The F-Word

One of the least discussed but most important factors to consider when hiring a financial advisor is whether or not they are a fiduciary. This means the advisor has a legal obligation to put their clients’ interests ahead of their own. Most consumers assume that their advisor is acting in this capacity, when many times he is not. The law regards the job of advisor as a position of trust and requires those with a fiduciary obligation to disclose any conflicts of interest and to act with a heightened sense of duty toward clients. Registered… [read more]
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Casualties of Complexity

At the risk of sounding naïve, I believe that many of the problems we experience as investors and the institutions that regulate us are brought on by complexity. The book, A Demon of our Own Design, got me started thinking this way. Written by Richard Bookstaber in 2007, it gives an insider’s view of the 1987 Crash and the collapse of Long-Term Capital Management, the hedge fund that took down UBS when it collapsed in 1998. Each disaster, and several others described in the book, was caused by an attempt to use complex financial… [read more]
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You Need A Budget (.com)

Over the last several months, many of us have re-realized the importance of a good budget. This is normally a four-letter word at worst and, at best, something we periodically place on the to-do list between “clean out the gutters” and “wash the windows”. When we do get around to it, we spend a rainy weekend knee deep in piles of old bills, credit card statements and receipts trying to figure out where exactly all of our money went. Whether through Excel, Money or Quicken, we eventually produce some kind of budget that represents the… [read more]
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The New Rich

A financial crisis causes us to reevaluate every aspect of our lives. Many people have discovered that they have been so busy accumulating “stuff” to keep up with the Jones’ (not Jeannette and Gregg), that when this is no longer possible, the emptiness in their lives becomes apparent. For the past 19 years I have gotten a first-hand look at how people deal with the financial matters. The most important lesson I have learned is that money and happiness do not go hand- in-hand. Many times it’s the people who spend the most that never… [read more]
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