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:

Financial advice from TV experts is a no-go

By Robyn Davis Sekula

I ran across a story this week about Glenn Beck's financial advice. First of all, you need to understand I'm not a fan of his. I think he's theatrical and reactionary. I do think he makes some good points, but I can't get through the drama to listen to what he actually says. It's too much to wade through for me.

It bothers me to read that he's been dispensing financial advice. He has no expertise on this, and his idea about buying gold is just plain silly.

I've heard Dave Ramsey address buying gold a number of times, and his point is always this: when an economy collapses to the point that paper money is not valuable, gold is not helpful, either. He points to New Orleans during the aftermath of Hurricane Katrina as the most recent example of economic collapse. Were people trading gold coins? Not at all. They were bartering for bottled water, tarps, building supplies, generators and gasoline. Those were the things that were desperately needed and in very short supply.

There's also the journalist in me that notes that Beck is paid for his endorsement of gold as a commodity, and he's likely paid very well. It may even be in his contract to endorse it on his "news" show. Therefore, he's not objective.

I asked Dan Danford, Principal and CEO of the Family Investment Center, to weigh in on Beck, and here's what he thinks:

I share Beck's concern that many political policies discourage entrepreneurship and capitalism. And I also believe that investors have suffered at the hands of Wall Street and supportive bureaucrats. But capitalism grows from the basic initiative of people, and no government has ever succeeded is destroying that trait. I believe, strongly, that creative people find ways to make money and build companies even when the government discourages it. Corporations adjust to changing situations and needs. In brief, I don't think capitalism is dead and I don't believe all the doomsayers about the U.S. economy.

Then, I specifically asked about Glenn's endorsement of gold as an investment. Dan said this:

The time to buy gold is always before people start talking about it. I think Glenn should stick to broadcasting but there are a host of others who disagree!

What it all boils down to is this: if you are taking specific investment advice from someone who is talking to you, and not with you, you're heading down a dangerous path. There are some universal ideas, such as that we all need to save for retirement, and shouldn't have credit card debt. But how to invest that retirement, specifically, is a question Beck isn't qualified to answer, because he doesn't know you.

If you are seeking good, solid financial advice that applies to you, which is what you should want, you need to seek an independent financial advisor who isn't being paid a commission or a fee or anything else to endorse a specific product. That advisor needs to know how tolerant you are of risk, how far away from retirement you are, how many children you have and their circumstances, and whether or not you're divorced, widowed, married or single. All of that is important, as well as 100 other small factors that really change how you save, and what for.

For instance, in my case, I'm self-employed. That fact alone means I probably need a larger cash savings fund than many people, and a qualified investment advisor would tell me that, and NOT tell me to have a bunch of gold sitting around. You can't pay your mortgage with gold if you lose your biggest client.

Listen to Beck, if you like. But take any advice he gives with more than a grain of salt.