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Start a New Business in 5 Easy Steps

Business Financing

Getting your business off the ground isn’t always as easy as it seems. With a laundry list of to-do items, it can be hard to prioritize which needs have to come first. Luckily, Alpine Bank is here to help! By following these key stepping stones, we’ll help you get on the path to success with your new business venture.

  1. Develop a business plan. Determine what it is you want your business to do, and how you want to do it.
  2. Capital. Capital. Capital. Make sure whether you’re working with investors, securing a business loan, or putting up the money yourself, you have all the funds you need in addition to a large cushion for overhead and operating expenses.
  3. Get it in writing. With options such as an L.L.C, Corporation, S Corporation, Nonprofit or Cooperative, you’ll want to protect your personal finances with a legal structure for your business.
  4. Make it official. After registering with state and local tax agencies, you’ll need to obtain the appropriate permits and licenses to make your business compliant with local laws and regulations.
  5. Get people in the door. Ensure you have an effective marketing strategy, or list of transferred clients to get your business off the ground. The old saying, “If you build it they will come,” no longer applies. Make sure everyone in your area knows you’re opening, and offer a valuable incentive to help encourage them to stop by.

Local businesses are the backbone of small town America. If you’re looking to set-up your own new shop, Alpine Bank is eager to help! Our experienced business lenders are here to find you the best business financing option for your needs!

Save $3,500 this Year by Removing These 6 Things

Saving Money

 

Saving money is no easy task! Only after dedication and determination, can you look successfully into your account to see the difference saving can make. At Alpine Bank, we’re excited to help you achieve your financial goals, and we can’t wait to get started! If you’re looking to tuck some funds away for an emergency savings, or vacation fund, these six tips can help you accumulate $3,500 in savings over the course of the next year.

  1. $720: Cut the cable – at $60+ each month this common expense eat up your budget in a hurry!
  2. $1400: Brew your own java – instead of grabbing a latte on your way to work make your own cup of joe and save that extra $4/day.
  3. $600: Plan Your Meals – instead of playing by ear each night for dinner, make a dedicated meal plan each week and stick to it. This will help cut costs on eating out and unused groceries. Remove one dining out meal each month and see the difference this can make!
  4. $468: Workout at home – the average gym membership runs $39/month which over the course of the year can add up quick. Try online workout videos and create a routine which uses various household items.
  5. $312: Pack your lunch – With most quick lunches running about $10/each, sneaking away for lunch could be costing you! Try packing a lunch from home to avoid these expensive dining options. Changing just three lunches each month could save you more than three-hundred dollars!

 

Learn how to open up your ideal savings account at Alpine Bank to get started on your savings dreams today!

Retirement Planning: The Basics

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Determine your retirement income needs

It’s common to discuss desired annual retirement income as a percentage of your current income. The problem is that it doesn’t account for your specific situation. To determine your specific NEEDS, you may want to estimate your annual retirement expenses.  You can use your current expenses as a starting point, but note that your expenses may change dramatically by the time you retire.  You should also take inflation into account. The average annual rate of inflation over the past 20 years has been approximately 2.3 percent. (Source: Consumer price index data published by the U.S. Department of Labor, January 2015.) A realistic estimate of your expenses will tell you about how much yearly income you’ll need to live comfortably.

Calculate the gap

Once you have estimated your retirement income needs, take stock of your estimated future assets and income. These may come from Social Security, a retirement plan at work, a part-time job, and other sources. If estimates show that your future assets and income will fall short of what you need, the rest will have to come from additional personal retirement savings.

Figure out how much you’ll need to save

By the time you retire, you’ll need a nest egg that will provide you with enough income to fill the gap left by your other income sources. But exactly how much is enough? The following questions may help you find the answer:

  • At what age do you plan to retire? The younger you retire, the longer your retirement will be, and the more money you’ll need to carry you through it.
  • What is your life expectancy? The longer you live, the more years of retirement you’ll have to fund.
  • What rate of growth can you expect from your savings now and during retirement?
  • What do you want to do in retirement?

Build your retirement fund: Save, save, save

When you know roughly how much money you’ll need, your next goal is to save that amount. It’s never too early to get start saving (ideally, begin saving in your 20s). You may want to arrange to have certain amounts taken directly from your paycheck and automatically invested in accounts of your choice. This arrangement reduces the risk of impulsive spending that will threaten your savings plan.

Understand your investment options

You need to understand the types of investments that are available, and decide which ones are right for you. If you don’t have the time, energy, or inclination to do this yourself, hire a financial professional. He or she will explain the options that are available to you, and will assist you in selecting investments that are appropriate for your goals, risk tolerance, and time horizon. Note that investments may involve the risk of loss of principal.

