Wednesday, September 29, 2010

Living in the suburbs may not work for retirees

We spotted a great piece by Steve Vernon on CBS that offers a fresh perspective on where to live during retirement. He contends that most people buy a house in the suburbs while they're raising their family, and never really consider whether or not it's appropriate to stay in as they age. (Our thanks toRetirement Revised for pointing out the article.)

Vernon says it's not - mainly because most people don't need as much space, and the suburbs can put them far away from amenities they need, such as doctors, grocery stores, restaurants, etc. Seniors would be wise to be near public transportation, too, as they age so they can use the bus or train when they give up driving. It's an interesting idea, and almost the exact opposite of what most people do. Here's his list of what to look for:

The answer? Move out — while you still can. Here’s what I’d look for:

A smaller place with reduced bills for utilities, insurance, property taxes, and ongoing maintenance
The ability to walk, bike, or take public transportation to most, if not all, of your regular activities. This would include shopping, errands, medical needs, hobbies, and entertainment.
A location that makes it easy for you to get out and exercise, and includes nearby walking or bike paths
Close-by group social activities, such as church, community centers, theaters, and adult education schools

You can read his full take on it below:

Tuesday, September 28, 2010

Dad's Divorce: Home Closing Costs

Dan Danford regularly provides commentary for Dad's, a web site for men going through the divorce process. In this week's edition of Money Made Easy, host Dan Danford answers this financial question from a viewer: What closing costs should I anticipate in purchasing a marital home?

Danford, MBA, CRSP of Family Investment Center, explains the confusing process of home-buying and what you can expect to pay at closing.

Monday, September 27, 2010

Is the recession over? Does it matter?

It's easy to get caught up in the financial news of the day. And lately, the financial news has been all about the recession.

It's over! Some economists have told us.

It's not over! Others have told us.

But in the end, does this matter to you or me? How does this change our daily activities? It really shouldn't. If you're job hunting, keep at it. If you're trying to sell your house, keep it nice, and follow the same rules you would otherwise. In both situations, you may need to bump your activities up a notch in a down economy, but don't let the news dictate how you handle your individual situations.

Really and truly, do what you would in any other economy.

If you must, read all about it here:

Wednesday, September 22, 2010

Dad's Divorce: gift tax

Dan Danford regularly provides commentary for Dad's, a web site for men going through the divorce process. In this week's edition of Money Made Easy, Dan answers this financial question from a viewer: What is the most amount you can give/receive in a year as a gift without it being taxed? I stand to inherit a $15,000 gift this year. Can it be taxed?

Danford, MBA, CRSP of Family Investment Center, explains how the gift tax works and what exemptions apply.

Listen to the podcast for all your personal financial help.

Monday, September 20, 2010

Help for non-profits

By Dr. Jason White
Family Investment Center

Non-profit organizations have been hit hard by the recession. They're been asked to serve more people as needs increased - but they've also experienced a drop in donations as those who have funded them in the past may be holding their money a little closer than previously.

I recently addressed this time of struggle for non-profits for Mainstream, Inc. and the Kansas and Missouri Non-Profit Associations on "Future Impact of the Recession on Non-profits." If there's interest, I'm happy to give the presentation again to other similar groups. You can watch my presentation below. Thanks to SlideShare for providing the ability to share PowerPoint presentations and videos.

Friday, September 17, 2010

Media mentions: Jason White interviewed about student debt

Our own Jason White was recently interviewed by Edward Burch, a reporter for St. Joseph's own KQ2, for a story on student loan debt.

Thanks for including us, Edward!

You can't afford to go without health insurance

The Kansas City Star's Dollars and Sense Blog reported this week that 7 million Americans lost employer-sponsored health insurance last year. That's a huge number - but it's somewhat expected, since we've seen lots of layoffs and downsizing in the past few years.

This is what the U.S. Census Bureau reported:

Census data released today said 50.7 million Americans lacked health insurance in 2009, from 46.3 million in 2008. That was the highest number of uninsured since the bureau began collecting such information in 1987.

If you want to read the original summary of key findings from the survey, go here:

Most Americans get their health insurance through their work, and if they lose their job, some may not be able to afford to pay for it privately. Here's something you need to understand though: going without health insurance, no matter your age and health, is a huge gamble. Even though you may be in terrific health, you could easily be involved in a car accident or suffer from a previously undiagnosed condition. If you're without health insurance, and something happens to you, it can leave you bankrupt. You cannot afford to be without it.

