Lebel & Harriman LLPRebecca Burchill, ChFC®, CLU®Managing Director366 US Route 1Falmouth, ME 04105207-773-5390(207) 773-3814 (fax)rebecca@lebelharriman.comwww.lebelharriman.com

March 2016Protecting Your Business from Cyber Threats

Cost of Living: Where You Live Can AffectHow Rich You Feel

Can You Get to a Million Dollars?

How long will I have to pay for privatemortgage insurance?

Lebel & Harriman NewsletterInsurance DivisionProtecting Your Business from Cyber Threats

See disclaimer on final page

Risk management isa key component inany successfulbusiness plan. Intoday's world--wheredata breaches arecommonoccurrences--it'sespecially importantfor business ownersto understand the

digital risks they face. Are you doing all you canto mitigate the risk of a cyber attack?

Understanding the risksMany small-business owners may think theirorganizations hold little appeal to hackers dueto their small size and limited scope. However,according to the Small Business Administration(SBA), this naivete may actually make themideal targets. Small businesses are keepers ofemployee and customer data, financial accountinformation, and intellectual property. Theirsystems, if not adequately protected, may alsoinadvertently provide access to larger suppliernetworks. "Given their role in the nation'ssupply chain and economy, combined withfewer resources than their larger counterpartsto secure their information, systems, andnetworks, small employers are an attractivetarget for cybercriminals," reports the SBA onits cybersecurity website.

Consider the following tips compiled frominformation supplied by the SBA, the FederalTrade Commission (FTC), and the FederalCommunications Commission (FCC).

Cybersecurity tips1. Assess: To protect your organization, youmust first understand your vulnerabilities. Howare your systems protected? Do you collect andstore personal information of customers andemployees, such as credit-card information,Social Security numbers, and birth dates? If so,how is this information stored and who mayaccess it? Do you have a Wi-Fi accessible toemployees and customers? How do yourvendors and other third-party service providersprotect their information? It may help to engagea professional to help identify your risks.

2. Protect: Ensure you have firewall andencryption technology protecting your Internetconnections and Wi-Fi networks. Make sureyour business's computers have antivirus andantispyware software installed and updatedautomatically. Require employees and otherswho access your systems to use complexpasswords that are changed regularly. Keeponly personal data that you actually need anddispose of it securely as soon as it no longerserves a business purpose. Back up criticalinformation and data on a regular basis, andstore the backups securely offsite. Assignindividual user accounts to employees andpermit access to software and systems only asneeded. Be especially cautious with laptopsand company-assigned smartphones. Questionthird-party vendors to ensure that their securitypractices comply with your standards.

3. Document: Establish clear security policiesand procedures and put them in writing. Coversuch topics as handling sensitive or personalinformation, appropriate use of Internet andsocial media, and reporting vulnerabilities.Clearly spell out consequences for failing tofollow the policies.

4. Educate: Develop a mandatory employeetraining program on the importance ofcybersecurity. Explain the basics of personalinformation, as well as what is and isn'tacceptable to post on social media. Employeescould unknowingly release information thatcould be used by competitors or, worse, bycriminals. Ensure that employees understandthe risks associated with phishing emails, aswell as "social engineering"--manipulativetactics criminals use to trick employees intodivulging confidential information.

For more informationBusiness owners who want to learn more canfind a wealth of helpful information online. Inaddition to visiting theSBA's cybersecurity website, business ownersmight want to review "Protecting PersonalInformation: A Guide for Business" and "Startwith Security: A Guide for Business," bothavailable on the FTC's website.

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Cost of Living: Where You Live Can Affect How Rich You FeelDo you find yourself treading water financiallyeven with a relatively healthy householdincome? Even with your new higher-paying joband your spouse's promotion, do you still find itdifficult to get ahead, despite carefully countingyour pennies? Does your friend or relativehalfway across the country have a better qualityof life on less income? If so, the cost of livingmight be to blame.

The cost of living refers to the cost of variousitems necessary in everyday life. It includesthings like housing, transportation, food,utilities, health care, and taxes.

