Suggestions for creating a better shopping experience

By Laura Price, Family Investment Center

I love grocery shopping. Seriously, I do. And in my opinion, of all grocery stores, Hy-Vee is crème de la crème. But due to, I admit, my own ill planning and procrastination, I found myself picking up last-minute holiday groceries just two days before Christmas. Needless to say, my poor timing sucked the thrill out of the normally-pleasurable experience.

After barely finding a parking spot at my beloved Hy-Vee, I was thrilled to see every checkout open and many employees roaming the aisles offering assistance (kudos!). Still, the crowds nearly drove me to insanity. From this experience, with the help of some friends, I developed a list of suggestions for grocery store management to consider. Stores could make extra annual revenue by imposing the following sensible fees:

1) Leaving your cart unattended in the middle of the aisle: $3.50 plus $1.50 cart removal fee (hey, you leave it, you lose it)

2) Letting your child drive the cart: $4.00

3) Cart heel bumps: $5.95 first offense, then $12.95 every bump after

4) Ringing up an overflowing cart in multiple orders: $7.00 convenience charge per order, rung up at a specially-designated register (check-writers can use only this register as well)

5) Express lanes accommodating those with only eight (8) items or less, $10.00 for every item exceeding the limit of 8.

6) Senior citizens get a 10% discount for shopping Monday through Friday between 9:00 a.m. and 5:00 p.m.

*Note: all fees are subject to doubling in the months of November and December.

I might also note that though #6 doesn’t seem like a profit-booster, there’s no doubt there are indirect financial benefits. Happier customers, young and old, yield higher sales. It just makes sense.

One of the best ideas provided was to use the above fee schedule as a fundraising mechanism. High school students police the stores, then the revenue is split between the students and the store. It’s a total win-win.

Have I missed any? Comments/suggestions? Fees too high? Too low? Know any grocers?

Money Made Easy: Financial New Year's Resolutions

In this week's edition of Money Made Easy, Dan Danford answers this financial question from a viewer: What are some New Year's resolutions you think we should follow to help improve our finances?

Danford, of Family Investment Center, offers his financial advice on how you can have a better financial situation in 2011.

Table Talk

Families gather around a table to catch up on events of the day. Table Talk is Dan Danford’s way of keeping family and friends informed about Family Investment Center and related topics.

By: Dan Danford, MBA, CRSP of Family Investment Center

Do you like to eat? Imagine a buffet where every customer is routed to a different line according to a pre-purchased ticket. Some customers enjoy traditional fare while others choose from the world's most delicious and exotic treats -- succulent lobster, prime angus beef, exotic side dishes, and luscious desserts.

Now, for sake of illustration, assume all meal tickets cost the same amount. Also, to emphasize my coming point, imagine that each buyer chooses the preferred line in advance, and for two entire weeks. Last, there's no deviation from the ticket once bought; i.e., no outside food or drink for two entire weeks (you reach an irrevocable food decision at the time of purchase).

Nearly everyone chooses the gourmet line, right? A seemingly simple decision. Of course, it can't be that simple because life isn't that simple. Instead, insert this bit of suspense into the process. A certain number of randomly selected diners will eat dog food. Not once or twice, but for the entire two weeks. And the odds differ depending on which ticket you choose -- one in ten traditional diners get Alpo, one in three gourmet diners. Over a year, there may be streaks of winners or losers, but the odds hold in the end. One in ten, or one in three.

At mealtime, lucky diners from both lines enjoy tasty, rounded meals. They happily discuss their good fortune, although some traditional eaters are openly envious of the gourmet fare. Occasionally, someone complains a bit, wishing they'd been smart enough to choose a gourmet ticket. In a distant corner, randomly selected losers sit dejectedly munching dog biscuits.

So, what's your choice? Traditional or gourmet meal ticket? Same cost, what's it going to be?

Seriously, is it worth extra risk to order gourmet food? In my example, a gourmet ticket increases your downside risk by over three hundred percent (from one in ten to over three in ten). With these odds, I'm guessing that most rational people (hypothetical in my example) will choose the traditional ticket.

So I am puzzled to watch people (non-hypothetical now) flock to high-risk, high-return market sectors. As we invest, we choose between options offering a variety of risk and return outcomes. Every decision faces an unknown outcome, although history provides some helpful hints about risk and reward. It is clear that some investment choices create greater opportunity to lose money. There are obvious streaks (we may have witnessed the longest winning investment streak ever), but, still, some investments offer a much higher potential for loss.

One measure of investment risk is a factor called Beta. Don't worry about the math, here, but realize that a Beta Coefficient is calculated for most stocks and mutual funds (ask your advisor). A Beta of 1.00 (perfect correlation) means that the security (either stock or fund) has moved exactly with the market (an index) during some measurement period. The market index went up five percent, and the security followed by rising five percent, too. The same exact percentages when the market moved down.

