Karl Marx, Jay-Z & SGI Funds have a lot in common

Usually the title of these posts IS a myth.  But believe this one is true.  Where did I come up with these seemingly completely unrelated topics?  Oddly, they were in the top 10 financial search words last month.

Karl Marx

Karl Marx Monument in Chemnitz

First, what he was not.  Marx was neither Russan nor capital-C Communist, despite having written The Communist Manifesto.  He was a law student from a wealthy Jewish family headed by his attorney father.  I'm guessing his unpopularity with the authorities from whom he fled Germany, France & Belgium was due to his central belief that theology would eventually succumb to philosophy.

A prolific journalist & author, Marx was admirable in his focus on fair & efficient political and social processes (such as his belief in a "constitutional republic with freely elected assemblies".  Like I, he felt wealth and merit needed to be reconnected, without which there would be constant struggle between the economic classes.

Jay-Z

Streetart in Katoomba

The first hip-hop billionaire, Jay-Z (aka Shawn Corey Carter) holds the fascination of millions around the world.  We obsess over our billionaires, that's for sure.  But as perfectly stated in this recent USA Today article, Jay-Z epitomizes what every investor should emulate:

1. Diversify across several sectors and industries.  Jay-Z has his own champagne and congac brands, sports promotions, investments in fashion, Uber & his own Uber-like jet sharing app as well as his own venture capital firm

2. Invest in what you know and love.  This is important because if you don't love your work and your place in the world (e.g. your investments) you probably won't be motivated to put in the effort and commitment necessary to be successful.

3. Commit to your goals.  Not everyone can be a billionaire.  In fact, hardly anyone can be.  I would restate this as "pick goals that inspire your commitment".

Would Marx have liked Jay-Z?  I think so.

ESG

Experiencing heavy in-flows of new capital, ESG funds mirror the growing awareness that sensible and ethical companies are more likely than the liars and cheaters to flourish in the future.  ESG stands for Environmental, Social and Governance & the funds and companies that pass those screens.  

ESG is supposed to be a more evolved, stringent screen than SRI (socially responsible investing) or sustainable investing.  Here's what they mean, in a nutshell:

• Environmental- conserving, protecting and even enhancing local and global natural environments
• Social- treating employees, clients, partners and the communities in which the business operates with respect by following the law, providing quality safe products & services, & contributing to the needs of local communities.
• Governance- operating in a compliant, equitable and transparent manner.

So I find it encouraging that people are interested in these three topics.

 

Your Constructive Comments are Welcome!

6 Financial Steps You Should Consider NOW

Would you like to know why I've gotten zero freaked-out calls or emails from my clients because of the coronavirus, political upheaval or [insert your own freak-out factor]?  It's because we've already tested even worse scenarios (like the 2001-2003 recession) in their written retirement financial plans and they know they will be OK. 

However, that doesn't mean there aren't new opportunities and cautions:

1. If we have not developed your written retirement financial plan then get yourself on my schedule immediately.  I've opened my calendar up as much as possible for the next three weeks.  Call me at my mobile at 503-698-1110 or simply schedule yourself here:  https://calendly.com/g---5

Key Takeaway:  No matter what is happening in the world and in your life, there are risks to avoid and opportunities to acquire.  These risks and opportunities should be tested and executed carefully, as part of an overall plan, not by running out and buying four thousand rolls of toilet paper.

2. To make up for losses in the market-based portion of your portfolio, don't settle for inflation losses in your cash.  You should be getting at least 2.0% on your two-year money.  I've seen savings accounts paying as little as 0.07%.  Yes, seven hundreths of a percent. Increasing earnings and other benefits on your safe money will help offset these short-term fluctuations in the market and make dramatic long-term differences in your future cash flow. 

3. Does it make sense to refinance debt?  Probably.  Interest rates have tumbled with the market & I doubt they will increase this year.  Refinancing may be a great way to reduce your budget and preserve your savings. 

