By Dana L. Reynolds, Esq.

Disputes regarding the relocation of a child’s primary residence can be emotionally difficult and otherwise frustrating for all parties involved. As explained in Part I of this article, Delaware Courts have long recognized that consistent and frequent contact between a child and both parents is typically in the best interests of a child, as is continuity of a child’s academic and community endeavors. However, when a custodial parent wishes to relocate with a child to another State or any location within the State that presents a geographical hurdle thereby disrupting such consistent and frequent contact between a child and his/her parents, litigation typically ensues. More often than not,  the “left-behind” parent might object to the move as such a proposed move usually requires the  child to leave friends and
family behind and readjust to a new school and community and  further impacts the child’s relationship with the parent who remains in Delaware.

Although Delaware’s General Assembly has not adopted the Model Relocation Act (http://www.aaml.org/library/publications/model-relocation-act-0), which was promulgated in the late 90’s by the American Academy of Matrimonial Lawyers, the Family Court often uses its discretion to consider the factors enumerated in this Act in order to supplement its best interest analysis under Section 722 of Title 13 of the Delaware Code and the Contact Guidelines (http://courts.delaware.gov/Help/Visitation/visitation.stm).

The Model Relocation Act lists the following factors to consider for relocation determinations:

(1) the nature, quality, extent of involvement, and duration of the child’s relationship with the person proposing to relocate and with the non relocating person, siblings, and other significant persons in the child’s life;

(2) the age, developmental stage, needs of the child, and the likely impact the relocation will have on the child’s physical, educational, and emotional development, taking into consideration any special needs of the child;

(3) the feasibility of preserving the relationship between the non- relocating person and the child through suitable [visitation] arrangements, considering the logistics and financial circumstances of the parties;

(4) the child’s preference, taking into consideration the age and maturity of the child;

(5) whether there is an established pattern of conduct of the person seeking the relocation, either to promote or thwart the relationship of the child and the non-relocating person;

(6) whether the relocation of the child will enhance the general quality of life for both the custodial party seeking the relocation and the child, including but not limited to, financial or emotional benefit
or educational opportunity;

(7) the reasons of each person for seeking or opposing the relocation; and

(8) any other factor affecting the best interest of the child.

See Model Relocation Act, Section 406.

Clearly, any adult has a right to move wherever and whenever he or she desires. However, if a custodial parent’s desire to relocate with a child is deemed not to be in the child’s best interest, pursuant to the “best interest” factors in § 722(a) and the Contact Guidelines (as supplemented in the Court’s discretion by the Model Relocation Act factors), Delaware Courts will not permit the relocation of the child. Of course, this can be very limiting on a parent’s ability, or his or her new spouse’s ability, to advance careers or find new jobs in a better job market. While factor 6 in the Model Relocation Act might offer some glimmer of hope to a relocating parent – as it does touch upon the enhancement of the general quality of life for both the custodial parent and the child – this factor is obviously neither controlling nor determinative given the existing statutory law in Delaware under section 722 or the Contact Guidelines. Herein lies a very big problem for an unemployed parent in Delaware who is faced with the dilemma of continuing a primary or shared residential placement arrangement and receives a job opportunity in another State which would allow that custodial parent to become financially healthy.

To make matters more complicated, relocation determinations can be difficult to predict given the fact-specific “best interests” inquiry.  Often times, the Family Court denies a custodial parent’s relocation request. See L.H. v. D.H., 2010 Del. Fam. Ct. LEXIS 37 (Del. Fam. March 22, 2010) (denying custodial mother’s request to relocate to North Carolina for better job opportunity for child’s stepfather and noting determinative factor under 13 DEL. C.  § 722(a) was factor 3 as it related to the negative impact relocation would likely have on the children’s relationship with the father); J.B. v. A.C., 2009 Del. Fam. Ct. LEXIS 78 (Del. Fam. June 15, 2009) (denying custodial mother’s request to relocate to Liberia for new job and noting that although mother had a number of relatives in Liberia, the relationship between the parents was deemed antagonistic and mistrusting, Liberia was not a signatory to the 1983 Hague Convention, and child did not want to leave the U.S.).

