Corporate Executives

10 Big Employers That Let You Bring Your Dog to Work

Here is a nice article provided by Sarah Smith of Kiplinger:

 

By Sarah Smith Intern / August 2017

 

While Donald Trump has yet to appoint a four-legged friend to walk the halls of the White House (making him the first president since William McKinley not to have a dog), his Secretary of the Interior, Ryan Zinke, made history this March when he debuted a program allowing dogs in certain government offices. While this may have been a first for the government, many companies have known for years that letting man’s best friend come to work can boost employee satisfaction and retention rates.

A recent study from Banfield Pet Hospital put numbers behind these policies, noting that about two-thirds of the human resources decision makers polled said that potential job candidates inquire about pet policies during the application process. Pet-friendly companies are more likely to retain talent as well — 82% of employees surveyed said they feel greater loyalty to their company because of pet-friendly policies. Other studies also speak to the popularity – and health benefits – of having dogs at work, even for employees who don’t have a pet of their own. As of 2016, 8% of employers allowed dogs in the office, up from 5% in 2013.

If you can’t bear to say goodbye to Spot each morning on your way to work, check out these 10 companies across the U.S. that will not only let you keep him at your desk but may also help with doggy day care, money for pet adoptions and even pet insurance.

 

Amazon

 

•Headquarters: Seattle

•Number of employees: 341,400

•Dogs allowed: every day

•Dog-friendly policies since: 1990s

 

Amazon has been dog-friendly since its earliest days. Rufus, a former editor-in-chief’s Welsh Corgi, was the first pup to roam the company’s Seattle headquarters and is credited with launching Amazon’s music and video stores with one of his paws (aided by an employee, of course). Now, his picture hangs all over the campus, and a building is named after him.

A few decades later, more than 4,000 dogs are registered to come into the office, and as many as 500 are there on any given day. Before an employee can bring his or her pooch in, the employee must talk to managers and teammates to ensure that everyone is comfortable with the new addition, and submit paperwork including proof of vaccinations. With so many dogs on file, Amazon knows its pack like it knows its customers: The three most popular breeds are golden retrievers, Labrador retrievers and labradoodles, and the most popular names are Lucy, Bella and Charlie.

 

Ben & Jerry’s

 

•Headquarters: South Burlington, Vermont

•Number of employees: 500+

•Dogs allowed: every day

•Dog-friendly policies since: 1990s

 

At the offices of the celebrated ice-cream makers, some “employees” have different interests. Scout loves daily visits with Isabel; Tank and Lola play Frisbee together; and Cinnamon looks forward to games of fetch. As you may have guessed, they’re not humans but are part of the firm’s “K9-5ers” program, which brings 20 to 30 dogs to the office each day. Since the company’s inception, dogs have been allowed in buildings (but not in the kitchen or conference spaces). Members of the program must follow the Canine Code of Conduct (squeaky toys must stay at home, and employees with dogs must have fresh water near their workspaces at all times), and workers are encouraged to take breaks to tend to their dogs’ needs, such as playing on the company’s lawn or at a nearby park.

Spokesperson Lindsay Bumps says an employee-led dog committee helps resolve issues involving animal misbehavior and employees who are uncomfortable around pups. Ben & Jerry’s boasts a 97% employee retention rate, and Bumps says that dog-friendly policies “absolutely” are a factor.

 

Build-A-Bear Workshop

 

•Headquarters: St. Louis

•Number of employees: 1,000

•Dogs allowed: every day

•Dog-friendly policies since: early 2000s

 

Build-A-Bear founder Maxine Clark always loved dogs but wasn’t allowed to have one at home when she was growing up. That drove her decision to have dog-friendly policies in her company’s St. Louis headquarters. Now, as many as 15 dogs join their owners in the building each day.

In accordance with the company’s “doggy onboarding” policy, barkers and biters aren’t allowed in the office. While dog-friendly policies are a perk for employees, Build-A-Bear makes sure the pups get perks, too. Canine employees frequently are treated to doggy “cele-bear-ations” with frosty paws for the dogs (and birthday cake for the humans).