4. Is funding for your lifetime budget locked in?  If not, wouldn't that be worth finishing up?  Then you can ignore market hysteria.  Cash flow solves all other financial problems.

5. Do you need to put off that expected retirement date this or next year?  I won't sugar coat it; maybe you do.  But how do you figure out when you can retire?

6. Finally, taxes will probably shrink your money more this year than will the market.  What tax planning have you done?  Did you know the tax issue will become even more concerning in 2026 when the Tax Cuts and Jobs Act expires?  I don’t see any of my peers doing tax planning.  Maybe this is the perfect time to do Roth conversions or in-kind conversions of poor performing stocks.  When the market recovers, all the gains can be tax-free.  This video is pending my review of the three “stimulus” packages.  Lots of little- and not so little -goodies for everyone.

Warm wishes during these trying times,
and get yourself on my calendar!: 
https://calendly.com/g---5
Gary
 

Your Constructive Comments are Welcome!

There Oughta' Be a Law! (repost)

I'm reposting this financial mostly-a-myth because of the recently and rapidly growing list of "mistakes" made by our president and virtually every one of his inner circle.

I confess that my first reaction to outrageous behavior is, "there oughta' be a law!".   One way I attempt to keep up with the times is to watch TV about once a week, usually a news program on Sunday morning.  Holy cow!  A dozen "there oughta' be a law!" incidents come up in 15 minutes (so far, my upper tolerance limit), most having to do with advertising:

• Gambling is portrayed as entertainment, showing idiotically grinning couples.  I've never seen people smiling in a casino, have you?  There oughta' be a law against these ads.
• Drugs are also paired with happy, healthy actors who, in reality, will probably never need a prescription in their lifetimes.  Drug ads should be illegal.
• Fashion is advertised as an essential source of happiness, acceptance and, well, evolving as humans!  A top fashion consultant admitted that he doesn't follow consumers' fashion desires, he manufactures them.  There oughta' be a law.  (But in my case it's obvious I don't follow fashion.)
• Food.  If you just look around it's apparent that Americans get plenty of food.  Yet billions are spent daily trying to get us to eat cheap, crappy "food".  Or food that neither our budgets nor our bodies can afford.  This should be illegal, just like hard liquor ads are.
• Cars are a personal statement, instant evocations of status and coolness.  Oh.  And they can transport things and people.  But we need fewer of them, not more of them.  How are these ads any different than hard liquor, gambling, drugs or food?
• Investing "porn" is everywhere.  Really?  You're going to plan out the rest of your life based on information from whoever spends the most money to catch your eye??  Where do they get all that money to spend on ads?  From your money.  There are rational, evidence-based rules & tools you can find online, most for free.  Finally, there are honest, wise and experienced advisers in your community to help you curate the deluge of money madness.  Investing & insurance ads should be illegal. 

But then, several weeks after our Nuevo Vallarta vacation, it dawned on me what had been different- and profoundly relaxing -about Mexico.  At the resort, what was it about the pool area, the weight room, the parking lot . . . everywhere that was so calming?  What was absent?  Then I realized there were No signs, no rules, no "Danger" or "Forbidden" or "Warning" placards at every turn.  It felt clean, quiet, uncluttered, adult.  They relied on the intelligence and character of their guests to make things run smoothly and so far it seemed to be working.

Wouldn't it be easier, less expensive and more effective to encourage consumers* to be smarter and more discerning ?  That's a transferrable skill.  It would make us all better citizens, parents, workers, entreprenuers and, yes, consumers.  Absolutely there should still be laws and enforcement of them.  But the path to perfect safety is more perilous and ultimately results in zero freedom under dictators.  Which is why our current administration wants to entice you down that path to make you dumber, more fearful and less tolerant, hence, easier to manipulate and control.

*And, in the vein of today's post, voters

Your Constructive Comments are Welcome!

