Thursday, December 31, 2009

Should I get a job with benefits?

Dan Danford receives questions from viewers who see his podcast on Dad's Divorce, a web site for men going through the divorce process. He recently addressed a question from a viewer who wanted to know if he should close his small business and take a job with benefits, including health insurance. Get Dan's take on it below.

And by the way, Happy New Year! Set some strong financial goals for yourself for 2010. Don't let the recession be an excuse not to address financial issues.

Wednesday, December 30, 2009

Don't exceed FDIC limits

One day each week, we answer a question from a reader. We'd love to have your questions. Please post in the comments section.

QUESTION: I am in my 70s and have significant savings of $625,000. I have it all at one bank. Is that dangerous? Should I spread that out? What if the bank fails?

ANSWER from Dan Danford: Dangerous probably isn't the right word. It's not prudent to exceed the FDIC limits because, if the bank fails, you are at risk for losing any amounts over the limit. So, most advisors would recommend that you split this money among several different insured banks. A good advisor could help you do this within one insured brokerage account. We have a number of clients who own multiple FDIC-insured CDs within the same account.

The bigger question, and the one you didn't ask, is whether having significant amounts in bank deposits makes any sense at all. I know what you are gong to say; you are too old to take any risks with your money. My answer to that question is that the biggest risk facing retired folks today is that they'll outlive their savings. Inflation is a continuing force, and bank deposits don't keep pace with inflation. Simply, a new car's worth of money today won't buy a new car ten years from now, even with the banker's interest added in. Or, at least, it never has in the past.

Unless you have health issues I don't know about, you could easily live another fifteen to twenty years. The investment approach you are using leaves you exposed to the biggest risk of all. And the FDIC won't help you with this one.

Tuesday, December 29, 2009

A few ideas for last minute tax planning

By Dan Danford, MBA, CRSP®

It's not too late to put a few strategies in gear to save money for the 2009 tax year. You can still fund an IRA, of course, which shaves off some of your taxable income. Here are some other strategies, which I'll be discussing and sharing in depth on KMBC in Kansas City on Wednesday, January 30, in the 7 a.m. and 8 a.m. hours.

College 529 Plans: 2009 Missouri or Kansas Tax deduction for contributions to a 529 plan.

Charitable gifts: Write a check today or tomorrow for your favorite charity, and take a 2009 deduction.

Medical expenses: Only deductible above certain levels, but – if you are there this year – stock up on contact lenses or other allowed stuff. Go on a medical buying spree today!

Defer Income: Tell the boss to pay your 2009 bonus in January. Less 2009 income means less tax in April.

Take gains or losses on investments: Sell mutual funds tonight or tomorrow to balance gains/losses. Again, less 2009 income means less tax.

Wednesday, December 23, 2009

Don't worry about tax breaks, just save

One day each week, we post a financial question from a reader and answer from Dan Danford. This week's question is about retirement savings for those with significant incomes. If you have a question, post it in the comments section.

QUESTION: I am a physician. I make too much to qualify for a Roth IRA, and I am considered a highly compensated employee, so I’m very limited in what I can contribute to our work retirement plan. I don’t really understand why I am so limited. Do I have any options for retirement savings?

ANSWER FROM DAN DANFORD: Our government punishes high earners with limitations on how much they can contribute to retirement plans. It's a throwback to day when managers conspired to keep workers out of plans, while funding their own to the max. Now, people at the top a the wage ladder face face daunting rules about deductible deferrals or contributions. Once you've met those limits - and I assume from your question that you have - there are just a few options left to you. Depending on where you work, you might try a deferred compensation plan. These are often funded by an insurance product, but they can be created by your company as a benefit for a select group of managers. This type of program is often used to augment qualified retirement plans for highly compensated employees.

As an individual, you could look into buying an annuity product though an insurance company. I don't often recommend annuities because most feature high costs and limited flexibility (including surrender charges, which I hate). But, they are a way to set aside money towards retirement when you are maxed out on retirement plans.

