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Friday, January 16, 2015

Investors Should Only Read Materials That Give Them Happy Thoughts

This happy-thought rule unfortunately is an indicator of a Ponzi scheme or cult, this admonition to only be "positive" and avoid "negative" thoughts.

To tell you the truth, I don't even know what that means.  Who determines what's "positive" or "negative"?  As real estate mogul & guru John T. Reed has said, (if I may paraphrase) "I don't care if information is pessimistic or optimistic.  I only care that it's accurate."  I agree.  Do you really want to filter out all displeasing information?  At your peril.

Suppose I'm driving down the highway and you are my passenger.  Up ahead, you see a large wooden box that has fallen off a truck into our lane.  Is it "negative" for you to point that out to me?  Certainly.  But not nearly as negative as crashing into the box.  It would be accurate for you to say, "Look out!  There's a box in the road!".  It would also be accurate for me to decide that it would be better to avoid that box than to smash into it.  It would be no time for smarmy value judgments or magical thinking like "Think positive and the box will disappear!".

Which is why you should write your Congressional representatives and insist they support FINRA's** "CARDS" program.  CARDS stands for "Comprehensive Automated Risk Data System", the main purpose of which is to catch crooks in the act, in real time, instead of years later.  Naturally, the financial industry says CARDS would be "burdensome" (it wouldn't) and jeopardize investor privacy (wrong again).  What it would actually jeopardize is Wall Street's insider profiteering at investor expense.
It is good enough for me that the Consumer Federation of America* supports the CARDS proposal.  Don't believe the fear mongering from the brokerage community.  CARDS will level the playing field back in the direction of you and me.  After all, if we're going to spy on people, why not spy on those who handle other people's money?

** Financial Industry Regulatory Authority
*An association of hundreds of pro-consumer groups

Thursday, January 8, 2015

My Classes are just like "Rich Dad" Superstar Robert Kiyosaki's.

ALERT:  The title of this post is a MYTH.

My Retirement Planning Success classes are nothing like the infamous Rich Dad, Poor Dad author and entrepeneur's.  In addition to my never having declared bankruptcy  (twice)-or in any other way stiffed anyone on a debt- here are the differences between my Richness of Life classes and Rich Dad Education:

  1. My classes are not hook, line and sinker come-ons to sell you on ever more expensive classes and materials, preying on that greatest (and most exploited) of human tendencies:  hope.  My class materials are based on academic research.  As Helaine Olen wrote in Forbes, Rich Dad "tips ran the gamut from ridiculous to illegal and downright hurtful and included advocating for insider trading, . . . purchase of multiple real estate properties with little or no money down and telling followers they could purchase stocks on margin via unfunded brokerage accounts"
  2. My net worth doesn't come from the money you pay for my classes.  In fact, your tuition doesn't even cover my costs.  In contrast, most of Kiyosaki's $80 mil. net worth came right out of the pockets of his now much poorer students.
  3. The information and strategies I teach are not secret, magical, exclusive or exciting.  They are tried and true, boring, and methodical.  They are widely available online and in print.  So why come to a class?  Because I've sorted through all the chaff for you.  Because when you're done with my class and our one-hour strategy session, you will have a clear picture of where you are and where you're going.  And where you can go in retirement.
  4. Again, from Forbes "No one has ever proven that Rich Dad, the man who supposedly gave Kiyosaki all his advice for wealthy living, ever existed".  The researchers and academics I use all exist.  I give you their names and websites.  
  5. I give you everything I have upfront in the 6 hour course.  No need to enroll in progressively more expensive "workshops" which have cost up to $45,000 with Rich Dad.  If you need individual work and a customized plan, we execute a professional contract on an hourly basis with definite costs and benefits spelled out.
  6. I am a legal fiduciary.  I have to demonstrate that my recommendations are in your best interests without regard to mine.
So that's enough.  Though, it still astounds me how people pursue the appearance of advisors' financial stability (fancy offices, $1000 suits, expensive cars, Vogue-ish secretaries) without asking, "Who is really paying for all that?"  You are.

Best Wishes for a successful New Year.

    Friday, January 2, 2015

    Myth: "Socialism" curtails our freedoms

    Do I even dare go here? Can't resist.
    First, let's set the stage for the recent revival and use of the terms "socialist" and "socialism". Here are the elements:
    1. An American population whose every shifting thought, feeling, belief and behavior has been analyzed and cataloged by a gargantuan corporate marketing machine.
    2. Since the 50's this information has been exploited to inject into all of us a deep sense of inadequacy, longing and discontent paired with artificial external "solutions" (aka mindless consumption of goods and services).
    3. Because government is and has been the only referee in this game, corporate marketers have every motivation to bribe or sabotage the referees.
    4. So they portray government agencies as the source of the very discontent which they themselves have sown upon us!
    5. Hence their propagation of that incendiary but obtusely overused word, "socialism", in talking about "government".

    What percent of folks who use the socialism label do you think have actually looked up the definition? I would guess close to zero, based on the facile arguments that include it. I'm not going to get into it in this blog. Please see the excellent discussion at:
    Can we agree on just one thing?: That it makes sense to maximize the efficiency and effectiveness of our means of production and allocation of resources.  How could anyone argue against that guideline?  Am I being unreasonable?

    No single system will be the best at doing this in all cases at all times. As Blackwater (the mercenaries in the Middle East who massively botched the job) has demonstrated, a private sector military just does not work.  Self-regulation by the financial sector does not work.  Corporate prisons do not work.  Self-management of pollution by the polluters does not work (might as well have prison inmates managing their incarceration).  The private sector also gets a D- grade for its dismal investment in essential infrastructure like roads, bridges, communications networks, schools, water quality, air quality, soil & food quality, research & development.  We should be using an evidence-based approach to decide which type of system works in each situation.

    Maximizing the efficiency and effectiveness of our means of production and allocation of resources requires a broad view, adherence to scientific principles, consensus on paths of action, and discipline to be sure everyone does his part and is rewarded for doing so.  Call it what you like- mass co-operative ventures, government, socialism, etc. -these types of large scale long-term collaboration are essential to a free and civilized society.  Which may be why we don't have one.

    Civilized societies don't wage perpetual war.  Civilized societies don't let their members die or go bankrupt for lack of health care.  Civilized societies don't prey on their children to satisfy prurient urges and corporate bottom lines.  Civilized societies don't allow some of their members to poison others in the name of profits.  Civilized societies don't revel in imposing ignorance and deception upon their citizens.

    So let's keep the debate at the level where it belongs- efficiency and effectiveness of public policy -and abandon the tossing about of uselessly labeled stereotypes like "socialist" or "free-market".