 

Eventbrite

 

•Headquarters: San Francisco

•Number of employees: 500

•Dogs allowed: every day

•Dog-friendly policies since: 2006

 

Eventbrite, a San Francisco-based event-planning company, has allowed “Barklings” in the office since its inception. However, the company’s landlord only permits five dogs each day, so employees must vie to reserve spots for each day they want to bring in their pups, as the company currently has 35 registered dogs.

Before they can start reserving spots, employees must submit veterinary documentation, commit to the Four Paw Pledge — promising they’ll be responsible, transparent, pragmatic and compliant — and bring their dogs in for a good behavior interview. Barkling Ambassadors—employees who are passionate about having dogs in the office and comply with the pledge—conduct the interviews to determine if dogs are well behaved. With the wishes of those who don’t like dogs in mind, the company has made spaces such as the kitchen, bathrooms and conference rooms dog-free.

 

Glassdoor

 

•Headquarters: Mill Valley, Calif.

•Number of employees: 700+

•Dogs allowed: every day

•Dog-friendly policies since: 2013

 

For Glassdoor, a company that allows employees to anonymously review their workplaces, instituting dog-friendly policies was a relatively low-cost way to encourage employees to bring their “whole selves” to work, as the company puts it.

On an average day, there are as many as 30 dogs in the office, although there are designated areas that are dog-free for people who have allergies. Glassdoor employees must follow “doggie rules,” including keeping pets on a leash or in a crate, and making sure their dogs play well with others, don’t bark and are housebroken.

Glassdoor also encourages a dog-friendly workplace among the firms it profiles. Last year, on National Bring Your Pet to Work Day, it asked firms to post a picture of dogs in the workplace to their Glassdoor corporate pages.

 

Google

 

•Headquarters: Mountain View, Calif.

•Number of employees: 72,053

•Dogs allowed: as often as twice a week

•Dog-friendly policies since: 1998

 

Tech giant Google is a proud member of team dog — the employee code of conduct reads “Google’s affection for our canine friends is an integral facet of our corporate culture. We like cats, but we’re a dog company, so as a general rule we feel cats visiting our offices would be fairly stressed out.” Since the company’s inception, dogs have been allowed on Google’s main campus once or twice a week. Frequent canine visitors are issued their own IDs that attach to their collars so they can roam the buildings freely.

Employees are responsible for their dogs’ care, supervision and cleanliness while at work, and they are instructed to be mindful of colleagues who are allergic or uncomfortable with animals. Spokesperson Ty Sheppard says that dogs add a playful and dynamic atmosphere to the campus — and most importantly, they serve as an extension of family for many employees.

 

Purina

 

•Headquarters: St. Louis

•Number of employees: 6,500

•Dogs allowed: every day

•Dog-friendly policies since: 1998

 

It may not come as a surprise that pet supply company Purina’s offices are dog — and cat — friendly. It opened its doors to furry friends in 1998 and has since expanded its “Pets At Work” program to encourage and teach other companies about dog-friendly policies. Each week, the offices see a few hundred dogs and cats, who must be up-to-date on vaccinations and exhibit good behavior. Spokesperson Lorie Westhoff says it’s up to employees to know their pets and whether or not they’ll succeed in an office environment.

Westhoff says, “Simply put, Purina is a pet care company full of pet lovers. Pets are central to our lives, both personally and professionally, so allowing pets in our offices feels like the right thing to do. It also goes a long way toward promoting the balance between work and home.”

During the day, dogs can exercise at an on-campus dog park or on paths designed for dog-walking. Purina’s pet perks don’t end there. Purina gives employees $200 to help offset the costs of adopting new pets. They also receive free treats and discounts on all Purina food and cat litter products.

 

Salesforce

 

•Headquarters: San Francisco

•Number of employees: 14,000

•Dogs allowed: every day

•Dog-friendly policies since: 2014

 

At the San Francisco-based headquarters of customer relationship management company Salesforce, employees have access to “Puppyforce,” a communal workspace for dog owners and their furry friends. Since 2014, this workspace has offered a combination of doggy day care and shared office spaces, so employees can work while supervising their pets.

This hybrid workspace was the result of compromise. After soliciting feedback from employees during a trial run of a dog-friendly policy, Salesforce decided to create an independent, soundproof workspace for dog owners, with special rubber flooring because of concerns raised about allergies, hygiene and disruptive barking.