A high Beta (1.20) indicates that the security moved twenty percent more than the market -- both up and down. Lower Betas (.80) show the security moved less than the market (again, by twenty percent).

Now, Beta isn't foolproof (nothing is), but a high Beta mutual fund has fluctuated much more during the measurement period than a low Beta fund. So, chances of a bad outcome are much higher because downward fluctuations are so repulsive to investors. Usually, lower Betas result in lower overall performance. But, it's because risks are probably lower, too (based on past history).

Investors today don't seem to understand that a market (or stock, or fund) up hundreds of percent in twelve short months owns a very different risk profile from other options. It's not less risky because of recent performance, but almost certainly more so. If you doubt me, check the Beta for those highflying stocks or funds. It's okay to consider or even buy such investments, but you must know that your chances of sitting alone rise with this choice. Maybe rise a whole lot. Consider them for your $2,000 IRA contribution, perhaps, but not the entire kid's college fund.

Okay, the dog food illustration is overly dramatic. But the point is to explain risk in an understandable way and to suggest that there are very different potential risks -- measurable risks --for the choices we consider. One thing stands true from the illustration, when we approach the market with $10,000, the entry price is the same for either choice. We can buy $10,000 of a conservative choice or $10,000 of a riskier choice. It's the outcome that might differ.
Chances are good that we'll enjoy a favorable outcome with either choice. But, the chances of eating dog food are much higher with some choices than others. Risk and reward are absolutely related; the higher the potential gains, the higher the chance of losing money. It really is that simple.

If you'd like professional evaluation of risk in your portfolio, give us a call. Our objective research compares thousands of stocks, bonds, and mutual funds. We can help!

For more finance advice, follow Dan Danford on Twitter

Roth IRA Conversions

"The primary attraction of a Roth IRA is the absence of future income taxes. Account holders contribute after-tax money, which grows tax-free until withdrawal." Excerpt from Dan Danford MBA, CRSP of Family Investment Center’s article in Medical Economics Magazine.

In this article titled Roth IRA Conversions, Opportunity or Trap, Dan discusses how changing a traditional IRA to a Roth is easier than ever, but may not be right for everyone. To read this article, click here.

Dad's Divorce: Paying Off Mortgage Debt

Dan Danford is a regular contributor to Dad's Divorce, a web site for men going through the divorce process. Most of his advice, though, is general enough that everyone can use, particularly this podcast on mortgage debt.

In this week's edition of Money Made Easy, host Dan Danford answers this financial question from a viewer: Does it make sense to pay down my mortgage by making extra payments if I plan to sell the house in just a couple years with no intention of paying off a 30-year mortgage?

Danford, MBA, CRSP of Family Investment Center, explains why he likes mortgage debt and gives additional financial advice.

You can watch it right here.

Dad's Divorce: Prioritizing Debt

In this week's edition of Money Made Easy, host Dan Danford answers this financial question from a viewer: Do you have a model or plan I should follow when it comes to prioritizing debt? In general, what debts should I pay off first, such as mortgages, credit cards, car loans, etc.?

Danford, MBA, CRSP of Family Investment Center, explains the "snowball model" and why paying off debt combines both financial and behavioral considerations.

Dad's Divorce: Biggest Mistakes In Your Investments

In this week's edition of Money Made Easy, host Dan Danford answers this financial question from a viewer: What's the biggest mistake individual investors make?

Danford, MBA, CRSP of Family Investment Center, explains the keys to your personal financial success and what resources are available to help you get there.

Keeping Up With Dan Danford

For many years Dan Danford, MBA, CRSP of Family Investment Center has shared investment advice in countless articles. Some of the articles that Danford has been featured in can be found in The Wall Street Journal, New York Times, Medical Economics, Yahoo Finance, and numerous other magazines and websites.

Below are just a few links to some of the recent articles Danford has been featured in.

Medical Economics, November 5, 2010
In his article Roth IRA Conversions, Opportunity or Trap, Dan Danford discusses how changing a traditional IRA to a Roth is easier than ever, but it may not be right for everyone. Read the article.

Bankrate.com, January 13, 2010
Dan Danford was featured in Sheyna Steiner’s article, Americans Not Confident about Getting Rich. In a recent survey, 70 percent said it’s harder to get rich in America today than it used to be. As Danford explains, the survey responses might have less to do with our ability to gain wealth and more to do with what we’ve experienced in the recent past. Read more.

Yahoo! Finance, December 15, 2009
In Bankrate’s Sheyna Steiner’s “aking Financial Risks Without Regrets, she explores how buying a home, starting a business, and investing can result in big pay-offs, but explains their risks as well. When it comes to investing, it’s easy to get caught up in the ups and downs of the market. Danford gives input on how investors should keep inflation in mind rather focusing solely on market fluctuations. Read the article.

