Holidays and long weekends are a popular time for email scammers to strike. Recipients of scam messages are more likely to believe urgent pleas for money or assistance from an acquaintance on vacation who says they are unreachable by phone. Meanwhile, victims are less likely to check their email on their day off to discover strange replies that might tip them off that their account has been hacked and used to send scams to their contacts.
That might help explain why this morning after Independence Day weekend, I have already heard from several people who received an email from a known contact who claims to be travelling and in urgent need of a birthday gift for a relative (warning bells!)
In this scam, the contact asks the recipient as a favor to purchase a several hundred dollars in gift cards and email them to the relative with the promise of repayment as soon as they return from their trip. Of course, many people can identify this as a scam and know that they should not purchase the gift cards (which are commonly requested by scammers in lieu of wire transfers), but a more serious concern is that the sender’s email account has very likely been compromised and used to send this scam to dozens of their personal and business contacts without their knowledge.
Is there anything you can do?
If you ever receive one of these messages from a friend or colleague, you may wish to notify them via telephone (not by email – you’ll see why in a bit) that their email password may have been stolen and their email account compromised. They should immediately change their password, and if they have reused the same password on other online systems, they should change it there as well, preferably using a unique password on every system.
Why not just reply to the email?
In many cases the attackers perpetuating these scams will also create email filter rules to automatically delete or redirect inbound emails to an external mailbox that they control. This prevents the real account owner from being alerted to the compromise and allows the attacker to monitor the email remotely for signs that they’ve been discovered. So after changing the email password, users should also check their email filtering rules for any suspicious rules that were created without their knowledge. Filter rules are a feature that most users don’t access frequently, so these links may help finding the setting for several common email providers:
Everyone can follow a few basic precautions that will help avoid a compromised online account:
1. Use a password manager to generate and securely store random, unique passwords for each and every site so that one stolen password does not jeopardize multiple accounts.
2. Enable two-step verification (also known as two-factor authentication) on all accounts that offer it, but especially for email and banking accounts. This makes it much more difficult for an attacker to log in with a stolen password. Instructions depend on your provider, but most email and banking services offer this option now:
Microsoft (outlook.com, live.com, hotmail.com, msn.com, etc.)
3. Never type a password into a website that was accessed via an email link. Attackers steal passwords by forging email from a well-known website with a link to a fake login form. The login page may look exactly like the real site, but the password is sent to the attacker instead. The forgery might even log into the legitimate site afterword to avoid raising suspicion.
Restricted stock units (RSUs) play a big role in compensation packages, especially for high-tech companies. Thanks to the tech industry, RSUs have become increasingly popular as many employers offer them as part of their compensation package. It’s important to understand what RSUs are and how they work, to ensure you’re not leaving any money on the table when negotiating your salary, and to help you determine when/how to sell them for cash needs or diversifying your investments.
RSUs are issued by an employer to an employee in the form of company stock. They’re restricted because you can’t sell them until they vest, meaning you don’t really own them yet. Vesting typically occurs after you’ve been with your company for a pre-determined length of time or have hit pre-determined performance goals. The shares either vest in stages (grading) or all at once (cliff). When your RSUs vest, they’re considered income and are taxed as such. Your employer will hold back a certain amount of your shares to pay your income taxes, and you’ll receive the rest. Your taxable income is the market value of the shares at vesting. Once your shares vest, you can sell them.
We always recommend that folks sell their RSUs once they vest to better diversify their risk. You already rely on your company for your paycheck and many other benefits that it’s best to limit how much of your wealth is dependent on your company. It’s also best to diversify your investments and avoid concentrated positions in any one stock regardless. If you do choose to hold your RSUs when they vest rather than selling them, any future gains will be taxed at current capital gains rates.
If RSUs are a part of your compensation package and you’d like help to better understand how to make them work for your needs, please reach out to us.
Written by: Geoff Curran, CPA/ABV, CFA, CFP® and Alex Golubev, CFA
The last few years have seen tremendous growth in the short-term rental housing economy. Services like Airbnb and VRBO connect homeowners and travelers around the world. While vacation rentals aren’t anything new, home-sharing platforms make it more convenient than ever for homeowners to earn extra money on their personal residence or vacation home. Airbnb fosters accountability and transparency by inviting hosts and guests to review and rate each other on criteria like cleanliness, following house rules, and ease of communication. A whole ecosystem of services has also sprung up to streamline and improve host operations (Smartbnb, AirDNA, NoiseAware, Vacasa, Evolve and many more). However, vacation rental remains a highly competitive and regulated industry.
Hosts in the Airbnb space face many challenges for success. Setting up homes for vacation rental, optimizing rental rates and cleaning properties between guests eats into time and money. Once rentals are rolling, even successful properties can hit speed bumps. Tourist demand is often seasonal or focused on appealing properties in central locations. Low barriers to entry can also reduce profits as more hosts enter the market and/or authorities create regulations to raise the bar. Short-term rental earnings have curbed in highly-regulated tourist hubs like New York, LA, San Fran, Barcelona, Berlin, and Amsterdam.
