Master Financial Education


E. F. Moody Jr.


EFM@EFMoody.com

 PhD, MSFP, MBA, LLB, BSCE

I have asked Errold Moody to provide a brief example of what he has actually found on behalf of a client who engaged his services to review the insurance contracts which funded the client's estate plan. You will be amazed. In my 30 years in the business, I have never seen an authoritative, objective, prudent expert speak so clearly on the use of insurance. What Errold can do is unique in the industry.

Steven Winks

Secretary of State John Kerry - In America,  "you have a right to be (as) stupid (as) you want to be."
(But too many Americans are abusing the privilege)

Why did our systems fail and why will they continue to do so?  From Paul Volcker

"our economics are based on “an unjustified faith in rational expectations, market efficiencies and the techniques of modern finance”


  Albert Einstein
  

7/31" 
Investment advisers???

only 4 percent of financial advisers in 2013 held the chartered financial analyst designation, perhaps the most rigorous investment designation. Some 17 percent were certified financial planners and 11 percent were chartered financial consultants.

Many of the larger brokerage firms have programs that aim to accredit advisers who want to manage clients’ money directly. Sometimes called “reps as portfolio managers,” they may not be true portfolio managers. Instead, they’re executing the firm’s strategies.

7/31:

Not good for future economics

The homeownership rate in the U.S. fell to a 19-year low as rising prices and tight credit kept many first-time buyers out of the property market.

The share of Americans who own their homes was 64.7 percent in the second quarter, down from 64.8 percent in the previous three months. The rate matched the level in the second quarter of 1995.

Housing has become less affordable and more difficult to finance for entry-level buyers, even as mortgage rates have held close to record lows. First-time purchasers accounted for 28 percent of all sales of previously owned homes in June, compared with about 40 percent historically

7/31: Mutual funds versus etfs

7,707 to 1,294, at the end of 2013

7/31:
In debt?

More than 35 percent of Americans have debts and unpaid bills that have been reported to collection agencies

The study found that 35.1 percent of people with credit records had been reported to collections for debt that averaged $5,178, based on September 2013 records. The study points to a disturbing trend: The share of Americans in collections has remained relatively constant, even as the country as a whole has whittled down the size of its credit card debt since the official end of the Great Recession in the middle of 2009.

As a share of people's income, credit card debt has reached its lowest level in more than a decade, according to the American Bankers Association. People increasingly pay off balances each month. Just 2.44 percent of card accounts are overdue by 30 days or more, versus the 15-year average of 3.82 percent.

7/30: THINTELLIGENCE (from Jurrasic Park)

“They (dinosaurs) don’t have intelligence. They have what I like to call ‘thintelligence.’ They see the immediate situation. They think narrowly and they call it ‘being focused.’ They don’t see the
surround. They don’t see the consequences.

Now, put "people" in instead of dinosaurs.

7/30:  Women investors

Seventy-seven percent of women want to be involved in day-to-day investment decisions,, yet 72 percent say they “know less than the average investor” about investing in general. equal, I always preferred an intelligent woman over an intelligent man as a client. They ask more questions and are more involved in the process. And a lot less ego screwing stuff up/

EFM- that is wrong. They only THINK they know less. Everythign else beingfg

7/30: Medicare:

Medicare’s budget has always had two problems. One is inflationary — medical spending has tended to grow much faster than the economy over all. That problem has eased over the last few years as health spending has slowed. But the other is harder to fix — it’s demographic. Medicare covers everyone over the age of 65, and as the United States population ages, that means it will need to care for a growing share of the country’s health care.

This year, enrollment in the program is about 54 million people. In the year that the trustees now project that Medicare will start struggling to pay all its hospital bills, enrollment will be more than 81 million, and the number just keeps going up after that. Even if spending for each individual in the program stopped growing, Medicare would still have to cover all those new people. If spending growth held pace with inflation, Medicare’s budget would look a lot like Social Security’s. The Social Security trustees also came out with a report Monday: They expect that program to face insolvency in 2033.


Hungry, Hungry Medicare

The Medicare trustees project that the health care program will come to represent a growing share of the U.S. economy over time. 

Percentage of gross domestic product spent on Medicare
%
6
4
2
0
6.5%
1970
1980
1990
2000
2010
2020
2030
2040
2050
2060
2070
2080
2087
Projections begin in 2013


The Medicare Program Keeps Getting Bigger

As the population ages, a larger proportion of Americans will enter the Medicare program. That will be true no matter what happens to health care spending.

Share of population enrolled in Medicare
%
25
20
15
10
5
0
23.5%
1970
1980
1990
2000
2010
2020
2030
2040
2050
2060
Projections begin in 2013

7/30:

Fighting Resistance From Seniors
 

Uprooting an elderly loved one and moving them into your home is difficult enough, but add to that the resistance you may receive, and the caregiving becomes an all-encompassing activity. Your loved one's natural tendency is to resist care and assistance, if only because they do not want to think of themselves as old. Often caregivers will become easily angered and irritated at the thought of a loved one refusing care and this conflict can be very damaging to the entire caregiver-care recipient experience. Understanding the stress and loss of independence your relative faces when they give up their home is the first step in easing the tense situation. Here are a few other ideas that may be helpful if you are experiencing any resistance in your daily caregiving.

  • Allow the loved one to have a part in the decision making process surrounding their care and well-being. Do not let them feel they have no part in their future, and allow them the chance to voice their view about they care they would like to receive.

  • The senior may want to start a fight or bring up past actions that occurred, but remain focused on the matter of their care, and do not take part and say anything you may regret later.

  • Remember to think of your own needs, and set limits in the amount of work your willing to take on. Perhaps you provide the in-home care for them, but are unwilling to bathe them, yet your loved one refuses to allow a home-care aide to assist you. Explaining your feelings to your relative and being honest with what your willing to help with can allow you the control of the situation.

  • Be willing to work with the senior in order to find some kind of agreement. Whether they refuse full-time care and you disagree entirely, consider alternatives such as a weekly visit from a health aide and Meals on Wheels service that may ease tension and be agreed upon by both of you.

  • Realize that they are more than likely not going to be happy about the situation, and focus on maintaining the quality of care. They may not look forward to having someone bathe them and cook for them, but you can see a difference in their care and let the senior in time grow accustom to the change.

  • Do not make the situation entirely about them, instead allow them to see it through your eyes to get an idea the work you put forth. Tell them the stress and workload you face and their understanding and willingness to resist you in the future may be lessened. They will look at it as an opportunity to help you in the process of them receiving the aid.

  • Work up to changing your loved ones life and do not suddenly start changing everything they have grown accustomed to over the years. Alert them to any fears you may have, prepare them for any changes, and be as calm and positive as possible to reassure them it is for the best.

  • Plan ahead in case of a sudden decline in health or hospitalization, because it is at these moments where you may face little resistance and can alter their daily care in the manner you see appropriate.


7/29:
HOW MUCH SHOULD PEOPLE SAVE?

7/29:

7/29:
Market timing


prevailing volatility management solutions involve the purchase of a “tail risk hedge. “These have usually come in the form of insurance-like derivative products that will kick in when returns are overly negative, and they’re generally more popular for institutional investors. “The difficulty is that these instruments tend to be quite expensive and they’re often fairly complicated. And when markets are behaving nicely, they can be a real drain on performance. You’re paying a hefty premium for something that isn’t used, and taking on counterparty risk.”

7/28: Please help and send me $250. I will guarantee lots of money in return

Embassy of the United States of America

Plot 1075 Diplomatic Drive

Central District Area, Abuja.

E-mail:  ambassador.jamesentwistle@yahoo.com

E-mail : ambassador.jamesentwistle@yahoo.com

Contact phone number : +2348162362366

 Dear Friend

 THIS IS Ambassador James F. Entwistle U.S. Ambassador to Nigeria. UNITED STATE OF AMERICA AMBASSADOR TO NIGERIA.  I SHALL BE COMING TO YOUR COUNTRY FOR AN OFFICIAL MEETING ON TUESDAY AND I WILL BE BRINGING YOUR FUNDS THROUGH AN ATM MASTER CARD OF $15M ALONG WITH ME BUT THIS TIME I WILL NOT GO THROUGH CUSTOMS BECAUSE AS AN AMBASSADOR TO NIGERIA, I AM A US GOVERNMENT AGENT AND I HAVE THE VETO POWER TO GO THROUGH CUSTOMS. AS SOON AS I AM THROUGH WITH THE MEETING I SHALL THEN PROCEED TO YOUR ADDRESS. (SEND YOUR CELL PHONE NUMBER AND THE ADDRESS WHERE YOU WANT ME TO BRING THE PACKAGE).

YOU HAVE REALLY PAID SO MUCH IN THIS DELIVERY THAT MAKES ME WONDER. YOU ARE A VERY LUCKY PERSON BECAUSE I SHALL BE BRINGING IT MYSELF AND THERE IS NOTHING ANYONE CAN DO ABOUT IT. CHECK HERE:  http://nigeria.usembassy.gov/biography.html .PRIVATE E-MAIL:

THERE IS ABSOLUTELY GOING TO BE GREAT DOUBT AND DISTRUST IN YOUR HEART IN RESPECT TO THIS EMAIL COUPLED WITH THE FACT THAT SO MANY MISCREANTS AND IMPOSTERS(SCAMMERS) HAVE TAKEN POSSESSION OF THE INTERNET TO FACILITATE THEIR NEFARIOUS DEEDS, THEREBY MAKING IT EXTREMELY DIFFICULT FOR GENUINE AND LEGITMATE BUSINESS CLASS PERSONS TO GET ATTENTION AND RECONGNITION

YOUR PACKAGE($15M) MUST BE REGISTERED AS AN AMBASSADORIAL PACKAGE FOR ME TO DEFEAT ALL ODDS AND THE COST OF REGISTERING IT IS $250.THE FEE MUST BE PAID IN THE NEXT 50 HOURS VIA WESTERN UNION SO THAT ALL NECESSARY ARRANGEMENT CAN BE MADE BEFORE TIME WILL BE AGAINST US.

 YOU SHOULD SEND THE FEE DIRECTLY TO THE CARGO REGISTRATION OFFICER

WITH THE INFO BELOW-

RECEIVER'S NAME: WILLIAM KONGA

AS SOON AS YOU SEND THE FEE MAKE SURE YOU SEND ME THE PAYMENT INFORMATION. MY FLIGHT IS TUESDAY AND I EXPECT YOU TO COMPLY BEFORE THEN SO THAT THE DELIVERY CAN BE COMPLETED. IF YOU DO NOT COMPLY, THEN IT WILL NOT BE MY FAULT IF YOU DO NOT RECEIVE YOUR PACKAGE.

 Ambassador James F. Entwistle

U.S. Ambassador to Nigeria

7/28:

Equally weighted

In a
study Robert Arnott and his co-authors picked 100 portfolios, each with 30 equally-weighted stocks from the 1,000 largest American stocks by market capitalisation. 94 of the 100 “dartboard portfolios” did better than a market cap-weighted portfolio of all the 1,000 stocks. Similarly, in another study Andrew Clare, Nick Motson and Steve Thomas randomly picked American stocks to construct ten million indices. An additional twist to their experiment was that the stocks were also randomly weighted. Nearly all of the ten million "monkey indices” delivered “vastly superior returns” compared to a cap-weighted index.

The most knowledgeable respondents in the survey were found to hold 11.5% more stock in their portfolios than their least knowledgeable peers. It could thus simply be the case that more financially literate individuals hold more stocks rather than being better at picking them. While the authors speculate that the estimated positive effect of financial knowledge on returns could be even stronger if investors face a more complex set of choices (the particular institution in this study offered a menu of mostly index funds), the opposite is also plausible if financially illiterate individuals were to be found to make more random stock selections.

But empowering investors by boosting their knowledge is probably a good idea at any rate. Surveys often show a surprising lack of fundamental financial and numerical skills. A Eurobarometer report, for example, found that only 56% of Europeans are able to correctly compute the first year’s interest on a €50,000 loan with 6% interest (yes, the answer is €3,000).


7/28:
Going down


The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.

For households at the median level of net worth, much of the damage has occurred since the start of the last recession in 2007. Until then, net worth had been rising for the typical household, although at a slower pace than for households in higher wealth brackets. But much of the gain for many typical households came from the rising value of their homes. Exclude that housing wealth and the picture is worse: Median net worth began to decline even earlier.

“The housing bubble basically hid a trend of declining financial wealth at the median that began in 2001

 

7/27: GDP-

. The International Monetary fund cut its forecast for both U.S. growth and global GDP growth this year. On Wednesday, the IMF announced that they would be cutting its U.S. economic growth forecast for 2014 to 1.7%, down from 2%, citing economic struggles in the first quarter. Then on Thursday the IMF cut the global GDP growth forecast from 3.6% down to 3.4%.




7/27:
Economic moat: Coined by Warren Buffett and
widely used by Morningstar, this term refers to a company's sustainable competitive advantages over its competitors. This can be achieved in one of five ways: cost advantage, efficient scale, intangible assets, network effect, or switching costs (you can find out more about each of these moat sources in this article). Morningstar assigns its Economic Moat Rating (wide, narrow, or no moat) to all the companies its equity analysts cover. Morningstar research has shown that companies with wide moats tend to be better at sustaining profitability over time than those with narrow or no moats.


Memoir is not an act of history but an act of memory, which is innately corrupt.
Mary Karr
7/27: Climate change- well we screwed that up.
Living animals- pretty much the same:

"Among terrestrial vertebrates, 322 species have become extinct since 1500, and populations of the remaining species show 25% average decline in abundance."

But if humans as a species don't want to take our chances with a sixth mass extinction, we need to start taking drastic measures now. The momentum is already moving against us.

Too late

7/27:
Investment software"

more than 71% said they now use compliance software, whether on their broker-dealer platform, as an outsourced service or in a product provider's offering. In 2013, 66.1% of respondents said they used compliance software, and in 2012, only 38% of advisers were using it.

Personally, I was interested to see whether more advisers would be using re-balancing tools in 2014, considering many so-called “robo advisers” rely on algorithm-driven software to automatically rebalance client portfolios. The results are in, and the answer is yes. Fully 52.2% of advisers as of 2014 are using portfolio re-balancing tools, versus just 45.0% in 2013 and 37.5% in 2012.


7/27: Groundwater- like individual planning, little may be done until far too late. Certainly where none of the participants can actually see the loss

Since 2004, researchers said, the Colorado River basin — the largest in the Southwest — has lost 53 million acre feet, or 17 trillion gallons, of water. That's enough to supply more than 50 million households for a year, or nearly fill Lake Mead — the nation's largest water reservoir — twice.

Three-fourths of those losses were groundwater, the study found.

"Combined with declining snowpack and population growth, this will likely threaten the long-term ability of the basin to meet its water-allocation commitments to the seven basin states and to Mexico,

7/27: Financial knowledge

a recent National Bureau of Economic Research working paper concludes that “Overall, financial knowledge does appear to help people invest more profitably; this may provide a rationale for efforts to enhance financial knowledge in the population at large.” That paper also cited previous studies showing that more knowledgeable people accumulate more wealth.

But Zimbardo — an emeritus professor who has written more than 50 books and is best known for the controversial 1971 Stanford Prison Experiment that highlighted the ease with which people assumed roles as victim or victimizer — found that financial knowledge does not strongly predict financial health.

“In other words,” a summary of the study states, “given a high level of acumen, it is not possible to predict people’s financial behavior

Dwelling in the past, as it were, is highly correlated with financial health; those who live in the present are poor financial decision makers; and those who live in the future are not generally financially “healthy” but often succeed at avoiding being financially “sick.”

Symptoms of financial sickness include a propensity to borrow money from payday lenders; file for bankruptcy or experience foreclosure; carry a credit card balance; or ignorance of the interest rate one pays on borrowings.

The reason past-oriented people are financially healthier is that they “base their decisions and actions on memories rather than current experience,” the summary states. People with negative past experiences, and a past orientation, take less risk and thereby avoid financial ruin. On the downside, such people may be more likely to keep their wealth in cash and avoid prudent investment risk

And this:

A financial literacy test given by the National Financial Educator's Council found that test-takers from 15-18 years old scored an average of only 59.6%.


7/27: Drink up and buy a coffin

Drunk driving has an estimated economic cost of about $199 billion per year in the U.S.. Additionally, in 2012, drunk driving led to the deaths of 10,322 people.


7/27: Bada bing, bada boom:
10,000 baby boomers retire every day

7/24:

  1. If I close my eyes, nobody will get hurt. The effect of ignorance on performance in a real effort experiment

Date:

2014-06

By:

Agne Kajackaite (University of Cologne)

URL:

http://d.repec.org/n?u=RePEc:cgr:cgsser:05-03&r=cbe

This paper tests whether staying ignorant about the negative consequences of one's own actions affects agents' performance in a real effort experiment. We conducted treatments in which subjects' effort either increased only one's own payoff or also increased the donation to a bad charity. Ignorance was introduced by letting agents to decide whether or not to learn if the effort benefits the charity. Overall, we find that in the conditions with complete information agents exert significantly higher efforts if there are no benefits for the bad charity. With respect to ignorance, we show that (i) almost a third of agents stay ignorant, and (ii) the ignorant agents exert significantly more effort than agents who know that their effort benefits the bad charity. We also find evidence for a sorting of low social types into ignorance, as exogenously uninformed agents exert less effort than ignorant agents.


