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DECEMBER 2012 VOLUME 3 ISSUE 5

Financial focus

A Look Back and a Glimpse Ahead At Timothy Herbert Financial Group, we want to continue to provide all

of our clients with superior service and a top-notch experience. As part of that commitment to you, we are pleased to provide you with

our 5th semi-annual newsletter, filled with personal notes from the staff, educational articles, great photos from past events and much

more. On behalf of the entire team, we wish each of you a wonderful holiday season and a prosperous New Year!

INSIDE THIS ISSUE Six Excuses for Not Saving for Retirement 2

Drought Doesn’t Only Affect Farmers 3

Going Green for the Holiday Season 4 Juvenile Diabetes Event 2012 5 Special Post-Election Analysis 6 Understanding the European Crisis 7 Contact Our Team Members 8

Happy Holidays!

Six Excuses For Not Saving For Retirement

We have all heard them and most of us have had occasion to give a few. Excuses are a means of rationalizing behavior we think may be controversial. For those on the receiving end, they can be a source of humor or disgust. One thing is for certain, people have a lot of excuses for not saving for retirement. Here are six of them:

I am paying for my child’s college education. There are many ways to fund your child’s education, including student loans, scholarships, grants, and other means. There are very few ways to fund your retirement. Retirement should be a savings priority. My parents died young. Dying young is not a retirement plan and cannot be relied on. People are living longer today than ever before, and the trend is expected to continue.

I will live on social security. According to the 2010 trustees report for the Social Security Administration, the reserve will run out by 2037, and projected tax proceeds should cover about 75 percent of benefits through 2084. If Congress does nothing, younger generations may receive lower benefits than expected. I will always work. A day may come when you are not able to work anymore. About 40 percent of people retire earlier than expected. Almost two-thirds of them retire because of poor health or a disability.

BENEFITS OF BEING

ONE WITH NATURE

Remember when your Mom would order you to go

outside and play? It turns out she was on to

something. Studies across the globe have found that spending time in nature –

playing in the yard, walking through the woods, or even

just observing a natural setting- offers a wealth of

health benefits:

• Lowers cortisone (the stress hormone) levels

• Reduces blood pressure • Improves immunity • Sharpens memory • Improves attention span

Too many current expenses. The only cure for too many expenses is old-fashioned budgeting. Always pay yourself first and, if there is money left over, splurge on the things you want. Don’t think about what you are missing today; think about what you will get in the future. I am unemployed. Losing your job is not uncommon today. While unemployed, you may have to cut back or stop saving all together. Once you find a new job, make sure you start saving for retirement immediately. If you have been excusing yourself from saving for retirement, it’s time to

take action. Join your employer-sponsored retirement plan, open an IRA, or call us for additional suggestions about how to save and invest for

your future.

The above material was prepared by Peak Advisor Alliance.

TIMOTHY HERBERT

The Herbert Family had a great summer spending time on the lake! Now that fall/winter has started, Kara is back at Michigan State University and is a

sophomore this year. Madison is also a sophomore this year at Clarkston High School.

To learn more about Tim, you can visit his On a Personal Note page!

The Torosian’s are geared up and ready for a fun winter! Noah, their oldest son,

started pre-school this fall. Luke has enjoyed uninterrupted “Mommy time”

for the first time! To learn more about Scott, you can visit his

On a Personal Note page!

