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This Holiday Season, Ignore the Relatives

‘Tis the season to gather and celebrate with friends and family. Each year, old traditions are remembered and new traditions are made. We reconnect with those we see often and long-lost relatives alike. Reliability has become an evasive event in the busy world we live in today. In the craziness and uncertainty of our day-to-day lives, we take solace in the certainty that some of these events provide.

In some families, it is a holiday tradition to attend church or temple together. In others, Grandma will play the piano while everyone sings along. And in others, it is a virtual certainty that everyone will get their year’s worth of invaluable wisdom from that goofy brother-in-law that goes by “Blaze”.

Celebrating with relatives is a wonderful thing, but this time of year, we must all be more conscious of the unrelenting human desire to compare ourselves and our decisions to the people and things around us. The relatives you ought to ignore are not people, but perceptions. (more…)

Forget the Obamacare Exchange Websites, Find an Agent!

The highly anticipated rollout of the new health insurance exchanges / marketplace has provided plenty to talk about. Unfortunately for Obamacare supporters, it has provided enormous amounts of ammunition to opponents as the exchange websites have been nothing short of a collasal failure. Fortunately, there is a better solution.

First and foremost, I am not a licensed health insurance agent. Like many of you, I have tried numerous times to access the site, both for myself and to assist clients in obtaining coverage. After several weeks of frustration, constantly being kicked-out of the site and having to start over, and our clients being so fed-up that they stopped trying, I (accidentally) realized last week that there is a much easier solution – use an agent! Not surprisingly, my favorite resource for Affordable Care Act fact vs. fiction, Carolyn McClanahan, is all over this in her column this week at Forbes.com: The Unknown Workaround To Healthcare.gov

An agent can provide access to all the same policies (and more) that are available on the exchange, but unlike the websites, an agent provides you with access to a reliable, capable resource that will help you navigate your options and choose from the dozens of policies available to you. Better yet, the enrollment process with an agent ensures that you never have to visit the exhange sites ever again! (more…)

All Wealth is Relative

A recent article on CNN Money cited that “a whopping 70% of those with at least $1 million in assets that are invested or available to invest, excluding home values, don’t consider themselves to be wealthy…it’s only when they hit the $5 million mark that millionaires begin to feel ‘wealthy.'”

I would submit that our feelings of wealth are far more associated with the life decisions we make and social circles we participate in, than the numbers we see on our net worth statements. Ted Roosevelt once said, “comparison is the thief of joy.” Feeling wealthy is a function of feeling that you have enough…of wanting what you have, rather than being consumed with what you want. (more…)

Approximately Right vs. Precisely Wrong

Photo Credit: ThinkStock

Photo Credit: ThinkStock

The second president of the United States, John Adams, made a prediction years ago in a letter to his wife:

“The second day of July, 1776, will be the most memorable epoch in the history of America. I am apt to believe that it will be celebrated by succeeding generations as the great anniversary festival…It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bonfires and illuminations, from one end of this continent to the other, from this time forward forever more.”

Make no mistake about it, John Adams painted an incredibly accurate picture of what was to come! This coming month, a mere 237 years later, our nation will celebrate its great anniversary festival by hosting parties, parades and fireworks with our neighbors, family and friends.

But focusing too heavily on the details, however, one could also argue that John Adams was wrong. After all, we celebrate our nation’s independence on the fourth of July, not the second!

In hindsight, it seems ridiculous to claim that Adams was incorrect. In the moment, however, it is easy to get distracted by minutia that has little relevance to our financial well-being. We easily become critical of ourselves and envious of others, resulting in us completely missing the big picture. (more…)

Ruminations on Q1 of 2013

punxsutawney-philLike the winter that will never end, the US stock market continued its unwavering advance in the first quarter of 2013. And just like those that planned their spring planting around the forecast of Punxsutawney Phil on Groundhog Day, folks relying on the state of the global economy to predict the direction of markets are experiencing a rough spring.

How long this market advance will continue is anyone’s guess, but rather than attempting to predict that, we will continue to focus on establishing a sound financial planning and investment framework that provides the highest likelihood of achieving long-term objectives regardless of short-term gyrations.

Over the last several months, we have endured more of the same political discourse in the form of debt ceiling negotiations, “the sequester” and “furloughs.” Once again, Congress enjoyed getting a bunch of attention for a few days, and then punted.

As predicted in January, once we passed the February debt ceiling deadline and ran out of things to report here in the US, our media turned their attention overseas.

