Charles Carroll of Carrollton: Maryland's First Citizen

The eldest Caroll set about building wealth, a trait he passed on to his son, Charles Carroll of Annapolis, who in turn bequeathed it to Charles Carroll of Carrollton. Even during the most pivotal moments of the revolution and the lead-up to independence, correspondence between the latter two Carrolls dealt as much or more with business affairs than military of political ones. But for decades, the family labored under the fear that English authorities could at any time exercise laws that would strip them of everything. In the early 1760s, Caroll of Annapolis was so fearful that he began settling his affairs and liquidating assets in preparation for a move somewhere more hospitable.

Charles Carroll of Carrollton spent years in France and later England getting his education, not returning to Maryland until he was 27, but he nonetheless had a keen sense of his familys determination to overcome a precarious position. His father was so obsessed with the familys lineage that he did not marry Carrolls mother until the son was old enough to prove himself a suitable heir. The fathers letters to the son included reminders that those who ruled were possessed of malice that they would not only deprive us of our property but our lives.

As early as 1763, Caroll of Carrollton remarked in a letter to his father that America is a growing country. In time it will amp; must be independent, but it would be some years before he would get involved in revolutionary politics in Maryland.

He returned to the New World as the controversy over the Stamp Act was coming into full bloom. That levy on assorted uses of paper, from playing cards to newspapers, drew ire throughout the colonies in a preview of the arguments about taxation without representation that would gain their full expression in the years ahead. In her 1942 biography Charles Carroll of Carrollton, author Ellen Hart Smith found ample evidence that Caroll was able to articulate well the arguments against the Stamp Act and did so but only in his private correspondence to friends and business associates in England. Publicly, he stayed out of Maryland political life, instead devoting his attentions to marrying and managing his fathers massive estate (which included, it should be noted, some hundreds of slaves). He at least professed not to mind the exclusion, writing on various occasions that holding public positions would inevitably erode a mans virtue.

Instead, he became a noted host and fixture in the Annapolis social scene, earning a membership in the tony Homony Society, which had previously excluded Catholics and which boasted as members not only the new colonial governor, Robert Eden, but also two of Marylands other eventual signers of the Declaration, William Paca and Samuel Chase.

First Citizen

Realtor of the Week: Team finds real estate rewarding

Owning a home is one of the major milestones in life.

We believe it is important for everyone to invest in their future, by planning, and moving forward in homeownership, said Rebecque Demark, a Realtor with Heritage Texas Properties.

For Demark, real estate is one of the most rewarding fields.

We are helping people find the place they will call home. We are in a service industry and our job is to serve our clients, and assisting people with building wealth, Demark said.

The 'Down-Payment' Myth Stumps First-Time Homebuyers

Even though the economy is in a slow-motion recovery, the real estate market is moving at full speed. Existing-home sales in May ran more than 5% ahead of last year, which itself was already the best year for sales in a decade.

However, one group of Americans is notably absent from this measure of the American dream: first-time homebuyers. Historically, first-timers have made up 40% of all homebuyers. But in all of 2015 they accounted for merely 30%.

With the many benefits of homeownership, why the hesitation?

The answer often boils down to a lack of information. Many potential first-time buyers continue renting because they assume homeownership is only for the wealthy, those who can afford a hefty 20% down payment. They feel in their gut what economists have verified -- that saving for 20% down on an average home with an average income could take a decade or more.

Heres what these aspiring but frustrated potential buyers dont know: the 20% down payment requirement is a myth. Mortgages for as little as 3% down are readily available.

Still, 73% of millennials have little or no awareness of such finance options. Last year, as many as a half a million potential first-timers may have delayed home buying because of whats in their heads, not whats in their wallets.

Most first-time buyers belong to the millennial generation, those in the 19-35 age group. The formative experience of their youth was the great recession, with its devastating foreclosure debacle.

Theyre graduating from college with a record amount of student debt and entering the workforce only to find limited opportunity and stagnant wage growth. Its not surprising that they are getting married and having children later than previous generations. Although repeated surveys reveal that they aspire to own a home, theyre largely unaware of mortgages designed specifically for them.

The Federal Housing Authority has supported mortgages with just 3.5% down for decades and has traditionally been the mortgage of choice for most first-time homebuyers. As a direct result of the great recession, lending standards became overly restrictive -- but they are now much more reasonable. In 2014, Fannie Mae and Freddie Mac both began guaranteeing mortgages with down payments as low as 3%, which are available through responsible lenders nationwide.

Like all mortgages, low down-payment programs still require good credit and verifiable income, and they may impose additional requirements such as mortgage insurance. But when combined with near historic lows in interest rates, such mortgages represent an attractive opportunity for first-time homebuyers.

Whats more, rents have been escalating faster than home prices. The percentage of an average income needed for rent often exceeds that needed for a mortgage payment. Depending on individual financial circumstances, a low-down payment mortgage could actually improve monthly cash flow for many buyers.

Those pondering the prospect of homeownership should understand that mortgage interest, property taxes, and some closing costs are all deductible and can significantly reduce ones tax bill. But there are a number of lesser known advantages that warrant as much -- if not more -- consideration.

