High Gas Prices: Blessing in Disguise?: The Future for Investors - Yahoo! Finance
I think you'll find this balanced article on oil prices and their long term affects to your liking. There appears to be a new trend in long term oil prices that underly Mr. Siegals assertions.
Scott Dauenhauer, CFP, MSFP
Friday, November 04, 2005
Biloxi, Mississippi - The Katrina Bomb
As many of you know I spent a week in Mississippi during the month of October. My mission was two fold - repair damaged roofs and tarp them off and to "muck out" houses that had been flooded.
It was a tiring but rewarding week and my heart was warmed by the resiliency of many of these people in the midst of what could only be described as utter disaster. Most of the astonishing damage was done obviously in the coastal areas, and as you'll see when you look at my pictures it literally looks like an atomic bomb went off. Amazingly there were area's that were barely touched, but most people felt some effect.
The first day we helped an 80 year old woman who had lived in her house for 40 years. Our job: remove everything including the drywall, insulation, flooring, and ceilings. When we were finished the house was basically a frame and a foundation, nothing was salvageable. There was a pile of junk probably 16 feet high in her front yard awaiting to be hauled away. You'd think this woman would have been devasted, but she was very up beat and very kind to us. She made it her mission to come back to the house every day to feed a bird that had survived the storm. She was thankful to be alive. I doubt I would have had her attitude had the same thing happened to me.
On a funny note, her neighbor had just purchased a brand new large screen Plasma TV before the hurricane hit.....it didn't survive, but we didn't have the heart to throw it in the junk pile!
It will take many years to clean up the mess and rebuild, but it will get done and probably quicker than most people think. We saw hundreds of relief workers in Mississippi working hard to bring back America to a place that had suddenly turned into a war zone.
I had a few new experiences as well....
I ate Fried Catfish for the first time
I ate Fried Dill Pickles for the first time
I ate a bunch of fried stuff that I didn't really know what was inside....hopefully for the last time!
That week in Biloxi taught me how fortunate we are, but it also assured me that if we experience a disaster in California (earthquake anybody?) that we will have an onslaught of Americans on our doorsteps ready to help us pick up the pieces and move on.
As a side note, the organization that I was working under was Samaritan's Purse, which is run by Franklin Graham (Billy Graham's son).
Please take some time to view the photos by clicking on the link above. There are a lot and some may not make much sense, I haven't had time to edit them....
Scott Dauenhauer
It was a tiring but rewarding week and my heart was warmed by the resiliency of many of these people in the midst of what could only be described as utter disaster. Most of the astonishing damage was done obviously in the coastal areas, and as you'll see when you look at my pictures it literally looks like an atomic bomb went off. Amazingly there were area's that were barely touched, but most people felt some effect.
The first day we helped an 80 year old woman who had lived in her house for 40 years. Our job: remove everything including the drywall, insulation, flooring, and ceilings. When we were finished the house was basically a frame and a foundation, nothing was salvageable. There was a pile of junk probably 16 feet high in her front yard awaiting to be hauled away. You'd think this woman would have been devasted, but she was very up beat and very kind to us. She made it her mission to come back to the house every day to feed a bird that had survived the storm. She was thankful to be alive. I doubt I would have had her attitude had the same thing happened to me.
On a funny note, her neighbor had just purchased a brand new large screen Plasma TV before the hurricane hit.....it didn't survive, but we didn't have the heart to throw it in the junk pile!
It will take many years to clean up the mess and rebuild, but it will get done and probably quicker than most people think. We saw hundreds of relief workers in Mississippi working hard to bring back America to a place that had suddenly turned into a war zone.
I had a few new experiences as well....
I ate Fried Catfish for the first time
I ate Fried Dill Pickles for the first time
I ate a bunch of fried stuff that I didn't really know what was inside....hopefully for the last time!
That week in Biloxi taught me how fortunate we are, but it also assured me that if we experience a disaster in California (earthquake anybody?) that we will have an onslaught of Americans on our doorsteps ready to help us pick up the pieces and move on.
