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Client Newsletter
Volume 4, Issue 4
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Inside This Issue:
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Feature Story:
We Want Our Own Bailout!
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Did You Know?
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Success Story Of The Month
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Financial Tip Of The Month
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Health Tip Of The Month
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Client Quiz
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For More Information
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Easter Rabbit Trivia
The saying "mad as a March hare" refers to the wild antics of male hares as they compete with other males in the spring. Mating behavior with females often looks like a crazy dance. The saying "they multiply like rabbits" probably refers to the ability of hares and rabbits to conceive a second litter while still pregnant with the first. It's not surprising that rabbits became fertility symbols. Rabbits, however, do not lay eggs, in case you wondered. The idea of the egg-laying bunny came to America in the 18th century with German immigrants in the Pennsylvania Dutch area. They said that on Easter morning, good children found bunny eggs in their hats. In Australia, there is a long-running campaign to replace the Easter bunny with the Easter bilby. The bilby, an endangered species, is a little smaller than a rabbit. It has a long nose and ears almost as big. A portion of the profit from selling chocolate bilbies goes to protection and research.
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"Live as if you were to die tomorrow. Learn as if you were to live forever." ~ Mahatma Gandhi ~
"A government big enough to give you everything you want, is strong enough to take everything you have."
~ Thomas Jefferson ~
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Well, we sent a request to the Treasury Department, and the new Secretary of the Treasury, Mr. Gettner, asking if we could skip paying our income taxes like he did, knowingly, and then get appointed to a top cabinet position.
No response.
We also asked for our own multi trillion dollar bailout, as we believe WE are too big to fail.
Still no response.
Shoot.
We thought these guys were going to send us our own bailout package, since they’re bailing out basically everybody and their brother!
In fact, as of the date we’re writing this article, the government agreed to give the biggest losers of all, the executives at AIG, another 30 billion dollars on top of the 150 billion bucks they’d already received!
See, they all say AIG is too big to let go down. That the economic consequences would be too catastrophic if AIG went down for good.
After all, they only lost 61.7 BILLION in the 4th quarter of 2008, so why wouldn’t we want to bail them out, and make sure we keep the same
executives in charge to run the company who’ve done such a bang up job!
Their total loss for 2009 was a mere 99 BILLION. Pretty good, huh? Can you remember a company losing 99 BILLION in one year?
We can’t.
Here’s the AIG deal.
According to MSNBC, there was a unit of AIG in London that had only 377 employees out of over 150,000 employees. Just a fraction of their total work force.
But this unit was in charge of their non-traditional investments, mostly involved in their creating and trading in things called “derivatives”.
We won’t try to go into an explanation of derivatives, but suffice it to say that they are kind of “phantom” investments that invest in things that don’t necessarily exist in real life, and don’t have any way of arriving a true market value. Mostly “assets” that were backed by home mortgages.
Then you have companies like AIG selling and buying insurance against these underlying assets derivatives, creating even more phantom money.
See, the big underlying “asset” AIG and
virtually all of the big derivative players used was packages of “mortgages”.
 We put “mortgages” in quotes, because these mortgages AIG was selling and putting derivatives on, were mostly based on large numbers of mortgages that were underwritten with little or no qualifications.
For example, people by the tens of thousands a month, were getting mortgages on houses they couldn’t afford, and didn’t have the assets nor income to qualify for a normal mortgage.
See, people could get a mortgage at a 1 or 2 percent interest rate (that was temporary) and not be required to put anything down.
They were told not to worry that the payment increase coming a few months out (that could actually be more than their monthly income) wasn’t anything to worry about, because the house would go up in value, and you can refinance it again then.
So banks packaged up thousands of these bogus mortgages as “securities”, somehow getting the “independent” rating agencies to give these basically worthless securities AAA ratings, and then sold them to large institutions, foreign governments, etc.
Then the AIG’s of the world concocted even MORE financial instruments, these derivatives, to artificially generate phantom money.
And when the “stuff” hit the fan last year, the house of cards AIG built on a foundation of nothing-ness...came crashing down.
Long story short, this 377 employee unit, plus the cooperation of the head guys at the home office allowed the company to get to be the biggest insurance company in the world...and also now be the biggest disaster in the world.
As of this writing, the share price on AIG is down to 42 cents a share, from over $40 a share less than a year ago, down 98%.
Wow. It’s hard to believe what we’re seeing. How could these guys who are responsible for all this keep their jobs? How come these guys aren’t in jail?
We’re not asking nor expecting sympathy for people at AIG and the dozens of other companies we’re bailing out that were mismanaged at best, criminally managed at worst...but think of the 150,000 people at AIG who had nothing to do with these mortgages and derivatives...yet have lost their life’s savings.
It’s an ugly story, but it should be out in the open. And it brings up the question of what YOU should do now. The ONLY answer is to sit down, and do a review of YOUR entire financial picture so you can build a new plan for your future.