For many Americans, homeownership is the single greatest contributor to building wealth. The net worth of homeowners is far greater than that of renters -- a truth that persisted even through the financial crisis. Additionally, homeownership creates a stronger bond to the neighborhood and is a good predictor of positive outcomes for children. Indeed, children of homeowners are much more likely to finish high school.

Unfortunately, the mistaken belief that a large down payment is required to buy a home is preventing many who are creditworthy from enjoying the benefits of homeownership. In reality, todays real estate market is very receptive to first-time buyers. Millennials may be facing many challenges and uncertainties, but getting into a home of their own neednt be one of them.

  • Liniger is the CEO, chairman, and co-founder of RE/MAX.

Brexit aftermath: Sky isn't falling

What to do?

I understand its not fun to watch the value of your portfolio drop by 5-10% in a few days. But investors should not panic, and should stay calm. As George Santayana said, Those who cannot remember the past are condemned to repeat it.

In this case that means remembering that over time the market will rebound and head higher. Casselman continues, Every one of those declines has been followed by a rebound.

Sometimes it comes right away. Sometimes it takes weeks or months. But when it comes, it comes quickly. If you wait until the rebound is clearly visible, youve already missed the biggest gains.

What is the secret to building wealth? Buy quality assets, whether stocks or real estate, and just hold on to them. If you can buy them at a 20-25% discount, more power to you.

What we learn time and again when the markets drop, is that if you dont have the stomach for the volatility or you are worried that your portfolio will drop so much that you cant fund retirement or that apartment purchase, then you have no business having such exposure to stocks. You should invest what you can afford to lose, because in the short-term, no one knows how the market will behave.

The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.

This email address is being protected from spambots. You need JavaScript enabled to view it.

Aaron Katsman is a licensed financial professional in Israel and the United States who helps people with US investment accounts.

He is the author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing.

A law for building wealth

Lebanon is being blessed with another proposed law, and several serious voices are intonating praise of the type of a minor doxology to the deities of capital. The new private equity draft law is designed to boost the – currently lacking – ability of fund operators to incorporate commercial entities that are best suited as establishments offering private equity and venture capital avenues. These establishments have hitherto been forced to function with difficulty because they had to rely on holding companies or other conventional formats instead of incorporation as firms with a general partner/limited partner structure.

Mohamed Alem, managing partner of the law firm Alem amp; Associates in Beirut, explains to Executive how and why his firm has approached the project of drafting the law. “Lebanon is not known to have an infrastructure on the legal level that encourages the creation of Lebanon-based private equity funds,” he says. “The purpose [of introducing the law] is to allow room in Lebanese legislation to permit the structuring of private equity funds, which are typically funds structures, obviously companies, in which you have a general partner and limited partners.”

According to Alem, Lebanon’s dated Code of Commerce, or legal framework for corporations and businesses offering the well-known sociÃtà anonyme Libanais (sal) or sociÃtà à responsabilità limitÃe (sarl) company forms, is not optimally suited to the tasks of giving investors enough minority shareholder protection, the fund managers the flexibility to make decisions, and provide the whole corporate structure with what he describes as “tax transparency”. This is an extremely important issue to address, he says, as for companies using the private equity funds structure “there should be no penalization from a tax point of view.”   

Whereas the common formats of incorporation such as sal and sarl according to the central bank  both limit shareholder liability to their capital contribution, they also give shareholders duties and rights that allow them to influence corporate decisions on the board level. Converse to that, the European continental format of the sociÃtà en commandite simple (known as SECS or SCS in francophone countries and as KG in German speaking ones) distinguishes two classes of participants in the company, which according to Alem corresponds to the general partner/limited partner structure commonly used by private equity companies.

In private equity (PE) parlance, the general partner (GP) of a fund is the decision maker regarding the investments and manager of day-to-day operations. The limited partners (LPs), on the other hand, supply the fund with its ammunition – the cash needed for investments – and have certain expectations, namely to make a healthy return on their money.

The law is being commissioned by the Office of the President of the Council of Ministers – the prime minister’s bureau. The main driver behind the initiative is Lebanon for Entrepreneurs (LFE), a nonprofit organization that was established in 2013 and that, in the words of its managing director Abdallah Jabbour, supports legal reform and other measures that would be beneficial to the business community, with special emphasis on entrepreneurs and members of the Lebanese diaspora. “We started with 16 laws on our list in 2014, three of which we were able to pass successfully. We have been drafting several laws in conjunction with the prime minister’s office and advocating for adoption of some laws that have been sitting in various drawers,” Jabbour says.

The Lebanese private equity draft law will benefit the country’s economic community and more specifically, the group of financial actors that spend their time with the structuring and operations of private equity and venture capital funds. This funds industry is a highly skilled and specialized profession, with a handful of practitioners who contribute to wealth creation – firstly their own.

Confidence in confidence

What makes this a macro-economically interesting discussion is the disproportionately large growth of entrepreneurial companies that are taken forward by PE and VC funds. This is also the argument of Firas Safieddine, executive board member of the Capital Markets Authority. “As regulator we believe that the private equity law is a requirement to complete the ecosystem as regards to equity and capital markets,” he tells Executive.

Under this mandate, the CMA became a stakeholder in reviewing and assessing the draft law, which according to Safieddine was “beautifully written” but would need a further round of drafting and review. He expects that the law, once it is passed, would deliver a component to make the Lebanese scene more inviting for investors.