Category Archives: Finance

Secure Places to Stash Your Cash

40You might well, sooner or later, end up in possession of sensitive papers or other portable assets of great value that should be kept in a safe place – like an offshore safety deposit facility.

What kind of things are we talking about? Any valuable papers. Things like automobiletTitles, Coins (rare), Passports, Bearer Shares, Citizenship Records, Bills of Sale, Pension records, school transcripts, trust documents, immigration papers, rare stamps, mortgage documents and so on. You may also wish to store data such as USB memory sticks or backup DVDs securely off-site.

A safety deposit box is also recommended by many experts for estate planning purposes. To pass the contents of a safe deposit box to your heirs without any formalities, all that is necessary is that another person have access and a key. This is accomplished by having the inheritor be a signer on the box. If you don’t want them to have access during your lifetime, you keep the key and arrange for it to be delivered to them in a sealed envelope with instructions, upon your death or disablement.

Should you Use a Bank or an Independent Safe Deposit Box Company?

Generally the best solution is to rent a safety deposit box in a reliable major, first class bank – not just a box company. Many banks will require that you also have an account with them and that withdrawals to pay the box rent be authorized in advance.

Why should you use a bank rather than an independent safe deposit company? Because independent companies seem to fold or get robbed with great regularity. Like public storage facilities, they are also frequently used by less desirable characters.

On the other hand, a private storage outfit may not require any identification to open a box. They may accept any nom de plume you care to give them. Customers may be admitted on the basis of a plastic card without any need to sign in. As such a box is not linked to any account or payment facility, it behooves the user to pay several years in advance. This will avoid the box being opened and the contents sold for non-payment of rent.

One client told me the sad story of how after a long hospital stay due to cancer, he discovered that his box in a public self-storage unit had been opened after a year for non-payment of rent. The contents were sold at auction. He had a collection of old stock certificates that were worthless as stocks, but of great value to collectors. One had a rare original signature of inventor Thomas Edison. They were disposed of as scrap paper.

The Best Countries for Offshore Safe Deposit Boxes

Austria, Switzerland and Luxembourg are traditional safe havens that are perfect for safe deposit boxes. A good country for a box is one where there is no need to show a passport or go through any formal border controls. This is not the case with Switzerland – unless you take your chances on one of the very few unmanned border crossings!

Vienna and Zurich airports are also convenient national airline hubs. You can conveniently pass through these countries when travelling between other cities. Just arrange a stop over long enough to visit your stash; putting in or taking out what you need. For a safety deposit box locale you don’t need to seek out a tax haven. Any peaceful, stable country where property rights are respected is just fine.

Almost all banks offer safety deposit boxes. If yours is located in a country where you have no problems, it doesn’t matter much which one you use. But you should have at least one person you trust who knows about the box and is able to access it. If you have an accident it is important that your box not be forgotten or abandoned.

Keep the Key Safe!

When you have opened the box, consider depositing the key in a sealed envelope with the bank’s safekeeping office or your personal private banker. By doing this you ensure that the key won’t be discovered on your person or among your possessions by anyone with dubious intentions, like your soon-to-be ex-wife.

Many bank safety deposit boxes have two keys – one is held by you. The second (a general pass key) is kept by the bank. Only with both can the box be opened.

In the very latest high-tech safe deposit boxes, there is no key. These safe-deposit boxes can be opened only with fingerprint scans. Another solution is to use boxes in places where they have combination locks. Experienced safe-crackers are good at opening combo-locks. They are less secure than complex keys – in our experience. We are likewise not keen on secret memorized numbers. Why? Because we have more than once forgotten an important combination or password.

Be sure that you can access the box without showing ID, in case you lose it and need to get at your backup copies that you thoughtfully secured within the box! Some banks, particularly those in Zurich, want to see and photocopy ID every time you access your box – even if you are well known. Where ever your box may be, be sure you are introduced to several of the staff who can help you access your box without ID should you need to. Tell them to take a good look and remember you personally so you can always access your box or the money in the account without any identification. Tell them your favorite stupid joke or story and tell them to remember it so that you can tell it again many years later. Then they will remember you!

