You’ve hired a reputable builder, collected paint swatches and selected the siding and now you’re finally ready to start that long-awaited remodeling project. Before you begin construction, there is one more thing that you need to do—talk to Cleary Insurance, Inc.!
Advice for Do-it-yourselfers
If you decide to do it alone and manage a renovation yourself, you assume all the risks. A review of your homeowners coverage for liability and property is prudent, as you are assuming more risks and exposures than contemplated by homeowners insurance.
Hiring subcontractors who can provide you with a “Certificate of Insurance” or copies of their policies showing their general liability and workers’ compensation coverage is mandatory for your legal protection.
If a friend or relative helps out as a favor—no money changes hands—and gets injured, your homeowners insurance typically covers the cost of their injuries, up to your policy limits. It’s important to note that a homeowners policy is not designed to provide primary liability protection for these injuries. If a helper is seriously injured, the domino effect can be financially and emotionally difficult for all who are involved. For an extra layer of protection, it’s a good idea to also carry umbrella liability coverage, which kicks in to provide liability coverage above your homeowners limits.
Insuring the Real Value of Your Home
Experts estimate that one-fourth of remodeling projects add at least 25 percent to the value of a home, yet often most homeowners forget to increase their coverage to protect their investment. Most homeowners insurance policies require 100 percent of the home’s replacement cost, so it’s important to raise your home’s policy limit before your project begins.
When undertaking a remodeling project, people often forget to review their insurance needs, too. Whether your addition budget is large or small, you are adding both the value of your home and your exposure to risk. To ensure that your project goes smoothly and that you have the coverage you need, here’s what you need to know.
Working with General Contractors
The best way to minimize your renovation risk is to hire a reputable general contractor for the job. As part of the bidding process, ask the general contractor to provide a Certificate of Insurance and/or copies of the policies. Specifically, check for coverage for the following:
- Workers’ compensation: Verify that he or she has workers’ compensation coverage in the event that an employee or subcontractor gets hurt on the job.
- General liability: Ask if the contractor has liability insurance, which covers losses due to negligence and errors or omission, which results in property damage. Also, ask that you are added as an “additional insured.”
- Builders risk: This policy is designed to cover damage to your home and materials, including those not installed yet. We can help you verify whether you should require this from your contractor, based on your renovation project.
If they don’t carry the proper coverage, they are not the right contractor for the job!
Your Insurance Partner
Adding to your home is exciting, but poses financial risks. Contact Cleary Insurance, Inc. at 617-723-0700 to learn more about all of our home, auto and life personal risk management solutions.
This fall our client focus is on George and Margaret Greene. George and Margaret moved to the North Shore of Boston from England in 2010. Prior to moving here, they raised their family in Hong Kong where George taught at the university for 38 years.
During trips back to Hong Kong they stayed in a guest house on campus where they met a young Kenyan and learned about his project to give girls in his county a chance at a high school education.
In Kenya, the government provides an education through the eighth grade. Once through the eighth grade, many are left in a perilous situation where they might be married off or worse. Many will never get out of their village.
George and Margaret visited Kenya on two occasions and set up the Evergreen Initiative to support as many young girls as possible to receive an education and escape the future that awaits them.
This is a true grass roots effort. Every dollar they raise gets to the girls. To put a girl through a year of school, approximately $750 to $1,000 is needed depending on the transportation costs of the bus. This money covers tuition, books, uniform, shoes, hygiene products and transportation to school.
Below please meet Irish and Beatrice, who will be High School seniors in January 2023. They are two of 4 girls currently being supported by Evergreen Initiative. If you would like to support this effort and girls such as Yvonne, please send Margaret an email at firstname.lastname@example.org.
Presented by Matt Clayson
The journey to financial independence and wellness starts with saving. But for many people, that can be a challenge, especially in trying economic times.
But there are strategies and mechanisms that can help you get on track for retirement.
If you are not currently saving … start
For people in their younger years, starting a retirement savings plan can be the biggest challenge, but also the most important step toward ensuring financial security and well-being in the future, even if that future seems far off.
