Financial Education: Read the Warning Labels

December 24, 2010

I spoke with someone recently who just welcomed a new baby into her household.  As we were talking, the conversation turned funny when we started talking about some of the warning labels on toys for children.  My youngest child is almost 9, but one of the funniest things I have ever read was the warning label on one of the toys he received at a very young age.  It was an ExerSaucer or something similar.   The assembly instructions were fairly easy, but what really stood out was all of the warnings about product usage.  If I recall correctly, the first two warnings were: Continue reading “Financial Education: Read the Warning Labels”

Get Rich Quick, or Not so Fast?

December 17, 2010

In my blog, Danger Spots When Getting Rich Quick!,  I talked about a few ways to STAY wealthy when people become millionaires overnight.  While becoming a millionaire overnight sounds really exciting and fun and maybe even a little glamorous, it’s not how most of the millionaires I have met during my career have become wealthy.  OK, so if that’s not how they got there, what have they done? Continue reading “Get Rich Quick, or Not so Fast?”

Lost Focus: Planning Your Finances

December 10, 2010

Sometimes we just don’t want to look in the mirror and ask ourselves tough questions.  I had one of those moments recently.  I was going to a football game and the line outside of the stadium was incredibly long.  It took 40 minutes to get inside the stadium when it usually takes 5-10.  If we were going to get to our seats in time for kickoff, we were going to need to really hustle.  Sitting in the upper deck, in a stadium without escalators, can be a challenge.  I have seen a lot of people heading toward my section stop at a halfway point (it’s almost a legitimate cardio workout just getting up to our seats!) to catch their breath.  I got to my section and realized that I was breathing heavily and felt very tired and out of shape.  It was at that moment that I had to ask myself the question “Have I lost my focus?” Continue reading “Lost Focus: Planning Your Finances”

Danger Spots when Getting Rich Quick!

December 03, 2010

When I read the article, Getting Rich Quick: True Tales of Overnight Millionaires, I had a few thoughts (which means that I’ll probably write mores blogs about it).  The first thought was, “All I need is that one great idea and I’ll be in the ranks of overnight millionaires.”  Then, I thought about how long it takes to be an “overnight success,” and how many instant millionaires (lottery winners, recipients of lawsuit proceeds, inventors, etc.) I have seen during my career and how many have blown through the money as fast as they received it.  Getting “rich” is difficult, but staying there is even harder. Continue reading “Danger Spots when Getting Rich Quick!”

Financial Blind Spots Can Come Back to Haunt You

November 26, 2010

Spoiler Alert:  Watch this video before reading this blog:

[YouTube video: Selective Attention Test]

There are a few reasons that I found this video particularly interesting (which means I’ll probably talk about it in a few blogs).  The first thing that struck me was the concepts of “blind spots.”  When I watched the video for the first time I didn’t see the gorilla.  How in the world can a gorilla walk across the screen, do a little dance, and go unnoticed?  I was so focused on the task at hand (counting the passes by the white shirted players – and I was able to correctly count the number of passes), that I missed something as blatantly obvious as a gorilla on the screen. Continue reading “Financial Blind Spots Can Come Back to Haunt You”

Family Drama and Your Will

November 19, 2010

I recently had a meeting with a woman who said she had a “simple question” about wills.  She was the last person I was meeting with that day, so I relaxed and got mentally ready for a simple question which would be followed by a quick workout and dinner.  My brain was just about to get put into action jointly with my stomach with the goal being to figure out what to eat.  Just as soon as I finish this simple question.  At least that’s what I thought for a few seconds. Continue reading “Family Drama and Your Will”

Big Incomes, Big Debts, Big Accomplishments

November 12, 2010

I have noticed a pattern in my blog writing, and it’s that I notice behaviors and decisions that people make and most of the things I’ve pointed out recently have been about bad decisions.  I guess I have followed the lead of the news media and have only been reporting on bad news, in the hope that we can all learn from other people’s mistakes.  Here is a good news story for a change of pace. Continue reading “Big Incomes, Big Debts, Big Accomplishments”

More is ALWAYS Better…(or is it?)