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

What Is Inflation and Why Should You Care About It?

ABANK_12_FacebookPrices: Up, up and away

Inflation occurs when there is more money circulating than there are goods and services to buy. The process is like trying to attend a sold-out concert at the last minute; there is more demand for tickets than there are tickets to go around. As a result, tickets may trade hands for far more than their stated prices. When there’s a lot of demand for goods and services, their prices usually go up. The law of supply and demand produces price inflation.

Inflation cuts purchasing power

When some people say, “I’m not an investor,” it’s often because they worry about the potential for loss. It’s true that investing involves risk as well as reward. However, there’s also another type of loss to be aware of: the loss of purchasing power.

Inflation is painful enough when you experience a sharp jump in prices. However, the bigger problem with inflation is not just the immediate impact, but its effects over time. Because of inflation, each dollar you’ve saved will buy less and less as time goes on. At 3% annual inflation, something that costs $100 today would cost $181 in 20 years.

Personal Financial Planning

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Financial planning is the process that can help you pursue your goals by evaluating your whole financial picture, then outlining strategies that are tailored to your individual needs and available resources.

The financial planning process

Developing a comprehensive financial plan and putting it in place generally involves the following steps:

  • Take account of your income, assets, regular monthly expenses, and liabilities; evaluate your insurance, your investments and savings, and your estate plan
  • Establish and prioritize your financial goals and set a time frame for each
  • Identify areas of financial concern and financial strengths
  • Monitor your plan and make adjustments as your goals, time frames, and circumstances change
  • Use the services of financial professionals who have the expertise necessary to provide objective information and help you implement your plan results

Set and prioritize financial goals

Determining financial priorities and goals is ultimately the responsibility of you and your family. Start by making a list of your short-term goals (e.g., new car, vacation) and your long-term goals (e.g., home purchase, child’s education, retirement). Then try to prioritize those goals. How important is each goal to you and your family? How much will you need to save in order to reach each goal? Once you have a clearer picture of your goals, you can work toward establishing a budget that can help you pursue them.

Establish a budget

Creating and maintaining a budget may not only help you target your financial goals, but regularly reviewing and updating your budget can help keep you on track. To develop a budget that is appropriate for your lifestyle, you’ll need to identify your current monthly income and expenses.

Start by adding up all your income. Next, add up all your expenses. It helps to divide them into two categories: fixed expenses (e.g., housing, food, clothing, and transportation) and discretionary expenses (e.g., entertainment, vacations, and hobbies). You’ll also want to make sure that you have identified any out-of-pattern expenses, such as holiday gifts, car maintenance, and home repair.

Once you’ve added up all your income and expenses, compare the two totals. If you find yourself spending more than you earn, you’ll need to make some adjustments. Look at your expenses closely and cut down on your discretionary spending.

Tips to help you stay on track

  • Stay disciplined: Make budgeting a part of your daily routine
  • Distinguish between expenses that are “wants” and expenses that are “needs”
  • Avoid using credit cards to pay for everyday expenses: It may seem as though you’re spending less, but your credit-card debt may continue to increase

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

Six Small Ways to Save Big Money

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Instead of focusing a lot of effort on making many changes to your spending habits, these six areas of your financial life can yield big savings and earnings with just a few small tweaks.

  1. Insurance

Many insurance carriers offer a bundling discount if you purchase multiple insurance plans through them. If you have two cars, insure both with the same firm, and consider using that firm for your rental or home owners insurance too. Ask your broker for other discounts you might be eligible for. Another great way to save on auto insurance is to increase your deductible to lower your monthly premiums.

  1. Your home

If you’re currently looking for a new home, try to purchase one that costs less than what you think you can afford, and don’t forget to factor in association fees, taxes, homeowners insurance and other costs that come with owning a home. If you already own a home, consider refinancing to potentially save hundreds each month. Finally, making your home safer (by installing a smoke detector, for example) can decrease your home owners insurance premiums.

  1. Debt payment

If you can, pay off your credit card bills in full each month so you won’t ever have to pay interest. To prevent having to put large amounts of money on a credit card with a high interest rate, save up an emergency fund for unexpected expenses. If you’ve already charged a sizable debt, develop a debt repayment plan and work it into your budget so you can pay off your cards as soon as possible and pay less interest in the long run. If you’re in good standing, it’s worth it to contact your credit card company to request a lower interest rate.

