What is the Federal Reserve System?

Our financial planning team in St Louis often gets questions from our clients about the Federal Reserve System (simply known as "the Fed") and how it can affect their investing and saving strategy.  Understanding what the Fed is, and how this central banking system of the United States operates, can help you work towards achieving your financial goals.  The financial advisor team at Bogetto and Associates want to provide you some historical information about the Fed and how it manages interest rates in the United States.

History of the Fed

The Fed was created on December 23rd, 1913 in response to several financial panics that occurred in the early 20th century.  The need for a centralized monetary system caused the creation of the Federal Reserve System.  The primary motivation for creating the Federal Reserve System was to address banking panics. Other purposes are stated in the Federal Reserve Act, such as "to furnish an elastic currency, to afford means of re-discounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes".  Before the founding of the Federal Reserve System, the United States underwent several financial crises. A particularly severe crisis in 1907 led Congress to enact the Federal Reserve Act in 1913. Today the Federal Reserve System has responsibilities in addition to ensuring the stability of the financial system.

So what does the Fed really do?

The Fed has several functions to include:

• Addressing banking panics
• Serves as the Central Bank of the United States
• Supervise and regulate banking institutions
• Protect the credit rights of consumers
• Manage the nation's money supply
• Moderate long-term interest rates
• Strengthen the US standing in the world economy

The structure of the Fed is comprised of a Board of 7 Governors who are appointed by the President of the United States, and confirmed by the Senate for 14 year terms.  This board oversees 12 District Reserve Banks and sets national monetary policy.  It also regulates the US banking system.

So how does the Fed affect my financial planning?

The Federal Reserve System implements monetary policy largely by targeting the federal funds rate. This is the interest rate that banks charge each other for overnight loans of federal funds, which are the reserves held by banks at the Fed. This rate is actually determined by the market and is not explicitly mandated by the Fed. The Fed therefore tries to align the effective federal funds rate with the targeted rate by adding or subtracting from the money supply through open market operations. The Federal Reserve System usually adjusts the federal funds rate target by 0.25% or 0.50% at a time.

https://en.wikipedia.org/wiki/Federal_Reserve_System#/media/

The effect of increasing or decreasing the federal funds rate has a ripple effect.  In general, the lower the rate, the lower a bank can charge interest on loans such as mortgages, and credit cards.  It costs less to borrow money and provides consumers with access to money to spend immediately.  When consumers pay less for a house or car loan, they have more money to invest or save.  Businesses can also benefit, as it allows them capitol for new equipment or hiring new employees.

If the federal funds rate is higher, then consumers won't have as much disposable income, and banks may make fewer loans.  Businesses may also contract and the demand for goods and services may help to lower inflation.

It's important to keep an eye on what the Fed is doing with the federal fund rate, as it can affect your decision on where to put your investments or savings.  Different financial products may be affected (either positive or negative), and your decision on where to find your highest rate of return my change.  

Let Bogetto and Associates help you figure out what the Fed's effect on your financial goals may be.

Hiring a professional financial advisor firm can make a big difference in working towards achieving your financial goals.  We look at what the Fed is doing and can offer you advice on what financial products may fit best for working toward achieving your goals.  If you have further questions on the Fed or want to know how interest rates affect your investments or savings, please give us a call!

Sources:

http://www.federalreserve.gov/ 

http://www.investopedia.com/articles/stocks/09/how-interest-rates-affect-markets.asp

https://en.wikipedia.org/wiki/Federal_Reserve_Bank 

Financial Health...For Now & Tomorrow

Contact us Today

Website - www.bogettoandassociates.com

Telephone - 314-858-1602

Email - peter@bogettoandassociates.com

10805 Sunset Office Drive, Ste. 202

St Louis, MO 63127

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Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC

Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

Planning for your retirement - it's never too late to start!

Retirement planning is a necessary, but often neglected part of your financial future.  When you start off in your early years (18-35), you are often consumed with the activities of daily living and retirement seems very far away.

In your middle years (35-55), you are just as busy as in your early years, but now you are often dealing with children in school, saving for college years, and possible still paying for student loans. Retirement may still be the last thing on your mind!

As you approach your retirement years, you are hoping to arrive at this proverbial place with debt paid off, money in the bank and a feeling you will be fine now and 30 years into retirement.

At Bogetto & Associates, we have the tools, services and expertise to help you work towards YOUR retirement goals and we are GREAT listeners. Whatever stage of life you and your family are in, we have answers that may help you work towards achieving your short and long term retirement goals.

