21 Things You Should Never Buy New - My Money (usnews.com)

Ok. I’ve said it before. It has never been a better time to save money. And you can do it without sacrificing either necessities or life’s little pleasures if you re-adjust your thinking. For many items we routinely use, buying retail, even at discount stores or those tempting 10-20% off sales (20% off what?) is not the best choice. In many categories there are easy ways to find deals on gently used, sometime like new, merchandise. Getting into the habit of buy used can really tighten your budget.

The trick is, don’t just redirect your spending elsewhere. Put the money in savings or better yet add to your IRA, a 520 College Saving Fund, or invest wisely. Ask a Registered Investment Advisor (RIA) like Oaktree Captial for help finding the best use of your savings.

Meanwhile check out this helpful list of 21 Things You Should Never Buy New from US News and World Report’s My Money blog.


21 Things You Should Never Buy New - My Money (usnews.com)

Coach John Wooden: The real difference between success and winning: Coach John Wooden on TED.com

“Success comes from knowing that you did your best
to become the best that you are capable of becoming.”
--John Wooden

I found the most extraordinary video. It’s 18 minutes of Coach Wooden at about age 91. It’s titled, simply, John Wooden on true success.

In case you forgot (or never knew), he does know a thing or two about success. As the UCLA Basketball Coach, his records include:

• Ten NCAA Men’s Basketball Championships.

• Seven NCAA Championships in seven consecutive years: 1967, 1968, 1969, 1970, 1971, 1972, 1973.

• Most appearances in the Final Four, 16; most consecutive appearances, 9; and most victories, 21.

• Most consecutive victories: 88 during 1971, 1972, and 1973.

• 38 straight victories in NCAA tournament play between 1964 and 1974.
• Eight perfect PAC 8 Conference seasons (now PAC 10).

Get a cup of coffee or tea, take an 18-minute break, and watch John Wooden on true success. Just click on the link below.

TED Blog: The real difference between success and winning: Coach John Wooden on TED.com

13 Things Your Financial Adviser Won't Tell You

I found this interesting article on Shine from Yahoo! , an on-line lifestyle blog. They in turn got it from the Reader’s Digest. I am passing it along to you because it generally repeats what I have been telling folks about financial advice from brokers and others who rely on commissions or hidden charges. It’s good to see others taking up the same cause. Remember, Registered Investment Advisors (RIAs) like Oaktree are fee-only advisors and portfolio managers whose income is tied to your total assets under management and who are thus tied to the successful return on your investment for their income.
--R.S.J.




13 Things Your Financial Adviser Won't Tell You

Interviews by Michelle Crouch

Financial consultants share some of the secrets of the trade.

1. Certified financial planners and NAPFA-registered financial advisers take a pledge to put their clients' interests ahead of their own, but traditional stockbrokers aren't held to the same standard, even if they've given themselves the title “financial adviser.”

2. Do some digging before you hand me the keys to your future. Use BrokerCheck at finra.org to see if I've been in trouble.

For the complete article go to 13 Things Your Financial Adviser Won't Tell You

Amazing Grace

How would you like want your financial resources to contribute to your life fulfillment and the life fulfillment of other? In case you missed this story in the news, here is one woman who answered that question.

When Grace Groner died at the age of 100 recently, she left behind a surprise—a bequest of more than $7 million to her alma matter, Lake Forest College. What made it unusual was that Grace was not known as one of the many millionaires who make the Chicago North Shore suburb one of the nation’s most affluent towns. She did not inherit or marry money or build a business that left her wealthy. She did not dwell in one of the town’s mansions, but in a tiny frame cottage built many years earlier as a home for one of the domestic servants to the rich.

Grace was born on a farm in near-by Lake County. She and a sister were orphaned when she was twelve. A prominent Lake Forest family took the girls in and paid their way to the local college. She graduated in 1931, the depths of the Depression, but was lucky to get a job with the pharmaceutical company Abbot Laboratories as a secretary which she held for 43 years until she retired. She never married and lived simply, buying clothes at thrift stores and walking rather than owning a car.

Early in her career at Abbot, she bought three shares of specially issued stock in her employer’s company for $60 each. She never sold them. The stock split many times and she re-invested all of her dividends living on her salary and later her retirement income. Despite the many ups and downs of the stock market, including last year’s crash, the investment grew to millions before she died.