Last, just set money aside in an investment account and don't worry so much about the tax breaks. Only dividends and interest are taxable as income, and it's easy to minimize those on an annual basis. Gains will be taxed at favorable rates, so that's a benefit, too. Importantly, you have maximum flexibility with accounts of this type. No tax penalties, and you can spend whenever and however you like.

Sunday, December 20, 2009

From Kiplinger's: Gift ideas that save the recipient money

So we're all a little tight on funds these days. Here's some terrific ideas from Kiplinger's that help save the recipient money. What a wonderful idea. Make sure the person you're buying for will really use the items you're giving though. Gifts that really say that you know the person and their taste are the best received.

Friday, December 18, 2009

Frugal by nature

By Robyn Davis Sekula

In the past few years, my income has increased. In fact, it’s more than tripled. It’s been terrific. But I have spent so many years not making all that much that I’ve developed some thrifty habits. And even now that I’m making much better money, I’m not willing to let go of most of my frugal ways.

Why? Mainly because I enjoy getting a bargain. Plus, I believe that most items in the world are overpriced. Children’s clothing is among the things on the top of my list. Since my first daughter was born, and I wasn’t making much money, I picked up most of her clothes at yard sales. I then passed those on to my twin daughters a few years later. To this day, they still wear hand-me-downs. It doesn’t make one bit of difference in their lives. I find that coats, sweaters and fancy dresses are among the most overpriced and the most under-used by children. I regularly pick these up in almost new condition and pass them along to my children. Or I buy new clothes at the end of one season and use them a year later. But I never, ever pay full price for any clothing. It’s just about never worth it.

Books and toys are also just as good used as they are new, for the most part. I buy books for myself, my husband and my children second-hand. They read just the same and can be less than half the price of new. They’re essential in my home for all five of us.

However, one of my frugal habits has gone by the wayside. Now that I need to dress professionally, I do not buy second hand clothes for myself or Greg. Adults are hard on clothes. We keep them for a long time and wear them for years. I’ve gotten picky about my clothes. I buy quality items, usually from Land’s End, Talbots (actually an outlet they have in Lexington, Ky.) and Coldwater Creek, which is a wonderful catalog company. The clothes wear well and stay with me for a long time. Also, fit matters, and you simply can’t try on clothes at Goodwill or yard sales. I do buy the occasional item at a yard sale, but not often, and only if it’s very cheap. If so, and it doesn’t fit, I donate it to Goodwill and move on.

I’ve also given up the routine eating out that tends to drive the lives of those with small children. Now, Greg and I go to nice restaurants and hire a babysitter. It’s an expensive evening out, but extremely valuable to us. We spend money now on things that mean something.

So where does our money go? This year, I made $25,000 extra over last year’s income. I made a point not to blow it. I paid off our van, which had $10,000 in debt, and put away $5,000 each for us in Roth IRAs. I also doubled our payments to our second mortgage, and at the end of the year, doubled the amount we’re putting away for the kids’ college funds and through Greg’s 403 (b) at his work. I’ve also built up savings. We did splurge on a new TV, but not much else.

The point is this. I simply LIKE being thrifty. After 15 years of working in professional jobs where I made sometimes as little as $15,000, I have gotten into frugal habits that stay with me. I now can afford some things of quality, and I buy those things when I need them. I probably won’t ever start shopping at Gymboree for all of my kids’ clothes. Yes, they sell great stuff, but good gracious, $50 for a kids’ dress is nuts. It pains me to pay that and know that it will be stained and outgrown in a matter of a few weeks. What I really love about being frugal, too, is that I’m going to pass these habits on to my kids. They are having a happy childhood, thank you very much, doing simple things like baking cookies and playing dressup, and reading books with us. It’s all they need.

I don’t really like expensive jewelry (too flashy) and cut flowers just die. Want to get to my heart? Buy me an iTunes gift card. Nothing means more to me than permission to buy music.

We dumped cable TV this year because we realized we really don’t watch $60-some worth of TV each month. Instead, we have Netflix, and their wonderful Roku watch-instant player.