Shhh… Can You Keep a Secret?

Don’t just take a safe deposit box key and keep it on a gold chain around your neck at all times. This is something that movie villains do.

If you want something secret, always think ahead. Don’t tell anyone about it. Leave the key and instructions with your personal banker or someone you trust implicitly. Also think ahead! Leave death instructions in your box – just in case something happens to you. These can be written, or can be on a CD in video form. Your box will be opened after about a year or two of inactivity – if and when the annual fees don’t get paid.

Sometimes a safe deposit box is forgotten for decades. About seventy years after the criminal mastermind and reputed billionaire Al Capone died in prison, a closed bank that he once owned in Chicago was found to have a long forgotten, secret locked underground vault registered in his name. His money had never been found. A national television network bought rights to show the drilling and re-opening of this vault ‘live on TV.’ Many people, myself included, tuned in for the grand opening. We thought it would be an event to equal the discovery of King Tut’s fabulous tomb in Egypt. What happened? It was a good show with a let-down for an ending. Apparently, someone with a spare key to Al Capone’s safe deposit facility had arrived there first. Nothing of the slightest interest was in the vault.

Will Your Secrets Die With You?

Most offshore banks will require that you have a bank account with them and that they be authorized to withdraw your annual safety deposit box rent payments from that account. With such instructions and automated payment you could be dead for many years before you are presumed dead and your box is drilled. Thus your banker should perhaps be instructed to open your instructions (not your box) in case he doesn’t hear from you for a certain period of time, like say three years. Better yet, your banker should be instructed “after 3 years of no contact, please contact my attorney, XYZ, or your kids, wife, best friend.” Someone you trust should have instructions on what to do with your assets in the event of your death, disappearance or disability. Your banker should be told what to do or how and when he is to contact those persons who will surely know where you are.

Perhaps someone you trust, who has nothing to gain from suing you, should be given a sealed power of attorney or an assignment plus a valid will so that all loose ends are tied up. Without this, in Switzerland for instance, the bank just keeps your assets! Simple as that. In English speaking countries there is usually an escheat law covering dormant accounts and abandoned safe deposit box contents. In England, unclaimed money and assets go to ‘The Crown.’ In California, box contents and accounts dormant for over seven years go to the Teachers’ Pension Fund.

In such cases, the heirs have only a very limited time to make claim. Most never do because they never learn of the assets.

Your Anonymous Safe in an Austrian Palace

The Swiss and the Austrians generally excel at running discreet safe deposit facilities. In nearly all countries, ID is required to rent a safe box. But in Austria, at the time of writing, there is one safe deposit company offering anonymous safes. It has been around for years and was highly recommended by a reader. It’s a good place to store second passports, bank cards and other PT paraphernalia that you may not want to keep in your home country.

This company has its facilities in the basement of a beautiful Viennese palace. It’s name is Das Safe and its website is http://www.dassafe.com If you are in Vienna, you can visit them at Auerspergstrasse 1. We predict they will stay in business for a long time to come, but for how long they will be allowed to take anonymous business is open to question.

Other recommended safe deposit facilities in Austria are at the Schoellerbank branches (where no key is required – access is regulated by an electronic fingerprint scan) and at the Raiffeisenbank in the ‘secret’ enclave of Jungholz.

A Reliable Safe Deposit Company in Prague

Another service we know of is Prague Safe Deposit in the Czech Republic. They require valid ID to open a box. The service from then on is highly professional and discreet with no ID required for later access. You can pay up to five years in advance. Entry to the main vault is self-service with a swipe card system at the main door. You can give the door card and key to anyone. They can then gain access to your safe-box without the need to meet any staff or identify themselves in any way.

