This week: Retailers release quarterly reports

For those of you who keep some money in the market, take note that this week, many retailers will be releasing their quarterly earnings reports. The Kansas City Star's Dollars and Sense blog had a nice post today quickly and neatly outlining who will be making reports on which days. To see the list, go here:

http://economy.kansascity.com/?q=node/7983

Today (Monday) Lowe's opened with its earnings, which were up. Reaction was mixed in the market, with Lowe's keeping its thoughts on the matter cautious but optimistic. Here's that report on Market Watch: http://www.marketwatch.com/story/retailers-open-mixed-on-lowes-report-2010-08-16

And here's Lowe's own press release: http://investor.shareholder.com/lowes/releasedetail.cfm?ReleaseID=499393

What's your number? Part Two

Dr. Jason White
Director of Investments, Family Investment Center

This is a continuation of my last column discussion of the best-selling book "The Number" by Lee Eisenberg. I previously indicated that the book itself was primarily a moral and philosophical examination of the process of monetary accumulation. Eisenberg asks us some difficult questions regarding our motives for saving; our future plans, be they in retirement or otherwise; and the most difficult financial question of all – how big must our “number,” that is our annual income generated in retirement, be.

Page 251 of the Eisenberg primer describes for us what he calls “The Number, Quick and Dirty.” Despite the rule-of-thumb nature of the title of Eisenberg’s number calculation, his formula is actually quite elegant and comprehensive. If you are nearing retirement, or a prudent long-term planner wanting a comfortable retirement, consider plugging your financial information into the following formula.

A) Total all of your investments account balances for retirement.
B) Multiply line A by .04, which represents a safe and reasonable 4 percent rate of savings withdrawal in retirement.
C) Divide your total home equity by the number of years you plan to live in retirement. When I do such financial planning, I automatically assume a client lifespan of 100 years. If you run out of money at age 100, you probably won’t know or care anyway!
D) Divide any anticipated inheritance monies your expect to receive by the same number of years you used in part C.
E) Add the anticipated annual Social Security payment you expect to receive.You get a statement from the Social Security Administration every year showing this amount, so it shouldn’t be too tough to find.
F) Add in your annual anticipated pension or annuity payments (if any).
G) Add in realistic earnings you expect to possibly receive from part-time work, consulting, etc., if any.
H) Total lines B through G. This total represents the annual dollar amount you can reasonably and safely expect to have available to meet expenditures during your retirement years.

See, that wasn’t too horribly complex. So, how did you come out? Were you pleasantly surprised? Were your intellectual gut-feeling “number” guesses close? Are you shocked and terrified that you won’t have enough money in your golden years?
Take a deep breath.

Now you know the facts of your situation and can begin to tweak the savings or expenditure side of your personal balance sheet as you and your financial advisor see fit, especially if it appears you may be short (as most of us probably are). If you have a number of years left to retirement, or can delay retirement a few years longer than you had planned, you may be able to make up the difference with more aggressive savings. Note: I do NOT recommend more aggressive investing for folks nearing retirement for fear of principal loss and a worsening of the situation. Sometimes macroeconomic timing is just lousy. Still, even a prudent investor, with an understanding of portfolio risk, should likely never drop their stock allocation to less than 25 percent of investable assets.

The other side of the coin to examine is your anticipated retirement expenditures. Maybe regular golfing at Mozingo makes more sense for you that at St. Andrews. A reasonably priced Ford is probably nearly as reliable and comfortable as that coveted BMW. You get the idea ...

I hope you found this exercise helpful and informative. Call me if I can be of assistance to you in fulfilling your long-run dreams.

How much money would make you feel wealthy?

By Dan Danford

We've often tossed around the word wealthy in our offices, with some of our folks saying we shouldn't use it, because those who are don't like to talk about it, and sometimes, they don't even feel wealthy, even though they may be. And those who aren't wealthy are jealous. It's a tainted word, really, wealthy, and all the various subsets of it - wealth, etc.

So this story caught my eye today, even though it's from a few days ago. CNN Money did an interesting story on how much money it takes for us to feel wealthy, complete with a handy calculator to tell us where we fall for our income and age. It's a fascinating story, and the calculator is particularly intriguing. Plug in your age and annual salary and it will tell you what the median net worth is for your age, and then the median net worth for your salary. Take a look and see where you fall.

And you tell us: how much would it take for YOU to feel wealthy?

http://money.cnn.com/2010/08/09/news/economy/wealth/index.htm

Event: Impact of the Recession on Non-profits

By Dr. Jason White
Family Investment Center

In a few weeks, I'll be speaking to Mainstream, Inc. and the Kansas and Missouri Non-Profit Associations on "Future Impact of the Recession on Non-profits." The event is set for Thursday, August 26, from 1 to 4 p.m. at Cabela's in Kansas City, Kan.