The best thing you can do for your family’s budget is find the things that you’re spending on that really don’t matter to you. Do you read the magazines that come into your home? Do you actually watch much TV? How often do you take out that boat? Where is the fat in your budget, and what happens if you trim it?

I’d love to hear your own stories of frugality. Post in the comments section.

Thursday, December 17, 2009

Congratulations to Dr. Jason White

By Dan Danford

Sometimes we need to take a moment to just appreciate the folks around us. I want to take a moment here, publicly, to thank Dr. Jason White for his guidance, particularly during this past year. Jason is our director of investments and he was recently recognized by his hometown, Raytown, and inducted into the Raytown Alumni Hall of Fame. What a terrific, well-deserved honor. Here's the full article.

Jason White inducted into Raytown Alumni Hall of Fame
Dr. Jason White, Director of Investments at Family Investment Center, is one of the newest members of the Raytown Alumni Hall of Fame. He was inducted into the Hall on November 1 as one of only five other inductees and was honored for his accomplishments in the fields of investment management and economics research. White, the youngest ever Raytown High School inductee, was recognized as a dedicated teacher and community member, successful entrepreneur, portfolio manager, and financial consultant.

"Jason has made really strong contributions to the university, to our firm and to the community as a whole," said Dan Danford, Principal and CEO of Family Investment Center. "He absolutely deserves this honor and we're so pleased to see him recognized for his hard work, particularly at such a young age."

The Alumni Hall of Fame is a program that pays tribute to alumni who have achieved a certain level of distinction in their lives and careers and also celebrates the rich heritage of education in the Raytown community. The school district's nominating committee selects individuals of noteworthy success in areas such as business, visual or performing arts, community service, academics, athletics, or military service.

White has received numerous other awards, including the NWMSU Alumni Association Distinguished Faculty Award, Sam Walton Free Enterprise Fellow, Mortar Board Teaching Excellence Award, and the Melvin and Valerie Booth College of Business Dean's Teaching Excellence Award.

Wednesday, December 16, 2009

Handling student loan debt

I think it's safe to say that the majority of college graduates have some sort of student loan debt when they graduate. It's almost commonplace. If you've chosen a private school and financed the entire education, the debt can easily be in the six figures, and if you've gone to graduate school on top of that, you could be talking about $150,000 or more. It's a huge, incredibly daunting figure.

In this episode of Dan Danford's podcast for Dad's Divorce, he shares tips and ideas for handling student loan debt. Remember, as your children choose an educational institution, encourage them to choose a lesser cost school if they'll be incurring debt. It can make a huge difference in their lives down the road. The less debt they have, the more freedom they have in their careers. Watch Dan's podcast below for more advice.

Tuesday, December 15, 2009

Risk without regret

Investments carry risk. It's just part of the deal. Our friends at Yahoo! Finance explored the idea of calculated risk and interviewed our Dan Danford for the piece, which was published today on Yahoo!.

Our thanks to Yahoo! Finance and the writer, Sheyna Steiner.

Monday, December 14, 2009

Monday question: Why not just savings account?

On Mondays, we answer a question from a reader. If you have a question for us, post it in the comments section or DM us on Twitter @family_finances.

QUESTION: My wife and I are retired, both of us in our mid-70s. We lost a good bit of our retirement account in the past two years. Given the problems with the stock market, does a savings account paying 3 percent sound like a good place for our money? We find it difficult emotionally to stay in the market, and my wife especially is losing sleep over it. We have less than $100,000 in retirement savings.

ANSWER FROM DAN DANFORD: Well, I'll eat my hat if you can find a saving account paying 3 percent today! Even CDs - where you "lock up" your money for a lengthy period - aren't that high. This is a very unique investment period, and the only redeeming value of cash or bank accounts is that you won't lose money. In the long run, of course, you will because money rates are insufficient to offset inflation. That's why most advisors recommend a diversified retirement portfolio.

The past several years, indeed the past decade, have been very tough on investors. Remember, though, most folks don't buy stocks because they want to, they buy them because the need to. Simply, no other asset class has the demonstrated potential to beat inflation over time. Retired people (you are a great example) must look forward to several decades of future life expectancy, and "keeping money in the bank" hasn't historically fared well against that scenario.