However, there have been some recent cases where relocation was found to be in a child’s best interest because of very specific facts and circumstances including that (i) the relocating parent already had sole custody and the non-relocating parent only had supervised visitation and the child was dependent/neglected as to that parent (see N.D. v. A.S. & K.S., 2009 Del. Fam. Ct. LEXIS 72 (Del. Fam. July 20, 2009)); (ii) there was evidence that the non-relocating parent emotionally abused the parent seeking relocation, seriously undermined the relocating parent’s ability to make decisions regarding the children, and failed to exercise visitation rights and pay child support (see A.B. v. T.B., 2010 Del. Fam. Ct. LEXIS 7 (Del. Fam. March 19, 2010)); or (iii) the child was experiencing a serious academic crisis that could be remedied by a move out of State (see R.D. v. J.D., 2010 Del. Fam. Ct. LEXIS 34 (Del. Fam. May 24, 2010)).

As demonstrated by the “best interests” analytical framework and case law, custody and residential placement/relocation determinations may be very difficult to forecast because they involve highly fact specific inquiries.  What can be garnered from the “best interest” test and case law is that, unless there are substantially compelling circumstances which would persuade the Court to find otherwise, a Delaware Court often times will find that joint legal custody and shared residential placement is in the best interest of a child. Along these same lines, a relocation request – which is a more significant request than mere local residential placement with one parent – will likely not be granted unless the facts and circumstances are incredibly persuasive. A more attractive and financially advantageous relocation typically will not give rise to the circumstances necessary to convince a court to grant a relocation request.

Dana L. Reynolds, Esq. has lived in Wilmington, Delaware for most of her life, and is a graduate of Cornell University and Widener University School of Law. Her expertise and integrity have earned her a reputation as one of Delaware’s premier attorneys in the areas of family law – including divorce, dissolution of civil unions, custody, egg and embryo donations, surrogacy agreements and pre-birth proceedings for parentage – and criminal defense, including domestic violence, drunk driving offenses (DUIs), misdemeanors, felonies, juvenile delinquency and expungements. Her website may be found at www.danareynoldslaw.com.

LAW OFFICES OF

DANA L. REYNOLDS, LLC

2 Mill Road, Suite 202

Wilmington, Delaware 19806

Phone (302) 428-8900

FAX (302) 397-0606

info@danareynoldslaw.com

www.danareynoldslaw.com

By Dana L. Reynolds, Esq.

Delaware law is gender blind with respect to the determination of legal custody and residential placement of a child after parents separate. More often than not, joint legal custody with shared residential placement is the norm in Delaware. Of course, if parents work to communicate and cooperate in co-parenting after separation, the child will have an easier adjustment period, parent-child bonds will strengthen with the parent who had not previously been the child’s primary caregiver pre-separation, and child custody litigation might never become an issue.   However, custody litigation should be expected when one parent unilaterally assumes sole custody and residential placement of the child and/or relocates with the child to a location outside of Delaware or to another distant part of Delaware without the express consent of the other parent or without substantially compelling circumstances (such as domestic violence) which pose a serious threat of immediate and irreparable harm to the child or parent.

As an initial matter, parents are statutorily deemed the “joint natural guardians” of their children, and are “equally charged with the child’s support, care, nurture, welfare and education.” 13 DEL. C. § 701. Section 701 explains that each parent has “equal powers and duties with respect to such child, and neither has any right or presumption of right of fitness, superior to the right of the other concerning such child’s custody or any other matter affecting the child.” The equality in Section 701 goes not only to the financial and emotional support of the child, but also to joint decision-making with respect to the child’s life, such as medical care, education, and religious upbringing, to name a few.

