The Million-Dollar Matrix

The Matrix isn’t real, but it provides some interesting insights into what it takes to accumulate $1 million.

Buy-and-Hold: Hanging on, or
gone for good?

A popular accumulation strategy is taking a pounding in the financial media. A little bit of insight into why a “logical” theory doesn’t deliver real-life results.

Warren Buffett Remains Optimistic

The nation’s best-known investor tells why he thinks the future looks bright – even if today it seems a little cloudy.

529 Prove Problematic

A brief review of how well-intentioned, state-sponsored college savings plans are encountering some bumps in the road.

Complete PDF HERE.

THE ISSUE IS INCOME
The bottom-line objective of any individual financial program is to provide an ongoing stream of income to meet the necessities and pleasures of life. This issue addresses several topics that emphasize the importance of income planning.

How Long Can Your Human Asset Keep Paying Dividends?
When Time magazine’s cover declares “Jobs are the new assets,” you know there’s been a re-awakening to the value of human capital. A brief overview of why human capital is so important in individual financial programs, and what you can do to enhance and protect what is arguably your most important asset.

The Logic of a Longevity Annuity
Who would buy a financial product that won’t pay penny for 25 years and if the account holders don’t live that long, they lose their entire investment? Sounds like a very bad investment. But it’s also a very interesting insurance idea that allows individuals to spend down their wealth in retirement – and not go broke. (Oh, and there might even be a better way to accomplish the same thing.)

Non-Cancelable and Guaranteed Renewable: Contract Language You Need
When you consider disability insurance, several clauses in the contract determine who really has control over the long-term value of the coverage. Find out why “non-can” can make all the difference.

FINANCIAL LITERACY QUESTION: How much is a TRILLION?
(You’ve got to see it to believe it!)

Complete PDF HERE.

OUTRUNNING THE FINANCIAL LIONS–Here’s a new take on a popular fable. Everyday, three financial “lions” come roaring after you. Find out who they are, and what you can do to avoid being caught by them.

BUY-SELL AGREEMENTS–Many profitable businesses are built on the combined efforts of two or more people. But what happens when one of the partners isn’t there anymore? A brief overview of the most effective responses to the departure of an owner.

USING A FALSE IDENTITY TO FILE A TAX RETURN–It’s the latest bit of twisted ingenuity by identity thieves: Stealing your ID to file a false income tax return, either to receive a refund, or to hide other income.

DO YOU HAVE AN “INHERITANCE PORTFOLIO?–If you can’t take anything with you, are there some things you’d like to be sure you leave behind? This article explains why certain types of assets might be better suited to be passed on as an inheritance.

THE SODA GAME–A neat game you could play with your children or grandchildren to teach them the value of money, and the importance of saving. Oh, and there’s a grown-up version as well.

For the full PDF, click here.

The March edition of the Financial Times is out:

READY FOR A PEP TALK?

With all the economic bad news, the natural reaction might be to cut your losses, cut your expenses and retreat. But even in bad times, asking the question “How can I be most productive in this moment?” may yield some surprising alternatives to simply hunkering down.

SOME INTERESTING NOTES ON LIFE INSURANCE

• Why even fee-based financial experts need help from life insurance agents

• Why one of the fastest-growing demographics in life insurance sales are people over 70

• Why a presidential campaign may have been rescued by a life insurance policy
  

AN ALTERNATIVE TO THE DEBT SNOWBALL

What’s the best way to pay off credit card debt? A look at a popular conventional approach, and a thought-provoking alternative.

THE ENROLLED AGENT

Enrolled Agents are tax experts empowered by the licensed by the U.S. Treasury to represent taxpayers before the IRS. With audits of high-earning individuals rising significantly, this article gives several reasons why you might want to know an
Enrolled Agent.

For the full version of the articles in PDF form, click here.

Below are some notes on the February edition of the Financial Times.

IF YOU SAVE TOO MUCH, DOES IT HURT THE ECONOMY?

According to some prominent economic thinkers from the past century, individual saving can actually make bad national financial situations even worse! So right now, with the sub-prime mortgage crisis, high fuel prices and shaky stock markets, should you consider cutting back on your saving?

WHAT DO YOU DO WHEN YOU CAN’T PAY YOUR MORTGAGE, OR YOUR PROPERTY TAXES – OR THE NATIONAL DEBT?

A brief overview of “innovative” ways to solve desperate financial circumstances. But will they really work, or just delay inevitable financial pain?

LARRY KING’S LIFE INSURANCE PROBLEMS

Life settlements can be a legitimate way to immediately leverage the financial value of insurance on your life. But the strategy has consequences, as talk show host Larry King found out. A report on his legal proceedings gives some insight to the unique value of life insurance.

PREDICTING YOUR PERSONAL FINANCIAL FUTURE

Economic forecasters have all sorts of formulas and indicators to predict the future. Similarly, there’s a simple way to gauge your financial future. Read an excerpt from John McCormack, on how he can tell if someone is going be financially successful.

For the full article click here.

The January edition of the Financial Times is linked at the bottom. Here’s my summary:

THE REASONS NOT TO–Sometimes the best way to understand why you should do something is to also understand why not to do it. An article about what you can learn from a good financial professional by asking what not to do – along with some cautions about using the reasons not to as excuses.

