Putting It In; Taking It Out- Part II: Context is Everything

Putting It In; Taking It Out- 

Part II: Context is Everything

I’ve cut so much hair, I’ve lost my concept

Warren Beatty in Shampoo

            “Okay, okay.

            Yada, yada, yada.

            Enough already, Mr. Enough!

            What is the best method for withdrawal (decumulation – takin’ out) for income that I won’t outlive???”

            ‘Tough cookies!’ as we would say at West End Drive while playing boxball in the street in Overbrook Park, Philly with the likes of Marvin ‘Dog Food’ Dash, Alan ‘Wonderwoman’ Winderman, and Rickie ‘Rosenbag’ Rosenberg. You’ll just have to get through Part II first as: things not worth doing are not worth doing well or as Mae West would say, ‘things worth doing are worth doing slowly’ if Part III will be of any value.

            Context is everything.

            “The Answer” isn’t an answer as there are only tradeoffs. The appropriate tradeoff is framing the correct question, specifications and criteria.

            So…

            There are two overarching contextual questions to determine:

1.      The Goal/Objective Parameters (from a deterministic and as well as stochastic perspective ((Monte Carlo probability simulation)

2.      The Boundaries (specifications and criteria)

The Goal Objective Parameters

(the following assumes the objective is interrelated with other personal financial objectives – not in being dealt with in isolation- otherwise you solve /tradeoff one problem and create two others)

            Typically a deterministic (1) personal financial objective should address the following elements:

1.      Amount (Expected Outcome)

2.      Start Date (2)

3.      Duration (Time Horizon)

4.      After Tax Rate of Return (remember it is not what you make, it is what you keep)

5.      Inflation Rate

6.      Funding Required per the aforementioned (before offsetting accumulated resources)

7.      Annual Payment Required to Fund Risk Adjusted (3)

A faulty premise in retirement funding and distribution is that the amount required even after meeting the required rate of return – risk adjusted – and increased for inflation (or decreased for inflation) will be the same required amounts throughout all of retirement.

Typically, not always, there are three phases to retirement (not including the slow down transition period prior to retirement):

1.      Go go

2.      Slow go

3.      No go

Each of these ‘sub’ retirement objectives typically requires different funding amounts as well as  distinctive assumed inflation rates (especially considering increased non covered medical expenses – as ‘everyone wants to go to heaven,’ as comedian Timmie Rogers would state, ‘but nobody wants to die’ ((even if Medicare won’t cover the expense))). Thus, there is really at least three ‘retirement objectives’ regardless of deterministic or stochastic approaches to ‘what the number is’ and how much can be withdrawn.

There are other criteria, factors and specifications (rational and emotional) to consider including but not limited to:

1.      Risk Capacity (as opposed to risk tolerance)

2.      Withdrawal sequence taxable accounts versus tax deferred accounts (pension, profit sharing, IRAs, 401ks etc) and, for example, the sequences’ impact on the Obamacare 2.3% surcharge threshold

3.      Inheritance desires for your lucky sperm and ovarian club progeny

4.      Volatility buffers

Risk Capacity

            I’d love to play center for the Denver Nuggets. But at 5’5” tall, regardless of skill set, but I don’t have the required height capacity.

            Planners throw around ‘risk tolerance’ like it was Oprah telling the audience everyone gets a new car today. The risk tolerance measures are typically global and qualitative NOT IN CONTEXT OF THE OBJECTIVE. Therefore, I find them worthless. If all one requires is a 5% after tax rate of return – even if the S&P is up 20% who cares – you manage the goal with the least risk – rather than managing the asset as the vast vast majority of so called personal financial planners (commission, fee and commission, and yes even fee only especially the a little bit pregnant percentage of assets under management supposedly fee only planners as well as personal financial planning pornography journalists) assert.

            Risk capacity is 1) at what point a decline impairs the objective versus the percentage decline (capacity) in the resources in hand the objective can absorb.