Many people come to us at 55 when we can still provide answer for a healthy retirement. 401k, IRA,and investments will be your basis for retirement. Social Security needs planning to make sure you are taking advantage of the best way to maximize this benefit. During the planning stage we will show you how to set aside assets for the first year of retirement and for the next 10 years. We will also develop a strategy to handle planning for age 70 and beyond working towards supplementing your income for 10 years or longer.

Here are some ideas that you may want to consider when planning for retirement

(Source:  http://www.dol.gov/ebsa/publications/10_ways_to_prepare.html)

Facts

• Fewer than half of Americans have calculated how much they need to save for retirement.
• In 2014, 30 percent of private industry workers with access to a defined contribution plan (such as a 401(k) plan) did not participate.
• The average American spends roughly 20 years in retirement.

1. Start saving, keep saving, and stick to your goals

If you are already saving, whether for retirement or another goal, keep going! You know that saving is a rewarding habit. If you're not saving, it's time to get started. Start small if needed and try to increase the amount you save each month. The sooner you start saving, the more time your money has to grow (see the chart below). Make saving for retirement a priority. Devise a plan, stick to it, and set goals. Remember, it's never too early or too late to start saving.

2. Know your retirement needs

Retirement is expensive. Experts estimate that you will need at least 70 percent of your pre-retirement income – lower earners, 90 percent or more – to maintain your standard of living when you stop working. Take charge of your financial future. The key to a secure retirement is to plan ahead.

 

3. Contribute to your employer’s retirement savings plan

If your employer offers a retirement savings plan, such as a 401(k) plan, sign up and contribute all you can. Your taxes will be lower, your company may kick in more, and automatic deductions make it easy. Over time, compound interest and tax deferrals can make a big difference in the amount you will accumulate. 

4. Learn about your employer's pension plan

If your employer has a traditional pension plan, check to see if you are covered by the plan and understand how it works. Ask for an individual benefit statement to see what your benefit is worth. Before you change jobs, find out what will happen to your pension benefit. Learn what benefits you may have from a previous employer. Find out if you will be entitled to benefits from your spouse's plan.

5. Consider basic investment principles

How you save can be as important as how much you save. Inflation and the type of investments you make play important roles in how much you'll have saved at retirement. Know how your savings or pension plan is invested. Learn about your plan's investment options and ask questions. Put your savings in different types of investments. By diversifying this way, you are more likely to reduce risk and improve return. Your investment mix may change over time depending on a number of factors such as your age, goals, and financial circumstances. Financial security and knowledge go hand in hand.

http://www.dol.gov/ebsa/publications/10_ways_to_prepare.html

6. Try not to touch your retirement savings

If you withdraw your retirement savings now, you'll lose principal and interest and you may lose tax benefits or have to pay withdrawal penalties. If you change jobs, leave your savings invested in your current retirement plan, or roll them over to an IRA or your new employer's plan.

7. Put money into an Individual Retirement Account

You can put up to $5,500 a year into an Individual Retirement Account (IRA); you can contribute even more if you are 50 or older. You can also start with much less. IRAs can also provide tax advantages.

When you open an IRA, you have two options – a traditional IRA or a Roth IRA. The tax treatment of your contributions and withdrawals will depend on which option you select. Also, the after-tax value of your withdrawal will depend on inflation and the type of IRA you choose. IRAs can provide an easy way to save. You can set it up so that an amount is automatically deducted from your checking or savings account and deposited in the IRA.

8. Find out about your Social Security benefits

Social Security pays benefits that are on average equal to about 40 percent of what you earned before retirement.  For more information about your social security benefits, go to www.ssa.gov.  

9. Ask Questions

Find a financial adviser that you trust, ask questions and make sure you understand the answers. Get practical advice and act now.  The financial planning advisers at Bogetto & Associates are here to answer your questions!

Financial Health...For Now & Tomorrow

Contact us Today

Website - www.bogettoandassociates

Telephone - 314-858-1602

Email - peter@bogettoandassociates.com

10805 Sunset Office Drive, Ste. 202

St Louis, MO 63127

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Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC

Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Meet Peter Bogetto!

Bogetto & Associates has a talented team of financial professionals in St Louis to help you plan for your Financial Health...Now & Tomorrow.  In this week's blog, we want to feature the founder and owner of Bogetto & Associates, Peter Bogetto.

Meet Peter Bogetto

Growing up in the upper peninsula of Michigan, Peter left the beauty of the area to attend LaSalle Institute, a boarding school in Glencoe, Missouri, for his high school years. Here he met students from all over the U.S. South America, and India.

Obtaining a B.A. from St. Mary’s University in Winona, Minnesota Peter went on to teach in Minnesota and Wisconsin before deciding on a financial career. In 1974 he began his financial services career. In 1990 he opened Bogetto and Associates. Through his lifelong interest in healthy living, he believes every client should receive a plan that provides healthy financial choices.

To get to know Peter a little better, we asked him some questions about his family, hobbies, and interests:

Q & A with Peter

Q: Who is your Family?

A: I have three wonderful Children all of whom are successful in their chosen careers. Kay my oldest lives in Indianapolis with her husband Greg Stone and her two boys (my pride and joy) grandsons Jacob 11 and Benjamin 8. They visit often and I try to get to Indianapolis at least once a month. My Daughter Anne has been married to Tim Cejka for less than a year. They are both happy in their careers. I of course would like them to think about giving me another grandchild. My Son Ben is single and is taking over my business. We work together on a daily basis. By the time the weekend comes he really doesn’t want to spend any more time with me. 

Q:  Where did you go to school and how did you gain experience in financial advising?

A:   I got my undergraduate degree from St. Mary’s University in Winona, Minnesota. It included an education degree and I did teach high school students for 5 years. Following that I explored other avenues and settled on the financial industry by becoming a life insurance agent with John Hancock. I completed my financial designation degrees for the Chartered Life Underwriter degree and for the Chartered Financial Consultant degree from the American College. Financial planning and advising was a natural progression for me as it kept me before people and gave me the opportunity to use my teaching skills to establish goals and present financial plans to work towards achieving them. For me what I do has never seemed like work. I love my clients and I love what I do. 

Q:  What is your favorite sport to watch and who is your favorite sports team?

A:  I am not what you would call a sports nut. I do like watching hockey and baseball but find myself preferring to travel to Indianapolis to watch my grandchild play baseball and soccer. 

Q:  Do you have pets?  If so, what kind of pet and what is their name?

A:  I have adopted a senior pet who is 9 years old. He is Chihuahua and is a fierce guard dog and a great companion. He loves to go with me everywhere I go and follows me around the house. His name is Murphy after my first childhood dog. 

Q:  What was the last movie that you saw that you really enjoyed?

A:  I just saw BOSS with Melissa McMarthy. She is currently my favorite comedic actress and I’ve seen most of her films. I also like old movies and tv shows such as I love Lucy, The Golden Girls, and the Honeymooners. I prefer films that will make me laugh. 

Q:  Why did you go into the financial world?

A:  I like helping people work toward achieving their goals. I take every clients goals and objectives very personally and work to give the best advice that I would also give to myself. It allowed me to continue my ‘teaching’ career by teaching clients how money works. 

Q:  What do you like to do when you are not working?

A:  Cooking, going on long walks and hikes with my dog, gardening, working out, going to movies, theatre, out to dinner with family and friends. 

Q:  If you had to give advice to young people today with their finances, what would it be?

A:  Start saving and investing as early as you can. Establish a plan and stick to it. Be sure you have set aside 3 to 6 months of your take home income to help you in the event of job loss or illness. Protect your life value and earning power. 

Q:  What is the last book you read that you liked?

A:  "Sail" by James Patterson. I also like reading books by Balducci and other and other mystery writers. The books that have the most profound effect on me have been my middle eastern writers such as: "The Kite Runner" by Khaled Hosseini and "The Forty Rules of Love: A Novel" by Rumi written by Elif Shafak.

Q:  What do you like the most about helping people with their financial future?

A:   Life is never linear. Like the stock market it has its ups and downs. People who stick to their goals through good and bad times have the possibility of creating wealth for themselves. My greatest joy is seeing people successfully ease into their retirement with enough money to enjoy it.

Financial Health...For Now & Tomorrow

Contact us Today

Website - www.bogettoandassociates

Telephone - 314-858-1602

Email - peter@bogettoandassociates.com

10805 Sunset Office Drive, Ste. 202

St Louis, MO 63127

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Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC

Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates...Financial Health for Now & Tomorrow

The Bogetto & Associates team is here to help you plan towards you financial health with a wide variety of investment and insurance products.  We can help your individual needs and your business financial planning needs as well.  In this latest blog post, we will give you an overview of our financial products and financial services that can help you plan for Now & Tomorrow!

Our Mission

We work to engage individuals, families and businesses on helping them to work towards achieving financial health now and in the future. Our main goal is showing clients how to work towards accumulating wealth and preparing for all the events of living. Each client is unique and there is no one plan that fits everyone. Understanding the clients past financial plans through in depth questioning will help us focus on helping them work towards achieving their goals.

Our Products to help you towards your financial future

Bogetto & Associates offers a range of financial products for you to choose from depending on your current life situation.  We are experts in how each of these products may fit your particular needs, and we can offer advice depending on your financial goals.  