In its permanent form, Puppyforce requires reservations for one of its shared workspaces, accommodating a total of six employees. If interested, employees at the California headquarters must reserve space on a daily basis in advance. All dogs must have security badges and photo IDs. While the company currently offers Puppyforce only at its California property, it says it is considering expanding the program to offices around the globe.

 

VMware

 

•Headquarters: Palo Alto, Calif.

•Number of employees: 20,000

•Dogs allowed: every day

•Dog-friendly policies since: 2014

 

VMware, which specializes in cloud and virtualization software, maintains an open campus policy under which employees’ friends and families are welcome at holiday celebrations, concerts and social events. The company extended this policy in 2014 to allow four-legged friends at work too.

Even before dogs were allowed on VMware property, the company offered pet insurance as a benefit, which spokesperson Michael Thacker says helps the company attract and retain workers. The company offers two plans through Nationwide, and both reimburse 90% of expenses on vet bills, including accidents, illnesses and hereditary conditions. One of the offered plans also reimburses expenses relating to wellness exams and routine appointments.

 

Zynga

 

•Headquarters: San Francisco

•Number of employees: 1,700

•Dogs allowed: every day

•Dog-friendly policies since: 2007

 

At video game developer Zynga’s San Francisco headquarters, dogs are welcome every day and have been since the company’s founding in 2007. In fact, the company credits its name, logo and office signage to its founder’s American Bulldog, Zinga.

Employees must complete dog registration forms every six months, and dogs must be housebroken, licensed in San Francisco and up-to-date on vaccinations. When dogs aren’t busy soaking up attention at their owners’ desks, they can check out the company’s “Barking Lots” — grassy areas near café and kitchen spaces — where they can socialize while employees eat. They can also take a trip to the “Wooftop,” a rooftop space where are allowed to play off-leash. And the company’s food services also tend to the canine companions, with dog treats from the bakery and, on special occasions, leftover bones from the in-house butcher.

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

10 Best Jobs for the Future

Here is a nice article provided by Stacy Rapacon of Kiplinger:

 

By Stacy Rapacon, Online Editor | July 2017

 

The U.S. job market is looking good. The unemployment rate is hovering below the 5% mark, as it has been for more than a year. But not every profession is booming. "In general, it’s a very robust labor market with a lot of widespread growth," says Josh Wright of labor market research firm Economic Modeling Specialists International (EMSI). "A few key sectors are trending up, but some are trending down."

To help you identify which is which, we made it our job to crunch the numbers. Starting with a list of 785 popular occupations, we narrowed the choices to 10 of the most promising by focusing on fields that are projected to expand greatly over the next decade and currently offer generous paychecks. In fact, all of the jobs on our list have annual salaries that are well above—and in many cases more than double—the median for all jobs. We also favored jobs that don't necessarily call for a huge investment in education to get started. 

Unless otherwise noted, all employment data was provided by Economic Modeling Specialists International, a labor market research firm owned by CareerBuilder. EMSI collects data from more than 90 federal, state and private sources, including the U.S. Bureau of Labor Statistics. The total number of jobs listed for each occupation is for 2016. Projected ten-year job growth figures represent the percentage change in the total number of jobs in an occupation between 2016 and 2026. Annual earnings were calculated by multiplying median hourly earnings by 2,080, the standard number of hours worked in a year by a full-time employee.

 

App Developer

 

Total number of jobs: 798,233

Projected job growth, 2016-2026: 21.6% (All jobs: 8.6%)

Median annual salary: $97,483 (All jobs: $43,233)

Typical education: Bachelor's degree

 

Why become an app developer? Check the palm of your hand (or maybe in the couch cushions) for the answer. The proliferation of mobile technology is driving demand for development of new applications of all kinds, from news and games to music and social sharing. Systems software developers, who create the operating systems for computers and mobile devices, are also poised for prosperity. From about 414,000 jobs currently, the workforce is projected to grow 16.0% by 2026. Systems software developers earn a median income of $104,767 a year.