Modern Medicine, December 18, 2009
In his article Quality Investment Help can be a Bargain, Dan Danford discusses how performance is one of many factors to consider when contemplating an investment strategy, how expertise is important especially during times of market turmoil, and how risk is a critical factor in an investment strategy and cannot be overlooked. Read the article.

RIABiz, May 25, 2010
Featured in Mike Byrnes’ column covering seven things advisors need to know about social media, Dan Danford shares his thoughts on how social media helps establish brand credibility and how it connects advisors to traditional media. Read the article.

Bank Investment Consultant, September 2009
In her article Marketing on a Shoestring, industry marketing guru Marie Swift talks about techniques advisors can use to stay connected to current and prospective clients. In discussing ways to use low cost multimedia technology, she cites Dan Danford who uses Twitter, video presentations, a blog and special features on his website. Read the article.

For a longer list, click here.

Dad's Divorce: What To Invest In

Dan is a weekly contributor to Dad's Divorce, a website for men going through the divorce process. The site may be been designed for men, but the advice usually can apply to anyone. In this week's edition of Money Made Easy, host Dan Danford answers this financial question from a viewer: When choosing which companies to buy stock in, what should I be looking for? What are some steps that I should take to research a company?

Danford, MBA, CRSP of Family Investment Center, explains the difference between great companies and great stocks and how to seek unbiased research.

Worst States for Retirement

Ebonee Bright

Family Investment Center

Money Rates reported that Missouri is the number 9 worst state to retire in. Based on a life expectancy of about 76 years and the fact that Missouri is the 15th most violent state in the United States, they deemed it unwelcoming for retirees.

You can read the full story below.

10 Worst States for Retirement

Click here to see their best states for retirement.

Missouri Western vs. Northwest Missouri

NCAA Football Playoffs

By Ebonee Bright
Family Investment Center

Tension runs high at Family Investment Center this time of year. No, not because of the stock market, but because of COLLEGE FOOTBALL SEASON!

Defending national champion Northwest Missouri State University will host Missouri Western State University in the first round of the NCAA Division II football playoffs on Saturday, Nov. 20, at Bearcat Stadium in Maryville. Kickoff is set for noon.

The term ‘rivalry’ is an understatement when you live in a region like ours. With two talented football programs so close together, you find enemy fans everywhere you go! It’s especially true at Family Investment Center.

Dan Danford, Chief Executive Officer of Family Investment Center, is a Griffon super fan. Dan a graduated from Missouri Western in 1987. He was also honored with the 2003 Missouri Western State College Distinguished Alumni Service Award. Dan supports all Missouri Western athletic teams.

“Jason and I agree on almost everything about investing. We disagree on almost everything when it comes to this football game! The only football point where we agree is that it will be a fun Saturday for both Western and Northwest fans. Our region is lucky to have two quality programs close enough for an intense annual rivalry. It’s a quality of life thing for everyone in our area,” Danford says.

But on the other hand, Dr. Jason White, the firm’s Director of Investments and a Northwest faculty member, couldn’t disagree more. Jason earned a Ph.D. in Economics and Political Science from the University of Missouri in 2003, an MBA from Rockhurst University, and a BS degree in Finance from Northwest Missouri State University. He is a steadfast Bearcat fan, committed to wearing Bearcat Green and supporting all of the Bearcat teams.

To order your tickets to the game, click here. If you can’t make the game, catch the play-by-play action through the Bearcat Radio Network or the online internet webcasts. Or purchase live video streaming through B2 Networks and the MIAA. Click here to view the playoff bracket.

Talent wins games, but teamwork and intelligence wins championships.

Dad's Divorce: Refinancing When Unemployed

Dan is a weekly contributor to Dad's Divorce, a website for men going through the divorce process. The site may be been designed for men, but the advice usually can apply to anyone. In this week's edition of Money Made Easy, host Dan Danford answers this financial question from a viewer: I have recently been laid off from my job right at the time I was considering refinancing my home. Would I still be able to refinance my house if I am currently unemployed?

Danford, MBA, CRSP of Family Investment Center, explains the factors banks and mortgage companies will use in their consideration.

Family Wealth Advice: Financial Character Traits III

By Dr. Jason White
Director of Investments
Family Investment Center

Dr. Jason White is Director of Investments at Family Investment Center and an Economics, Ph.D. at Northwest Missouri State University

This is the final article of three on the application of Northwest Missouri’s Culture of Character traits to our personal financial lives. We last left off with a discussion of the trait of Cooperation.