Unlike other “secret millionaires” Grace was neither a recluse nor a miser. Grace just chose to live simply. She always remained connected to Lake Forest College and regularly attended events there. She was active in the local Presbyterian Church. A cultured and gregarious woman, she had a wide circle of friends. She regularly gave to charity and through her church often gave anonymous gifts to local families in need. Before she died she had established an $180,000 scholarship fund at the college. After retirement she enjoyed traveling.

Her lawyer was one of the few who knew the extent of her wealth. He helped her establish a foundation to fund her endowment for the college. The President of the college was told a year before she died that there would be a bequest, but he never knew its size until the will was read.

Grace’s gift will fund scholarships for students to study abroad from about $300,000 annual income from the principal. She also willed her tiny home to the school. It will be named “Grace’s Cottage” and will house recipients of her scholarship aid.

Her friend and attorney William Marlatt summed up her life best, “She could have lived in any house in Lake Forest but she chose not to. … She enjoyed other people, and every friend she had was a friend for who she was. They weren't friends for what she had."

This modest woman left not just an estate--she left a state of Grace.

10 Things to Do Right Now to Slash Spending and Debt

Any financial planning process begins with a change in financial behavior and expectations. The degree of change varies based on financial priorities, but in the end, it’s about adopting new habits and abandoning others. Here are some things to consider.

Refinance if you can

Mortgage rates are still at historically low levels. You’ll need at least 10 percent equity (20% of equity will save you on mortgage insurance costs) in your home and a credit score exceeding 720 to qualify for the best rates. Start negotiating with your current lender first and see how well you do. But be careful about using home equity to cover credit card debt unless you can slash or eliminate future credit card use.

Track your spending for a week

Write down every dollar you spend in the average week (and cut off credit card use during that week). At the end of that week, start taking out non-essential items. Start with coffee and restaurant or carryout meals and work backward from there.

Make a budget

Once you know how your income covers your essential expenses and a few inexpensive treats that should stay in, build a budget that includes specific amounts to allocate toward debt. Keep a running total of your spending going forward, and revisit how that budget is working on a monthly basis until you start to see some positive results.

Reset your entertainment expectations

Enjoy social time with friends. Entertain economically at each others’ homes. Eat out sparingly and rent a movie instead of going out to the theater. Check entertainment listings for free events that interest you. Review subscription to publications and the level of your cable or satellite TV packages. Use libraries, parks and free public recreation opportunities. Play with the kids or grandkids.

Take over home and auto maintenance yourself

Learn as much as you can about home and routine auto maintenance chores and consider doing those jobs you that have confidence you can safely accomplish. Estimate the cost of materials and the value your time before doing them yourself. Seek help from friends and family and offer mutual assistance for bigger jobs.

Set a new gift policy

Do all of your adult friends and family really need a present for birthdays and major holidays? Suggest a gift drawing, a budget limit, a moratorium on gifts, or some other alternative where you trade off gifts for quality time.

Switch to Debit Cards

Bank debit cards are typically welcome at most stores where credit cards are accepted. Expenditures come directly out of you checking, savings, or money market account and is safer for you than caring large sums of cash and is preferred by merchants to checks. If you don’t have one, ask your bank to replace your traditional ATM card. Don’t forget to check for fees and penalties, which vary greatly from bank to bank. Some well known mega banks have been loading up on such fees. Many community banks offer more affordable options. Retain at least one credit card for essential major purchases that cannot be paid for at once, but again shop for the best deal for your needs.

Revamp your shopping list

Grocery, pharmacy, and common “notions” shopping take a big chunk out of your weekly budget. Substitute generics and house brands where practical, Forego packaged meals in favor of cooking from scratch with often cheaper fresh ingredients. Buy in bulk where possible and practical. Cut luxury items without totally denying yourself some pleasures. Check sales, but be careful you don’t use more money for fuel and loose more of your valuable time than you save by running around to multiple stores.

Talk to your family about spending

This is a conversation you need to have not only with your mate, but with your children. Children and teens can handle a lot when they are given the facts without instilling unnecessary fear and anxiety. Setting money priorities is part of growing up and an important life lesson.