So please give us a call NOW, before too much of the year passes you by! Let’s get your numbers crunched, and squeeze every legal dollar we can into your pocket!
Remember, we HATE hearing about what you just did with your money. We want to hear, “Here’s what we’re thinking about doing...”, not that you’ve already done it! We look forward to hearing from you soon!
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- REMEMBER -
WE WANT YOU TO CONTACT US WITH YOUR "HERE'S WHAT WE'RE THINKING ABOUT DOING" QUESTIONS, NOT YOUR "GUESS WHAT WE JUST DID!" COMMENTS!
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| Our monthly feature of tidbits of news and info to make your life easier and your money work harder, so you're healthy all the time! |
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1.) Apple, Microsoft and Palm To Offer New Operating Systems - This will be remembered as a landmark year for computer operating systems. In 2009, Apple's new Snow Leopard system is slated to debut, and Palm will offer an all-new smart phone system called Palm WebOS. Those with a first look at Snow Leopard say it tweaks the original Leopard operating system, with significant improvements of interest to developers .The official release of Microsoft's Windows 7 will affect more users. It will show up in new computers this fall, and Vista upgrades to Windows 7 should be available at about the same time. The new system solves many of the compatibility and performance problems of Vista. When Vista was first released, it didn't work properly with accessories, such as printers, until vendors made software fixes. For Windows 7, developers were told to enforce a rule that "if it works in Vista, it will work in 7." Upgrades from Windows XP, however will not be supported, according to Business Week tech expert Stephen Wildstrom. The Wall Street Journal's Walter Mossberg is enthusiastic about 7. Even in test form, he says, it "leaves Vista in the dust," and is a pleasure to use. It has fewer nag screens than Vista and is faster. Mossberg says it could be a serious competitor for Apple's current Leopard system. He doesn't know how it will compare to Apple's coming Snow Leopard. Windows 7 has flashy, multitouch screen navigation. Borrowing from Apple's OS X, it has a simplified task bar at the bottom of the screen. It shows a single icon for every program you have open. There is a simple option that let's you put an icon into the taskbar. Vista's Mail, Calendar, Photo Gallery, Movie Maker and Address Book programs are removed. To get similar free programs, you have to download them from Window's Live service or alternatives from another company.
 2.) Here's A Short Course On How To Safely Pull A Boat Or Camping Trailer- It's almost summertime. If you are a boating and camping enthusiast, you will soon be taking to the road. Now is the time to review your equipment, including the hitch and turn signals. Before making the first trip with a particular trailer, check your driver's manual to find the gross vehicle weight and towing capacity of your car or truck, advise the experts at Trailer King in Poughkeepsie, New York. If you use a trailer hitch rated for less than the weight you are pulling, look into a weight distribution system to provide a more level ride and greater control in traffic and cross winds. Because all vehicle/trailer hookups handle differently, practice doing some test turns, backups and stops in an empty parking lot. Before hitting the road, do a final check to be sure the hitch connection is good and that the brake lights on the trailer work. Check to be sure that anything attached to the trailer is securely fastened down. Know the height of your trailer, so you don't get stuck in a tunnel or under a bridge. A few driving tips from the California Department of Motor Vehicles:
* Drivers pulling a trailer must overshoot their turns, taking them wide enough so the trailer's path does not put it off the road. If it happens, stop. Be sure the road behind you is clear, back up and make the turn again.
* Allow plenty of extra space when changing lanes. Avoid abrupt moves.
* Test the stopping power of your vehicle and trailer on the road before you have to stop suddenly. Keep a safe distance behind cars in front of you.
* Avoid jackknifing when backing up, a term that describes the relationship between the vehicle and trailer to be in a V position rather than an L position. If it happens, pull forward and start again. Always go very slowly when backing up with a trailer and never let its position get beyond the L shape.
 3.) More Young Grandmothers, Grandfathers Want To Be Called Something Else - If you are 45 or 50 and look and feel 10 or 15 years younger, it can be shocking to be called Grandmother Jones, especially in public. You know who Grandmother Jones is, she's your husband's mother, not you. For you and other forever-young baby boomers, Granny and Gramps just won't do. Your whole generation is reinventing old age, according to the experts at AARP.
Men are as sensitive to age-related names as women are. "Papaw" will do for some. One writer for Saturday Night Live wanted to be called "Sheriff." Some children of baby boomers are puzzled that their parents are so concerned. But new grandparents often negotiate with them and come up with a name they want to be called. "Nanna" is a popular choice. One grandmother chose "Coco," and another chose "Glamma." YiaYia (YaYa) is chosen by some young grandmas even if they aren't Greek. Today's boomers say, it's not just about trying to stay young. It's about recognizing their individuality. Then again, one grandmother says she doesn't care what her granddaughter calls her, just so she calls her.
