SINGLE FINANCE Avoid Investment Rip-Offs: Plan! BARRY'S LETS RENT IT PARTY RENTALS ALL OCCASIONS I 855-0480 1 29212 ORCHARD LAKE RD. South of 13 Mlle SINGLE & COMMITTED: JEWISH COMMUNAL RESPONSIBILITY" " RABBI MARC S. BLUMENTHAL Service & Special Singles Oneg Friday, Jan. 16, 1987 8:00 p.m. TEMPLE BETH EL 7400 Telegraph Birmingham, MI Send it for Less at ... 61,- 611 0 - e 1 -.Steven M. Zimberg, CFP For singles, managing money can be especially dif- ficult because the financial de- cision making is borne alone. And, since the better quality investments are not available for very long, the ultimate de- cision must be made quickly. How can you determine - which investment oppor- tunities, if any at all, are the good ones, and which should become part of your portfolio? You must begin this selec- tion process by first developing a personal financial plan. This plan should include your fi- nancial wants, needs and go- als. It must include available capital, tax considerations and risk parameters. Likewise, it must weigh the preference for cash flow, tax benefits and asset appreciation. The actual investment is secondary to these criteria because without a plan the best investment could cause financial ruin. Types of investments gener- ally fall into two main categories: marketable and unmarketable securities. The most common are marketable securities such as the stocks, bonds, annuities, and similar > investments which you would acquire through your broker or licensed agent. These invest- ments can generally be con- verted into cash within a few days. ' The less common investment category is the unmarketable security. This type of invest- ment has no public market for ) easy selling and has less gov- ernmental monitoring, and therefore contains a greater risk of financial loss. Natur- ally, it is this area which is most abused. Now, especially with the stringent new tax laws, in- vestments must have economic substance, or else there is a good chance the investment will be construed to be a fraud or a sham by the IRS. There- \_ fore, you can be pretty certain that most every investment will have a favorable legal and tax opinion. However, just because an in- vestment is considered legal and the numbers are accurate, does not mean that the invest- , ment is economically sound, nor that it is suitable for your unique financial situation. The real problem today is that often these investments will offer a significant upfront commission, and the selling broker, or financial planner will become influenced by this L 1 Steven Zimberg is president of Asset Advisory Services, Inc. i n. Franklin. attractive commission and want to put everybody into the investment without really ap- praising the validity of the in- vestment with those unique goals and objectives of their client. How do you evaluate the economics of an investment? Much of it will be written in the actual offerings memorandum. Perhaps the best place to begin is where it shows the amount you are required to invest. If this amount is out of your league, then stop and find an- other investment. Otherwise, grab a pencil and proceed to the next step which is to read all of the bold print. Use the pencil frequently. Underline phrases, circle paragraphs, make question marks, and write questions in the margins. As you proceed through the memorandum, carefully read the subjects covering experi- ence of management, conflicts of interest, risk factors, suita- bility factors, possible changes in tax and other laws, alloca- tion of income and expenses, and similar economic details. You must also read between the lines. Feel free to call col- lect to the investment manager and ask questions. Be blunt, ask things like, "have you ever done this before?" and "tell me about your track record." The time value of money is a critical factor in computing the return from an investment. Simply stated, a dollar earned today is worth more than a dol- lar earned tomorrow because the dollar earned tomorrow is illiquid, uncertain and may not include interest. For example, an investment which projects to return your money after 30 years may not be as good as money sitting in the bank earning interest. The ultimate profit potential of the proposed investment may be unnecessarily reduced or eliminated going after just taxes. Therefore, you will find that you may be wise to accept less tax shelter in favor of higher economic return. Likewise, investments which have greater risks, should typ- ically offer investors a higher return. You should be both conservative and flexible in your projections. If you are unable to review the investment on your own then a competent investment adviser must be retained. After you have determined that the investment meets your eco- nomic objectives, then the legal and accounting profes- sionals should complete the re- Continued on next page Sponsored by: THE COMMUNITY NETWORK FOR JEWISH SINGLES 6453 Farmington Rd. The Super-est Party of the Year (at Maple Rd.) 855-5822 Community Network for Jewish Singles presents SHOES On The Boardwalk Orchard Lake Rd S. of Maple "THE ICEBREAKER" Saturday, January 24, 1987 9:00 p.m. - 12:00 a.m. 737-9059 Northland .:.58971347.: Far cne THREADS ALWAYS 20% TO 60% BELOW RETAIL 24901 Northwestern Hwy. Southfield Tired of lonely winter nights? Come celebrate winter with us. Enjoy dancing and music of the fabulous DJ of Honey Radio, Mr. John Ray. A sure way to have a great time and meet lots of new people. Come dance the night away... Admission: $6.00. Refreshments are an additional charge. Liquor to be served. For further information contact Jill Cole at 661-1000, extension 347. 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