It’s Your Money, You Are The Boss!

Are you the kind of person who would, if bumped in a theater lobby by someone rude, say, “Excuse me” or “I’m sorry,” when it’s not your fault?

I believe that you should be a squeaky brake disc, that you should be a strong advocate with your doctors, lawyers, and especially with your money managers.  I have spoken to people (some friends, some just strangers met on LinkedIn) who also have money with a hedge fund manager.  They cannot read their statements, which seem to be purposefully incoherent.  They seem to be ‘okay’ with this notion that they don’t need to understand everything and that it adds to the mystique of it all.  They’re reluctant to ask for explanations, not wanting to seem unsophisticated.  I say that if someone who wants to manage your money cannot explain his or her philosophy in a simple paragraph, then you shouldn’t let him or her manage that money.  And if those who do manage your money cannot simply explain their own statements to you, then you are probably headed for a sad experience.

It’s your money; always remember that.  Money managers tend to think that, once the funds are deposited, it’s their money and the clients are nothing more than an annoyance.  Cure them of this notion.  Call them once a month or at least visit the brokerage site to see how your funds are doing. 

As a growing company, we believe that the best ideas come from clients, from their interaction with the world and that we want them to check in if they have any bright ideas that could help produce superior returns. 

Investing for Your Children’s Future

There are a million ways to the truth in money management, and no such things as the “Holy Grail.”  And if you’re raising children and facing serious tuition prospects in the near future, here are a few guidelines to follow.

Of course, college education today can cost as much as $40,000 annually.  And that’s before you buy books, much less the computer-related fees that are standard in higher learning today.  If you take the route into private education earlier, at the high school level, the costs are still mind-boggling.  Boarding schools can charge more than $24,000 a year.  And because many parents are in a dual income (professional) household, preschool and private grammar schools can set you back $15,000 a year or more. 

I believe in a three-part practical approach to investing for a child’s education.  Start with U.S. Treasury zero coupon bonds.  These bonds pay no interest in cash.  You can buy them at a discount, say, 30 cents on the dollar.  They mature at face value in a specified time frame.  This way you can target maturities to match your requirements like, maturities to coincide with freshman year in college, and so on. 

Currently, money doubles in these instruments in 11 years so that $5,000 automatically becomes $10,000 in October, 2020.  This works out to be about 5.9% annually.  Not so hot, you say?  Perhaps, but it makes sure that part of the tuition is taken care of automatically, and you don’t have to suffer through the sometimes (if not more often) negative bias of the stock market. 

The second part of investing for children’s education involves periodic purchases of a good growth mutual fund.  Such can be found through Rydex and CAM Trading.  And money should probably be systematically added to the fund so that you can take advantage of dollar cost averaging (putting similar amounts in monthly or annually, often when prices are lower and more shares can be bought).  Any financial website can provide you with historical returns of all the mutual funds they carry.  The earlier in a child’s life you start this program, the better it will work. 

The last part is the most aggressive part, and like the growth-oriented mutual fund, it requires patience and discipline.  It involves hiring a professional investment management firm where your money can take advantage of both the ups and downs of a cyclical market. 

Put your plan into action.  The earlier, the better.  Invest at the same time each year, like a child’s birthday, or during the holidays.  It makes it simpler to remember and becomes automatic.  It also helps you stay discipline and patient. 

Should You Sell Your Gold?

With news of gold prices hitting $1,350 an ounce – buyers of all kids are eager to get their hands on all that glitters.  That includes the contents of your jewelry box.  Gold-party organizers, jewelers, mail-in companies and even kiosks at the mall want to pay for what you’ve got. 

While it’s easy to be dazzled by visions of quick cash, some (if not most) individuals and firms might take advantage of your enthusiasm.  So, here are a few tips to make sure you get the best deal when selling your metal.

1.  Know what its worth.  Buyers can offer widely different amounts for the same pile of earrings.  I found a simple formula for determining your gold’s worth:  Weight in Grams (use your kitchen scale) x Current Gold Market Price / Divide by one of these (10k = 74.8, 14k = 53.2, 18k = 41.5, 24k = 31.1).  Then multiply by 0.50 and 0.80 to get a fair price within that range. 

2.  Ignore the mail-in buyer ads that are blanketing the airwaves.  When you send off a piece of jewelry, you’re unlikely to go through the hassle of getting it back in order to compare prices.  As a result, these mail-in companies are able to low ball because they know they have a captive audience.  You might be better off shopping your gold around traditional jewelers, coin dealers, pawnshops, even gold parties.  Remember, just because you go into a store and ask what they’ll pay doesn’t mean you have to sell on the spot.  You should think about it first.  Also, there are some advantages to selling to jewelers as you may be able to get money for diamonds in the piece, generally if they’re at least 0.25 carat. 

3.  Consider a trade-in.  You might get a better deal if you’re willing to trade up your jewelry.  If you’re interested in a swap, visit at jeweler who sells pieces you’d like to wear.  And when someone admires your new ring, you can say, “Oh this old thing?”  (Literally).

Fostering Personal Relationships Online To Improve Business Success

In business (as in life, too) when you make a personal contact with people, it makes it much more difficult for them to ignore you, or more importantly, treat you badly. Wherever possible in life, personalize your relationships.  Many (if not all) of my real life friends are on Facebook.  And why not?  It’s convenient, centralized and most of all, easy!  They have yet to do any empirical research on the long-term effects of Facebook, but my feeling is, it does not facilitate honest, personal relationships with all of those people on your list of friends.  I’ve read somewhere and don’t quote me on this, but the human mind can only handle up to 50 or so friends, the rest are just strangers.   While you may have shared a response to someone’s Status Update, or pressed the “Like” button on a discussion among your social network, the vast majority of the interactions on Facebook is analogous to making eye contact with strangers on an elevator!

Now, I know that’s harsh, especially if you’re the one with over 1000 “friends” on Facebook!  I’m simply stating a point, and that is, any relationship you can make more personal improves your chances of success.   Whether that’s on Facebook, LinkedIn, or, dare I say it, Myspace, the connections you make have intrinsic and market value.  You may not do business with the vast majority of your connections due to a variety of reasons, but the real value is in grassroots marketing.  Your direct connection may not have a need your products or services right now, but they may know someone who does. 

I can only speak for myself and the Financial Services industry when doing business with someone online.  If you do a Google search, you’ll find that this industry is saturated with potential Financial Professionals in your area and deciding which one to go hire can be a daunting task.   So, try to do business with someone who has a classic type A, obsessive-compulsive personality.  These people need to be adored (or at least needed).  Because of this, they tend to kill you with personal service and attention.  They really want your portfolio to work-because of their ego, not yours. 

And since what you really want is not some hobo who makes a killing from selling you commission-based mutual funds but a strategy to set you free financially, here are some questions to ask anyone who presumes to handle your money. 

• Do you know anything about history, art, or literature?  It is my personal prejudice that anyone who watches my money should know a lot about the past, about human nature.  Good money management is more about understanding emotion that it is about quantitative analysis.  Your money manager should be working with both sides of his or her brain.
• What is your philosophy of investing?  Make sure that whoever is going to watch your nest egg can articulate what he or she believes in-in simple, easy language.  If you cannot explain what your broker or investment advisor believes in, you shouldn’t be investing with that person.  Also, personal money managers should have their investing philosophy in plain sight (business cards, front page of their website, etc…).
• Do you own stock yourself?  (You’d be amazed how many financial consultants own no securities themselves).  Ask what the broker or investment advisor currently owns and what he or she has learned from the successes and failures.  If they haven’t failed, they haven’t tried, so steer clear from them.