It's Going to be a Groundhog Year

It’s mid-December and I’m listening to Christmas music so I am in the best mood as I can be as I write. 2011 was a challenging year. Between Capitol Hill, Wall Street, global unrest that we’ve never felt before, and the economic ripple effects of 2008 still being felt, it was difficult to “think happy thoughts” as one of my golfing buddies has said to me occasionally on the course. Maybe you felt that way…maybe you’re still feeling that way…
I went back through my writings for 2011 and it was a lot of hardcore stuff. I truly believe that traditional financial planning is no longer in your best interests and continues to be perpetuated by writers for newspapers and magazines, “financial entertainers”, company product brochures, and a lot of other people that aren’t licensed to sell anything to anyone anywhere. It’s all painted with a lot of warm fuzzies about this utopia that we enjoyed in the 80’s & 90’s and are unlikely to see again for the foreseeable future.
Remember the movie “Groundhog Day” with Bill Murray? When he kept repeating the same day over and over and over? That’s what I mean by this month’s title. 2012 will be similar to 2011. If you disagree, then someone please give me some facts and ideas as to how it will be different? It seems Congress can’t get along with each other, it’s an election year, which means nothing will get done by our voted officials, and the global economy is…well…volatility reigns…let’s just leave it at that…
I’ve written about Einstein’s definition of insanity numerous times. So what are you to do to get through this “Groundhog Year” and avoid the definition? Forget resolutions…I’m talking about your money, your future, and your family. Here are some thoughts…some are easy…some will take some work and a lot of thought…and some are just plain ole common sense.
1. Get yourself organized! Online banking is great, but an electronic system such as Mint.com or Quicken will show you exactly where your cash flows are going. You might be surprised!!
2. Are your wills up to date? Do you even have one? Do you know what happens when someone dies? It’s time to learn. Its ridiculous how many people don’t have wills, so get it done! I’ve got a list of attorneys that will be glad to talk to you that specialize here.
3. Review all of your insurance programs. People tend to buy insurance based on cost and convenience…which can result in disaster when what they actually own is put to the test. Low deductibles mean higher monthly costs. In the event of a bad scenario, know exactly how much protection you are paying for. Chances are it’s not enough. Term insurance runs out. Group life and disability plans are cheap for a reason. There could be a potential recapture of hundreds of dollars just from that simple review…and potential benefits in the millions!
4. SAVE MORE MONEY!!! The average US savings rate hovers around the 2-4% range (Source: US Dept of Commerce). You need to be saving at least 10-15%...20% is where our firm likes our clients to be. The only way I can do it is monthly drafts from my checking account. If it’s in my account & not stashed away somewhere, I’ll spend it. The interest on savings is irrelevant…just start putting $$$ away!
5. Recognize that we are still in the early stages of a BEAR MARKET. If you chart the S & P 500 since 2000, we are at a 0-1% return over the eleven year period and it could be well into 2020 before we see another Bull Market. (Source: Ned Davis Research) Yes, from 1982-1999, you could expect average annual returns of 17%, but that was then. What are your strategies for the financial goals you have (college funding, retirement, etc.) when there are no returns? (HINT: Click on the Sailing & Rowing logo to validate what I just said.)
6. Recognize the difference between TAXABLE LATER and TAXABLE NOW. Given $14,000,000,000,000 of governmental debt and $68,000,000,000 of money owed in Social Security, Medicare, government employee pension & healthcare plans, do you really want to throw all of those $$$ in your 401(k) into the future where inflation, a declining workforce, and an aging population could eat away at the worth of those assets?
7. Seek to learn more about tax advantaged investments…there are more available to you than you think!
8. Truly think about where you are in your financial life cycle? Are you in Accumulation mode? If you’re like me and are over 50, you’re probably thinking about Preservation mode. If you’re closer to retirement, Distribution is where you should be focused. Lastly, what is your Legacy? Many of my small business clients are focused on “Exit Strategies” from their business. What is your “Exit Strategy”? If you don’t have one, one will be chosen for you…it’s called Life Happens.
9. GET OUT OF DEBT. I’m talking strictly about consumer debt. Mortgage debt doesn’t count in my mind. Tax deductible mortgage interest is about all you have left to claim on your tax return. Yes, it’s post-Christmas, so pay the cards off. This is one of the few areas I will agree with the “financial entertainers”…There I said it!!
10. “Rinse, Lather, Repeat”. …just like the shampoo instructions…keep these thoughts in your mind, and never stop the process…and get someone to help you (Shameless self promotion, by the way.) You’ve probably got enough financial products, but they are like a junk drawer with no coordination and a lot of product pitches thrown in. Your car insurance agent will never talk to your investment advisor who will never talk to your banker…so who determines what is best for you & your family?
OK, I’m stopping at 10…that’s enough! I told you some would be hard and some would be common sense…as always, I’m here…and everything you’ve just read is what we do here at Peachtree Planning. I wish you a wonderful Groundhog Year….oops, I’m sorry…2012…