            Period – end of sentence (and not an Obama ‘period’)

Withdrawal Sequence Taxable & Non Taxable Accounts

            While technically your ‘tax deferred’ withdrawals are not subject to the Obamacare surtax, the withdrawals ADD to the base for calculation and imposition of the Obama Doesn’t Care surtax.

            PERIOD.

            All things being equal, however, the longer withdrawals can be delayed from the tax deferred account up to the required age of 70 ½ for required minimum distribution (RMD) the better. (That said, a discussion of Roth IRA’s in this regard is outside the scope of this discussion)

Inheritance desires

            Stipulating my opinion for a hand up not a hand out per the negative principle upon which America was founded (against hereditary privilege ()aka The Lucky Sperm Club)), too many work free retirements have been deferred, delayed etc due to the personal financial ebola of higher education costs incurred for offspring who have subsequently boomeranged back with resentment rather than gratitude to top it off.

            The above stated, here is the question, ‘will you jeopardize the retirement objective (income preservation) through requiring riskier higher rates of return and delaying retirement and its duration for wealth preservation (inheritance for your lucky sperm club?).

            If so, the legacy funding should be figured into your overall financial plan and its consequences on the retirement objectives (go go, slow go, and no go).

Volatility Buffers

            Volatility kills investment. We confuse volatility with risk (the risk of not making the goal – outliving the money) but still volatility is risky killing objectives because of fear of the moment – managing assets instead of managing goals.

            You know the story of Joseph and 7 good years and 7 leans years per the dream of the fatted cows and the emaciated cows.

            (Note per the dream after the 7 prosperous years represented by the fatted cows, the emaciated cows ate the fatted cows and gained no weight. This was the first instance of the Adkins Diet).

            In any event, under Joseph’s viceroy tenure, Egypt not only withstood the 7 lean years but Pharaoh (not the Egyptians per se) prospered by having prepared during the fatted years.

            Joseph had created a buffer from the volatility by storing during the fatted years.

            In several studies of mutual funds, there has been a curious finding: the mutual fund’s rate of return is much higher than it’s average shareholder’s because of fear during downturns and resulting turnover (volatility).

            To buffer the natural human tendency to retrench during volatility, a 2 year or more buffer of cash and cash equivalents is suggested.

            Yes, this will lower the overall rate of return though often not as much as one would think if as a result of the buffer one increases their deductibles on home, auto, blanket insurance as well as increasing the waiting period in their long term care insurance lowering premiums per year.

            An alternative for those over 62 who can’t afford this large a buffer given their retirement goals – a standby reverse annuity line of credit – can buffer and help one withstand the inevitable volatility swings that can destroy investment.

           

The above said – there is a major flaw in deterministic (average rate of return) personal financial planning – The Flaw of Averages

(Oy vay iz mir (oh, woe is me)!!! You had me slough through all above to state this???

Yes, because as useful the probabilistic method (Monte Carlo simulation) is, it too has problems ((not the least of which is keeping, sometimes unnecessarily assets from distribution, which, increases the basis for assets under management fees for ‘personal financial planners)) )

The Flaw of Averages in Deterministic Planning

            Given all the boundaries, criteria, and assumptions above, the major problem with the ‘deterministic’ approach – is ‘The Flaw of Averages.’ Per author Sam Savage’s book by the same title, The Flaw of Averages he describes the fallacies that arise when single numbers (usually deterministic averages) are used to represent uncertain outcomes.

            An example:

            The Platte River averages say 4’ in depth. Being 5’5” (compact, not vertically challenged) on a good day, I should be able to slough across it.

            Wrong.

            I’ll drown because at some points the Platte is 4” high and at other points 20’ deep.

            So using an average after tax rate of return, the average desired amount needed for the objective per year, average inflation rate etc – exposes one to what is called ‘sequence (of returns) risk.’

            For example per Savage’s book

            Let’s say you had $200,000 to invest in 1973 and expected it to last 20 years throwing off $32,000 (given a 14% rate of return – the average of the S&P Index from 1952-2001 - in the deferred IRA). Well the market was off over 38% in 1973 and the account would have tanked in 8 years. However per Savage, starting in 1974, the account would have made all 20 years distributions would some left over, versus starting in 1976, the fund would have tanked in 10 years thru 1974 and your little nest egg might last 7 years at that.