7/23: Perception versus reality

About 81% of overweight boys and 71% of overweight girls believe they are about the right weight

7/23: Very very hot:

last month's average global temperature was 61.2 degrees, which is 1.3 degrees higher than the 20th century average. It beat 2010's old record by one-twentieth of a degree.

 The world's oceans not only broke a monthly heat record at 62.7 degrees, but it was the hottest the oceans have been on record no matter what the month

All 12 of the world's monthly heat records have been set after 1997, more than half in the last decade. All the global cold monthly records were set before 1917.

The first six months of the year are the third warmest first six months on record, coming behind 2010 and 1998

Global temperature records go back to 1880 and this is the 352nd hotter than average month in a row.


7/22:

Dear Advisors:

Ameriprise has been sued by their own employees (see article).

 

"In this case, a group of employees who were enrolled in Ameriprise's defined-contribution retirement plan said the firm breached its fiduciary duty under the Employee Retirement Income Security Act of 1974 by offering proprietary fund options that paid fees to Ameriprise and its subsidiaries as well as offering more expensive share classes than necessary of RiverSource funds, a predecessor to Columbia. The plaintiffs claimed $20 million in losses."

 

Wow! If they would do this to their own employees, what are they instructing their advisors to do? Hmmm.......

 

Sell proprietary Mutual Funds? YES!

 

Sell proprietary Variable Annuities? YES!

 

Ameriprise advisors sell their own RiverSource Variable Annuity for extra fees to clients.

 

Makes you wonder!

 


 


7/21:

Retirement Planning for the Unwealthy

But volatility is not risk ipso facto. And a 1.9% return over retirement????

7/21: This NY Times article is a travesty

FINRA Arbitration
Last year, about 18 percent of customer cases, or 499 claims, were decided in arbitration. Customers received monetary or nonmonetary damages in 42 percent of those cases. But 77 percent of customer cases — including settlements between the parties and arbitration awards — resulted in some sort of monetary or nonmonetary relief (such as canceling a stock purchase and getting money back).

Investors’ lawyers say, however, that even a $1 win would be considered an award so the statistics don’t necessarily provide the full story. “It is seldom that you see a home run,” even on stronger cases


“One of the big deficiencies in the process is the quality of dedication of the arbitrators. “You can have some that are very smart and they try to do the right thing. And then you have people in there who are career arbitrators, and know if they give a big award they won’t get on another case” because the brokerages will not choose them to be on their panels.


The leading reason consumers pursue arbitration is because of claims of a breach of fiduciary duty, which is the legal way of saying the broker did not act in a customer’s best interest. There were nearly 1,900 of those cases last year,
according to Finra, followed by lesser numbers of cases involving claims of negligence and misrepresentation. Problems involving stock investments were the most frequent, followed by mutual funds and variable annuities.

Then read this

: The Failure of Securities Arbitration

7/21: Hot out there

2013 was somewhere between the second- and sixth-hottest year on record for the planet since record keeping began in 1880.

And the checkup results show the planet ranged well outside of normal levels in 2013, hitting new records for greenhouse gases, Arctic heat, warm ocean temperatures and rising sea levels.

"The climate is changing more rapidly in today's world than at any time in modern civilization,"

7/21:

  1. John Doe's Old-Age Provision: Dollar Cost Averaging and Time Diversification

Date:

2014

By:

Dirk Ulbricht

URL:

http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1376&r=rmg

Do timing and time diversification improve the average investor's stock market return? Contrary to literature's scenario of wealthy investors, average investors invest each month over life. Many purchases prevent investors from buying at peak, but horizons decrease, giving latter investments less time to offset losses. This paper accommodates timing using internal rates of return, facilitating the comparison of wealthy and average investors. One to 480 months investments in S&P and downward trending Nikkei, are compared. In conclusion, average investor's risk and return ratios improve with horizon and, compared to wealthy investors, in bullish and deteriorate in bearish markets.

7/21:

7/21

  1. Advances in Financial Risk Management and Economic Policy Uncertainty: An Overview

Date:

2014-06-23

By:

Shawkat Hammoudeh
Michael McAleer (University of Canterbury)

URL:

http://d.repec.org/n?u=RePEc:cbt:econwp:14/17&r=rmg

Financial risk management is difficult at the best of times, but especially so in the presence of economic policy uncertainty. The purpose of this special issue on “Advances in Financial Risk Management and Economic Policy Uncertainty” is to highlight some areas of research in which novel econometric, financial econometric and empirical finance methods have contributed significantly to the analysis of financial risk management when there is economic policy uncertainty, specifically the power of print: uncertainty shocks, markets, and the economy, determinants of the banking spread in the Brazilian economy, forecasting value-at-risk using block structure multivariate stochastic volatility models, the time-varying causality between spot and futures crude oil prices, a regime-dependent assessment of the information transmission dynamics between oil prices, precious metal prices and exchange rates, a practical approach to constru cting price-based funding liquidity factors, realized range volatility forecasting, modelling a latent daily tourism financial conditions index, bank ownership, financial segments and the measurement of systemic risk, model-free volatility indexes in the financial literature, robust hedging performance and volatility risk in option markets, price cointegration between sovereign CDS and currency option markets in the GFC, whether zombie lending should always be prevented, preferences of risk-averse and risk-seeking investors for oil spot and futures before, during and after the GFC, managing financial risk in Chinese stock markets, managing systemic risk in The Netherlands, mean-variance portfolio methods for energy policy risk management, on robust properties of the SIML estimation of volatility under micro-market noise and random sampling, asymmetric large-scale (I)GARCH with hetero-tails, the economic fundamentals and economic policy uncertainty of Mainland China and their impacts on Taiwan and Hong Kong, prediction and simulation using simple models characterized by nonstationarity and seasonality, and volatility forecast of stock indexes by model averaging using high frequency data.



7/21: LTC riders

The difference between 101(g) and 7702B riders.

It’s easy for consumers to think they are buying “long-term care” coverage, when, in fact, it turns out to be a “chronic illness” rider that only pays benefits if a physician certifies that the policyholder is “permanently disabled.”

Indemnity payments are, in effect, accelerated death benefits. With little or no upfront cost and with fewer underwriting requirements than a 7702B, this type of rider, known as a 101(g), can be appealing. However, the words “long-term care” can’t be used in marketing this type of rider.

In contrast, a 7702B is a true LTC rider, and requires a special license to sell the product. Benefits can be accessed when a physician certifies that for at least 90 days, the policyholder is unable to perform at least two Activities of Daily Living (ADLs) or suffers from a severe cognitive impairment.

7702B riders offer indemnity or reimbursement payments.

The difference goes beyond who receives benefit checks, a policy owner or a third party service provider. The reimbursement option offers the flexibility of making the payments to the policy owner or through a third-party service provider, based on submitting paid receipts to the insurance company. Indemnity payments are made directly to those who provide services.

With reimbursement, payments are limited to the actual charges for the services, even though the amount stated in the policy may be higher. Indemnity plans pay the maximum amount allowed by the policy, no matter what the actual charges happen to be.


7/19: ALZHEIMERS

  • 7 in 10 people with Alzheimer's and other dementias live at home.*
  • $216 billion/year in non-paid care is provided by family members.*
  • 1 in 3 caregivers of people with Alzheimer's provide care for 5 years or more.*

7/19:
National  nursing home deficiency reports 

7/19: Half
of america lives in these counties



7/19:


7/17: Pay attention to this

The following is an excerpt from Chapter 4 of Cullen Roche’s new book “Pragmatic Capitalism: What Every Investor Needs to Know About Money and Finance.

Few myths in the world of finance are more pernicious than the many that surround the career of Warren Buffett. Warren Buffett is the most glorified and respected investor of all time. 

After all, it’s widely believed that he became the world’s wealthiest man by essentially picking stocks. But Warren Buffett is also remarkably misunderstood by the general public.  I personally believe the myth of Warren Buffett is one of the greatest misconceptions in the financial world.

To most people Warren Buffett is a folksy frugal regular old chum who just has a knack for picking stocks.  He works hard at finding “value stocks” and then just let’s them run forever, right? It’s the old myth that you can buy what you know (say, Coca-Cola because you like Cherry Coke or American Express because you like its credit cards), go through the annual report, plop down a portion of your savings in the common stock and watch the money grow through the roof. 

Well, nothing could be further from the truth and here we sit with an entire generation who believes the simplistic approaches of value investing or buy and hold are the single best ways to accumulate wealth in the market.  Contrary to popular mythology, Warren Buffett is an exceedingly sophisticated businessman.  In order to understand how dangerous this myth is we have to dive deep into Buffett’s story. 

To a large extent, the myth of Warren Buffett has fed a stock market boom as a generation of Americans has aspired to make their riches in the stock market. And who better to sell this idea than financial firms?  After all, a quick allocation in a plain vanilla “value” fund will get you a near-replica of the Warren Buffett approach to value investing, right?  Or maybe better yet, reading six months of Wall Street Journals and reviewing the P/E ratios of your favorite local public companies will send you on your way to successful retirement. 

By oversimplifying this glorified investor named Buffett the general public gets the false perception that portfolio management is so easy a caveman can do it. And so we see commercials with babies trading from their cribs and middle aged men trading an account in their free time. 

And an army of Americans pour money and fees into brokerage firms trying to replicate something that cannot be replicated. Financial firms want us to believe the myth of Warren Buffett.  In fact, many of their business models rely on our believing the myth of Warren Buffett. 

Let me begin by saying that I have nothing but the utmost respect for Mr. Buffett. When I was a young market practitioner I printed every single one of his annual letters and read them front to back.  It was, and remains the single greatest market education I have ever received. 

I highly recommend it for anyone who hasn’t done so. But in digging deeper I realized that Warren Buffett is so much more than the folksy value stock picker portrayed by the media. What he has built is far more complex than that.

In reality, Mr. Buffett formed one of the original hedge funds in 1956 (The Buffett Partnership Ltd), and he charged similar fees to the fees he now condemns in modern hedge funds. Most important, though, is that Buffett was more entrepreneur than stock picker. 

Like most of the other people on the Forbes 400 list of wealthiest people, Buffett created wealth by creating his own company. He did not accumulate his wealth in anything that closely resembles what most of us do by opening brokerage accounts and allocating our savings into various assets. Make no mistake: Buffett is an entrepreneur, hedge fund manager, and highly sophisticated businessman. 

The original Buffett Partners fund is particularly interesting due to Buffett’s recent berating of hedge fund performance and fees. Ironically Buffett Partnership charged 25 percent of profits exceeding 6 percent in the fund. This is a big part of how Buffett grew his wealth so quickly.  He was running a hedge fund no different than today’s funds. 

And it wasn’t just some value fund.  Buffett often used leverage and at times had his entire fund invested in just a few stocks. One famous position was his purchase of Dempster Mill in which Buffett actually pulled one of the first known activist hedge fund moves by installing his own management at the firm.  Buffett, the activist hedge fund manager?  That’s right.  He was one of the first. His venture to purchase Berkshire Hathaway was quite similar.

Berkshire Hathaway isn’t just your average conglomerate. The brilliance behind Buffett’s construction of Berkshire is astounding. He effectively used (and uses) Berkshire as the world’s largest option writing house. The premiums and cash flow from his insurance businesses created dividends that he could invest in other businesses. 

Berkshire essentially became a holding company that he could run this insurance-writing business through while using the cash flow to build a conglomerate. But Buffett wasn’t just buying Coca-Cola and Geico. Buffett was engaging in real investment in many cases by seeding capital and playing a much more active entrepreneurial role in the production process. 

He was also placing some complex bets (short-term and long-term) in derivatives markets, options markets, and bond markets. The perception that Buffett is a pure stock picker, as many have come to believe, is a myth. 

It’s also interesting to note that the portfolio of stocks he has become famous for is the equivalent of just about 28 percent of Berkshire’s enterprise value as of 2013. His most famous holdings (Coke, American Express & Moody’s Corporations) account for roughly 8 percent of the total market cap.

Interestingly, two of Buffett’s most famous purchases weren’t traditional value picks at all but distressed plays. His original purchases of American Express and Geico occurred when both companies were teetering on the edge of insolvency. These deals are more akin to what many modern-day distressed debt hedge funds do, not what most of us think of as traditional value investing.

Make no mistake – Buffett has the killer instinct prominent in many successful business leaders.  Just look at the deal he struck with Goldman Sachs and GE in 2008. He practically stepped on their throats when they needed to raise capital in the depths of the financial crisis, demanded a five year warrant deal, and profited handsomely. 

Of course Buffett described the deal as a long-term value play. If a distressed-debt hedge fund (which is a role Berkshire often plays) had made the same move, reporters might have described the fund manager as a thief who was attacking two great American corporations while they were down. 

Warren Buffett is a great American and a great business leader, but do your homework before buying into the myth that you will one day sit atop the throne of “world’s richest person” by employing a strategy that is, in fact, nothing remotely close to what Berkshire and Mr. Buffett actually do.



7/17: Women

Only 31% of women in the U.S. use a financial professional, compared to 48% in 2008. "It’s the time factor, that women don’t have time, and also the fear factor of addressing one’s reality. "We’re finding that approaching women in a group setting and workshops where they are talking and asking questions among friends or colleagues is one situation in which women are more open to hiring a financial professional."

7/17:


7/17: Mentally ill

In the 1980s, researchers found about 6 percent of inmates showed signs of serious mental illness. A survey published in 2009 found 17 percent of jail inmates with serious mental illnesses. Individual jails report far greater numbers

7/16: Designations

About 17% of advisers have a CFP designation, compared to 11% who have ChFCs

The ChFC designation has historically been the domain of agents and advisers working with insurance.
The ChFC program of study will now include nine required courses

7/16:

Making Final Arrangements for a Terminally-Ill Loved One

By Marie Marley, PhD

No one wants to make arrangements for the death of a terminally–ill friend or family member. It’s painful to think about any loved one’s eventual passing, but it’s important to make the arrangements sooner rather than later. In fact, it’s best to do it when you first learn your loved one has a terminal diagnosis. Why? Because once you have taken care of all the plans, you can just relax and enjoy spending whatever precious time you have left together.

There are other reasons as well. One is that you’ll save yourself untold stress when your loved one does pass away. When you’re grieving and not functioning at your best, you won’t have to rush around making a multitude of arrangements, gathering needed documents and information, making important decisions, and performing a whole host of other tasks, many of which have to be completed quickly.

More importantly, you’ll have time to visit with your closest friends and family at the time of the death. These persons will be critical providers of emotional support for you. If you haven’t made the needed arrangements, you’ll be so busy, you won’t have much time to spend with them.
Although you can’t arrange everything in advance, there are several tasks you can complete. You may want to include your loved one in the planning; but if you don’t, you should find a friend or family member who can help you. That will make it a little less daunting.

Medical/Legal Issues: Hopefully your loved one will already have a living will, power of attorney and durable power of attorney for healthcare. If they don’t, you should encourage them to execute these documents as soon as possible. This will guarantee that their wishes regarding their end-of-life care will be carried out. The documents will provide instructions as to whether they want heroic measures taken to extend their life, whether they want a Do Not Resuscitate order and other issues.

If you’re the parent or guardian of a terminally-ill minor, you won’t need these documents. For a mentally disabled adult who can’t execute the documents, however–such as a person with dementia or severe mental illness, you may have to go to court to gain guardianship of the person, especially when family members don’t agree on what to do.

Call List: One of the first things you will have to do when the person dies is inform family members and friends. This can be immensely draining. It’s a good idea to prepare a list, including phone numbers, of people who will have to be notified. You don’t have to call all of the people yourself. You can indicate on the list which friends and family members you’d like to make each specific call on your behalf. That way, you can reduce your burden by calling only those few people who are closest to you.

Obituary: Obituaries need to be sent to newspapers promptly. You can write it or have someone else prepare it. Start by collecting all the needed information. This will include important dates and other information about the person’s life, such as what years they were in the military (if applicable), the specific years they worked at a particular company, the year they married, the spelling of any names you might not know, and any other details you’d like to include.
Also, select a photograph if you want to have one displayed in the obituary. Finally, record the phone number of the newspaper(s) where you want the obituary to appear. You can always make any needed changes later.

Eulogy: It takes time to prepare a thoughtful, well-written eulogy. The first step is to determine whom you’d like to deliver it and then ask them if they will do it. Have the person write as much as possible in advance. They will probably need you to supply some details about your loved one’s life. If you want to deliver the eulogy yourself, go ahead and prepare it, getting any help you may need from a friend or family member who is a gifted writer. This document, too, can always be revised later if need be.

Funeral: Go to a funeral home and make (and pay for) all the needed arrangements so when the time comes, all you have to do is place one call to them. Also, if you want to make any remarks at the funeral, prepare them now. Give some thought to other people you may want to speak and ask them in advance. This is also a good time to select the music you want played and investigate potential performer(s) if you want live music. Other tasks include designating pall bearers, selecting any prayers you want read, making up the official program, selecting the person you want to officiate, and choosing a religious speaker if you want one.