One of the toughest character traits from my point of view is Perseverance, which is demonstrating determination and commitment to complete a task. This is undoubtedly one of the hardest on the list, but also the most rewarding. Financial Perseverance requires current sacrifice, by saving as opposed to spending, with a reward that may not be revealed until many decades into the future. Perseverance requires faith in your financial plan, trust in your advisor’s method, and the constitution not to waiver, even in the worst of times. Ultimately, a savings program will yield rewards, even when market waters are choppy and difficult to navigate. Steady as she goes!

Perseverance goes hand-in-hand with our next trait: Patience. Legendary investors like Benjamin Graham, Charlie Munger, John Bogle and Warren Buffett all have preached the importance of due diligence, followed by steadfast Patience in your investment choices. But, please do not confuse Patience with stubbornness or indifference. While the former is an example of laudable self-discipline, the latter reflects unwillingness to change for any reason, even compelling and/or rational ones. Patience is defined as the ability to remain calm and to wait for what you want. Like perseverance, patience is also a hallmark of the long-term investor.
Those who exude Confidence have visible freedom from doubt and a strong belief in both self, and in a power greater than themselves. Be Confident that your sector-diversified portfolio of mutual funds with strong management and somewhat boring, steady and reliable annual returns will always beat the high-flyers and quick buck artists that may make a big short-run splash, but invariably are a long-run bust with equal disruption. Confidence also means believing in the skills, abilities and advice of your financial advisor and any other professional service experts you hire. Assemble a group of people you would be willing to trust to oversee your mother’s finances without your oversight, and I guarantee financial Confidence will not be a worry for you.
Last but not least on our list of financial character traits is integrity. This means always doing the right thing even when no one else is watching. To be honest, financial Integrity may be a bigger problem for those of us in my industry, than for our customers. It seems that most every day I pick up The Wall Street Journal some broker, insurance, annuity salesman, executive or analyst has made news for engaging in illegal, or at least questionable, behavior. To the best of your ability, stay away from these folks. Many inhabit Wall Street, but they are sometimes discovered on Main Street as well. They always have a story to explain the “misunderstanding” that took place when a client fires (or worse, sues) the malfeasant party. My strong belief in the majority of cases of accused wrong-doing is that where there is smoke, there’s fire.

Well, that completes the list of Northwest Missouri Culture of Character Traits as I see them applied to personal finance. I hope you enjoyed reading them as much as I enjoyed writing them.

St. Joseph Business Summit 2010

Once again, Family Investment Center is sponsoring the St. Joseph
Business Summit this year! One of the pillars of economic
prosperity is the success of businesses all around the United
States. This half-day program has been created to help local
business people get better and to spur budding entrepreneurs on
to great things.

This year's keynote will be Danny O'Neill, "the Bean Baron"of The Roasterie, Inc., a specialty coffeeroasting company which services espresso bars and coffee houses, fine restaurants, high-end grocers, offices and retail accounts. Danny started The Roasterie in thebasement of his Brookside home in November 1993, but his passion for coffee began in high school when he spent a year in
Costa Rica as an exchange student. He spent several weeks picking
coffee. Since then, Danny has made hundreds of trips to origin,
touring different segments of the coffee industry and locating the best coffees in the world. Since The Roasterie's inception, Danny has become a sought-after expert in the ever growing coffee industry. He has judged cupping and barista competitions all around the globe since 1995.

For more about the program and registration information, click here.

Thursday, November 18th
8:00 a.m. - 1:00 p.m.
MWSU Fulkerson Center

Is Your Money Safe?

During the financial crisis, which nearly cripples the entire financial and banking system, the Federal Government and Federal Reserve were forced to act and protect banks on Wall Street and Main Street. Risky practices such as low/no documentation mortgage loans, the use of extraordinarily high leverage, and tax oversight have created a banking climate that has deepened and lengthened the Great Recession.

Are your savings at risk? What can you do to protect your family, business, or non-profit organization?

In this video Dan Danford, MBA, CRSP of Family Investment Center, gives brief information about the safety and insurance issues for Family
Investment Center clients.

To be updated on new videos feel free to subscribe to Dan's youtube channel at http://www.youtube.com/dandanford.

Dad’s Divorce: Mortgage Loans Being Sold

Dan is a weekly contributor to Dad's Divorce, a website for men going through the divorce process. The site may be been designed for men, but the advice usually can apply to anyone. In this week's edition of Money Made Easy, host Dan Danford answers this financial question from a viewer: I bought a house a couple of months ago and it seems like every other week I get a letter saying my mortgage has been sold again. Can you explain why mortgages are constantly being sold?

Danford, MBA, CRSP of Family Investment Center, explains the financial reasoning behind buying and selling loans.

Financial Character Traits: Part 2

By Dr. Jason White
Director of Investments
Family Investment Center

Dr. Jason White is Director of Investments at Family Investment Center and an Economics, Ph.D. at Northwest Missouri State University.