            Thus there is a sequence risk to average rates of return.

Monte Carlo Simulation per Objective

            The deterministic model does not address sequence risk, stochastic (Monte Carlo simulation) methods do. The result should be after going through thousands of iterations, the probability of meeting the goal and or at 80% thru 95% what it would take additionally to make the goals.

I prefer a baseline Monte Carlo step – what if I change nothing and precede as is – what is the probability of failure stipulating bad data in bad data out. Critical and typically overlooked – is running different longevity scenarios.

More often than not, the results of Monte Carlo analysis are so bad – clients go ‘here, I thought I was doing great’ or worse, ‘what the ((well you….))’….

That is why both the deterministic and the monte carlo simulation should be run with the three retirement phase portfolios (go go, no go and slow go) as well as differing longevity assumptions – to see the probability of failure which sets up the discussion for next Part III – Methods of Distribution for Income Preservation.

Remember:

·         Context Is Everything

·         Manage Goals Not Assets

·         & Mae West

           

(1) Deterministic Model – a mathematic model in which outcomes are precisely determined through known relationships without any room for random variation. In comparison, stochastic models (i.e. Monte Carlo simulation) uses ranges of values for variables iin the form of probability distributions. In personal financial planning, the deterministic model, for example would yield, the average payment necessary to fund a goal, the average distribution available during the duration, etc. The Monte Carlo method would yield given the criteria inputted – the probability of reaching the goal.

(2).- One study indicates that retirement date explains 53% of the fluctuation in withdrawal rate.

(3).- Some use ‘beta,’ return on beta, downside risk measurements, standard deviation etc as the proxy for risk. Risk, not a game by Parker Brothers, when all is said and done, is making or not making the objective.

Part I: Income Preservation vs Wealth Preservation

Part I: Income Preservation vs Wealth Preservation

aka Puttin’ It In & Takin’ It Out

            Despite perfunctory winks and nods, all (99.99%) of personal financial planning is about ‘more.’ By external relative comparison more validates worthiness – yes, one’s worthiness in this model/heuristic. Thus, the change and acceptance thereof of income preservation as the primary objective – especially at the dilution & consumption of ‘net worth’ - instead of wealth preservation is a tough transition for most (as well as so called personal financial on a percentage of assets under management compensation mode the higher the assets under management the greater the planner’s compensation; the lowering of assets under management reduces the asset under management compensation of the planner).

            So, the transition and realignment of resources for income preservation usually comes at the expense of more, more, more while explicitly and or implicitly induces the feeling expressed or unexpressed irrationally of being less  - given the ‘lessening’ of net worth and the hardwiring and acceptance of the ‘more’ heuristic.

            A case in point: annuitization.

To annuitize is to convert a sum of money (from capital that has been accumulated) into a series of payments. For example, an investor may pay a sum of money in return for payments of a fixed or inflation adjusted amount for a fixed period of time or a lifetime of monthly payments. However, once the annuitant or annuitants (in the case of a joint and survivor annuity) die unless there is a period certain of annuity payments regardless of annuitants living – the annuitant and any residual accumulation is forfeited to the insuring insurer.

That’s right that $50,000, $100,000, $1,000,000 plus is gone once you are gone except in the cases stipulated above (which lowers the annuity payment during life.)

People hate insurer issued annuities (and well they should –which are a rip off with 2-3% going to fees annually – and variable annuities are worse).

But the concept of annuitization in personal financial planning relative to enough for income preservation is ‘worth’while.

One can do their own ‘annuitization,’ however, as some self serving brokers will state accurately but incorrectly (as a lawyer friend of mine use to say), you still have the risk of mortality and outliving your own annuity.

As far as mortality risk (some annuities pay up at death – not usual but some for a price do) better to have your own much much cheaper life insurance (assuming insurability (1)) than the cost of mortality insurance inside the annuity.