KCNA/AFP/GETTY IMAGES

KCNA/AFP/GETTY IMAGES

We started to hear of more nuclear threats from North Korea, but fortunately for all of us, the great US ambassador, Dennis Rodman, made his way overseas to hang-out with Kim Jong Un and patch things over.

On a more serious note relating to the threats from North Korea, there was a wonderful op-ed written about a week ago by a young woman interning for The Verge (www.theverge.com), titled “What North Korea’s Threats Sound Like to a South Korean College Student.” It is a wonderful read to provide some perspective about life on the Korean Peninsula. Those of you viewing this via PDF can simply click the link. Alternatively, if you have a moment to search for that title online, it will pop-up as your first search result.

We also turned our attention overseas just in time to learn about the country of Cyprus, which bolsters an economy smaller than the state of Vermont – the smallest state economy in the United States. The country made headlines by suggesting that they were literally going to take money out of people’s bank savings accounts to help maintain the solvency of their banking system. This prompted many pundits to begin suggesting that if it can happen there, it can happen here. That proclamation is utter nonsense for more reasons than we can get to in this letter.

bitcoinFueled, in part, by the bank crisis in Cyprus, we also saw the rise and fall of the “bitcoin,” a so-called digital currency that is supposed to provide an alternative to the risks of holding actual money. The creator of this digital currency remains anonymous today. This is not a joke.

Bitcoins have actually existed since 2009, but were relatively unheard of until gaining enormous attention the past few months. As a byproduct of that attention, the price of a bitcoin has swung wildly from $13 on January 1, 2013 to as high as $266 on April 10, 2013. Within 6 hours of hitting its high, the price of a bitcoin dropped from $266 to $105 before closing out the day at $160. Given that the most important tenet of a reliable currency is price stability, it is safe to say the bitcoin is anything but that. Not surprisingly, this sudden rise in demand for bitcoins coincides almost perfectly with the recent drop in commodities prices, particularly gold and silver.

Investors must recognize the difference between speculating and investing. Making investment decisions based on anything written above is nothing more than speculation, no matter how much support and conviction you believe you have. But it is far better to invest your hard earned assets in things (companies) that actually make more money, rather than hoping a greater fool will come along and pay more for something you previously purchased.

Obamacare: Where Will You Buy and What Will it Cost?

With the first quarter of 2013 rapidly coming to a close, folks have to begin to brush up on their understanding of the changes to the health insurance system that will be taking place January 1, 2014 under Obamacare.

A recent blog published at Forbes.com by physician turned financial planner, Carolyn McClanahan, provides an outstanding overview of how the new law may impact individuals and families. In my humble opinion, Carolyn is probably the foremost expert on Obamacare and how it will impact families, having read every single page of the 2,409 page bill. The link above will take you to her post.

In short, if you have individual health insurance, it is probably going to get more expensive next year. If you are on your spouse’s health care plan through their employer, it is possible you will have to find new coverage at the end of this year. And in either event, the cost of obtaining coverage under the new law may surprise you.

This is a particularly well written article by one of the foremost experts in the industry. If you are interested in following updates on the new law, be sure to follow her posts on forbes.com and twitter @carolynmcc.

Rationalizing the Foodie Lifestyle

I was recently quoted in an article in the Minneapolis Star Tribune about a subject near and dear to my heart – food! The article, Millenials are Becoming the Foodie Generation, is about the growing tendency of millenials to be very passionate about what and where they are eating.

While I would argue that this is far more than a generational phenomenon, millenials pay more attention to their food and dining experience (both at home and out on the town) than any generation ever has in their 20’s and 30’s. This has, in turn, led to an explosion of new restaurants promising a unique and vibrant scene, along with dozens of farmers markets and grocers that focus extensively on locally sourced and organic foods.

The danger of this lifestyle progression is that many millenials refuse to make these necessary trade-offs. A recent New York Times article titled, Younger Generations Lag Parents in Wealth Building, explains that the average millenial has less wealth accumulated than their parents did at the same age. While there are no shortage of articles about this blaming everything from mounting student loan debt, to the housing collapse, to unemployment and underemployment rates among this generation, the simple reality is that lifestyle inflation from generation to generation has greatly outpaced wage growth.

Americas-Shrinking-Grocery-Bill

Virtually any foodie will acknowledge that healthier ingredients for cooking, or a better dining experience out on the town comes at a cost. One of the millenials interviewed for this article states that he spends as much as 20% of his income on food. While that number may seem ridiculous at first glance, the average household spends 11% on food today, but spent nearly 17% in 1984. (more…)

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