Skip to main content
Home Working together to build your tomorrow

Keep the right stock/bond mix

What exactly will happen when we start living on our savings to support that eccentric personal lifestyle to which we all look forward?

When that day comes, we will typically have two types of money. First will be retirement plan money in IRA or 401(k) accounts. The rest will be so-called "after-tax" money that could have come from home equity available after downsizing. We might have inherited some money or sold a business.

A few of us may even have a conventional savings and investment account resulting from the practice of self-discipline and living like a monk.

Put a lid on costs for 401(k) plans

What this country needs is a $1 war tax on gasoline, but that is politically unacceptable.

The thought of a 33 percent increase in gas prices drives voters nuts. However, about 50 million 401(k) participants are experiencing about a 20 percent increase in their 401(k) costs every year, and until recently, we weren't hearing a peep out of them.

Unlike the gas pump's scrolling dollar signs, the 20 percent increase is a silent killer of retirement plan values. Nobody ever receives a bill or writes a check for this ever-increasing cost.

No sure answers on care insurance

My father said that he would consider a long-term care policy if he could find one that offered coverage for when he could no longer mix a martini.

In recent months, I have had a number of people ask for my advice on this relatively new invention of the financial services industry. I must confess, there is no clear-cut answer when it comes to long-term care insurance.

A typical plan pays $150 a day for three years for when you can no longer perform aspects of daily living.

Protect assets for your heirs

The Pension Protection Act of 2006 moved us one step closer to being able to inherit retirement plan money more effectively or to pass it on to heirs more efficiently.

This is important because there is now more than $3 trillion sloshing around in 401(k) plans. The last time I looked, toward the end of the 1990s, that number was $1.8 trillion.

Teamwork key to success

I turned to my friend Bob Stearns -- a font of good information on narrowly defined topics such as baseball or real estate -- and I asked him to fill me in on this phenomenon of tenants-in-common partnerships.

In simple terms, this financial tool allows someone to sell their real estate holdings and end, once and for all, the responsibilities and hassles of being a landlord.

Foreign markets not fooling around

I always laugh when I thumb through my copy of John Spooner's classic, "Do You Want to Make Money or Would You Rather Fool Around?"

Well, I sometimes think to myself, Why not fool around a little bit? This is only money we're talking about -- not infidelity.

I found myself reviewing the performance of some of these emerging markets funds and country-specific funds that were up as much as 50 percent last year -- doubling in value during the past three years.

It's time to tame executive greed

Back in the 1980s, when Drexel Burnham was a junk bond powerhouse, there was a story about a bond trader who was furious after receiving his measly $6 million year-end bonus. Screaming obscenities at his boss, he threw the check on the floor and jumped up and down on it.

Somehow, today's stories of executive greed remind me of that image. To save capitalism, it's time for the government to step to the plate and make an attempt to stop the hemorrhaging of our stockholders' money.

Iraq war cost

Back in the late 1960’s, David Rockefeller was Chairman of Chase Manhattan bank when he became one of the first business leaders to publicly speak out against the war in Vietnam. Louis Lundborg was then the Chairman of the Bank of America, so from the U.C. Berkeley business school, I wrote him a letter asking if he would be expressing a similar sentiment. I said I thought it was important for the business and financial community to make a case for what they thought was wise public policy.

Mutual fund rates maginified

What a difference a percent makes. A combined attention to mutual fund quality and mutual fund costs can increase the probability of gaining that extra 1 or 2 percent annual return on your portfolio overall.

Why does such a seemingly small difference in rate of return become so important? It's the magic of compound interest over a sustained period of time that adds hundreds of thousands of extra dollars for each additional percentage point.

Subscribe to