This particular enterprise is a joint venture between one of the Czech banks and the Chequepoint chain of money changers. It has been around since 1992. They are located in the basement of an old bank building just off the famous Wenceslas Square. They welcome visitors to stop by and inspect the facilities. The street address is 28 Ijna 13. The website is not currently available in English, but if you do visit them you will find they speak English.

Reef Hidden Pocket Stash Thong – The Sandals With a Secret

40If you are like me you like to go to the beach or lake on hot summer days. I can’t seem to soak up enough of the sun and water and I always like to look my best even when I’m swimming and sunning. That’s why I can’t ever leave the house without my Reef hidden pocket stash thong sandals. I just love these shoes and they also hold a little secret. Want to know what it is?

The secret of these shoes is that they have a hidden compartment in the heel for you to hide your goodies in. This compartment is big enough to hold an id or credit card and some emergency cash. I used to hate to have to drag my bag along with me to the beach, and I had to watch it like a hawk so it wouldn’t get stolen. Since I started buying Reef Stash sandals, I just put what I absolutely need in the secret compartment in my shoe. Works like a charm.

The shoes that I am referring to here is actually called the Reef Stash 2 sandals, but my friends and I refer to them as the hidden pocket stash thongs. They are not only handy at the beach, but we also like to wear them to outdoor concerts, fairs and other summer activities where we don’t want to have to carry our purses around with us all day.

These sandals are also high on my comfort list. You can walk all day in these shoes because the soft jersey lining and the anatomical padded footbed makes your feet feel good all day. The Stash 2 comes in three stylish colors which are brown/pink, black/white and white/blue. Now you know the secret of the Reef hidden pocket stash thong.

Stash Safes – Stash Safes Keep Your Valuables Secure From Any Burglars

39Stash Safes are a great way to keep your home or office safe and secure. These items are designed and manufactured for one purpose – to blend in with the regular household items of little interest for burglars. Why would someone waste valuable ‘burglary’ time looking at a book on a table or a can of Del Monte Corn when there are real items left around in plain sight to steal?

Stash Safes (sometimes called Can or Diversion Safes) come in varieties to be placed in the bathroom, kitchen, living room, even the garage. Why do they work to keep your valuables safe?

These safes are simply decoys – exact replicas of other common items found in every home except that they are cleverly hollowed out to enable you to put your valuables in them. Using the ample space inside, you can store possessions like watches, cash, jewelry, gold coins – almost anything that is of value to you that you want to keep hidden yet in plain sight.

For some Stash Safes it’s a good idea to camouflage them even more. For example, if you have a Barbasol Can Safe then put a little shaving cream around the nozzle or if you have a safe that looks JB Engine Degreaser, then put a little grease handprint on the surface of the can to make them even more realistic.

The concept of a Stash Safe working in successfully fooling the burglars is based on the logic that these thieves are in a hurry. Most cases of home invasion last only a few moments as the crooks are anxious to get out before the owner returns or the neighbors report movement. This is why you cannot expect the burglars to shake every can in sight or in the kitchen to see if there is something inside it or not.

These items also make great gifts. Of course Aunt Mary might wonder why you gave her a can of Ajax Cleanser for a birthday gift but after you explain its use, she’ll thank you over and over again because everyone has something of value that they want to keep available but also be hidden from untrustworthy eyes. She might even go out and get a few more – some for her and others for her friends.

Stash Safes are necessary home security products that should be in every house, apartment and office so you won’t be the next victim of a home or office

Business Productivity Gains Can Come From Seemingly Small Tasks

38Many businesses fall into a trap by focusing on core processes for productivity gains while ignoring potentially hundreds of small, tedious, administrative tasks that threaten to bog down the team. The flow of work, pace of decisions and even responsiveness to customers can be severely hampered by these tasks while the business strives to solve bigger challenges. At some point the cumulative effect of such non-core and yet required tasks becomes a drag on the ability to perform and grow.