Relative to ‘outliving’ the self funded annuity – that is a question of planning and one’s tolerance for risk relative to the goal. After all, even with state’s limited annuity pool guarantees, insurance companies regardless of AAA+ ratings go down or are merged out to hide that they are going down – delaying annuity payments (remember Mutual Benefit Life’s AAA+ rating as well as New England Life and Confederation Life – Mr. Broker?).

Annuities are really just a wrapper around bonds and income investments though variable annuities have equities inside as well. The only distinction is that – and assuming the insurer doesn’t go down – that the payments will continue – you can’t outlive them for which you pay a heck of a premium – commission (on the purchase or in surrender) and 2-3% every year.

Thus, an alternative privately created ‘variable annuity’ is buying Berkshire Hathaway B  and say a balanced or income oriented mutual fund like Vanguard Wellsley in equal portions over a 3 or 5 year period to minimize ‘interest rate risk’ along with a term life insurance policy to cover ‘mortality risk.’ After all, what do you think the insurers are buying for an immediate fixed annuity or a variable annuity?

So, annuities suggested by a planner (there are exceptions) is buy and large an indication of a lazy ‘so called’ planner.

Still, the overarching problem is the fear of outliving one’s money and therefore irrationally choosing wealth conservation at the expense ironically of the income preservation for not outliving one’s resources!

Income preservation methods (many) aka ‘putting it in and taking it out” (not code for personal financial pornography) will be the subject of the next post.

(1) What most insurers don’t tell those with higher mortality risk (and most planners don’t know) is that there are impaired risk annuities which have higher payouts based to the fact those impaired risk potential annuitants will have shorter longevity and thus the payout period would be less than normal

When 1% Is Really 20%: Assets ‘Under’ Management’s Misleading Personal Financial Planning Compensation

When 1% Is Really 20%:

Assets ‘Under’ Management’s Misleading Personal Financial Planning Compensation

If all you know is a hammer, everything will look like a nail

Maslow

            The predominant method of fee only and fee based personal financial planning is assets under management (AUM). And coincidentally, the asset under management percentage just so happens to have gravitate to 1% of the total assets managed.

Just coincidentally.

            1% of assets under management?

This metric is wrong – while accurate it is purposefully misleading to indicate ‘a small amount,’ while if the 1% was applied to the rate of return - the percentage would be much larger (assuming a positive rate of return and possibly worse much, worse if applied to a negative rate of return when the risk adjusted rate of negative return was greater than the market loss).

            And that 1% asset under management compensation as a percentage of the rate of return will be probably be an even greater as the increasing demographic of an aging population takes net more and more out of the market which,  compounded by declining birth rates, makes for a greater probability of declining rates of return in the financial markets in the future.

            AUM compensation is not only a conflict of interest between planner and client (I win maybe you win; I win you lose) but it is inherently in conflict with the essence of personal financial planning – aligning personal financial resources to achieve life goals, values and payoffs.

            Arguments to the contrary by Trojan horse asset managers in personal financial planning clothing, are akin to Dracula guarding the bloodbank.

            Assets under Management (AUM) compensation is not only a ruse – it is contrary to the mission of personal financial planning as stated above. And the assets under management compensation causes the personal financial planner necessarily to perform relative external indexes (to Dow Jones, S&P) for more, more, more – instead of relative to the client’s best interests and goals. Furthermore, assets under management compensation functionally and constructively incentivizes the so called financial planner (really a masquerade for being an asset manager in personal financial planner clothing) to focus on comparative rate of return (S&P etc)--- not goals. And to reiterate, personal financial planning is about managing goals not managing assets. Managing assets is merely a tactic to achieve the goals and desired payoffs.

Do not place a stumbling block before the blind
Leviticus 19:14

For example, if the rate of return in the portfolio is 5% and the planner receives 1% on the assets under management, the client is paying 20% of the rate of return. This revelation is not disclosed in the planner’s investment advisory ADV required by the Securities and Exchange Commission under conflicts of interest or risks. Furthermore, if the client’s portfolio declines 5 – the planner still gets his or her 1% - increasing the decline in the portfolio to up to 6% of 16% of the decline.