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| (Note: The details of these stories have been changed to maintain confidentiality, and some compilations are used to accomplish anonymity.) |
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 Gary and Jill are in their late forties. Gary has worked for over 20 years as a computer expert for a large technology giant.
With Gary being a whiz with computer networks, something that’s hard to outsource to Asia, he reaped the benefits of the boom his company was experiencing. The couple soon got used to stock options pouring in, and were enjoying living the high life. He was promoted several times and kept getting bonuses in cash and more stock options.
Like many other people in their position, Gary and Jill were riding the tidal wave of the economic boom pre-2007. Vacations every year, new cars, and all the extras they had never dreamed they would be able to offer their kids. Refinancing their house every year or two, with an ever increasing value.
Since they had been so conservative in their investments, they didn’t feel they had to hold back their spending. Until early 2008, they figured that they were set for the future.
Gary called us a few weeks ago and wanted to schedule an appointment as soon as possible. We cleared our schedule, so that Gary and Jill could come in right away.
When we sat down with them we weren’t surprised to see Gary so upset. We see so many people now-a-days who come in for an initial appointment, and are very distraught.
Gary held his head in his hands and literally started crying. Jill joined him in crying a few seconds later. Gary told us that his company had just laid him off. He had been moved to a new division of the company that was doing work for financial companies like banks and brokerages. They had just closed the division down because most of the clients are TARP banks, and cannot afford to upgrade or improve their computer systems. They eliminated all the staff in his division, and said, sorry, but your old job is no longer available, so you’re out of work.
On top of that his 401K plan, which was the bulk of their retirement savings, had shrunk by over 50%. He had most of it invested in the company’s stock and a mutual fund the company offered that offered mostly what used to be called “blue chip” stocks, that are now down the toilet. Gary was faced with finding a new job, as well as trying to make up several years of earnings in his retirement plan.
Gary felt that he made a big mistake by not being more diversified in his retirement plan, and felt very guilty about all the spending he had done over the past few years. He thought that he was set for life at his company, and in the field he was in.
He was also miserable about having taken the kids college funds out of what at the time, he said he called “boring CD’s” a couple years ago, right at the top of the market...and those funds have now dropped down to less than 40% of the original balances. Their oldest is going to college in the fall, and their daughter, only a year behind. Jill said she didn’t have the heart to tell the kids their dreams of the schools they wanted to attend might be impossible now.
We told Gary that the first thing we would have to do was take a look at his 401K, and then contact his Human Resources department so that his rollover was done properly. We also had to analyze all of his stock options, and determine which ones were worth anything (most weren’t worth a penny) and figure out how to handle the tax consequences of exercising and cashing in the options that did still have some value. Since some of them were non-qualified options, and others were incentive stock options, and the resulting tax issues were pretty complex.
Gary just found a job, but it is a low level position, and pays poorly, especially compared to what he used to make. Jill, who hadn’t worked outside the home since the kids were born, also found a low paying job in a golfing store.
We helped them create a new financial plan, and using the new jobs’ much lower numbers, showed them what kind of insurance they needed to get based on their new job’s much reduced benefits, how to pay the least amount in taxes legally possible, how to properly diversify their 401(k) rollover, what to do with the college funds, which debts to work on paying off first, and so on.
So, Gary and Jill began a new chapter in their lives together. Through all this financial turmoil and stress, they stuck together, becoming even closer than ever. Gary’s ego has been blasted, but he just told us that his new employer is opening a consulting division, and thinks he would be a good man to run it. (At much higher pay and benefits, of course.) We’ll keep our fingers crossed. And if Gary does land this new position, we’ll be glad to re-write their financial plan.
So, even though Gary and Jill have taken a big financial dip, it looks like they’ll come out of it so much better because of the planning. All and all, another potential failure turned into a modern day success story!
While your situation might not be the same as Gary and Jill’s, you shouldn't take that to mean your planning needs aren't just as critical! PLANNING BEFORE TAKING ACTIONS IS THE MOST FUNDAMENTAL, AND IMPORTANT ELEMENT OF FINANCIAL SUCCESS!! So make sure you take heed, and call us BEFORE making any moves! We're here to help you plan, and make sure you have the best shot at financial security! Especially during these tough economic times.
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 The 2009 economic stimulus bill, passed in February, offers first time home buyers a nifty perk: A 10 percent tax credit up to $8,000 for home purchases made in 2009. The tax credit is limited to buyers who have never purchased a home or those who haven't owned a home in three years.
Last year Congress passed a similar tax credit but there is one significant difference between that one and this new credit: You don't have to pay back the new credit.
In addition this new credit is 'refundable'. That means the credit pays for the taxes you owe and if the credit is more than the taxes owed, you get a check for the difference. The tax credits make the decision of whether to rent or own a much easier one and it seems buyers are making their move.