Financial products

• Mutual Funds
• Bond Funds
• Fixed, Indexed and Variable Deferred Annuities
• Immediate Annuities
• Real Estate Investment Trusts

Retirement Plans

• Individual Retirement Accounts (IRA’S)
• Traditional IRA’s
• Roth IRA’S
• Simplified Employee Pension (SEP)
• 401k
• Roth 401k

Insurance

• Life Insurance
• Income Replacement
• Long Term Care
• Medicare Plans

Financial Services available with Bogetto & Associates

Whether you are an individual or business owner, we have financial services that can help you.  Our extensive experience is a strength and we have dealt with the ups and downs of the market.  We also listen very carefully to your needs and goals and can structure a plan to help work towards those goals. Contact us now to start your financial journey!  Here are some examples of our financial services:

Individual Services for Financial Advice

• We are your source for financial planning, goal setting, budgeting, and coaching for retirement, wealth accumulation, investment management and risk avoidance.

Professional Services for Financial Planning

• Team Bogetto has more than 50 years of experience in the markets. Peter started out in Financial Services in 1975. Having lived with the inevitable ups and downs of the market, he knows how to handle volatility.

Estate Planning Services

• Net worth, income, will*, power of attorney, estate transfers and charitable giving are all part of our estate analysis. *Bogetto and Associates does not provide legal advice.

Other Financial Services

• Education funding
• Insurance Analysis and planning
• Pension maximization Strategies
• Social Security Planning
• Long Term Care Planning

Medical Insurance

• Medicare planning

Whether you are just starting out with your financial future, are in your middle years with children and education planning needs, or are looking toward your retirement years, our financial planners in St Louis  may have the products to help you.  Give us a call or contact us via email to start your financial planning journey!

Financial Health...For Now & Tomorrow

Contact us Today

Website - www.bogettoandassociates

Telephone - 314-858-1602

Email - peter@bogettoandassociates.com

10805 Sunset Office Drive, Ste. 202

St Louis, MO 63127

Follow Us

Facebook

Twitter

LinkedIn

Google+

Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC

Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Welcome to the Bogetto & Associates Blog!

Bogetto & Associates Financial Advisors is now blogging!  We are glad you are here and we will be offering a great deal of information in the coming weeks about a wide range of topics.  We will talk about building financial plans for all of your life's events, giving ideas on how to work towards accumulating wealth and achieving your goals, and presenting information on our various financial products in St Louis.

In addition, we will be posting on several social media channels, so if Facebook, Twitter, LinkedIn, or Google+ is your preferred social media channel, we will also be giving some great information on all of these social media platforms that can help you.  We encourage you to also send us your questions, and our financial experts will answer them.  Make sure to subscribe to our blog to ensure you don't miss any of our great advice!

The Bogetto & Associates Mission

We work to engage individuals, families and businesses on helping them work towards achieving financial health now and in the future. Our main goal is showing clients how to accumulate wealth and prepare for all the events of living. Each client is unique and there is no one plan that fits everyone. Understanding the clients past financial plans through in depth questioning will help us focus on working towards achieving their goals.

The Bogetto & Associates Team

Peter Bogetto

Growing up in the upper peninsula of Michigan, Peter left the beauty of the area to attend LaSalle Institute, a boarding school in Glencoe, Missouri, for his high school years. Here he met students from all over the U.S. South America, and India.

Obtaining a B.A. from St. Mary’s University in Winona, Minnesota Peter went on to teach in Minnesota and Wisconsin before deciding on a financial career. In 1974 he began his financial services career. In 1990 he opened Bogetto and Associates. Through his lifelong interest in healthy living, he believes every client should receive a plan that provides healthy financial choices.

Ben Bogetto

Ben is proud to be a Saint Louis native; growing up in Kirkwood and attending Kirkwood public schools from Kindergarten through High School. His college studies led him to Indiana University where achieved a BM, and furthered his passion for culture, music, & athletics. After returning to Saint Louis, Ben joined his father, Peter, in helping American families work towards realizing and achieving their financial goals based around a healthy financial plan. In his free time Ben enjoys attending Saint Louis sporting games and various social and arts events around the city, playing softball, hockey, and golf with friends, and visiting his nephews, Jacob and Benjamin, in Indianapolis.

Follow all of our social media

Don't miss any of the financial planning advice in St Louis that we will be giving.  Make sure to become a fan or follower on all of our social media channels and tell us if you like what we are saying!

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Twitter - https://twitter.com/BogettoAdvisors

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Financial Health...For Now & Tomorrow

Contact us Today

Website - www.bogettoandassociates

Telephone - 314-858-1602

Email - peter@bogettoandassociates.com

10805 Sunset Office Drive, Ste. 202

St Louis, MO 63127

Follow Us

Facebook

Twitter

LinkedIn

Google+

Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC

Bogetto Financial is not affiliated with First Heartland Capital, Inc.