  1. Spending plan

Think of your budget as a way to organize your spending, not necessarily limit it. You can automate your finances to make sure your savings and investing goals are always met and your bills are always paid on time. This will save you money by avoiding late fees and penalties. By having a budget, you’re less likely to waste money on purchases you’ll later regret.

  1. Taxes

Make sure you’re taking advantage of applicable deductions and credits. To lower your taxable income, contribute money to a 401(k), IRA or 529 plan. To minimize your capital gains tax, consider selling some of your investments at a loss—but make sure you’re not using taxes as your main motivation for selling. Another easy way to get a tax deduction is to make a charitable contribution. Finally, a Health Savings Account is a tax-free way to save money for health expenses. The money goes into the account tax-free and is exempt from taxes upon distribution.

  1. Investing

The best way to get a return on your investment is to start early. Open a retirement plan and begin contributing as soon as possible so your money can experience the “magic of compounding” that only happens over time. Keep in mind that frequent trading and investing small amounts over time may cost more in commission and fees. Research the fees associated with your investments to make more strategic decisions or consider switching to a lower cost plan.

Sometimes the smartest financial moves (such as investing or buying insurance) can quickly eat away at your budget. By making small changes in these six areas, you can save significant amounts of money without significant effort.

Investment and insurance products are: not Alpine Bank products; not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

Time Can Be a Strong Ally in Saving for Retirement

ABANK_16_Facebook_v4Father Time doesn’t always have a good reputation, particularly when it comes to birthdays. But when it comes to saving for retirement, time might be one of your strongest allies. Why? When time teams up with the growth potential of compounding, the results can be powerful.

Time and money can work together

The premise behind compounding is fairly simple. Your invested dollars may earn returns from those investments, then those returns may earn returns themselves–and so on. That’s compounding.

Compounding in action

To see the process at work, consider the following hypothetical example: Say you invest $1,000 and earn a return of 7%–or $70–in one year. You now have $1,070 in your account. In year two, that $1,070 earns another 7%, and this time the amount earned is $74.90, bringing the total value of your account to $1,144.90. Over time, if your account continues to earn positive returns, the process can gather steam and add up.

Now consider how compounding might work in your retirement plan. Say $120 is automatically contributed to your plan account on a biweekly basis. Assuming you earn a 7% rate of return each year, after 10 years, you would have invested $31,200 and your account would be worth $45,100. That’s not too bad. If you kept investing the same amount, after 20 years, you’d have invested $62,400 and your account would be worth $135,835. And after just 10 more years–for a total investment time of 30 years and a total invested amount of $93,600–you’d have $318,381. That’s the power of compounding at work.

Keep in mind that these examples are hypothetical, for illustrative purposes only, and do not represent the performance of any actual investment. Returns are likely to be different each year, and are not guaranteed.

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

Retirement Plan Considerations at Different Stages of Life

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Throughout your career, retirement planning will likely be one of the most important components of your overall financial plan. Whether you have just graduated and taken your first job, are starting a family, or are enjoying your peak earning years, your employer-sponsored retirement plan can play a key role in your financial strategies.

Just starting out

If you are a young adult just starting your first job, chances are you face a number of different challenges. College loans, rent, and car payments are competing for your entry-level paycheck. The decades ahead of you can be your greatest advantage for your retirement fund. Through the power of compounding, you can put time to work for you. Compounding happens when your plan contribution dollars earn returns that are then reinvested back into your account, earning returns themselves. Time offers an additional benefit–the potential to withstand stronger short-term losses in order to pursue higher long-term gains. That means you may be able to invest more aggressively.

Getting married and starting a family

You will likely face even more obligations when you marry and start a family. Mortgage payments, higher grocery and gas bills, child-care, family vacations, college savings contributions, and home repairs and maintenance all compete for your money. Although it can be tempting to cut your retirement savings plan contributions to make ends meet, do your best to resist temptation and stay diligent. Your retirement needs to be a high priority. While you’re still approximately 20 to 30 years away from retirement, you have decades to ride out market swings. That means you may still be able to invest relatively aggressively in your plan.

Reaching your peak earning years

The latter stage of your career can bring a wide variety of challenges and opportunities. Older children typically come with bigger expenses. You may find yourself having to take time off unexpectedly to care for aging parents. On the other hand you could be reaping the benefits of the highest salary you’ve ever earned. With more income at your disposal, now may be an ideal time to increase your contributions. If you’re age 50 or older, you may be able to take advantage of catch-up contributions, which allow you to contribute up to $24,000 to your employer-sponsored plan in 2016, versus a maximum of $18,000 for most everyone else.