As a side note, the organization that I was working under was Samaritan's Purse, which is run by Franklin Graham (Billy Graham's son).
Please take some time to view the photos by clicking on the link above. There are a lot and some may not make much sense, I haven't had time to edit them....
Scott Dauenhauer
The Myth of the "Independent" Advisor
Scenario
Prospect: Tell me Mr. Advisor, what makes you qualified to give planning advice and manage my money? Also, are you fee-only?
Advisor: Well, for one thing I am completely independent and I am fee-based. I don't work for any of those evil brokerage firms you see advertised on TV.
Prospect: Wow, let's get started then!
Ok,
So this little parody is a bit over the top, but it is demonstrative of the sales pitch used by most registered representatives today. Everybody is using the term independent (and also Fee-based) to try to make them appear to be better than someone else. Now, I fully endorse trying to separate yourself from the pack, I do it myself, however when I state my credentials they are actually true. When most registered reps (term used to describe advisors regulated by the National Association of Securities Dealers) tell you they are independent they fail to define what independence means for them. The only true independent advisors are the ones who are Registered Investment Advisors and are fee-only (meaning their compensation comes from their clients directly). All others are basically charlatans if they represent themselves as Independent.
Why? As a registered representative you must affiliate yourself with what is called a Broker/Dealer (hereinafter referred to as a B/D). A B/D is basically an entity that provides oversight of other brokers, the technical definition is "any individual or firm in the business of buying or selling securities for itself and others." There are many types of B/D's, but in the most basic sense you have the big brokerage firms (Merrill, Morgan, Smith Barney) and the "Independents". They are referred to as independents because typically the registered rep is not an employee of the B/D (as they are at the big firms), they are separate businesses.
Despite the fact that they are separate businesses the registered reps affiliated with B/D's have similar restrictions as to what they can sell to you as the reps at the big brokerage firms. The main difference is that reps at "independent" B/D's get to take home a bigger chunk of the commissions they earn. In fact, that is the main difference (as it applies to the consumer). An rep at an "independent" B/D has the same restrictions on what can be sold, the same conflicts of interests, and the same regulatory structure as the big brokerage firms. Actually, the regulatory oversight is usually less at an indepedent B/D, thus you have more risk of being sold a bad product. Iindependent B/D's got slapped just as hard as the big brokerage firms in the "shelf space" scandal in which it was learned that big mutual fund and annuity companies paid the B/D's money so that their products would receive preferred selling status.
What you should know about reps who claim to be independent is that this basically refers to how they receive their commissions. They are independent because they are not an employee, though they are regulated much of the time as if they were. The main reason reps go independent is because they get to keep more of their commissions (I'm all for that). However, being independent does NOT mean they are unbiased, does NOT mean they will act as a Fiduciary, and does Not mean they are fee-only. I have seen more people hurt by the so called "independent" planner than I care to talk about. In the end most independents are about product sales.
You must ask yourself, do you want an Independent, or someone who will put your interests first? Actually you can have both. As a Registered Investment Advisor with no outside affiliations to pull my strings I can give unbiased, independent advice that is free of product sales and commissions. Make sure you know who you are dealing with and always ask as many questions as possible, especially if someone is claiming the term "Independent" as a credential.
Scott Dauenhauer, CFP, MSFP
Prospect: Tell me Mr. Advisor, what makes you qualified to give planning advice and manage my money? Also, are you fee-only?
Advisor: Well, for one thing I am completely independent and I am fee-based. I don't work for any of those evil brokerage firms you see advertised on TV.
Prospect: Wow, let's get started then!
Ok,
So this little parody is a bit over the top, but it is demonstrative of the sales pitch used by most registered representatives today. Everybody is using the term independent (and also Fee-based) to try to make them appear to be better than someone else. Now, I fully endorse trying to separate yourself from the pack, I do it myself, however when I state my credentials they are actually true. When most registered reps (term used to describe advisors regulated by the National Association of Securities Dealers) tell you they are independent they fail to define what independence means for them. The only true independent advisors are the ones who are Registered Investment Advisors and are fee-only (meaning their compensation comes from their clients directly). All others are basically charlatans if they represent themselves as Independent.