SCOTT TOROSIAN

PERSONAL NOTES

The worst Midwest drought since 1988 baked farms from Arkansas to Ohio and threatening corn output during the summer of 2012. The price of the grain used in food for people and livestock is surging at a time when retail meat costs are at near record highs. “The most serious consequence of the increasing heat… has not been the temperatures. It has been the evaporation rate. Much of the U.S. was left drought stricken by almost two years of La Nina conditions,” said climatologist Evelyn Browning-Garriss, author of BrowningNewsletter.com. Ernie Goss, a professor of economics at Creighton University in Omaha, Nebraska, warns that the drought will have regional, national, and even international consequences. “Farm income, which has underpinned the growth of many rural states, will be under ‘significant’ downward pressure,” he said. In June 2012, farmers were expecting record yields. They will suffer even though federal crop insurance programs will prevent the dust bowl bankruptcies and farm repossessions that John Steinbeck wrote about in his 1939 classic, The Grapes of Wrath. This year, insurers will see “the largest claim they’ve probably ever had,” predicts John Cory, chief executive officer of Prairie Mills Products LLC, a grain processor in Rochester, Indiana. In the past decade, the average price of food, as measured by the United Nations, has tripled.

While spending on food as a percentage of income in the U.S. may still be less than 10 percent, more vulnerable countries are suffering. Egyptians, for example, spend 40 percent of their income on food. Jeremy Grantham, the founder of the GMO investment management fund, says food is a big worry, especially the meat habit acquired by the world’s exploding middle class. One pound of dressed beef displaces 30 pounds of grain, he said. Grain productivity may be reaching a point where the big wheat and rice producers have not made any progress for more than 10 years. While we often hear “There is no inflation,” consumers already have experienced food price inflation in recent years. Inflation is insidious because it usually incurs incrementally and is sometimes disguised by food retailers who reduce the weight of items, but not the price. Inflation also compounds because the 10 percent price increase paid today is a bigger cash outlay than a 10 percent price increase a year or two ago. Restaurant chains will face higher costs, but less so for the multi-national companies such as McDonalds and Yum Brands, which can source produce locally in the many different countries where they operate. However, households will be most affected in the months and possibly years ahead as the prices for most everyday foods, from bakery products to soups, and especially meat and chicken, increase. Browning-Garriss says that the U.S. – which ended the La Nina cycle with 56 percent of the lower 48 states with dry or drought conditions – is now 72 percent dry. Even more serious are the dried out areas as they are the most productive agricultural lands in the nation. The above material was prepared by Peak Advisor Alliance.

PERSONAL NOTES

DEANNA HARLESS

BRIAN HERBERT

Deanna and her husband just celebrated their first anniversary! They had a great summer including

trips to Alabama and Northern Michigan. In addition to their two adorable cats, Leonardo & Leia, they are further expanding their family as

they are expecting their first child in February 2013! To learn more about Deanna, you can visit her

On a Personal Note page!

Brian’s daughters are both registered nurses. His older son Austin is a senior at Royal Oak High

School and his younger son Wade is a freshman. Brian enjoys running and working out in his

spare time. To learn more about Brian, you can visit his

On a Personal Note page!

HOLIDAY SNACKING

Chocolate Peppermint Smoothie

Ingredients

2 cups chocolate yogurt

1 cup ice

1 cup milk

3 tablespoons chocolate syrup, plus extra for glass

3 candy canes, crushed

Directions In a blender, add yogurt, ice,

milk and chocolate syrup. Puree until smooth. Moisten the rims of each glass and press into crushed candy

cane. Drizzle chocolate syrup in each glass then pour in

smoothie. Recipe from FoodNetwork.com

Drought Doesn’t Only Affect Farmers

DANIELLE

BOYER

Danielle graduated from Oakland University in April with a Bachelor’s degree in Finance and a

minor in Communications. She is looking forward to the fall and winter months so she can

carve pumpkins and plan family holiday gatherings!

To learn more about Danielle, you can visit her On a Personal Note page!

PERSONAL NOTES

LIZ KAADOU

Liz joined Tim’s team in April of 2012 as the Director of Marketing. She is a graduate of the

University of Michigan and loves her Wolverine’s – GO BLUE! Liz is looking forward to the winter

months so she can start her holiday shopping and baking!

To learn more about Liz, you can visit her On a Personal Note page!

Going Green for the Holiday Season

The Holidays Never Felt So Green Imagine how much energy and natural resources are wistfully wasted during the holiday season? The time has come to add a glimpse of green glimmer to your holiday traditions! Here are a few tips: 1. Opt for a live tree. You can even choose a tree that you can plant in your backyard once the holidays are over!

