The lessons our generation has failed to learn

Our savings, wealth accumulation as well as wealth preservation habits are affected by our  environment, past and present as well as our perception of the future.  Our personal experiences and exposure play a big role in how we view our finances.  Good or bad, our personalities then refine our path.

While history has had lessons to teach about the dark and traumatic days of the great depression, from people jumping out of buildings unable to cope with sudden financial loss, to perception changes for those that lived to tell the tale.   No other generation has been able to turn adversity into something positive as the children of the Great Depression have.  The deep losses instilled an acute need to preserve what little they had and that in turn made them the greatest savers of all time.   In their own crude and unsophisticated way they employed diversification way before it became a sexy investment strategy.  All in all they learnt their lessons well.

With our generation on the other hand, we appear to have collectively missed out on our teaching moment. The dark days of the Great Recession are neatly packed away without us learning enough to prevent a recurrence.  While we may look to the politicians to put in place policies that will make the economy churn again for everyone, there is also a need for each of us to take ownership of our own future.

With the holiday season the throngs of people flocking to the malls speak little of how the economy really is.  For the last couple of years economic inequities have been the buzz, the existence of the two Americas  - two economies.  While the stock market has surged ahead, main street has struggled to ride along the wave with a notable stagnation in wages.  Which then begs the question - who are the people shopping in huge numbers on a daily basis?  Sadly it can only mean that Americans continue to be big spenders without learning that buying our way to recovery using plastic is unsustainable growth.  Borrowed money still needs to be paid back at some point.

There is a need for people to learn that just because something is on sale - no matter how much of a cut - it does not create a sufficient need for you to make a purchase.  Even the recent dramatic fall in gas prices have some feeling the urge to go into big purchases.  Which then begs another question - how many people have the recommended six months of expenses put away for a rainy day?  For most the excuse is that its #Christmas but have we not commercialized a day that commemorates the birth of child whose parents had absolutely nothing materialistic to offer him at his  birth.

We all need to know that risk is real.  Curbing one's spending is a real need.  Even if you have enough for a rainy day how are you doing on your retirement saving?  One's need for a retirement nest egg is more important than buying a new car purely because the dealers have come up with attractive offers.  If we try to remember the uneasiness of 2008/2009 we should like the Children of the Depression and learn ways that will ensure the next time the economy goes through another free-fall we will have enough of a cushion to ride the wave.  And should we not experience worldwide economic challenges then good saving habits will only serve to ensure our retirement years will be financially comfortable.

Good or bad, how much do you learn from those you interact with?

Ideally I would like to believe I learn from every single relationship, whether fleeting or solid.  The people who enter our lives can either enrich us or diminish.  From some we learn how not to be and from others we learn gratitude.  Some bring out the best of us and others overshadow us, dooming us to serving their needs while our own needs take a backseat.  

We overlook the benefits or limitations that are encompassed in our lives.  We may feel that our past and its horrors are behind us, forgetting that we are truly a culmination of every experience of our lifetime.  What differs is how each of us allows said experience to be a teaching moment, propelling us to higher levels of success.  The value of our lessons, good or bad, are within our control.

While two people may share an experience, how said experience affects each of them will be at the mercy of other factors that will influences a pull towards one direction or the other.  Lack in our childhood can either teach us to be frugal in our adult life and yet for the next person a degree of recklessness, living for the moment.  No matter what the fundamental influencers are in our lives we can still train ourselves to make the experiences have positive results.

From the very selfish I have not only learnt how to set hard goals but also to keep unwavering focus until I have achieved my objectives.  Fortunately for me I have the beneficial influences of my father's giving nature that helps me to keep balance.  Keeping balance requires that I have an intimate knowledge of my own strengths and weaknesses.  Knowing one's own shortcomings goes a long way in ensuring you not only set realistic and achievable goals but also to recognize under performance.

Remember those who succeed take ownership of their future, leaving nothing to fate.  Even though initially it is fate that either puts opportunities at your doorstep or removes it, it is within your reach to change the course at a minimum.  We all yearn for financial independence as such it should follow that we ensure we are participating at the highest levels possible to build or preserve our wealth regardless of amount.

If you do not believe in yourself or your abilities then you should not expect more of others than your are willing to commit to.  Whether you are negotiating the purchase price of your new home; your salary; or you are  making a presentation to a potential client you need to sell the goods to yourself first.  How good is your pitch when you are putting your skills on the market? In a world that is constantly evolving we need to continue learning to ensure it is the best of us that competing.

Are you a participant or are you living on periphery of a productive society?

As the world changes we are required to change along with it but few see the path ahead clearly enough to know the right time to make said changes.  Sometimes these changes are as simple as switching lanes on an open highway but at other times appropriate timing and not only a clear vision of one's surroundings is required. For most we get caught up living our lives that we neglect to be more aware of the needs of the changing world around us.

I am a true believer of choices.  No matter what limitations we are subjected to through the ''lottery of life" at the core of it all each one of us has choices.  You have choice to work harder in order to achieve your goals or you choose to succumb to your "station in life" and merely exist on the 

periphery of a productive society.  Our choices only come about as a result of how honest we are with ourselves. How often do you take stock of your life?  Or do you just continue on the path you accidentally found yourself on years ago?  Have you ever truly taken the time to assess your true capabilities or do you conform to the box people have placed in?  Do you take responsibility for the choices you have made in life or are you in the camp of those that believe fate happens?  No action is in itself a choice not to change, whether you can see the options in front of you or you take it upon yourself to create options for yourself.

Now that does not discount those of us who are definitely more blessed than others but what of those who soar when life has been everything but giving.  Those who fervently search and claim what nature denied them at birth.  What is lacking in the efforts of those that never reach the “Promised Land” but is found by the few that do fulfill their life's ambitions.  If we are all truly seeking success why then do a few make it and the rest of are left wanting.

If we all want better what then stands in our way? How far back does one need to go to correct things? Was it in high school that we formed bad habits? Or picking our major in college?  Or is simply our personality that stands in our way?  Many people make the crucial error of choosing a career based on high salaries or what is in high demand at the time they are entering college.  So whether there is a high demand for doctors and nurses if you are not a caregiver by nature your success will not only be limited but the chances of you being happy at work are slim. If you are a creative person you will not do well in that job that requires research and thinking.

When making career, retirement investment or big purchases think your choices through.  Research where necessary but more importantly make your choices but do so wisely.   

Stagnation for some while all else is thriving

In the month ended October 31st 2008 the Dow Jones Industrial Average plunged 14% or 1526 points closing at 9,325.01.   Most of us remember those days as the "dark days" - no light at the end of the tunnel, the misery was pretty widespread.  It appeared the down turn would continue unabated and the fear was commonly felt worldwide.