THE TAX YOU CAN’T PLAN FOR–The sharp differences of opinion regarding the federal estate tax have made for some unusual legislation – and as we approach 2010, the situation will get even stranger. A quick overview of the issues, and ramifications.

ONE BAD YEAR–In non-guaranteed financial instruments, there’s always the risk of losing money, but there is the expectation that over the long haul, the losses will be overcome by gains. But it’s surprising how much impact even one bad year can have. Check out the math; you’ll be amazed!

HOW LONG IS LONG-TERM?–A companion article to the one about losing money. A new article reveals the best time horizon for profit in the stock market may be a lot longer than you think.

DETAILS, DETAILS–For many, a will doesn’t become a priority until it’s too late. However, doing a few things right on a regular basis could make it easier for everyone.

For a complete PDF of the article, click here.

Finally! The December issue of Financial Times, with the following official comments from your Trusted Financial Advisor:

RIPPLE EFFECTS OF PROSPERITY–When you have your financial stuff together, you make the world a better place. Most of the time, financial decisions are evaluated in terms of their personal impact, but well-managed and prosperous individuals also have a positive impact of society at large. Read about the interesting way in which your prosperity ripples out to others.

OVER-PAY YOUR WHOLE LIFE INSURANCE–Conventional financial wisdom often touts the idea of paying less for insurance of all kinds. But there are some occasions where overpaying might be better long-term strategy. A brief overview of paid-up additions and how using them can provide more long-term flexibility in your life insurance program.

SUB-PRIME SUBPLOTS–The financial fallout from the failure of many sub-prime mortgages is receiving major play in the financial press. But behind the headlines are several other stories, some that might be more interesting and revealing.

SPEND-DOWN MATH–The ultimate purpose of all accumulation is distribution. So after decades of saving, how do you start spending it? A little touch of math to illustrate the fundamental differences in the most prevalent spending strategies.

For the full PDF of the Newsletter, click here.

The newest issue of the Financial Times is out. Here is a summary of some key issues:

Bill Gates got lucky (How you can get lucky too.): For the past decade, Bill Gates has been the richest person in the world. Believe it or not, one of the reasons Bill Gates achieved such financial success is because of luck. A commentary on random chance affects your chances for prosperity, and what you can do to increase the odds.

What’s at the end of your housing curve?: Should you ever want to pay off your mortgage, and own your home free and clear? What about as you approach retirement? Several perspectives on the financial and psychological benefits of life without a mortgage.

Beware of the bear in retirement: When using financial vehicles that deliver fluctuating returns, buy-and-hold may be a suitable long-term approach. But a simple mathematical discussion highlights the difference between accumulation and distribution strategies.

Social Security crisis no longer in the distance: When the first baby boomers start drawing Social Security benefits this January, the dire warnings about the demographic problems plaguing the governmental “security net” are coming closer to reality. How will this crisis be resolved? Besides the political response, what can you do as an individual?

For the full issue on PDF, click here.

The newest issue of the Financial Times is out. Here’s a summary:

Antidote to the Sub-Prime Mortgage Crisis: What impact will the sub-prime mortgage crisis have on your financial life? A brief discussion of the problem and the possible ripple effects – along with a proven approach to riding out the inevitable ups and downs in your financial life.

Disability Insurance – A Common Foundational Weakness: Even though most Americans acknowledge a single incident of disability would severely impact their financial lives, very few own disability insurance. Why? A short commentary on the realities of disability, and the financial fall-out that often follows.

What is BOLI? Find out why banks give permanent life insurance a significant place in their financial operations, and how some of the same financial principles can be applied for individuals.

The Opportunity Cost of Season Tickets. If you are a football fanatic, keep this information under wraps! Your obsession could cost you more than a million dollars!

Retirees Don’t Want A Mortgage Payment. Some financial commentators might argue that owning a home free and clear is unprofitable because all that equity is just sitting there. But most retirees see it differently.

For the full issue on PDF, click here.

The September issue of the Financial Times (and not that London nonsense, but the REAL Financial Times) is out. Here is a summary of some of the key issues:

PAPER ASSETS VS REAL ASSETS
Paper assets and real assets have distinct differences. Not only is it important to know and understand these differences, it’s also helpful to keep each type of asset in balance as part of your overall financial program.

A NEW TREND IN HOMEOWNERS’ DEDUCTIBLES
Could you afford a $15,000 deductible for damages to your home that were caused by natural disasters? A short explanation of why insurance companies are changing the way they price homeowners’ insurance.

ATMs IN HOUSES OF WORSHIP?
New IRS regulations on documentation for charitable giving have become much more stringent. Some charities, particularly houses of worship, have come up with might be considered an inspired response – and in some cases, actually received more donations.

RISK TOLERANCE ILLUSTRATION
If a picture is worth a thousand words, this illustration should give you plenty to talk (and think) about when the topic is your risk tolerance.

RATIONAL DECUMULATION
When it comes time to spend accumulated assets in retirement, what asset class works best? A new report from the Wharton School of Business offers some interesting opinion, including some thoughts on why many (even “financial professionals”) don’t respond rationally to the challenge of spending our savings.

For the PDF on the full issue, please click here.