by Mark Attanasio
Even if you never actually see your paycheck and it is automatically transferred to your bank account each week, you may still how much you’re making—maybe even down to the penny. Most people are fully aware of their income. But when it comes to net worth, the story is entirely different.
This is problematic because, unlike your income, net worth encompasses all your assets and debts. Calculating your net worth can provide you with a true measure of your financial well being, as well as providing you the information you need to improve your fiscal standing.
To help you figure out what you need to know about net worth, here are some of the questions others are asking too.
What, exactly, is net worth?
There is a simple formula that easily defines net worth. Add up all your assets—income, savings, investments and property. Then subtract all your existing debts. The total is your net worth.
When will I need to know my net worth?
While you won’t need to keep track of your net worth on a day to day basis, there are critical moments when it’s a good idea to have a firm grasp of your true value. You may want to understand the long-term trends for your net worth (how quickly you’re making or losing value) when planning your retirement or your estate. You may need it when looking to secure a mortgage or apply for student loans on behalf of your children.
I can’t touch my retirement accounts for 30 years. Do they count?
Your liquid assets are only one part of the net worth equation. Even if you don’t receive a distribution from your 401(k) or IRA accounts now, they’re still considered a part of your net worth.
Do I have the same net worth as my spouse?
Depending on how you and your spouse manage your household finances, your net worth may be identical or it could be drastically different. If you’re both listed as co-owners of your home, share a credit card or car, those assets will be attributed to both of you. If you both purchased vehicles separately, only the vehicle to your name will be considered for your calculation. However, if you add your partner’s net worth to yours, you’ll know your household net worth, which itself is important to track.
How do you account for outstanding car loans and mortgage payments?
When incorporating existing loans into your net worth calculation, you cannot truly consider houses or vehicles as assets until they’ve been paid for in full. So if you took out a $100,000 mortgage and have paid off $99,000, your home is still considered a $1,000 liability. But once you’ve made your last payment your home becomes a $100,000 asset.
Now that you have a better grasp on your net worth, stop by any office of The Milford Bank to see how you can continue to improve your financial standing today. You can also learn more at our online Learning Center or check out more financial calculators here.
by Celeste Lohrenz
Regardless of whether or not you’re the owner or an employee of a small business, do not make the mistake of thinking that your organization is under the radar for cybercriminals. While large attacks on businesses like Target or Home Depot might dominate the headlines, smaller organizations may be just as likely to be targeted.
In fact, 43 percent of all cyberattacks in 2015 targeted small businesses—a significant increase from five years ago, when that number was a mere 18 percent. There are a confluence of factors making cybersecurity even more pressing. The size and sophistication of cyberthreats continue to increase, while technology continues to play a larger and larger role in business operations.
A cyberattack can cause a network outage that may cost your business money through lost worker productivity, infrastructure repairs or a breakdown in communications. Privileged data can be stolen, leaving your organization, customers or employees vulnerable. Your brand may suffer a tarnished reputation if any of these circumstances come to pass, and your revenue stream could dry up.
Most small businesses do not have the budget to resolve these problems if they occur, so the need to improve your organization’s cybersecurity efforts should be a top priority.
Here are a few of the biggest cyberthreats to small businesses today, as well as measures you can take to ensure your organization is protected.
Phishing: If you’ve ever received a strange email from one of your contacts with a strange link embedded in it, you have likely experienced a phishing scam. The email wasn’t really sent by your contact—and if you click the link, your device may become infected with a virus that can grant a hacker access to any other device connected to your network.
The best way to protect against phishing scams is to educate all employees about what to look for when it comes to opening suspicious email.
Ransomware: Ransomware is malicious code that infects a computer and encrypts important data so that it cannot be accessed by the appropriate party. Hackers will demand payment for the safe return of your files—but may not follow through with their side of the transaction even if your business antes up.
Once you’ve been hit with ransomware there isn’t a lot you can do—even the FBI has gone on the record stating that in some cases, the best thing to do is to pay up. Instead, you’ve got to be proactive. Make sure any device connected to your network is regularly updated with the latest security patches, and if your budget permits, back up vital information in a secure data center.
Denial of Service (DoS): During a DoS attack, a connected group of computers infected with malware will rapidly send traffic to your website, flooding your page with more bandwidth consumption than you have available. The result is that your site effectively goes offline. If your business relies on Internet traffic as a means of generating revenue, you can’t afford to let your page be impacted by a DoS attack.