In the years that have followed some have been blessed to participate in the rise of the stock market. In the third quarter of 2014 the Gross Domestic Product (GDP) expanded at a rate of 3.5%,with the growth being credited to a decrease in imports and an increase in military spending.  (2008 - USA GDP was -0.3%) Year-to-date in 2014 the Dow is up 813.86 points or 4.9%.  Closing the month of October at 17,390.52.  Truthfully very few would have ever imagined that significant a recovery.  It is all very positive but sadly only a very small portion of the population has participated in the recovery.

For the man on the street who does not invest in the stock market, who is still trying to get back to her/his earning capacity prior to 2008-2007 it is all very hard to understand.  The government appears to have had many programs to stimulate the economy but none of those programs appear to have trickled down to main street.  Employers continue to sing the song of hard times.  If we are to believe them it makes the recovery of the stock market a little confusing as one tries to understand exactly whose recovery is being mimicked by the stock market.    

On October 7th 2014 Walmart announced it was cutting health benefits for 30,000 workers.  It sited increased costs and the availability of alternatives for its employees through #ObamaCare.  Now beginning November 1st Walmart is offering "rollbacks" to beat the competitors in attracting shoppers into their stores. This comes with an offer of free delivery for their season's top 100 hottest gifts.  Which all begs the question - were the benefits cut to accommodate the rollbacks?  So what kind of holiday are their employees whose hours were cut supposed to have?

At  some point something has to give for it is unsustainable for large sections of the population not to participate in the economy. This coming week is the elections and we are being bombarded by TV and Radio commercials filled with sound bites that are meant to sway voters.   At their core none really give the voter true insight as most of the things being said do not really apply to #MainStreet.  Those that do will be debated to death but no real resolution will come to be.  Most in the middle class mistakenly feel that the debate on #minimumwage does not really concern them.  Nothing could be further from the truth, for unlike the ineffective recovery of the stock market, a rise for the minimum wage will have positive effect of salaries of the middle class.

Why the American Dream is unattainable for today's generation

We brag of being the best country in the world; the leader of the free world; at the forefront of innovation as well as our ability to spread democracy.  The land of opportunity!  Yes but precious few fully understand what said opportunity is.  Many strive to achieve the American Dream but of these how many have a true understanding of what is required to succeed?   In a capitalistic economy the foundation is provided, but that foundation is the ability to educate oneself or start a business. You are are required to compete at very high levels.  Education being bricks afforded you but you are required to do the building yourself, by no means a handout.  As they say you need to have some "skin in the game".

The American Dream is not a finished product you can buy somewhere.  No quite the contrary.  You are required to plan; strategize, hard work and commitment are prerequisites for the long journey. There are no quick fixes nor are there any short cuts.  Not  a sprint but a marathon and your endurance is constantly tested. Yes I know many feel the lottery will get them where they need to be but seriously how is that option working for you so far?

Many complain about the struggles of paying bills is a hindrance to achieving their goals but how many of us take the time to review our expenses to see if our spending habits support our end goals. Whether your goals are to buy a home or financial independence, you need to plan as well as commit to achieving said goals.

Over the weekend a friend told me he had joined the gym.  Being an avid "keep fit" person I asked which gym it was.  I must confess being in the wealth management profession I habitually mentally compare the cost of things as well as a person's ability to meet the costs they are committing themselves to.  While my friend's commitment to working out is in itself great news,  lately he has not taken great care of his health.  Sadly too the same disconnect has been applied to his financial well-being.

Where people go wrong on their journey to achieve the American Dream is the inability to take full advantage of the availability of products for most income levels as a way to reign in expenses.  My friend selected a gym where his monthly costs are around $200, which cost is way above his income level.  There are very good gyms for a tenth of his current cost that will avail him exactly the same amenities.  He says this avails him what he needs - a private room to exercise! But that can be achieved working out at home without unnecessarily parting with large amounts of money.

He admits that it is a heavy expense for him to take on but I doubt very much that he will give it up any time soon.  In the very same way he will not be adjusting his goal to achieving the American Dream even though clearly his expenses do not support his goals.  It is important to remember that to build wealth you not only need to find ways to increase your income but reducing expenses is equally important.

Our parents' generation achieved American Dream because they were very goal orientated while being very frugal too.  Today's generation is not only constantly bombarded with commercials for products that they do not need but they also feel  a deep need to keep up.  The disadvantage is the inability of many to know what their personal entry level is.  Social pressures are daunting but not so hard to overcome if one is goal orientated.  If you are unwilling to reduce your expenses then you need to aggressively work at increasing your income so that you have disposable income to buy what you desire.

Broke for the wealthy vs. broke for the rest of us

After Hilary Clinton’s claim at being #broke when they left the White House and now Robin Williams supposedly having been going through financial problems and as well as having a TV show cancelled.  I am drawn to the conclusion that we really need a vocabulary for the wealthy and another one for everyone else. With an estimated net worth of $50 million (far less that I would have thought he would have) and four movies still to be released; we are clearly not speaking the same language.  Families that had the unemployment benefits cut say they are broke, millionaires say they are broke.

Now in defense of millionaires it is their inability to continue living their exorbitant lifestyles – four homes on different continents, private jets, costly divorces (#prenuptialagreement) etc. that is what they are having a difficulty dealing with.  Why not just call it a “social traumas of drastic lifestyle changes”.  Full disclosure here, I am not trying to diminish just how hard this might be for an individual who does not understand the true meaning of lack or the need to create a simple #budget to ensure you are living within your means, because I am fully aware of how hard it is.  All I am saying that is because we are utilizing the very same words yet the meaning for each instance is worlds apart, why not just find different words that more aptly fit said case.

I personally, am by no stretch of the imagination of means but every so often I am made to count myself blessed when I come face to face with the people we serve through the church.  Their meaning of #broke has a whole different meaning to mine.

I love/loved Robin Williams – his amazing talent is the source of many of my childhood laughs.  Hilary Clinton on the other hand, her ambition and focus drive are things any parent wishes for her daughters but with each of these great personalities there still is a need as with all of us, regardless of what we mean when we say we are broke, for strong financial planning.  Some of us get a second chance as the Clinton's did but for others sadly the demons appear too overwhelming to conquer.

The benefits of appropriate timing when building wealth

The primary difference between the wealthy and everyone else is time management.  The wealthy tend to plan their purchases and because they are not so desperate they never fall prey to the penalties of quick money.   It is important to note that there is a difference between the wealthy and the rich.   The rich are still trying to figure things out and are not totally immune to some of disadvantages faced by the middle class.

 For the poor on the other hand their purchases are more demand based.   The poorer a person is the more last minute their purchases tend to be and unfortunately there is always a premium attached their access to money.  Ideally people need to always factor in the cost of borrowing to get a better picture of their spending patterns.  It is not enough to know that you are meeting all you bills each month, take it a step further.  Every penny counts when building wealth.  If you think you have been overcharged take a moment to ask for a breakdown of the costs.  Just because someone is providing a service it does not naturally follow that they have carte blanche.   After all it is a free economy and pricing flexibility is fully in play – willing buyer vs willing seller – there is always room to negotiate.  Some companies now offer you a menu of services that have a corresponding price structure. If you are selecting from a 'menu" then it isn't enough to just buy for price, a discount today might turn out to be a premium tomorrow.