Custody determinations in Delaware are based on the “best interests” of the child. Courts rely on the “best interests” test to determine the legal custody (joint vs. sole legal custody) and residential arrangements (i.e., primary residential placement with one parent and  visitation to the non-residential parent vs. shared residential placement) for a child based on all relevant factors including:
(1) the wishes of the child’s parents or parents; (2) the wishes of the child;
(3) the interaction and interrelationship of the child with his or her parents, grandparents, siblings, stepparents co-habiting with parents, any other residents of the household or persons who may significantly affect the
child’s best interests;
(4) the child’s adjustment to his or her home, school and community; (5) the mental and physical health of all individuals involved; (6) past and present compliance by both parents with their rights and responsibilities to their child under § 701; (7) evidence of domestic violence; and (8) the criminal history of any party or other resident of the household including whether the criminal history contains pleas of guilty or no contest or conviction of a criminal offense. 13 Del. C. § 722(a).   Notably, 13 Del. C. §722(b) explains that “[t]he Court will never presume that a parent, because of his or her sex, is better qualified than the other parent to act as a joint or sole legal custodian for a child or as the child’s primary residential parent, nor shall it consider conduct of a proposed sole or joint custodian or primary residential parent that does not affect his or her relationship with the child.”

Legal Custody:  Joint vs. Sole Custody

In the majority of custody cases, joint legal custody is the norm.  In the most simplest of terms, joint legal custody is where the parents have equal decision-making authority in all major decisions in the child’s life such as the child’s education, activities, medical care and religious upbringing.     However, in certain circumstances, the Court might be compelled to place all decision-making power in one parent and thus award sole custody to one parent. Examples of such circumstances include, but are not limited to, situations where the non-custodial parent is incarcerated, has committed acts of domestic violence against the other parent or the child, is a sex offender, suffers from serious emotional, mental or serious physical health problems, has failed to provide any support to the child and/or has not otherwise exercised his or her parental obligations (such as in cases of dependency, abuse or neglect). The sole custodian will then have authority to make many unilateral decisions (aside from relocation out of state or otherwise far away from the non-custodial parent) without the input of the non-custodial parent.  However, and unless a Court orders otherwise, a non-custodial parent has the right to be informed about the child’s  life and have access to the child by unsupervised or supervised visitation (usually decided by the Court), mail, internet, or telephone.

Residential Placement:  Shared vs. Primary Residential Placement

As with legal custody, shared residential placement, i.e., split 50/50 residential placement, is commonplace in the majority of custody cases and is based on the best interest of the child.  It is well-recognized by Delaware Courts that, assuming both parents are “effective and competent and that the child is safe with each parent”, a child who has had daily contact with both parents should receive as much quality time as possible and will benefit from continued regular and frequent contact from both parents.   Accordingly, simply because one parent has been the primary caretaker does not necessarily mean that the other parent will not ultimately receive substantial visitation and/or shared residential placement.

Delaware’s Contact Guidelines, found at http://courts.delaware.gov/Help/Visitation/visitation.stm, lay out additional factors that the Court considers when deciding the residential placement of a child and the frequency and type of visitation with the non-residential parent: (1) previous contact with parents, (2) parents’ ability to communicate, (3) geographical proximity with regard to home, school and daycare, (4) housing arrangements, (5) parents’ work schedule, (6) number and age of siblings, (7) drug and alcohol history, (8) prior parental interaction, and (8) other relevant factors as the Court deems appropriate.  The effect of the Contact Guidelines is that more and more cases are resulting in shared residential placement which is sometimes (but not always) phased in depending on the child’s age.
In particular, the Contact Guidelines provide, in part, as follows:

For those children who have had more exclusive care by one parent, the Court should consider whether such overnight visitation should be phased in.

Birth to 18 months: Every other weekend, beginning 6:00 p.m. on Friday through 6:00 p.m. Sunday and two week nights for a minimum of three hours with the parent seeking contact.  Each parent shall be entitled to two non-consecutive weeks of vacation.  A parent shall give a minimum of thirty (30) days written notice to the other parent prior to the first parent exercising his or her vacation.

18 months to 5 years: Two overnights per week and every other weekend from 6:00 p.m. on Friday through Monday morning with the parent seeking contact. Each parent shall be entitled to two non-consecutive weeks of vacation. A parent shall give a minimum of thirty (30) days written notice to the other parent prior to the first parent exercising his or her vacation.

5 years and up: Shared contact schedule which may be extended to alternate weeks. As seen above, the Contact Guidelines do take into consideration the age of a child and generally will “phase in” a shared residential placement if that is what is in the child’s best interest. However, parents should note that all residential and visitation determinations are based on the child’s best interest and not necessarily on what is convenient for one parent or even the child’s wishes. Parents should take special care to avoid taking any actions which might be viewed as efforts to alienate a child from the other parent because the Court will take those types of actions into consideration when making decisions regarding residential placement and visitation.

Stay tuned for the next issue because Part II of this article will explain custody in the context of relocation disputes.

Dana L. Reynolds, Esq. has lived in Wilmington, Delaware for most of her life, and is a graduate of Cornell University and Widener University School of Law. Her expertise and integrity have earned her a reputation as one of Delaware’s premier attorneys in the areas of family law – including divorce, dissolution of civil unions, custody, egg and embryo donations, surrogacy agreements and pre-birth proceedings for parentage – and criminal defense, including domestic violence, drunk driving offenses (DUIs), misdemeanors, felonies, juvenile delinquency and expungements. Her website may be found at www.danareynoldslaw.com.

LAW OFFICES OF

DANA L. REYNOLDS, LLC

2 Mill Road, Suite 202

Wilmington, Delaware 19806

Phone (302) 428-8900

FAX (302) 397-0606

info@danareynoldslaw.com

www.danareynoldslaw.com

When I woke up this morning my car, walkway and driveway were all coated with snow for the first time this year. The side roads were also blanketed, but when I arrived at work, the area was clearly shoveled or salted with not a snowflake in sight. The building that I work in is always very good at making sure that the grounds are well-maintained, however, I’m sure some people are not so lucky.

If you find yourself faced with having to navigate a slippery, snowy or icy walkway at work, be sure to take extra caution and go slow so that you can try to avoid a painful fall.  But, even in the best of circumstances, accidents can still happen, and this is especially true for slip and fall accidents.  So, if one minute you are walking along at work and minding your own business and the next minute you are performing a less-than-graceful tumble to the ground while your co-workers try to suppress their giggles, here is what you need to know:

•  As a general rule, all accidents that happen while you are working are covered by Workers’ Compensation insurance. This means that any medical bills that are incurred as a result of your accident are covered, and you are eligible for certain other benefits in connection with your accident as well.

•  Under the “going and coming” rule, you are not covered by Workers’ Compensation insurance while you are traveling to and from work.  That does not mean that you are completely without recourse for those injuries, it just means that someone other than your Workers’ Compensation insurer may be responsible for them.

•  There are exceptions to the “going and coming” rule:  1. if you are on the premises where your work is to be performed, and those premises are either occupied or controlled by your employer; or, 2. if you are engaged in the employer’s business at an alternate location, at the request of your employer.

Generally speaking, if you are injured while in your employer’s parking lot , your injuries will be covered under Workers’ Compensation insurance. This is especially true if your employer directs you to park in a particular parking lot.  Of course, as with anything in life, there are exceptions to every rule, so if you have been injured in a similar scenario I suggest consulting an attorney who specializes in this area of the law to find out exactly how these laws apply to your particular case.

Workers’ Compensation laws dealing with the “going and coming” rule and whether you are in the course and scope of your employment when you are injured can be difficult to figure out. A consultation with a lawyer who specializes in this area will be able to give you insight as to whether your particular injury qualifies for Workers’ Compensation benefits. All of the lawyers in my firm, including myself, offer consultations for work injuries.  The consultations are free, and the insight into your claim could be invaluable to your future health and benefits.

Heather has been an attorney for over five years, and is currently practicing workers’ compensation and personal injury law at Kimmel, Carter, Roman & Peltz, P.A. with offices in Newark and Wilmington. Heather worked her way through law school as a paralegal in a personal injury firm. After passing the bar exam, she spent several years working as a defense attorney, representing local, regional and national companies. With the knowledge gained of the inner-workings of these companies, she now represents injured workers and personal injury plaintiffs.

Heather is a graduate of Widener University School of Law, and the University of Nebraska- Lincoln. Prior to attending law school, she was licensed as a paramedic and spent time volunteering for her local ambulance corps. She is also active as a coach and judge for the Delaware High School Mock Trial Competition.

Heather is licensed to practice law in: Delaware, Pennsylvania, New Jersey, and the U.S. Virgin Islands.

For more information, or to schedule a free consultation, please call
(302) 565-6100 or e-mail her directly at HLong@kcrlaw.com.

Testimonials:

“You got me a better settlement than I was expecting!”  ~ J.M.