You win – I win; you lose – I still win?

            Now planners will argue that if the planner doesn’t add value to the client (regardless of compensation method) the client will leave anyway. However, rarely does a planner disclose  that financial planning practices are overwhelming sold on the basis of AUM (AU= gold M= more for me?) on a discounted cash flow basis – like an annuity etc.).

            But if the masquerading asset manager in personal financial planning clothing was managing goals instead of relative rate of return (more, more, more comparatively), then comparison to indexes would be irrelevant. The planner might actually seek to return less than the market though with significantly less risk because the goal has been met or  on target and preservation of capital from risks would be primary. Thus,  Dow might be up 15% but all that was necessary for the goal was 8% - why not lower risk to insulate the goal?

            Why not?

            Assets under Management compensation is reduced.

            Assets under Management is in a conflict of interest with the achieving of goals – fueled by the planner selling more, more, more rather than meeting goals, goals, goals.

            Why sacrifice what is needed for what is not needed?

            The answer is More the allure of More absolutely and relatively for the client – the allure of More by AUM for the asset manager in personal financial planner clothing.

            This AUM compensation has led many a AUM compensated planner to suggest larger mortgages so the client would have More in the market – for a higher rate of return. This is financial leverage rather than the peace of mind of having the house paid off – not being beholden – having FUability because of AUM and the allure of More. In this example, using a higher mortgage on a house is like a Hedge Fund using leverage – which magnifies returns on the upside but also on the downside as the 2007 meltdown proved. Is this AUM inspired leveraging aligning personal resources to achieve life goals and values?

An ass-et manager is an ass-et manager is an ass-et manager

            In a broader context, if the question is ‘what is ENOUGH’ rather than ‘more, more, more’ – AUM would be irrelevant. Managing goals rather than comparison with the Dow Jones – goes further to relieving  financial anxiety, putting money in its place – so then clients can elevate – connect – transcend to their significance – their what next – their purpose.

            AUM is inherently a contraindication to the aforementioned – blasphemy to the mission of personal financial planning – an imposter – a personal financial planning pretender – when in reality it is just a false façade for asset management.

            Solutions to the misleading AUM?

1.      If the so called planner wants to be an asset manager, so be it. But stop calling oneself a personal financial planners and term yourself what you are: an asset management – first foremost – fully transparent.

2.      Also, it suggested that in the SEC ADV form and add new chart (which must be disclosed at the initial prospect meeting) showing the effect of the asset under management percentage as a percentage of rate of return of loss. (There is precedent – mutual fund’s disclose their management costs in year dollars already in their prospectuses). Thus, instead of the crutsy misleading minimization FOOL Disclosure of merely 1% AUM, the client can see the FULL Disclosure maximums of AUM over time.  (That surely will get the potential client’s attention and move the planner, in response, to other forms of fee only compensation –or give up the ruse).

3.      Reduction of AUM and or clawbacks if the there are losses. AUM would be restored once there are new profits.(Now that would be accountability). Thus, you lose – I lose. There is an exception: if there are  losses were, and on a risk adjusted basis, the planner’s performance was such that less was lost than the indexes, the planner, the planner should receive his AUM percentage with no adjustment relative to new profits. Thus, the paradigm of AUM changes to, you lose less – I am still rewarded – because the client has to gain less on the upside to get back to where he or she was previously.

AUM and Clients’ Culpability

There is no parasite (the AUM asset manager in personal financial planner clothing) without a host (the client). And the hosts are the clients whose lips say the want to achieve certain goals but their actions, telephone calls, and complaints say, “More, More, More….” (which is never satisfactory ‘we should have bought more, we shouldn’t have bought as much…)

Without getting in the questions of human nature, fear and greed, etc. still,  an AUM charat as percentage of rate of return chart needs to be disclosed for full and timely fashion. Then let’s see if AUM (assuming no price coordination by planning trade tax exempt associations) can stand on its own which would  uncover the real essence of AUM – holey asset management rather than  personal financial planning in holy cloth.