Fundamentally a person’s basic needs will remain the same over their lifetime, its only the quality the changes due to circumstances.  Without an intimate relationship with our finances and goals we will always think that need and availability of funding determine our how, where and how much we spend earnings.  Once you train yourself into having a long-term, well managed view of your future you will realize you have a lot more flexibility in what you can do, reducing expenses and increasing savings accordingly.

Ignorance is not a valid form of defense - Small business & retirement plan compliance

Conventional wisdom says do your research before embarking on a new business.   For some starting a new business is overwhelming, fear of failure becomes a barrier.  For others the adventure and thrill are their driving force that pushes them to surge ahead.  Fortunately there are the cautious few that read all the right books, visit the websites but better still will seek the counsel of those in the know.  Another group fully acknowledges their shortcomings and partner up with people who complete them.  It is these to last two groups that will eventually make up that successful 33%.   

There are numerous organizations (both government and private), books and websites giving a mired of tips on starting a new business.  Regardless of the guidelines showing you pitfalls to avoid, the percentage of businesses that fail within the first three years remains pretty much the same.  So if it isn't lack of available information, what then leaves us wanting? The need for knowledge does not end here. 

  

With every stage of growth in business comes with it a greater need for compliance and it is here where danger awaits the unsuspecting business owner.  For those entrepreneurs driven into business either by sheer passion to fulfill a need for a service that was beckoning or a simple need for independence and growth, hiring a competent administrator would be a step in the right direction.  Being good at one thing it does not necessarily follow that you can run the business all on your own while still meeting the need that drove to this point in the first place.  No one of yearns to be jack of all trades but instead we all want excel in our chosen field.  

They say ignorance is not a valid line of defense.  So as a business owner you are required to be in compliance with all governing bodies which apply to your chosen entity type.  From payroll and income taxes to whatever tax shelters your accountant might suggest, being on the one right side of the rules may save you a lot aggravation and unnecessary penalties.  Retirement plan compliance is a current favorite of the IRS audits and you would be well served to pay attention to their guidelines on Operating a Simple IRA if this is what you opted for. You hear "Simple IRA" as tax shelter for retirement planning but it is anything but simple - Saving Incentive Match Plan Employees.  The simplicity is only in the fact that the required tax reporting of regular Profit Sharing Plans and 401(k) Plans is not required for a Simple Plan.  The plan works basically like an IRA and in most cases you use a prototype document that the mutual fund company has already obtained document approval from the IRS.

Basic advantages are:

• Easy to set up and maintain – usual mutual fund company handles most of the details.
• Tax deferred contributions for employees through payroll deductions.
• Employer is not tied down to one option, can either simply match only participating employees or alternatively employer can elect to contribute a fixed percentage of all eligible employees’ pay.
• Tax credit of up to $500 per year for each of the first 3 years for the cost of starting a SIMPLE IRA plan.
• No requirement for annual reporting
• Low administrative costs

Most employers fail on disclosures documents to all eligible participants as well as the calculation and timely deposit of contributions. An example given to me by a well seasoned third party administrator, Terrence Ronczkowski of Pension Administrators based in Inverness, Illinois. When calculating annual compensation Section 125 Cafeteria Plan for Simple Plans only is not to be consider in compensation but even though it is for all other retirement plans.  If an error is picked up during an audit the IRS' treatment of the error will depend on who is on the receiving end of the benefit.  If it is the owner then you are required to withdraw the excess contribution.  However if it is an employer who is not highly compensated then the error will not require correcting.  This treatment mirrors the nondiscrimination requirements on other retirement plans..  

While the initial audit might be random but when the IRS selects a year to audit the year before and the after the period under examination are fair game. Compliance, compliance, compliance - I really could not emphasize this more.  Good record keeping goes hand in hand with compliance, if you are required to give all eligible employees plan documents it does not hurt to have copies of acknowledgement of receipt of said documents on file.  An opt-out form from an employee is just as important as an opt-in, file both accordingly.  

Like anything else it is tedious and cumbersome when you are initially familiarizing yourself with all the rules and regulations but once you get a hang of it all the simplicity does become real. 

If we plan and train for a sprint triathlon why do we find financial planning so daunting?

A dear friend of my mine and I have been toying with the idea of running a sprint triathlon for close to three years and each year we would come up with "acceptable reasons" on why a particular year was not the right year to do this.  Finally we came to the realization that without actually signing up for a race we will never commit to the required gruesome training and conditioning needed for one to be ready on race day.

Running and biking are what I considered conquerable feats for me, since I did run the Chicago marathon twice, albeit ten years ago but I still maintain I have an idea what to expect.  While not a fast runner I can definitely build up the endurance to run the distance.  Swimming on the hand has been overwhelming to say the least.  The swimming pool itself would be manageable, but Lake Michigan, well what more can I say.  It is not that I do not know how swim, quite the contrary.  Way back when in high school I was solid swimmer but years of growing up and all that goes with it I have not swam enough to call myself a comfortable swimmer.

Before I embarked on my plunge into the pool again I wanted to do the necessary research so that I am informed enough minimize any chance of injuries and; or fatigue.  I started consulting friends who have participated in  same type of race, as well as doing my share of goggling.  By the time I entered into the water I was fully informed. For example breaststroke, my swimming stroke of choice, while doable is not ideal for a triathlon.  Besides the fact that free style is a faster stroke but I can save my legs and use only upper body for that part of the race.

As I sat reviewing my meals for the coming week I came to the realization that we pay more attention and are more committed to our extra curricular activities than we are to the fundamental parts of our lives. We embark on life changing moves without doing a thorough  research.  Whether you are buying a home or renting there is more to a neighborhood than just the right school district.  While price and school district may fit into your needs, but spending an hour plus to and from work eats into the your time with the same family you are trying to ensure a good education, not to mention costs of wear and tear if using your own vehicle.

Take the time you spend working on your taxes as another example, most wait until the TV channels are flooded commercials tax preparations services or software and the deadline to file is looming.  Do you earnestly feel you do yourself justice with this timeline.  While the Internal Revenue Services offers an Extension of Time to file, said extension is not for payment of taxes.  US taxes are not the simplest by any means.  Each year comes along with it some changes and not having a full understanding can be a costly mistake.  Tax deductions, while beneficial, can be costly if the timing is all wrong or income phaseout limitations are not taken into consideration.

Most people are not comfortable the financial planning process.  Some find the questionnaire a little too invasive..  It is not easy handing over your personal information to a stranger but for a thorough assessment of your income vs your expenses a full disclosure is necessary.  If are not forced to sit down and take an account of spending we will never know whether or not you are on track to meet your goals.  Whether your income is a seven figure or five figure, everyone needs a plan.  No reasonable person embarks on a journey without some planning.  Destination, length journey (both distance and duration), expense are but a few of the items one would list before making a journey.  No one wants to run out of money before your journey is completed, so why do we embark on our life journey leaving so much to chance.  How come it is so difficult for people to prepare for their own retirement years?



