Nov 7th 2005

It was my fault. I took some time off to go hunting, even though I knew that there was a good chance the world would fall apart. And this is what happened: A horrible mudslide in Central America, parts of India and Pakistan devastated by one of the deadliest earthquakes in history, a new tropical storm swirled up ominously in the Gulf, Mount Everest inexplicably lost 12 feet in height and a tornado in the Midwest . For those of you who are hiding under your beds, you can safely come out again; I'm back in my office.

While hunting, I did have a saw fall out of a tree and try to cut my nose off, another saw cut through a branch and attack my left hand (3 stitches) and a small tree I was pruning jumped up and it tried to take my head off. Hunting is dangerous.

This is the time of year that we start planning what we want to do during the next year. We try to pre-set client appointments, find a financial planning theme for the coming year and improvements our systems to better help our clients. No matter how much planning we do, nature will usually throw a monkey wrench into things along the way. Yet having a plan often helps us to get better results.

Very often the financial planning theme will be different for each client, as almost each client is in a different stage of his or her financial planning life. Often, the times we pick for appointments will not fit into the client’s schedule. That is OK. We can and will work around these small setbacks. The real joy will come next year at this time, when we see the results of the planning we do now.

June 24th 2005

From time to time I sit back and look at where we have been and how I see it relating to where we are. Although not a complete match, I see us now in a period of time like 1974, 1984 and 1994. In 1974 the oil problems were hitting their second crisis period in 3 years and the markets looked bleak. In 1984 we were in the middle of the S&L crisis, high interest rates and the markets looked bleak. In 1994 we had just had a war in the Middle East , oil prices were up, interest rates were being raised and the markets looked bleak. Today, we have a war in the Middle East , oil prices are hitting their second crisis period in 3 years and the markets look bleak.

During each period you heard people say, “In the future the stock markets will not be able to give us the returns we had in the past.” In the 1970s oil drove the stock markets up during the last half of the decade. In the 1980s computers and lower interest rates drove the stock markets up during the last half of the decade. In the 1990s the internet and lower interest rates drove the stock markets up during the last half of the decade. All of these decades started the boom in the latter half of the decade. They were driven by things we did not even know existed before the decade began.

Well, guess where we are today. I see the markets ready for another new driver that many people do not see coming. Do you see what it is?

June 05. 2005

Retirement in the 21st Century is't like it use to be.

There are several stages in retirement.

1. The early stage (the go-go years).
2. A stage where people can no longer do all the tasks of daily living (the slow go years).
3. Finally the nursing home stage (the no-go years).

During the early retirement, individuals have the most flexibility and can enjoy life the most: they can continue to work full time or part time, they do some things themselves rather than hire someone More importantly, during this time the amount of assets at that time has the biggest effect on sustainable withdrawal and life expectancy is the most difficult to determine. You should tend to be conservative in withdrawal rates during that period. During early retirement the client can enjoy his spending the most, but the trick is to not have the spending be too high or there won't be enough left for the no-go years.

With depression era people, the problem usually is not spending enough of their money. Many planners seem to have the issue of urging these clients to spend more, because depression era people believe they will never have enough. The baby boomer generation is another story. They have not ever had to go without or wonder where their next dollar would come from. They all spend too much, to early in retirement and on many things they really do not need.

I want my clients to understand the trade-off.

June 05, 2005

Currently the economy is growing faster than it is creating jobs. Put another way, companies are accomplishing more and more with technology rather than people. There is a disconnect between job creation and GNP growth which begs the questions:

How will we provide a living to additional people with an economy that creates jobless growth?

How will you protect your assets in an economy that is doing this?

June 05, 2005

It appears that the stock markets liked the information coming out of the Federal Reserve today. There are no guarantees with investments, but it appears the markets want to rally.

May 05, 2005

We need to help people gain insight into the future and how it will impact on them. We need to help people to work on their own personal strategic planning processes so they can move forward and realize their goals whether they be short- or long- term. We need to do this without getting caught up in the short-term smoke screen thrown up by the media. Live and work for the future, not the past or the present.