Why can it be a challenge? Often, those just starting out in their career and working life are saddled with a large amount of student loan debt. That presents a question about whether it’s better to direct resources to paying off debt or start building a nest egg for retirement. The answer will be different depending on individual circumstances, but will probably lie somewhere in the middle.
Those starting out also likely face lower paychecks than those whose experience have allowed them to command a higher salary. Amid living expenses and day-to-day demands, setting aside money for retirement savings can seem like less of a priority.
Which is a mistake. For one thing, many employers offer incentives for company-sponsored retirement savings programs, typically matching a certain percentage of contributions. Not taking advantage of such saving plans amounts to essentially turning down a pay raise. Also, starting a savings program, especially in early years, takes better advantage of compounding interest over time.
That math can help those starting a savings program in later years, too.
If you think you can’t afford to save, you may want to look at moves to improve your financial wellness and allow at least some funds to go into a savings program. These steps include:
- Creating a budget. This is central to getting a handle on your personal finances. It will also likely identify areas where cutbacks may be possible in order to direct some money to savings.
- Learning to manage debt. This is the area that trips up many people. Credit cards can lead consumers to rack up more in obligations than is necessary or wise. On the other hand, some types of debt are necessary. Understanding the kind of debt you have and having a plan to tackle it is a positive step.
- Managing student loans. For those starting out, student loans may be a part of the debt load. Beyond setting an overall debt plan, investigate the specific options available to you for student loan debt.
Those already saving may still want to take a couple of steps to make sure they are on course to meet their retirement goals.
First and foremost, make sure you are on track. This will help you gauge how your savings are stacking up against your likely needs.
If you are falling behind, you may consider ways to save more, especially if you still have a number of years until your likely retirement. Since many people have some portion of their paycheck deposited directly to a retirement savings account, some simply try increasing that percentage.
Additionally, you may want to do some retirement savings account housekeeping. This can include checking to be sure your beneficiaries are current and taking steps to make sure you are always current on your account status. But, perhaps more importantly, it also includes making sure your investment asset allocation is correct for your age and risk tolerance.
If you are approaching retirement … double check
Estimates vary as to how much in savings you should have to maintain your current standard of living in retirement. They typically range from six to nine times your annual income and can be affected many factors, like geography and market conditions.
If you find that you are falling short, there are steps you can take. For one, most qualified retirement savings plans allow for stepping up contributions as you approach retirement. Make sure you are taking full advantage of those provisions.
Also, you should check on your Social Security status and formulate a claim strategy. Many file for benefits as soon as they can. But benefits grow the longer you wait. So for some, it might make more sense to delay filing, depending on the level of their retirement savings, their health, or the possibility of continuing to work for more years.
No matter your age, saving is a critical element of financial wellness. So, it’s important to understand where you stand in the savings cycle in relation to the retirement you’d like to have. And whether you are early in your working years or nearing retirement, understand the options and steps you can take to try and make sure that your retirement savings meet your needs.
Feel free to reach out to schedule a discussion with our retirement planning specialist.
As 2022 begins its last quarter, now is a good to review various risk management ideas you may wish to consider and or implement for 2023. Risk Management consists of implementing polices, practices or procedures that reduce the odds of loss or the size of a loss once it occurs. An example of reducing odds of a loss, would be reviewing your employees driving records before you hire them and annually. The better your drivers, the lower the odds of a loss. In addition, training the drivers on what to do after a loss can make a big difference in the size of a loss. Do they know to not offer responsibility, take pictures, get names of other drivers, etc.
All clients want the lowest insurance premiums possible and using risk management practices is a great tool in having lower premiums due to having a more attractive loss history.
Most insurance carriers offer loss control and risk management services at no charge to the client. Consider 2023 as the year to make improvements in this important area of your company’s financial wellbeing. Contact your Cleary Insurance Account Executive to discuss risk management ideas.
Posted by Alyssa Malmquist on August 31, 2022
If you’ve ever felt a surge of well-being while listening to classical music, you’re certainly not alone—and best of all, that doesn’t have to be a temporary feeling. Research indicates that this type of music offers plenty of long-term benefits when it comes to your health.