Reception after the Funeral: If you plan to have some sort of reception or meal after the funeral, figure out where you want to have it. If it will be in someone’s home, pick out a caterer, unless you will ask your guests to each bring a dish.

Memorial Service (if you plan to have one): Think about where you’d like for it to be held. Prepare a framed photograph if you plan to display one at the service. Other duties are the same as those for a funeral service.

Burial Location: If you’re planning to have a traditional burial and your loved one doesn’t have a plot, select a cemetery and purchase one. You can also look into headstones at this time.

Disposition of Cremains: If the person will be cremated, determine where you want the cremains to be placed. And when you’re making those arrangements, which it’s best to pay for in advance, select an urn. This can be an especially gruesome task that’s best dealt with before the time of need.

Making final arrangements for a disabled terminally-ill loved one who is still living can be very stressful and may feel macabre, but it will not be as agonizing as having to do it at the time of their death.


7/14: Water Water NOT everywhere


there are a series of regional predicaments in a world where the distribution of fresh water is so lopsided that 60 per cent of it is found in just nine countries, including Brazil, the US and Canada

Agriculture accounts for 70 per cent of all water use compared with 22 per cent for industry and just 8 per cent for domestic users

Just over 97 per cent of the world’s water is in its oceans. Of the 2.5 per cent that is fresh water, almost 70 per cent is locked away in glaciers and ice caps and about 1 per cent is in lakes, rivers and other surface water sources. The remaining 30 per cent is groundwater, some of it so ancient and hard to replace it is known as fossil water.

7/13:

Hospice Care
by Peter Ganther   

As caregivers to someone who is terminally ill, we must eventually think about end-of-life care for our loved ones.  We want them to die in familiar surroundings with us and with dignity, and not in a cold and sterile hospital setting.  hospicee care can help.

The term hospicee dates back to the Middle Ages in Europe.  Then it was used to refer to places o charitable refuge offering rest and refreshment to weary travelers.  These homes were usually run by monasteries; the most famous of which, St. Bernard, is still a shelter for those passing over the Alps.  During World War II, the special needs of the dying were recognized and this led to the modern hospicee movement.

The modern hospicee movement was started by a British physician named Dr. Cicely Saunders who established St. Christopher�s hospicee outside of London.   This hospicee combined modern symptom and pain control techniques with compassionate care for the dying.  These same basic principles apply to today�s hospicees as well.  The first hospicee in the U.S. was organized in 1974 in Connecticut.

hospicee is not necessarily a place though.  It is a system of caring for someone who can no longer benefit from aggressive treatment for their disease.  In fact, treatment has become futile.  The emphasis in a hospicee situation is on palliative (easing without curing) care and pain treatment.  Most hospicee care not only treats the loved one, it counsels the families and caregivers as well.  All of this is done through an interdisciplinary team consisting of highly trained volunteers, home health aides, dieticians, social workers, clergy (if applicable), nurses, and doctors.  In addition to providing nursing care, hospicees may supply physical therapy, drugs, and medical equipment.  Most of the care is provided in the loved one�s or the caregiver�s home, but hospicee centers are available in many areas.

Simply put, the hospicee team is a compassionate group of individuals who address the emotional, physical and spiritual needs of patients and families alike.  There is often a spiritual/emotional healing that happens when the patient and family begin to focus on living peacefully and with dignity rather than focusing on the condition or disease.

The therapy that the team provides is designed to relieve symptoms, use pain medications effectively, improve the quality of life, and prepare the loved one and their caregiver(s) and family members for death.  Nothing is done to speed death, but it is allowed to happen naturally.  The benefits are an increase in patient satisfaction, a reduction in costs, and the mitigation of family anxiety.  

The decision to enter hospicee is not an easy one.  To some it feels like giving up, but it really comes down to accepting one part of the natural cycle of life.  For many, dying at home peacefully is a better alternative than fighting in a hospital until their last breath.  It is not for everyone, and, as much as possible, your loved one should decide for themselves.

One must qualify for hospicee care.  In most cases, a doctor must have diagnosed the patient as having a terminal illness that is most likely to cause death within six months.  The patient can leave at any time.  An example of this would be an improvement in the person�s condition to the point where they might want to start treating it again.    Most insurance plans, including Medicare and Medicaid, pay for hospicee care.  Many times even those without insurance are still eligible.  Costs are covered mostly through donations.

The immediate goal of the hospicee team is to develop a �plan of care� for the patient.  Before this can happen, the team meets with the patient�s personal doctor(s) and the hospicee physician to discuss the patient�s history, current symptoms, and life expectancy.  The team then meets with patient and family members.  Available services, the philosophy of hospicee, and expectations are considered here.  Other topics at this meeting might include comfort and pain levels, equipment and medication needs, support systems, and financial and insurance resources.  From these meetings a care plan tailored to meet the patient�s specific needs is developed.  This plan is reviewed and revised regularly as a patient�s condition changes.  Typically, counseling and bereavement services are available to family members for a year after their loved one�s death.     

According to hospicee Foundation of America, the following questions should be asked when selecting a hospicee: 

  • Does the hospicee serve your area?

  • Is the hospicee licensed (where applicable) and Medicare/Medicaid certified?

  • Does the hospicee provide the services you want/need?

  • What does the hospicee expect from you and your caregiver support system?

  • Will your insurance plan work with the hospicee?

  • Does the hospicee have a support program for caregivers?

  • Where is needed inpatient or respite care provided?

  • Is the hospicee�s position on resuscitation, hydration and antibiotics consistent with yours?

  • What out of pocket expenses should you anticipate?

  • Is there a sliding scale payment plan for services not covered by insurance?

If your loved one is diagnosed with a terminal illness, this might be a good alternative for you.  Your loved one�s comfort will be a priority, and they can pass on peacefully, surrounded by the people they have cherished most.  Not only that, the whole family can benefit from the hospicee experience through their bereavement counseling.  You may learn a little more about death, and, in so doing, learn a little bit more about life.


7/10:



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7/10:

Average performance in financial literacy

Click to edit
Mean score
Range of ranks
Shanghai-China 603 1-1
Flemish Community
(Belgium)
541 2-2
Estonia 529 3-4
Australia 526 3-5
New Zealand 520 4-6
Czech Republic 513 5-7
Poland 510 6-7
Latvia 501 8-9
United States 492 8-12
Russian Federation 486 9-14
France 486 9-14
Slovenia 485 9-14
Spain 484 10-15
Croatia 480 11-16
Israel 476 11-17
Slovak Republic 470 15-17
Italy 466 16-17
Colombia 379 18-18
OECD average-FL 500
Source: Figure VI.2.3 | OECD

7/10: Out of whack



7/9 
Structured Variable annuities

A SNVA embeds a structured note inside a VA. With the Allianz Index Advantage VA, for instance, investors can choose from two profiles. The Index Protection Strategy is the more conservative option. It uses the S&P 500® as the benchmark index and for June 2014 it had a “Declared Protection Strategy Credit” of 4 percent. If the index return is flat or positive for the year, investors’ accounts receive that credit. This strategy also provides a full buffer. That means when the index's return is negative, no gain or loss is credited to the account.

Those investing in the Index Performance Strategy can select the S&P 500 (13 percent cap as of June 2014), the Russell 2000® index (15 percent cap) or the Nasdaq-100® index (12.25 percent cap). This strategy provides a 10 percent buffer. In other words, if the index return is negative but less than 10 percent, the account is protected against that loss. If the loss exceeds 10 percent, the account receives a negative performance credit of the negative index return minus the 10 percent buffer.

Annual fees and contract maintenance can still result in a loss of principal in either strategy, however.

The three insurers’ products offer a range of contract features so you’ll have to compare them to determine which, if any, meets your clients’ needs. The Allianz product uses one-year periods to determine index performance, . AXA Equitable offers one-, three- and five-year terms (referred to as “segments”), and MetLife has one-, three- and six-year options. Downside buffers also vary among the insurers.


7/8:


7/8:


7/8:

12 annuity suitability factors you need to know


7/8: Interest rate Pooling

Current interest rate crediting methods

There are four basic methods of crediting current interest to conventional nonindex fixed annuities.

1. Portfolio method. For an annuity that uses this method, all contracts will be credited each period with the same current, non-guaranteed interest rate, regardless of when annuity contributions (premiums) were received, except for contracts that are still within an initial interest rate guarantee period.

2. New money or pocket of money method. For an annuity using this method, the rate of interest credited to all contracts will depend upon when the premiums were received. For flexible premium annuities, this can mean that a particular annuity contract might receive, on any given interest crediting date, several different rates, each applied to the pocket of money received during the time period specified for that pocket.

Example: Mr. Jones’ flexible premium annuity was issued June 30, 2009. Interest is credited each year, at a rate determined annually. On June 30, 2012, the contract is credited with the following:

a. 4.00% for all premiums received in the period 1/1/2009 – 12/31/2009

b. 3.89% for all premiums received in the period 1/1/2010 – 12/31/2010

c. 3.80% for all premiums received in the period 1/1/2011 – 12/31/2011

d. 3.56% for all premiums received in the period 1/1/2012 – 12/31/2012

3. Tiered interest rate method: Type one

In this method, the interest rate credited to a contract depends upon the cash value of the annuity.

Example: Ms. Smith’s annuity credits interest according to the following current schedule:

a. 4.00% for the first $50,000 of cash value

b. 4.25% for the next $50,000 of cash value

c. 4.5% for cash value in excess of $100,000

4. Tiered interest rate method: Type two

In this method, interest is credited at one rate if the owner annuitizes the contract and at a lower rate if the contract is surrendered. In these contracts, the value is generally reported as two separate items: (a) the annuity value and (b) the cash value or contract value. The cash value will be reduced, on surrender of the contract, by any surrender charge applicable. The amount payable at the owner’s or annuitant’s death may be either the cash value or annuity value, depending upon contract terms, and a surrender charge may or may not apply.


Interest rate guarantee period

Sometimes the current interest rate of a newly issued fixed deferred annuity may be guaranteed for a specific period. If so, then at the expiration of this period, renewal interest is credited according to the crediting method used for that particular contract — subject, of course, to the guaranteed minimum rate.


Interest rate renewal history

One item that every advisor who is considering recommending a fixed deferred annuity must consider is the history of the issuing insurance company with regard to renewal interest rates. Renewal rates, except for contracts in the interest rate guarantee period, are entirely at the discretion of the issuing insurer and subject, of course, to the minimum rate guaranteed in the contract. Some insurers have a distinguished history of declaring renewal interest at competitive levels. Others, unfortunately, do not. In the 1980s and 1990s, a few insurers offered fixed deferred annuities at initial rates well above the level offered by most competitors and, as soon as the interest rate guarantee period elapsed, renewed these contracts at, or barely above, the guaranteed rate. Fortunately for consumers, most insurance companies did not play this game. Nevertheless, the risk with this sort of “bait and switching” is one that the prudent advisor must take into consideration. The authors strongly advise taking a close look at the published history of the renewal crediting rate of any insurance company whose products you are considering.

A final observation on the subject of interest rate crediting is in order. It may appear to the advisor inexperienced in fixed deferred annuities that renewal interest rates, while they may drop from the initial level to as low as the guaranteed rate, may also rise at that point — even beyond that initial level — if interest rates are increasing at that time. That may appear logical, but it is not likely to happen. In the authors’ experience, insurance companies rarely declare renewal interest rates at a level higher than the initial rate. This may, of course, be due to the fact that, for the past thirty years and more, interest rates have, in general, been trending downward. Nevertheless, there have been short periods, during those decades, during which rates increased. In those periods, the initial rate offered by insurance companies, on their fixed deferred annuities, did increase — but the renewal rates for existing contracts did not.


7/7:  PETER BERNSTEIN

We don't know what's going to happen with anything, ever. And so it's inevitable that a certain percentage of our decisions will be wrong. There's just no way we can always make the right decision. That doesn't mean you're an idiot. But it does mean you must focus on how serious the consequences could be if you turn out to be wrong: Suppose this doesn't do what I expect it to do. What's gonna be the impact on me? If it goes wrong, how wrong could it go and how much will it matter?

Pascal's Wager doesn't mean that you have to be convinced beyond doubt that you are right. But you have to think about the consequences of what you're doing and establish that you can survive them if you're wrong. Consequences are more important than probabilities.


7/7:

These Are The States That Allow Married Tax Returns For Same-Sex Couples

7/7:
death-with-dignity

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7/7:

Hyperthermia: Too Hot For Your Health
Source: The National Institute on Aging (NIA)

During the summer, it is important for everyone, especially older adults and people with chronic medical conditions, to be aware of the dangers of hyperthermia. Hyperthermia is an abnormally high body temperature caused by a failure of the heat-regulating mechanisms in the body to deal with the heat coming from the environment. Heat stroke, heat syncope (sudden dizziness after prolonged exposure to the heat), heat cramps, heat exhaustion and heat fatigue are common forms of hyperthermia. People can be at increased risk for these conditions, depending on the combination of outside temperature, their general health and individual lifestyle.

Older people, particularly those with chronic medical conditions, should stay indoors, preferably with air conditioning or at least a fan and air circulation, on hot and humid days, especially when an air pollution alert is in effect. Living in housing without air conditioning, not drinking enough fluids, not understanding how to respond to the weather conditions, lack of mobility and access to transportation, overdressing and visiting overcrowded places are all lifestyle factors that can increase the risk for hyperthermia.

People without air conditioners should go to places that do have air conditioning, such as senior centers, shopping malls, movie theaters and libraries. Cooling centers, which may be set up by local public health agencies, religious groups and social service organizations in many communities, are another option.

The risk for hyperthermia may increase from:

  • Age-related changes to the skin such as poor blood circulation and inefficient sweat glands

  • Alcohol use

  • Being substantially overweight or underweight

  • Dehydration

  • Heart, lung and kidney diseases, as well as any illness that causes general weakness or fever

  • High blood pressure or other health conditions that require changes in diet. For example, people on salt-restricted diets may be at increased risk. However, salt pills should not be used without first consulting a physician.

  • Reduced perspiration, caused by medications such as diuretics, sedatives, tranquilizers and certain heart and blood pressure drugs

  • Use of multiple medications. It is important, however, to continue to take prescribed medication and discuss possible problems with a physician.

Heat stroke is a life-threatening form of hyperthermia. It occurs when the body is overwhelmed by heat and is unable to control its temperature. Heat stroke occurs when someone’s body temperature increases significantly (above 104 degrees Fahrenheit) and shows symptoms of the following: strong rapid pulse, lack of sweating, dry flushed skin, mental status changes (like combativeness or confusion), staggering, faintness or coma. Seek immediate emergency medical attention for a person with any of these symptoms, especially an older adult.

If you suspect someone is suffering from a heat-related illness:

  • Get the person out of the heat and into a shady, air-conditioned or other cool place. Urge the person to lie down.

  • If you suspect heat stroke, call 911.

  • Apply a cold, wet cloth to the wrists, neck, armpits and/or groin. These are places where blood passes close to the surface of the skin, and the cold cloths can help cool the blood.

  • Help the individual to bathe or sponge off with cool water.

  • If the person can swallow safely, offer fluids such as water or fruit and vegetable juices, but avoid alcohol and caffeine.

The Low Income Home Energy Assistance Program (LIHEAP) within the Administration for Children and Families in the U.S. Department of Health and Human Services helps eligible households pay for home cooling and heating costs. People interested in applying for assistance should contact their local or state LIHEAP agency or go to http://www.acf.hhs.gov/programs/ocs/liheap.


7/3:
FAT baby boomers age 65 and older are either overweight or obese—72 percent of men and 67 percent of women

7/3: Variable with caps and buffers

IRI offered the following examples of the choices that structured products offer clients.

The buffers allow clients to elect what percentage of market loss that their account value is protected from, with commonly available amounts including 10%, 20%, 30% and 100%.

One example would be a client investing $100,000 and electing a three-year term with a 20% buffer. In this example, assume the cap is 10%.

In an “up” market, if the index grows less than 10% over the three years, the account value will be credited with the full growth of the index. If the index grows 5%, the account value would be $105,000.

However, if the index grows more than 10%, the account value would be $110,000, as the growth is capped at 10%.

In a “down market,” if the index is down 20% or less, the account value will be $100,000 after three years, whereas if the index is down more than 20%, the account value will decrease based on the difference of the buffer (20% in this example) and the index.

If the index is down 25%, the account value will be decreased to $95,000 (25% less 20%).

IRI noted in its white paper that one company has recently launched a product covering the “tail” risk of a down market. For example, if a 10% “buffer” is elected, the account value will not decrease more than 10%.

As for caps, IRI notes that they are set by the company and differ based on the duration and index elected.


7/2

Life insurance is a complex amalgamation of legal, tax and economic elements. Basically, it is a unique wealth creation tool that assures the accumulation of a desired amount of liquid capital at death. Depending on the plan of insurance, it may also create more or less capital for lifetime needs.

