January 2017

In Debt, We Trust

  “Compound interest is the eighth wonder of the world…He who understands it earns it…He who doesn’t, pays it.” – Albert Einstein Reverse compound interest is the most financially devastating force in the universe. We are speaking of credit card debt. This over $1 trillion time-bomb has Americans paying interest rates that can range from 20%-30%. This…

Extraordinary Claims Require Extraordinary Evidence

“Sh#t happens.” -Unknown Financial markets have no resemblance to a closed scientific lab. Physics and chemistry are based on successfully predicting future behavior; relying on these concepts when designing a portfolio is a recipe for disaster. To be a good investor, you need to be an historical scientist rather than a chemist or physicist. This means…

Every Time History Repeats Itself, The Price Goes Up

  “I have written too much history to believe in it.” Henry Adams The most important lesson history can teach us is: The unpredictable is the only thing that is predictable. Looking back to the past should not be used as a forecasting guide to the future. Expecting events to repeat themselves in order to profit from…

Investors First!

Major brokerage firms and insurance companies are deliberately misleading consumers and collecting billions in unnecessary fees. People living in different geographic locations can have a spirited debate regarding President Trump’s Orwellian vision of America. Something that is beyond debate is the financial landscape many consumers find themselves in is a dystopian hell hole of conflicts of interests and…

Student Loan Servicing: A Predatory And Conflicted Mess

Unnecessarily ruining disabled veterans’ credit scores is a small part of the mess that has become our student loan servicing system. Student loan collectors are often motivated by perverse incentives that we have seen before in the financial services industry. Profit maximization often takes precedence over the borrower’s best interests. Navient, the nation’s largest student loan service company…

Should Walmart Sell Mutual Funds?

Far too often, financial middlemen, more commonly known as advisors, do not connect consumers with the products they really need. The information that many “professionals” provide can be very conflicted and non-transparent. According to the author John Kay, the way financial advisors provide advice is more similar to, “the tourist guide who directs us to his…

The Sooner You Fall Behind, The More Time You’ll Have to Catch Up

  Annuities with rolling surrender charges suck. There is no other way to describe these deceptive, shameful products. For the uninitiated, surrender charges are a way some insurance companies reimburse themselves or, more bluntly stated, collect ransom payments from clients. Companies will pay a salesperson an upfront commission and they need a hedge in case…

Advisors: Aim For Simplicity, Not Pretentious Jargon

  “You must learn to talk clearly. The jargon of scientific terminology which rolls off your tongues is mental garbage.”-Martin Fischer When things appear difficult to process, they are seen as both less appealing and less true. This is no more apparent in the field of finance where the use of incomprehensible jargon is the…

The 401(k) Road To Serfdom

“We have met a man of God today”- Czar Nicholas II  The 401(k) plan is the poster child for the law of unintended consequences. The unanticipated and unintended effects of its ascension as the heir to the traditional company pension plan has changed the way Americans save for retirement; many would say, not for the better….

We Can’t Direct the Wind, But We Can Adjust Our Sails

“The things in our control are by nature free, unhindered, and unobstructed, while those not in our control are weak, slavish, can be hindered, and are not our own.” Epictetus We often become our own worst enemies by focusing on financial events we have no control over. We become bitter and irrational over imaginary market enemies…