In a previous column, I attempted to apply what many of us believe to be good character traits, but in the context of our personal financial lives. I am using a list from several years ago that became known as the Northwest Missouri Culture of Character Traits. I have previously written about responsibility, respect, self-control and citizenship.

Compassion shows caring for others with kindness. Do we financially support community and charity? Time is money as they say, so that counts too. When the Ministry Center is accepting donations, do we give some of the good stuff, or do we contribute the lima beans more often than not? If religion is something we value, do we tithe (contributing 10% of income earned) to our Church, as scripture indicates we should? Or perhaps, are we working toward tithing – which is wonderful! Many of us feel financially compassionate toward charity and religion, but are we really doing our fair share?

My family’s personal monetary commitment to tithe and charity is better than it used to be, but still below the bible’s guidance. Giver and receiver benefit most when gifts are given happily, even eagerly, for all to truly enjoy fellowship and caring that stems from the act of giving.

Tolerance demonstrates an acceptance of differences and the uniqueness of others, while celebrating the common ground we share. Every one of us has different financial goals, savings proclivities, spending habits and risk versus reward tolerances. I may be a big spender, while my neighbor is much more frugal. Does that financial difference make one of us a better person than the other? Clearly not. Financial tolerance recognizes that not all of us value and treat wealth and money in the same way, and that is okay.

Honesty is being truthful in what we say and do. Are we always honest with our family, friends, associates and clients? Perhaps more importantly, are we completely honest with ourselves? Do we sometimes sugar-coat the risks of an investment opportunity by overstate potential rewards, and ignoring the real risk of loss? This Great Recession has been difficult for those who may not have clearly understood their own reactions to loss and volatility.

Cooperation champions working together toward a common goal. Families do this all the time. They may institute a program of thrift, pinching pennies to save for various goals: a house; a new car; a college education; a retirement; or maybe a dream vacation. Having cooperative advisors on a personal and professional level can make life so much easier and more rewarding.

That’s eight financial character traits down with four more to go in my next column.

See you soon!

Family Investment Center Hires Intern

Ebonee Bright has begun working at Family Investment Center as the Finance Communications Intern. During this year's fall semester, she will be assisting the team in improving its social media outlets and client communications.

Bright is currently enrolled as a junior at Missouri Western State University, expecting to graduate in May of 2012 with Bachelor of Science degrees in Business Administration and Economics.

In addition to working at Family Investment Center, Bright is employed by the Royals Corporation in Kansas City, MO as a KCrew member. She has also previously worked as a model and sales associate at Hollister Company in Independence, MO, as well as a salon reservationist at Salon Ambiance in Lee's Summit, MO.

In the coming weeks, look for her posts on the company's blog and Twitter and the evolving improvements to the company's website and Facebook page (Dan Danford and Family Investment Center).

College Planning

Ebonee Bright
Family Investment Center

With college expenses skyrocketing and a decrease in resources available for financial aid, college costs are becoming more and more overwhelming for parents. College costs aren’t just tuition, books, and room & board anymore. There are hidden fees like school brand clothing, parking passes, Greek fees, formal events, health expenditures, and even parking fines.

It’s not too late to start planning for your child’s further education:

Fill out the Free Application for Federal Student Aid (FAFSA). Don’t wait until your taxes are complete to fill out the FAFSA, waiting will only result in an insufficient aid package or no financial aid at all. Even if you think your family won’t qualify to receive benefits there are other benefits from filling out the FAFSA. It is beneficial for borrowing low interest student loans and is often required for merit based grants and scholarships. Colleges also use the information to offer need-based work study programs and grants.

Discuss money management with your college student. It’s no secret that college students are notoriously bad at managing personal finances. Sharing information about tuition costs, book costs, and other costs with students will help them gain an understanding about the importance of financial planning. It is important that they understand the consequences for overspending and take responsibility for their finances.

Start a 529 College Savings Plan. The purpose of a 529 College Savings Plan is to fund future college costs. Having a savings plan does not exempt families from receiving financial aid. Prior to July 1, 2006 a 529 College Savings Plan was treated as a resource which reduced financial aid. Since then the 529 Savings Plan has been considered a parental asset and doesn’t influence financial aid eligibility for the student.

Gain information from trusted resources. Using financial planners can be beneficial to families who want to plan for college saving. Choosing a financial planner can determine your college funding needs and tailor a plan to help you meet them.

Charities Boost Investment Returns Without Speculation

Dan Danford, MBA, CRSP®
Family Investment Center

For sake of discussion, let’s say your favorite charitable organization has an endowment of $10 million. You’ve likely got a Finance Committee and a paid manager (or two) for the portfolio. In most cases, your performance is probably okay, and you don’t harbor any strong dissatisfaction with the current arrangement.