There is a middle ground, though. We advise clients to maintain diversification at a tolerable level. In other words, keeping just 30 to 50 percent in stock market mutual funds is enough for a solid inflation hedge. It's tolerable for most families because the downside risk is mitigated. If the stock market falls by 40 percent, and you've limited your portfolio to 50 percent in stock funds, then you maximum exposure is a 20 percent slip in total portfolio value. Most people can tolerate a temporary dip like that to maintain buying power throughout their investment period.

In investing, you must focus on future goals and needs. Turn off the television market pundits because they yap about the next 15 minutes or 15 weeks. And they don't know anyway. Sleep comes easier when you ignore all the bad news. I've been doing this now for 30 years and there has never been a moment when the doomsayers were quiet! In thirty years. It's not rocket science, but it's not Armageddon, either.

Friday, December 11, 2009

New laptop in your future? Here's a guide

Many folks turn to computers this time of year as a great present. And it is. But one note: those popular netbooks that you see floating around yes, are sleek and small, but they'll be limiting if you try to get by with just that. Instead, think about a more lasting purchase: a full-size laptop.

Here's a good, short guide to Windows laptops we ran across on Yahoo! Finance. Remember, your best purchase isn't always the cheapest option. It's the option that will last the longest and give you the best value.

Thursday, December 10, 2009

Pay attention when remodeling

By Robyn Davis Sekula

So let's say you want to remodel your house with hopes of selling it and gaining back most of that investment. Be careful how you spend those rehab dollars, reports Remodeling Magazine. It matters what you do and how you do it if it's important to you to get that money back.

The photo I posted with this article shows my renovated attic, which we turned into an office in January 2007. Adding space by remodeling an attic or basement is one of the better choices, MSN says. "You get more bang for the buck putting money into a basement or attic upgrade than adding a wing to the house," the article states. "Some of the highest-return projects include a deck addition and quick, conservatively priced replacements of old siding, entry door or windows."

Here's a summary of the article and more great information on>1=35000

On the Right Track

Jason T. White, MBA, Ph.D.
Director of Investments
Family Investment Center

Celebrating its 125th year, the Bureau of Labor Statistics (BLS), the data crunching arm of the U.S. Department of Labor, gave the nation an early Christmas present with its December 4 release of the latest employment statistics. The news was good!

The unemployment rate fell from 10.2 percent to 10 percent for the month of November. Job losses essentially slowed to zero, with a reported 11,000 job decrease in nonfarm payroll unemployment, the lowest job loss total since the recession officially began in December 2007.

From Fall 2008 to late Summer 2009, the economy was shedding jobs at a rate of over 400,000 per month, with the most severe monthly losses approaching 800,000 jobs in the Winter of 2009.

The economy is picking up steam, and I would not be at all surprised to see the December report be our first month of job GROWTH since December, 2007 – a welcome sign of rebounding employer confidence and general economic hope.

Even with this good news, the jobless picture is still sobering. There are 15.4 million Americans who are unemployed. BLS defines unemployed as those looking for work but unable to find it. The jobless total was 7.5 million, and the unemployment rate 4.9 percent, when the Great Recession began in December 2007.

The November unemployment rate among the “major worker groups” as defined by the BLS were as follows:

Adult Men 10.5%
Adult Women 7.9%
Teenagers 26.7%
Whites 9.3%
Blacks 15.6%
Hispanics 12.7%
Asians 7.3%

Job losses continued in the construction, manufacturing and information industries, while temporary labor and healthcare posted job growth. Of those individuals classified as “long-term” unemployed (those jobless for 27 weeks or more) rose by 293,000 to 5.9 million, and the employment-to-population ratio was unchanged at 58.5 percent.

It is clear to me that the economic recovery is gaining solid footing, and this is be reflected in the improved jobs picture. Look for the labor market to show increasing strength as we enter 2010.