You may mitigate the impact of a DoS attack by quickly scaling up your bandwidth to handle strain of the added traffic. Check with your service provider for the appropriate connectivity package for your security needs.
Unfortunately, no business today is exempt from the threat of cyberattacks. Small businesses can be particularly vulnerable, though, because they generally have fewer resources to alleviate the financial hardship caused by a cyberattack. To learn more ways to effectively manage your business, check out our Learning Center here.
By Karuna Kasbawala
When Forbes put out its latest list of the 500 wealthiest people around the world, the individuals selected had a collective net worth of $4.7 trillion. While you may not be in a position to ask for their advice on where to bring your private jet for maintenance, there is plenty for the average person to learn about wealth management from the people who do it better than anyone else.
Below are the five individuals that topped Forbes’ list, as well as a wealth management lesson you can apply in your own life.
Bill Gates: Gates is an annual contender for the richest person in the world. But his path to success wasn’t always clear. After enrolling in Harvard in 1973, he dropped out of school two years later to start a company you’ve probably heard of before—Microsoft. While earning a college degree can have a tremendous impact on your earning potential, don’t make the mistake of thinking it is the only way you can become successful.
Carlos Slim Helu: While lesser known than Bill Gates, Carlos Helu’s net worth is nearly identical. How has he done so well? The key was starting early. At 12 he was investing in bonds, stock and learning how to do book-keeping and read financial sheets from his father. If you have young children, don’t shy away from teaching them the importance of wealth management. Click here for additional resources to getting your kids educated about banking today.
Warren Buffett: Buffett owes much of his fortune to his ownership of Berkshire Hathaway. Much of the corporation’s work revolves around real estate, but Buffett himself is not a customer. He still lives in the home in Omaha, Nebraska that he purchased 60 years ago for just $31,500. Take a look at your own life—are there more cost-effective and practical ways to handle your assets?
Amancio Ortega: As the founder and chairman of Inditex—a famous fashion company in Europe—Ortega knows that when it comes to accumulating wealth, every step you take is important. As a young teenager in Spain, Ortega started working as a shop hand for a shirt maker in his town. He perfected his craft for years before finally launching his own line of bathrobes and opening his own business. Amancio Ortega’s success proves that all work has value. Even if you’re at the bottom of the ladder now, the hard work you put in can pay dividends down the road.
Larry Ellison: Larry Ellison is a testament to the notion that giving up hope should never be an option. Even though he is a successful Silicon Valley magnate today, Ellison was not exposed to computer sciences early in his life like other high-earning tech innovators. In fact, he was only introduced to computer design during his second attempt at higher education.
You don’t need billions of dollars to have a high quality of life. But if you’re like most, having a little extra money in your savings account wouldn’t hurt either. The wealthiest people in the world all had to earn their first dollar at one point, just like everybody else. It is their discipline, hard work and humility that helped them keep the momentum moving forward. Find more ways to manage your wealth at our online Learning Center by clicking here.
by Pat White
With Labor Day coming up on September 5—the first Monday of the month—many of us will be taking advantage of the impending three day weekend. Whether you’re using the chance to take one last weekend getaway to the beach before the end of summer, hosting a backyard party with your friends and family, or heading out to the mall to take advantage of Labor Day sales, we all have one thing in common—we’re grateful to have a little extra time for ourselves.
However you choose to spend your Labor Day, be sure to take a few moments to remember the meaning behind the holiday. We wouldn’t have the wages, benefits or time off that we enjoy today without the activism of our ancestors.
Here are five things you may not know about Labor Day to better educate you on the origins of the holiday.
- The idea for Labor Day is believed to have begun in Canada in 1872—22 years before it became a national holiday in the United States! In a show of solidarity for striking workers, 1,500 citizens from Hamilton, Ontario demonstrated in the streets. Their aim? A nine hour work day.
- Even though Labor Day became a national holiday in 1894, it was first celebrated in New York City by the Central Labor Union in 1882. Over the following 12 years, 23 states marked their own celebration before the Federal government opted to make it a universally recognized holiday.
- Congress voted unanimously to make Labor Day a national holiday in 1894, just six days after the conclusion of the Pullman Strike. During the strike, 125,000 railroad workers walked off the job to protest wage cuts without a corresponding decrease in rent and utility costs in their company-owned housing. During the strike 30 workers were killed, 57 were wounded and property damage exceeded $80 million.