Nowhere is this more evident than in the information technology division of the business. IT is where the priorities of the business go be converted into efficient and productive systems. Nowhere in the list of priorities did a host of administrative tasks appear as a priority and you would not expect to find them there considering the importance of core processes that drive the operation of the business. However, the productivity gains that may be achieved with just a small bit of attention to these tasks can have a dramatic ability to free up precious employee time to focus on getting the more important job done.

The IT organization supported by the heads of various business and operating divisions, have become masters at hunting buffaloes. No measly squirrels for them. They are so busy preparing the big guns, hunting parties and horses to go and hunt for the buffaloes that they are seemingly unaware that the squirrels are stealing their stash of nuts that was supposed to provide energy during the winter months. In much the same way, the focus on large projects allows the burden of many small administrative tasks to steal away valuable time and productivity.

In fact, they appear so determined to hunt buffaloes that when a squirrel is presented to them as an opportunity they will spend days and even months working to convert it into a buffalo worthy of their attention. Along the way, the employees and even department heads becomes increasingly frustrated at the need to perform so many tasks manually when a simple automated solution seems self-evident. Occasionally, individual departments will find a small budget and go outside to find a third party who may be able to help them.

Of course, since IT establishes the rules about what is acceptable technology, solutions and even providers, going outside the company often ends in a political tangle that only further complicates the issue. As businesses evaluate their priorities for investing in the development and automation of key business processes and managing the flow of information through the operation, they should include a review of the administrative tasks being performed, the frequency at which they are performed, the number of employees performing the same task, the time consumed and the potential for errors. Core operations or customer facing systems will always be assigned the highest priority, but ignoring these tasks can result in a huge productivity drag.

Determine what it will take to hunt the buffalo in the most efficient manner with the most proficient resources and leave some small unit behind to go after the squirrels to protect your stash of nuts. This small unit of technical IT staff must be empowered to identify specific administrative tasks and deal with them one at a time without being forced to convert each into a buffalo first. You may just find that the overall productivity and employee satisfaction in your business increase dramatically. You also find there are fewer buffalo to hunt than you assumed, as your team has been so adept at converting every squirrel into a buffalo that requires a lot more resources and time to

3 steps to a safer retirement stash

42If all you want to do is protect yourself from a market downturn, the answer is simple: Put your dough in FDIC-insured accounts. Even if stock prices go into a free fall, your principal and investment earnings will be safe.

But that’s not a real solution for most people. We know that severe market setbacks are inevitable — and we get particularly concerned when stock prices are at or near a peak — but we’re not able to predict their timing. For example, when the Dow dropped 15% in the summer of 2011 amid concerns about S&P’s downgrade of U.S. Treasury debt, many investors feared the slide would continue. In fact, the Dow subsequently rose nearly 70%. So hunkering down in bank savings accounts, CDs and the like could relegate you to subpar inflation-lagging returns for a long time.

Which means that you can’t invest just to avoid a loss. You’ve got to develop a strategy that gives you reasonable protection from short-term setbacks in the financial markets but also offers a shot at investment gains generous enough to grow your nest egg if retirement is still a ways off, or assure your savings will be able to support you the rest of your life, if you’ve already called it a career.

So, how can you manage this balancing act between security and growth potential? I recommend this three-step process:

1. Start with a portfolio review. Before you consider making any changes, you first need to make sure you know exactly what you own now. So you want to tally the value of all your investments and then break down the amount devoted to each of three broad categories: stocks, bonds and cash. You can do a finer breakdown if you wish: small stocks, value shares, short- vs intermediate-term bonds, etc. But to get an overall sense of where you stand, divvying up your portfolio into stocks, bonds and cash is fine.

If you own funds or ETFs that invest in both stocks and bonds — asset allocation funds, target-date portfolios, balanced funds, etc. — you can get a stocks-bonds-cash breakdown by plugging the fund’s name or ticker symbol into Morningstar’s Instant X-Ray tool. Once you’ve gone through this exercise, you can calculate the percentage of your holdings in each category. Many investors may be surprised to find that they’re holding a more aggressive portfolio than they think. Why? Well, unless you’ve been rebalancing periodically (or pulling money from your stock holdings), the fact that stocks have returned roughly four times as much as bonds over the past five years would have significantly tilted your portfolio mix much more toward equities, making it more vulnerable to a setback than it was five years ago.