It's a timely topic, as the Recession that we're currently enduring has hit them twice as hard. Many non-profits have seen an increase in requests for assistance, as many people have lost their jobs, but they've also seen a decrease in donations and, if they're living off endowment interest, a decrease in the amount of income from their endowments. It's incredibly stressful.

What I hope to do is present non-profits with strategies that can help them weather this time. I plan to cover the following points:

• Economic stress on non-profits, and how they are coping.

• Why some non-profits are weathering the storm, while others are bankrupt or headed
in that direction.

• The combined impact of lower revenues; higher costs; declining endowment values; and slower cash flow collections.

• The "nimbleness" of some non-profits that have mitigated financial damage.

• Suggested coping strategies to survive, and even thrive, this Great Recession we are enduring.

If you want to attend, you can register here: http://bit.ly/cWYW6x

Hope to see you there!

Social Security changes can affect retirees wallets

By Robyn Davis Sekula

Ask anyone in their 30s if they expect to receive Social Security upon retirement, and you'll find that almost all of us think it won't be around for us. Some of us, like me, are saving aggressively for retirement to make up for it.

Statistics actually show that Social Security may be around, just not at its current levels. Even those currently on Social Security (or getting ready to retire) are affected by the changes to the program.

It's a great idea to keep abreast of developments and changes in Social Security. Here's a great piece we found from Fidelity.com, posted on Yahoo.com, about Social Security income and how seniors will be affected by raising the eligible age to 70.

Here's an excerpt:

Social Security will, according to the last annual report from its trustees, be able to pay full benefits through 2037. Then, if there are no changes in the program in the meantime, the taxes collected will be enough to pay out only about 75 percent of benefits through 2083.

So while Social Security's finances are stable in the short term, most experts agree that the program needs to be bolstered for the long term. Among the proposals circulating is one from Representative John Boehner of Ohio, the House Republican leader, who recently suggested raising the retirement age to 70 for people at least 20 years from retirement.

Read the full article here:

http://finance.yahoo.com/focus-retirement/article/110241/social-security-jitters?mod=fidelity-readytoretire&cat=fidelity_2010_getting_ready_to_retire

Billionaires give back

By Dan Danford

In our society, it's fashionable to villify the wealthy, particularly those who are extremely rich. We tax them more heavily - and few have a problem with that.

But often, those who are wealthy are the ones who help our society the most. They build businesses and provide jobs to those around them, and sometimes to people around the globe. And many of them turn into philanthropists who fund charitable causes, year after year. The Bill and Melinda Gates Foundation is among the best examples of this.

The Wall Street Journal recently reported that Gates and Warren Buffett have challenged fellow billionaires to follow their example and give away the majority of their fortune, and some are following in their footsteps. It's extremely admirable.

Here's an excerpt from the story:

Mr. Buffett and Mr. Gates in June had asked the individuals and families to publicly commit to give away at least half of their wealth within their lifetimes or after their deaths.

The pledge stemmed from a series of dinners the two men held for the nation's billionaires over the past year to discuss the effects of the recession on philanthropy.

Read the full story here:

http://online.wsj.com/article/NA_WSJ_PUB:SB10001424052748704017904575409193790337162.html

Credit card issuers get sneaky

Didn't we all know this would happen?

As soon as the government cracked down on the credit card industry, card companies found new ways to bilk the unsuspecting public.

Those bulky Card User Agreements that they send you once a year or so with lots of tiny, tiny print? You need to read that.

You also need to read this story from The Wall Street Journal detailing some of the card companies' newest tricks.

Read this excerpt to get an idea of how the companies are getting sneaky:

The Card Act also stipulates that issuers can't jack up rates on existing balances unless a cardholder is at least 60 days late. But there is a creative maneuver around that: the so-called rebate card.

Citibank rolled out rebate-card offers to some of its customers last fall, offering to refund up to 70% of finance charges when customers pay on time. The problem: Rebate offers aren't governed by the Card Act, and an issuer can revoke them suddenly and hit cardholders with high charges.

The net result is the same as raising rates—and because it is perfectly legal, customers have little recourse. "Rebates on finance payments may seem like a good deal, but you could end up with a very high interest rate suddenly," says Mr. Frank, of the Center for Responsible Lending.

Read on for the full article:

http://finance.yahoo.com/banking-budgeting/article/110213/the-new-credit-card-tricks?mod=oneclick