Through its unique capital creation feature and tax advantages, life insurance can help people solve a host of personal and business problems. However, insurers offer a wide variety of life insurance policies that are suited to a broad host of financial planning problems. Once an advisor identifies a client's problems, the advisor must match the appropriate life insurance products to the problems. To do so, the planner must first fully understand the legal, tax and economic elements of life insurance and the particular features of each type of policy.

This primer provides an overview of the products available, and is designed to help you gain perspective and balance in your practice. 

Advantages

The advantages offered by life insurance vary with the type of policy and the problem to which the policy is applied. However, all types of life insurance policies provide certain favorable features, which are listed below.

  1. Life insurance provides a guarantee of large amounts of cash payable immediately at the death of the insured. The amount of the death benefit payable is usually significantly greater than the premiums paid for the policy.
  2. Life insurance proceeds are not part of the probate estate. The only way life insurance benefits become part of probate is when they are paid to or for the benefit of the estate of the insured. Therefore, the insurance company can pay death proceeds to the beneficiary without the delay caused by administration of the estate.
  3. There will be no public record of the death benefit amount or to whom it is payable.
  4. Life insurance policies generally have some protection against creditors of both the policyowner and of the beneficiary. The amount of protection varies from state to state.
  5. Life insurance cash values provide instant availability to cash through policy loans. The interest rate (or interest-rate formula) for policy loans is known in advance and is usually lower than the rate applicable to loans from other sources.
  6. The death benefit proceeds from a life insurance policy generally are not subject to federal income taxes.
  7. The increases in the cash value of a life insurance policy enjoy federal income tax deferral. Interest earned on policy cash values generally is not taxable unless or until the policyowner surrenders the policy for cash.
  8. Life insurance proceeds often are exempt from state inheritance taxes.
  9. Despite some highly publicized life insurance company insolvencies, the life insurance industry remains unparalleled in safety among the financial intermediaries such as the savings and loan, banking, and mutual fund industries. It is commonly noted that not a single dollar of death claim has been lost or denied because of a life insurance company insolvency or failure.

Disadvantages

  1. Life insurance is not available to persons in extremely poor health (although almost all individuals in poor health can obtain insurance).
  2. Life insurance is an extremely complex product that is hard to evaluate and compare. The time required to gather policy information, decipher it, and compare it with other policies discourages purchasers from engaging in comparison shopping.
  3. The cost of coverage reduces the amount of funds available for current consumption or investment.

1. Annual renewable term life insurance

Characteristics: “Pure” life insurance with no cash value element; initially, the highest death benefit for the lowest premium.

Market: Short to intermediate term need; need maximum death benefit for minimum initial premium. 
 
Death benefit: Fixed, level
 
Cash value (CV): No cash value
 
CV and/or dividends use current interest? N/A
 
Partial surrenders permitted? N/A
 
Policy elements: Bundled. 
 
Direct borrowing recognition: N/A
 
Advantages to buyer: Low outlay for large face amounts; develop outside investment program.
 
Disadvantages to buyer: Increasing outlay; buyer may not invest difference or may realize lower return.
 
Risks to buyer: Increasing premium. Failure to earn more after tax on investments than insurer.
 

2. Participating ordinary life insurance

Characteristics: Most common and easily understood form of lifetime coverage; known maximum cost and minimum death benefit levels; dividends may reduce premiums, pay-up policy, buy paid-up additions, accum. at interest, be paid in cash.

This LifeHealthPro story is excerpted from:

Market: Anybody who needs lifetime coverage.

Death benefit: Fixed, level.
 
Premium: Fixed, level.
 
Cash value: Fixed, with minimum guaranteed interest rate; excess through dividends
 
CV and/or dividends use current interest? Yes.
 
Partial surrenders permitted? Yes, but through paid up additions only.
 
Policy elemenets: Bundled.
 
Direct borrowing recognition: Yes, with many policies.
 
Advantages to buyer: Familiar product; predictable; helps buyer discipline; share in favorable interest, mortality and expense experience.
 
Disadvantages to buyer: Costly if lapsed early.
 
Risks to buyer: Failure to meet premium commitment

3. Current assumption whole life insurance

Characteristics: Mixes characteristics of universal life and traditional ordinary life; future premiums, face amount, and/or cash value based on interest, expense, mortality experience.

Market: Upper and middle income prospects.

Death benefit: Fixed, level.
 
Premium: May change based on insurer's experience; maximum guaranteed but insurer may charge less.
 
Cash value (CV): May change based on insurer's experience; guaranteed minimum; Minimum guaranteed interest; excess lowers premium or increases CV.
 
CV and/or dividends use current interest? Yes. 
 
Partial surrenders permitted? Yes.
 
Policy elements: Unbundled.
 
Direct borrowing recognition: Yes. 
 
Advantages to buyer: Take advantage of high current interest rates and improved mortality.
 
Disadvantages to buyer: Premiums can be higher or cash value lower than projected; policy can lose paid-up status.
 
Risks to buyer: If assumptions change adversely, premiums can be higher or cash value can be lower than with traditional products.
 

4. Variable life insurance

Characteristics: Whole life contract with assets supporting policy held in separate account; choice of investment assets; death benefits depend on investment results.

Market: Upper and middle income prospects with investment acumen.
 
Death benefit: Guaranteed minimum; can increase based on investment performance.
 
Premium: Fixed, level.
 
Cash value (CV): Based on investment performance; not guaranteed.
 
CV and/or dividends use current interest: N/A.
 
Partial surrenders permitted: No. 
 
Policy elements: Bundled, but to some degree shown in prospectus.
 
Direct borrowing recognition: No.
 
Advantages to buyer: Take advantage of growth in economy.
 
Disadvantages to buyer: Must decide on underlying investments and monitor them for change; few guarantees.
 
Risks to buyer: Investment risk is great. Typically higher expenses than traditional products.

5. Adjustable life insurance

Characteristics: May select death benefit and, within limits, choose premiums; face amount and premiums are fixed between adjustment periods; usual features of whole life. 

Market: Young families starting insurance program; need for flexibility with guarantees.
 
Death benefit: Adjustable. 
 
Premium: Adjustable at option of policyowner.
 
Cash value (CV): Varies depending on premium/death benefit mix; fixed with minimum guaranteed interest; excess through dividends.
 
CV and/or dividends use current interest? Yes.
 
Partial surrenders permitted? Yes. 
 
Policy elements: Bundled.
 
Direct borrowing recognition: Yes. 
 
Advantages to buyer: Flexibility to adjust to changing needs; only one policy needed.
 
Disadvantages to buyer: If needs are known and not likely to change, other products may be less costly per unit of protection.
 
Risks to buyer: Changes made by buyer to satisfy short-term needs may have an impact on the satisfaction of long-term goals.
 
See also: What type of life insurance do life insurance agents own?

 

6. Universal life insurance

Characteristics: Flexible premium current-assumption adjustable death benefit policy; policy elements unbundled; two death benefit options.

Market: Middle and upper income looking for ultimate in flexibility.
 
Death benefit: Adjustable; Option A like Ord. Life; Option B like Ord. Life plus term rider equal to cash value.
 
Premium: Flexible at option of policyowner.
 
Cash value (CV): Varies depending on face amount and premium; min. guaranteed interest excess interest increases cash value.
 
CV and/or dividends use current interest? Yes.
 
Partial surrenders permitted? Yes.
 
Policy elements: Unbundled.
 
Direct borrowing recognition: Yes.
 
Advantages to buyer: Greater transparency and more flexibility than Adj. Life.
 
Disadvantages to buyer: Flexibility places greater responsibility on buyer; buyer assumes greater investment and mortality risks.
 
Risks to buyer: Combined risks of universal and variable life products.

7. Universal variable life insurance

Characteristics: Combines features of universal and variable life.

Market: Middle and upper income with investment acumen looking for ultimate in flexibility.


Death benefit: Adjustable.
 
Premium: Flexible at option of policyowner.
 
Cash value (CV): Varies depending on face amount, premium, and investment performance; not guaranteed.
 
CV and/or dividends use current interest? N/A
 
Partial surrenders permitted? Yes. 
 
Policy elements: Unbundled. 
 
Direct borrowing recognition: No.
 
Advantages to buyer: Epitome of flexibility in all respects.
 
Disadvantages to buyer: Equity performance unpredictable; relatively high expenses; few guarantees.
 
Risks to buyer: Combined risks of universal and variable life products.
 

8. Annuities

Characteristics: Combine tax advantages, investment choice, flexibility and guarantees with various lifetime payout options that cannot be outlived.

Market: Middle and upper income; qualified (IRA) and non-qualified retirement arrangements.
 
Death benefit: Accumulation period: maximum of premiums or cash value; payout period: depends on option.
 
Premium: Fixed or flexible.
 
Cash value (CV): Varies depending on investment performance; minimum guaranteed interest rate unless variable annuity.
 
CV and/or dividends use current interest? Yes.
 
Partial surrenders permitted? Yes.
 
Policy elements: Partially unbundled. 
 
Direct borrowing recognition: Yes, if permitted.
 
Advantages to buyer: Cannot outlive benefits if life option elected.
 
Disadvantages to buyer: Expenses can be higher than alternative investments.
 
Risks to buyer: Under life options, payouts cease at death: if death occurs early, total benefits less than with alternative investments

7/2: Alzheimers-

  • 7 in 10 people with Alzheimer's and other dementias live at home.*
  • $216 billion/year in non-paid care is provided by family members.*
  • 1 in 3 caregivers of people with Alzheimer's provide care for 5 years or more.*
 

7/1: Wow:

. It's estimated by the Social Security Administration that over 25% of today's 20-year-olds will be disabled before retirement.



6/30:

The Bank for International Settlements has warned that “euphoric” financial markets have become detached from the reality of a lingering post-crisis malaise, as it called for governments to ditch policies that risk stoking unsustainable asset booms.

While the global economy is struggling to escape the shadow of the crisis of 2007-09, capital markets are “extraordinarily buoyant”, the Basel-based bank said, in part because of the ultra-low monetary policy being pursued around the world.

Leading central banks should not fall into the trap of raising rates “too slowly and too late”, the BIS said, calling for policy makers to halt the steady rise in debt burdens around the world and embark on reforms to boost productivity.


6/29: Manufacturing jobs gone forever

"A loss of manufacturing has contributed to the decline of the middle class. "People who are displaced from high-paying manufacturing jobs spend a long time unemployed, and when they take other jobs, those jobs generally pay substantially less."

Globalization, automation and recession destroyed nearly 6 million manufacturing jobs between 2000 and 2009. "The days of the factory job that just required a strong back are gone."


6/29: LTC- Sales of traditional long-term care policies fell 23% to 233,000 in 2012 from 303,000 in 2007, according to insurance trade group LIMRA, while hybrid sales have risen sharply, to 86,000 from 15,000 over the same time period.

6/29: 73% of American households are worth less than $100,000, but only 15% of advisers focus on such investors."

Of the 315,000 advisers working in the United States, only 5 percent are younger than 30,

6/29:
Drink up

One in 10 deaths among working-age adults between 2006 and 2010 were attributable to excessive drinking,

excessive alcohol use — which includes binge drinking, heavy weekly alcohol consumption and drinking while underage or pregnant — was responsible for approximately 88,000 deaths between 2006 and 2010. The lives of those who died were shortened by about 30 years.

About 70% of those deaths were working-age adults between the ages of 20 to 64,

 About 1.7 million people died from short-term causes such as crashes or accidents, compared to approximately 800,000 who died from long-term health causes like cancer or strokes,
6/29:

Keeping Safe at Home with Chemotherapy

by Cheryl Coppola RN, MSN, OCN

 

As more and more chemotherapy is given in outpatient clinics and at home, it is extremely important that caregivers and patients understand the risks and hazards that household members may be exposed to. Chemotherapy can be given via a portable infusion pump or in pill form. In both cases it is possible for cancer drugs to unintentionally come in contact with caregivers. When chemotherapy is given in any form, the body must then get rid of it after it’s done its job. This means that the drugs leave the body in a patient’s stool and urine. It can also be present in emesis. Traces of chemotherapy drug may be found in and on toilets, in disposable diapers or any clothing or laundry that a person has soiled after having a treatment. Cleaning the bathroom or handling body wastes or soiled laundry can expose you to these chemotherapy drugs. If you are handling infusion pumps or equipment, flushing intravenous lines or handling chemotherapy drugs in any form, traces of the drug can be present and can be absorbed through the skin.

Cancer nurses have long known that exposing themselves to chemotherapy can be harmful to their health. That’s why they follow strict standards published by the Occupational Safety Health Administration (OSHA) and the Oncology Nursing Society (ONS). These guidelines include safeguarding against drugs that are found in the urine, vomit and stool of chemotherapy patients. When you care for someone who’s receiving treatment in the home or outpatient clinic, you need to be careful about coming in contact with chemotherapy and the patient’s body fluids.

So what types of risks should caregivers be aware of when a patient gets chemotherapy at home or comes home immediately after a treatment at the cancer clinic? When a patient is given a treatment, the drug is present in body fluids for 48 to 72 hours after the infusion or treatment ends. With a home infusion pump, the drug can be spilled if the tubing is accidentally disconnected. When chemotherapy is spilled, it can be absorbed through the skin or the vapors can be inhaled. Acute exposure to body fluids or the chemotherapy drug itself can cause rash, nausea and vomiting, dizziness, abdominal pain, headache, nasal sores and allergic reactions. Exposure over a longer period of time is associated with birth defects, reproductive losses and cancer later in life.

If you or a family member is currently receiving chemotherapy, whether in the clinic or at home, it is strongly recommended that precautions be followed in order to keep household members safe:

  • Patients may use the toilet as usual, but close the lid and flush twice. Be sure to wash hands with soap and water.
  • If a bedpan, commode or urinal is used, the caregiver should wear gloves when emptying it. (Two pairs of latex or nitrile gloves are recommended.) Rinse it well with water and wash with soap and water at least once per day. The same applies to basins used for vomiting.
  • Wash clothing and linen as usual unless it’s soiled with chemotherapy or body fluids. Use gloves and immediately put the soiled laundry in the washer separate from other laundry. If you don’t have a washer, put laundry in a sealed plastic bag until it can be washed. •If chemotherapy is spilled on skin, irritation or rash may occur. Wash the area thoroughly with soap and water. If redness lasts more than an hour, call a doctor. You can avoid contact with skin by wearing gloves when handling chemotherapy, equipment or wastes.
  • For spills on the floor or in the home environment (not on your skin), your home health agency will supply you with a chemotherapy spill kit. Follow the instructions on the box exactly.
  • All cartridges, bags, bottles or tubing that contains chemotherapy must be disposed of in the supplied needle box.
  • Use gloves when handling all oral chemotherapy doses.
  • Keep all chemotherapy drugs, equipment, wastes, needle boxes, etc. out of reach of children.

Receiving chemotherapy as an outpatient is much more common than in the past and it’s much more convenient than getting treatment in a hospital. However, simple precautions need to be taken to make sure everyone at home stays safe.


6/29: some countries could face “additional costs of up to 50% of GDP” by 2050 if there is an upward revision to longevity assumptions by just one year,

“People aged 65 [and over] will outnumber children under 5 for the first time in human history in 2047,

6/27:
Got that right

the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. Until the Great Depression, most economists clung to a vision of capitalism as a perfect or nearly perfect system. That vision wasn’t sustainable in the face of mass unemployment, but as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets, this time gussied up with fancy equations. The renewed romance with the idealized market was, to be sure, partly a response to shifting political winds, partly a response to financial incentives. But while sabbaticals at the Hoover Institution and job opportunities on Wall Street are nothing to sneeze at, the central cause of the profession’s failure was the desire for an all-encompassing, intellectually elegant approach that also gave economists a chance to show off their mathematical prowess.

Unfortunately, this romanticized and sanitized vision of the economy led most economists to ignore all the things that can go wrong. They turned a blind eye to the limitations of human rationality that often lead to bubbles and busts; to the problems of institutions that run amok; to the imperfections of markets — especially financial markets — that can cause the economy’s operating system to undergo sudden, unpredictable crashes; and to the dangers created when regulators don’t believe in regulation.

It’s much harder to say where the economics profession goes from here. But what’s almost certain is that economists will have to learn to live with messiness. That is, they will have to acknowledge the importance of irrational and often unpredictable behavior, face up to the often idiosyncratic imperfections of markets and accept that an elegant economic “theory of everything” is a long way off. In practical terms, this will translate into more cautious policy advice — and a reduced willingness to dismantle economic safeguards in the faith that markets will solve all problems.

6/27:
And
"It is important to understand that a big part of the activities in the stock market are not derived from rational thinking and the flow of information, but rather from emotional human behavior," . "This is contrary to the accepted point of view that governs economic theories. Using physical terms, are very noisy. We show that most of the 'noise' is due to human emotional factors and has to be analyzed as such."