Still, there is an ongoing duty to invest wisely and safely, and to exercise proper supervision over the funds. Also, the current economic climate demands maximum effectiveness for every resource used by the organization.

The matter’s crux is this: every one percent of investment return brings $100,000 to your bottom line. Boost the returns and you boost the organization’s mission. More money for scholarships, or services, or other client support.

I’m going to mention the most obvious solution. The investment manager(s) needs to do a better job. If they’d choose better stocks or bonds, or mutual funds of stocks and bonds, resulting performance would create the desired new funds. If they can’t do that, maybe it’s time for a change.

That’s uber-obvious, and it’s where most boards go. And, for the record, it’s also where many investment professionals go, too. Banks, advisors, brokers, they all make claims and they all support those claims with believable documentation. Most will send out a team of sparkling professionals who are charming, articulate, and knowledgeable.

But it’s problematic, too. They all look good. And they all sound convincing. But – this is the serious flaw that most investors won’t touch – no one (and I mean absolutely no one) knows exactly what the future will hold. All those groups with all their expertise are merely guessing about the future. From this standpoint, the notion of adding an extra one percent through better investing is highly speculative.

There is another way, though, and it offers an almost-certain performance boost. If you take the existing portfolio and slash fees for trading, mutual funds, or portfolio management, those reductions flow directly to the bottom line. Want to boost portfolio returns by $50,000? Simple. Find a safe and insured custodian who won’t charge high fees to hold investments and send verified pricing and reports.

Need another $25,000? Find a way to shift some portion of the portfolio to index- or institutional-share managers. Either choice can reduce overall portfolio management costs by an easy quarter- or half-percent.

And there is no need to sacrifice performance. First, many existing managers will discount costs when pushed, but even if they won’t, there are hundreds of qualified companies who will. Here’s just one example: we can show you how to hire the widely acknowledged “nation’s most prominent bond investor” (New York Times, 2001) for a microscopic .46 percent per year. The best in the U.S. For your endowment portfolio. For less than one-half percent per year.

No firm you interview can offer that kind of quality for close to that price. And that’s just one example of one portfolio segment. We can show you similar savings though stocks, international investments, real estate, and other diversification realms. Virtually no reduction in quality; a serious and non-speculative reduction in fees. Instant boost to your bottom line.

One more thing. The returns from slashing fees are permanent. Unlike chasing investment performance, they bring increased returns to the bottom line in each and every subsequent year.

Why haven’t you heard this discussion before? That’s a great question, and one I’m pleased to answer. The simplest response is that fees are easily obscured when times are good. Rising markets and general prosperity hide a lot of sloppy practices. No one worries about an extra half-percent when investment returns run ten percent a year.

But the queasy combination of low returns and economic crisis has changed all that. Throw in greater industry transparency and we’re seeing a lot of things not discussed before.

There’s another point worth making. The rise of independent investment advisors is creating a lot of competition and pricing innovation. Firms like Family Investment Center have been around for decades, but technology and information are transforming them into investment powerhouses. Today, registered investment advisory firms are the fastest growing segment in the investment industry.

There’s no magic bullet for higher performance. And there’s no crystal ball about likely investment returns for 2011, 2012, or 2013. But there is a safe, reliable, and convenient way to boost portfolio returns and mission success. We’ve been doing it with top charitable groups in this region since 1998.

Financial Character Traits: Part 1

By Dr. Jason White
Director of Investments
Family Investment Center

This is the first of a three-part series of columns dedicated to fostering certain financial character traits. We have all seen these behaviors in others as well as ourselves.

Responsibility is defined as “taking ownership of what you say and do.” Likely, we all probably need to save more than we do, and we certainly are masters at preaching to our children regarding the merits of saving for future goals and for the challenges in life. We talk about Responsible practices like: saving for a rainy day; saving for retirement; having a cushion of savings in the event of job loss or disability; saving for the college expenses of our children or our children’s children, etc. Are we practicing such financial discipline in our own lives by taking Responsibility for our personal or family savings program?

Respect means “treating others with courtesy and honor.” Do we look down on others who may not have the asset total we do? Does our bankroll give us a right to be snooty, rude or elitist? Certainly not! We were born into this world naked, and we shall exit it the same way when our time comes. While we are here, we should strive to treat all persons with Respect, regardless of financial position or other material difference.

Self-control refers to “having control over one’s actions, words and emotions.” I see this as a close cousin of Respect, but it could also refer to our demeanor regarding our investments. Are we riding high when the stock market does well and in the doldrums when the Dow is not as rosy? Do we trade frivolously or attempt to time the market through such futile activities as day-trading and the like? Do we chase the hot stock tip or try to find a get-rich-quick scheme? Financial self-control means having a long-range financial plan and sticking to it, regardless of the distractions and temptations that may come along.