The Choice: ‘A Certain Nobility’ or The Commoditizing of Personal Financial Planning’?

The Choice: ‘A Certain Nobility’ or

The Commoditizing of Personal Financial Planning’?

There are no solutions, only tradeoffs

Professor Thomas Sowell

            Is Personal Financial Planning becoming commoditized by the likes of Vanguard (with it’s Vanguard Personal Advisory Service .3% vs 1% + a planning fee) and or Robo-Advisors like Wealthfront?

            Actually, for all the hand wringing and hoopla, the answer is no.

            What is being commoditized is the predominant organizing structure and paradigm of personal planning: ‘More .’

            ‘More’ is going for ‘less’ even at Verizon™.

            More is being sold for Less.

            More is becoming worth-Less (pun intended)

Disruptive distribution is taking its ‘toll’ on the fool’s gold promise of ‘More’ (Tautologically More is never enough). More personal financial planning is experiencing reductions in compensation akin to the effect that ETFs and Index Funds had had on mutual funds market share. And regardless of compensation method for More personal financial planning, compensation reduction due to commoditization is a reality ‘lessening’ the grip of the illusory value proposition of More personal financial planning. Further’more’, planners, head in the sand, whose personal financial planning compensation method is inextricably More woven do so at their own risk and practice peril:

            In particular, More is imbedded in financial planner compensation with the tradeoff supposed value of the method as illustrated below

·         Percentage of assets under management (AUM) compensation -if the client makes More, then the planner makes More (win, win!) But if the market goes down and the client assets are reduced– the planner wins while the client ‘loses’ as the planner is still paid (though less) per assets asset under management percentage. The Assets under Management “More” is you win, I win, you lose, I still win but less so.

·         Value added ‘reduction in taxes’: the client will have More by paying less (even if illiquid non income producing investments are employed for write offs  and or  aggressive tax strategies are used)

·         Sales commission/transaction planning: making More and or paying  less aka fill or kill whereby the salesperson in planner clothing gets his regardless of ‘More ’ or ‘less’

·         Fee and commission or fee and commission offset – see AUM above and fill or kill

Of course, in denial, the planning community will answer, “if we don’t perform (make More or pay less taxes so the client has More – we’ll be fired.” The reality is they’ll be fired anyway – as More is nebulous, ‘never enough’ and continually in akin to the hamster on the spinning wheel while being in comparison to others/indexes (S&P, Dow Jones etc) setting up inevitable relative disappointment in the More planner.

Recently, some financial planning practice experts have counseled solo planners facing shrinking compensation to ‘go big or go away’ (consolidation cost savings). ‘Go big or go way’ is denial of the top line revenue shrinkage – and a failure to see outside the  ‘financial planning practice litter box of More. Another approach bandied about is ‘BFF(F) (1)Yaktdy Yak (‘don’t talk back’) (2) nebulous personal financial life planning – to avoid reduction of fees.. While personal financial life planning is ideal, the faux Trojan Horse Yakty Yak personal financial planning trades on the advisor client relationship to maintain compensation level: mining the mountain rather than assisting the client to climb his mountains linking his personal assets to achieve life goals and values.

Any jackass can kick down a barn but it takes a carpenter to build one

Former Speaker of the House Sam Rayburn

So, how can the personal financial planner offer value and maintain his or her compensation level in the face of the commoditizing and depreciation of the ‘More’ “value” proposition?

Half truth; whole lie

Talmudic Saying

In the early days of fee only planning, commission and fee and commission planners would ask me, ‘how do I explain to present commission and or fee and commission based clients that I am going ‘fee only’ (without losing them?’

Flippantly, my first answer was, ‘tell them, I’m sorry I was shtupping you all these years, but I’m not going to shtup you any more, I’m going fee only.’ After the reaction of a Jerry Lewis spit take or a disbelieving head double take (‘what did you say?) by the ‘planner,’ I would offer the following suggestion: indicate to the client that in one year your practice shall be totally converted to fee only. However, offer the client a choice – he may stay with the current transaction/commission compensation agreement till next year  but thereafter immediately by converted to a fee only agreement or convert immediately to fee only compensation.. Having the sugar of choice makes the medicine go down a little easier – though the planner still should expect some churning and loss of clientele in the transition.