2. Reduce your outdoor decorations. Try using LED lights! Also, limit your light time. Adjust your use of decoration lights for use from dusk to bed time, turning them off during the day and when you’re not home.

3. Use recycled materials. You can cut up last year’s holiday cards to make tags for this year’s gifts. You can also use recycled paper for wrapping. Try decorating your tree with strings of popcorn and pine cones that can be given to the birds and animals outside once you take your tree down.

4. Choose environmentally-friendly gifts! Give the gift of homemade, organic bread. Sponsorships and adoptions are also great gifts (such as adopting a whale). There are great earth-friendly jewelry stores that make jewelry out of zulugrass, which is sustainable natural grass that are dyed an array of different colors. These beads are handcrafted and entirely eco-friendly!

5. Send gift cards! You can send them online via email, this reduces the need to drive and it takes less fossil fuels to send gift cards than transporting large boxes! GO GREEN WITH YOUR FINANCES! The time has come to go green with your financial statements! Instead of having them mailed to your home, why not have them electronically delivered to your email and reduce paper waste? Follow these quick tips to finally feel financially green! Go to your fund company’s website and on the homepage there should be an area that says “Go Green” or “Go Paperless.” Click that area and follow the directions! If you are unable to locate the paperless statement option from the fund company’s website, go to Google Search and type in the fund company’s name and the word “paperless.” For example you could search “Jackson National Paperless.” A link should come up taking you directly to the page.

PERSONAL NOTES

VICKI LIFT

Vicki, Ken and Mackenzie are keeping busy with the newest addition to their family, “Dolce.” Dolce is a 16.4 Hand Hanavarian horse. Between horse shows, volleyball and high school, the family has

been very busy! To learn more about Vicki, you can visit her

On a Personal Note page!

Juvenile Diabetes Walk 2012

As many of you know, we chose to team up with the Juvenile Diabetes Research Foundation as a corporate sponsor for the 2012 Walk to Cure Diabetes event. The walk took place on Sunday, September 23rd and was an immense success, as well as

a very humbling and emotional experience. It raised over 1.4 million dollars for the foundation! All of us here at Timothy Herbert Financial Group joined together and walked the 1.5 miles around the GM Tech Center to aid the foundation in finding

a cure for Type 1 Diabetes. Our goal was to help those affected by this incurable disease live a longer and healthier life. Tim’s younger brother has suffered from Type 1 Diabetes his entire life, so partnering with this amazing foundation was a

cause very close to his heart.

We are very excited to announce that with the help of all of our wonderful clients, business partners, friends and family, we were able to raise $3,705.00 for the Juvenile Diabetes Foundation. While a cure still does not exist, this money will aid the foundation in continuing the extensive advancements they have made in the battle against diabetes. Words cannot express

our heartfelt gratitude to everyone that supported us in this lifesaving walk. Each and every one of you is now a hero to someone with Type 1 Diabetes. On behalf of our entire team, we truly thank you for your support.

Please visit our Timothy Herbert Gives Back page for updates on the Juvenile Diabetes Research Foundation, as well as

information about all of the deserving charities we support. We were also featured in a number of local newspapers about our partnership with JDRF. Please visit our Newsroom page for links to all of the wonderful articles!

Special Post-Election Analysis

With the election behind us, what’s next for the economy and the financial markets? In this special analysis, we’ll take a look at what the election means, how the markets are reacting, and where we go from here. What the Election Means For starters, the political makeup of the country hasn’t changed much. President Obama remains in the White House, the Democrats are still in charge of the Senate, and the Republicans retain the House. With no significant change in the balance of power, both parties will have to find ways to compromise in order to keep the country moving forward and to avoid the economy falling off the looming fiscal cliff. Economically, our politicians need to tackle two major issues – the fiscal cliff and unemployment. The fiscal cliff is perhaps the biggest and most immediate of the two. As a result of previous legislation, deep, automatic federal spending cuts and tax increases will take place in January unless the President and Congress agree to some alternative plan. If they fail to reach an agreement, going over the cliff, “would not only risk another recession, but would intensify anxiety about the dysfunction of the U.S. political system,” according to The Wall Street Journal. On a related note, our ever-growing national debt is deeply entwined with the fiscal cliff issue. If Washington can effectively solve the cliff issue, it might also put the deficit on a path to sustainability – and that could be great news for the economy and the markets. The second issue is unemployment and it is deeply entwined with economic growth. While the unemployment rate has come down, it’s still too high as, “roughly 3.6 million Americans have been without work for a year or more and are still looking,” according to The Wall Street Journal. Government policies and regulations have a major impact on corporate America’s desire to hire and expand. If our leaders can enact pro-economic growth policies, it might encourage businesses to reinvest and hire more people.

Here are several other things to keep in mind as a result of the election: 1. Healthcare overhaul Love it or loathe it, it’s here to stay. Among other things, companies with 50 or more full-time equivalent employees will be required starting in 2014 to provide health-insurance benefits or pay a penalty. While small businesses may not be happy about that, at least they can now plan for it.

2. Tax Increases President Obama has said he’d like to see taxes rise for couples earning more than $250,000 a year. Also, tax rates on dividends and capital gains may rise. Of course, these won’t happen unless Congress passes them.

3. Tax Breaks Both sides seem to agree that certain tax breaks and loopholes will have to go as part of any compromise. And, while this might avoid raising tax rates, it would mean a tax increase for those affected.

4. Entitlement Reform Any “grand bargain” on the deficit will likely mean changes to Social Security and Medicare. In other words, we could see Democrats agreeing to reductions in benefits in exchange for Republicans agreeing to tax increases or closing tax loopholes. 5. Easy Money With the President’s reelection, Federal Reserve policy is likely to remain “easy.” This could mean more rounds of quantitative easing and continued low interest rates. The economic issues facing our country are serious and the folks in Washington know it. They also realize it will take compromise to get things done. As CNN said, “Both sides agree the best outcome would be a broad deal addressing the overall need for deficit reduction, including reforms to the tax system and entitlement programs such as Social Security, Medicare, and Medicaid.” Let’s hope our politicians put politics aside and do what’s best for our country to get us growing strongly on the road to economic prosperity.

How the Markets Are Reacting With the polls showing the President in the lead going into Election Day, the financial markets shouldn’t have been surprised when he won – but it appears they were. U.S. stocks dropped 3.6 percent in the two days after the election before finishing slightly higher on Friday, according to data from Yahoo! Finance. Looking at history, it’s interesting to note that the stock market performed quite well during President Obama’s first term. The S&P 500 index rose 76 percent from inauguration day to last week’s Election Day. By contrast, it declined 13 percent during George W. Bush’s first term, rose 60 percent during Bill Clinton’s first term, and rose 25 percent during Ronald Reagan’s first term, according to MarketWatch. How much of those returns can be attributed to each President’s policies is anybody’s guess, so it’s hard to draw solid conclusions from them. In terms of sectors to monitor, MarketWatch says the following might benefit from the election results: 1. Healthcare Drug companies and insurers might benefit from the healthcare mandate as coverage expands over time. 2. Home Construction and Real Estate Continued quantitative easing and low interest rates may bode well for the housing market. This could be very beneficial for the economy as housing plays a significant role in economic growth 3. Precious Metals Gold prices rose last week as investors think continued quantitative easing could be bullish for the shiny metal. Where We Go From Here Putting the election behind us has removed one hurdle to moving the country forward. With campaigning out of the way, Washington can get back to work.

The above material was prepared by Peak Advisor Alliance.