Citizenship is “being loyal to your school, community and country.” Are we good Citizens as investors? Do we always vote our stock proxies, or do we cast them into the wastebasket, leaving the task of board oversight to other shareholders? Evidence indicates most of us choose the latter. A good corporate (shareholder) Citizen takes an active interest in the investment position(s) s/he holds and is educated about what those investments are designed to do – and what they are not designed to do as well.

On Entrepreneurs: Social Network Movie is Both Entertaining and Thought-Provoking

Dan Danford, MBA, CRSP®
Family Investment Center

The late George Carlin was a favorite entertainer. He was blessed with a unique life perspective, and his genius for wordplay offered an enormous creative platform. Most anyone from the 1970s can recite verbatim bits from his wildly successful comedy albums.

George had some anger, too. He often poked fun at sacred cows – using biting commentary towards religion, politics, and corporate America. He was counter-culture in almost every way, and he made us laugh as he skewered many of the authorities and things that made America great. He’s renowned for, among other things, being the very first host of Saturday Night Live.

This is a classic entrepreneurial parable.

I thought about George while watching The Social Network. Mark Zuckerberg, the guy who created Facebook, shares a few quirks with Carlin. First, his personality is unique to the point of being antisocial. Second, his genius is unquestionable. Third, there’s an anger simmering right below the surface.

This whole Facebook story is pretty entertaining. I love entrepreneurs, and this is a classic entrepreneurial parable. It plots an unlikely hero against a host of challenges, and – against all odds – he meets with remarkable business success. It’s the same inspiring story of Bill Gates or Oprah Winfrey or Howard Hughes, from an earlier era.

You watch this movie unfold and wonder if Zuckerberg’s hilarious awkwardness fuels his unique genius. Maybe the miracle of Facebook grew from Zuckerberg’s personal deficits. Perhaps the real purpose of Facebook was to reject authority on every conceivable level. He sure tries.

I genuinely wish I knew this guy. He’s portrayed as an angry geek who torches his only friends. Along the way, he creates a $25 billion dollar company, and changes the Internet landscape forever. Possibly the world’s landscape, too, for that matter. There are now over 500 million Facebook users worldwide; more than the populations of any countries in the world except China and India. The Facebook community is now the world’s third largest nation!

You don’t get to 500 million friends without making a few enemies.

There’s another lesson in this story, as well. It’s a sidebar to every successful entrepreneur’s tale. It chronicles the rocky road from admiration to dismay to outright contempt. We love to publicly celebrate business success in America; it’s a lot less tolerable when it involves our personal friends and acquaintances.

Zuckerberg is plagued by people who want. He is the figurative goose who laid a $25 billion dollar golden egg, and various friends and acquaintances want some. No matter the legal grounds (documented in the movie, and elsewhere), none of them makes a serious claim to his tech skills, thought processes, or vision for Facebook’s incredible success.

It’s not that they didn’t contribute in some ways, just not in similar proportions. To me, that’s the tragedy. In America, guys who don’t deserve it can still collect an awfully big payday. That includes your former friends, if you are Mark Zuckerberg.

The Movie’s Trailer: http://trailers.apple.com/trailers/sony_pictures/thesocialnetwork/

It’s important to note that this movie was not authorized by Mark Zuckerberg and did not have his cooperation. He claims that it is inaccurate in a variety of ways. See
http://www.cbsnews.com/8301-501465_162-20019824-501465.html
for Zuckerberg’s comments.

Dad's Divorce: options for retirement

Dan is a weekly contributor to Dad's Divorce, a website for men going through the divorce process. The site may be been designed for men, but the advice usually can apply to anyone. In this week's edition of Money Made Easy, host Dan Danford answers this financial question from a viewer: I am an avid world traveler and am seriously thinking of moving to another country after I retire where the U.S. dollar is much stronger. I don't want to stay here and just watch my retirement portfolio dwindle in net worth. Is this a smart move financially?

Danford, MBA, CRSP of Family Investment Center, suggests what factors to evaluate in your decision making and what options you have in retirement.

Gambling on real estate in Las Vegas

All of us have made decisions that have cost us financially. Real estate is one of the ones that has affected most of us in the biggest way. We ran across this article today that tells one couple's story about what happened when they decided to keep their home in Las Vegas after they were transferred by the military overseas. As you can imagine, there hasn't been another time to sell that house since they left Vegas - and now they're trapped.

It's a good cautionary tale. Remember, when you get transferred to another city, for the military or for any other reason, being a long distance landlord is never, ever ideal. It will likely cost you much more than it will net, and unless you're wealthy, don't try it. Here's the story.

http://articles.moneycentral.msn.com/SmartSpending/blog/page.aspx?post=1814676&ocid=twmsnss

Dad's Divorce: preparing for higher taxes

Dan is a weekly contributor to Dad's Divorce, a web site for men going through the divorce process. The site may have been designed for men, but the advice usually can apply to anyone. In this week's edition of Money Made Easy, host Dan Danford answers this financial question from a viewer: With the Bush-era tax cuts possibly coming to an end, what can I do to brace and secure myself for higher taxes?