A college degree in computer science, software engineering (both among our best college majors for a lucrative career) or a related field is a standard requirement to land most software-development jobs, but a master's degree can give you a leg up on the competition. Without a bachelor's degree, you can break into the tech field as a web developer, a role that typically requires just an associate's degree to get started and pays a median salary of about $60,385 a year. Also, the number of such jobs is expected to grow 26.5% to nearly 214,850 positions by 2026. Beyond formal education, expect to keep learning throughout your career in any tech job; you need to stay on top of any new tools, computer languages and other advances.

 

Computer Systems Analyst

 

Total number of jobs: 597,812

Projected job growth, 2016-2026: 22.0%

Median annual salary: $85,080

Typical education: Bachelor's degree

 

This is a nerd's world, and we're all benefiting from it. With the computerization of everything from phones and coffeemakers to cars and airplanes, you'd be hard-pressed to find a business that doesn't rely on computers in one way or another. That puts the folks who run the computers in very high demand. Computer systems analysts ensure that organizations' technological needs are met and are constantly improving with the advancements and demands of the increasingly connected world. Information security analysts—the white hats charged with protecting us from the increasing digital dangers—are also in high demand with their current count of 92,902 people expected to grow 19.6% by 2026.

A bachelor's degree in information technology or another computer-related field is typical for these workers. But you can also qualify with a liberal arts degree and techie talents you developed outside of a standard four-year program (perhaps even using free online classes).

Further up the career ladder, once you've picked up five or more years of experience in this field, you might shoot to become a Computer and Information Systems Manager. The median pay for this position is about $130,400 a year, and demand for it is projected to grow by 17.9% percent over the next decade.

 

Nurse Practitioner

 

Total number of jobs: 145,331

Projected job growth, 2016-2026: 32.3%

Median annual salary: $98,288

Typical education: Master's degree

 

Health care coverage in our country may be up for debate, but the increasing need for quality medical care is irrefutable. Advancing technology, greater focus on preventive care and an aging population will mean a growing number of patients requiring care in hospitals, doctors' offices, long-term-care facilities and even private homes. Nurse practitioners (NPs) are highly sought after to meet that need. They’re able to provide much of the same care as full-fledged doctors, including performing routine checkups and writing prescriptions, and they can work independently. Exact guidelines vary by state.

Registered nurses (RNs) are also in high demand. The already robust workforce of 2.9 million is expected to grow 17.2% by 2026. And they enjoy a healthy pay rate, too: The median salary for RNs is $67,418 a year.

Becoming a nurse requires either a bachelor's of science in nursing (another one of our best college majors), an associate's degree in nursing or a diploma from an accredited nursing program (which usually takes two to three years). NPs must also get a master’s or doctoral degree. Both RNs and NPs need a license to practice, not to mention reserves of compassion, patience and emotional stability.

 

Physical Therapist

 

Total number of jobs: 226,661

Projected job growth, 2016-2026: 30.4%

Median annual salary: $83,501

Typical education: Doctoral degree

 

Aging baby boomers are a boon for those working in physical therapy. Many more workers will be needed in this field to care for victims of heart attacks and strokes and to lead them through rehabilitation. And with ongoing advances in medicine, more people will survive such traumas and need rehabilitative services. You'll need a license to go along with your doctorate.

For similar reasons, demand for occupational therapists is expected to grow at a 25.6% clip over the next decade. While physical therapists focus on rehabilitation of major motor functions, occupational therapists help ill or disabled patients develop or recover the ability to independently perform daily tasks, such as dressing or feeding themselves. Occupational therapists typically need a master's degree to get started and earn a median income of $79,619 a year.

 

Health Services Manager

 

Total number of jobs: 337,863

Projected job growth, 2016-2026: 17.4%

Median annual salary: $93,294

Typical education: Bachelor's degree

 

The increasing demand for medical services calls for more people to manage them. Health services managers may oversee the functions of an entire medical practice or facility—as a nursing home administrator, for example—or a specific department, as a clinical manager for, say, surgery or physical therapy. Health information managers work specifically on maintaining patient records and keeping them secure, an especially important task as everyone is shifting to digital.

A bachelor's in health administration is the ticket to this profession, but a master's in health services, long-term-care administration or public health is also common among these workers. You may need to be licensed to run certain types of facilities, such as a nursing home, for which all states require licensure, or an assisted-living facility. Check with your state's department of health for details.