6/26: Down and out

The median household in 2013 had a net worth of just $56,335 -- 43% lower than the median wealth level right before the recession began in 2007, and 36% lower than a decade ago. “There are very few signs of significant recovery from the losses in wealth suffered by American families during the Great Recession,”



6/25:
housing



6/24: MARRIAGE AND MONEY - Studies have shown that money is the number one reason married couples argue, and often the main reason couples head to divorce court. Clear communication is key to having the correct expectations when it comes to money and marriage. Here are the tasks couples should work on to make sure they are on the same page when it comes to their lifetime financial goals.
1.    Write It Down
2.    Manage Your Collective Debt
3.    Agree on How to Spend
4.    Allocate Funds
5.    Get Professional Guidance

6/24:



6/24: the average American spends only
19 minutes a day reading; young people read less than ever, apparently, with people ages 25 to 34 reading eight minutes a day on weekends and holidays, while those 20 to 24 average around 10. This, of course, is a decline: a report from Common Sense Media found that 45% of 17-year-olds admit only reading for pleasure a few times a year — up from 19% in 1984.

6/24:
INHERITED IRAs NOT PROTECTED - In an important decision, the Supreme Court ruled unanimously that the funds in an inherited IRA are NOT protected in bankruptcy.  The decision does not affect bankruptcy protection for our own retirement accounts, including IRAs, which continue to be protected during bankruptcy.  Non-spousal IRA beneficiaries have little recourse.  Spousal IRA beneficiaries, however, have the option to roll inherited IRA assets into their own IRA, where the assets would receive creditor protection.  Without the rollover, the assets will be considered an inherited IRA without creditor protection. 

6/24:
BROKEN FINANCIAL AID SYSTEM - One need only see the tally for America's student debt load - $1.2 trillion at last count, with an average $29,400 per college graduate - to realize something is badly broken in our financial aid system. Most (read all) 17- and 18-year-olds aren't typically savvy enough to understand the implications of taking on thousands of dollars in loans. Since 1978, tuition has soared by more than 1,120% while the average family's wages barely budged. 

6/24:


6/24:


6/22:

1. Assisted Living Communities Have Limited Availability

As of 2013, assisted living communities across the nation had an 89% occupancy rate according the National Investment Center. This means that there is a good chance that your preferred community is full. Westermann estimates that 35–45% of senior living communities are fully occupied or nearly full.

2. Wait Lists Require Deposits

Most senior communities require payment to be added to a wait list. Fortunately, most community wait list deposits are fully refundable at any time. The cost of the deposit can vary significantly between communities. Westermann says he has “seen wait list deposits range from $250–$2,000 for independent living, assisted living and memory care.”

3. Not All Wait List Policies Are the Same

Westermann stresses that families should understand the deposit process when they are shopping for assisted living or memory care due to immediate need. Some communities will hold a specific apartment 15–30 days for a family that has made a refundable deposit. Other communities may offer “first right of refusal.”

A first right of refusal occurs when a second family becomes interested in an apartment the first family has already deposited on. The community normally gives the first family at least 24 hours to elect if they want to take an apartment. If the family elects to not take the apartment they can change their first right of refusal to a different apartment or keep their position on the wait list for the next available apartment.

Make sure to speak with a staff member at your preferred community if you have questions about their wait list policy.

4. You Can Reserve Your Favorite Apartment Suite

Wait lists allow consumers to reserve their first choice apartment suite without making a commitment. Families can use these policies to acquire the most desirable suite or room while giving themselves ample time to learn more about the community and research other options. Westermann explains, “Check to see if a wait list deposit is fully refundable at your chosen community. If it is, use this option to your advantage. Place a deposit on the exact apartment size, style, floor and view that you desire. When it becomes available you will get a call, and if you aren’t ready, you can hold that same position on the wait list. If something happens and you don’t plan on moving, the community will mail the check back to you in 30 days or so.”

5. Some Communities Have Internal Wait Lists for Special Care

Many assisted living communities also offer memory care for residents who have moderate to advanced Alzheimer’s disease and other types of dementia. Memory care is typically provided in a special, dedicated area at the community. This allows residents with dementia to graduate from assisted living to higher levels of care without having to move to a completely new community.

Westermann told us, “A family or a community nurse can initiate the conversation that an assisted living or independent living resident should consider moving to memory care. If memory care is full, communities will usually place an internal resident at the top of the wait list for a higher level of care.”

1. Assisted Living Communities Have Limited Availability

As of 2013, assisted living communities across the nation had an 89% occupancy rate according the National Investment Center. This means that there is a good chance that your preferred community is full. Westermann estimates that 35–45% of senior living communities are fully occupied or nearly full.

2. Wait Lists Require Deposits

Most senior communities require payment to be added to a wait list. Fortunately, most community wait list deposits are fully refundable at any time. The cost of the deposit can vary significantly between communities. Westermann says he has “seen wait list deposits range from $250–$2,000 for independent living, assisted living and memory care.”

3. Not All Wait List Policies Are the Same

Westermann stresses that families should understand the deposit process when they are shopping for assisted living or memory care due to immediate need. Some communities will hold a specific apartment 15–30 days for a family that has made a refundable deposit. Other communities may offer “first right of refusal.”

A first right of refusal occurs when a second family becomes interested in an apartment the first family has already deposited on. The community normally gives the first family at least 24 hours to elect if they want to take an apartment. If the family elects to not take the apartment they can change their first right of refusal to a different apartment or keep their position on the wait list for the next available apartment.

Make sure to speak with a staff member at your preferred community if you have questions about their wait list policy.

4. You Can Reserve Your Favorite Apartment Suite

Wait lists allow consumers to reserve their first choice apartment suite without making a commitment. Families can use these policies to acquire the most desirable suite or room while giving themselves ample time to learn more about the community and research other options. Westermann explains, “Check to see if a wait list deposit is fully refundable at your chosen community. If it is, use this option to your advantage. Place a deposit on the exact apartment size, style, floor and view that you desire. When it becomes available you will get a call, and if you aren’t ready, you can hold that same position on the wait list. If something happens and you don’t plan on moving, the community will mail the check back to you in 30 days or so.”

5. Some Communities Have Internal Wait Lists for Special Care

Many assisted living communities also offer memory care for residents who have moderate to advanced Alzheimer’s disease and other types of dementia. Memory care is typically provided in a special, dedicated area at the community. This allows residents with dementia to graduate from assisted living to higher levels of care without having to move to a completely new community.

Westermann told us, “A family or a community nurse can initiate the conversation that an assisted living or independent living resident should consider moving to memory care. If memory care is full, communities will usually place an internal resident at the top of the wait list for a higher level of care.”


6/19: fat, fat, fat



6/19; And fast fat



6/19: : What we should.....

 

6/19: Oil movement



6/18:


6/18: Numbers
CFP badge holders increased 17.5% between 2008 and 2013, to almost 70,000, according to the CFP Board. That is even as the overall ranks of advisers shrank 11% to an estimated 302,270

6/18:
The Dangers of Ignoring Cataract Symptoms

 

Delaying Treatment of Advanced Forms of the Common Eye Disease Can Increase Risk of Permanent Blindness and Injury.

The American Academy of Ophthalmology urges seniors and their caregivers to be aware of the dangers of ignoring the symptoms of cataracts, a leading cause of visual impairment that will affect more than half of all Americans by the time they are 80 years old[1]. Delaying diagnosis and treatment of age-related cataracts can increase seniors' risk of permanent blindness and can lead to both physical and psychological damage.

Cataracts are caused by the clouding of the lens of the eye and are most common among older adults as the condition develops as the eye ages. Many seniors cope with cataracts — accepting vision loss as an inevitable part of the aging process rather than seeking medical treatment. Due to the incapacitation caused by blurred vision, leaving cataracts undiagnosed and untreated can lead to physical danger such as injuries from falls or running into unseen objects, as well as psychological harm like depression and social isolation. In addition, the longer advanced forms of cataracts are left untreated, the more difficult it can be to successfully repair the damage caused to the eye.

Adults age 65 and older should have regular eye exams to monitor for the development of cataracts, in addition to other common eye conditions and diseases, such as age-related macular degeneration (AMD) and glaucoma. People with diabetes, a family history of cataracts, and those who smoke tobacco are at an increased risk of developing cataracts. Common symptoms such as dull, blurry vision, colors appearing less vibrant, and halos around lights may begin to be noticeable as cataracts develop. This cataract simulator demonstrates how vision is affected by cataracts.

Cataracts are nearly always treatable with surgery, but it may not be necessary until performing daily activities becomes difficult. If daily life isn't disturbed, a change in a person's eyeglass prescription may be all that is necessary until visual impairment becomes more severe. If completing everyday tasks is challenging, cataract surgery should be discussed with an ophthalmologist — a medical doctor specializing in the diagnosis, medical and surgical treatment of eye diseases and conditions.

"Seniors who find themselves giving up normal tasks like reading, exercising or driving due to cataract symptoms should know that they do no not need to suffer in silence," said Rebecca Taylor, M.D., spokesperson for the American Academy of Ophthalmology. "Cataract surgery can help these individuals regain their sight and their independence. It is one of the most common and safest procedures performed in medicine, so seniors should not resist seeking help. Getting treatment can vastly improve your quality of life."

For people without regular access to eye care or for whom cost is a concern, EyeCare America, a public service program of the Foundation of the American Academy of Ophthalmology, offers eye exams and care at no out-of-pocket cost to qualifying seniors age 65 and older through its corps of nearly 7,000 volunteer ophthalmologists across the U.S. To learn more about EyeCare America or to find out if you or a loved one qualifies for the program, visit www.eyecareamerica.org. EyeCare America is co-sponsored by the Knights Templar Eye Foundation, Inc., with additional support from Alcon and Genentech.


6/17: Exit wounds

Federal Reserve officials have discussed whether regulators should impose exit fees on bond funds to avert a potential run by investors, underlining concern about the vulnerability of the $10tn corporate bond market.

Officials are concerned that bond funds are becoming “shadow banks”, because investors can withdraw their money on demand, even though the assets held by the funds can be hard to sell in a crisis.

US retail investors have pumped more than $1tn into bond funds since early 2009. This has created a boom environment for fixed income money managers, but raises the prospect of a massive disorganised flight of money out of the industry should interest rates rise sharply in the coming years.

Exit fees would seek to discourage retail investors from withdrawing funds, thereby making their claims less liquid and making a fire sale of the assets more unlikely.



6/16:
FAT

1. For U.S. businesses, the expense of overweight conditions has now outstripped any other employee health-related cost.

2. More than half of the U.S. population will be obese by 2030. Right now two thirds of the population is either overweight or obese.

3. Obesity leads to at least 60 related chronic diseases. Over 75 percent of hypertension is linked to obesity. Approximately two thirds of U.S. adults with type 2 diabetes are overweight or obese.



6/16
Have Assisted Living Facilities Forgotten About Dads?
With more men moving to assisted living communities, this gender gap can make things more challenging for adult children to find a community that caters to men’s interest and will make dad happy.

6/16:
Dying

The National Funeral Home Alliance has workshops and support for home funerals. Myfuneral.com (whose motto is “The Early Bird Gets the Worm, Remember, It’s Your Funeral, Enjoy It While You’re Still Alive”) lets you plan your own service with music, photos and readings. The National Funeral Directors Association website has suggestions based on a person’s profession or hobbies. Some employers have begun offering funeral planning services with “funeral concierges.”

6/16:



6/15:

How Many Fathers?

70.1 million

Estimated number of fathers across the nation in 2008, the most recent year for which data are available.
Source: Wave 2 Fertility Topical Module from the 2008 Survey of Income and Program Participation

24.7 million

Number of fathers who were part of married-couple families with children younger than 18 in 2013.

  • 21 percent were raising three or more children younger than 18 (among married-couple family households only).
  • 3 percent were a subfamily living in someone else's home.

Source: America's Families and Living Arrangements
<http://www.census.gov/hhes/families/data/cps2013FG.html> Tables FG1 and FG3

2.0 million

Number of single fathers in 2013; 17 percent of single parents were men

  • 9 percent were raising three or more children younger than 18.
  • About 44 percent were divorced, 33 percent were never married, 19 percent were separated, and 4.2 percent were widowed.
  • 39 percent had an annual family income of $50,000 or more.

Source: America's Families and Living Arrangements
< http://www.census.gov/hhes/families/data/cps2013FG.html> Table FG6



6/15:
So pure

the Pew Research Center finds Americans are divided by ideology and partisanship not only when they cast ballots, but also in choosing where to live, where to get their news and with whom to associate.

And peaceful coexistence is increasingly difficult.

According to the poll, the share of Americans who hold across-the-board conservative or liberal views has doubled in the last decade, from 10 percent in 2004 to 21 percent today. Only 39 percent of Americans have an even mix of liberal and conservative positions, down from 49 percent 10 years ago.

The numbers of ideological purists are larger among the politically engaged than the general public, suggesting the ideological stalemates that have become more common in Washington and statehouses around the country are likely to continue. A third of those who say they regularly vote in primaries have all-or-nothing ideological views, as do 41 percent who say they have donated money to a campaign.

And among partisans, ideological purity is now the standard. Majorities in both parties hold either uniformly liberal (on the Democratic side) or conservative (among the GOP) views.




6/15:

Fighting Caregiver Fatigue

By Kristine Dwyer, Staff Writer

Calvin’s day begins before 5 A.M. He knows another exhausting day lies ahead. He allows himself only enough time to have a cup of coffee and read the paper before lying back down by his wife’s side until 6 A.M. when the daily routine begins again; toileting, showering, dressing, wheelchair transfers, laundry, meal preparation, housekeeping, correspondence, paperwork, yard work, personal care. Soon its time for a doctor appointment; more wheelchair transfers, a trip to the pharmacy, grocery shopping, and then, finally, a return home to continue the care routine. No time to rest during the day. Bedtime planning takes an hour so he begins by 9 P.M. Calvin is physically and emotionally exhausted by 10 P.M. and falls asleep quickly. But he is awakened and out of bed at least three times during the night, tending to his wife’s needs, taking her to the toilet, or changing wet sheets. He attempts to return to bed and finds he cannot fall asleep. His mind is active, he feels anxious and has relentless thoughts that swirl in his mind. Daybreak seems to come too quickly and the schedule begins once again. Caregiving consumes 24 hours of the day and sleep deprivation and fatigue are the common denominators.

Caregiver fatigue cannot be understated. According to Webster’s dictionary, fatigue means “physical or mental exhaustion; weariness.”  Spouses, adult children and family members alike are susceptible to caregiver fatigue whether they are providing care twenty-four hours a day or caregiving from a distance. The sandwich generation faces particular challenges as they attempt to provide care to elderly parents while juggling the demands of young families and fulltime careers. Whether caregivers are losing actual sleep or simply wearing down from the constant worry and obligations, help is needed before feelings of resentment and guilt set in or the caregivers’ health is compromised.

Sleep is absolutely necessary to live; however, it is often a low priority in the whole caregiver scenario. As an adult, our bodies need six to nine hours of sleep and after age 65, we need six to eight hours per night. The American Association of Retired Persons (AARP) likens the need for caregivers to take care of themselves to performing regular maintenance on a car. Without regular attention, even the finest cars and caregivers will soon deteriorate. Rest must be a priority. The brain’s frontal lobe especially relies on sleep to effectively function. Without adequate rest, the brain’s ability to access memory, control speech and resolve problems, is greatly hampered.

Family caregivers truly are at risk of physical and emotional problems of their own while they are providing care to a loved one.  Fatigue contributes to an increased vulnerability to illness and it is prevalent in nearly all caregivers, yet unseen by most. The results of fatigue creep in over time, robbing the energy and focus of a caregiver. They often become so immersed in their role that they are unable to see their own health decline ‘right before their eyes’. According to one home care director, by the time many care providers realize they have become caregivers, they are already suffering from the symptoms of caregiver fatigue and are headed for burnout!

Lack of sleep can affect emotional as well as physical health. It can produce anxiety, anger, irritability, affect concentration and task performance, impair judgment to the point of danger (driving, using machinery and administering medications), and impact job performance. Sleep deprivation can lead to mental distress, memory loss, and depression. One male caregiver reported that the emotional fatigue was greater for him than the physical exhaustion. He explained that his wife’s behaviors (for example, false accusations, memory loss, hallucinations, and repetitive statements) often lead to daily arguments and disrupted routines that drained his emotions. He finally learned, over time, that he had to train himself to ‘pick his battles’ in order to avoid arguing as well as ignore some of his wife’s peculiar responses and redirect their daily conversations.

The physical consequences of sleep deprivation can include changes in appetite (weight gain or loss), frequent infections, addictions to alcohol or prescription drugs, problems with focusing, droopy eyelids and increased sensitivity to pain. In addition, lack of sleep can interfere with the body’s ability to regulate insulin production and the metabolism of sugar, putting caregivers at a higher risk of developing diabetes.

There are several ways that caregivers can take steps to fight fatigue and improve their physical and mental health.

1. Recognize that fatigue is present and that it is negatively affecting daily life.
2. Seek solutions to alleviate fatigue and sleep loss.
3. Carry out these solutions with the help of family, friends or hired services.