- The average wage for a laborer during the 1890’s was 15 cents per hour. A skilled worker, such as a carpenter, would still expect to bring home an average of only 32 cents per hour.
- President Cleveland, though he supported the establishment of the Labor Day holiday, was fearful that empowering workers would give rise to strikes, riots and strengthen socialist and anarchist movements.
- The first minimum wage law was passed in New Zealand the same year that Labor Day was established as a national holiday.
Ultimately, we should not celebrate Labor Day without forgetting the activism and difficult conditions that workers endured in our recent past. Because those individuals were willing to stand up and fight for their rights, we now enjoy the fruits of rising wages, shorter work hours and better benefits.
All offices of The Milford Bank offices will be closed in observance of Memorial Day. Be sure to download our mobile application though, and you’ll be able to conduct your banking conveniently without having to stop at one of our locations. You can download the application here.
By Mark Attanasio
When thinking about the path to retirement, we tend to assume a typical trajectory: go to school, get a job and then work tirelessly for the next 40 years. But in reality, there are many different paths to the same destination. Today, many people are opting to find alternate ways to retirement, opting out of the traditional decades-long grind.
Putting an early end to the punching of time cards used to be considered the luxury of Powerball winners. But these days, there are many options for people with the desire to cash out early.
For instance, many people are opting to change the language of work altogether. Instead of going into retirement, many are seeking instead to achieve financial independence—being in a position of having sufficient personal wealth to live without having to actively work for basic necessities.
So how can you achieve financial independence? Here are a few ways to get started.
Put your money to work for you: You may need to work tirelessly early on to amass enough money to start investing. But once you do, make investments that will provide you with supplemental income. For instance, if you opt to invest in stocks, aim for companies that pay shareholder dividends. If you’re going to invest in real-estate, consider a multi-family unit or in-law apartment that you can rent to cover your own mortgage.
If you’re interested in owning your own home but aren’t interested in making it part of your investment strategy, consider joining the tiny house movement. Ranging from 100-400 square feet, tiny houses provide many of the creature comforts of a home—but on a much smaller scale. Ideal for those who simply need a place to hang their hat at the end of a busy day, tiny houses are optimal for anyone willing to go to unusual lengths to achieve financial independence.
Transform passion projects into side jobs: How would you spend your time if you didn’t have to work? If you love to create art, there’s likely a market for your work. If you like to travel, consider becoming a contributor for a travel blog. No matter what your passion project happens to be, there’s likely a way you can capitalize on the hobbies you’re already enjoying.
Live below your means: This is ultimately the lynchpin of financial independence. No matter how much income you have coming in, you’ve got to be willing to keep growing your savings. You never know when an unexpected expense might arise. If you remain disciplined about your spending, you won’t have to start filling out job applications every time you need to bring your car into the mechanic or buy a new hot water heater.
To set out on your own path to financial independence, stop in to a Milford Bank branch location and speak with one of our team members about setting up a strategy that will work for you.
by Lynn Viesti Berube
There’re reasons dogs are considered man’s best friend: They give their owners unconditional love, are intelligent, provide countless hours of entertainment and are highly loyal. If you’re thinking about adding a puppy to your family unit, consider all these charming attributes. But also think about whether you can afford to own a dog. According to Pet Education, out-of-pocket expenses for just the first year of your puppy’s life can be as high as $6,600.
Certain costs, such as for services provided by a veterinarian—from vaccines to heartworm shots, to spaying or neutering—are unavoidable. Yet, you can mitigate other costs by taking the following measures:
Find an alternative to pet stores: Buying a puppy from a pet store could cost you $1,000. For a dog with a lower price tag, explore alternative options like animal rescue shelters or adoption clinics. Have a specific breed in mind? Consider contacting a rescue group. All pedigrees are available in shelters and foster homes. Adoptions are usually low cost or free.
Double your dinner recipe: Purchasing food for your dog isn’t cheap. The good news is that you can add some of the common foods you already cook—rice, vegetables and meat, for example—into their diet for a healthy and cost-effective solution. Be sure to consult with your veterinarian first, though, to make sure the ingredients you use are dog-friendly and offer enough nutrition.