 

Physician's Assistant

 

Total number of jobs: 103,422

Projected job growth, 2016-2026: 28.8%

Median annual salary: $98,869

Typical education: Master’s degree

 

Physician's assistants (PAs) are similar to nurse practitioners in knowledge and abilities. PAs are trained to diagnose and treat patients and are able to write prescriptions and order tests. But unlike NPs, they work under the supervision of physicians and surgeons. (Again, specific duties and supervision requirements vary by state.)

To get started, you need at least two years of postgraduate study to earn a master's in this field, and you need a license to practice. While the extra schooling is costly, it’s less taxing than a full M.D. According to the American Medical Association, the average medical student graduates with more than $180,000 in debt.

 

Dental Hygienist

 

Total number of jobs: 207,223

Projected job growth, 2016-2026: 19.0%

Median annual salary: $73,141

Typical education: Associate's degree

 

People in the oral health field have a great deal to smile about. In addition to growing demand for dental hygienists, the numbers of dentists and dental assistants are also expected to increase—by 12.4% and 19.6%, respectively, over the next 10 years.

The median salary for a dental hygienist, who typically cleans teeth, takes x-rays and educates patients on proper care, is about double that of a dental assistant. (A dental assistant’s duties may include prepping patients for treatment and sterilizing equipment.) And the path to get started as a hygienist is much less costly than that of a dentist. You usually need an associate's degree in dental hygiene, which typically takes three years to complete. You also have to get a license to practice. Requirements vary by state. Learn more from the American Dental Hygienists' Association.

 

Market Research Analyst

 

Total number of jobs: 557,031

Projected job growth, 2016-2026: 20.9%

Median annual salary: $61,816

Typical education: Bachelor's degree

 

With advancing technology allowing companies to collect more data about their operations and customers, the need is greater for people who can make sense (and dollars) of it all. Enter the consultants. Market research analysts help companies navigate an increasingly competitive business landscape by crunching numbers and studying market conditions and consumer behavior. With their analyses, they can develop effective marketing strategies, which may include setting appropriate prices and choosing advantageous store locations. Similarly, operations research analysts help firms increase efficiency, lower costs and boost profits, using mathematical and analytical methods. They are expected to grow their own numbers 28.4% to 134,180 by 2026, and their median salary is $78,666 a year.

While a bachelor's degree can get you into either position, a master's degree can help you secure a top spot. Prospective market research analysts should study marketing research (obviously) or a related field, such as statistics or math. Future operations research analysts might study a technical or quantitative field, such as engineering, analytics or (again) math. Work experience or a strong background in statistical and data analysis will give you an added advantage.

 

Personal Financial Adviser

 

Total number of jobs: 251,715

Projected job growth, 2016-2026: 23.8%

Median annual salary: $86,780

Typical education: Bachelor's degree

 

As Americans age and pensions become a thing of the past, the value of good investment advice will only grow. Baby boomers, especially, could need more professional help as they plan for and enter retirement.

You usually have to be a college grad to get on this career path. A bachelor's degree in finance, economics, accounting or a similar field would best prepare you for dealing with money matters, but most employers don't specify a required major. Certification from the Certified Financial Planner Board of Standards—which requires you to earn a bachelor's degree, have at least three years of relevant work experience and pass a rigorous exam on a wide range of financial issues—adds to your credibility. Licensing is required to sell certain types of insurance and investment products.

 

Speech Language Pathologist

 

Total number of jobs: 142,715

Projected job growth, 2016-2026: 21.0%

Median annual salary: $73,334

Typical education: Master’s degree

 

The health care industry, in general, continues to be an attractive field, driven in large part by the aging population. Speech therapists, specifically, are needed to treat the growing number of patients whose language has been affected by health conditions associated with aging, such as hearing loss or stroke. Greater attention to treating children with language disorders, such as stuttering, also drives demand for these professionals, about half of whom are employed by schools, according to the U.S. Bureau of Labor Statistics.

In addition to having a master's degree, a speech language pathologist usually needs to be licensed by his or her state. Check with the American Speech-Language-Hearing Association for more information.

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

Creating a smooth transition from corporate executive to self-employed

It's no surprise that entrepreneurs, start-ups and small businesses will play a major role in the economic recovery and Boulder, Colorado is a hub for entrepreneurs.  What may surprise you is who is expected to lead this wave of new businesses.

A recent study by the Ewing Marion Kauffman Foundation entitled “The Coming Entrepreneurship Boom” predicts that the Baby Boomers, ranging in age from 45 to 63, will be at the forefront.

The reasoning – the oldest Boomers are on the cusp of retirement yet unable to retire due to shrunken portfolios. At the same time, they are not exactly the most attractive job candidates in the market due to age. So, many are exploring a third option – starting their own companies.

But before you quit your day job, individuals should not only examine their personal and potential business finances, but also think about the considerable lifestyle changes entrepreneurship can bring.

A visit to your certified financial planner can help you start to review your financial and personal capacity to make such a new enterprise work.  Also, consider these tips:

 

Start writing your business plan: There are some people who tell you that a business plan is necessary for a new company only if you want to borrow or seek investors for a startup. The truth is that sitting down and writing a formal business plan is an excellent way for anyone to examine the idea, structure and money sources for their business concept and most important, the potential of profit from the idea. One of the best places to get the basics of the business planning process is the U.S. Small Business Administration’s Small Business Planner website

 

Branch out for advice and assemble a wealth management team: A visit to your certified financial planner can help you start to review your financial and personal capacity to make such a new enterprise work.  But you should also seek advice from others with more specific areas of concentration, such as investment advisors who specialize in wealth management, tax advisors, attorneys and small-business peers.  Think of it as your wealth management team. The team will create a smooth transition and help avoid common mistakes with your investments, taxes and business structure.

 

 Get rid of your debts: With the possible exception of mortgage debt, there’s very little “good debt” in the life of a businessperson. So while you’re researching your business concept and putting together your own financial plan, start cutting back and erasing as much credit card and adjustable-rate debt from your personal life as possible. The continuing credit crisis is making it tough for any business owner – even experienced ones – to borrow money at attractive rates. You’ll have the most flexibility when you owe as little as possible.

Think about refinancing your house to lower your monthly payments, if the interest rates make sense. Another option may be to reduce your payments by going from a 15 year mortgage (if you have one) to a 30 year mortgage. Banks and mortgage companies will typically loan you more money if you have a steady income than if you don’t. Once your money is in your house, it is usually hard to access it if you have little or no income.

Get a home equity line of credit set up while you are employed full-time. You don’t have to access it, but you can if you run into trouble once you start your business.

 

Work on your emergency fund: While it’s wise for everyone to have three to six months of cash set aside for basic living expenses in case they lose their job or face a medical emergency, emergency funds are particularly necessary for new business owners. Startups can be particularly expensive, and most businesses are not profitable from day one. Plan a more extensive emergency fund such as six months to a year's worth of expenses for yourself and for the business as well.

 

Diversify your portfolio: If you are a corporate executive who is transitioning to the self-employed world, you should eliminate all company stock to dramatically reduce your individual stock risk. Your portfolio should be more conservative in the beginning due to the nature of the business start-up. Finally, your taxable accounts should be more conservative so you could tap those accounts if your emergency fund is exhausted.

 

Start thinking about your legal business structure: Your personal financial situation and the kind of business you’re starting should determine the legal designation of your company. 

Before choosing a business structure, such as a sole proprietorship, S or C corporation, partnership, Limited Liability Partnership (LLP), or Limited Liability Company (LLC), owners should reflect on their business in the context of their overall financial life and ask themselves a series of questions:

  • Is the business going to be your primary source of personal wealth and daily cashflow?
  • Is it a side business?
  • Do you expect the business to pay for your retirement?
  • Do you want it to provide other financial benefits?
  • Do you want to pass it on to family members or sell it to existing employees or outside buyers?

The answers to these questions figure importantly into the decision, along with other key factors such as what type of business you’re starting, its risk factors, current tax laws, and regulations such as workman’s compensation.