1.  What will it take to save for a goal?
2.  401k-deduction-calculator-taxes
3.  Simple Savings Calculator
4.  What is your tax bracket?
5.  How long should you keep tax records?

When you refer to yourself as poor or in poverty do you have a true understanding of true poverty......

Growing up is generally fun and adventurous.  At each stage, whether it is our adolescence; early adulthood or adulthood itself; we always tend to feel we have the world figured out.  The most confident being the teenage years and that is because we are at our most fearless at this stage of our lives. We think we know what we want and that no one else understands, especially the adults.  Forgetting that said adults were too once teenagers.

As we grow older caution is introduced to our lives as life experiences teach and shape us.  As we see more of the world our views too begin to change along with it.  Lack of exposure can also limit our view of the world and our future. With each of us how we perceive our future has a lot to do with our life experiences to date and the degree of confidence we have  in ourselves matters a great deal.  How much perceived ownership you have in your life, present or future, depends on your view of the world around you.  There are those that will constantly seek  to learn more and acquire a better understanding as they map their journey through their life cycles.  But for others they have resigned themselves to their station in life.

For the latter, their resignation tends to be rooted in the philosophical argument of the "lottery of birth".  Some feel they were destined to fail.  To some extent there is some truth to this for those that were born in abject poverty.  Living in situations where every effort is spent on finding the next meal.  Some go for days without eating at all.  In these areas of the world, where a vivid absence of the "soup kitchens" that are a great "safety net" in western countries, untold suffering continues unabated.  For those in abject poverty the lack goes beyond basic human needs.  Survival, at best, is questionable.

For the majority that have the opportunity to be reading this article your lottery had a lot more personal choice attached to it.  You own where you are by pure choice.  Now I am not saying that you are guaranteed a seven figure salary, no not at all that would require a lot more education and some benefits of the lottery of birth".  For most in the developed world education or lack of it is a choice.  Quality of education is not necessarily a choice but some education at a minimum is availed to all.  A school within a certain distance, transportation is also an option are availed where necessarily.  When you were younger the choice might have been made for you by your parents but choice was still there nonetheless.  If your parents' income was under a certain threshold government assistance is at hand to provide food at school or link cards for food at home.  All that was required of you was to apply yourself at school for a better life than that of your parents.

Now I am not purporting that life is a walk in the park for all in the developed world, not at all.  Life is hard in the first world especially for those earning minimum wage, hence the debate over the need to increase it to a living wage.  Regardless of where you put yourself to live better we need to strive more.  While some of us may have a better foundation to build on and others none at all, the hardships endured should not deter one but only serve to inspire. If you think you are living in poverty then take the necessary steps to break the cycle of poverty even if it means asking help from others.  Somewhere in the world there is a young man or woman who would trade places with you at the drop of a pin.  To them your lottery was huge.

Soccer/football - World Cup and the USA - is it your choice watch or not to watch?

For a sports junkie like myself the last couple of months have been pig heaven; tennis, ice hockey, basketball, and now the FIFA World Cup - the icing on the cake.  For the rest of the world there is no one event bigger than the FIFA World Cup and I think having to wait for it for four years makes it even sweeter. Countries competing at the highest level; families, friends gathering around TV set in living rooms and bars worldwide.   People betting on games, tears of disappointment when teams under-perform, my own bracket fell apart within the first few games.     The excitement is intoxicating. 

I must admit with each World Cup the coverage in the USA improves significantly.  This year we have ESPN and Univision covering the matches.  Estimates have the viewership up approximately 37% on 2010's numbers. With a population of over 300 million this is a mere fraction watching the World Cup, but it is said to be good for a nation whose love for soccer/football is in its infancy.  When comparing it to the number drawn in by the Super Bowl which brags an all-time high of 109 million viewers, numbers are very small.  Those in the know credit the growth in soccer viewer to two main aspects.  The first being the ever expanding Hispanic population - soccer runs in their veins.  Second is the population brought up by "soccer moms" – for them soccer has been a part of their lives.

All in all some feel soccer will never be a big a sport in the USA as it is not a viable sport for commercial sponsorship.  This is a contradiction to the recent commitment by NBC Universal, which now offers coverage of the Barclays Premier League and Fox will be covering the German Bundesliga football.  Corporate America is dissuaded from sponsorship by the lack of timeouts during game.  During NFL football and NBA basketball these slots are used to load up with commercials – guaranteed number of eyeballs for advertising.

Which begs the question on programming that we see on TV - how much is free choice? How many games or programs are on air because they are popular?  How many programs are there simply because of the advertising revenue they bring?  Many confess to being part of the Super Bowl viewership solely for the commercials.

It is a given that the USA is a retailer’s dream but how much do we allow ourselves to fall prey to marketing.  How many of us make purchases out of true need?  How many after seeing ads over and over again are intrigued to try a new product?  When budgeting do you put aside money specifically for these purchases?  A good example is my favorite grocery store - Mariano's.  Their goods are stocked so perfectly and each visit leaves you over budget and it isn’t that they are expensive.  Quite the contrary, reasonably priced but the shelving is done so well that you see the perfect sides to that one item you went in for.  They cater to customer so well that you mentally make notes of items to pick up on your next visit. 

“Timing is everything” – that is if you know what you are waiting for…

 “In the landscape of time, there are few locations less comfortable than that of one who waits for some person or event to arrive at some unknown moment in the future.” Robert Grudin

They say timing is everything but for many of us we then get caught in a rut waiting for that one great sign that says now is the time.  Worst still few really know what said sign would be and as such opportunities are lost while we wait.  Movement is always good, even if at a minimum it is a lateral transfer, for it allows for growth through exposure.

In relationships we let an abusive situation fester; allowing it to consume us until we cannot even recognize ourselves.  We keep watering long after a plant is dead.  Work situation is no different.  Many of us stay in jobs too long, stuck in yesteryear, when staying in one job for a lifetime was viewed as a sign of stability.   Alas no more.

Today we are constantly reminded that it is an employer’s market.  That as long as the pool of "possible employees" is as big as it is that you are well served to stay where you are.   Where the Great Depression created a population of great savers who were frugal almost to a fault, the Great Recession created people who are fearful but unfortunately our generation did not get the memo on frugality either.  There is a downside to our kind of fear.  Our fear stifles growth. 

The economy itself has all but recovered but the jobs market missed the gravy train.  The employees who were not retrenched during 2008 and 2009 recession years have held onto their jobs as if their very lives depended on it.  Having been woven into the web of lies that says you need your job more than you employer needs your skill-set.  If you are buying into the story that there aren't enough jobs to go round then you support the insignificant pay increase, which each year falls well short of the cost of living adjustment. 