Shop around for quotes. Independent insurance agents may be able to help you find a deal that you can afford. Some opt for a high-deductible plan that would kick in if anything catastrophic happens, but doesn't cover the everyday doctor visits. You should also check with your state to see if you're eligible for any sort of state plan.

Whatever you do, don't go without. You can't afford it.

Tuesday, September 14, 2010

Thoughts for grandparents on grandchildren

It's rather sad to say that some biological parents simply don't have what it takes to raise children - and thus, the duty sometimes falls to grandparents. This leaves grandparents in a bind. It's demanding to raise small people, which is why those who give birth are, by design, young. It's also taxing on your finances at a time when you're supposed to be ramping down.

We ran across this great piece today that gives legal, personal finance and psychological advice for grandparents raising grandchildren. Whether this is you or someone you know - or a situation that may come your way one day - this is worth reading.

Our thanks to and to the author of this piece, Kenney Hegland, for the great advice.

Monday, September 13, 2010

Dad's Divorce: emergency savings

In this week's edition of Money Made Easy on Dad's, host Dan Danford answers this financial question from a viewer: How many months worth of emergency savings do I need? What about if I am approaching retirement and will have a very stable income of my pension and social security benefits?

Dan Danford, MBA, CRSP of Family Investment Center, debunks the general rule of thumb for emergency funds and offers financial advice on how to prepare for retirement.

Listen to the podcast for all your personal financial help.

Friday, September 10, 2010

Check your insurance when sending a kid off to college

So you've sent your kid off to college. Congratulations!

But by chance did you consider the ramifications on your insurance? has a few great tips and things to consider if you've got a kid off at school. For example, in some situations, your kid's stuff in a dorm room is covered if it gets lost, damaged or stolen. But the minute they move off campus, it's not. Great tip. Read on for more:

Wednesday, September 8, 2010

Warren Buffett leads by example

Dr. Jason White
Director of Investments
Family Investment Center

I was thinking back on my utter amazement when I first heard about and attempted to digest the scope and meaning of the largest philanthropic pledge in the history of mankind.

In 2006, Warren Buffett decided to give away the vast majority of his fortune, to the tune of over $40 billion. His plan was to donate 5% of his shares in Berkshire Hathaway annually, or about $1.5 billion based on 2006 share prices, to five charitable organizations, with the lion’s share flowing to the Bill and Melinda Gates Foundation.

Wow – talk about role models!

Of course, the story made huge news at the time with coverage all over the print and broadcast media for several weeks. Our local papers, The Associated Press, The Wall Street Journal, CNBC-TV, and my favorite rich-guy illustrated magazine, Fortune, all weighed in on the details of the plan and speculated on what this gift meant for Berkshire Hathaway, the Buffett family, and the future of philanthropy in society.

Let me try to put the magnitude of this gift into some historical perspective, if it is even possible to do so. The July 10, 2006 issue of Fortune carried a tremendous article on the Buffett gift that I encourage you to look up and read if you are interested in the details of the arrangement. The three most charitable philanthropists in history, Andrew Carnegie, John D. Rockefeller and John D. Rockefeller, Jr. gave a combined estimated $19.8 billion dollars to charitable causes over the years spanning 1889-1960, measured in 2006 dollars. Buffett alone is personally giving away more than double that amount with a much shorter time table. Amazing!

With hindsight, it was probably not a coincidental event when Bill Gates also announced in 2006 that he would be stepping down as Chief Executive Officer of the Microsoft Corporation in order to focus more time and attention to the work of the Bill and Melinda Gates Foundation. Of the estimated $5 billion annual gift from Buffett, 83% goes directly to the Gates Foundation with specific instructions that the funds should be used immediately in support of the Gates Foundation mission. Bill and Melinda have focused their charitable work on three distinct global scourges: HIV/AIDS, tuberculosis, malaria, and some assorted other human health threats.

Half of the remaining 17% of Buffett’s annual gift goes to the Susan Thompson Buffett foundation, formerly known as the Buffett foundation, but renamed after Warren’s wife Susie died many years ago. The remaining 8.5% is donated to three separate charitable foundations, each run by one of Buffett’s children.