Please note the ‘wealth management division’ of a certain major major wirehouse  is now ‘touting goals based personal financial planning’ with full transparency (3) – not that the realization that ‘More’ personal financial planning does not offer a value proposition conducive to retention. My question to this Wealth Management head (still charging directly or indirectly the ‘More‘ oriented assets under management) – ‘what are you telling your clientele relative to your new approach, ‘sorry we’ve been shtupping you all these years, now we’re gonna make it right but still get compensated on the  More oriented AUM but now we will be transparent?’

(I’ve thought of sending the Wealth Management Director an appropo gift of a brief case filled with Vaseline jars to share with his clients.)

            Making the compensation transition while giving a client choice is the easy part, the hard part is offering a better value proposition than ‘More’ – value that goes to the heart of what really is the core essence ideal ‘a certain nobility’ of the role of personal financial life planning in the client’s life’

‘A Certain Nobility’: Enabling Connection

Every art and every inquiry, and similarly every action and pursuit, is thought to aim at some good; and for this reason the good has rightly been declared to be that at which all things aim

Aristotle, Nicomachean Ethics

Other than coordination, the fundamental promise of that certain nobility of personal financial planning is enabling connection even reconnection to significance. In particular, personal financial planning’s potential is aligning the client’s personal resources (capital – financial and otherwise) to the support the realization of life goals, values and their desired payoffs, thus, transcending to significance. And yes, that significance – the good – is meaning – the meaning IN the client’s life, making that difference fulfilling ‘why I am here.’ In the process, if the personal financial life planner is doing his job, there is a healing of personal financial anxiety, puttin’ money in its place to elevate to that significance – that certain nobility – and in this process minimize or remove some of the stumbling blocks in client’s paths (like “More” for More’s sake) which often is blinding them from realizing their life goals, values and significance.

Given the aforementioned’, and probably available for 99cents used on Amazon, within the first and second editions of my book ENOUGH(sm), is the ‘personal prospectus session.’ This session, which occurs after securing documents and initial information, but before running any numbers, quantifies values, illustrates decisions, turning points empirically on a life line allowing initial inferences as to how personal financial resources decisions and tendencies occurred within the context of past life choices, achievements and yes, even regrets. The personal prospectus concludes with the creation of one’s mission and vision– what it is and ‘more importantly’ what it is not. This personal ‘prospectus’ is not nebulous Yakety Yak personal financial life planning – but rather it is connection, alignment – and concrete.

And if do say so myself, this ‘personal prospectus’  holds up well now 40+ years since first implemented into my prior personal financial life planning practice.

Encore: Ta Daa!!!!

The above said, should I decide to update a 3^rd edition of ENOUGH(sm), amongst other changes, I would add a chapter particularly targeted to those 50 and above: The Soul Resume – After Life Insurance©. (This addition to the ENOUGH(sm) process would ideally, though not necessarily, to be implemented prior to the first annual review with the client over 50.)

It is my hope that The Soul Resume: After Life Insurance© will, in part, answer the questions of Encore, and ‘What Next’ (itself symptomatic of the continued search for meaning IN one’s life) as an affirmative exercise to disprove ‘there are no second acts in (this) life’ incorrect setting the stage for the client’s and yes the planner’s encore.

The Soul Resume: After Life Insurance© will be forthcoming in the next few weeks. Contact this blog if interested with acknowledgment that receipt of the The Soul Resume: After Life Insurance© is under the provision that it will NOT be redistributed. Name, address, phone number and email address will be required.