 

Choose an accountant who works with the self-employed: If you are transitioning to the self-employed workforce and are certain you will have income, you will have to pay estimated taxes and you may want to set up payroll. In addition, you can set up a retirement plan for your business and save upwards of $100,000 per year if you have the cash flow to support it. Coordinate with your accountant and wealth manager to set up the most appropriate plan for your business.

 

Plan your healthcare and other basic benefits: Automatic benefits are the plus side of working for someone else. When you’re working for yourself, you become your own HR department and chances are you won’t be able to match your old employer’s buying power. If you support a family with these benefits or if you have particular health concerns, you need to price the out-of-pocket costs of such benefits before starting your own company – depending on the business and the cost of those benefits, you might want to rethink your plans. You should try to make sure your life insurance and health benefits are similar to your current benefits as you make your transition.

 

Price disability coverage now: You might have short-term disability coverage as part of your current employee benefits, but that will likely end once you quit your job. You should price long-term disability coverage based on your present working salary so you can qualify for the highest possible benefit. Disability coverage is critical for self-employed people since they’re their own support system.

 

Update your estate planning documents: If you haven’t updated your estate planning documents in the last five years then the transition to self-employed would be a good time for an update. Your estate planning needs are an ongoing process, so don’t neglect this part of your wealth management plan.

 

Plan how to market your business: Marketing will be a key part to get the word out about your new business. You can be the best at what you do but if no one knows who you are then it will be hard to survive. Understand the difference between pull marketing and push marketing. Read books about running a business such as Michael Gerber’s E-Myth. It is important to think about the long-term vision of your business right from the start.

 

Consider a slow transition: If your income will be too small to sustain your lifestyle, consider a slow transition to the self-employed world. Look to diversify your income streams to have multiple sources of income so you aren’t dependent on one client for your livelihood.

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

 

Top Issues Facing Corporate Executives Before They Retire

As a well-paid corporate executive, you might think that shifting into retirement will be a breeze.

But even with enough money to retire, there are concerns facing corporate executives, which can turn that calm breeze into choppy gusts.  For a smoother ride, be prepared to do some planning many years before you retire.

A good place to start your planning before retirement is to calculate how much money you need.  To answer this, look at what your take home pay is and subtract out any current savings. Current savings can consist of contributions to an IRA (Roth IRA), contributions to a taxable investment or savings account or extra principal payments. From this, subtract estimated amounts for additional retirement income such as Social Security, pensions, or rental incomes. This will provide a good idea of what you need on an after tax basis to live on during retirement. Typically, this works out to be 60%-80% of your pre-retirement income. But having enough money to retire is not all there is to it.

One of the biggest issues facing a corporate executive is figuring out what to do with your large position in the company stock or company stock options. Just like any other stock, owning a large position in a single stock is risky business.  It leaves you with an unbalanced portfolio, that’s subject to wild swings.

Look at the standard deviation of your portfolio with and without the large position in the company stock. There are techniques to hedge your large position by using stock options and equity collars. These methods can become complicated and usually require the assistance of an investment professional and accountant.

Company stock options such as incentive stock options or non-qualified stock options are even more risky because of the leverage factor. Here is an example to explain leverage:

Suppose you own 5,000 stock options that are vested, and the option price is $30 per share with a current stock price of $50. When the stock price is $50, your options are worth $100,000. Suppose the stock drops $10 overnight – a gap opening after bad news comes out after the close and the first trade the next day is $40 per share – your options are now worth $50,000, which is equal to a 50 percent drop.

If you owned 2,000 shares of stock at $50 per share, your investment would be worth $100,000, but if the stock dropped $10 per share to $40, your investment would be worth $80,000, or a drop of 20 percent. You can see how the same $10 drop magnifies the dollar and percentage drop in the option versus the stock example.

Looking at your entire investment portfolio, you should create a plan to diversify your large position many years before you retire so when the time comes, your plans are not derailed because the stock has dropped. Coordinate your plan to diversify with your wealth advisor, accountant and your company’s compliance department. All corporate executives are passionate about their company stock, but people in general are talking about different stocks, which collectively make up the market as a whole. You need to have a plan to take the emotion out of selling the stock because emotion can lead to irrational investment decisions.