 

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

Doetch Farms

Spring Planting Season

Jeremy Doetch

Jeremy Doetch, VP, Ag & Commercial Services

As spring starts to erase the remnants of winter, I can’t help but get anxious and excited for this season.  It’s the time of year that I make a checklist for the next 90 days. The reasons I do this is because I’m part of an elite group that consists of 2% of the United States population. This group is working feverishly to get everything ready.  We check and double check equipment, technology items, seed, and fertilizer, and then we count down the days until it all begins. Every member of this group has their own way of preparing for the spring.

For me, this checklist revolves around smells. It may sound funny, but it’s something that has been sown deep into my roots. I can’t wait to smell the exhaust from a tractor just starting up. I can’t wait to smell fresh tilled dirt. The mixture of seed and graphite, along with the occasional smell of grease.  The way the smell of the dirt changes from May to April to June – And then, the satisfaction of a carefully executed plan coming to fruition when I see the first sign of corn and soybeans sprouting above the ground. The smell of freshly cut hay and yes, even the smell of fertilizer.  These smells keep me grounded, keep me focused, and keep me on track.

These checkpoints help me understand and appreciate a farmer’s perspective. When I’m sitting across the desk from a farmer wanting to do business with me, I never forget my roots and I know that this farmer understands my appreciation of these smells in a way that the other 98% of the population does not. We’re farmers. We’re part of an elite group.

Our agriculture lending team has very deep roots in this industry.  When we take the banker hat off at the end of the day, we are putting the farmer hat on.  We strive to help farmers grow their business, protect their legacy, and transition to the next generation.  If your banking relationship is broken and needs repairs, we have the tools to fix it and get you back to enjoying the smells that you love, worry free.

So to my fellow elitists, I wish you all a prosperous and safe spring planting season.  I hope at some point this season, as you are filling your planter at sunset, you take in a deep breath and think to yourself, “It doesn’t get any better than this.”

Jeremy Doetch, Vice President, Ag & Commercial Services, has more than 14 years of experience in commercial and agricultural lending. From the Poplar Grove area, Doetch plays an active role in his family’s grain, hog and trucking operation. 

Three Keys to Remember for IRAs

Stephen Hofmann, J.D., CPS, Assistant Vice President, Wealth Advisor & Investment Officer

Stephen Hofmann, J.D., CPA, Assistant Vice President, Wealth Advisor & Investment Officer

It’s that time of the year – we all have taxes on the brain. Whether you’ve yet to file, or if you’ve already filed and are looking to get this next year started off on the right foot, we’ve got some key reminders regarding taxes and IRAs.

    1. It’s time to save with a Traditional IRA. Depending on your age, you may still have time to contribute to an Individual Retirement Account (IRA). The Internal Revenue Service (IRS) imposes deadlines on when contributions can be made to traditional IRAs. If you have not filed your tax return, and would still like to make a 2015 contribution, you still have time. For 2015 contributions, you have up until the filing of your 2015 income tax return or April 18, 2016.
    2. There are current tax benefits with a Traditional IRA. At $5,500 ($6,500 age 50 and older), the annual limits to an IRA may seem small, but combined with tax breaks and compounding, your savings can add up significantly over time. Depending on your income, you may receive a current tax deduction for the amount of your annual contribution. The size of that tax deduction depends on the tax bracket you are in for 2015. In other words, the traditional IRA can have a double benefit, by saving for retirement and providing a current income tax deduction.
    3. Don’t forget about the Roth. The annual contribution limits to a Roth IRA are the same as a Traditional IRA. However there is no current income tax benefit for contributing. Under current IRS rules, the assets in a Roth IRA will grow income tax free. When you make qualified distributions from a Roth, those distributions are not taxable (traditional IRA distributions are treated as taxable ordinary income). With patience, the tax free benefit of a Roth IRA can be a strong planning tool for your retirement. The Roth does have income contribution limitations, but if a taxpayer is eligible to contribute, the taxpayer can reap large future benefits.

Alpine Trust & Investment Group offers several different calculators to help you begin your planning. These tools are an excellent place to start, providing an opportunity to identify your desired course of action. Meeting with a wealth advisor or retirement planning specialist will help you put that plan in place. Please feel free to reach out to one of our many talented advisors here at Alpine Trust & Investment Group.

Stephen Hofmann, J.D., CPA, is an Assistant Vice President, Wealth Advisor & Investment Officer at Alpine Trust & Investment Group. He has more than 7 years of experience in managing assets, tax planning and financial planning. 

*This does not constitute tax planning services. The above statements do not include all IRS rules that may impact the contributions and tax benefits. To confirm what options are available to you, please contact one of our wealth advisors or retirement planning specialists.

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.