So there is the plan. Five billion a year split among five separate charities. Even with the unprecedented size of this gift, it will still take decades for Buffett to give it all away at a $5-billion per year pace. However, don’t assume that Buffett is planning on shutting out his family entirely from inheriting a piece of his wealth. I researched Buffett’s comments from the past on inherited wealth. Going all the way back to a September 29, 1986 Fortune article, Buffett was quoted as saying “…a very rich person should leave his kids enough to do anything, but not enough to do nothing.” I am certain his heirs will be well provided for, and I really respect his personal values regarding monetary success.

What a legendary, wise, generous and beautiful man Warren Buffett is. The world will miss his living example terribly when God decides to call him home.

Tuesday, September 7, 2010

Get your house market-ready

By Robyn Davis Sekula

I took my mom house-hunting this weekend. We spent two afternoons with a real estate agent (a particularly astute agent near us named Ed Clere) and looked at one-story homes in existing neighborhoods. We were looking mainly at homes $150,000 and under. Mom lives in Virginia, and since I live in Indiana, she's looking at moving closer to us, now that Dad has passed away.

I was struck by how very many homes are on the market. Ed ran a search of homes with our criteria and found more than 100, and he narrowed it down to about 20. Through this process, I've developed a short list of rules for anyone with a house on the market.

Know this guiding principle: the market is flooded with houses, many just like yours. Your home needs to be better than the others, distinguishable in some way, that will help it sell. Since you can't do much at this point about the quality of construction, the only things you can affect are the way the house feels and looks. Understand that although these things are subjective, they make a very big difference in how your home shows to potential buyers.

So, on to my rules:

1. Your house has to be clean. This is true of vacant homes as well as those that are occupied. It needs to look as if a vaccuum has run through it sometime recently, and it shouldn't have cobwebs in the corners, and certainly no dirty sinks or toilets. You'd be amazed at the filth of some of the houses we were in. One of our very favorite houses was a really clean older style ranch house that had just a few nick-nacks and paintings left in it. It really just felt more home-y.

2. Your house should be available. If your house is on the market, and you skip town for vacation without getting it ready to show, shame on you. You've missed a great chance to show it.

3. Your house should smell at least decent. One home we went in had such a heavy odor of smoke that someone had tried to mask with a perfumed spray that it was overpowering. I had to leave. No way would I buy that house; the risk is too great that I'd have to live with it. However, once the front door stood open for even 10 minutes, it made a big difference. Opening the windows some would have really helped, and could have been done in advance of the showing. Also, please don't cook cabbage or fish the day before a showing. Or hey, here's an idea: don't eat either one inside your home until the house sells. Think bread, and brownies.

4. Your house needs to feel comfortable. The best house we went in just felt like you could move in. It showed great - and it was chock-full of furniture. But it had a cozy feeling, mainly thanks to the fact that it was clean, freshly vaccuumed, and not cluttered.

5. Your house has to have any junk out of it, particularly in situations in which you're showing a vacant home that was owned by, say, your mother or grandfather. One house we went in the real estate agent swore was a great house, but it was filled to the brim with junk everywhere, and it all pertained to the various equipment some need in old age - hospital bed, walker, etc. To my mom, it was just plain creepy.

6. Your house should have extra information available in a notebook on a table for people to peruse. Tell us it has a new furnace, new roof, new plumbing - whatever. Those things will matter to a buyer. That cozy house I mentioned earlier had that, and we spent some time looking through it. If mom had wanted a new home with an open floor plan, that definitely would have swayed us in its favor, as all of the information was favorable.

7. Your house needs a real estate agent who is available. This doesn't come from this go-round of house shopping. Eight years ago, when we were moving to Indiana, we wanted to see a particular house, but the real estate agent was not available on weekends. If your agent doesn't work weekends, you don't need them. That's just plain idiotic. That's when most people house-shop, so your agent needs to be available.

So, now that I'm done with my little rant, tell me your rules. What do you think are the dos and don'ts of showing your house?

Wednesday, September 1, 2010

Examining a private equity deal

Sometimes we run across an article that helps people understand how financing works. Here's a great example from today's Wall Street Journal from the paper's Deal Journal. It explains how Private Equity groups may make a killing by selling Burger King - and why.

It doesn't sound right, does it? Burger King - and even Arch-enemy McDonald's - are seeing lagging sales. The article notes that in a recession, fast food usually does well, thanks to consumers' desire to spend less. That's not been true lately.

If you want to learn more about how these deals work, read on for a terrific dissection.