In the financial services industry there has been considerable discussion on the application of the fiduciary standard of care for clients versus the suitability standard of care. There are generally two sides to the argument: on the fiduciary side the standard of care is to act in the best interests of the client (the standard that Jim and I are held to and embrace) and the other side which is a suitability standard of care in which the recommendation needs to be suitable, but not necessarily in the best interest of the client. This is where things get sticky. Acting in the best interest of the client is pretty cut and dry. After extensive questioning and gathering of information a recommendation is made to the client based on what is best for their situation. This means recommending keeping the current course of action, following a designed and carefully thought out […]
financial planning
The Cost of Waiting
Procrastination is a silent and slow killer. Everyone, including yours truly, is guilty of putting things off, waiting until the last minute and then scurrying around frantically to get done what we could have easily gotten finished weeks or months ago if we would have either planned ahead or simply started. Let me give you an example. Last year my wife and I were debating whether or not to have a tree removed from our back yard. The culprit is the much loathed sweet gum tree that is common in this area of the country. Readers familiar with this pariah of the deciduous family of trees recognize it with annoying “gumballs” that are far from being smooth but rather are the sharp and pointy fruits that fall relentlessly from the tree mainly in the fall and work wonders on mower blades and bare feet. Needless to say they are a […]
Share, tweet, print, email, like or pin this post:
Should You Pay Off Your Mortgage Early?
As individuals pursue the American Dream of buying their first or next home the question may arise on whether or not it’s a good idea to pay down the mortgage and have no mortgage debt or pay the normal monthly payment and invest the extra money that would have gone to pay down the mortgage early in a place (the stock market) that offers the potential for higher returns over the long run. There are many fierce advocates for paying off debt, any debt early. While this is a wise choice regarding high interest debts such as credit cards, student loans and other high interest loans it may not necessarily be the case for home mortgage debt. Here’s a situation where for some folks it may make sense to pay down early and for others they may wish to consider invested the extra money elsewhere. Generally, the younger a person […]
Share, tweet, print, email, like or pin this post:
Market Returns Aren’t Savings
In 2013 the market and those invested in it experienced a nice return on their investments. The S&P 500 rose an amazing 29.6% while the Dow rose 26.5%. Needless to say 2013 was an amazing year for investors – but try not to make the following mistake: Don’t confuse investment returns with savings. While it is true that the more of a return an investor receives on his or her investments the less they have to save it still does not mean that your returns should take the place of systematic saving for retirement, college or the proverbial rainy day. And by no means should you reduce the amount you’re saving thinking that the returns from 2013 and other bull years will repeat and continue their upward bounty. Investment returns are the returns that an investor receives in a particular time frame. For 2013, if an investor was invested in […]
Share, tweet, print, email, like or pin this post:
Have a HEART
Yes, I am organizing this writing around Valentine’s Day as a clever way to introduce a benefit military service members and their families can take advantage of as well as tie it into the title itself. The Heroes Earnings Assistance and Relief Tax Act or HEART Act provides service members and their families with certain pension and tax benefits while living or in the event of the service member’s death. According to http://myarmybenefits.us.army.mil/ these are some of the benefits that can be taken advantage of due to the HEART ACT: Accelerated vesting in the retirement plan (but not any imputed additional benefit accruals for the period of military service) Additional life insurance benefits Other survivor’s benefits depending on the benefits of the employer Employers also have the choice of treating the disabled or deceased service member as if they had returned to work the day before the disability or death occurred. […]
Share, tweet, print, email, like or pin this post:
Codes of Ethics – A Reflection
Codes of ethics can be an effective means of guiding and directing personal behavior – I believe this is true as long as the person adhering to the codes actually adheres to and believes in them. Otherwise it’s just words memorized for an exam or used in vain in a feeble marketing attempt to gain clients. Perhaps I am being too harsh or too opinionated, but for me, codes of ethics or any type of code for that matter such as the Code of Law, the Internal Revenue Code are pretty uniform and significant words that are to be followed appropriately. As mentioned above however, the Code of Law or the Internal Revenue Code are only going to be followed and upheld by those who believe in following them – there will of course be those that choose not to follow those codes and break the law. Granted, codes of […]
Share, tweet, print, email, like or pin this post:
Disclosure or Maximum Information?