Single or family of six?Singles, couples, and families typically havemany of the same expenses--for example,everyone needs shelter, food, and clothing--butfamilies with children typically pay more in eachcategory and have the added expenses of childcare and college. The Economic Policy Institute(epi.org) has a family budget calculator that letsyou enter your household size (up to two adultsand four children) along with your Zip code tosee how much you would need to earn to havean "adequate but modest" standard of living inthat geographic area.

What areas have the highest cost of living? It'sno secret that the East and West Coasts havesome of the highest costs. According to theCouncil for Community and EconomicResearch, the 10 most expensive U.S. urbanareas to live in Q3 2015 were:

Rank Location

1 New York, New York

2 Honolulu, Hawaii

3 San Francisco, California

4 Brooklyn, New York

5 Orange County, California

6 Oakland, California

7 Metro Washington D.C./Virginia

8 San Diego, California

9 Hilo, Hawaii

10 Stamford, Connecticut

Factors that influence the cost of livingLet's look in more detail at some of the commonfactors that make up the cost of living.

Housing. When an area is described as having"a high cost of living," it usually means housingcosts. Looking to relocate to Silicon Valley fromthe Midwest? You better hope for a big raise;the mortgage you're paying now on your

modest three-bedroom home might get you awalk-in closet in this technology hub, whereprices last spring climbed to a record-high$905,000 in Santa Clara County, $1,194,500 inSan Mateo County, and $690,000 in AlamedaCounty. (Source: San Jose Mercury News,Silicon Valley Home Prices Hit Record Highs,Again, May 21, 2015)

Related to housing affordability is student loandebt. Student debt--both for young adults andthose in their 30s, 40s, and 50s who either tookout their own loans, or co-signed or borrowedon behalf of their children--is increasinglyaffecting housing choices and living situations.For some borrowers, monthly student loanpayments can approximate a second mortgage.

Transportation. Do you have access to reliablepublic transportation or do you need a car?Younger adults often favor public transportationand supplement with ride-sharing services likeUber, Lyft, and Zipcar. But for others, a car (ortwo or three), along with the cost of gas andmaintenance, is a necessity. How far is yourwork commute? Do you drive 100 miles roundtrip each day or do you telecommute? Havingto buy a new (or used) car every few years cansignificantly impact your bottom line.

Utilities. The cost of utilities can vary bylocation, weather, usage, and infrastructure.For example, residents of colder climates mightfind it more expensive to heat their homes inthe winter than residents of warmer climates docooling their homes in the summer.

Taxes. Your tax bite will vary by state. Sevenstates have no income tax--Alaska, Florida,Nevada, South Dakota, Texas, Washington,and Wyoming. In addition, property taxes andsales taxes can vary significantly by state andeven by county, and states have different rulesfor taxing Social Security and pension income.

Miscellaneous. If you have children, otherthings that can affect your bottom line are thecosts of child care, extracurricular activities,and tuition at your flagship state university.

To move or not to moveRemember The Clash song "Should I Stay orShould I Go?" Well, there's no question yourmoney will go further in some places than inothers. If you're thinking of moving to a newlocation, cost-of-living information can makeyour decision more grounded in financial reality.

There are several online cost-of-livingcalculators that let you compare your currentlocation to a new location. The U.S. StateDepartment has compiled a list of resources onits website at state.gov.

Americans on the move

Americans are picking up andmoving again as the recessionfades, personal financesimprove, and housing marketsrecover. Counties in Florida,Nevada, and Arizona hadlarger influxes of people, whilesome counties in Illinois,Virginia, New York, andCalifornia saw more peoplemoving out. (Source: The PewCharitable Trusts, AmericansAre on the Move--Again, June25, 2015, www.pewtrusts.org)

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Can You Get to a Million Dollars?Often in life, you have investment goals thatyou hope to reach. Say, for example, you havedetermined that you would like to have $1million in your investment portfolio by the timeyou retire. But will you be able to get there?

In trying to accumulate $1 million (or any otheramount), you should generally consider howmuch you have now, how much you cancontribute in the future, how much you mightearn on your investments, and how long youhave to accumulate funds.