Why? As a registered representative you must affiliate yourself with what is called a Broker/Dealer (hereinafter referred to as a B/D). A B/D is basically an entity that provides oversight of other brokers, the technical definition is "any individual or firm in the business of buying or selling securities for itself and others." There are many types of B/D's, but in the most basic sense you have the big brokerage firms (Merrill, Morgan, Smith Barney) and the "Independents". They are referred to as independents because typically the registered rep is not an employee of the B/D (as they are at the big firms), they are separate businesses.
Despite the fact that they are separate businesses the registered reps affiliated with B/D's have similar restrictions as to what they can sell to you as the reps at the big brokerage firms. The main difference is that reps at "independent" B/D's get to take home a bigger chunk of the commissions they earn. In fact, that is the main difference (as it applies to the consumer). An rep at an "independent" B/D has the same restrictions on what can be sold, the same conflicts of interests, and the same regulatory structure as the big brokerage firms. Actually, the regulatory oversight is usually less at an indepedent B/D, thus you have more risk of being sold a bad product. Iindependent B/D's got slapped just as hard as the big brokerage firms in the "shelf space" scandal in which it was learned that big mutual fund and annuity companies paid the B/D's money so that their products would receive preferred selling status.
What you should know about reps who claim to be independent is that this basically refers to how they receive their commissions. They are independent because they are not an employee, though they are regulated much of the time as if they were. The main reason reps go independent is because they get to keep more of their commissions (I'm all for that). However, being independent does NOT mean they are unbiased, does NOT mean they will act as a Fiduciary, and does Not mean they are fee-only. I have seen more people hurt by the so called "independent" planner than I care to talk about. In the end most independents are about product sales.
You must ask yourself, do you want an Independent, or someone who will put your interests first? Actually you can have both. As a Registered Investment Advisor with no outside affiliations to pull my strings I can give unbiased, independent advice that is free of product sales and commissions. Make sure you know who you are dealing with and always ask as many questions as possible, especially if someone is claiming the term "Independent" as a credential.
Scott Dauenhauer, CFP, MSFP
Wednesday, November 02, 2005
Impact to Retirement Plans of New Roth 401(k)
The above link will take you to a summary of the study with a link to the full study. The study points to the Roth 401k/403b as a new benefit available for employers to adopt beginning January 1, 2006 and shows how it can benefit employees.
I believe the Roth 401k/403b is a great option for a lot of people, not just the highly paid. I think a new concept in investing is beginning to take shape, that of tax diversfication and the Roth is at the center of it.
Tax Diversification refers to diversifying your investments into accounts other than just pre-tax, tax-deferred options. You should aim to have money in tax-deferred accounts, but you should also try to accumulate money in tax-free accounts, such as Roth IRA's and 401(k)/403(b)'s, this gives you the ability manage your taxes better in retirement in order to minimize what you owe.
I have a few interesting strategies for the Roth 401k/403b for people who have inherited money or expect to inherit money in the future to take a look at.
Scott
I believe the Roth 401k/403b is a great option for a lot of people, not just the highly paid. I think a new concept in investing is beginning to take shape, that of tax diversfication and the Roth is at the center of it.
Tax Diversification refers to diversifying your investments into accounts other than just pre-tax, tax-deferred options. You should aim to have money in tax-deferred accounts, but you should also try to accumulate money in tax-free accounts, such as Roth IRA's and 401(k)/403(b)'s, this gives you the ability manage your taxes better in retirement in order to minimize what you owe.
I have a few interesting strategies for the Roth 401k/403b for people who have inherited money or expect to inherit money in the future to take a look at.
Scott
Subscribe to:
Posts (Atom)