Heartland Trust Company Brings Responsible Investing to Our Clients
This is a topic that has been flying under the radar for a bit too long. What does “responsible investing” mean and why would someone allocate their assets towards it?
In industry talk, we refer to this as environmental, social, and governance (ESG) investing. Responsible portfolios are centered on these three criteria. Until recently, the problem with many of the funds in this space was that one fund’s ESG criteria could differ from another’s. It was awfully hard to distinguish if funds were simply using it as a marketing moniker or if they actually meant what they said.
We didn’t want to put our client’s hard-earned assets into funds that didn’t represent their values. Finally, a coherent set of principles started to gain traction a few years ago.
Is a Charitable Trust A Good Option for You
Philanthropy is a key to the success of our region. The financial generosity of donors combined with donations of time and talents directly enrich the lives of those in need. This indirectly enriches the lives of us all. If you would like to make a gift now that will benefit both you and the charitable organization of your choice, one of the options listed below might be right for you.
Would you like to make a substantial give to a favorite charity, but hesitate because you may need those assets to support you while you are living? If so, you may want to consider a charitable remainder trust. The trust will pay taxable income to you (and your beneficiaries, if desired) for life or a term of years. The balance of the trust is then transferred to charity. Highly appreciated assets are excellent for funding charitable trusts, as the trust does not pay capital gains tax if those assets are sold and the donor uses the appreciated fair market value to determine the amount of the charitable contribution. Establishing a charitable remainder trust creates a current federal charitable contribution itemized deduction. North Dakota residents may also qualify for the ND Tax Credit for Planned Gifts. There are a number of payout options for charitable trusts:
Meet Jill McAndrew
Jill is an Operations Associate at Heartland Trust Company, handling the day-to-day tasks for the Operations team. Her optimistic outlook and upbeat personality make her a great coworker!
Tell us about yourself.
First, I have a confession. I am a terrible cook and the cupcake recipe below is from my mom. There is almost zero chance I could bake them successfully, but I can verify that they are delicious!
I have a daughter who will graduate high school next year, so I have one last year stocked full of school activities. As sad as I am for her to grow up, I can’t wait to see what path she chooses next. I volunteer with the Arthritis Foundation and facilitate a connect group for those with all types of arthritis and rheumatic diseases here in the Fargo-Moorhead area. It is such a rewarding experience to help people and be part of their arthritis journey.
Teaching Your College-Age Child About Money
When your child first started school, you doled out the change for milk and a snack on a daily basis. But now that your kindergartner has grown up, it’s time for you to make sure that your child has enough financial knowledge to manage money at college.
Lesson 1: Budgeting 101
Perhaps your child already understands the basics of budgeting from having to handle an allowance or wages from a part-time job during high school. But now that your child is in college, he or she may need to draft a “real world” budget, especially if he or she lives off-campus and is responsible for paying for rent and utilities. Here are some ways you can help your child plan and stick to a realistic budget:
- Help your child figure out what income there will be (money from home, financial aid, a part-time job) and when it will be coming in (at the beginning of each semester, once a month, or every week).
- Make sure your child understands the difference between needs and wants. Your child should understand how important it is to cover the needs first.
- Determine together how you and your child will split responsibility for expenses. For instance, you may decide that you’ll pay for your child’s trips home, but that your child will need to pay for art supplies or other miscellaneous expenses.
- Warn your child not to spend too much too soon, particularly when money that has to last all semester arrives at the beginning of a term.
- Acknowledge that college isn’t all about studying. While you should include entertainment expenses in the budget, encourage your child to stick closely to the limit you agree upon.
- Show your child how to track expenses by saving receipts and keeping an expense log. Knowing where the money is going will help your child stay on track.
- Encourage your child to plan ahead for big expenses (the annual auto insurance bill or the trip over spring break).
- Caution your child to monitor spending patterns to avoid excessive spending, and ask him or her to come to you for advice at the first sign of financial trouble.
Prepare and Enjoy
Before the start of every Concordia football game, Coach Terry Horan quotes Joshua 1:9: “Be strong and courageous. Do not be terrified; do not be discouraged, for the Lord your God will be with you wherever you go.”
As we move through life, there are defining moments that we can prepare for and some we cannot. Moments that make us happy, sad, mad, proud, and a myriad of other emotions. Something as memorable as a summer weekend when we play the best golf game of our life with a great group of friends, or the exhaustion and uncertainty from a long health battle. These experiences shape our outlook on life, the stories we tell our kids, and how we plan for tomorrow.
In our line of work, we understand what people are going through because we experience the same things. Whether something is expected or unexpected, prepare for it and embrace those you trust to help you get through it.
What Coach Horan was impressing on the Cobbers before taking the field is that we have prepared for today. Not just in the days and weeks leading up to the game, but the months and years as well, whether we knew it or not. Every experience has shaped us, no matter how large or small. Get out there and enjoy the moment. We have a game plan, but also be prepared for the unexpected to arise for us to overcome. Be confident and strong and remember that someone will always have your back to help you through the hard times and enjoy the good times.
Meet Dustin Sobolik
Dustin is the Investment Officer at Heartland Trust Company. He oversees investment research, meets with analysts, and does much of the financial planning for our clients.
Tell us about yourself.
I’m a north Fargo native and attended Minnesota State University Moorhead from 2007 to 2011. I guide discussions in our Investment Committee and have a mild obsession with statistics and analytics. Aside from working with clients, a large portion of my role revolves around conducting research and meeting with outside analysts.
What do you like to do in your spare time?
Inflation Doesn’t Retire When You Do
The need to outpace inflation doesn’t end at retirement; in fact, it becomes even more important. If you’re living on a fixed income, you need to make sure your investing strategy takes inflation into account. Otherwise, you may have less buying power in the later years of your retirement because your income doesn’t stretch as far.
Your savings may need to last longer than you think
Gains in life expectancy have been dramatic. According to the National Center for Health Statistics, people today can expect to live more than 30 years longer than they did a century ago. Individuals who reached age 65 in 1950 could expect to live an average of 14 years more, to age 79; now a 65-year-old might expect to live for roughly an additional 19 years. Assuming inflation continues to increase over that time, the income you’ll need will continue to grow each year. That means you’ll need to think carefully about how to structure your portfolio to provide an appropriate withdrawal rate, especially in the early years of retirement.
Trusts Built Trust
Next year – 2020 – will mark 30 years that Heartland Trust Company has served our community.
As you might know, we started our business by managing trusts, serving as trustee for the benefit of our clients and their beneficiaries. And over the decades, these trusts led to your trust – and our growth.
Today, we still do trusts, but our largest group of account types includes IRAs and investment accounts. We also set up and manage 401(k) plans for businesses.
When to Consider Target-Date Funds
Since target-date funds were first offered in the early 1990s, they’ve become a widespread investment vehicle for retirement. Their booming popularity is no surprise. After all, a target-date fund (or TDF) is easy for novice investors to manage, and even experienced investors can appreciate the hands-off simplicity they can offer.
But do your research: a TDF may not always be the best choice for you.
TDFs are designed for individuals with particular retirement dates in mind. In fact, the name of the fund often refers to its target date. For example, you might see funds with names like “Portfolio 2030,” “Retirement Fund 2030,” or “Target 2030″ that are intended for individuals who plan to retire in or near the year 2030. The fund’s mix of investments automatically adjusts as time moves on, becoming more conservative as you get older and closer to retirement.