2. Assess your risk tolerance. Once you know your portfolio’s stocks-bonds-cash mix, you want to determine whether that blend is consistent with your appetite for risk. This is important because investing more aggressively than you handle emotionally may lead to you selling stocks in a panic during market downturns, which could turn temporary losses into real ones. Invest too cautiously, on the other hand, and you may not get the returns you need to grow your nest egg or make it last throughout retirement.

The easiest way to get a fix on how much risk is right for you is to complete a risk tolerance questionnaire like the one Vanguard provides free online. You answer 11 questions designed to gauge, among other things, how long you plan to keep your money invested and how large a loss you feel you could take without jettisoning stocks. The tool will then recommend a blend of stocks and bonds (and, in some cases, cash) based on your answers. Many financial planners use a more comprehensive 25-question risk profile sold by FinaMetrica. For $45, you can fill out that questionnaire online and receive a detailed report that shows how to translate your score into an asset allocation.

If the recommended portfolio you get after going through the risk assessment differs significantly with the way your assets are actually allocated — say, you’ve got 80% in stocks vs. a suggested 60% — then you’ll probably want to seriously consider bringing your allocation closer in line with the recommendation. But before you do anything, go on to step 3.

3. Gauge a crash’s potential effect. Ultimately, what matters most is how well your portfolio (and you personally) can handle a major correction both in the short- and long-run. There are two ways to estimate that.

First, you want to get an idea of how your current portfolio (and your recommended allocation) might fare in a severe downturn. From the market’s peak in late 2007 to its trough in early 2009, for example, the Standard & Poor’s 500 index lost roughly 55%, while the broad investment-grade bond market gained about 8%. There’s no guarantee future downturns will duplicate the past. But if you’ve got 70% of your nest egg in stocks and 30% in bonds, it’s reasonable to assume your retirement portfolio might lose in the neighborhood of 36% of its value (assuming no rebalancing). If, on the other hand, the risk assessment tool recommended a 50% stocks-50% bonds mix, that portfolio would have lost more like 24%. If a 36% loss would have you dumping stocks and fleeing to cash and bonds, then emotionally at least you may be more suited to the more conservative 50-50 mix.

Remember, though, your goal isn’t just to minimize damage during a crash. For all you know, a big setback may not materialize for yours. So you want a portfolio that will perform well if the market continues to cruise a long time. And even if a crash does occur soon, you’ll still have earn a decent return in the years afterwards if you want to enjoy a secure retirement.

To be sure that you’re well-positioned for the long-term, go to a retirement income calculator that uses Monte Carlo simulations. The calculator will estimate the likelihood that you’ll be able to generate the income you’ll need during retirement based where you stand now — that is, how much you’re saving for (or spending in) retirement, how your assets are allocated and the current market value of your portfolio. This is your “pre-crash” estimate.

To see how your chances of achieving a secure retirement might change after a crash, plug in the projected value of your portfolio assuming the potential loss you estimated at the beginning of step 3. If the portfolio mix recommended by the risk assessment tool was appreciably different from your current allocation then plug the estimated loss for that portfolio into the retirement calculator too.

By going through this exercise, you’ll be able to see not only how different mixes of stocks and bonds might fare during a severe market downturn, but how they might affect your chances of achieving a secure retirement in the long run. By comparing the results — and also trying out other scenarios — you can come to a much more informed and nuanced decision about investing your retirement assets than you would by simply trying to minimize a short-term loss.

Just make sure you go through this exercise before the market goes haywire. Because if you wait until things are falling apart, you’ll have fewer effective options for improving your retirement prospects, and they’ll be much less appealing.