November 05, 2010

I saw the movie “Supersize Me” recently.  (Yeah, it’s been out a long time and I’m just now getting around to it!  But I HAVE seen every Disney and Pixar movie made in the last 10 years.)  One part of the message that I heard in the movie was that “We’re Americans! Bigger is better!!!”

The “bigger is better” mentality permeates our society, and excess is often rewarded.   Just look at any Red Carpet event and the attention heaped on celebrities for proof.  But, can this culture of excess be a bad thing financially?  I think so. Continue reading “More is ALWAYS Better…(or is it?)”

Social Security as Your Bond Portfolio?

October 29, 2010

As someone who has a moderately aggressive investment approach, I had a conversation with a friend who has a very aggressive investment approach (in my opinion) and he has made me rethink a piece of my own investment philosophy.  I thought I’d share the conversation and see if anyone wants to add their opinion into the debate.  My friend is just about 50 years old and has always been an aggressive investor. Continue reading “Social Security as Your Bond Portfolio?”

Why Do Individual Investors Do Worse than the Funds They Invest In?

October 22, 2010

So…when I wrote Part I of this blog, I pointed out an issue but gave no solution.  I hate it when people do that!  So, I’ll try not to do that very often.  The situation was that individual investors often make decisions that allow them to “Buy High, Sell Low.”  Now maybe I’m not the best with investing, but that sounds like a lousy strategy!  What can be done to improve it?

Well, the most obvious and simple answer (which surprisingly is often the best answer) is to have a strategy.  Continue reading “Why Do Individual Investors Do Worse than the Funds They Invest In?”

Why Do Individual Investors Do Worse than the Funds They Invest in?

October 15, 2010

I wrote ‘How does Drew Brees Do That?’ in a prior posting about decision making.   I was reminded of that while listening to a financial talk show.  The host talked about a study that was performed to track individual investor performance vs. the performance of the funds in which they invest.  The study was very revealing and it ties in with the concept of decision making.  The study said that over a 20 year period ending in 2005, the average stock mutual fund earned 11% while the average stock mutual fund investor earned only 3.9% during that time frame.  My first question was…why? Continue reading “Why Do Individual Investors Do Worse than the Funds They Invest in?”

The Little Italy of Open Enrollment

October 08, 2010

In my last blog, The Little Italy of Open Enrollment, I was a hungry man staring down a street filled with masses of people and almost visible aromas and tastes of authentic Italian food.  I was in search of a simple answer yet was faced with too many choices to see things clearly.  For the employee receiving thick info packets during open enrollment season, there is good news.  You can absolutely find what you need without your head exploding because of too many choices.

The most important thing to remember is that the choices you are faced with are about BENEFITS.   Continue reading “The Little Italy of Open Enrollment”

The Little Italy of Open Enrollment

October 01, 2010

If  you are hungry for Italian food and you happen to be in New York City, a trip to Little Italy sounds logical, right?  I’m a tourist in NYC, not a local, so I figured the best Italian food must be in Little Italy.  When I got there, I walked along a street that was closed to traffic and on either side of the street there were restaurants filled to capacity.  They all looked fabulous.  As far as the eye could see there were pastas, meats, wines, lasagna, cannoli, and the smell of the food was heavenly.  What happened to me in this land of abundant choice?  My brain shut down.  I couldn’t think.  I became paralyzed by having too many choices and not enough information to process all of the choices.  Suddenly, I wished I was in a small town with only 1 restaurant. Continue reading “The Little Italy of Open Enrollment”

How Does Drew Brees Do That?

September 24, 2010

Decision making…it’s one of the things that I heard a lot about while watching football last Sunday.  An NFL quarterback needs to make an enormous number of decisions in an incredibly short period of time before  a ridiculously large human being with fire in his eyes and bad intentions running at nearly world class speed hits him with the force of a wrecking ball.  THAT is working under duress!  In our lives we may not have 6’4”, 250 lb people trying to drive us to the ground during the course of our workday, but we are all under some form of stress. Continue reading “How Does Drew Brees Do That?”