Invest in proper training: Taking the time to properly train your dog will have long-lasting positive effects for all of you. Don’t think of spending money on training as an expense, but rather, an investment. If your dog isn’t taught to respect you and your property, it might behave in unfriendly, even dangerous, ways. Dog’s have lots of energy and need to learn how to channel it appropriately so they don’t do damage when you’re not around. In addition, dogs in new surroundings often experience anxiety and might express their feelings by chewing on furniture, or behaving in other destructive ways. In other words, a well-trained dog is less likely to require frequent shopping trips to IKEA.
Make your own toys: Trekking through the aisles of a pet store, you’ll see a multitude of expensive dog toys made from common household items. Instead of spending money on a piece of rope, for example, check your garage for a similar “toy” first. Another tip: Purchase out of season toys at the pet store. Your dog does not care if you give him/her a snowman toy in the summer.
Be proactive about healthcare: Just as you do for yourself, take a proactive approach to your dog’s healthcare. Regular check-ups can prevent illness from impacting your dog’s quality of life, and help you avoid more-expensive medical treatments. A balanced, nutritious diet and daily exercise will also go a long way toward keeping your pet in top shape. Also be sure to brush your dog’s teeth, administer heartworm and tick prevention medications, and strictly follow any recommendations made by your veterinarian.
These measures will ensure that adding a dog to your family won’t upend your financial stability, and will allow you to enjoy your new pet for a long time. For more ideas on managing your money as you go through life, check out the Milford Bank Learning Center.
By Jorge Santiago
While there are countless banks you can choose to protect and grow your wealth, the simple truth is that there are many differences between the global megabanks you might be more familiar with and locally-focused community banks.
The question you’ve got to ask yourself is this: which type of bank will meet the needs of you and your family?
You already know all about the megabanks. They’ve got stadiums named after them. They’ve got expensive commercials featuring famous actors and actresses. The odds are, you know all about what the megabanks can offer.
So here’s a closer look at what a community bank can provide:
- The same services as bigger banks. A smaller bank doesn’t equate to smaller financial service offerings. Community banks can provide everything you’ve come to expect: investment vehicles, insurance, business loans, mortgages, financial consultation, retirement accounts and more.
- You can get to know every employee.
- Your success is their success. The deposits made at community banks are redistributed in the form of business loans and mortgages to other members of the local economy. That means community bankers have a vested interest in your financial well-being.
- Greater investment in community events. We’re also renowned for spurring greater attention to local community events. Raising money for local causes helps bring the community together and draws on the spirit of what community banking is all about.
- You aren’t just another number. Community bankers can take the time to get the whole picture about who you are as an individual, and take that into account when working with you.
- Streamlined financial processes. You won’t have to jump through hoops when you do your banking locally. You’ll be able to work with just a handful of individuals and take the time to build a relationship.
You already knew about what the megabanks were all about. Now you know what community banks can do for your family. If banking local sounds like the right choice for you and your family stop by the nearest Milford Bank branch location to you. Click here to find out more.
By JoAnn Sabas
After the purchase of your new home, you’ll likely experience an adjustment period during which you learn how to alter your budget and lifestyle to accommodate the new expenses in your life, such as mortgage payments and property taxes. One thing you’re probably not counting on, however, is a major household repair.
But even if you purchased a move-in ready house that doesn’t need any immediate repairs, the truth is that a major unexpected expense could surprise you at any time. For instance, a brand new furnace can malfunction just after the warrantee expires. A storm can do structural damage that your insurance company will only partially cover. In truth, there are many expenses waiting for you when you purchase a new home. If you prepare, you’ll be ready when they happen.
Here are three ways your family can be ready for a major household repair when it happens to you.
- Add repairs into your monthly budget proactively. There are two popular schools of thought for budgeting for home repairs. Some say that you should sock away 1 percent of the cost of your home each year to prepare for maintenance (if your home cost $200,000, put aside $2,000 each year). Others say you should save $1 per square foot each year (so if your home is 1,500 square feet, you should save $1,500). You may not always use the full amount, but that just means you’ll be better prepared the following year.
- Get at least three quotes on any work you contract. ’re handy around the house, doing your own repairs can come back to haunt you down the road. If you plan to resell your home soon, there’s a good chance you’ll need to verify the work was done to code by a licensed professional. When you do reach out to have work done, be sure to get at least three quotes. This will help you get a truer sense of how much your repairs actually cost, and give you leverage to negotiate the cost of the job.