I would like to cry foul to that train of thought.  There is absolutely no way anyone who has been out of work for a stretch of time can come in and step into my shoes without there being significant decrease in productivity for a period.  Yes, I do concede that everyone is replaceable in the long run but, fundamentally the longer someone works on something the more proficient they are.  Whatever happened to a "bird in hand is worth two in the bush".  

According to the Bureau of Labor Statistics report there were over 4.0 million job openings at the last business day of March. This speaks volumes of the opportunities that are available.  If you feel you are currently not qualified for the jobs on that are available maybe a career change and/or training would not be a bad idea.  Whatever the action you might end up taking, any has to be better than none.  It is important to acknowledge that there are times when value increases with transfer, meaning it is easier to get a significant pay increase by taking your knowledge elsewhere than it is by trying to prove to your current boss that you are “worth your weight in gold”. 

The biases that divide us

According to psychologists having biases can be a healthy thing but for tangible benefits "keeping them in check requires a delicate balance of self-awareness".  Asking the majority of us to "balance our self-awareness" is a tall order since most go through life without the slightest inkling who we really are.  And for those of us who actually embark on the quest for self-realization the journey itself can be more cumbersome than we are willing to commit.

I believe some of us unknowing default to our biases as we seek a comfort zone or a known quantity/quality.  But for others it is our weaknesses that lead us to use biases as a crutch.  We hide behind our self-proclaim principles, never venturing out to view the world from a different vantage point if not only to confirm that the grace is truly greener where we reside.

Everyone complains that economy and/or the country as a whole is not going in the right direction.  A quest for the exact nature of the problem is no easy feat since our view of what is missing or going wrong is fundamentally affected by our own personal biases.  Now for the man on the street it may be as simple as not having a job or worse still being homeless.  For the small business owner it might be the perceived imposition of Obama Care or the possible increase to minimum wage rate.  For the Fortune 500 companies it might the inability to bring in tax-free the trillions of dollars earned in foreign countries.

For each sector the problems are real and depending on individual perceptions and biases the gravity of the each can be life shattering.   It is easier, albeit selfish, to only worry about the things that affect you directly.  Since Main Street does not have the necessary funds to afford single-minded lobbyist who fight relentlessly to keep their issues on the forefront of policy discussions in Washington, their needs will forever be a line items that only appear during election time.

As we approach the mid-term election season take ownership of your own future.  Do not rely on media to make decisions for you.  Every news channel has its own biases and it is in understanding what these biases are that one is able to separate truth from propaganda.  Fox News will always favor the republican view, while MSNBC is the democrat equivalent.  CNN is all about the sensational - their biases are more towards ratings.  That is not say the other two channels do not worry about ratings either.  Ratings are media’s first loyalty and being informative news source to you comes well after their biases have come into play.

As individuals we owe to our future to take the necessary time to research the candidates on our ballots.  Do not allow your needs to be boxed into one party or the other.  Where a candidate does not speak to any issues that are of concern to you reach out to his local office and ask for their position on the issue.  Ask what they intend to do if elected.  More importantly once elected do not forget to hold their feet to the fire - promises made must be fulfilled.  Be your own lobbyist.

Your professional success and the role your parents play

Just had the opportunity to attend my cousin's daughter's graduation from Embry-Riddle University.  Have seen her grow into an amazing and extremely accomplished young woman on a journey that only she can limit.  Looking at her as she said her "thank you's" to the small gathering of family and friends that had traveled some distance for her graduation,  I found myself especially proud of her, but also of her parents and grandmother too. "Gogo" as she affectionately refers to her grandmother, her "favorite person in the whole world".  As she recited some hilarious college memories, I was blown away by the collective raw commitment that has brought her this far.

As children many of us are not fully aware of the role parents play in our success as adults.  Those of us that have had "hovering parents" or "tiger moms" are often heard complaining, "my mom is intense"; "my dad is psycho".  Before a child has figured out how to hold their own feeding bottle, some parents are already visualizing graduation day.  Our professional success is a life-journey that begins early in life.  Lessons and habits learnt as we grow we draw upon in our adult life.  Habits picked up in the play ground that determine our ability to play well with others; negotiate our turn on the swings later on aide us in the dynamics of adult life.

My school friends and I often joke about how some of the things that the "Dominican nuns" taught us helped strength us.  It is in recounting these memories that I failed to understand parents who are disconnected.  Some parents in Chicago are up in arms with Mayor Rahm Emanuel for closing failing schools, or the latest proposed "turnaround" which involves laying off entire staff for low test scores and replacing them with staff that have a better commitment to children's overall success.  Parents in these schools want status quo.  They do not see anything wrong with the fact that their children are way behind the rest of the nation, and the world on basic reading skills.  Past minimum wage jobs their children will not have the necessary skills to be gainfully employed.

The blatant disconnect between a need to be appropriately educated before you are requesting lawmakers to provide jobs is staggering.  Many of the parents who are expressing displeasure at the path Mayor Emanuel has chosen look to schools as a "babysitting facilities" and not as educational institutions.  The total opposite of my cousin and my aunt who have worried and planned from pregnancy.  We are supposed to want better for our children.  Our choices as parents on primary or secondary schooling for our children has lasting ramifications on where they end up for their tertiary education and life as a whole.  And that is not to say university is the only way for everyone - USA is way behind on vocational training options that Germany offers its high school students.  Which itself is a testament to their lower unemployment numbers.

Unemployment Rates US vs. Europe

It can all be overwhelming to a parent to know where to begin but the foundation is built on simply wanting better for your child.  Holding your child's feet to the fire when things start being difficult later on in life for every experience is but a lesson that serves a future need.

Given up looking for a job - what next?

Along with the drastic drop in USA unemployment numbers from 6.7% to 6.3%, comes many questions on how we came to the number since there is still continued consumer dissatisfaction.  GOP would love to take credit in that saying without the unemployment insurance extension people were forced to go out and look for jobs.  Unfortunately this clearly does not add up.  In the same period that 288,000 jobs were created the 0.4% drop in the unemployment number is approximately 733,000.

Some economist explain the difference in numbers by accounting for discouraged job seekers, others state it is a drop in new people entering the job market.  Which ever way you choose to look at it behind the numbers are real people with real problems.  Congress will have long winding discussions on the statistics behind the decline - juggling whose needs are more worthy of their attention.  Whatever path Congress chooses to take or not take, there remains an unacceptable number of Americans without the appropriate means to provide for themselves and their families.

What is the next step?  Since many would have already signed up for all the regular supplements to lost income one wonders what viable options remain..  What additional life changes does one now need to make?  I hear in conversation how many move in with family as they make their initial lifestyle changes after losing their jobs.  The unemployment insurance is only a fraction of income one would have been receiving.  There are serious and lasting psychological ramifications that are silently endured by many.

The job training programs that are being run are obviously not effective if no tangible results are achieved.  Whether it is individuals feeling too old to go through the much needed career change or it the young new entrants into the job market that lack the required training for our changing economy it is clear more urgent and effective policies are needed instead of the unending and clearly unfruitful debates.

