Monthly Archives: January 2014

Tiger 21- Financial Network

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Tiger 21, more formally known as The Investment Group for Enhanced Results in the 21st Century, is in large regard a glorified investment club.  It is an investment club with a $30 thousand annual membership fee.  Collectively, the club’s 230 members control assets valued in excess of $20 billion and have a median net worth $75 million.  I rather doubt anyone reading my Blog would qualify for membership.  Yet the truly wealthy are worth studying in terms of how they invest and what it is that motivates them to take action.  This is true because, as we have observed since the financial meltdown of 2008 – the rich indeed do get richer.  The wealth of the rich has recovered while the middleclass in America continues to struggle. Continue reading →

Problems with Simple Financial Planning

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My previous post demonstrated how a young guy named Rich got out of school, worked 40 years and saved enough to retire with an income equal to his final year salary from actually working.  The key assumptions I discussed were that he would need to save 21% of his income for all 40 years and get a modest salary increase every year.  What I did not discuss was the probability that he would be able to earn a steady 8% rate-of-return (ROR) on his 401k year in and year out.

 I should note that his discussion is for your entertainment and designed to get you thinking about the future.  Implementation of any concepts described should be reviewed with a professional financial planner beforehand.

 As any student of personal finance, you should readily ascertain, the actual ROR you earn may jump around considerably.  I’ve been an active investor for over thirty years and I have had years with double digit gains and years with double digit losses.  On balance, I am far ahead for having been in the market of stocks and bonds since the early ‘80s. Continue reading →

Saving For Retirement – an example

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As a CPA and a former financial advisor, it seems people are always asking me one of two questions: 1) how much should I be saving and 2) what do you think my number is?  My usual answer is 15 to 20 percent and more than you think!  The people asking the questions are usually looking for free advice and, after I give them the advice they seek, I add the simple disclaimer, “It’s worth every penny you paid.”  All kidding aside, the financial discussions on this blog are to entertain and to get you thinking.  When it comes time that you actually want to take action you should meet face to face with a qualified advisor, who should take the time to understand your individual situation. Continue reading →

The Hat

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With summer’s end, come the merchandise sales at the lake.  Over the weekend I purchased a ball cap that I had my eye on for some time.  That morning the $19.95 hat was in a large bin of hats offered for $5.00.  As the young woman at the counter is checking us out she tells my wife Sue, “That will be $8.33.”  Sue says, “That seems kind of high”, to which the sales clerk replies, “Well there’s sales tax”.

Mildly amused up to this point, I jump into the conversation. “ Do you agree the hat is five dollars?”  “Yes”, she replies.  “Is the Idaho sales tax rate still 6%?”  Again, “Yes.”  “Well then, the tax would be thirty cents and the total is $5.30.”  At this point she presents us with a printed receipt and says, “But it says $8.33!”  I offer, “Maybe if you tell it that the hat is $5.00 it will print the correct receipt.”  She says, “Okay, I can override the price”.  Me, “Really, they let you do that?”  Oh my.  Continue reading →

Paper Boy? Why?

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Think back to when you were a kid in elementary school and there was something you really wanted. You might have asked for it on your birthday, had it on your list to Santa or some other special occasion. It could have been a special trip, an activity or a thing you were just dying to have. For me it was a Schwinn Varsity Sport ten speed bicycle.  The year was 1967, I was 12, and had just moved across the country from Washington DC to Spokane Washington the previous summer. I wanted that bike more than anything. The bike was about $75 and I had no money and no real means to earn money. These days, Baby Boom parents would have bought their son the bike just for having made the move with the family. Not so my dad. As a Navy Commander and combat pilot he expected discipline in his troops and his children. No amount of pleading, begging or similar tactics would sway the Commander. His only suggestion was that I find a way to earn some money. Continue reading →