Improved heart health
Should Mozart and Strauss be part of your heart health strategy? That’s the conclusion of a German study that looked at the effects of classical music compared to other genres. A group of healthy participants listened to either pop music or classical music for just a few hours, and those in the latter group showed lower blood pressure and heart rate after listening.
Even those who already have heart issues could see an advantage. Another study looked at the effects of classical music on participants with heart failure and found that 30 minutes daily for three months resulted in better sleep, lower anxiety and depression, and higher quality of life.
Better pain control
There’s an effect called “music-induced analgesia,” which means that music can actually reduce pain in a way that’s similar to pain medication. For example, a study on patients with fibromyalgia—a condition that tends to come with considerable, chronic nerve pain—found that listening to music, including classical music, can reduce pain and even improve functional mobility.
That study noted that the mechanism is likely related to how music boosts dopamine, one of the hormones related to feelings of well-being. When this happens, your brain may reduce pain signals.
Another study reports that classical music may have an effect on acute pain as well. Researchers found that people recovering from surgery were able to be prescribed lower doses of pain relievers when they listened to this type of music, and even tended to have shorter hospital stays.
More mental clarity
With a more comprehensive amount of mental quiet, it’s much easier to concentrate and focus on tasks at hand, and classical music can be a boon for providing that type of ease.
For example, research published in the Journal of Music Therapy looking at the effects of music written by Mozart versus “new age” music found that both types inspired feelings of thankfulness and love, but participants in the classical music group had substantially higher levels of mental quiet, awe, and wonder.
This seems to be true even for kids. A study from the Institute of Education at the University of London assessed the effects of classical music on children aged 7 to 10 and found that after just six listening sessions, they showed higher levels of concentration and self-discipline.
How does classical music stack up against other relaxation techniques? Quite well. One study, published in the journal PLoS One, recruited 60 women and split them into three groups: one that listened to the classical Miserere by composer Gregoria Allegri, one that enjoyed the sound of rippling water, and the last with no sound at all, only rest.
The three groups differed significantly in terms of stress response. While the music group had more stress than the water group while listening, it showed much faster recovery than the other groups. Researchers concluded that because of this, music should be seen as an intervention tool for stress management and stress-related health issues.
That last item is particularly important, because stress has been shown to contribute to a range of health issues, including low back pain, cardiovascular disease, even some cancers. Lowering stress levels in a way that helps you bounce back quickly from stressors can potentially mitigate these risks.
What about other music?
If you’re not a fan of classical music, good news: Other types of music have also been shown to be beneficial to your mental and physical health, especially if it’s music that makes you feel a deeper sense of relaxation or joy.
For instance, researchers at the University of California, Berkeley looked at the reactions of over 2,500 people to thousands of song samples, and found that multiple types of music prompt emotions like amusement, cheerfulness, desire, dreaminess, and triumph. Although they can also evoke feelings of sadness or annoyance, it depends on what type of music you choose.
The lead researcher noted that music is a universal language, but that we don’t always pay enough attention to what it’s saying and how it’s being understood. Taking the time to incorporate more music into your life—classical or otherwise—could be an important step toward learning this language and supporting your health along the way.
To learn more about physical wellness, plus a fresh perspective on overall health and wellness, download Allways eBook.
Markets have been troubled. Open any brokerage or 401(K) statement and you are likely to see a page of red. It seems that nearly everything has gone precisely the wrong way: bonds are down, stocks are down, and gas prices (along with the price of nearly everything else we purchase) are up.
Fear and uncertainty abound, and the headlines foreshadowing the end of the world are not helping.
And yet…perspective matters.
There are three important points:
- While painful, what has occurred is a healthy and needed reaction to the withdrawal of liquidity.
- I am beginning to find more optimism in our monetary policy than I have in nearly three decades.
- This is not the time to react emotionally. Even if we are pushed into a recession, if history is any indication, we will likely be fine.
With that, let us begin.
Liquidity and monetary policy
As we’ve discussed in previous updates, the U.S. Federal Reserve is the Central Bank to the United States and, as the name states, is essentially the lender of last resort. The Fed (as it is colloquially referred) has very crude tools. It can:
- Signal what it’s going to do by talking.
- Raise and lower the rates at which banks borrow (through one mechanism called the Federal Funds rate).
- Expand its balance sheet by (essentially) printing currency and buying bonds.
For the sake of brevity today, generally speaking, the Fed cuts rates when unemployment is too high and raises rates when inflation is too high (remember the dual mandate).
Yet, for four decades, the Federal Reserve has provided more and more liquidity by steadily lowering rates. And yet, for four decades, growth has been, by and large, strong and unemployment has been, by and large, reasonably low (with some exceptions).
This introduced a strange dynamic where each time the Fed cut rates, it would cut much more deeply than when it would raise rates … hence, rates fell over a long period of time.
This is, in essence, just an expansion of liquidity. If a consumer would want to borrow $10,000 at 5 percent, they would probably be willing to borrow a much higher sum at 3 percent.
More broadly, in the last three years, for example, the Federal Reserve has created (through the Treasury) an additional $5 trillion (yes, trillion) out of thin air to help counteract the economic effects of COVID-19. In 2007/2008, the Fed introduced a bit over $1 trillion to counteract damage from the Global Financial Crisis. To be clear, some of this was absolutely needed and a good deal of it was remarkably effective.
And yet, as with anything, there are no absolute decisions, only tradeoffs. The obvious consequence is we have increased the money supply in the United States and, therefore, the value of our dollars has diminished. This, along with pent-up demand from COVID and supply chain disruptions, caused inflation to rise … and has created a very specific form of inflation referred to as monetary inflation.
As such, once it was clear inflation wasn’t “transitory,” the Fed finally began taking steps to reverse the cycle.
First it signaled it was slowing or stopping the expansion of its balance sheet, then it signaled it was going to raise rates and now it is in the process of raising rates.
As markets (both financial and physical) went up because rates went lower, markets go down when rates go higher. On the margin, the introduction of liquidity makes prices increase and the removal of liquidity makes prices decrease.
This is both logical and, in aggregate, a healthy move to begin focusing more intensely on the real economy and less intensely on the performance of markets.
Market performance during recessions
The question on the minds of many is therefore how far will the Federal Reserve go? Will the Fed bring inflation back down? Yes, I believe so. Will the Fed irreparably crush markets? No, I don’t believe so. Will the Fed push us into a recession? Well, possibly…
Which brings us to Chart 1: market performance during a recession, after a recession, and during “normal” times.
The period following recessions is quite good, however, as markets recover and generally with less of the unhealthy excesses that exacerbated the sell-offs in the first place. These periods are so good, in fact, that over the seven recessions from 1970, the year immediately following the end of the recession were slightly better than “normal times.”
Therefore, what to make of it all and what are investors to do?
- First and foremost, breathe. We have been through inflation, pandemics, wars, poor policies, high rates, low rates, high unemployment, low unemployment, and many other difficult environments before. Incentives drive behaviors and markets are driven by incentives. Those incentives haven’t changed and, as providers of capital, we, as investors, must still rely on those principles above all else.
- Second, recognize our human brain isn’t very good at market timing. Markets are down and if you have experienced the pain thus far, there is very little expected value in trying to time the market going forward. Even the most sophisticated investment organizations in the world can’t time markets very well.
- Third, go back to your plan. Market sell-offs are wonderful opportunities to refresh on goals and objectives. Refresh on how much you are spending and whether savings rates are high enough. Dare I say there might even be opportunities (as most equities are now less expensive and most bonds are now yielding more)?
- Fourth, review your fixed-income (e.g., bond) portfolio. The yield curve is now inverted which means shorter-term bonds are often yielding more than longer term bonds, and those shorter-term bonds are often associated with less risk. There are many other factors involved, of course, but where possible, consider shortening duration (the maturity of the bonds in your portfolio) if you haven’t done so already. Remember, inflation is not yet under control and it is unclear how soon that will happen.
In closing, take a moment to breathe, do not react emotionally, and use the difficult markets as an opportunity to reaffirm your long-term plan.