Wednesday, December 9, 2009

Energy measures could save you taxes

With the end of the year coming up, we're all beginning to think about taxes. Here's an interesting story worth following on proposed new tax credits for those who purchase energy conserving appliances and take other measures that save energy. Be careful not to over-buy just to get a tax credit - but if you plan to purchase a major appliance soon, it makes sense to pay attention to this news.

Tuesday, December 8, 2009

Dad's Divorce: How to handle an inheritance

Every now and then, something great happens: you get unexpected money. It's a terrific position to be in. On Dad's, Dan Danford provided an outline of how to spend the extra money. Dan provides a weekly podcast for the site.

Monday, December 7, 2009

Steer away from company stock

Every Monday, we answer a question from a reader on our blog. This week, we're answering a question from a connection on Facebook. If you'd like to pose a question to us, post it in the comments section or DM us on Twitter. We're @family_finances.

QUESTION: How often should we rebalance the investments in our 401(k)? I wrangle with this a lot and I know many people who just dump everything into their company stock and sit back. (Good luck.) What's the right strategy?

ANSWER from Dan Danford: Company stock is a terrible choice. I once worked at a bank where almost everyone "directed" their profit sharing balances into bank stock. Long-time regional banking group, with a decades-old record of paying "rising dividends." Eighteen months after I started there, the bank failed (no fault of mine, though!) and employees I know lost their entire retirement savings. Sounds like Enron, right? This nasty scenario repeats itself every few years, and employees, managers, regulators, and legislators all scream in anguish!

But in every case, a brief discussion with any competent advisor would have navigated those portfolios into a diversified model. There are just too many variables beyond your control to hitch your entire retirement savings to one company's wagon. Five to 10 percent in company stock would be the max I'd recommend.

Instead, build a diversified portfolio using index or other low-cost funds, and keep buying no matter the current market environment. Most investment performance comes from the mix of investments in a portfolio. So, most advisors advocate asset targets tailored to an investor's situation - say, 80 percent stocks and 20 percent bonds for an aggressive long-term portfolio. However, that exact mix changes daily as the markets fluctuate and new deferrals are added. So, it pays to re-visit the portfolio occasionally and re-balance if desirable. Some 401(K) plans have the technical ability to do this automatically each month, quarter, or year. Occasional re-balancing makes good sense, and we typically do it with our client portfolios on an ongoing basis (as an advisor judgment, though, without any "automatic" feature).

Strip away the jargon and re-balancing is actually a shift of assets away from the best-performing sectors into the worst. Not everyone wants that, and there is powerful debate within the professional community about the proper frequency and benefit. If a plan offers it, some employees will probably use it. It might even be beneficial during certain periods. For larger balances, though, I prefer some human input into those decisions.

Many 401(K) plans offer "lifestyle" or "target date" portfolios. This is a simple auto-pilot choice where the fund is automatically adjusted for your age and risk tolerance. I recommend them, especially in early years where balances aren't too large. Let professionals adjust the asset targets for you.

Be aggressive, and stick to it. Most people, given their own choices, are too conservative with retirement investments. These accounts are long-term in nature, and aggressive investing is rewarded over lengthy periods. Make aggressive choices, stick to them through thick and thin, avoid tinkering, and conduct a thorough review every two to three years. You'll be amazed how much you can accumulate effortlessly.

Friday, December 4, 2009

Collaboration: Vicious group-think with a point

Editor's note: We're re-posting this, as it has been popular with our readers and we wanted folks to find it easily. Enjoy!

By Dan Danford, MBA, CRSP

The great manipulation technique of this decade is “collaboration.” This horrendously popular business term has been deployed in all areas of American life.

We hear it constantly at work, and now it is now worming its way across the nation like some dreaded crop blight or tree disease. A recent Google search yielded some 83,000,000 hits in under a quarter-second. That’s five times more than “synergy” and four more than “paradigm.” We’re talking the World Series of inane business terminology, here.

According to Webster, to collaborate means 1) to work jointly with others or together especially in an intellectual endeavor, 2) to cooperate with or willingly assist an enemy of one's country and especially an occupying force, or 3) to cooperate with an agency or instrumentality with which one is not immediately connected.