Buy used

If you need clothing, a car or a new watch to replace the old one that’s past fixing, it might be worthwhile to buy second-hand. You can often find high quality items on the internet on places like craigslist and e-bay. Plenty of people have unloaded items in relatively good shape to bring in cash during the recent downturn. But always take care that you do not buy a pig in a poke and check out options to return items that do not meet your expectations. Thrift stores can be an excellent source for good used clothing and furniture. Consignment shops where you can obtain fashionable, even designer, gently used clothing suitable for business wear and dress-up, are thriving in this economy. If anyone asks, don’t call it used; call it “vintage.”

***
This article was produced by the Financial Planning Association, the membership organization for the financial planning community, and was edited by FPA member Robert S. Jackson, PhD. and Patrick Murfin of Oaktree Capital Corporation.

Grandparents Can Still Help their Grandkids Get a Good Financial Start

Though grandparents are among the millions who have taken a big hit to their portfolios, careful planning still can ensure a healthy contribution to the education and financial future of their grandchildren.

According to 2008 research from The Hartford Financial Services Group , 65 percent of grandparents reported that they plan to contribute financially to their grandchildren’s college education, yet that less than one third of had talked with their adult children about those plans.

The amount of money that changes hands between grandparents and their grandchildren is typically substantial even before the kids head off to college. Hartford reports that more than 40 percent of grandparents spend more than $2,000 annually on their grandchildren before they reach 18 years old. When the kids head off to school, over half of grandparents who plan to contribute will give more than $10,000, with a quarter of those planning to give more than $30,000.

It makes sense to coordinate a gifting strategy with the parents. A Registered Investment Advisor (RIA) like Oaktree can be a big help in sorting out options.

Talk with adult children

Adult children and their parents might find it difficult to talk about money issues in general, but discussing a positive goal like funding a child’s future can pave the way to also making later discussions about the grandparents’ estate issues and end-of-life care a little easier to handle. These discussions will hopefully deliver a reality check to all parties. The Hartford survey says that 60 percent of the grandparents believe that financial aid will be an important part of the way their grandchildren will pay for college. Adult children who have been involved in college planning may already know that federal aid is declining, and that grants and scholarships cover only an estimated 15 percent of total college costs.

Start early

While many families don’t turn to relatives for help until there’s an immediate need, earlier planning produces better results. Most grandparents already know from their earlier experience as parents that saving for a child’s college education is easier if it starts at birth. The same is true for the next generation. Grandparents and adult children need to set a plan in place as early as possible for maximum benefit.

Coordinate college support with overall estate planning

Grandparents should look at their support for their adult children and grandchildren as an overall part of their estate strategy. A professional financial advisor, in concert with estate and tax experts, can help grandparents and their adult children settle a series of estate issues at one time, saving time, money and worry later.

Consider the 529 plan option

A 529 College Savings Plan is an investment vehicle operated by a state or educational institution designed to help families set aside funds for future college costs. It is named after Section 529 of the Internal Revenue Service Code, which created these plans in 1996. If parents have set up a 529 plan for their child, grandparents can contribute to that plan or they can set up their own 529 plan account with their grandchild as the beneficiary.

Watch the fees

No matter what savings or investment options you choose, make sure you’re not overpaying fees. Brokers and agents will charge commissions and typically transaction fees. Mutual funds generally charge in excess of 1 percent of assets annually in “distribution fees” alone, plus front-end commissions, and often exit fees as well. RIAs, on the other hand, charge on the basis of total assets under management and typically charge none of these commissions and low, or no, “distribution fees.” Morningstar.com can provide you a general review of most mutual funds including their fees that you might be considering. The Security and Exchange Commission’s Mutual Fund Cost Calculator can help you determine how the fees and other costs associated with the fund will add up over time.

Offer some investing training wheels

Grandparents have a unique relationship with their grandchildren. They can teach without “lecturing” like their parents, and for that reason, they might consider setting up an investment account with a small balance that the kids can monitor and discuss under the supervision of the grandparent.

Make the grandkids beneficiaries

Naming your grandchild as the beneficiary of a retirement account or insurance policy can be a tax-smart way to provide financial support that could be for either college or a first home.

This article was produced by the Financial Planning Association, the membership organization for the financial planning community, and was edited by FPA member Robert S. Jackson, PhD. and Patrick Murfin of Oaktree Capital Corporation.

Happy Holidays from Woodstock

"Christmas in Woodstock"

Photo by Harold Rail

Wishing everyone a glorious holiday season from snowy Woodstock, Illinois. Treasure the true gifts of the season—love, family, peace, and sharing.

--Robert S. Jackson.