Interview with The Suit Magazine

1. Gary Duell, you are the Owner and Founder of Duell Wealth Preservation. What sparked your interest in this line of work and what were you doing professionally prior to this firm? What is the history of this firm?
* I began my career as an agent for Farmers Insurance. 
*After 15 years I was bored with selling house and car insurance.  I enjoyed learning about my clients and wanted to provide more value to them. 
*So, I got all the licenses needed in order to give financial advice.  But after working through several broker-dealers I found intolerable their restrictions on what I could say to my clients.  For example, we were forbidden to send follow-up letters to clients after a meeting to summarize what we discussed 
*So I formed my own RIA firm in 2007.


2. What qualities do you seek in your potential clients and on the flip side, what qualities do you and the firm possess that prompts potential clients to select your services?
THEM
*Lifetime students
*Sense of humor, affability
*Financially successful but not convinced of their success
*Open minded
*Connected- good referral sources
ME
*Also a lifetime student & generous teacher/consultant/collaborator
*Legal fiduciary
*Totally transparent
*Clean conduct

3. The paradigm suggests that the conversation has shifted away from the alpha approach [supposedly measurable gains attributable to the adviser] to a more conservative approach which provides a more customized solution. Do you agree with the premise?
*Alpha is problematic- 2 reasons:  Can you trust their past measurement of it?  And how do you justify projecting that into the future?
*Sheer computing power makes the latter approach- customized solutions -not only possible but necessary in order to claim to be a true fiduciary.
*Avoiding mistakes & losses is more important than chasing alpha.  This is something that can be promised.

4. Financial literacy among clients remains to be a problem. Planners say kids who grew up watching their parents go into debt want to avoid the same fate. Will we see more online tools to help "gamify" that financial planning experience while creating a more savvy relationship? 
*Absolutely.  So-called roboadvisers are appearing all over the place. 
*Initially these struck fear into the hearts of advisers but now most of us realize such software frees us to do the most important task:  connecting with and guiding our clients.
*These tools will most certainly become more prolific and powerful.

5. What does being a fiduciary mean to you and to your clients?
*I’m not sure it means much of anything to my clients until after I define it for them.  And even then the looks are skeptical.  We all know that legal obligations don’t guarantee good behavior.
*What I hope it means to my clients is that there are resources for verifying the fiduciary history of their advisers. 
*Which there are:  brokercheck.finra.com, for example, and each state’s regulatory agencies. 

6. Communicating with clients can be a challenging task, how do you insure plans stay on track, level set client expectations and most importantly handle unforeseen circumstances?
*We contact all clients no less than quarterly by phone or email.
*We issue a quarterly newsletter
*Annual review appointments are set a year in advance
*Special notices go out as need for topical or timely advice

7. With Americans enjoying increased longevity, what methods are you using to help clients create enough savings to last through what could be a retirement lasting as long as their working years while still maintaining their desired standard of living? What methods are you using to combat the potentially draining effects of long-term care?
*Virtually all of my clients are at or near the end of their asset accumulation phases.
*The moving parts that are available to work with at this point are Social Security benefits, pension timing & options, when to retire.
*Avoiding sequence of returns risk is task #1
*For long term care risk- which is substantial for couples -we explore three options, depending on level of assets:  LTCi insurance, asset-based solutions, Medicaid planning.

8. Do you think the current 401(k) fee disclosures are enough to fully inform savers or retirees of what they are paying for their accounts?
*Yes.

9. What has been your greatest success in this industry and what has been the failure or challenge that you learned the most from?
*My greatest personal success has been to teach classes and seminars.  Like the average person, I was more afraid of public speaking than death.  This has changed the quality of clients I acquire and also made my practice more fun and challenging.
*Biggest failure was dinner seminars.  It was hard to admit that I just don’t have the bright, magnetic personality for that to work for me.  Plus I think they have kind of a sleazy reputation. 

10. Goals for 2016 / 2017?
*Triple my business volume
*Settle on a roboadviser and asset custodian
*Figure out how to fairly charge for AUM
*Ramp up social media exposure
*Begin podcasting