I recently met with a woman who wanted help understanding and organizing her money, specifically her U.S. dollar investments.
“I’m totally overwhelmed with statements,” she told me as she emptied envelope after envelope onto my desk. “I have no idea what I own and I don’t know how to read all this stuff.”
By the time our meeting ended, her stress level had decreased dramatically and she knew exactly what was happening. Here’s what changed:
Figure out what you have
Sorting through the papers, we found statements from an IRA (an Individual Retirement Account) at a bank, and two different brokerage accounts. We made a list of her assets, and figured out what percent of her investments were in stocks and other risky securities and we compared that to how much was relatively safe. In her case, she had over 60% of her funds in cash positions that were earning almost no interest.
Decide what you need
It’s easier to understand and organize your finances if all your assets are held in one institution. Then, you just have to look at the first page of your monthly reports and glance at the summary section. The first page gives a summary of what’s going on: the account balance; how the funds are divided between stocks, bonds, cash, and other investments; and the change from the previous month. Often, there’s a chart summarizing your positions.
After you know what you have, ask your financial advisor to help determine if the account is set up to meet your needs.
In this client’s case, we opened a brokerage account for her through our U.S. brokerage firm and transferred the funds from her various other banks and companies so that everything would be consolidated, and so that we could best advise her on her investment choices. And, then we arranged for her social security checks to be deposited directly into her brokerage account!
Douglas Goldstein, CFP®, investment advisor is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published October 8, 2018.