Insight Financial Strategists LLC
Chris Chen CFP® is a Boston, MA area fee-only financial planner serving the entire region and clients across the country. Insight Financial Strategists provides financial planning, retirement planning, investment management, and divorce planning services to help clients organize, grow and protect their assets through life’s transitions. As a fee-only, fiduciary, and independent financial advisor, Chris Chen is never paid a commission of any kind, and has a legal obligation to provide unbiased and trustworthy financial advice.
Chris Chen CFP® is an experienced fiduciary, fee-only wealth manager providing unbiased financial planning and investment advice. He helps guide executives, physicians, attorneys and retirees with wealth accumulation and preservation, retirement income planning, and family protection strategies.
He is especially adept at successfully navigating clients through challenging life transitions such as retirement income planning, and divorce financial planning. As a fee-only financial planner, and a Registered Financial Advisor, Chris works with your own legal and tax advisers to build individual financial plans that address your unique goals, issues and constraints
Chris also helps clients with divorce coaching and post-divorce recovery, helping clients navigate the financial aspects of divorce, and resetting after the divorce into a financially successful direction.Chris earned his Bachelor’s degree in Economics from the University of Rochester and his MBA in Finance from the Univesity of Texas at Austin. He is also a CERTIFIED FINANCIAL PLANNER® practitioner, a Certified Divorce Financial Analyst, and is a trained Mediator, having completed mediation training in accordance with M.G.L. ch.233 § 23C
Chris invites you to sign up to start your own financial plan for free at po.st/financialplan
I don't see why you would want to refinance a $48,000 mortgage ona $25,000 property. I don't see why a bank would give you such a mortgage.
From what you are describing, the best financail option is to foreclose and buy another condo.
If I misunderstood let me know. I'll be happy to be creative!
Venture capitalists provide funding to startup companies, typically technology companies, almost always companies that have a strong growth potential. On the positive side getting financing from a VC firm means that you can be in business. So what are the disadvantages?
1. It's expensive
VCs will take a large equity position in the company that they invest in. Right off the bat, as an entrepreneur you will have given away a lot of your equity. As the entrepreneur goes through additional rounds of funding, his or her stake will continue to get diluted. It will not be long before the VC owns more of the company than the entrepreneur
2. Loss of control
The financing will come with many strings. One of them is making decisions on almost everything that is not product related. The VC can enforce that by taking a majority of the seats on the board of directors, and by appointing key personnel to your company including the CEO, the CFO, and even the CTO. Often these outside hires will bring in critical skills that the original team may not have had. However the balance of power is definitely tilted to the VC. Oh, and each of these people get to have an equity stake in your company.
3. You will be the last to be paid
The term sheets from the VC will specify how the VC and the entrepreneur get paid. The VC gets paid for his time and advice all along the way through dividends, while the entrepreneur will usually collect a salary.
When the company reaches its exit point (ie it gets sold or it goes public), everyone looks forward to getting paid. For runaway successes, there is enough to go around.
In the likely case that the company does not become a runaway success, the VC will get paid first as per the term sheets. If there is money leftover, the entrepreneur will then get paid.
VCs perform an essential function of funding startup companies. They are high risk investments, and as such they should bring a high return. Clearly VCs should get paid for the risks that they take and the know-how that they contribute.
However, for entrepreneurs who have other sources of funding, it is worth pondering the disadvantages of VCs.
No, you cannot. An inherited IRA is distributed differently from your own IRA. Whereas a Traditional IRA typically distributes for people who are older than 59 1/2 years of age, an inherited IRA can distribute when you are younger than 59 1/2. A traditional IRA must distribute when you have reached 70.
If your inherited IRA is a Traditional IRA, it is taxed as income. Whether it is a Traditional or a Roth IRA, there is a 50% penalty if the distributions are not taken as required.
It is all in the nomenclature:
Defined Benefit Plans define the benefit ahead of time. That benefit is usually a monthly payment in retirement, based on the tenure of the employee, his or her salary, and possibly other factors. Payments are usually defined to be for the lifetime of the employee. Employees are not usually expected to contribute to the plan, and as such they do not have individual accounts. The employee right is not to an account, it is to a stream of payments.
Defined Benefit Plans used to be common across large American companies. They are expensive to maintain as they require regular contributions from the employer to be funded. As a result, defined benefit pensions are often underfunded.
The funding expense usually accrues entirely to the company. Since the 1980's . companies have progressively reduced their defined benefit commitments, partially to reduce costs. Currently, most defined benefit plans are for government employees, union employees, with a smattering of legacy plans in corporate America.
In Defined Contribution Plans, the benefit is not known, but the contribution is. The contribution usually comes primarily from the employee, although many employers also have a company match. The advent of the defined contribution plan has allowed corporate America to disengage from defined benefit plans and to push the responsibility for retirement planning on the employee.
As opposed to defined benefit plans, employees have accounts in defined contribution plans. Subject to the vesting of the employee match, the money in the account is the employee's. Unlike defined benefit plans, the employee's retirement money is portable, ie it can be withdrawn or transferred to another account, within the limits of the rules. Some of the common defined contribution plans include 401(k), 403(b), 457, IRA, Roth IRA, SIMPLE IRA, and SEP IRA.
Employees in Defined Contribution companies have a choice for investments in their account. Most plans have a choice of mutual funds that attempts to cover the universe of possibilities, including fixed income and equity funds. Given that everyone's investment result will differ, and are no inherently predictable, the benefit at retirement is an unknown, unlike defined benefit plans.
A mortgage backed security (MBS) is a security, typically a bond, that is backed by mortgages. In a typical MBS, such as those marketed by FNMA or GNMA, the security is collaterized by hundreds or thousands of individual mortgages owned by Americans all over the country. MBS are usually considered a safe investment because the interest payment is secured by the payment of thousands of mortgage payers.
A Collaterized Mortgage Obligation (CMO) is a type of MBS with specific features. Most germane is that the CMO is divided into mutiple tranches with different risk profiles. A CMO may have a tranche A which would be the most secure, because interest payments are prioritized to go to tranche A. A tranche B would be second in line to receive payments, and so on. The lower the tranche, the less secure it is because the likelihood increases that it may not get payment, for instance if some homeowners fail to make their payments.
The typical MBS will have factored in the probability of defaults of it thousands of investments and will have averaged it across all investors. Hence investors will all receive the same payment.
On the other hand the CMO will have unbundled the risk of its security so that the higher tranches have less risk, perhaps even less risk than a typical MBS, and thus, will get a lower but more secure interest payment. The lower tranches will carry a greater risk, maybe even a risk greater than the typical MBS, and thus, will get a higher but less secure interest payment.
Most mortgage investors want to get a secure interest payments. Thus they should avoid the lower tranches of CMOs