Danford, MBA, CRSP of Family Investment Center, offers his financial advice on how you can prepare for increased taxation.

Media mentions: Dan Danford on gold

Family Investment Center’s Dan Danford was recently interviewed by Ray Scherer, a reporter for the St. Joseph News-Press, for an article on gold. Thank you, Ray!

Click here to read the article:

http://www.newspressnow.com/news/2010/oct/03/golds-shine-lingers/

Living in the suburbs may not work for retirees

We spotted a great piece by Steve Vernon on CBS Moneywatch.com 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:

http://moneywatch.bnet.com/retirement-planning/blog/money-life/retirement-planning-outside-the-box-move-out-of-the-suburbs/1887/

Dad's Divorce: Home Closing Costs

Dan Danford regularly provides commentary for Dad's Divorce.com, 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.

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:

http://www.cnn.com/2010/POLITICS/09/26/economy.poll/index.html

Dad's Divorce: gift tax

Dan Danford regularly provides commentary for Dad's Divorce.com, 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.

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.

The recession and nonprofits

View more presentations from Robyn Sekula.

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!

http://stjoechannel.com/search-fulltext?nxd_id=161015

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: http://www.census.gov/newsroom/releases/archives/income_wealth/cb10-144.html

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.

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 Boomer-Living.com and to the author of this piece, Kenney Hegland, for the great advice.

http://www.boomer-living.com/2010/09/grandchildren-law-and-advice-for-savy-boomers-and-their-families/

Dad's Divorce: emergency savings

In this week's edition of Money Made Easy on Dad's Divorce.com, 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.

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?

Walletpop.com 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:

http://www.walletpop.com/blog/2010/09/10/5-tips-for-students-and-parents-on-insurance-at-col/?utm_source=twitterfeed&utm_medium=twitter

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.

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?

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.

http://blogs.wsj.com/deals/2010/09/01/how-to-make-a-killing-on-burger-king/?mod=e2tw

Registered Investment Advisors keep clients' interests at heart

By Dr. Jason White
Family Investment Center

The world of investing and managing money can be confusing, frustrating, thrilling and gratifying all at the same time. Some folks have the financial acumen to manage their own portfolios and do quite well, while many flounder in a sea of millions of investment choices and scores of different account types and other arcane rules of the road.

If you have the time, talent and dispassionate experience needed to manage your own money, then this week’s column may not be for you, and that is just fine. The United States capital markets benefit greatly from the liquidity generated by a large number of self-interested investors. But, if you have ever considered handing off the keys to your investments portfolio to a professional, or if you have done so already, then read on.

Essentially, there are two breeds of investment advisors to choose from: Commission earning brokers who charge based on the investment products they sell, and those who work on a flat fee or “commission-free” basis, Registered Investment Advisors. Given today’s increasingly complex and intertwined financial marketplace, some traditional commissioned brokers have begun offering some types of fee-based, straddling the line between both. Yet there is a very important distinction between commissioned brokers and fee-based advisors. In legalese, it is the standard of care provided.

TAKE NOTE – A Key Point Follows

Commission-free Registered Investment Advisors (RIAs) are fiduciaries for their clients. This means that an RIA is legally and ethically bound to provide client investment services that are solely in the “best interest interest of the client.” Further commission-free (a.k.a. fee-only) RIAs must be completely transparant and disclose all fees paid by clients, by research or mutual fund companies, or any others ancillary charges – including.

Commissioned brokers are held to a much lower standard of care – the investments they recommend for customers must simply meet a “suitability” standard. Whether the recommended investment is in the best interest of the client is immaterial in the world of commissioned investment salespeople.

I have been both a commissioned broker and a commission-free (fee-only) advisor in my 20-years at the virtual intersection of the streets of Main and Wall. I will remain a passionate promoter of the commission-free RIA business model until or unless a better investment business model is developed that protects clients better than an RIA, or that is more transparent.

I’m not holding my breath waiting for this to occur.

You see, a fee-only RIA earns larger fee income from a client as that client becomes more and more wealthy. Thus, it is squarely in the best interests of both the client and the commission-free advisor to be invested in such a way as to maximize growth, income and safety over time. Clients and their advisors sleep better at night knowing that they are both on the same team. This is truly one of the best win-win scenarios available in today’s financial marketplace.

Dad's Divorce: Rebalancing your portfolio

Dan Danford regularly provides commentary for Dad's Divorce.com, a web site for men going through the divorce process. Of course, his advice applies really to anyone. You can watch his latest podcast here: