Tuesday, December 22, 2015

"....Planners & Clients Kill Personal Financial Plans & Goals"

Personal Financial Planning Software Doesn’t Kill Personal Financial Plans & Objectives; Planners & Clients Kill Personal Financial Plans & Goals

Guns don’t kill people; people kill people. And the same goes for software and personal financial planning: software doesn’t kill personal financial plans; planners & clients kill personal financial plans.
          Yes, software may misfire, software may be incomplete, and software may not be real time (though it is getting there.) But the real impact on realization and or being on track to personal financial goals from potential problems impacting the goal(s) (other than being realistic to begin with), is contingency planning in the planning process and updates.
          Placing the blame on software is placing the killing on the gun rather than who pulled the trigger.
          Trigger events are critical in contingency planning – be they a decline in a portfolio for an objective by X%, a medium to high probability and high serious potential event on a client’s business, or Obamacare care effecting the (beta- volatility) of an Internist’s flow of income.
          So while software is important, damn important – to play what if, to project, to now be more real time and user friendly, things not worth doing are not worth doing well and better to do the right thing right (contingency planning) then the wrong thing right (great software minimal contingency planning).
Now, it is true one can’t plan for all contingencies (there is always something). And one can get paralysis of analysis at the extreme. Furthermore, the high seriousness and low probability contingencies i.e. a flood, a disability etc causing capital depletion are best handled by risk transference (insurance) unless self insurance is a viable alternative. But the medium to high probability and medium to high seriousness (impact) potential problem analysis is given short shift in personal financial planning – as personal financial planning is minimally personal let alone based in strategic planning techniques used in business but focused on financial techniques applied to personal resources & More, More, More (which to repeat myself has a habit of becoming less, worse, later).
Below are my previous thoughts to a planner relative to ‘is financial planning software’ being incapable and a contingency planning process (potential problem analysis adapted from Kepner Tregoe Decision Analysis) that may be useful. Also, it is suggested that client’s ask their planner to see the planner’s business plan and his or her contingency planning for the practice. This suggestion is not to review their plan – but to see if they actually plan and contingency plan for their business or does the Emperor Planner have no clothes.

…I agree to your indictment  that personal financial planning software is incapable in addressing the ups and downs, uncertainty, and volatility.
Unfortunately, while valid - this indictment puts the software cart before the horse not vetting sufficiently contingency planning techniques which then financial planning software can be applied to....

The first question is contingency planning and triggers. Per Kepner Tregoe potential problems analysis (which I used per objective in copyrighted forms while in practice) the questions become

1- what is the potential problem(s) per objective
2- what would be the cause
3- what is the probability (high, medium, low)
4- what is the seriousness (high, medium, low)
5- how to prevent and if not prevent
6- how to minimize

and I added what is the trigger #7.

Thereafter, one has an action plan on the medium to high probability and medium to high seriousness in most cases as to what, who, when, cost etc... - per each objective within each key result area. (per asset protection/depletion - where there is low probability high seriousness - i.e. flood, hurricane etc one would use risk transference - insurance)

Where software - as a tool comes in - is the what if - in the contingency planning - set off by the criteria.

Thus, the horse is put before the cart so that the planner doesn't become hoarse with assurances and platitudes - but can with the client recall their documented contingency planning – being proactive rather than reactive or in a blame game.. (Even then, there still will be tuchass comforting necessary due to client amnesia(c))

Monday, December 21, 2015

An Example of The Distinction Between MORE-on Personal Financial Planning & ENOUGH Personal Financial Life Planning The Third Ave Focused Credit Failure:

An Example of The Distinction Between MORE-on Personal Financial Planning & ENOUGH Personal Financial Life Planning
The Third Ave Focused Credit Failure:

When Third Ave Focused Credit failed (invoked no redemptions), I am sure many a ‘planner’ heard – complaints and was blamed if it was in a client’s portfolio. The primary focus of the discussion should not have been on Third Ave Focus itself – but – if truly managing goals rather than assets (i.e. really doing personal financial life planning) the initial response by the ‘planner’ (which I guarantee it was not) should be to ask the client to ask himself:

1- Do I still have ENOUGH (or on target)  relative to my withdrawal or accumulation goal
2- Where did Third Ave Focused Credit fit relative into the goal
3- Why Third Ave?

Given the allocations, one's cash position and backups (ssi, and reverse mortgage) - do you still have enough per goal?

The Fit:  Third Ave Credit to begin with - basically would have been at the top of an income portfolio - not for consistent income - but it was a method of takeover using bonds - which would result in income and gains - with a bond base - which has been Marty Whitman's forte for 50+ years i.e Kmart etc

Why Third Ave - because it was under Whitman's supervision who other than Marks at Oak have been two of the if not the preeminent vulture capitalists using bond plays for decades.

Finally, third ave credit isn't alone on the hit it has taken - other funds of this nature are down 40%+ - a lot has to do with oil plays and even some health investments.

But the real question - the first question- is does one still have ENOUGH – or on target to enough. If a person is satisfied he or she has ENOUGH - that takes the blow out. If one only focuses on the day to day - this is a jolt especially given Whitman's background and supervision.

The question again to put things in context - does one still have ENOUGH or on target to ENOUGH per the goal or goals?

Thus analysis - after the fact - is a micro view of an asset not of a goal. Secondly, the analysis is just that - not personal financial planning let alone personalized financial planning. One manages goals not assets.

Follow up
ENOUGH Personal Financial Life Planning Philosophical Discussion

Per the above, I  hope I made the vivid distinction between financial planners (who are really just applying financial techniques to personally held assets) and personal - even personalized financial 'life' planning - managing goals not assets. By and large, so called personal financial planning - especially those on commission, fee and commission and yes even those on a % of assets under management are just asset managers in personal financial planning clothing. Thus, this financial planning is just a Trojan Horse for assets under management.

But the reality is there are no parasites without a host - and the host is client's MOREcondria derived from the Yetzer Hara (derivatively The Yetzer MORE inclination). This is not to exonerate - but rather my observation.

At the bottom is man's identification with his body as 'his sense of sense' and fearing extinction his strategy is acquisition (again in Hebrew acquisition is Cain - yes as in Cain and Abel) in delusion to solve mortality or at best palliate.. The derivative of the acquisition strategy is MORE and the impetus for certainty, permanence & continuity (even though more, better, now has a habit of becoming less, worse, later). Thus, there is never ENOUGH in this heuristic

This so called personal financial planning of managing asset NOT goals - is a logical symptom and why when an asset goes bad the question isn't 'do I still have Enough?' but rather blame, shouldas, couldas etc.

Thursday, December 3, 2015

MORE Hyper Chondria© It’s Worrying Causes Up To 5 Yr Lifespan Reduction

MORE Hyper Chondria©  It’s Worrying Causes Up To 5 Yr Lifespan Reduction

No worries
(Gen X cliché)..
What me worry?
(Alfred E Newman, Mad Magazine)

·         The Yetzer WORRY is a Jewish genetic inclination
·         The Yetzer WORRY (a derivative of the human condition Yetzer MORE  
·         The Yetzer WORRY reinforces  and  geometrically compounds:

The Yetzer MORE
·         Can take 5 years off of one’s life span
·         Once the Yetzer WORRY #1 is solved,  ‘the Yetzer WORRY  #2 is promoted giving rise to in the personal financial realm the following Yetzer MORE excuses:

·         I’m older now
·         That was then, this is now
·         I don’t have the energy
·         It’s a different world
·         China’s impact
·         The demographics have changed
·         Average middle class income is down
·         Jim Cramer says
·         That was then; this is now
·         The economy is artificial with the Federal Reserves low interest rates
·         Social security is a ponzi scheme
·         And the golden oldie that never gets old, ‘you don’t understand…I have to make more to have enough which I can’t tell you what enough is’
·         etc

Per a UK study, worrying - even  small stuff may cause us to worry for up to two hours a day which results in taking up to 5 years off your life not to mention reducing the quality of one’s life & health  with these worrisome preoccupations. Just think about (when not palliating in an altered state) the compounding imperative “never ENOUGH” generating & bolstering the compulsion of MORE MORE MORE beyond ENOUGH aka  MORE Hyper Chondria©.

            When worry and or its stress controls, according to clinical psychologist Dr. Bart Rossi stated ‘it could be a killer.’

Now per the study and subsequent comments in the media, one can treat the symptoms (i.e. talk about your worries and concern), know the facts to prevent escalating catastrophizing as  Albert Ellis termed it, even list the worries attempting to determine the cause and how to prevent or minimize the causes, effects, and discontinue worrying about the past and things one has no control over (easier said than done).

But, one can treat – manage – not eliminate - an underlying cause of Yetzer WORRY and its sub-derivative     MORE Hyper Chondria©  by:

1.      finding/discovering meaning IN one’s own life (their significance and mission) – enough to live for
2.      knowing what is ENOUGH – enough to live on – to enable #1 and thus reduce  the MORE Hyper Chondria©

Given the foundation fear of extinction (which man identifies as the body) and pain -  the total elimination of the Yetzer WORRY is fantasy as worry can also be useful in protection and caution.

He crosses his bridges before he comes to them. He gets it from his father
Mom, Rhea Schwartz on my worry at age 8

            Of course, this essayist writes the above recognizing full well recognizing his own hypocrisy and knowing we teach what we need to learn ourselves. We all self induce and suffer from & to some extent  Yetzer WORRY and MORE hyper Chondriacs© derivative however manifested.
            Finally, the  MORE hyper Chondriac© phenomena is  a dilemma between reduced longevity and the worry of ‘not having ENOUGH’ is illustrated by a Jack Benny comedy skit. When Benny was being held up at gunpoint by a robber, he was given a choice by the bandit who asked,“your money or your life?” Benny responded, responded, “I’m thinking, I’m thinking.” 

Pawnote: If all else fails –get a dog as an AIG study indicates the company of a dog or dogs increases human lifespan/longevity 7 years – which makes one a plus 2 (+2) in hockey terms offsetting the Yetzer WORRY& Yetzer MORE’s 5 year deficit.

Monday, November 30, 2015

Transformational Personal Financial Life Planning: Money 101 Good(s) & Service(s)

Transformational Personal Financial Life Planning:
Money 101 Good(s) & Service(s)

Transform= change, alter, renovate, make over

          Money (the current currency) is goods and services.
          However, money (goods and services) cascades to other representational values sequentially and or concurrently as follows:

  • Survival requiring goods and services
  • Not being dependent on others for goods and services (so called ‘independence’)
  • Not taking crap (‘FUability) by having goods and services
  • Not compromising principles therefore choice by having goods and services)

But money – and the amount therefore may also represent

  • Comparative net worth – net worthiness – status- versus others (be it relative to one’s dastardly brother in law, neighbor or Fortune 500) by having MORE  goods and services
  • A goods or services palliative creating altered (not altar-ed) states to divert, avoid, fill in one’s life
  • Goods and services enabling making a difference – whether for show relative to others (see comparative net worthiness above) and or one’s sense of elevated self (of modest stature or not)

But money – and the goods and services it converts to the underlying ‘value(s)’ – has the potential to become ‘transformational’

  • A means to enable the manifestation of meaning IN one’s life
  • A means to materialize the spiritual IN one’s life and others’ lives anonymously in deference to the will of the higher power one believes & has faith in

99%+ of Personal Financial Planning -even Personal Financial Life Planning (1)- regardless of assertions otherwise and irrespective of compensation method (yes, my ‘fee only’ colleagues) has catered to the Yetzer Hara inclination of MORE . This “personal financial planning” has genuflected to ‘not being dependent (fear), FUability, and or comparative net worthiness (without monetizing the client’s own adaptability and resourcefulness proven in difficult periods) – accented with comparison to external indexes (Dow Jones etc for More) though with a wink and a nod to goals. This ‘personal financial planning’ (reinforced by asset under management compensation) is systemically about managing assets (asset management) NOT managing goals – as behavior (compensation) is a function of its consequences. This personal financial planning is just a Trojan Horse for asset management and allocation.
And yes, while there is for estate and tax planning purposes engagement in charitable discussions and trusts  which may ‘coincidentally’ continue the renumeration of the planner (indirectly or directly through an affiliated Trust company) while appealing to named (vanity) recognition.

Yes, due to the primary fear of extinction (which is identified with the physical body) man’s foremost strategy against the inevitable is acquisition be it delusional or just palliation which inherently leads to the tactic and pursuit of MORE MORE MORE.
And yes, this underlying fear gives rise to the overriding personal financial terror and trepidation of outliving one’s money (goods and services – taking crap, being dependent, not having choice)
But there is a second concern that increases in frequency and severity especially for those getting up there in years. No longer believing in their invulnerability of the younger years, given their rotational ‘this’ and that’s,’ and those more frequent (when not awakened by age related conditions at 2 am in the morning) 2 AM eyes open staring at the ceiling increased ‘wonderings’: ‘is that all there is’ (before going back to sleep) waking up and increasing the dosage of their palliations and diversions.
Yes, goods and services may divert and palliate (the 50 year old male with a perm & the face life) with increase reoccurrence the hole in the soul manifests and presents itself in different ways as enunciated as:

  • making a difference (without busting a gut in 20 minutes at a level that it took 20 years in their vocational activities)
  • ‘the next chapter’
  • ‘something’s missing’

The aforementioned  ‘the hole in the soul’ is the lack of meaning IN one’s life or as Victor Frankel wrote ‘the will to meaning’ is devoid.

          Transformational Personal Financial Planning be it the approach I’ve suggested in different evolutions from ENOUGH to now ENOUGH: Jewish Personal Financial Life Planning™(2) or another process – aligns personal resources with life values and goals towards and yes, funding to enable ‘meaning IN one’s’ life for transcendence – transformation…for one’s good and one’s service.

Some things should stay as they are (conform), some reformed, others chloroformed, but the alchemy of personal financial planning requires transformation
"Just A Man of Dog"

          Otherwise, stick to the MORE, MORE, MORE – what are we all MORE ticians (e.e. cummings) remembering more, better, now which has a habit of becoming less, worse, later and MORE MORE MORE is just MOREphine for MOREons. Something to ponder during those 2 AM enlarged prostate callings and staring at the ceiling

 (1)    Today’s personal financial life planning seems to be ‘yakety yak’ (I’m your best friend) to retain asset under management compensation of 1% rather than to empirically concretely get to align the assets (financial and otherwise) with the client’s mission, meaning IN his or her life (especially given the planner hasn’t figured it out for himself or herself to be their own message).
(2)    ENOUGH: Jewish Personal Financial Life Planning™: healing personal financial anxiety, puttin’ money in its place, to connect to elevate and transcend to one’s significance & assignment: what one is meant to do and meant to be with ENOUGH to live on for ENOUGH to live on…

Wednesday, November 25, 2015

The Hobbit: The Yetzer MORE & 'My Precious'

The Yetzer MORE & My Precious  
from The Lord of The Rings
(The Two Towers)

The Yetzer MOREring
(The Precious)

Gollum: We wants it, we needs it. Must have the precious.
Gollum: He wants the Precious. Always he is looking for it.
And the Precious is wanting to go back to him... But we mustn't let him have it.

            Ever ever so gently, when my Hebrew school report cards came out, my Bubbe  (Tillie) Schwartz would sit down in her chair in the dining room and get out her change purse. With failing eyes piercing through her bifocals, she would gingerly open up that little change purse and take out a dime, putting in on the adjacent cabinet for each ‘excellent.’ (I had very few excellents in Hebrew School as the best students in public school, in competition, sought to be the worst Hebrew school students.) Still, hunched over that precious little change purse, Bubbe would close it ever so gently putting it back into her apron – giving ‘her boylah’ – the two or three dimes – if that.

            What goes up must not go down because ‘it’s ours, our precious” due to the infection of Yetzer MORE.
When there were years where relative to the goal and the risk, the allocation outperformed the required rate of return for the goal, I repeatedly reminded clients and others to remember this as ‘you will be giving some of this back in the future.’ Furthermore, when a fund, for example, did 2x or 3x the required rate of return – I made a point to remind them of the eventual part give back let alone don’t continue to expect this.
Of course, the clients and friends said they understood and recognized this eventuality but when it occurred – the Yetzer MORE  got the best of them forgetting the aforementioned counsel, forgetting that each stock, bond, mutual fund etc is just 1 ingredient in the goal – focusing on the one ‘bad’ one (not the goal even let alone ‘the good ones.’)
The Yetzer MORE – manifests itself as ‘my precious’ no different than for Gollum – and once the stock, bond, whatever is up – it’s theirs forever at that level (unless it goes higher) and any diminution is taking away, stealing their ‘precious’ even if still on target to or maintaining Enough…
The irony #1: ‘my precious’ more, better, now has a habit of becoming ‘less, worse, later’ in the Sisphusian pursuit of Precious MORE

Where is the power of The Yetzer MORE  derived from?
The Yetzer MORE is a derivative of the Yetzer Hara (the not good inclination) which itself comes from Cain – Acquisition.
And why Cain (as in Citizen Cain) Acquisition?
Acquisition is the perceived antidote or at least palliative to fear of extinction – our sense of self which we identify with our ‘precious’ body let alone being ‘dependent’ and taking ‘crap’ (not having choices being ‘in control.’)
Thus, The Yetzer MORE is not offset by:

·         faith in God and or
·         faith in one’s own adaptability and resourcefulness and or
·         knowing what ENOUGH IS, and or
·         meaning IN one’s life (which is relegated, or put off as ‘being to busy getting More to have ENOUGH which is never ENOUGH’ though at the same time concerned even complaining  about ‘what next in their life,’ or the ‘next chapter in their life’)

The Yetzer MORE OVERRIDES – Hi Ho Silver!! – (is it a good buy?).

The Yetzer MORE is Gollum’s my precious. And my precious is a Yetzer MORE phing of The Yetzer MORE.
And remember: one can die from an overdose of MOREphine – my precious.

Hi Ho Silver!! – (is it a good buy?)