Of those three, happy “collaborators” likely prefer the first, which sounds noble, but the bell which rings true today is the second; that is, to cooperate with or willingly assist an enemy (emphasis mine). That’s because collaboration is usually suggested by the strong as an effort to manipulate the weak.

Think about it. Do cries for collaboration ever rise up from the peasant classes? Not so much. They nearly always reign down from above. “Go, therefore, and collaborate on the issue of diminishing widget sales in the direct distribution channels of our Northsouthern region,” declares Mr. Puffy, the CEO. “Help them see why I think we should close that plant.”

In the community, it’s “let’s gather a group of social agencies to collaborate about neighborhood floral disintegration. Perhaps we could jointly commission a study to determine possible solutions,” intones Pansy Marigold, owner of the International Floral Studies Group. Blah, blah, blah, blah.

I loathe manipulation. Manipulators think they are smarter and sneakier than all the rest of us. They devise grand schemes to feather their own nest, and then coerce others to pay. They are bullies with velvet gloves. Collaboration is their tool of choice. “Everyone gets a say,” they’ll explain, but results are known far in advance to anyone with a brain. Ask around the office; manipulators think they are smarter, but they’re not.

There’s a sign on my desk declaring “none of us is as dumb as all of us.” The simple fact is that collaboration is often a management technique designed to exploit group dumbness. Most times, the lead collaborator has an agenda and a desired result. Others in the process are unwitting co-conspirators. They show up, hoping they can add data, or resources, or wisdom (or, with any luck at all, humor). Wrong. They are, in fact, adding dubious credibility to both the agenda and result.

Collaboration as intellectual endeavor? Maybe it could happen. When two university scholars gather at Starbucks to discuss research. Or when Bobby Flay and Rachel Ray conspire to create some new dessert for the Food Network. On ESPN commentators engage lofty discussions over the merits of a Wildcat offense in the NFL. (Though a friend just emailed that last weekend he heard a broadcaster suggest that two bruising linebackers "collaborated" on a tackle. I kid you not.)

Intellectual? Not today. Collaboration is a transparent and weak management tool. The suits want us to think we have input, so they put us in a group and guide us to their goal. But we have a secret weapon. Any of us are smarter than that group of us. As a tool, collaboration is dull, clumsy, and ineffective. Manipulators beware: we’re on to your hollow game.

Thursday, December 3, 2009

Responding to commonly-asked questions

"Our communication approach is different because our relationship with clients is structurally different."

Founder Dan Danford Responds to Common Thoughts and Questions

Family Investment Center is pretty well known beyond St. Joseph and Missouri.

That's very true. We've been in a lot of industry journals and several national magazines and newspapers. The day I was quoted in the Wall Street Journal was a big one for me! Recently, Jason White talked about retirement investing in Business Week. The past two years, Medical Economics magazine named us as one of the nation's 150 top advisors for physicians - the only Missouri advisory firm west of St. Louis.

What's the main challenge facing Family Investment Center today?

Our firm plays on a national stage, yet we're pretty quiet in the local market. We manage almost $60 million for our clients, and we're very active in the community. But our corporate visibility remains relatively low and a lot of people don't know enough about us.

Why is that?

One reason is that we tend to work with people who already have some money. If you mainly work with people who have sizable portfolios, how many people is that in St. Joseph? Our client base tends to be deep and narrow.

Why talk about marketing, then?

There are a lot of people here who will need our services at one point or another in their lives. They will retire and cash out their 401(k), or they will inherit money from a relative. Where will they turn for quality help? And, of course, there are others in our neighborhood that might be frustrated with their existing broker or bank.

Obviously, St. Joseph has a number of investment firms.

We have a different idea about investing, that's all. There are really just two structural approaches to managing portfolios. The traditional method is that you manage it yourself with the aid of a broker. The broker provides ideas and information, and helps you buy or sell securities. Some larger investors use multiple brokers to gather more ideas.