“If I hear of anyone that needs a lawyer, I’m sending them over to you.  This (settlement) will help me get back on my feet.”  ~ D.W.

“Thank you for working with me and keeping me informed during my case.”   ~ R.R.

By: Joanna L. Daneman, AAMS®

As an investor, you can get plenty of advice from financial experts on the evening news or cable financial shows. But you may actually be able to learn some deeper truths about investing by observing other professionals — such as winemakers.

At first glance, you might not see what these “guardians of the grape” can teach you about building an investment portfolio. After all, they’re shaping Sangiovese while you’re seeking stocks, they’re bottling Burgundy while you’re buying bonds, and they’re mastering Malbec while you’re monitoring mutual funds. Where’s the connection?

Start by considering the life cycle of wine and the concept of “vintage.” For example, a particular wine is labeled a 2005 vintage if it is made from grapes that were predominantly grown and harvested in 2005. Yet given the requirements of wine production, this 2005 vintage may not actually hit the markets until 2008 — and some aficionados may think the wine won’t taste its best until 2018.

If you translated this type of scenario to the financial world, you could say that the 2008 investment “vintage” was not promising, given that the value of almost all investments — even the quality ones — fell last year. But if you were to hold these quality investments for the long term — as you should, because investing is a long-term activity — you might find that the 2008 vintage investments may eventually become productive vehicles that can help you achieve your financial goals.

So, what lessons can you learn from winemakers? Here are a few suggestions:

• Be patient. Winemakers put a lot of time, effort and money into planting today’s grapes — for which they will not see one penny of profit for many years. Yet they have the discipline to wait patiently until the products of their labors come to fruition. Are all their wines successful? No — and all your investments may not be, either. But given enough time, quality investments can usually help you work toward your financial goals.
• Have faith in your strategy. Wine drinkers’ tastes can change from year to year. Yet winemakers don’t rip out their vineyards and replant them with today’s “hot” varietal. Instead, they cultivate the grapes they’ve planted, make the best wine they can and maintain their belief that their products will find a market. As an investor, you can’t allow yourself to be swayed by today’s hot tips and trends. Instead, build a portfolio of quality investments that can stand the test of time.
• Adapt your goals to your situation. One of the most famous winemaking regions in the world, Napa Valley, contains a number of microclimates that vary by temperature, rainfall and soil. Napa Valley winemakers know which grapes will do best in which microclimate, and they concentrate their efforts accordingly. And you, as an individual investor, should make your investment decisions based on your own “microclimate” — your risk tolerance, family situation, time horizon and other factors. In other words, you should choose those investments that are best suited for you and that have the best chance to help you meet your goals.

Investing, like  winemaking, is filled with challenges. But by observing how winemakers work, you may learn some things that can eventually help you raise a glass to your own success.

By: Mary Laskaris, Realtor

Have you heard the latest buzz?
According to the American Homeowners Association, due to decreasing property values in many areas, it is 60% more likely that your property taxes are too high.

There are several steps homeowners should take to investigate whether or not their property taxes can be lowered:

• First, get your detailed property tax assessment record online or from your assessor’s office. Check the accuracy of the details of your home used in the tax assessment.
• Check with a real estate agent to get a solid understanding of what homes are currently selling for in your community. Professional agents will have the most up to-date statistics on local market values.
• If errors have made your assessment higher than it should be, first try working directly with the assessor. If the correction cannot be made informally, you will need to make a formal appeal. Keep in mind there is usually a narrow window of opportunity in which to file an appeal. Some jurisdictions set specific times every year to hear appeals, while others only consider appeals for a few months after your house has been reassessed.

Be certain to maintain fastidious records during the entire process. Proper documentation can be critical in supporting your case.

You may also be eligible for property tax exemptions ranging from a senior citizen or active duty military discount, to discounts for those who own livestock, depending on your municipality.

Mary Laskaris can be reached at (302)383.9644.
Prudential Fox and Roach is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.

Mary Laskaris has been a knowledgeable resource for Real Estate matters in Delaware and Pennsylvania for over 30 years. She has negotiated over $300 million in sales during her impressive career. Mary has been continuously recognized as a Member of the President’s Circle and recipient of the Leading Edge Society award for Prudential Fox and Roach Realtors and is ranked in the top 5% of Real Estate agents in the United States. Her personal approach and high level of service is what Mary’s clients say makes her a great choice when choosing a realtor.

Mary Laskaris, Realtor 302.383.9644
Diane Penna, Realtor 302.598.9088
Corby Spruance, Realtor 302.530.1898
Kristi Prosceno, Team Manager 302.426.6187

Testimonials:

“Mary has been so patient and understanding of my needs.  She is truly a pleasure to work with.” ~ Chris C.

“Not only was Mary sensitive to the emotional aspects of the situation she was knowledgeable and professional in all aspects of the technical end.”~ Michael L.

“Thank you Mary for the much needed guidance and support, you are the best.” ~ Melania S.

“Mary was so helpful…this was our first house and we felt at ease the entire time.”  ~ Peter B. & Amanda R.

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Branch Manager
Home Savings of America

When a marriage ends in divorce, the lives of those involved are changed forever. During this time of upheaval, one thing that shouldn’t have to change is the credit status you’ve worked so hard to achieve.

Unfortunately, for many, the experience is the exact opposite. Unfulfilled promises to pay bills, the maxing out of credit cards, and a total breakdown in communication frequently lead to the annihilation of at least one spouse’s credit. Depending upon how finances are structured, it can sometimes have a negative impact on both parties.

The good news is it doesn’t have to be this way. By taking a proactive approach and creating a specific plan to maintain one’s credit status, anyone can ensure that “starting over” doesn’t have to mean rebuilding credit.

The first step for anyone going through a divorce is to obtain copies of your credit report from the 3 major agencies: Equifax, Experian®, and TransUnion®. It’s impossible to formulate a plan without having a complete understanding of the situation. (Once a year, you may obtain a free credit report by visiting www.AnnualCreditReport.com.)

Once you’ve gathered the facts, you can begin to address what’s most important. Create a spreadsheet, and list all of the accounts that are currently open. For each entry, fill in columns with the following information: creditor name, contact number, the account number, type of account (e.g. credit card, car loan, etc.), account status (e.g. current, past due), account balance, minimum monthly payment amount, and who is vested in the account (joint/individual/authorized signer).

Now that you have this information at your fingertips, it’s time to make a plan.

There are two types of credit accounts, and each is handled differently during a divorce. The first type is a secured account, meaning it’s attached to an asset. The most common secured accounts are car loans and home mortgages. The second type is an unsecured account. These accounts are typically credit cards and charge cards, and they have no assets attached.

When it comes to a secured account, your best option is to sell the asset. This way the loan is paid off and your name is no longer attached. The next best option is to refinance the loan. In other words, one spouse buys out the other. This only works, however, if the purchasing spouse can qualify for a loan by themselves and can assume payments on their own. Your last option is to keep your name on the loan. This is the most risky option because if you’re not the one making the payment, your credit is truly vulnerable. If you decide to keep your name on the loan, make sure your name is also kept on the title. The worst case scenario is being stuck paying for something that you do not legally own.

In the case of a mortgage, enlisting the aid of a qualified mortgage professional is extremely important. This individual will review your existing home loan along with the equity you’ve built up and help you to determine the best course of action.

When it comes to unsecured accounts, you will need to act quickly.  It’s important to know which spouse (if not both) is vested. If you are merely a signer on the account, have your name removed immediately. If you are the vested party and your spouse is a signer, have their name removed. Any joint accounts (both parties vested) that do not carry a balance should be closed immediately.

If there are jointly vested accounts which carry a balance, your best option is to have them frozen. This will ensure that no future charges can be made to the accounts. When an account is frozen, however, it is frozen for both parties.  If you do not have any credit cards in your name, it is recommended you obtain one before freezing all of your jointly vested accounts. By having a card in your own name, you now have the option of transferring any joint balances into your account, guaranteeing they’ll get paid.

Ensuring payment on a debt which carries your name is paramount when it comes to preserving credit. Keep in mind that one 30-day late payment can drop your credit score as much as 75 points. It is also important to know that a divorce decree does not override any agreement you have with a creditor. So, regardless of which spouse is ordered to pay by the judge, not doing so will affect the credit score of both parties. The message here is to not only eliminate all joint accounts, but to do it quickly.