Given the popularity and potential of Airbnb, clients have started asking whether it makes sense to rent out their homes. We always encourage our clients to consider how renting their property will affect their life. If renting out your home helps you support your lifestyle and travel more, then exploring AirBnB could be an exciting opportunity.
AirDNA is a great starting point for researching vacation rentals in your area. AirDNA can help you assess the earnings potential of your home, whether you’d like to rent out your entire place or just share a room. Dipping a toe in the water of home-sharing during your next trip out of town is a great way to start!
The checklist below provides helpful points to consider before renting out your property:
Home Insurance: Check with your home insurance provider to ensure that your insurance coverage is still adequate and will remain in force if your home is rented out. The strategy of doing nothing and asking for forgiveness later just won’t work with insurance companies if you have a claim. We reached out to Sue Greer from Propel Insurance for her perspective on managing liability. She emphasized watching out for “contract language that can limit, or void, coverage entirely when the property’s occupancy is other than what was noted on the signed application.” It’s also important to ensure that your other liability coverage like umbrella insurance will still cover any accidents that may happen on your property if it’s rented out.
Security: It’s important to make sure that your home is secure and that any irreplaceable valuables are properly locked up when others are in your home.
Locks: Digital locks are a great tool for avoiding sharing keys with guests, and they provide a simple way to setup new codes for each guest.
Alarm: You still need to actively use your alarm with guests coming and going. The good news is that alarm companies permit you to change codes digitally so that each guest has their own unique code.
Safe deposit box: Valuables that you won’t be taking with you, like jewelry and essential documents, should be stored in a safe deposit box at the bank.
Internet Network: It’s also important to maintain internet security. Remember to create a guest network, and change the wireless password when guests leave.
Co-host: Since most people rent out their home when they are out of town, it can be very helpful to find someone local that can help if there’s a problem in your absence. This could be someone to clean the property between guests—or even to break up an unruly party! Airbnb can help you find a co-host for 7-20% of the revenues depending on the services provided. There are also many new short-term rental operators that offer co-hosting services.
Maintenance: With guests coming and going, wear and tear can accelerate, and accidents can happen. Having a high security deposit helps mitigate costs in case of accidents. Given that home maintenance costs anywhere from 2% to 5% of your home’s value each year, setting aside a portion of your rental income to cover maintenance is a good idea.
Tax reporting: If your home is rented out for greater than 14 days a year, you’ll need to include the income and expenses on your tax return. Make sure to keep track of all your expenses incurred throughout the year related to the rental activities. This includes repairs, supplies, cleaning costs, new appliances and lawn care, just to name a few. Importantly, you can also claim some of your utility costs as an expense, including cable TV and internet, in proportion to how much of the year the home was rented.
If you have questions about this checklist or any other parts of your financial life, we recommend reaching out to a Merriman advisor. We can help with the decision to rent your home and with managing all the moving parts. You’ll have to share all the adventures you’ll be able to take once you explore Airbnb!
Anyone familiar with divorce knows how emotionally challenging it can be. On top of the emotional challenges, all the financial factors that need to be considered and evaluated add a lot of stress. After witnessing a few close friends go through this process, I decided to become a Certified Divorce Financial Analyst (CDFA®). With this credential and my financial planning background, I can better help alleviate some of the financial stress and uncertainty that comes with divorce.
So, what exactly is a CDFA®? It’s a professional who is trained to provide financial information and assistance to people going through a divorce by helping evaluate the following:
Short- and long-term financial impact of various settlement options for dividing marital assets
Settlement options for dividing pensions and qualified retirement plans
Settlement options for any jointly owned businesses
Child and spousal support payments
The CDFA® provides their client’s lawyer with data to help strengthen their case or works as the financial expert on a team in a collaborative divorce. My role as a CDFA® is to help people avoid common financial pitfalls of divorce, by offering valuable insight into the pros and cons of different settlement options.
My clients often ask why they’d need a CDFA® if they already have an attorney. It’s always beneficial to have an attorney involved in the divorce process to give legal guidance and advice, but why would you need a CDFA®? Attorneys specialize in law, not finance. While attorneys know what needs to be done from the legal perspective, they don’t necessarily have the background and training to understand tax implications and how to model the differences in the short- and long-term outcomes of various settlement options. Other experts, like CPAs, can provide some financial perspective, but CPAs tend to focus on short-term tax implications, neglecting longer-term outcomes. A CDFA® will make sure your interests are covered for both the short- and long-term.
How do you know if you need a CDFA®? There’s not a cut and dry answer to this question, but we recommend considering a CDFA® when the marital estate is over $2 million or when there are complex financial matters like a joint business or multiple properties. If you or someone you know could benefit from working with a CDFA®, please don’t hesitate to contact us.
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With the arrival of our first child fast approaching, my wife and I in all of our excitement have been working through a to-do list to prepare for this lifechanging event. While we know we have many surprises ahead, taking the time to learn, ask questions and plan for what’s coming can only help us.
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