One caregiver in a support group shared that she actually used respite care in her home to get a much-needed nap three times a week. Another woman asked family members to stay overnight once or twice a week to allow her a full night of rest. An important consideration is for caregivers to step back, set personal limits and encourage the care receiver to perform some of their own self-care activities. As time goes on, it can be easy to over-help and invite greater dependence by the care receiver. Others found, when they finally accepted outside help, they experienced a strong sense of relief. Most caregivers wished they had taken the help much sooner. In some cases, when 24-hour care is no longer achievable, moving a loved one to an assisted living facility or to a nursing home is the best solution.

Caregivers, as well as care receivers, need a well-balanced diet and adequate hydration during the day to stave off fatigue and vulnerability to illness. Try to avoid large meals, high fat foods and the drinking of fluids before bedtime. Taking vitamins, eating proteins, grains and fresh produce and decreasing sugar, caffeine, and alcohol can also promote wellness. Caffeine is a mild stimulant and consuming it before bedtime can affect sleep. It is also a diuretic and will result in an increased need to urinate during the night. Alcohol is a depressant by classification; however, it does cause a person to sleep lighter and awaken more frequently.

Fortunately, there are many things that can help to decrease weariness and promote a good night’s sleep:

  • Regular exercise can have a positive effect on improving sleeping habits as well as decreasing stress, depression and anxiety.
  • Try to maintain a daily routine for naps and sleep so that the body can adjust to a rhythmic pattern.
  • Listen to positive sounds to promote relaxation before sleep. Music or nature sounds, such as waves, can be soothing to the soul. Avoid watching stimulating television shows right before bed as this may bring alarming news that unsettles our mood and disrupts our ability to rest
  • Meditation, prayer, and deep breathing exercises are also options to use for calming our minds and bodies so that we can sleep. These can also be done if one awakens during the night.
  • Try drinking warm milk, taking a relaxing bath, reading something pleasant and perhaps journal some thoughts prior to bedtime.
  • If insomnia is prevalent, discuss medication options with a physician.

Caregivers must take time for themselves and focus on their own needs (both physical and emotional) to avoid depleting their strength and energy. Keeping a daily log of sleeping habits can be a “wake up call” to caregivers and a helpful tool for the doctor to determine recommended solutions. Record the quality of sleep as well as the frequency. Record also the foods eaten and the use of medication, caffeine and alcohol. Note the activities engaged in during the day as well as the emotions. After several weeks, trends may appear that offer great insight into the toll of caregiving and the decisions that need to be made to decrease fatigue and increase energy.

After years of sleep deprivation, fatigue can become a chronic state. The body’s biological clocks are disrupted and symptoms of aging seem to accelerate.  One adult daughter, who cared for her mother daily for three years, felt she herself had aged ten years and gained over 50 pounds. Three months after her mother was able to move to an assisted living facility, the daughter appeared physically transformed and actually looked younger than before she became a caregiver. She attributed it to finally being able to sleep normally and to focus on her own daily care needs now that her mother’s needs were being met by a caring staff.

It can clearly be seen that fatigue and sleep deprivation strongly impact the caregiver’s ability to provide the best possible care to their loved one. Family caregivers are at risk and must open their eyes to their own needs and solutions that may be available to them. Asking for help is a sign of strength, not weakness! When someone else takes over the caregiving responsibilities, even for a short time, caregivers can step back, focus on themselves, rest and get recharged.


6/12:
15%

Max the Most of Your Tax Bracket

It’s no secret that the more income you have, the higher your taxes will be. What’s often overlooked though is that in our system, everyone pays the same tax as their income moves through the tax brackets. For example, in 2014 you, me and Warren Buffet will all pay the same 15% on our 30,000th dollar of taxable income. Granted, Warren may blow right through the tax brackets to the point he’s paying 39.6% on most of his income, but that doesn’t change the fact that the 30,000th dollar will still be taxed at 15%. What’s my point? You may or may not have room within the 15% tax bracket and that could affect how and when you withdraw money from your retirement accounts.

 

In 2014, the 15% tax bracket applies to taxable income between $18,151 and $73,800 for joint filers (the range is $9,076-$36,900 for single filers). Taxable income is your income after deductions and exemptions. So, after you subtract $20,300, the standard deduction and exemptions for a couple, they could have adjusted gross income of up to $94,100 and still remain in the 15% bracket. And there lies the potential opportunity.

 

You may assess the tax landscape and your personal plan and decide that withdrawing money from your IRA or old 401(k) and paying 15% is a relatively good deal. If that’s the case, the old rule of thumb to delay touching your tax-deferred assets may not hold true … at least for the portion you could withdraw and still remain in the 15% bracket. For example, if you are on track to finish the year with $53,800 of taxable income, you could voluntarily withdraw up to $20,000 from a traditional IRA or retirement plan and still only pay 15% tax on the withdrawal. 

 

On the other hand, you might review your finances and find that you’re on target to finish the year with $72,000 of taxable income — you’re creeping towards the top of the 15% bracket — but still have a vacation, car or some other major expense that you’ll need to withdraw funds to cover. In that situation, you might choose to use non-retirement or Roth money to avoid climbing into the 25% tax bracket.

 

On a cautionary note, if you’re currently below the maximum Social Security taxation limits, adding additional income could cause a larger portion of your benefit to be taxable.

 

In any case, the key is to understand where you’re at in the tax bracket structure and recognize how it might influence your decision with respect to tapping your retirement funds.  This is something you or you and your team of advisors should be aware of and take into consideration as you map out your plan for how you’ll use your money

6/12: Just for fun?

1.It's possible for your body to survive without a surprisingly
large fraction of its internal organs. Even if you lose your
stomach, your spleen, 75% of your liver, 80% of your intestines,
one kidney, one lung, and virtually every organ from your
pelvic and groin area, you wouldn't be very healthy, but you would live.
 
2. During your lifetime you will produce enough saliva to fill
two swimming pools. Actually, saliva is more important than
you realize. If your saliva cannot dissolve something,
you cannot taste it.
 
3. The largest cell in the human body is the female egg and
the smallest is the male sperm. The egg is actually the only
cell in the body that is visible by the naked eye.
 
4. The strongest muscle in the human body is the tongue
and the hardest bone is the jawbone.
 
5. Human feet have 52 bones, accounting for one quarter of
all the human body's bones.
 
6. Feet have 500,000 sweat glands and can produce more
than a pint of sweat a day.
 
7. The acid in your stomach is strong enough to dissolve
razor blades. The reason it doesn't eat away at your
stomach is that the cells of your stomach wall renew
themselves so frequently that you get a new stomach
lining every three to four days.
 
8. The human lungs contain approximately 2,400 kilometers
(1,500 mi) of airways and 300 to 500 million hollow cavities,
having a total surface area of about 70 square meters,
roughly the same area as one side of a tennis court.
Furthermore, if all of the capillaries that surround the
lung cavities were unwound and laid end to end, they
would extend for about 992 kilometers. Also, your left
lung is smaller than your right lung to make room for
your heart.
 
9. Sneezes regularly exceed 100 mph, while coughs clock
in at about 60 mph.
 
10. Your body gives off enough heat in 30 minutes to
bring half a gallon of water to a boil.
 
11. Your body has enough iron in it to make a
nail 3 inches long.
 
12. Earwax production is necessary for good ear health.
It protects the delicate inner ear from bacteria, fungus,
dirt and even insects. It also cleans and lubricates the
ear canal.
 
13. Everyone has a unique smell except for identical twins
who smell the same.
 
14. Your teeth start growing 6 months before you are born.
This is why one out of every 2,000 newborn infants has a
tooth when they are born
 
15. A baby's head is one-quarter of its total length, but by
the age of 25 will only be one-eighth of its total length.
This is because people's heads grow at a much slower rate
than the rest of their bodies.
 
16. Babies are born with 300 bones, but by adulthood the
number is reduced to 206. Some of the bones, like skull
bones, get fused into each other bringing down the
total number.
 
17. It's not possible to tickle yourself. This is because when
you attempt to tickle yourself you are totally aware of
the exact time and manner in which the tickling will occur,
unlike when someone else tickles you.
 
18. Less than one third of the human race has 20-20 vision.
This means that two out of three people cannot see perfectly.
 
19. Your nose can remember 50,000 different scents.
But if you are a woman, you are a better smeller than
men and will remain a better smeller throughout your
life.
 
20. The human body is estimated to have 60,000 miles
of blood vessels.
 
21. The three things pregnant women dream most of
during their first trimester are frogs, worms and potted
plants. Scientists have no idea why this is so, but attribute
it to the growing imbalance of hormones in the body
during pregnancy.
 
22. The life span of a human hair is 3 to 7 years on average.
Every day the average person loses 60-100 strands of hair.
But don't worry, you must lose over 50% of your scalp hairs
before it is apparent to anyone.
 
23. The human brain cell can hold 5 times as much
information as an encyclopedia. Your brain uses 20% of
the oxygen that enters your bloodstream and is itself
made up of 80% water. Though it interprets pain signals
from the rest of the body, the brain itself cannot feel pain.
 
24. The tooth is the only part of the human body that
can't repair itself.
 
25. Your eyes are always the same size from birth but your
nose and ears never stop growing.
 
26. By 60 years of age 60% of men and 40% of women will
snore.
 
27. We are about 1 cm taller in the morning than in the evening,
because during normal activities during the day the
cartilage in our knees and other areas slowly compress.
 
28. The brain operates on the same amount of power as
10-watt light bulb, even while you are sleeping.
In fact, the brain is much more active at night than during
the day.
 
29. Nerve impulses to and from the brain travel as fast as
170 miles per hour. Neurons continue to grow throughout
human life. Information travels at different speeds within
different types of neurons.
 
30. It is a fact that people who dream more often and more
vividly on an average have a higher intelligence quotient.
 
31. The fastest growing nail is on the middle finger.
 
32. Facial hair grows faster than any other hair on the body.
This is true for men as well as women.
 
33. There are as many hairs per square inch on your body as
a chimpanzee.
 
34. A human fetus acquires fingerprints at the age of
three months.
 
35. By the age of 60 most people will have lost about half
their taste buds.
 
36. About 32 million bacteria call every inch of your skin home.
But don't worry, a majority of these are harmless or even
helpful bacteria.
 
37. The colder the room you sleep in, the higher the chances
are that you'll have a bad dream.
 
38. Human lips have a reddish color because of the great
concentration of tiny capillaries just below the skin.
 
39. Three hundred million cells die in the human body every
minute.
 
40. Like fingerprints, every individual has a unique tongue
print that can be used for identification.
 
41. A human head remains conscious for about 15 to 20
seconds after it has been decapitated.
 
42. It takes 17 muscles to smile and 43 to frown.
 
43. Humans can make do longer without food than sleep.
Provided there is water, the average human could survive
a month to two months without food depending on their
body fat and other factors. Sleep deprived people,
however, start experiencing radical personality and psychological
changes after only a few sleepless days. The longest recorded
time anyone has ever gone without sleep is 11 days, at the
end of which the experimenter was awake, but stumbled over
words, hallucinated and frequently forgot what he was doing.
 
44. The most common blood type in the world is Type O.
The rarest blood type, A-H or Bombay blood, due to the
location of its discovery, has been found in less than
hundred people since it was discovered.
 
45. Every human spent about half an hour after being conceived,
as a single cell. Shortly afterward the cells begin rapidly
dividing and begin forming the components of a tiny embryo.
 
46. Right-handed people live, on average, nine years longer
than left-handed people do.
 
47. Your ears secrete more earwax when you are afraid than
when you aren't.
 
48. Koalas and primates are the only animals with unique
fingerprints.
 
49. Humans are the only animals to produce emotional tears.
 
50. The human heart creates enough pressure to squirt
blood 30 feet in the air.


6/12:  Up and down after 1994

Cycles of bubble and crash have always existed, but in the 20 years after 1994, they became more severe and longer lasting than in the previous 20 years. For example, the bear markets following the Nifty Fifty crash in the mid-70s and Black Monday of 1987 had an average loss of about 40 percent and lasted 240 days; while the dot-com and credit crises lost on average about 52 percent and lasted over 430 days. Moreover, if you rank the largest one-day percentage moves in the market over this 40-year period, 76 percent of the largest gains and losses occurred after 1994.

6/12:



6/12:


There are about 1.5 million fewer construction jobs now than at the end of 2007, and 1.6 million fewer manufacturing jobs. Those two sectors account for nearly half the 7.3 million jobs lost in four of the five age categories. The rest of the lost jobs are spread across sectors such as retail, information, finance and government.

Men are still down about 1 million jobs from 2007 levels, while women are ahead by about 540,000. That’s probably because more women work in stable fields such as healthcare and education, whereas men tend to work in more-cyclical businesses. Women have also been earning more bachelor's and graduate degrees, giving them better qualifications



6/9: Online courses

MOOCs, and all online courses, are a really poor delivery system of education and especially critical thinking. Critical thinking doesn’t happen in a vacuum with some lone soul sitting at the computer and then answering a few questions afterward. Retention rate? Not great. Isolation factor? Huge. Deep understanding of the material? It could be measured in inches, never yards.

6/9: Death

Flight 370 disappeared Saturday with 239 people aboard. Using annual averages and March 14, 10,500 people have likely died from malaria since then. Four thousand have died from traumatic injuries, and 16,500 from tuberculosis. In America alone, 9,900 people have died of heart disease since Saturday. Just under 600 died in car accidents. Two hundred and fifty were likely murdered.

6/8:

SAGE - A Test to Measure Thinking Abilities


6/8: 401k fees

average total plan fees for large 401(k) plans with more than $1 billion in total assets are about 0.34% of assets annually, or $340 a year for an account with a $100,000 balance. However, at smaller plans with $1 million to $100 million in assets, the average is 1.16%, or $1,160 a year. Total plan fees include various administrative costs as well as the expenses built into the underlying investment choices.

the average expense ratio for an index mutual fund is 0.75%, or $7.50 in annual fees for every $1,000 invested, compared with 1.25% for actively managed mutual funds. ETFs are even cheaper, with an average expense ratio of 0.59%.

The difference in the average expense ratio of actively managed mutual funds and ETFs translates into an extra $8,711 in fees and forgone earnings over 30 years, assuming an initial investment of $10,000 and a 6% annual rate of return,


Almost half of 401(k) plans now have an automatic-enrollment feature, according to the Plan Sponsor Council of America. Some employers automatically escalate workers' contributions each year. As of 2012, nearly 40% of employer plans with an automatic enrollment feature included an auto-escalation feature, said the council, while about 18% of plans included an option for employees to opt in for auto-escalation. 6/8: Annuities with LTC riders

"Your client purchases an annuity product with a LTC rider that will begin to make (tax-free) payouts once your client requires care. Once the annuity funds run out, assuming the client still requires LTC services, the LTC rider activates and begins making tax-free payments. If the client never requires long-term care, the product simply provides annuity payouts according to the terms of the annuity portion of the contract, which are taxed under the usual rules governing annuity taxation."

6/5:

 

Company and Product

Maximum Distribution

Cash Value
at Age 65

Death Benefit
at Age 65

1

Penn Mutual: Accumulation Builder Choice IUL

$160,752

$1,690,159

$2,092,986

2

Minnesota Life: Eclipse IUL

$155,156

$1,669,588

$2,047,886

3

Pacific Life: Pacific Indexed Performer LT

$149,861

$1,586,293

$2,037,632

4

National Life: NL FlexLife

$149,199

$1,640,734

$2,052,366

5

North American: Builder IUL

$148,368

$1,773,439

$2,214,745

6

ING: ING IUL-Global Choice

$142,641

$1,522,046

$2,009,046

7

Lincoln Financial: LifeReserve IUL Accumulator

$138,493

$1,519,747

$1,970,712

8

Nationwide: YourLife Indexed UL

$135,912

$1,375,127

$1,860,490

9

Pacific Life: Pacific Prime IUL

$131,097

$1,412,962

$1,863,716

10

ING: ING IUL Protector

$127,583

$1,425,857

$1,934,857

11

American General: Elite Index II

$125,788

$1,437,424

$1,811,178

12

John Hancock: Accumulation IUL 14

$125,380

$1,382,320

$1,827,634

13

Prudential: Index Advantage UL

$124,658

$1,407,762

$1,781,175

14

American General: Elite Global Plus II

$123,990

$1,446,133

$1,898,076

15

Transamerica: Freedom Indexed UL III

$121,036

$1,391,760

$1,783,760

16

Aviva: Lifetime Builder III

$120,594

$1,395,970

$1,778,027

17

AXA: BrightLife Grow

$119,788

$1,347,821

$1,722,526

18

Allianz: Life Pro+

$104,927

$1,256,258

$1,624,286

Male, 35, Best Tobacco, Pay to Age 65, Minimum Non-Modified Endowment Contract Death Benefit; Increasing death benefit switching to level at age 65; fixed annual premium of $15,000 to age 65; 20 year annual distributions starting at age 65; fixed loans (after basis) targeting $10,000 cash surrender value at age 100; Maximum illustrated rate - Annual S&P 500 ® Point-to-Point Index Account option (where available)¹


6/5:



6/5:




6/5:
Rebalancing:

there were rolling periods of time in which not rebalancing produced better results (highlighted in yellow). The most distinct time periods in which we saw an advantage for not rebalancing were the three-year rolling periods from 2003-05, 2004-06 and 2005-07, as well as the five-year rolling periods from 2002-06 and 2003-07. As shown below in Table 3, these rolling time periods can be characterized as periods in which nearly all of the 12 asset classes had positive returns each year (shown below in yellow highlighting for the years 2003-07).