By Jim Schwartz (Yaakov ben Elisha)

‘A Man of Dog’ (In Training)

CHEWish on This(c)  More OR Less

(1).- BFF(F) – Best friend & fees forever a function of fees

(2).- Yakety Yak (by The Coasters) employing the tactic of ‘you have to understand before you are  understood’ (so that fee percentage will remain the same or higher)

(3).- The irony of this wirehouse’s Wealth Management Division advocating transparency is that for years the securities industry as well – yes, the CPA business and bankers fought full and timely disclosure of all compensation legislation in Colorado when functionally acting as and or holding themselves out as personal financial planners. Tooth and nails they fought an estimate of all compensation upfront with actual disclosure quarterly – and now, this wirehouse’s division is born again advocating transparency?

MORE & The Altered States™ Mutual Fund

MORE & The Altered States™ Mutual Fund

Against your will, you live

Ethics of The Fathers (Pirkei Avot)

            An all-encompassing theme throughout Torah (like ‘going down to go up’) is that of the involvement, withdrawal & return (Teshuvah).

            For example, on Shabbat we withdraw – separate from involvement with the secular to return again to the profane from the profound.

            (And on Shabbat it is said, the world is complete – unlike the continuous incompletion of our lives during the other days of the week.)

            Thus, there is this continuous cycle of involvement, withdrawal, and return for ‘the final return’ earned and merited.

            However, the above said, the cycle is more and more truncated avoided by the seeking of life ‘altered states’ – not just for the avoidance of pain or seeking of presentational pleasure – but the core motivation is to fill the void of emptiness (the hole in the soul) and alienation caused by a lack of meaning IN one’s life.

            When we think of altered states, this conjures up being high on drugs and or inebriated. But altered states’ to escape the aforementioned cycle include eating, entertainment, living life through others, the Broncos, and yes, readers even our dogs etc. These altered states are but pause button palliatives to band aid  – to flee the breads of our afflictions, short circuit the process of withdrawal, involvement, and return as well as the inevitable downs to go up.

            Thus, stocks involved in offering altered states is an investment theme to consider to capitalize on this ‘getting off’ palliation, and the void (the absence of finding meaning IN our lives – ‘against our (real) will.’

            For this, on behalf of the Shtup Family of Funds™, I present:

The Altered States Fund™ (symbol: OFF)

Tis better to alter than be altered

(so sayeth many a male canine)

            Turned off by the Obama -nation State of America?

            Turn off, Tune in, Drop Some Bucks into the Altered State Fund (OFF)

            OFF: invests in the following numbing/palliating/distracting mood enhancing industries:

• Alcohol (Distill, Swill & Refill)
• Tobacco/Pot (Wackie Tobaccie)
• Gaming – (Thrills & Chills)
• Sports (Bread & Circuses)
• X Rated Entertainment (Frills, Thrills & Handbills)
• Resorts (Sandals, Club Med etc)
• Companion Animals (Oxytocin & Devotion)
• Organized Religion’s Commemorative Plaques, Chachkas & Amulets

(Afterlife Insurance)

            The Altered States Fund Capitalizing On Great Escapes

A Kish Meir ‘Altered’ Tuchass Member of The Shtup © Family of Funds™

(A Tongue On Cheeks Production, 2013 update 2014)

***

Of course, the ultimate never ending enabler of ‘altered states’ is:

 MORE

(to kiss and make – whatever - better)

            Thus altered states, in time, require – MORE : higher and higher dosages to to ‘get OFF’ and remove one self to avoid confronting the void of lack of meaning IN one’s life and to sidestep the process of involvement, withdrawal, and return – as well as  going down to go up consciously.

            Altered states often become an addiction. And addiction sells as the old Phillip Morris (now Altria) is up over 50% in the last 2 years with dividends increasing over 10% a year and still yielding 5.5% (almost 400% over 1 year treasuries).

            And so, addictive altered states compound the probability that ‘the weekends are for Michelob©’ rather than Shabbat.

            The Altered States Fund(tim): offering A HIGH potential Return on others’ divestment from life (though Return is not guaranteed and restrictions may apply to Withdrawal)

Subsequent Stickering of Altered States Fund ™Prospectus:

As of 4/01/14 The Shtup Fund appoints a new

Altered State Fund™ Co-Manager: Red ‘Matrix’ Piller, CFA.