The Statue of Liberty & the Concept of Hope

September 17, 2010

On a recent trip to New York City, I took a quick 1-hour boat tour of the New York Harbor.  It was an incredible view of an incredible city!  The most significant part of the tour (at least for me) was when the engines slowed down, the boat stopped, and we slowly drifted past Ellis Island and the Statue of Liberty.  At the same time, the pre-recorded voice of the tour guide talked about the immigrants who came into Ellis Island filled with hopes and dreams of making a new life in the United States.  Virtually every story we heard on that tour was one of people who came here without anything, worked hard, believed in what they were doing and why they were doing it, and achieved success.  It was very inspiring. Continue reading “The Statue of Liberty & the Concept of Hope”

When You Want Something Done Right, You May Have to Do it Yourself

September 10, 2010

Over the last few months I have talked to a lot of people who are concerned that their company’s pension plan has changed for the worse.  These are people from many different employers all across the country.   Many others have seen an employer’s pension plan get frozen, terminated, or taken over by the PBGC.  What was just a generation ago almost a “given” has become increasingly rare, and even when it exists there is ever increasing skepticism about the long term viability of the pension plan.  So, what can be done? Continue reading “When You Want Something Done Right, You May Have to Do it Yourself”

Why Stop at Being a Millionaire?

September 03, 2010

While driving with my kids in the car recently, a song came on the radio.  The song is called Billionaire by Travie McCoy (I recommend the clean version over the explicit…), and talks about why the artist wants to be a billionaire.  He wants to be on the cover of Forbes magazine smiling next to Oprah and The Queen.  It’s a little bit silly, but very amusing, and my kids like the song.  (OK, after about 15 listens, I do too now.)  But, it made me think: “What would it take for someone to be a billionaire?”  Other than something obvious…like a billion dollars! Continue reading “Why Stop at Being a Millionaire?”

How We Can Learn a Valuable Lesson from Wesley Snipes

August 27, 2010

Wesley Snipes was recently sentenced to three years in prison for failing to pay over $15,000,000 in taxes.  It could have been worse for him; the sentence was considered light because “jurors accepted his argument that he was innocently duped by errant tax advisers.”

That makes me ask a few questions: Wesley, what exactly were you thinking? You hired tax advisors who told you it was acceptable to NOT FILE TAX RETURNS???  Did that not sound suspicious? Continue reading “How We Can Learn a Valuable Lesson from Wesley Snipes”

Paying Down Debt – Which Theory Works the Best?

August 20, 2010

In the last few months, I have fielded calls about paying off debts, and which of the many theories about debt pay off works the best.  There are 3 primary theories out there that are being pitched to individuals looking to get out of debt.  I will use the same sample debt with each of these methods, for the sake of comparison.  ($10,000 debt at 24.9%, $8,000 @ 15%, $2,000 @ 5%,  and $50 above minimum payments to add to principal.)

1.  The most common advice I see given in the financial media is to pay off the highest interest debt first.  Why?  Continue reading “Paying Down Debt – Which Theory Works the Best?”

What Does RICH Mean?

August 13, 2010

I saw an interesting article about mortgage delinquencies in the U.S. and there were some interesting tidbits of information in the report.  Overall, 1 in 12 people in the U.S. are at least 30 days past due on their mortgage.  Even more surprising was hearing that 1 in 7 mortgages of greater than $1,000,000 are past due.  This means that mortgages of more than $1 million are far more delinquent than mortgages under $1 million.  The media tells us that “the rich” are bigger defaulters than “the rest of us.”

My first thought was that the facts in the article had to be wrong.  I mean, are “the rich” (they are called that in the article’s headline) really not able to pay their mortgage.  After, they ARE rich, aren’t they?   That’s when one of my pet peeves (the use of the word rich in an improper context) reared its’ ugly head.  In the media and in politics, we often hear about “the rich” and that made me do a little thinking…………What does RICH really mean? Continue reading “What Does RICH Mean?”