director - Investment Officer
Daly & Vachek Investment Consulting Group
Of Wells Fargo Advisors
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
www.dvicg.com

Wells Fargo Advisors did not assist in the preparation of this article, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of Mark Daly and are not necessarily those of Wells Fargo Advisors or its affiliates.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC. Member SIPC

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December 2016

Resolve to Make 2017 A Year of "Financial Fitness"

I pulled into the gym parking lot at 5:30 AM the day after New Year's and guess what- it was packed! All those resolute folks were there to fulfill their annual pledge to exercise, lose weight, or buff their muscles.

It made me think about financial fitness- the regular, habitual actions that lead to fiscal serenity. Can we apply that same New Year enthusiasm to achieve monetary fitness goals in 2017?

The list of opportunities for fiscal improvement is long, but don't be intimidated by limited cash flow that prevents trying. As my group cycling instructor reminds me, small daily improvements in diet and exercise lead to life changing results, so get started! The miracle of compounding, prudently invested in growth assets, is by far your best friend.

Start by paying down debt, the most productive investment you can make. Debt is not inherently bad, but it does divert cash flow from the individual to the lender which could be used for other things, like saving.

How about funding a Roth IRA, or converting a traditional IRA to a Roth? Think about saving after tax so you'll have an already taxed pot of money when you retire. Begin with a simple budget that matches income with expenses, and carve out enough to fund your retirement plan.

Fund a 529 college savings plan for a child or grandchild. Most states offer tax advantages to the donor, and the money grows tax free if eventually used for qualified education expenses.

Assess insurance needs, including life and health, to make sure you have the correct coverage for your needs, but don't over pay for coverage you may not need. Price competition, especially for term life, is intense, and you may be over paying on that old policy. The same could be said of some annuity contracts.

Ipsos Public Affairs just conducted a survey for a major insurance company. The study reveals that 43% of Americans are optimistic about their financial situation, compared to 31% of those surveyed in 2011.

Let's all resolve to accomplish one or two financial fitness goals in 2017, what Dave Ramsey refers to as the "baby steps". In the meantime, I'm late for spin class, hoping to grab that last broken bike in the back row. Fortunately this will not be a problem in a few weeks or months!

Mark Daly, CIMA®
Managing Director - Investment Officer
Daly & Vachek Investment Consulting Group
Of Wells Fargo Advisors
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
www.dvicg.com

Wells Fargo Advisors did not assist in the preparation of this article, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of Mark Daly and are not necessarily those of Wells Fargo Advisors or its affiliates.

Insurance products are offered through our affiliated nonbank insurance agencies

Wells Fargo Advisors is not a legal or tax advisor.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC. Member SIPC

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November 2016

Preparing for Loss of a Spouse

My experience as a financial advisor for the past 25 years has given me a unique perspective on preparing for a spouse's death. We don't like to talk about our own mortality, let alone that of someone we love - but those difficult conversations are essential for your family's future security.

Most of us know the basic estate plan documents: will, durable power of attorney, health care power of attorney, living will and revocable living trust. Although these documents are vital, they fall well short in preparing for the emotional aftermath of a spouse's death. I've found that a few simple steps now can save a lot of heartache later, especially at a time when grief and confusion can paralyze the surviving spouse and lead to financial problems.

Keep your spouse up-to-date. Share passwords and other critical information- and where to find them. Meet as a couple with your professionals, including your CPA, estate planner, and financial advisor. If only one of you handles finances, the surviving spouse will be unprepared and vulnerable to financial predators later on.

Be open and transparent. Title accounts properly. Make it clear which assets will be passed directly to your spouse - for example a house that lists both of you on the title - and which assets will be transferred thanks to a beneficiary designation. It's important to review beneficiary designations for IRA accounts and other retirement plans; if your designation lists a former spouse, for example, your money will go to that person - even if you're remarried. Understand the probate process in your state as these can vary widely, adding extra complexity and cost.