Current balance--your starting pointOf course, the more you have today, the lessyou may need to contribute to your investmentportfolio or earn on your investments over yourtime horizon.

Time (accumulation period)In general, the longer your time horizon, thegreater the opportunity you have to accumulate$1 million. If you have a sufficiently long timehorizon and a sufficiently large current balance,with adequate earnings you may be able toreach your goal without making any additionalcontributions. With a longer time horizon, you'llalso have more time to recover if the value ofyour investments drops. If additionalcontributions are required to help you reachyour goal, the more time you have to targetyour goal, the less you may have to contribute.

The sooner you start making contributions, thebetter. If you wait too long and the timeremaining to accumulate funds becomes tooshort, you may be unable to make the largecontributions required to reach your goal. Insuch a case, you might consider whether youcan extend the accumulation period--forexample, by delaying retirement.

Rate of return (earnings)In general, the greater the rate of return thatyou can earn on your investments, the morelikely that you'll reach your investment goal of$1 million. The greater the proportion of theinvestment portfolio that comes from earnings,the less you may need to contribute to theportfolio. Earnings can benefit from long timehorizons and compound rates of return, asreturns are earned on any earlier earnings.

However, higher rates of return are generallyassociated with greater investment risk and thepossibility of investment losses. It's important tochoose investments that meet your timehorizon and tolerance for risk. And be realisticin your assumptions. What rate of return isrealistic given your current asset allocation andinvestment selection?

Amount of contributionsOf course, the more you can regularlycontribute to your investment portfolio (e.g.,monthly or yearly), the better your chances areof reaching your $1 million investment goal,especially if you start contributing early andhave a long time horizon.

Contributions neededNow that the primary factors that affect yourchances of getting to a million dollars havebeen reviewed, let's consider this question: At agiven rate of return, how much do you need tosave each year to reach the $1 million target?For example, let's assume you anticipate thatyou can earn a 6% annual rate of return (ROR)on your investments. If your current balance is$450,000 and you have 15 more years to reach$1 million, you may not need to make anyadditional contributions (see scenario 1 in thetable below); but if you have only 10 moreyears, you'll need to make annual contributionsof $14,728 (see scenario 2). If your currentbalance is $0 and you have 30 more years toreach $1 million, you'll need to contribute$12,649 annually (see scenario 3); but if youhave only 20 more years, you'll need tocontribute $27,185 annually (see scenario 4).

Scenario 1 2

Target $1,000,000 $1,000,000

Currentbalance

$450,000 $450,000

Years 15 10

ROR 6% 6%

Annualcontribution

$0 $14,728

Scenario 3 4

Target $1,000,000 $1,000,000

Currentbalance

$0 $0

Years 30 20

ROR 6% 6%

Annualcontribution

$12,649 $27,185

Note: This hypothetical example is not intendedto reflect the actual performance of anyinvestment. Actual results may vary. Taxes,fees, expenses, and inflation are notconsidered and would reduce the performanceshown if they were included.

In trying to accumulate $1million (or any otheramount), you shouldgenerally consider howmuch you have now, howmuch you can contribute inthe future, how much youmight earn on yourinvestments, and how longyou have to accumulatefunds. But remember, thereare no guarantees--evenwhen you have a clearlydefined goal. For example,the market might notperform as expected, or youmay have to reduce yourcontributions at some point.

All investing involves risk,including the possible lossof principal, and there is noguarantee that anyinvestment strategy will besuccessful. Review yourprogress periodically and beprepared to makeadjustments whennecessary.

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Lebel & Harriman LLPRebecca Burchill, ChFC®,CLU®Managing Director366 US Route 1Falmouth, ME 04105207-773-5390(207) 773-3814 (fax)rebecca@lebelharriman.comwww.lebelharriman.com

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016

IMPORTANT DISCLOSURES

Broadridge Investor CommunicationSolutions, Inc. does not provide investment,tax, or legal advice. The informationpresented here is not specific to anyindividual's personal circumstances.

To the extent that this material concerns taxmatters, it is not intended or written to beused, and cannot be used, by a taxpayer forthe purpose of avoiding penalties that may beimposed by law. Each taxpayer should seekindependent advice from a tax professionalbased on his or her individual circumstances.

These materials are provided for generalinformation and educational purposes basedupon publicly available information fromsources believed to be reliable—we cannotassure the accuracy or completeness ofthese materials. The information in thesematerials may change at any time andwithout notice.

Securities offered through ValMarkSecurities, Inc. Member FINRA, SIPC.Investment Advisory Services OfferedThrough ValMark Advisers, Inc. a SECRegistered Investment Advisor. 130Springside Drive, Suite 300, Akron, OH44333-2431. Telephone: (800) 765-5201.Lebel & Harriman, LLP is a separate entityfrom ValMark Securities, Inc. and ValMarkAdvisers, Inc.

Should I loan my child money for a down payment on ahouse?For a lot of young peopletoday, it's difficult to purchasea home without at least somefinancial assistance. As a

result, many young adults turn to their parentsor other family members for help with a downpayment.

If you plan on lending your child money for adown payment on a house, you should try toassume the role of a commercial lender. Settingthe terms of the loan in writing will demonstrateto your child that you take both yourresponsibility as lender and your child'sresponsibility as borrower seriously.

While having an actual loan contract may seemtoo businesslike to some parents, doing so canhelp set expectations between you and yourchild. The loan contract should spell out theexact loan amount, the interest rate and arepayment schedule. To avoid theuncomfortable situation of having to remindyour child that a payment is due, considerasking him or her to set up automatic monthlytransfers from his or her bank account to yours.

This type of loan documentation is alsoimportant for IRS purposes because there maybe potential income and gift tax issues withthese types of loans. For example, interest paidby your child will be considered taxable income,and if adequate interest is not charged for theloan, special imputed interest rules may apply.

If you don't feel comfortable lending your childmoney, you may want to consider making asmaller, no-strings-attached gift that doesn'thave to be repaid. Currently, you can gift up to$14,000 annually per person under the gift taxexclusion. However, if you do gift money for adown payment, your child's lender may stillrequire him or her to put up some of his or herown money, depending on the type of mortgagechosen.

Keep in mind that lending money to familymembers can be a tricky proposition. Beforeentering into this type of financial arrangement,you should take the time to carefully weigh boththe financial and emotional costs.

How long will I have to pay for private mortgageinsurance?It depends. There aregenerally two ways that privatemortgage insurance (PMI) canbe removed from your

mortgage loan. The first is if you request PMIcancellation directly from your lender. Thesecond is through termination by your lender.

You can request PMI cancellation directly fromyour lender once you have reached the datewhen the principal balance of your mortgage isscheduled to fall to 80% of the original value ofyour home. You can find this date on the PMIdisclosure form that was given to you when youfirst obtained your mortgage. The cancellationrequest can be made earlier if you have madeadditional mortgage payments that havereduced your principal balance to 80% at anearlier date. Your lender may also require youto meet certain other criteria in order to cancelyour PMI, such as certification that there are nosubordinate liens on the home and evidencethat the property has not declined below theoriginal value.

If you don't request PMI cancellation directlyfrom your lender, your PMI could still beremoved from your loan if it is terminated by

your lender. Your lender is required toterminate PMI on the date when the principalbalance on your loan is scheduled to reach78% of the original value of your home or onceyou reach the midpoint of your loan'samortization schedule (e.g., year 15 of a30-year loan), whichever occurs first.

Unfortunately, some mortgage companies don'talways follow the rules pertaining to PMItermination and continue to collect PMIpremiums from borrowers beyond thetermination date. As a result, many borrowersfind themselves paying unnecessarily for PMI.(Source: Private Mortgage InsuranceCancellation and Termination, ConsumerFinancial Protection Bureau ComplianceBulletin, August 2015) If you think you havereached, or are about to reach, the point in yourloan where PMI cancellation or termination is apossibility, you should contact your mortgagelender for more information.

Keep in mind that the above rules regardingPMI apply to borrowers who are current on theirloans and apply only to conventional mortgageloans closed on or after July 29, 1999.

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