Personal Finance 101

One big wake-up call from the recent economic downturn is that the literacy rate in this country is at absolute crisis levels. Financial literacy, that is.
Millions of high school, college, even graduate level students leave their alma maters every year completely unable to decipher basic financial information. Whether it is how a mortgage works, the true cost of carrying a credit card balance or the importance of maintaining a high credit score, even the extremely well educated are often completely in the dark. I’ve talked to many baby boomers recently who are concerned, some… [read more]
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Why Don’t You Just Give Your Broker a Gun and Tell Him to Shoot You?

(From Dan Solin’s blog, Huffington Post, July 14, 2009) A reader of my blogs sent me an e-mail with a Customer Agreement from a major brokerage firm. She asked me to look it over and tell her if she should sign it. The first thing that struck me was this clause: “Brokerage activities are regulated under different laws and rules than advisory activities and generally do not give rise to the fiduciary duties that an investment adviser has to its clients.” The agreement pointed out that the brokerage firm “…may face certain conflicts of interest… [read more]
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The Golden Ticket

Happiness is a by-product. You cannot pursue it by itself
Sam Levenson
As we approach retirement, much time is spent daydreaming about a life of leisure when we have no one to answer to but ourselves. Happiness seems inevitable when we are in charge of our own destiny. It is common to spend the years approaching retirement creating a plan so your financial house is in order, but less common to create a mission statement describing the purpose for the next stage of your life.
enter
In business, a mission statement is created … [read more]
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Baby Boomers Retiring – How Will it Affect the U.S. Economy

The Boomer generation is a demographic term for the Americans born somewhere in between 1946-1964. Based on a 2000 United States census, the Baby boomer generation is a population of roughly 83 million. To date, baby boomers range from 42 to 60 years of age. This means that the baby boomer generation is on its way to leave the labor force of the country. Baby boomers are offsprings of a healthy, erudite and bounty living. Because of this, they have changed the perspective of growing old by reinventing themselves to pursue a new passion. Because… [read more]
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The Forgotten Man

The specter of the Great Depression has been raised repeatedly since our current recession began. After hearing all the comparisons I decided to do some research of my own.
Amity Shlae’s book, The Forgotten Man – A New History of the Great Depression, does an excellent job of reviewing what the US went through from 1929 – 1940 with balanced and well-documented facts. After reading the book I am amazed that we came out of that time in history without becoming a socialist country or carrying permanent financial scars. My first major take-away from the… [read more]
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An Oracle Missteps

While as a rule I prefer not to forecast, an undeniable attempt by the markets at a recovery has begun, with some asset classes enjoying historic gains since early March. Even with this news, Warren Buffett, the Oracle of Omaha, has appeared in the media quite a bit with some downright depressing comments about the future of the economy. While I certainly believe that a return to “normal” will include some potentially significant bumps along the way and that a quick and easy ride back to where we were in 2007 (which was not,… [read more]
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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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