Divorce is difficult for everyone involved. By taking these steps, you can ensure that your credit remains intact. For a comprehensive analysis and written action plan to guide your through this difficult time, www.myMortgageReady.com is a program that works extremely well.

By: Shawn A. Myers
Financial Analyst
Integrity Advisors

Usually when we hear the word “investment”, we immediately think about Wall Street, 401K plans and other things that relate to investing in stocks, bonds and most recently, gold.

However, we should also understand that an investment can be described as something we own or something we do that generates a return.  Let’s look at three different types of investments…

Business Investments
Many businesses just starting out will need to borrow money to get started and handle expenses during the first couple of years.  The concept of leverage will come into play, which can be defined as a business that uses debt to gain a better return on their cash investment.  Let’s say for example that you have two choices; you can spend your life savings of $100,000 on starting a new business or you can spend half of it and borrow the remaining $50,000 from a lender.  To know whether or not this is a good decision you will need to determine what your estimated Return on Cash Investment (also known as ROI) will be.  We can take a few moments to follow the math to see how this works:

Calculation is: Company Profit ÷ Business Owner’s Cash Investment = Return on Cash Investment

Leverage can only work if the rate of interest rate paid on borrowed money (for example, 8%) is lower than the return on the owner’s cash investment (20%).  A good reason for using leverage would be to avoid taking cash out of a retirement account or the equity in the business owner’s home.

Investing in Yourself
Also known as self-investment planning, I personally think that this is the most overlooked investment of all!  The time and effort you spend working every day is an investment.  Excluding weekends, there are 269 work days during the calendar year.  If you earn $25,000 per year, you are getting $92.93 for every 8 hours of the day that you invest in the work that you do ($25,000 ÷ 269 days = $92.93).  So now the question is, how can I maximize the return on my investment?  One way is to outgrow your job by developing skills that go beyond the confines of your job description.  Examples would include training new employees, volunteering for special projects or developing your computer skills.  If you decide to go back to school for more training, make sure to pursue a career path that is currently in demand.  In many cases a compromise will be required between what you enjoy doing and what kind of jobs are available now and in the future.  The US Bureau of Labor and Statistics website provides this information under the section called Employment Projections.

Let’s say that this time and effort you invested results in a promotion 18 months later and your salary goes from $25,000/year to $35,000/year.  You would increase your income by $37.18 per day.  Remember we said that you were making $92.93 for every 8 hour day worked; now you are making $130.11 ($35,000 per year divided by 269 days = $130.11)

Home Ownership as an Investment
Just as with business ownership, owning a home also uses the concept of leverage.  Consider this example:

As you once again take a few minutes to follow the math, you will see that this can be a useful tool to use when deciding on where to purchase a home, especially with the economy being so volatile.

Finding other ways of investing can help ease the stress of depending too much on retirement plan performance or the state of the economy.

About Integrity Advisors: Shawn Myers is the president of Integrity Advisors, a training and consulting company whose purpose is to help small businesses achieve and maintain a strong sense of financial stability, strategic direction and long term success.

Shawn Myers has several years of experience in the Information Technology field where he developed skills in the areas of job costing and financial analysis.  In 2009 Shawn started his own consulting practice called Integrity Advisors and has created and implemented training classes for the Federal Highway Administration, the Christina School District and the Delaware Economic Development Office.  Shawn also provides accounting and financial management consulting services for small business owners.

Shawn has a Graduate School Certificate in Financial Management and is a Microsoft®  Certified Specialist in Excel®.  He is currently pursuing a Master of Science in Management degree from the University of Maryland University College.

98 Blue Ridge Circle
Newark, DE 19702
302-419-8175
www.integrityadvisors.info
Call today to schedule a free
consultation by calling 302-419-
8175 or sending an E-mail to
smyers@integrityadvisors.info.

Areas of Specialization:

• Business plan assistance
• Dashboard reports
• Comparative analysis reports
• Microsoft® Excel® training
• Inventory management reports
• Accounts receivable aging reports
• Break-even analysis
• Cash flow forecasts
• Monthly budget analysis
• Goal attainment reports
• Balance sheets & income statements
• Capital budgeting