Posted by Brian Carden at 12:33 PM | Permalink | Comments (1)

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12/06/2011

Memories of the Sears Wishbook

            What is it about Christmas that creates such nostalgia?  I remember when I was a kid in the 60’s, around the first of November, my brother David and I would impatiently wait every day for the mailman to deliver the first true signal that Christmas was coming….The Sears Wish Book!  Hopefully, you’ve just smiled…for whenever I mention this to someone, there’s a nice warm feeling about hearing those words…sort of like Homer Simpson when he thinks about donuts.  I found this cover of the 1966 issue…that would have made me eight & my brother David six…and I sure don’t remember our catalog looking this nice…ever!

 
               I remember Mom trying her best to help us avoid a fight when determining who got the first shot with it.  I guess she was lucky that it was just the two of us.  We didn’t have a sister, so the girls’ section usually wound up immaculate.   However, the boys’ section was altogether different, as we usually studied it line-by-line, page-by-page.  It was dog-eared, circled, marked up, numbered, prioritized, and written in by both of us.  If we had spent as much time with the World Book encyclopedias (there’s another memory for you) as we did with this catalog, we would have been considered child prodigies.  I guarantee you that I could find that football game with the vibrating field in about 30 seconds or less! 

             My memories take me back to the Sears & Roebuck on Central Ave. in Knoxville, which was almost identical to the old Sears store on Lafayette St. here in Nashville.  We would always walk through lawn and garden, through the appliance section, into the main store, and right into the candy counter.  Most times, we got dragged there for school clothes (Yuck!), but after that book came in the mail, we knew exactly where we were going….downstairs to the Toy department…and to see the big guy…the head honcho, the one guy that truly understood what that Wish Book meant to us…Santa Claus! 

             Our experiences with Santa weren’t as dramatic or tragic as the kids in “A Christmas Story”, but the memories of that Sears store are etched in my mind forever… as are the framed pictures of me and David on Santa’s lap in my home.  As I watch those old Super 8 movies of our childhood, (converted to DVD, thank you) I remember David and I on Christmas morning in our bedrooms, both feeling like two thoroughbreds in the gate, just waiting for Mom to give us the “all clear sign”.  It wasn’t Christmas without Dad and his movie camera with that light bar that had 10000-watt bulbs in it.  We still laugh about being partially blinded by it trying to get to our presents.

             Today, Christmas in so many ways is so different.  The Sears I remember is gone.  The Wish Book now has an I-PAD app.  This fall, both Mom and Dad have already proclaimed “Don’t get us anything as we don’t need anything!”  Yeah, whatever.  It’s probably going to be a “point & click” shopping spree online and gift cards for all…with a few surprises thrown in!  Last year, David asked for & got no telling how many E-Bay gift cards.  I think he had spent all of them by Christmas afternoon…me, I’m more of an Amazon.com guy.

             I consider myself a blessed man in that for as long as I can remember, the Carden family has gathered around the tree in my parents’ living room, all of sitting in the same exact places as mandated by Chase & Courtney, my nephew & niece.  It’s their job to hand out presents and we go around the room, opening gifts one at a time.  Dad doesn’t get as much chocolate as he used to, but it’s a sure thing he’ll get it. In spite of their proclamation, Mom & Dad usually are genuinely surprised.  As Mom says, after 59 years of marriage, it’s hard to surprise Dad…but we always seem to succeed.  Besides, being sneaky is half the fun of buying gifts in the first place.

             Yes, Christmas as I knew it as a kid will never be the same.  My Wish Book is now a personal journal of words, thoughts, experiences, emotions, goals, wants, prayers, and dreams.  The only pictures in it are those created by my mind and my heart.  Christmas today is about family and friends.  My clients seem to become my friends, and sometimes my friends become clients…and all of them become a part of my own personal family. 

                 So, with all my heart, please know if you’re reading this, that you are a part of my Wish Book, and I wish you all of the love, hope, and joy of this Christmas and Hanukkah season. 

Regards,

Brian

Brian_Carden@PeachtreePlanning.com

www.briancarden.com

Posted by Brian Carden at 1:42 PM in Current Affairs, Financial | Permalink | Comments (0)