Rebalancing did not add value when asset classes were generating positive returns year-after-year.  Let winners run – don’t rebalance. The obvious challenge is knowing ahead of time that winners will stay winners. Moreover, if we let runners “run,” the portfolio becomes disproportionately allocated in those winning asset classes – and when they get clobbered it’s painful. Choosing whether or not to rebalance essentially becomes a market-timing decision.

Rebalancing worked best when the time period was characterized by losses and gains among the ingredients in the portfolio. That is why we saw a steady rebalancing “premium” over longer time periods (as shown in Table 2). It is unusual for asset classes (particularly equities and diversifiers) to generate consistent positive year-to-year returns for long periods of time.

Table 3. Annual performance of 12 asset classes (using ETFs)

Year

US Large Cap

US Midcap

US Small Cap

Dev Non-US Equity

Emerging Equity

Real Estate

Natural Resources

Commodities

US Bonds

TIPS

Non-US Bonds

Cash

1998

28.67

16.90

4.76

19.60

-18.00

-16.25

-14.61

-27.98

8.56

3.74

17.66

5.34

1999

20.37

15.29

3.35

26.55

61.81

-3.95

26.63

42.81

-0.94

2.19

-6.84

5.01

2000

-9.71

17.37

21.88

-14.46

-27.45

26.46

15.24

24.43

11.49

12.95

-3.29

6.29

2001

-11.81

-0.90

13.70

-21.71

-2.73

12.45

-16.00

-8.68

8.31

7.68

-4.43

4.16

2002

-21.55

-14.37

-14.20

-15.43

-7.29

3.85

-14.37

24.56

10.12

16.33

21.33

1.65

2003

28.16

35.14

37.19

39.68

57.88

35.77

34.73

25.84

3.98

8.18

17.64

0.90

2004

10.69

15.77

23.55

18.94

26.31

30.87

24.69

37.15

4.22

8.30

11.53

1.11

2005

4.86

12.50

6.28

13.32

32.25

11.64

35.63

30.87

2.30

2.59

-9.25

3.01

2006

15.80

9.99

19.23

25.88

29.20

33.49

16.17

16.02

4.21

0.18

6.78

4.88

2007

5.12

7.12

-6.92

9.89

37.32

-16.42

33.71

31.50

6.84

11.95

10.41

5.14

2008

-36.70

-36.34

-32.33

-41.02

-52.29

-37.00

-42.89

-31.74

8.49

-0.55

4.21

2.77

2009

26.31

37.49

30.98

26.84

75.29

30.07

37.07

16.19

3.70

8.94

5.44

0.53

2010

15.04

26.26

25.11

8.25

19.44

28.42

23.35

11.90

6.25

6.13

3.82

0.06

2011

1.89

-2.16

-4.20

-12.26

-18.74

8.56

-7.80

-2.57

7.91

13.27

3.98

0.05

2012

16.02

17.82

18.97

18.82

19.20

17.62

2.02

3.50

3.92

6.39

5.86

0.04

2013

32.32

33.08

36.57

21.38

-4.92

2.31

15.54

-7.64

-2.10

-8.50

-3.56

0.02


6/2:
 



6/1:
Not very good at all

In the 2001 issue of the International Journal of Forecasting, an economist from the International Monetary Fund, Prakash Loungani, published a survey of the accuracy of economic forecasts throughout the 1990s. He reached two conclusions. The first was that forecasts are all much the same. There was little to choose between those produced by the IMF and the World Bank, and those from private sector forecasters. The second conclusion was that the predictive record of economists was terrible. Loungani wrote: “The record of failure to predict recessions is virtually unblemished.”

What about the great recession? The record of failure remains impressive. There were 77 countries under consideration, and 49 of them were in recession in 2009. Economists – as reflected in the averages published in a report called Consensus Forecasts – had not called a single one of these recessions by April 2008.

Why are forecasts so poor? The chief explanation is that the economy is complicated and we don’t understand it well enough to make forecasts. We don’t even fully understand recent economic history.

A second explanation for forecasting’s fallibility is that there is little incentive to do better. The kind of institutional chief economist whose pronouncement makes it into Consensus Forecasts will stick to the middle of the road. Most countries, most of the time, are not in recession, so a safe strategy is never to forecast one.


Intruder Alert!!!!
6/1:
 

6/1: IPOs



6/1:

SENIOR DISCOUNTS

Keep this list and send a copy to your senior friends and relatives.


 


YOU must ASK for your discount!

RESTAURANTS:

Applebee's:             15% off with Golden Apple Card (60+)

Arby's:                      10% off (55+)
Ben & Jerry's:         10% off (60+)

Bennigan's:             Discount varies by location (60+)
Bob's Big Boy:        Discount varies by location (60+)

Boston Market:       10% off (65+)

Burger King:            10% off (60+)
Chick-Fil-A:              10% off or free small drink or coffee (55+)
Chili's:                       10% off (55+)

CiCi's Pizza:            10% off (60+)
Denny's:                   10% off, 20% off for AARP members (55 +)
Dunkin' Donuts:       10% off or free coffee (55+)
Einstein's Bagels:   10% off baker's dozen of bagels (60+)
Fuddrucker's:          10% off any senior platter ( 55+)
Gatti's Pizza:           10% off (60+)

Golden Corral:        10% off (60+)
Hardee's:                 $0.33 beverages everyday (65+)

Jack in the Box:       Up to 20% off (55+)
KFC:                            Free small drink with any meal (55+)
Krispy Kreme:          10% off (50+)
Long John Silver:   Various discounts at locations (55+)
McDonald's:              Discounts on coffee everyday (55+)
Mrs. Fields:                10% off at participating locations (60+)

Shoney's:                 10% off
Sonic:                        10% off or free beverage (60+)
Steak 'n Shake:       10% off every Monday & Tuesday (50+)

Subway:                   10% off (60+)
Sweet Tomatoes:   10% off (62+)
Taco Bell :                  5% off; free beverages for seniors (65+)
TCBY:                        10% off (55+)
Tea Room Cafe:       10% off (50+)
Village Inn:                 10% off (60+)
Waffle House:            10% off every Monday (60+)
Wendy's:                     10% off (55 +)
Whataburger:             10% off (62+)
White Castle :            10% off (62+)

 

RETAIL & APPAREL:
Banana Republic:    30% off (50+)
Bealls:                   20% off first Tuesday of each month (50+)
Belk's:                   15% off first Tuesday of every month (55+)
Big Lots:                30% off
Bon-Ton Dept        15 % off on senior discount days (55 +)
C.J. Banks:           10% off every Wednesday (50+)
Clarks :                 10% off (62+)

Dress Barn:           20% off (55+)
Goodwill:              10% off one day a week (date varies by location)
Hallmark:              10% off one day a week (date varies by location)
Kmart:                  40% off (Wednesdays only) (50+)
Kohl's:                  15% off (60+)

Modell's Sporting Goods:  30% off

Rite Aid:               10% off on Tuesdays & 10% off prescriptions
Ross Stores:        10% off every Tuesday (55+)
The Salvation Army Thrift Stores:  Up to 50% off (55+)
Stein Mart:           20% off red dot/clearance items first Monday of every month (55 +)

GROCERY:
Albertson's:                       10% off first Wednesday of each month (55 +)
American Discount Stores: 10% off every Monday (50 +)
Compare Foods Supermarket:  10% off every Wednesday (60+)
DeCicco Family Markets:      5% off every Wednesday (60+)
Food Lion:                          60% off every Monday (60+)
Fry's Supermarket:            Free Fry's VIP Club Membership & 10% off every Monday (55 +)

Great Valu Food Store:      5% off every Tuesday (60+)
Gristedes Supermarket:     10% off every Tuesday (60+)
Harris Teeter:                    5% off every Tuesday (60+)
Hy-Vee:                            5% off one day a week (date varies by location)
Kroger:                            10% off (date varies by location)
Morton Williams Supermarket:   5% off every Tuesday (60+)
The Plant Shed:               10% off every Tuesday (50 +)
Publix:                             15% off every Wednesday ( 55 +)
Rogers  Markelace:          5% off every Thursday (60+)
Uncle Guiseppe's Marketplace:  15% off (62+)

TRAVEL:
Airlines:
Alaska Airlines:               50% off (65+)
American Airlines:           Various discounts for 50% off non-peak periods (Tuesdays - Thursdays) (62+) and up (call before booking for discount)
Continental Airlines:        No initiation fee for Continental Presidents Club & special fares for select destinations
Southwest Airlines:          Various discounts for ages 65 and up (call before booking for discount)
United Airlines:                 Various discounts for ages 65 and up (call before booking for discount)
U.S. Airways:                    Various discounts for ages 65 and up (call before booking for discount)


Rail:
  Amtrak:                  15% off (62+)
Bus:  Greyhound:           15% off (62+)  Trailways Transportation System: various discounts for ages 50+

Car Rental:
Alamo Car Rental:           Up to 25% off for AARP members
Avis:                               Up to 25% off for AARP members
Budget Rental Cars:       40% off; up to 50% off for AARP members (50+)
Dollar Rent-A-Car:         10% off (50+)

Enterprise Rent-A-Car:  5% off for AARP members

Hertz:                            Up to 25% off for AARP members
National Rent-A-Car:      Up to 30% off for AARP members

 

Overnight Accommodations:
Holiday Inn:                     20-40% off depending on location (62+)
Best Western:                40% off (55+)
Cambria Suites:            20%-30% off (60+)
Waldorf Astoria - NYC: $5,000 off nightly rate for Presidential Suite (55 +)
Clarion Motels:              20%-30% off (60+)
Comfort Inn:                   20%-30% off (60+)
Comfort Suites:             20%-30% off (60+)
Econo Lodge:               40% off (60+)
Hampton Inns & Suites: 40% off when booked 72 hours in advance
Hyatt Hotels:                  25%-50% off (62+)
InterContinental Hotels Group:  Various discounts at all hotels (65+)
Mainstay Suites:          10% off with Mature Traveler's Discount (50+); 20%-30% off (60+)
Marriott Hotels:             25% off (62+)
Motel 6:                         Stay Free Sunday nights (60+)
Myrtle Beach Resort:   30% off (55 +)
Quality Inn:                    40%-50% off (60+)
Rodeway Inn:                20%-30% off (60+)
Sleep Inn:                      40% off (60+)

 

ACTIVITIES & ENTERTAINMENT:
AMC Theaters:                          Up to 30% off (55 +)
Bally Total Fitness:                    $100 off memberships (62+)
Busch Gardens Tampa , FL :     $13 off one-day tickets (50 +)
Carmike Cinemas:                    35% off (65+)
Cinemark/Century Theaters:    Up to 35% off
Massage Envy - NYC:               20% off all "Happy Endings" (62 +)
U.S. National Parks:                  $10 lifetime pass; 50% off additional services including camping (62+)
Regal Cinemas:                         50% off Ripley's Believe it or Not: @ off one-day ticket (55 +)
SeaWorld, Orlando , FL :          $3 off one-day tickets (50 +)

 

CELL PHONE DISCOUNTS:
AT&T:                          Special Senior Nation 200 Plan $19.99/month (65+)
Jitterbug:                     $10/month cell phone service (50 +)
Verizon Wireless:       Verizon Nationwide 65 Plus Plan $29.99/month (65+).

MISCELLANEOUS:
Great Clips:      $8 off hair cuts (60+)
Supercuts:        $8 off haircuts (60+)



6/1:
 



6/1:

Study Finds Inconsistent Broker-Dealer Disclosure Practices
"A survey by an association of North American state and provincial securities regulators that found numerous inconsistencies in how broker-dealers disclose fees to customers adds weight to calls from federal regulators for service providers to furnish fee guides to employer retirement plan sponsors.... The survey identified: disclosures hidden in small print, embedded in lengthy account-opening documents or using varied terminology that does not define the service provided; differences in timing, placement, format, length and location of fee disclosures; and questionable practices regarding broker-dealer fee charges and markups."

6/1: Planning= 

Among Americans 40 to 54 years old, only 9 percent have done “a great deal” or “quite a bit” of planning, compared with 19 percent of people over 65.
6/1:

The World's Largest Hedge Funds Control 90% Of Industry Assets (Reuters)

The largest hedge fund managers in the world, each with over $1 billion in assets under management (AUM) control 90% of industry assets. These 505 hedge fund managers manage $2.39 trillion in assets. "The increase in hedge fund assets is being driven by allocations from the largest investors in hedge funds, those which currently allocate more than $1 billion to the asset class.

6/1: Home care

People ages 41 to 64 with severe brain injuries were only about half as likely to enter a nursing home if they had quick access to home health care benefits.

Quick access to home health care cut the risk that people ages 55 to 64 with physical disabilities would enter a nursing home about 75 percent.

Medicaid spent more on home health care for the people who got quick access to home health care benefits, but reductions in spending on nursing home care offset the increase in home health care spending, and total Medicaid spending for the quick-access group was comparable to the spending for the people who faced long delays


6/1:
A Third of the World Is Now Obese or Overweight

A new report by researchers at the Institute for Health Metrics and Evaluation finds that some 2.1 billion people are obese or overweight, but it's not an evenly distributed health problem: adult men are more overweight in the developed world, but it's women who are more overweight in developing countries
Almost 30 percent of the earth’s population is obese or overweight, estimating that this affects about 2.1 billion people

The prevalence of overweight and obese children and adolescents worldwide has increased by nearly 50 percent since 1980, the study says, and no country on Earth has successfully reduced obesity rates in the last 33 years.

Childhood obesity rates are notably higher in the Middle East and North Africa, particularly among girls





5/29:
Cough
April was the first time the monthly average of carbon dioxide in the atmosphere passed 400 parts per million, a threshold that the U.N. says has "symbolic and scientific significance"

5/29:
Medicaid
  • One-third of elderly Medicaid enrollees used long-term care services, but they accounted for 86 percent of all Medicaid spending on the elderly.
  • Fifteen percent of beneficiaries classified as disabled used long-term care services, but they accounted for 58 percent of all Medicaid spending on the disabled

In general, an individual can keep only up to $2,000 to $3,000 worth of assets, while a spouse’s protected assets are one-half of the couple’s countable assets up to the maximum, which is indexed annually. In many states the 2013 maximum was $115,920.

In addition, a monthly income allowance is permitted for people who apply for Medicaid and the amount of income varies by state. Spouses are generally allowed to keep their income, and if it falls below a specific amount, which varies by state and is indexed annually, income from the disabled spouse (i.e., Medicaid participant) can be directed to the community spouse (i.e., income from the spouse on Medicaid can be directed towards the spouse not on Medicaid.).

The Medicaid program was intended for poor people, not people who are poor on paper. Many long-term care Medicaid beneficiaries are in the middle- to upper-income classes and, without assistance to obtain eligibility, they would never be in the program. This slippery means of qualifying is not illegal, but one can see from the numbers that it has caused overuse of the program with the relatively few people accessing it for long-term care aid responsible for spending a disproportionate share of public monies for their long-term care expenses. 

The federal government has tried in the past to tighten up some of the vague language through which people can easily qualify. Each federal move has been countered by an analysis of the law and the identification of a new loophole, launching another round of what is referred to as “Medicaid planning.” The government then responds with more regulation, and so on. It’s like a chess match without a timer.

The Deficit Reduction Act of 2005 was the boldest move by the federal government to date in this ongoing battle to preserve Medicaid for the truly needy. In addition to reauthorizing the Long-Term Care Partnership Program, the Deficit Reduction Act made several changes to Medicaid eligibility:

  • The look-back period on a Medicaid application is now five years for everything. It used to be five years only for transfers involving trusts, and three years for all other transfers; now, Medicaid will be checking your client’s finances a full five years from the date of application.
  • The penalty period assessed for individuals deemed ineligible for Medicaid benefits because of a transfer within the look-back period now begins with the date of Medicaid application. Previously, the ineligibility period started on the date of transfer. That’s a significant difference. Now every financial transaction made in the previous five years is scrutinized and any penalties are assessed according to the date of application. This change dealt a substantial blow to some Medicaid planning strategies for those trying to qualify as “poor on paper.”
  • A cap was placed on the amount of home equity allowed when determining Medicaid eligibility. The cap is currently $536,000, although states can opt for $802,000, providing they apply for permission from the Department of Health and Human Services. The majority of states have used the $500,000 limit (as indexed for inflation) as they do battle with their own Medicaid budgets. Some states (Idaho and Nebraska, to name two) have chosen the $750,000 limit (as indexed for inflation), probably in recognition of the number of farms in those states whose equity value can be calculated on the high side. This rule was enacted to counteract the Medicaid planning technique of putting the majority of assets into a protected asset — the home — from which money could be easily accessed via a home equity line of credit. This was a less risky move than transferring assets out of one’s name.
  • Any annuity that has a deferred or balloon payment is counted as an asset. Or, if it has gone into an irrevocable payment mode, the annuity will be considered an asset transferred at less than fair market value and will be subject to a qualifying penalty period. Further, a Medicaid applicant must name the state as remainder beneficiary on all annuities or as second remainder beneficiary behind a spouse, disabled child, or minor child under the age of 21.

Following is a listing of what one can keep today and still qualify for Medicaid: 
  • An individual’s principal residence if home equity is below the threshold of $536,000 in 2013 (or $802,000 in some states); it can be above these limits if a spouse or child (under age 21 or blind and disabled) lives in it. The home equity limit is indexed for inflation.
  • An automobile
  • Personal property up to reasonable limits
  • Jewelry (such as an engagement or wedding ring)
  • A small amount of life insurance cash value
  • Burial plots
  • If married, the healthy spouse can keep (in 2013) 50 percent of total assets up to $115,920
  • Long-term care partnership policy proceeds

The obviously vulnerable assets here are the liquid ones: cash, checking and savings accounts, investments, stocks, individual retirement accounts, pensions, etc. These assets would have to be transferred out five years ahead of filing for Medicaid assistance.


First, the asset transfer must be irrevocable: in short, you cannot access that money. You can, however, transfer it to a child and have your bills directed to them to pay. But be careful. One agent told me that he knew a couple who transferred all their liquid money away to their son, only to see him divorced a couple of years later and half of their assets going to their former daughter-in-law.

Second, a Medicaid recipient may not be able to go to the facility that they want for long-term care. Medicaid works only with providers who accept Medicaid reimbursement (the lowest of any third-party payers), which could limit one’s choice. Third, a Medicaid recipient will likely have roommates. People whom you might never have associated with in your former life are now your companions for the rest of it.

Recent changes to the Medicaid program have made it more attractive for those trying to qualify for Medicaid assistance. In the past, one of the biggest drawbacks to qualifying for the Medicaid program for long-term care assistance is that Medicaid would traditionally reimburse only for nursing home care, the least desirable (to consumers) of all long-term care services. But in the last decade, Medicaid has been mandated to cover the more desirable benefit of home care. This has gained the interest of more consumers who in the past would have dismissed Medicaid as a financing option.

The home care movement in Medicaid stems from the 1999 U.S. Supreme Court ruling on Olmstead v. L.C., which held that the unnecessary institutionalization of people with disabilities is a form of discrimination. Thus began a steady shift of Medicaid beneficiaries from nursing homes to their own homes. Advocates say it saves Medicaid money because home care is less expensive. Opponents of this trend state that it merely extends the length of a Medicaid claim because you are giving people something they want — home care — vs. a nursing home, and thus are inviting earlier application. States simply see larger Medicaid expenditures every year.

Medicaid accounts for 40 percent of all long-term care spending. And because this serves only a small number of beneficiaries overall, look for states to consider making eligibility for reimbursement of these expenses much harder for potential applicants

5/29:
The Alaska Supreme Court ruled unmarried domestic partners have a right to some retirement benefits via a qualified domestic relations order (QDRO).

5/29:
How many days old are you?

5/29: Interesting
  • Term Insurance With A Disability Rider!!!
  • Issue Ages 18-50
  • Amounts from $25,000 to $999,999
  • 15-30 year Term
 
5/28: Fascinating

click on a city, country. etc and go on an unguided tour........

 


                     
•  
Masai-Mar Kenya   •   Plosky Tolbachik Volcano , Russia   •   Mont Saint-Michel Abbay, France   •   Acropolis, Athens, Greece   •   Ay-Petri, Ukraine   •   Angel falls, Venezuela   •   Angkor Wat, Cambodia   •   South Georgia Island, British overseas territory   •   Buenos Aires, Argentina   •   Athens, Greece   •   Bagan, Myanmar   •   Bangkok, Thailand   •   Barcelona, Spain   •   Moscow Kremlin, Russia   •   Rio-de-Janeiro, Brazil   •   Bryce Canyon, USA   •   Cancun, Mexico   •   Cape Good Hope, South Africa   •   Chicago, Illinois, USA   •   Corcovado, Brazil   •   Church of the Intercession on the Nerl, Russia   •   Venezuela, Surroundings of Angel Falls, Venezuela   •   Manhattan, New York, USA   •   The Caribbean, Dominican Republic   •   Paris, France   •   EuroMaidan, Ukraine   •   Everest, Nepal   •   Fjallabak Nature Reserve, Iceland   •   Lake Bogoria, Kenya   •   Pereslavl-Zalesskiy, Russia   •   Khabarovsk, Komsomolsk-on-Amur, Russia   •   Usti nad Labem, Czech Republic   •   Flooding, Germany   •   Florence, Italy   •   Forest falls, Brazil   •   Fussen Town, Neuschwanstein and Hohenschwangau Castles, Germany   •   Moscow Region, Russia   •   Golden Gate Bridge, USA   •   Grand Canyon, USA   •   Manhattan, New York, USA   •   Moscow, Russia   •   Egyptian Pyramids, Egypt   •   The Great Wall of China, China   •   Cape-Town, South Africa   •   Halong Bay, Vietnam   •   Oahu, Hawaii, USA   •   Manhattan, New York, USA   •   Langisjor and Veidivotn, Iceland   •   Hollywood, California, USA   •   Hong Kong, China   •   Jokulsarlon Ice Lagoon, Iceland   •   Iguasu Falls, Argentina   •   Iceland, Iceland   •  Kalyan Minaret, Bukhara, Uzbekistan   •   Kazan, Russia   •   Kiev, Ukraine   •   Kuala-Lumpur, Malaysia   •   Lake Powell, USA   •   Las Vegas, USA   •   Pisa, Tuscany, Italy   •   Los Angeles, California, USA   •   Las Vegas, Nevada, USA   •   Machu Picchu, Peru   •   Matterhorn-Cervino, Switzerland   •   Tikal, Guatemala   •   Mexico, Mexico   •   Miami, USA   •   Millennium UN Plaza Hotel, New York, USA   •   MKAD, Moscow, Russia   •   Easter-Island, Chile   •   Moeraki Boulders, New Zealand   •   Mono Lake, California, USA   •   Kotor Bay, Montenegro   •   Moscow, Kremlin, Russia   •   Moscow City, Russia   •   Moscow City, Russia   •   Moscow, Russia   •   Moscow Kremlin, Russia   •   Moscow, MSU, Russia   •   Moscow, Russia   •   Moscow, Russia   •   Krokus Expo Center, Moscow, Russia   •   City of Capitals, Russia   •   Istanbul, Turkey   •   Nazca Lines, Peru   •   Neuschwanstein Castle, Germany   •   Millennium UN Plaza Hotel, New York, USA   •  Millennium UN Plaza Hotel, New York, USA   •   Manhattan, New York, USA   •   Fiordland, New Zealand   •   New Jerusalem Monastery, Russia   •   Niagara Falls, USA   •   Norwegian Fjords, Norway   •   Novodevichy Convent. Moscow, Russia   •   Grimsvotn, Iceland   •   Orda Cave, Russia   •   Palm Jumeirah, Dubai, UAE   •   Paris, France   •   Petra, Jordan   •   Prague, Czech Republic   •   Reykjavik, Iceland   •   Romw, Italy   •   Golden Gate Bridge, San Francisco, USA   •   San Juan and Colorado rivers, USA   •   Goosenecks, Utah, USA   •   Oia, Greece   •  Shanghai, China   •   Moscow, Russia   •   Shwedagon Pagoda, Myanmar   •   Kremlin, Moscow, Russia   •   Saint-Petersburg, Russia   •   Saint Petersburg, Russia   •   Sankt-Moritz, Switzerland   •   Statue of Liberty, New York, USA   •   Manhattan, New York, USA   •   Swaminarayan Akshardham, India   •   Sydney, Australia   •   Ta Prohm, Angkor, Cambodia   •   Taj Mahal, India   •   The Drakensberg, South Africa   •   White Sea, Russia   •   Palpa, Peru   •   Great Barrier Reef, Australia   •   The Iguazu Falls, Brazil   •   Matterhorn, Switzerland   •   Everest, Nepal   •   Twelve Apostles Marine National Park, Australia   •   Blue Lagoon, Iceland   •   Trinity Lavra of Sait Sergius, Russia   •   North Pole, North Pole   •   Cramp fish, Maldives   •   Maldives, Maldives   •   Nepal, Nepal   •   Uzon caldera, Kamchatka, Russia, Russia   •   Italy, Vatican   •   Venice, Italy   •   Victoria Falls, Zambia   •   Ramenki,Moscow, Russia   •   Cape Town, RSA   •   Dubai, UAE   •   Toronto, Canada   •   Dubai, Islands, UAE   •   Neuschwanstein Castle, Germany   •   Amsterdam, Holland   •   Kamchatka, Volcano Plosky Tolbachik, Russia   •   Waterfalls, Iceland   • 

5/27:
Mentally Ill

Across the country, an estimated 356,268 people with mental illnesses, including bipolar disorder and schizophrenia, are in prisons and jails, compared with just 35,000 in state hospitals.

A study released in March by the Treatment Advocacy Center and the National Sheriff's Association, whose members have become the nation's reluctant warders of the mentally ill, indicated that the number of state mental hospital beds in proportion to the national population has fallen to what it was in 1850. It's as if we're regressing back to medieval tenets for dealing with the mentally ill. Back to the dark ages when it was acceptable to torment and torture and kill those befuddled souls deemed to be lunatics.

5/27: bubble

RBS and Lloyds retreat from London mortgages

 

Britain’s two state-backed banks have retreated from lending to the London property market since the financial crisis, in a sign of caution amid fears of an inflating housing bubble

.

5/27: Glass of employment (mauldin) 

the quality of the jobs that have been created since the end of the last recession does not match the quality of the jobs that were lost during that recession:

  • Lower-wage industries constituted 22 percent of recession losses, but 44 percent of recovery growth.
  • Mid-wage industries constituted 37 percent of recession losses, but only 26 percent of recovery growth.
  • Higher-wage industries constituted 41 percent of recession losses, and 30 percent of recovery growth.

Yes, unemployment is down, but so is labor participation, and the simple fact is that outside of the petroleum sector new jobs are not being created to anyone’s satisfaction. In my presentation at the conference I showed a chart that illustrates the fact that we are losing businesses faster than we are creating new ones – an unprecedented statistic. This is a glass not only half-empty but leaking:

unfilled job openings are at a five-year high. The U.S. government is granting fewer visas, college students are graduating without marketable skills, and the skills of many workers who have been laid off for long periods have become outdated

5/27:
The Psychology of Human Misjudgement - Charlie Munger

5/27:
10 Sobering discoveries about Americans and finance

If there was any doubt about the sad reality of America’s financial literacy, consider these 10 sobering findings:

  1. In describing what getting ahead means for them, nearly two-in-three Americans mention financial indicators, like financial stability, savings, retirement, covering bills, providing for a family, and other monetary items. — All State-National Journal Heartland Monitor Poll, 2012
  2. Forty-one percent of U.S. adults, or more than 92 million people living in America, gave themselves a grade of C, D, or F on their knowledge of personal finance. — National Foundation for Credit Counseling’s Consumer Financial Literacy Survey, 2014
  3. Less than half of the participants in a survey of 5,000 people could correctly answer eight basic financial literacy questions. — National Association for Retirement Plan Participants Study, 2014.
  4. Less than one in five U.S. adults consider themselves a Highly Disciplined financial planner – i.e., they know their exact goals, have developed specific plans to meet them, and rarely deviate from those plans. — Northwestern Mutual Planning and Progress Study, 2014
  5. In a survey of 25,500 participants in 28 countries, the U.S. ranked dead last when it came to the question: “To what extent would you say teenagers and young adults in (Country) are adequately prepared to manage their own money?” And 70.5 percent of respondents said American teens don’t understand money management basics. – Visa’s International Financial Literacy Barometer, 2012
  6. For every dollar spent on financial education, is spent on financial marketing. — Consumer Financial Protection Bureau, 2013.
  7. A survey of 25,000 Americans adults found that 61 percent do not compare offers or collect information from more than one company when shopping for credit cards. — FINRA’s National Financial Capability Study, 2012 
  8. Investors have a weak grasp of elementary financial concepts and lack critical knowledge of ways to avoid investment fraud. — Securities and Exchange Commission’s Study Regarding Financial Literacy Among Investors, 2012
  9. A survey of 1,000 individuals over 25 found that more than half of workers report they and/or their spouse have less than ,000 in total savings and investments. — Employee Benefit Research Institute’s Retirement Confidence Survey, 2013
  10. A survey of 9,523 individuals found that 28 percent of respondents had taken on credit card debt to keep up with student loan payments. — Young Invincibles’ Borrower in Distress: Survey on the Impact of Private Student Loan Debt, 2013


5/27: John Nicola

For a large part of the twentieth century the developed world experienced real growth of 3%+ per year. Many countries now have flat or declining populations, and all of them are aging. Looking forward, the developed world would be doing well if it were to realize real growth of 2% annually. Global growth will be driven by developing nations.


5/27: Yamarone-

Since GDP began to be reported in 1947, he points out, the U.S. economy has slid into recession every time GDP growth has fallen to 2%, a level below which it currently stands.


5/27:

Senior Care Payment Solutions

5/27:

LTC- According to the American Long Term Care Insurance Association, more than 8 million Americans have long-term care (LTC) insurance policies. But, according to Matt Murphy, many of these policyholders aren’t aware of what their policy covers, and aren’t able to take advantage of their LTC insurance benefits. In fact, women get an average of 50% of their LTC insurance premiums back in the form of care, and men successfully claim just 33% of their premiums, or payments into the policy.


Read more here: http://www.miamiherald.com/2014/05/25/4136659/fred-grimm-brutality-against-mentally.html#storylink=cpy

5/27:

Mental disorders in Elderly

“When assessing mental disorders in the elderly it is important to clarify if, in fact, the illness had its onset in the senior years or whether what is being seen is a recurrence of a disorder that had its onset earlier in life. When bipolar disorders are seen in seniors they are most often due to the recurrence of bipolar episodes which began earlier in life. That being said there are relatively uncommon geriatric onset bipolar disorders or disorders which have symptoms similar to bipolar illness (such as an episode of psychotic mania) which later turns out to be a manifestation of a more global illness, such as dementia. It is also noted that, not uncommonly, individuals with dementia will have significant psychiatric symptoms, such as agitation, combativeness, delusions or hallucinations, particularly as their disease progresses.”

 A complete neuropsychiatric consultation should include the following:

  • Cognitive tests
  • Mental status examinations
  • Neuroimaging such as MRI or CAT scan
  • Thorough social, developmental and physical history
  • Complete medication and supplement review
  • Laboratory assessments


5/25:

U.S. rental guide
(interactive)

Price per square foot. Pretty ingenious

5/25:
 Number of Alzheimer’s deaths found to be underreported


Official mortality figures may have substantially underreported deaths due to Alzheimer’s disease in 2010 show two recent studies supported in part by NIA. Underreporting of Alzheimer’s as a cause of death on death certificates is a well-known phenomenon. Some people with the disease never receive a diagnosis. Many others have dementia-related conditions, such as aspiration pneumonia, listed as the primary cause of death while the underlying cause, Alzheimer’s, is never reported.

5/25:
Insufferable

One way to protect yourself is to limit your selection of a planner to professionals who hold the CFP®  designation. At least you know you are selecting a real financial planner. The role of the planner is to help you develop a financial roadmap that is based on your goals, circumstances, concerns, budget, savings rate, proposed retirement date and other financial criteria. There are different types of plans based on your age, work status, family, and objectives: Financial Plans, Retirement Plans, Estate Plans, College Plans, Charitable Plans, and Tax Plans.

EFM- The CFP is ONE semester on money. To cover all the items above with any level of sophistication would take years longer.



A true planner does not get involved in the implementation of the plan (?), which may include investment and insurance advice. This type of professional focuses on the plan and refers you to professionals who provide other types of advice (investment, insurance, tax). However, this is increasingly rare because most planning-only professionals tell us it is hard to make a good living providing planning services. They have to get involved in the implementation of the plan to make significant money. Implementation includes specialized knowledge, for example investment, insurance, and tax expertise.

5/25:

It Is Officially Dangerously Quiet In Markets [The Economist]

The Vix has dropped to its lowest since 2007. Bond volatility is creeping closer to the historic lows it reached a year ago. And foreign exchange volatility is back to the lows of 2007. This is all probably bad, says the Economist. "One reason folks on Wall Street are deeply skeptical, if not downright hostile, to the Fed's policies is that they believe volatility is the natural order of things and artificially suppressing it via monetary policy is morally equivalent to price fixing, and more practically, bound to end in tears when the system's natural instability returns. I don't have much sympathy with the moral arguments; all monetary regimes fix the price of something in terms of money: bonds, short-term treasury bills, foreign exchange, gold. But I do worry that by squeezing out short-term volatility, we may be storing up long-term volatility. Hyman Minsky had spent most of the post-war years developing his thesis that stability begets instability, and died, in 1996, before he saw it vindicated with the 'Minsky moment' of 2008." 

5/25: