Most people know about 529 College Savings Accounts but few are aware of the new exciting changes under code section 529A. Passed in 2014, the Stephen Beck Jr., Achieving a Better Life Experience Act of 2014 is the single biggest improvement for the financial future of disabled people in a very long time.
Until the passage of the ABLE act most disabled individuals have been trapped in a life of government imposed poverty. Unfortunately, disabled people have been limited to financial assets of less than $2,000 or they would lose their government benefits. All of that is about to change with ABLE accounts.
Listen to the highlights of the exciting ABLE accounts program on this week’s program. The great news is disabled people will be allowed to have modest financial wealth and retain their government benefits. Wonderful news for the disabled community and their families.
Fiduciary Standard Versus Suitability Standard of Care
A recent interaction with an intern from a financial services firm on the east coast crystallizes the difference between being a fiduciary and a salesperson. This short segment is a great lesson in understanding the differences between a professional and a salesperson in the financial services industry.
The All-Weather Portfolio and Goals-Based Investing
The final segment of the program introduces the concept of an all weather portfolio and focusing on your needs or goals. It is a change in thought process from the usual product driven/returns driven investment mindset.
Contact Information – Gary Allen
If you have a question for Gary or would like to contact him, the best way is through email at email@example.com. You can also try his office at 916.436.8331 but he responds more quickly through email.
How Most People Feel About the Financial Services Industry
I wish I was only talking about sleazy salespeople from a classic Saturday Night Live skit, but sadly, that is not the case. Too often people have been taken advantage of by salespeople in the financial services industry that are not as easy to spot as the famous characters above.
Over the past 18 years I have heard so many horror stories from my KNBR listeners about their situation. Often there is a common theme of expensive or inappropriate financial products often sold by people they don’t trust. The road is littered with expensive products, high fees and outrageous commissions that have damaged the financial future of many people.
I happen to believe that most people are interested in a straight-forward, transparent relationship that is free of conflicts of interest and always in their best interest. Most financial advisers fail to deliver on these basics and rely on greed and fear to sell products.
For 18 years I have been on KNBR personally delivering straight-talk without the B.S., talking about business and investment issues that matter to most people. I want to thank my listeners for making my program so successful and popular over the years. Many people have asked why I don’t do workshops for people around the Bay Area. I have had a number of reasons not to, but after so long, I have run out of excuses not to provide them.
However, I will not compromise on my integrity and my commitment to provide my listeners with straight-talk and no B.S. So my workshops will have a very different feel from the usual provide food, sell something hard and then sell it some more events that people in my industry use to take advantage of you.
I will deliver education and information just like I do on my radio program. At the end of the event I hope you have a better understanding of how I think you should invest and take care of your financial life. If you would like to meet me I would enjoy meeting you as well. If you want to know what my firm does and how we help people that’s fine too. But you will never and I mean never get a hard sales pitch from anyone I work with. We educate people and give you the opportunity to make your own well-informed decisions. It is your money and your life!
One of my concerns is a lot of people might sign up for the event and then for whatever reason not attend. This means other people who would like to go cannot. It also makes it very hard to manage from a numbers standpoint. As I thought about this, just like magic, one of my listeners provided me with a great idea.
Instead of making it a free event like I planned, we will charge a nominal fee for the event and then donate every penny to charity. Each event will have a fee of $10 for an individual or $15 for a couple. And no we will not be checking to see if the couple is married, living together or whatever. Just sign up and come. Thank you Ed from Palo Alto!
I need your help. Where should I hold the workshops? Please help me out by using the form below to get on our workshop list and to let us know where you would like to see one held. By the way, please share this with your friends. Thank you in advance for helping me on this and I look forward to meeting all of you in person after all this time!
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.
Monetary and Fiscal Policy… Helping the Economy or Slowly Drowning it?
In 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
Jim 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
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
If you would like to contact Gary, the best way is through email at firstname.lastname@example.org. Or you can try to reach him at his office at 916.436.8331.
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)
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
If you would like to contact Gary the best way is through email at email@example.com or you can try him at 916.436.8331.
Human Capital and Financial Capital Equals Life Cycle Investing
Unfortunately, too many people do not understand the interaction between human and financial capital. Human capital is the collective skills, knowledge, or other intangible assets that you possess in order to create economic value. A simpler way to understand human capital is your present and future earning power. Education is an investment in your human capital that pays off in terms of higher productivity.
Our economic life cycle is driven by a balance between our human and financial capital. Early in life we have a lot of future earnings power in the form of human capital. As we work, we have a choice; to either consume our present earnings or save for future needs. That balance between consumption and savings is one of the primary drivers of our economic life. Consumption is spending, while savings is the process of turning human capital into financial capital. That financial capital becomes our investments.
In this program, I discuss the general concepts of human and financial capital and how it is crucial to understand the big picture. Hope you enjoy the program.
Have a question for Gary or would like to contact him? You can reach Gary at firstname.lastname@example.org. Or you can try to call him at his office at 916.436.8331.
Is it a good time to be in the market? What about timing the market? When is a good time to get in or get out of the market?
All of these questions are somewhat similar because they are asking if I have some kind of ability to know in advance what it going to happen. Unfortunately, I don’t have that power and by the way nobody else does either. Although Andrew Bogut of the Warriors predicted a Curry 3-pointer before he dropped one in… but aside from that, no one has the ability to predict the future with any certainty.
Later in the program, I cover the total wealth equation, which is a combination of human capital and financial capital. If you can understand this basic concept, it provides you with a much clearer understanding of the trade offs in life between spending and saving.
Finally, I spend time discussing how Wall Street and most firms have been wrong about your number for so long. Most financial firms talk about building wealth and reaching for some big number. That number represents a nest egg of wealth. However, for retirement, the real number should be income. People need an income to survive. Wealth is not tied to inflation or retirement and is a difficult concept for people to understand. Next week on the program, I will dive deeper into this important concept.
I hope you enjoy the program this week. As always, thank you for listening to my program on KNBR.Thanks to my great product Justine for always doing a great job.
If you have any questions or would like to contact me, email is usually the best email@example.com or you can try to call, but I am often unavailable 916.436.8331.
One of the big questions in life is how much do I need to save for retirement? There is so much information out there on the subject that it can be overwhelming. What I want to do is provide you with a simple, clear and concise overview of a very complicated question.
Fortunately, my friend Massi De Santis created a video a couple of years ago that does a great job. Massi is a Vice-President with Dimensional Fund Advisors. Massi holds a PhD in economics from the University of California, Davis. He was an assistant professor at Dartmouth College, where he taught finance and macroeconomics classes, and conducted research at the frontier of finance and business cycles. His research has direct implications in valuation and risk measurement, and has been published in journals, including The American Economic Review, The BEJournal of Macroeconomics, andStudies in Nonlinear Dynamics and Econometrics. He has lectured and presented research at a number of universities, central banks, and professional associations. He has also testified as an expert witness before the American Arbitration Association on matters relating to the valuation of business damages and the risk of interest rate swaps.
Here is a link to Massi’s short but insightful video on the subject.
Stock Market History: A Crash Course for Investors
About two years ago, our friends at Sensible Investing (from Birmingham, England) put together an eight-part series on the history of the stock market. It is an excellent piece of work, well worth anyone’s time even if they only have a passing interest in investments.
For those who are interested in finance, you might be surprised by what you find in this chronicle of financial history. The production is high quality and filled with great information.
I highly recommend the series for my listeners. – Gary Allen
Here is a link to the program by Robin Powell from Sensible Investing: