The Unfilitered Truth About the Financial Services Industry

John Oliver Lambasts the Retirement Plan Industry

A MUST WATCH FOR EVERYONE

Spend 20 minutes to watch the most entertaining explanation of how Wall Street and brokerage firms take advantage of clients. The filter is off as John explains it as only he can. Yes, there is some explicit language but it is completely appropriate under the circumstances.

If you have a retirement plan you must watch this video. If someone is trying to sell you financial products you have to watch this video. Thanks to John and his team for producing this video.

This video clip will leave you laughing and crying all at the same time. It exposes Wall Street for what it is in language that anyone can understand. Enjoy this video and PLEASE share it with everyone you know.

Gary Allen on Business: Sunday, June 5, 2016 – Podcast Now Available

Monetary and Fiscal Policy… Helping the Economy or Slowly Drowning it?

3d Little man choose between sink or swimIn the first segment of the program this week I talk about the potential impact of the unprecedented use of monetary policy to support global economies. How does it impact the global economy and what impact does it have on the average consumer?

In segment two, I provide my experiences with Uber as I travel on business around the country. I use Uber as a good example of how a disruptive technology/business model has upended the somewhat monopolistic stranglehold that traditional cab companies had on transportation.

What is often overlooked is how lower costs, more supply and competition has actually increased demand and improved the level of service. Another overlooked reality is how the average cost of licensing a cab adds $30,000 to $50,000 per year that is passed on to the consumer. Uber and its ride sharing competitors can offer lower prices because the licensing structure in place for traditional transportation companies is avoided. The cost of a taxi medallion to operate in NYC has for many years has been about $1 million. Uber and other ride sharing drivers do not have this requirement.

In segments three and four, the focus is turned to retirement vehicles. The segment covers some of the differences regarding pretax and after-tax considerations. The idea is to give you a better understanding of where to save rather than what to invest in.

As always, I hope you enjoy the program.Thank you for listening to my program on KNBR. – Gary

CONTACT INFORMATION

You can reach Gary at:

Email – gallen@prudentllc.com

Telephone – 916.436.8331

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Gary Allen on Business: Sunday, May 29, 2016 – Podcast Now Available

Costs Matter – The Impact of Fees on Your Retirement

Fees 3d Word Bear Trap Money Interest Late Payment Penalty

Hidden or in plan sight, fees can have a big impact on retirement

People have spent eternity trying to outguess or outsmart financial markets. Another way of looking at this is to understand that people are trying to control financial markets. However, financial markets are dynamic and resist control at any level. Ultimately, this is a fool’s errand. 

Conversely, controlling costs is something that can and should be done. On this program, I run through a study we recently prepared for a company. While simple, it shows the individual and cumulative damage that higher and unnecessary fees inflict on retirement investors.  

In the study, the impact on a small retirement plan of $5 million dollars over two decades is striking. While numbers can sometimes be hard for people to comprehend, the resulting impact changes people’s lives for the worse. By controlling costs and paying only necessary fees, it is possible for employers to have a large positive impact on their own employees. 

Later in the program, I discuss the three factors that people can use to impact their own retirement:

  1. Funding (wish I could change this)
  2. The timing of your retirement
  3. Change the way you invest

These three factors can have a positive or negative influence on your retirement. Since they are under your control or influence these are the items you should spend time on rather than worrying about trying to outsmart financial markets.

As always, thank you for listening to my program on KNBR 680. If you have questions or concerns about your own investments or would like us to review what you are doing, please contact Gary.

Contact Information

The best way to contact Gary is through email at gallen@prudentllc.com. But you can try to reach him by phone as well at 916.436.8331.

Email: gallen@prudentllc.com

Phone: 916.436.8331

 

Podcast

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Gary Allen on Business, Sunday, May 22, 2016 – Podcast Now Available

Business Alert!

California Employers Facing State Mandated Retirement Program

So far it has remained under the radar, but a major new State government program is rapidly heading towards a collision course with private employers in California. The California Secure Choice Act is a program that states private employers must offer a retirement plan to their employees or the employer will be forced to participate in a new retirement program mandated by the State of California.

California employers with five or more employees must comply with the mandate or face heavy penalties if they do not. Critics of the state program, including myself, have identified numerous issues small and large that plague the offering. My personal opinion is employers face significant potential risk (based on the current version of the regulations (5/22/2016). Further, the program in my opinion, falls short on providing an optimal solution for employees as well. The program design is flawed and incomplete leaving many questions unanswered. 

Currently, Secure Choice is on track for a 2017 debut, but could slip into 2018. However, make no mistake about it, this program is coming soon. And even if you do offer a retirement plan to your employees that may not exempt you from the mandate. The State is working on rules that would mandate coverage for part-time or contract workers that are excluded from your existing plan.  