In the financial services industry there are many products, services, business owners and employees that one would think would have one common goal – the welfare of the people they serve through investments, financial planning, insurance and other financial areas. Unfortunately, in an industry rampant with conflicts of interest it has become the norm, not the exception that people in the industry push forward in spite of the conflicts, not once the conflicts have been disclosed and resolved. Examples of conflicts of interest include salespeople that are paid only if they succeed in selling a client a product. This is what happens in most commission-only sales positions. Other conflicts arise when fee-only planners persuade a client to move their money to the planner in order to help them manage it, when in fact the planner is really not a planner at all, but simply an asset gatherer and the client […]
Share, tweet, print, email, like or pin this post:
How to Save More
This may seem like common sense but we are common sense people. If your’e looking for ways to save a bit more money in 2014 – here are some steps that you can take to put some extra green back in your pockets. 1. Brew your own coffee. I’m m a coffee fanatic and rarely go a few hours without replenishing my mug of joe. I can’t imagine what my coffee bill would be per month if I went to the fast food place or coffee shop – likely $5-$10 per day. At $150-$300 per month, brewing my own makes more sense. 2. Cut your TV costs. Don’t watch a lot of TV or want to make more time for other things? Simply reduce the channels you watch or scrap it altogether. This can put an extra $150 in your pocket per month. 3. Turn the lights off. This one is near and […]
Share, tweet, print, email, like or pin this post:
Book Review: The $1,000 Challenge
I picked up this book at FinCon 2013, the Financial Blogger’s Conference held last year in St. Louis. The author, Brian J. O’Connor, is the Personal Finance Editor and syndicated “Funny Money” columnist at The Detroit News. The book is the compilation of a 10-part series O’Connor wrote in 2010, wherein he opened up his personal financial situation to his readers and attempted to come up with ways to save an on-going $1,000 per month on regular, everyday expenses. The result is a surprisingly interesting (not to mention humorous!) journey with the author into the depths of personal financial dealings – everything from babysitting expenses to transportation costs to groceries. The author takes each section of his personal finances in turn, laying out what the current costs are, and the steps he took to make reductions in his monthly outlay. He the takes the series a step further to recommend […]
Share, tweet, print, email, like or pin this post:
Why Watching the Stock Market Can Make You Sick
I recently read a fascinating article on the correlation between market declines and admission rates to hospitals. The authors point out that almost instantaneously; the effects of a market decline affect mental health such as anxiety. In a nutshell, the authors describe that expectations about the future play a role in investor’s utility (happiness) today. The research in this article can be beneficial on two fronts. One the one hand, the information can be beneficial to advisors in educating their clients that once proper assets allocation for a particular client is achieved there is little to be gained by logging into an account and watching the daily and even hourly fluctuations of the market. And every asset class will fluctuate – which is why we diversify and allocate assets accordingly such as real estate, large cap stock, small cap stocks, commodities, bonds, etc. It’s important to note that at any […]
Share, tweet, print, email, like or pin this post:
Who’s Got Your Back?
We all have people we look to for advice and people whom we trust deeply with our thoughts, feelings, money, fears and dreams. These people could be loved ones, friends, family and professionals such a s doctors, psychologists, counselors and planners. Naturally we don’t trust just anyone with our most intimate thoughts, feelings and dreams. These are reserved for those people that we feel have earned that privilege. For the last week I have been working at my first residency for my PhD in Financial and Retirement Planning at The American College in Bryn Mawr, Pa. One of the courses involves the subject of ethics – and not just a list of commandments of what we should do, but more of a mentality of what we owe to ourselves, loved ones clients and people we come into contact with on a daily basis. There has been a lot of theory […]
Share, tweet, print, email, like or pin this post:
Chasing Returns
Looking at this morning’s financial section of the paper inevitably had a piece regarding the assets classes and the respective investors (gamblers) that did exceptionally well in 2013. There was mention of a firm that bet heavily on Japanese stocks and did very well, another investor bet against gold and achieved glamorous returns and a hedge fund that bet on US stocks and looked like gods among mortals. But that’s the problem with these scenarios – we are mortal. Pick up any financial magazine that reports on funds or stock returns and you’ll see examples of mutual funds, stocks and bonds that have either beaten or done worse than their counterparts. For example, US stocks did very well in 2013 – so a domestic large cap fund would look amazing based on what it did for 2013. Herein lies the problem; the publication is reporting what the fund did, not […]
Share, tweet, print, email, like or pin this post:
Goals for 2014
Goals setting and resolutions are among the top things on peoples’ minds when they start the New Year. And rightfully so. A new year signals a fresh, start a new beginning, a clean slate. Feeling refreshed and ready, most people start on their resolutions with the best of intentions – for about a week or two. Then they either give up, forget, fall back onto the same habits and routines that they promised they’d get out of the year before. It’s great to have resolutions – but they must be accompanied by resolve. What is resolve? Resolve, according to Merriam-Webster’s dictionary is to make a definite and serious decision to do something. This means planning ahead, expecting obstacles and figuring out ways to push through and achieve your goals. I recommend writing your goals or resolutions down. Here’s how: To begin write out your financial, fitness, work, eating, etc. goals […]
Share, tweet, print, email, like or pin this post:
Charitable Donations
This time of year many people find it in their hearts to give. They’ll give to friends, family, loved ones and charitable organizations that can help maximize the gift such as a church, charity, or foundation. Last week I had written about the law of reciprocity and giving, and this week I’d like to mention how you can make your giving work in favor when tax season rolls around. As of this writing there are about 11 days left in 2013. Some individuals will be looking to see how much they can give or how much more they can give in order to receive the biggest tax deduction they can for charitable giving. Of course, gifts to friends and family are not deductible, but there are times when gifts or donations are completely deductible and may be to the tax advantage of the person giving or donating the gift. According to […]
Share, tweet, print, email, like or pin this post:
Book Review: How Much Money Do I Need to Retire?
This book, by Todd Tresidder, cuts through much of the extra “stuff” that you find about retirement planning, to help you do some really useful, back-of-a-napkin retirement planning for yourself. Tresidder, who has a practice coaching folks with financial planning based on his concepts, developed his planning methods in real practice for himself. Tresidder “retired” from his regular job at the age of 35 using these tactics, and has been helping other folks to use these methods in planning for retirement ever since. In this book, Todd goes through the conventional methods of planning for retirement savings, which includes gathering some information that is impossible to calculate: How much money will you need every year for the rest of your life? What will be the rate of inflation? When will you die? Your spouse? What rate of growth will your investments experience over your lifetime? What will be the sequence […]
Share, tweet, print, email, like or pin this post:
The Law of Reciprocity
As your wealth accumulates and continues to grow, there is a law I want you to be mindful of and respect. You don’t have to follow it, but believe me, it will pay you more than any bank, investment, mutual fund, or stock could ever do. I’m talking about the law of reciprocity. Some call it tithing, luck, karma, reaping what you sow, give and take. Whatever you want to call it, it works. And I highly recommend that you do it. Following the law of reciprocity means giving a little of what you make. It could mean giving to your favorite charity, your church, a friend in need, a homeless shelter, or any other cause or helpful service in your community. The point is to give. And it will come back to you in droves. Don’t ask me how it works, it just does. I promise you that. Consider […]
Share, tweet, print, email, like or pin this post:
Book Review: The Other Talk
A Guide to Talking with Your Adult Children About the Rest of Your Life This book, a relatively short read at 176 pp before appendices, is a nice guide for folks facing (or in) retirement and dealing with those end of life issues that we all must face at some point in our lives. As the subtitle implies, this book guides the reader through the process of having the “other talk” with our children. The first talk is about the birds and the bees, and the analogy between that talk and the “other talk” is apt. The subject matter is profoundly difficult and emotional for both parties, but avoiding the talk (either one) can have serious impacts for both parties as well – because avoiding either talk will not keep the “event” from occurring. The author Tim Prosch relies on many personal experiences as well as a great deal of […]
Share, tweet, print, email, like or pin this post:
How Much is 1%?
A penny saved is a penny earned and penny-pincher are two common terms that are used to describe someone that is most likely frugal. I would admit I am one of those individuals that aspires to both phrases – and it’s not out of accident. I am one of those folks who will pick up a penny (heads or tails showing – no superstitions here) when walking down the street and put it in my pocket. That penny, nickel, or quarter (in rare cases a one-dollar bill or even higher) will usually make its way into my piggy bank or more likely one of my daughters’ porcelain pigs. I pick up the loose change for one of two reasons: It’s literally free money. To not pick it up is asinine. Little amounts add up. Think of it this way – a penny is 1% of a dollar. A dollar is 1% […]
Share, tweet, print, email, like or pin this post:
Book Review: How to Give Financial Advice to Couples
Subtitle: Essential Skills for Balancing High-Net-Worth Clients’ Needs This book, by Kathleen Burns Kingsbury, is a very good book for all financial advisors to read – even if your clientele isn’t “high-net-worth” clients. I’ve had my share of client-couples who had difficulty in reconciling financial concerns with one another, and (as you probably know) the number of digits on the couple’s bottom line net worth has nothing to do with it. Author Kingsbury, a wealth psychology expert, has a great deal of experience and knowledge on the subject to share. She covers the issues that couples face when dealing with monetary subjects, which can range from having opposite but complementary skills and mindsets regarding money to having basic problems in dealing with conflict with one another. Every couple has areas where they’re not completely in concert with one another – it would be really unusual if everything about a couple […]
Share, tweet, print, email, like or pin this post:
Annuities – Fees, Expenses, and Taxes
Last week we covered some of the differences in annuities and the various types of annuities someone can purchase. In our final annuity installment (no pun intended) I want to explain some of the fees and expenses that some annuities and annuity providers employ. As mentioned in my first annuity article annuities are an insurance product – insuring against living too long. Most companies that offer annuities will charge for this insurance by means of what are called mortality and expense charges. M&E charges can be as low as .25% to as high as over 2%. These charges are the expenses the annuity company charges to the entire risk pool of policyholders in order to pay for the few that will outlive their life expectancy. Most policyholders and annuitant will not outlive their life expectancy and thus pay for those that do. M&E charges will also help the annuity company […]
Sterling Raskie, MSFS, CFP®, ChFC®
The latest in our Owner’s Manual series, A 401(k) Owner’s Manual, was published in January 2020 and is available on 
A Medicare Owner’s Manual, is updated with 2020 facts and figures. This manual is available on 
Social Security for the Suddenly Single can be found on Amazon at 
Sterling’s first book, Lose Weight Save Money, can be 
An IRA Owner’s Manual, 2nd Edition is available for purchase on Amazon. Click the link to choose the 
Jim’s book – A Social Security Owner’s Manual, is now available on Amazon. Click this link for the 
And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.