A little knowledge is dangerous - Financial Literacy

Over the years I cannot tell you how many people hear something at a dinner party and want to run with it. While we learn a great deal through our regular daily interactions it is still prudent to fact-check what you hear from friends and family before plunging yourself into an investment nightmare. Many lack the basic financial literacy required to navigate their way through many of the investment vehicles available for use when building wealth.  If you are one of the few that are comfortable in admitting something is "above them" then seeking the assistance of a professional will always serve you well.  No need to commit to a purchase with said professional, simply make it known right from the beginning that you are merely researching.   

FINRA requires that at the time you set up account an investment professional required to ask you suitability questions.   These may appear to be an invasion of your privacy but, truth is as invasive as the questions may appear, they are a guideline to what sort of investments are suitable for you personally.  You are under no obligation to answer said questions but by withholding any relevant information you only serve to undermine your own success.  Even with purchases where you are not subjected to suitability questions it is prudent that you personally seek to ensure the investment vehicle at hand is right for you.  There are checks and balances that you as an individual should do.  FINRA has suitability guidelines are a handy resource.

When purchasing a home or a car never buy more than you can afford nor more than you need.  If you are single no point is buying a six bedroom house.  Tying funds up in one asset is a drawback to your goal of wealth accumulation.  One needs to categorize the items purchased for use separate from items purchased for investment.  With this in mind when making an investment choice it is unwise for you to look solely on the rate of return. There is the concept of "risk/reward" but more importantly you cannot risk more than you can afford to lose.  As such you need to pay attention to the Risk-return trade-off.

There are various free online courses that one can take in the comfort of their home that will go a long way towards ensuring basic financial literacy.  

Job Creation - The disparity between the needs of Main Street and Wall Street’s targets

Most of us see the change in economy as having begun in 2008 but in reality the problems started years before that.  The rise in unemployment has many contributing factors.  While we constantly find ourselves looking to politicians to put in place the right policies to encourage job creation, we forget our part in electing officials that are able to conceptualize our needs and put said policies in place. If we do not participate at the early of the process we really do not have the right to voice our displeasure nor be disgruntled at the policies in place.

Many of us are lukewarm at best during local elections but get caught up with the excitement of nationwide candidates.  If you asked the next person on the street who their local representatives are I would hazard a guess and say 1 in 4 are aware who represents them.  Asking who actually took time to know who is on the ballot before elections would give us less encouraging numbers.  Flip the question and nearly all of us know exactly who Mark Zuckerberg, Steve Jobs, Warren Buffet or Bill Gates is.  Others are even more familiar Miley Cyrus, Kim Kardashian or the crew from Duck Dynasty.  All in all most are more committed to the votes on "The Voice" or "American's Got Talent" than to their electoral duties as citizens. 

The corporate world's first loyalty is to its investors and its a relationship that requires constant nurturing. Rightly so in a world where capitalism is supposed to reign supreme.  Capitalism encourages competitiveness among us and it is through this that we have made huge strides innovation.  United States rose to greatness through innovation and manufacturing.  The manufacturing provided good paying jobs for the workers as well as good quality products that the workers purchased, plus surplus to supply the world markets.  The innovation has continued unabated with it the rise of companies such as Apple and Facebook.

The most profitable of corporate America, Apple, does most of it's manufacturing overseas but USA is the biggest market for Apple.  So the benefits of the manufacturing are being enjoyed by other countries but the consumption of said products are still in USA.  In the first quarter of 2014 Apple reported earning of $11.62 per share on sales of $45.6 billion.  Apple is not alone.  GE is rumored to have put forward an offer to purchase the French company Alstom as solution to GE long standing large cash being held overseas.  GE is not the only company with large cash reserves that Wall Street has been lobbying for a tax holiday to bring the funds into the USA.  As good as the reports being posted by Facebook the actual number of employees is a mere 6,818.  Apple on the other hand has 50,50 employees.

Needless to say it is abundantly clear that there is no relationship between the targets/estimates Wall Street sets for companies and the much needed job creation that Main Street has been yearning for badly so long.  The Federal Reserve for its part continues to weight the tools it has on hand to decide when the economy will be on sound ground so that they in turn can raise the historically low interest rates.  All in all Main Street continues to struggle.  While its not something we can expect Wall Street to changes it is something that deserves more attention than Congress is paying to the need of job creation.  The decrease in the number of unemployment are but a mere reflection of disgruntle job seekers giving up.

Identity Theft

Most of us have security alarms systems at home or on our cars.  Few of us walk away from our cars without double checking to see if we really locked the car.  All of these extra steps only serve confirm just how visual a society we are but yet we live in a world that is anything but visual.  Why is it that we pay so little attention toward preserving the things that we have worked so hard, if not for the time it has taken us to accumulate our assets but also for our precious future.

All that awareness seems to fall away as soon as we see an item being advertised for a lower purchase price.  We quickly pick up our electronic device and start the process of making the purchase.  The Target and Neiman Marcus security breaches should have taught us many lessons but we learnt very little if anything at all. Target sent emails to all those affected offering credit monitoring for a year but one wonders just how many of us actually went through with the application.  Yes we do tend to dismiss the possibility to something happening to us.  Many echo “what are the odds?” or alternatively “I do not have anything that someone would want to steal”.

It will not always be that we are made aware of our information being comprised.  Most organizations have an obligation to inform you as well offer some solution to limit losses but what if the breach was either at your home or maybe via your electronic device.  Do not make the mistake of thinking that since you do not how to monetize stolen data that it is useless information. 

Ensure that protecting your information is second nature to you.  Change your passwords on a regular basis ensuring that you avoid the usual mistakes of using any of the following:

1.      Words you can find in the dictionary.

2.      Passwords shown as "example strong passwords."

3.      Personal information, such as names and birth dates, names of your children.

4.      Avoid sequences of numbers in order as well as keyboard patterns

5.      Repeating characters, such as mmmm3333.

6.      Universal password (same password for all your accounts).

One needs to be equally careful when disposing of mail, i.e. bank and credit card statements; even regular mail that just has your address on it.  Thieves have become extremely resourceful at piecing together any information that you are reckless with, as well as any additional information that they can find online without much effort.  Shredding is the way to go but if you are going to buy one then it is advisable to purchase one that “cross-cuts” as there now is available software that can put together papers that are shredded the normal way.

This past tax season many people had the misfortune of being victims of identity theft with “refund fraud”.  The IRS has "Tips for Taxpayers, Victims about Identity Theft and Tax Returns"“ that are worth your while to read over.  For those that have been victims the IRS has been issuing pin numbers to allow filing your tax return.

Regardless of how tedious this may all seem it is extremely beneficial to follow through with all the suggested precautions as well as checking your credit report annually.  There are also various companies out there that now offer credit protection at differing levels but this too can be pricey.