The most recent home sales figures (from December 2008) show a 6.5 percent increase in home sales. This surge in home sales, especially in the midwest and south, suggest that tax credits, plus favorable buying conditions have made home ownership very affordable. Right now interest rates are at 5 percent or lower while home prices are very reasonable. Some experts say the combination has made homes more affordable today than they have been in 20 years. That means you can own a great home sometimes for the same cost as renting.
Homeownership has been called 'The American Dream,' because homeowners take great pride in owning a slice of America. As a homeowner, you can make your home and your lot into exactly what you want, tailoring it to suit your tastes and life style. What many non-homeowners do not realize is that their home and the improvements they make on it increase in value over time. That is one reason why homeowners are worth 35 times more than the average renter. According to David Bach, author of The Automatic Millionaire Homeowner, real estate is the best way to take an ordinary income and expand it. "As long as you're alive, you have to live somewhere. Why not let where you live make you rich?" Bach writes.
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| Please keep in mind that this tip is designed to be of help for you, but is not to be relied upon as advice. It is merely a reminder that there are many choices you have available to you, and that planning is the only way to find the right answers for your situation! As with any financial issues, make sure you get the right information before making a decision! If you have any questions, we'll be glad to help you! |
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| These tips are not for everybody and should not be taken as specific recommendations. Before you take any action regarding yours or anyone's health, we strongly suggest you consult a qualified physician! |
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 Over the last 50 years, patients with almost any kind of complaint demanded antibiotics from their doctors, and the doctors often prescribed them. Today, medical experts say that in many cases, other courses of treatment would be better for several reasons.
- Antibiotics cause diarrhea up to 25 percent of the time.
- One in every thousand patients is found to be allergic and ends up in the emergency room. Others don't report less serious allergies that just cause a rash.
- Antibiotics very seldom help patients avoid a serious complication.
- They do nothing to relieve symptoms or pain.
- They kill off many microbes in the gut that protect against disease-causing invaders.
Doctors at Harvard Medical School advise that antibiotics are useless for colds, the flu, most sore throats and the vast majority of bronchitis cases. These illnesses are caused by viruses. Antibiotics kill only bacteria. Still, half of antibiotic prescriptions go to people with viral infections even though they won't be helped. Doctors say people want antibiotics, which may prevent some complications, and they do little harm. At the Medical University of South Carolina, they say patients don't want to hear about antibiotic risks. They just want to feel better. In many cases, antibiotics won't help.
To avoid prescribing antibiotics, more doctors are prescribing pain relievers, inhaled drugs that work against cough, and medications containing steroids for several other complaints.
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Q. Inflation is defined as a rise in prices?
True False
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Q. 5. What is tax freedom day?
A) A day free from sales tax
B) When you've earned enough to pay all taxes for the year
C) National day to protest high taxes
A. B: When you've earned enough to pay all taxes for the year. It's the day of the year, April 23 in 2008, when we as Americans have earned enough in total to pay all of our taxes. That day fluctuates - it's three days earlier in ‘08 due to the stimulus package recently put into place and, though there is a national average, state-by-state, Tax Freedom Day differs: New Yorkers have to wait until May 5, while Texans can start "celebrating" April 12.
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Baton Rouge, LA- Did you know that all financial advisors are not the same? And, if you need to get some help with your money, you will need to know what to ask a financial professional before you make any moves!!
Most people really don't know what questions to ask, or what things they should be aware of. When it comes to your money, you had better know!
Picking the right advisor can help you, and picking the wrong advisor can be a big mistake!
Make sure you know which is which! In today's messed up economy, you cannot afford to take any chances. If you are like most of us, these days of world crisis, economic slowdown, and general confusion have you downright worried.
You know what? You should be! Managing money was always tough, but this last year has set records for government foul-ups and totally unpredictable markets.
These are scary times. And, therefore, you must be sure to use an advisor that will be right for you!
To help you, we have prepared a FREE REPORT called "Ten Questions You Must Ask A Financial Advisor BEFORE YOU HIRE THEM!"
To get your FREE REPORT, and learn the secrets some advisors would prefer you never knew, call toll-free 1-888-6INVEST, 24 Hrs.to get your free copy of this eye-opening report will be sent to you immediately. Call NOW!
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YES! I'd like more FREE information on the following:
FREE Reports Available!
Call Toll-Free 888-6INVEST, 24 hrs., or Email us To GetA Copy Of Any Of These Free Reports!
- “The Tax Savings Secrets The IRS Doesn’t Want You To Know!”
- “The Secret Alternatives To Lousy, Low Yielding CD’s...What Banks Don’t Want You To Know!”
- “The 10 Biggest Mistakes People Make Before Or After Retiring...And How You Can Avoid Them!”
- “The 14 Questions You Must Ask BEFORE You Hire A Financial Advisor!”
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