There is a much simpler solution for employers to avoid the California Secure Choice Act. Employers can offer a payroll deduction IRA program to their employees without cost or personal liability to the business or its owners. Payroll deduction IRAs have been around for decades and work very well for employers of any size. You can provide your employees with a simple and effective way to save for retirement without cost to you.

I am very concerned that the California Secure Choice Savings Program will turn out to be the equivalent of the Affordable Care Act (ACA) for retirement plans. You can avoid the headaches and the uncertainty by offering a private solution today. 

You can listen to more about the California Secure Choice Act in segments three and four of my show this week.

In segments one and two of the program, I discuss the flaw of retirement planning that focuses on building wealth instead of a stream of income for retirement.   

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Gary Allen on Business: Sunday, May 15, 2016 – Podcast Now Available

Jim Cramer of Booyah Fame Mainly Delivers “Boo”

Jim CramerJim Cramer of Mad Money fame on CNBC has popularized fame with his fast paced show that has its roots in the production values of the Jerry Springer show. You may laugh, but Cramer’s Mad Money show is the brainchild of Susan Krakower, the former producer of the over the top Jerry Springer show. If you think about Springer, sports talk radio and a touch of a traditional financial show, you have the secret sauce that became Mad Money.

The show has seen a ratings decline in recent years but the frenetic energy remains. Adding some spice, this weekend a new movie titled Money Monster starring George Clooney has opened across America. But the focus of my story on the show this week is a research report that also was released on Friday. That report from researchers at the Wharton School of Business look into the track record of Cramer’s stock picks.

It may come as a surprise to some, but I was not caught off guard by the results of the research report. Bottom line, Cramer has not done well compared to the S&P 500 with his charitable fund. While Cramer is just one example, he is the poster child for “smart” active management. At this point the numbers are in and Cramer like most of his peers trail the returns of the stock market.

The Living Wage Movement For A Few

Protest

Everywhere you turn these days, people are protesting for a living wage. Currently, the living wage benchmark according to the protestors and their supports is $15 per hour. However, the part of the story that most protestors are missing is who will be left working once $15 per hour becomes reality.

Fast food workers are some of the primary protestors pressuring employers to raise the minimum wage to $15. Too often companies are vilified for underpaying their workers and having profits that are too large. Are there companies that take advantage of their workers, of course, but I never remember anyone until now talking about a fast food job being a place to work to support a family of four. 

Fast food jobs and most retail jobs have traditionally been entry level positions for young and or unskilled workers to enter the workforce. In my opinion, the majority of the workers currently protesting for $15 per hour will be worse off if they achieve their goal. The reason is simple, automation will replace most of the jobs and they will be unemployed. A fraction of the current workers will be left earning $15 per hour watching customers order and pay for their own meals at self-service kiosks, while a couple folks will be left in the back feeding machines that prepare most of the food. Wendy’s this week became the first major fast food chain that said it will install these kiosks this year at all of its locations.

The problem is not $15 per hour for entry level jobs. The problem is too many low or unskilled workers who do not have access to training or education opportunities to improve themselves.  

Gary Allen on Business – Sunday, May 15, 2016 – Podcast

The Cramer story and $15 for the few highlight the show this week. Hope you enjoy the podcast. – Gary 

CONTACT GARY:

If you would like to contact Gary, the best way is through email at gallen@prudentllc.com. Or you can try to reach him at his office at 916.436.8331.

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Gary Allen on Business; April 10, 2016 – Podcast Now Available

scared-kidFinancial Gibberish

Communication is such an important thing. Countless books have been written about the subject yet we still struggle to communicate with one another. In the world of financial services, some miscommunication is unintended while some happens to be on purpose. It is hard to question the advice or the validity of an investment strategy when you cannot understand it. The real trick is to know when someone is struggling to communicate with you or if they are purposely trying to talk circles around you. The first is irritating and CAN cost you a lot of money, while the second WILL cost you a lot of money!   

 I spend some time on the program trying to translate financial speak into common sense. It is hard to translate but well worth it. The difference can mean thousands of extra dollars in your pocket instead of in the pocket of the person trying to sell you a product.  

The Active Management/Passive Management Debate (Case Closed)

Analysis

Analysis

Later in the program, I provide the basic facts of how active management fails to deliver on its promise of beating the market. I still wonder why so many people believe in the Wall Street Santa Claus of superior performance when study after shows that the Grinch is alive and well in the canyons of Manhattan. 

As always I hope you enjoy the show. – Gary 

CONTACT GARY

If you would like to contact Gary the best way is through email at gallen@prudentllc.com or you can try him at 916.436.8331.

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