We are constantly looking for bargains but are we aware of indirect cost said bargain

I do believe there are many of us out there who are constantly searching for bargains for our everyday needs.  In fact I must confess it has been a number of years since I last paid full price for clothing, that is of course not including my running shoes.  I justify this by living by my own self proclaimed motto of not living by trends set by some stranger who really does not understand me.  Dressing for comfort is first and foremost after that I believe the 50-70% off original price sale is closer to the real price we should be paying than the huge "needless markup" we are often subjected to.  With that I do acknowledge that everyone goes into business to make a profit.

This concept of making a profit should also be applied when looking at one's own compensation whenever you are employed but seldom do people know their true own value.  Whether you have sacrificed time and/or money to educate yourself, or over the years you have acquired a skill-set, haunted by the great recession we allow employers to protect their margins by paying us less than we are worth.  

While the majority of Americans, regardless of political party affiliations, are all in support for an increase in the minimum wage there are those like Rep. Joe Barton (R-Texas) who feel it has outlived its usefulness and should be repealed.  It will continue to be a battle of wills until people begin to realize that by continually accepting to be underemployed are unknowingly reinforcing depressed wages and it trickles down to the minimum wage.  Of course the large numbers of unemployed do factor in but something has to be said for the disadvantages to employers should they be constantly retraining new employees because they refuse to pay a just wage.  "A bird in hand is worth two in the bush".

One would think that any costs relating to increasing employee compensation would be handled like any other cost a business owner comes across in the course of doing business.  Gas prices go up all the time as does the cost of most materials and these increases are taken in stride.   Why should the employee be the one to "suck it in"?  Well it turns out employees are the weakest link and as such employers feel this is the cost they can bargain - your desparate need to be employed at a minimum!
Big box stores like Walmart often make statements on how difficult it would be increase wages especially since theirs customers have come to rely on low prices.  Slate has a video that is worth looking at - "Would  Walmart's prices spike if they paid their employees more?

Reading for comprehension can save you money and more

Something needs to be said about how we read.  I acknowledge when I am reading for pleasure depending on the article I generally just scan through it at first to see if anything perks my interest.  If something does I go back to the beginning and give it a somewhat more committed effort.  With my work, however, I feel I need to clear my mind because of the sheer amount of detail I have to take into consideration.  Most of us simply do not take the time to read for comprehension.  Being short of time, always on the go, we tend to scan through documents picking a few words and then running on assumptions.  Again for casual reading this is sufficient but for legal documents, tax returns etc., we are required to establish a certain degree of understanding before putting our name to a document.  Important to acknowledge that by signing your name to any document you are legally libel for the contents.  Simply put you own the statements therein.

Technology has advanced tremendously, and continues to do so at a rate much faster than most people are able to keep up with.  Just because something is advertised as being simplified it does mean that it is simplified for everyone.  Our capabilities and comprehension differ.  Right Brain – Left Brain and all that comes with it.  That you do not know something or nor understand it does not make you a lesser person.  Failure only comes in when you forego seeking assistance where you clearly need it.

Growing up my mother always used to hammer into our heads “ a Jack of all trades is a master of none”.  For some being a ‘Jack of all trades’ is a good thing but for my mother its simply failure to excel.  In my mother’s eyes it means you are mediocre at everything.  She believes you need to master something – your thing – choose one thing that you are absolutely great at and everything else you only need a working knowledge to decipher where to seek masterful help.   This way of thinking continues to serve me well.  While I still believe in doing a great deal of things for myself I never waste my time battling with something that someone else can do more efficiently with no adverse ramifications on my part.

I had a client call me several times this week because their FAFSA application was being questioned for ‘irregularities’.   She was pretty sure she knew what she needed and asked me for specific documents that she was required to submit with her applications.  I questioned the period she was asking for and she said she had talked to someone at the FAFSA office and these documents were exactly what she needed.  I told her that I might be wrong but it did not sound right but I nonetheless facilitated in getting her what she requested.

Needless to say a day or two later she was back with more questions but now much less confident.  I discussed with her that in today’s world when you are asked for information one should not take the request lightly as 99% of the information will require some sort verification that is independent of you.  Her husband had prepared their tax return and miscoded one of the two the Form 1099Rs that he entered and had completely omitted another one.  On the surface it might seem like nothing but the miscoded form was for a “Deemed distribution” for a loan that was outstanding when her employer terminated their retirement plan.  The amount needed to be added to her taxable income for 2013 but her husband had coded it as a rollover.  The resolution is an amended tax return to ensure that their income for 2013 is correctly reported.

Now I am not saying everyone should seek the assistance to CPAs, Enrolled Agents or a Registered Tax Return Preparer.  If your return is simple, Form W2, then definitely save yourself the preparation costs and do your own return, but please take the time to read the questions being asked by the software you using for there is always a very logical reason when the questions was asked in the first place.  If however, your income is a little more complicated or you have had “life event” that might require more schedules than you normally need to file it is foolish to presume you will catch up on all the necessary tax changes to walk it alone.  If you are adamant to do your own return then surely take the time to do the necessary research or at a minimum have someone else review your work before filing your return. 

No excuse for getting it wrong when today everything is at our finger tips - one only needs to take the time to read and comprehend!  

Your compensation vs a stranger's sexual preferences - which one is more important to you?

It boggles the mind how Americans in general will go to the ends of the world to express their views (for or against) on someone else's sexual preferences but when it comes to their own compensation they become mute.  When the debate ending DOMA was raging strong people from all walks of life put in their two cents worth.  Passions were high - those in support marriage equality were 100% behind President Obama - held his feet to the fire where they felt it necessary, the push itself was unrelenting to say the least.  Those against it, equally passionate - foreseeing the end of the world as we know it, made their voices heard and continue putting an equal amount of pressure trying unsuccessfully to sway things back to their way of thinking.

In 2014, though some conservatives still continue to fight a losing battle to prevent marriage equality, President Obama has moved onto making income inequality the next war-front but this time round it appears he is on one side by himself, and on the other side is corporate America fighting hard to keep their margins in place.  The American people (for whom Obama is fighting to increase their compensation with whatever tools he has available to him) are sitting quietly on the sidelines, being spectators as though they do not have any "skin in the game".  That passion that was raging strong as it intrusively pried into the bedrooms of strangers has surprisingly lost its fervor.

There are those who feel that Obama's efforts are socialistic in nature being imposed on a capitalistic economy.  These people hold the view that USA is the land of opportunity and that if you work hard enough you can achieve anything - you can build wealth, you need only pull yourself up by your "boot straps".  Unfortunately for those struggling to pull themselves up into middle class the "bootstraps" that were provided in the form of a good education, well paying manufacturing jobs that came with good solid pensions and health insurance are no longer around as a way to the middle class.  No,  steadily Corporate America has been reducing the number of employees on one end while drastically the number and value of employee benefits; and basic compensation itself has not kept in stride with the every rising cost of living.