You also need to figure out how much you need in retirement and make sure your “withdrawal rate” is reasonable. A safe withdrawal rate depends on your time frame and how aggressive or conservative your portfolio is structured. Typically, a safe withdrawal rate is on the order of 4 percent of the value per year for a well-diversified portfolio of stock and bond funds. This should last around 30 years if you maintain a well-diversified portfolio, maintain your discipline and continually rebalance your portfolio.

Making the smooth transition is by no means a quick and easy process. To facilitate a smoother transition into retirement, there are a few more steps you can take. The most crucial step is to consolidate your assets, which should help make the creation of your retirement paycheck easier.

Finally, you will need to create a diversified portfolio that will provide you with your sustainable withdrawal rate and your retirement paycheck. Coordinate with your wealth advisor and accountant to design a plan to withdraw money from your different accounts on a tax-efficient basis. Rebalance your portfolio as you periodically withdraw your money.

Financial issues aside, possibly the hardest question to answer for corporate executives is what do to with your free time?  Frequently, your job has become your identity. Like the Major League Baseball World Series slogan “I live for this.” You must discover what you live for? Why do you work and earn money? This is something you should begin thinking about years before you retire.

The retirement process is complicated and overwhelming. Know that it is possible to create a sustainable, enjoyable retirement.

 

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

  

Hedging your company stock is easier said than done

Life gets in the way of your best intentions. As a busy executive, work and family usually are your highest priorities, while portfolio management gets left to a few moments on weekends and evenings.

Owning company stock and/or options throws an extra challenge into the mix. Overconfidence can lead to an underestimation of the real risk of these investments. Since you work for the company you feel that you will be able to tell in advance when to get out of the stock (even though you are not supposed to).

But trying to find the best strategies to hedge or dispose of your company stock and options can be a daunting task. Hedging your company stock requires skill and persistence and knowledge of sophisticated techniques.

The most common strategy is to create a collar on the stock, establishing a ceiling and floor to which the stock can't go above or below. To do this, you purchase a put option on the stock and sell a call option. For this example, we’ll assume you own 10,000 shares of stock XYZ and the price is $50 per share and your cost basis is $25 per share. First, figure the option expiration date you should use to hedge your stock. Typically, option expirations run in three-month cycles, so options would expire in three, six or nine months, or one-year time frames with some options expiring in as long as two years. If it’s a six-month expiration, you would purchase a put option that expires in six months and sell a call option that expires in six months. Say you purchase 100 June 40 puts for $4 (one put hedges 100 shares, so 100 puts hedge 10,000 shares) and you simultaneously sell 100 June 60 calls for $4. You have effectively hedged your stock for no cost or in other words have created a zero cost collar.

We also forgot to mention that all this has to happen simultaneously otherwise you are exposed to individual company risk. A typical individual company stock is two- to three-times more risky that a diversified portfolio of mutual funds. Now that you are hedged you have to understand the mechanics of the hedging. On expiration day which is the third Friday in June, your stock will be sold if it is above $60 or below $40 per share.

You might think you are all set, but other things can occur to derail your plans. You have muted the range of outcomes for your company stock to plus-or-minus 20 percent, or basically what you would expect from a diversified portfolio over a six-month period.

Now suppose the stock closes at $51 per share on the third Friday in June, then you have to redo the whole process again by buying 100 December 40 puts and selling 100 December 60 calls. In this case, you may even make a little money, but no point should you leave your company stock unhedged at the risk of the stock losing more than 20-percent of its value overnight

Logistically, the continuous hedge requires a lot of work. For example, if you chose options that expire on the third Friday in June and you wait until the next Monday to re-hedge, you are exposed to company stock risk all weekend, which can be unsettling. What if you are in a blackout period during the time the options expire and you can't rehedge your position? Or, what if the blackout period lingers longer than expected leaving your position unhedged?

Alternatively, you could purchase the call and sell the put before expiration but this would also result in another set of transaction costs and then re-hedge with another set of options all in one day. This will take time and discipline and also double your transaction costs.

A wealth management professional can help you with these complicated transactions. Other options might include selling some your company stock for a profit while tax rates are low in exchange for investments in a diversified portfolio of stock and bond mutual funds around the world. Either option would likely reduce investment risks and stress, while increasing free time with your family and doing the things you love.

 

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.