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Understanding the European Crisis

Countries with too much sovereign debt have increasingly found it difficult to raise the money they need at affordable rates in the financial markets. At the same time, banks in many of these countries have come under pressure as deposits have fled to countries with stronger economies. Because the banking systems are much larger than the economies of their home countries, the governments lack the ready resources to prop up banks in trouble. Until recently, Spain’s sovereign debt was roughly the same as Germany’s as a percentage of economic output, according to the International Monetary Fund. But Spain has Europe’s highest unemployment rate and is once again in recession. As its banks have deteriorated, Spain has been forced to seek assistance for them from elsewhere in Europe. Many of Europe’s Economies Are Weakening The debt crisis and government efforts to curb spending have further weakened many economies. The crisis first afflicted some of the smaller economies, but is now threatening larger ones like Spain and Italy. In the short term, the economic outlook is poor with many peripheral countries in deep recession. Their Banks, Which Dwarf Their Economies, Are Hurting Though the banks of many European countries have long been larger than their home countries’ economies, they are now in some cases more than twice the size. The loan portfolios of many of these banks have deteriorated substantially. And many banks had borrowed to lend more than they had in deposits. With loans going bad, the banks need to shore up their capital. But investors no longer want to lend them money. And depositors, fearing the banks might not survive, have been moving their money to banks in stronger countries, like Germany.

Many Countries Mired in Debt The countries that adopted the euro were supposed to adhere to strict spending standards to prevent their debt from getting too big. They agreed to a debt target of 60 percent of their economic output. Some did, but others, with substantial social safety nets, were not as frugal. They could finance their deficit spending at relatively low interest rates as long as Europe’s economy remained healthy.But when the financial crisis erupted, the economies shrank and their debts ballooned. Investors began to lose faith in the ability of those countries to repay their debts So Many People Out of Work The best and perhaps the only way for Europe to recover from its financial problems is to get its economies growing rapidly again. That could ease some of the pain that has led to political and social unrest. The unemployment rates of many countries are very high. In Spain and Greece, the rates are comparable to what they were in the United States during the Great Depression.

Hundreds of Billions In Aid Has Come Up Short Two bailout funds have been created for countries that need assistance. The problem with the funds is that they are essentially a form of self-insurance. Since they were created, the funds have provided loans to Ireland, Portugal, Greece and now for Spain’s banks. As countries become debtors, they drop out as guarantors, putting more financial demands on the other European countries. The situation in Europe might be worse were it not for a system that was created to clear transactions between central banks. That system is now providing loans to central banks of countries whose banks are suffering withdrawals. The money comes from the central banks of nations with healthier banks, like Germany, the Netherlands and Luxembourg. Germany already has substantial exposure to the weaker economies, which is one reason it has been reluctant to agree to issue pan-European bonds.

By DYLAN LOEB McCLAIN http://www.nytimes.com/interactive/2012/06/14/business/global/understanding-the-european-crisis.html

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REGISTERED REPRESENTATIVES OPERATIONS LEADER ASSOCIATES Timothy Herbert Danielle Boyer Associated Tax Planners, LLC 248-648-8598 x 106 248-648-8598 x136 Stephen Hayes, CPA therbert@cfiemail.com dboyer@cfiemail.com 25240 Lahser Road, Ste 3 Southfield, MI 48033 Scott Torosian DIRECTOR OF MARKETING Tel: 248-353-9353 248-648-8598 x 103 Liz Kaadou Fax: 248-416-1187 storosian@cfiemail.com 248-648-8598 x 113 email: steve@taxplantoday.com ekaadou@cfiemail.com

TEAM LEADER DIRECTOR OF FIRST IMPRESSIONS Estate Planning Associate Deanna Harless Vicki Lift Thomas Mohan 248-648-8598 x 106 248-648-8598 248-267-3298 dharless@cfiemail.com mohant@millercanfield.com MARKETING ASSOCIATE Brian Herbert 248-648-8598 x 135 bherbert@cfiemail.com

2701 Cambridge Court, Suite 525 Auburn Hills, MI 48326

Main: 248-648-8598 Fax: 248-648-8599

therbert@cfiemail.com www.timothyherbert.com

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