Open bank accounts in joint name. Failing to do so could prevent a spouse from accessing cash to pay bills and final expenses. Credit card accounts and utility bills in a single name could prevent a spouse from paying them. The card company or utility generally won't even talk to you if you're not on the account.

Get a handle on Social Security. It can be confusing to claim this benefit at the time of your spouse's death, but making the correct selection could make a big difference in benefits received over a lifetime. The same applies to a pension plan that offers a survivor benefit option.

Understand the household budget and monthly operating expenses. Many couples underestimate the amount they spend. A one-page spreadsheet is adequate for most people, but knowing where the money goes every month is critical.

Everyone will have a final day on earth. Preparing for that day in advance can make a huge difference in how we deal with the stress and anxiety at the intersection of legal, personal and financial matters.

Mark Daly, CIMA®
Managing Director - Investment Officer
Daly & Vachek Investment Consulting Group
Of Wells Fargo Advisors
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
www.dvicg.com

Wells Fargo Advisors did not assist in the preparation of this article, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of Mark Daly and are not necessarily those of Wells Fargo Advisors or its affiliates.

Insurance products are offered through our affiliated nonbank insurance agencies

Wells Fargo Advisors is not a legal or tax advisor.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC. Member SIPC

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Business Insider
November 2016

Preparing for Loss of a Spouse

My experience as a financial advisor for the past 25 years has given me a unique perspective on preparing for a spouse's death. We don't like to talk about our own mortality, let alone that of someone we love - but those difficult conversations are essential for your family's future security.

Most of us know the basic estate plan documents: will, durable power of attorney, health care power of attorney, living will and revocable living trust. Although these documents are vital, they fall well short in preparing for the emotional aftermath of a spouse's death. I've found that a few simple steps now can save a lot of heartache later, especially at a time when grief and confusion can paralyze the surviving spouse and lead to financial problems.

Keep your spouse up-to-date. Share passwords and other critical information- and where to find them. Meet as a couple with your professionals, including your CPA, estate planner, and financial advisor. If only one of you handles finances, the surviving spouse will be unprepared and vulnerable to financial predators later on.

Be open and transparent. Title accounts properly. Make it clear which assets will be passed directly to your spouse - for example a house that lists both of you on the title - and which assets will be transferred thanks to a beneficiary designation. It's important to review beneficiary designations for IRA accounts and other retirement plans; if your designation lists a former spouse, for example, your money will go to that person - even if you're remarried. Understand the probate process in your state as these can vary widely, adding extra complexity and cost.

Open bank accounts in joint name. Failing to do so could prevent a spouse from accessing cash to pay bills and final expenses. Credit card accounts and utility bills in a single name could prevent a spouse from paying them. The card company or utility generally won't even talk to you if you're not on the account.

Get a handle on Social Security. It can be confusing to claim this benefit at the time of your spouse's death, but making the correct selection could make a big difference in benefits received over a lifetime. The same applies to a pension plan that offers a survivor benefit option.

Understand the household budget and monthly operating expenses. Many couples underestimate the amount they spend. A one-page spreadsheet is adequate for most people, but knowing where the money goes every month is critical.

Everyone will have a final day on earth. Preparing for that day in advance can make a huge difference in how we deal with the stress and anxiety at the intersection of legal, personal and financial matters.

Mark Daly, CIMA®
Managing Director - Investment Officer
Daly & Vachek Investment Consulting Group
Of Wells Fargo Advisors
101 S. Capitol Boulevard
6th Floor, Suite 610
Boise ID 83702
www.dvicg.com

Wells Fargo Advisors did not assist in the preparation of this article, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of Mark Daly and are not necessarily those of Wells Fargo Advisors or its affiliates.

Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.

Sources:
ThinkAdvisor.com "Crucial Life Task: Planning for a Spouse's Death" by Ellen Uzelac
Wells Fargo Advisors "Five Most Important Estate Planning Documents" CAR 1015-01813

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