The biggest reduction in the workforce came as a result of the great recession of 2008.  The majority of companies downsized their payroll by staggering numbers as they tried to stay afloat during very uncertain times.  The employees that remained under employment saw their workload increase without the corresponding increase in compensation.  Through 2009 and 2010 conventional wisdom was that one should simply be grateful that they have job at all and needing to be properly compensated for the work you did was a luxury many had to forgo.  The majority of employees today still feel obligated to be grateful to have "A JOB" especially as unemployment remains relatively high for an economy that is supposed to have recovered.  Most employees are extremely unhappy but do not dare switch jobs out of pure fear of LIFO -  being the new kid of the block  "last in first out"have.  This is primarily why President Obama is fight income inequality by himself.  People are afraid - they believe the threats that Corporate America is giving.  Most continue to struggle and bridging the shortfall between income and expenses by dipping into their regular savings and retirement accounts.

According to the Congressional Budget Office (CBO) the increase of minimum wage to $10.10 that the President is proposing will effectively increase the income of approximately 16.5 million people.  Those pushing against the increase use the same report, stating that we need to save the jobs of approximately 500,000 that are likely to lose their jobs should the minimum wage be increased.  Little is said about the 900,000 who will be raised out of poverty.  As I have said before this baffles me somewhat.  An employer is willing to let go some employees because he feels he cannot afford the payroll, cannot possible cut his profit or adjust his pricing somewhat.  How cutting his labor affects his business is something that no one seems to bother explain.  My assumption would be the remaining employees are asked to take on more work since they technically they have been given a pay increase.

If for the 500,000 losing their jobs was purely for the fact that they had least skill set and in turn they felt moved enough by the loss to improve themselves it would all be beneficial process in the end.  Unfortunately most people when they lose their jobs its never about them but how wrong the employer was.  I asked someone the other day why they temp, she replied it was because she had lost her permanent job and finding another one has proved difficult at best.  "Why not try for a permanent position with the companies that you are temping with?" I asked her.  "Oh they told me that in the current environment I did not have required skill set" she responded. "Did you ask what skills would be required ?"  "No."  To me she appears very content, content being stuck with no growth.  Her lack of desire or drive to improve herself so that she has the relevant skill set is scary notion that she believes at some point employers will require less than they are now. So she waits.  Were she nearing retirement one would try and understand but for a young woman in her late 30s mind-blowingly retarded.

Avoiding probate by using transfer-on-death instruments

Dealing with one's mortality has always been somewhat of a difficult hurdle to jump over.  Most of us wait until death is persistently knocking on our front door, before we acknowledge that there is some preparation that is required of us.  The fear of the unknown scares the majority of us into shutting down the whole process.  Preservation of ones' wealth makes it a necessary evil, an inevitable process.  Avoiding burdening our loved ones with handling all our financial problems, problems that we could have handled ourselves prior to death, gives them time to mourn our passing instead of cleaning up after us.

Once someone said to me people with long-term illness are lucky in a horrible way, because they are stopped in their tracks and made to face their mortality, while the rest of pretend the day will never come.  Waiting until one is terminally ill is something of a gamble because you are working on the assumption that you are 100% sure you will get a warning of sorts. I personally feel if we learn to live our lives to the fullest - each day as though it was the last but also as though it was the beginning of something new; this will make it somewhat easier to be prepared for the inevitable. Do not procrastinate living your dreams least you run out of time. 

You work so hard to acquire the property that you have and should want your loved ones to get as much of it as possible.  There are plenty of instruments available that afford you the opportunity to protect your assets and ensure that the people you wish to inherit your wealth are the ones the ones that ultimately inherit it.  In the absence of clear and direct instructions upon your death your property becomes subject to probate.  Meaning legal proceedings, directed by the courts, will determine who inherits your property.  This can be a very costly, long and confusing process for your loved ones to endure.

I had a client once who fought a long battle with cancer. She had two siblings, one told her she needed to make alternative arrangements for her own care that did not include them, because they felt not well equipped to deal with her illness nor the inevitable death. The other sibling practically gave up their own lives to be her primary caregiver during her last days.  Being single and never had any children (now not there are any guarantees that your children will readily look after you should you need it either) absence of family can make a bad situation worse.  During our many conversations she would reiterate how she wanted Marybeth, (the sibling looking after her) to inherit all her assets, and to ensure that Sarah got nothing.  Sarah's absence during her sister illness was difficult to accept.  With all the planning, having all her accounts to transfer-on-death, there was unfortunately an account that she had forgotten about.  The account went into probate and was split between her two surviving siblings, following the law but totally against the deceased dying wishes.

The most economical way of avoiding probate is by making use of the Transfer of Death Instruments that are available. Now most of these are revocable, meaning should the family member that you named either predecease you or falls out favor, you can change this at any time.  It is important to note that you need to do the necessary research, ensuring however you decide to title your property it is within the laws of the state or country you reside in. Should you have property in a different State to your resident state, then it is the laws of the State where the property is that you follow and not where you are resident.

There are many instruments available, where you reside, in the case of real estate property will determine which instrument is better suited for you.  For example in Illinois, 2012 saw the introduction of  Illinois Residential Real Property Transfer on Death Instrument Act.(755 ILCS 27/) - which permits an individual to pass ownership at death to another person at a minimal cost.  You would approach your local  There similar instruments for vehicles too, but in this case you would need to approach your local DMV so that the name of your beneficiary is added to the certificate of registration.

For brokerage accounts (holding securities such as stocks, bonds, mutual funds) you can use Transfer-On-Death registration. Again this can be changed at any time should your situation change and require it. Bank accounts use Payable-On-Death but you need to request for the necessary forms to have this on file from your bank.  It is important to note that if done this way it does not give the named beneficiary access to the account during your life time.  Upon your death they will be required to produce proof of death along with appropriate identification to transfer the funds to their name.

Retirement accounts are handled differently, depending of course on your resident state as well as whether you are married or not.  You will need to research on your residence state requirements.  With IRAs (Individual Retirement Accounts) it is advisable to do this at the time you open the account.  Some brokerage houses will insist you name a beneficiary when you open your account, but sadly this is not the norm.  It is most advisable you make a point of reviewing the beneficiary designations on all your retirement accounts at the earliest convenience.  For 401(k), Profit Sharing Plan, Defined Benefit Plan you will need to contact the third party administrator who handles the plan.  If you are not sure who that is, your human resources department should be able to point you in the right direction.

As with other transfer-on-death registrations/instruments, with retirement accounts the designations are revocable of course, but they do also offer the possibility of appointing contingent beneficiary in case your primary beneficiary predeceases you.  For some states Spousal Consent maybe required, if you do not name your spouse as 100% primary beneficiary.  The following states do not require you to notify your spouse should you wish to make any changes:  Alabama, the District of Columbia, Colorado, Georgia, Indiana, Kentucky, Maryland, Mississippi, Montana, Nebraska, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, and West Virginia