It is hard enough to keep track of current finances. The last thing you need is to worry about old money, especially when it involves words like “capital gains.”
Fear not. Amelie Escher is here to help. A former interior designer and financial professional at Merrill Lynch, Escher has founded Your Old Money, a financial services business based at 42 Governor’s Lane. Her goal is to help a drastically underserved sector of the investment world — people who aren’t sure what they’ve got or what they owe on it. Far too often, she says, people hold stocks without any real knowledge of when they acquired them. They have built portfolios over many years or have inherited them from deceased parents, and the origins are fuzzy.
Worse, as individual stocks get split, things get even fuzzier. Say stock in Brand X Co. starts selling for $100 a share. Brand X Co. might decide that’s too much per share, so it will split the stock into shares that you can now buy for $50 apiece. But you have no idea when that happened, just that you have 854 shares of something.
The problem is that if you don’t know their origins (a.k.a. basis) of your stock, the government will assume that you gained the entire amount from scratch and tax you accordingly. “The way I put it at cocktail parties is: If you go to a parking garage and you lose your ticket, they’ll charge you for the whole day,” Escher says. “The government does the same thing. If you don’t know the details, they’ll penalize you for the full amount.”
The mistake, of course, can be a pricey one. Say your stock in Brand X is worth $25,000. You only paid in $10,000, so your capital gains are $15,000. That is what you should pay taxes on, not the whole $25,000.
Exactly how common is the problem? One of her clients is a sizeable brokerage firm in the area that she cannot mention by name or by actual size. But its brokers each have about 100 cases of this type in their portfolios.
Your Old Money offers a fee-based online service to help investors calculate the whens and how-muches in their holdings. Escher works with GainsKeeper, a division of a Netherlands-based financial services firm, Wolters Kluwer, to get the calculations and data basics. Then she does some detective work with those unsure of what they have. There are common times people come into stocks — they start a new job, they receive company stock when it goes public, when they reach a milestone anniversary, when they retire.
These moments provide clues. For example: even if you do not know specifically when your father started working for Brand X, you can safely guess 1970 as a starting point, and work from there.
Though Your Old Money did not launch until this past spring, Escher founded the company a year ago with the help of Tucker Capital (234 Nassau Street) and the law firm Fox Rothschild (997 Lenox Drive) to help existing brokers and individual investors get a better handle on her pet issue. Brokerage houses shy away from this kind of thing because it enters the arena of investment advice, she says. She saw a need and an opportunity.
Her itch to help the common man sort out what she admits is an esoteric endeavor is what got her out of interior design. Escher was born and raised in Princeton (she won’t say when, but admits to being born in the ’70s) and went to Kenyon College for a bachelor’s in art history. Her parents — her mother was a school teacher, her father an architect — encouraged her to learn everything about everything and she generally took their advice by reading encyclopedias for recreation.
Escher took her art background to Los Angeles, where she ran her own interior design business and worked on film and television sets. She still runs across one of her set pieces in a commercial or TV show. “I loved it, but I thought it was just really fluffy,” she says. “I wanted to be able to help people.”
Her general head for business made her the go-to person for her friends when they needed help figuring out their credit card issues and such, and she figured that she could do something in the financial world.
She called Merrill Lynch’s Princeton office and talked herself into a job in 2006. She spent about two years ensconced in the financial market and considers it a real-life MBA-style education.
But though she loved her job, she saw person after person look at his portfolio and stammer when asked its origins. “No one wants to solve the problem,” she says. So she decided to be a financial problem solver.
Being an art person, Escher says, has helped her communicate with the non-money-minded. Money can be a scary topic for some, yes, but you need to know what you have and what the government wants to take. Ultimately she hopes to soothe the nerves of anyone who says “I don’t like to talk about money” or “I’m not a numbers guy.”
“I don’t know why monetary knowledge is considered optional in our society,” she says. “You need to know about it.”
Your Old Money, 42 Governor’s Lane, Princeton 08540; 609-937-0479. Amelie Escher, founding member. www.youroldmoney.com