- Purchase your own parts. If you let a contractor do the shopping for you, you might end up with a more expensive furnace than your house really needs. When possible, purchase your own parts so your expenses end up going primarily to labor. You can often find better deals for used goods online, wholesale supply stores, or even outlets, where a brand new, fully functioning appliance may be marked down drastically simply because it was returned.
While there are many benefits to owning your own home, the responsibility of maintenance is certainly not one of them. But as long as you prepare for the inevitable, and respond responsibly when something goes wrong, you won’t put yourself, or your family, at risk of having to sacrifice your quality of life.
By Kristine Rodriguez
If you’re among the 72 percent of Americans with a smartphone, we’ve got great news for you: Managing your finances with The Milford Bank has never been more convenient. Thanks to recent upgrades to our mobile banking application, our customers can now complete financial transactions whenever and wherever they choose. We provide this functionality for iOS and Android smartphone and tablet users alike. We’ve even got you covered if you use one of Amazon’s Fire tablets.
With Milford Bank’s mobile app you can:
- Check your account balances.
- Review recent account activity.
- Transfer funds among your Milford Bank accounts.
- Pay a bill or set up automatic payments.
- Make changes to pending payments.
- Find the nearest ATM or branch location.
- Make deposits.
But that’s not all. We recently added a feature that should evoke an even more positive experience for our customers: Instant Balance!
Have you ever needed to determine your account balance quickly, but your cellular signal wasn’t strong enough to open your applications or connect you to the Internet? Or perhaps you forgot your login information for the Milford Bank mobile application. You’ve got to make a purchase but are hesitant to do so without knowing your balance for fear that you might drain your account.
With the Instant Balance feature, you can tap an icon right on the logon page and a pop-up box will provide the balances for all your Milford Bank accounts. For security, the pop-up box will not reveal your account numbers in full, nor will you be able to use this feature for any other banking function.
You’ll have instantaneous access to your account balances, giving you the flexibility to complete transactions, and the peace of mind from knowing exactly how much money you’ve got to spare. You won’t hold up the line at the grocery store, and you’ll greatly reduce the risk of bouncing checks.
We understand that our customers don’t want banking to be another item on their to-do lists. We would much rather be helping them cross things off those lists. With the technology available today, the financial services you need should be convenient, seamless and always there, moving as quickly as you do. That’s why we’ve taken the time to provide a mobile application that supports those objectives.
To learn how to bank mobile and download the Milford Bank mobile application, click here.
By Patty Gallagher
Even from the time your child enters high school, teachers and advisors are beginning to prepare your children for higher education. The idea that your son or daughter is going to graduate might seem far off then, but by the time he or she enters junior year the prospect starts to get real.
All of a sudden, you start researching the cost of tuition—between $21,000 and $23,000 for one year at Connecticut’s state schools—and wonder how you’ll be able afford higher education. But don’t be alarmed by the sticker shock. There are ample resources available to your family to ensure your child can get a college degree.
Here are just a few ways you ensure your child earns a degree without you having to empty your savings account.
- Financial assistance: Click here to check out the scholarship finder in the left hand column of the Milford Bank Learning Center. By entering your child’s SAT, ACT and GPA, as well as the state where he or she wants to go to school, you can receive a free customized scholarship report detailing available funding emailed to you directly—and at no cost. You’ll also find educational resources to learn about student loans and grants.
- Take introductory classes at community college: Many course credits earned at community colleges will satisfy the basic requirements of degrees at more expensive schools. Learn which credits will transfer, have your child complete a semester or two at community college, and then begin applying to other schools.
- Apply as a commuter: Half the cost of tuition goes to paying to live in dorms on campus. Based on the average state school tuition, your child could commute from home and save your family roughly $900 per month. Even if he or she is adamant about moving out, a $500 per month apartment near campus would still help your bottom line.
- Make minor lifestyle adjustments: If your student is just entering junior year of high school, that means you have roughly two years before they head off to college. That’s 730 days of expensive lattes, going out to eat instead of dining in, and all the other expenditures that seem trivial until you add up the costs. By making minor lifestyle adjustments—even if just for the next two years—you can give your savings account a sizable padding.
- Select an investment vehicle: There are many ways to invest your savings. Some accrue interest more quickly than others. Speak with a bank representative about your student’s goals, your timeframe and the amount of money you’re looking to save and you’ll be able to find the right strategy for your family.
The sooner you start planning for your child’s future, the easier time you’ll have when that future becomes the present. Come down to any Milford Bank branch location and start earning your education on saving for college today.