The other approach - our approach - is to hire experts to manage the portfolio for you. This has been around for a very long time, too, but was limited to wealthy individuals and institutions. Through first-rate technology, Family Investment Center brings that approach to all our clients.

How unique is that business structure?

Well, we're kind of unique in this marketplace, but similar firms are very successful throughout the nation. In fact, SEC-registered investment advisors are one of the fastest growing segments in the investment world. Registered investment advisors have been around since the 1940s, but their original focus on large foundations and wealthy individuals kept them out of the public eye. Until recently, that is.

Why is that better?

Well, it depends on the investor, of course, but I've found that most people aren't well suited to evaluate a broker's recommendation. There are a lot of moving parts, with numerous variables. It's uncomfortable to decide on things you don't really watch on a daily basis, or completely understand. When someone shows a better way, people take it.

Our investment approach is academically sound. We build diversified portfolios and monitor them on an ongoing basis. We use institutional research and top-notch managers from around the world. It's a proven system and it really works.

What do you do best? What separates you from others?

Two main things, I think. Our attention to proven investment strategies and vehicles keep our clients in the mainstream of investing. We don't get cute and we stick to solid investment basics. We do things that have worked in the past and trust that they will work in the future, too. So far, that's been the case.
Our communication approach is different because our relationship with clients is structurally different. We don't sell anything except our expertise. We educate and explain, and we're pretty good at it. We are knowledgeable consultants, and clients appreciate our objective judgment and insight.

Any investors who don't fit your model?

If what you want is someone to hold your hand or stroke your ego, we're probably not the right firm for you. If you want a proven process with high odds for success, we're your guys.

How is Family Investment Center regulated?

We used to get that question a lot, but now that we've been around since 1998, it's less of an issue. We are registered with the United States Securities and Exchange Commission (look up our SEC file number #801-63744) and all client portfolios are held at a non-related investment firm. Clients get monthly statements directly from their custodian to verify portfolio holdings, prices, and balances. It's a very good system.

Wednesday, December 2, 2009

Change habits for better 2010

Periodically, we get inquiries from journalists writing about personal finance. Often, they're seeking advice for readers and viewers. Recently, we got an inquiry from a reporter wanting to know what new advice is out there for their readers. Dan Danford had a great response, so I'm posting it here. --- Robyn Davis Sekula

By Dan Danford

There's almost nothing new under the financial sun. But that doesn't mean that we can't learn something new every day. For 2010, some of us need to incorporate some new behaviors based on these past few years. One lesson might be to turn buying inside out. In earlier years, we used a credit card to buy things today and pay for them with future earnings. A newer and better approach is to put money aside today so we can buy things later. It's inside out.

Another good idea is to treat your home mortgage like a very good friend. Some folks hate debt and focus a lot of attention on "paying it off soon." Maybe a better way is to maintain it like a vintage car, and lavish attention on maintenance and repair. Keep current with the payments, refinance when desirable, and only pay it off when no better option for investing exists. There is almost always a better option for long-term money.

My take is that many people think they are doing the right things, but they are not! We learn financial things from our parents, grandparents, and friends, and much of it is twisted by myth and self-interest. Tough times create an opportunity to learn some better things for ourselves.

Tuesday, December 1, 2009

It's the most expensive time of the year

We've already warned you of the dangers of being one of those parents who just HAS to have the most in-demand toy of the Christmas season for your child. It's silly, and most of the time, by January 1, your kid has forgotten completely about whatever must-have you've procured. People pay way too much for these items and even get into violent fights over the toys. Definitely not worth it.

If you'd like to have a fun look through must-have toys of Christmases past, here's an interesting story from Esquire.

Saving goals and financial recovery

Every week, Dad's Divorce, a web site for men going through the divorce process, posts a podcast with Dan Danford of the Family Investment Center. It's a great platform for delivering information in a succinct, simple way and we feel it helps many people. Of course, the information doesn't just pertain to men. It's great advice for anyone. This week, we tackle a subject that has been on many minds: saving goals and financial recovery. We'd love your feedback.