Financial Answers "IN SIMPLE LANGUAGE"

It’s hard to believe but April, 2010 will mark the Happy 2^nd Birthday of In Simple Language.  Where has the time gone?  All we know is it has had its moments and its ups and downs which is the way life usually works. 

It has been a lot of fun writing and posting all of the articles. We look forward to many more years of providing you timely, interesting, and accurate financial information written In Simple Language.

We especially want to thank all of the faithful In Simple Language readers who continue to post their comments whether good, bad, or indifferent.  Without you In Simple Language readers, the blog articles are just meaningless words on yet another web page…just more overwhelming information that you just don’t need.  Thank you for making it more than that.

 For your continued support and readership, We are truly gratefully. 

 THANK YOU!

 Rich Sowa

 Chief Education Officer

 Sowa Financial Media, LLC

• Leave a comment... (1)

I suppose this shouldn’t come as a surprise to anyone since all we seem to see anymore is the ravenous greed of so many people in the financial services industry.  It still bugs me to read and hear about how someone ripped someone else off and made millions doing it.  I suppose if you are going to rip someone off you should make it worthwhile.  However, that is not a justification for stealing from someone.  Never has and never will be.

This time the dirtbag is not some misguided financial advisor who needed a 20,000 square foot home, six Mercedes, and a yacht.  No this time it was a dirtbag banker who decided to rip you and me off by defrauding the TARP (Troubled Asset Relief Program) Program put into place last year to bail out a bunch of greedy financial types, mostly bankers.

So who is this Dirtbag?

It seems that Charles Antonucci, (let’s call this lowlife Chuck from now on) the former president of a New York City bank, was recently arrested on fraud charges.  Chuck, former president of the privately held Park Avenue Bank, was using his position and knowledge to rip off the TARP Program to the tune of some $11 million plus.

It seems Chuck developed his criminal scheme as soon as he was aware of the TARP Program and how it was going to function.  And Chuck also has the distinction of being the first person to be arrested for ripping off the TARP Program…and probably not the last.

So why am I telling you this?

So why am I telling you this?  What does this have to do with you?  You don’t even live in New York City and have never heard of Park Avenue Bank.  I am sure that there are more “Chuck’s” out there in the financial services industry and you need to keep vigilant and watch for these dirtbags.

If you have been reading In Simple Language for the last two year’s (see Checking Out Your “Trusted” Financial Advisor-March 17, 2010 and Did You Do Your Homework?-November 3, 2008 or put trusted financial advisor into the search box and you will find more articles on this topic) you will remember that I have written numerous articles about how to choose your trusted financial advisor. 

The same goes for any banker, insurance person, or anyone who is going to be involved in your financial affairs.  The same suggestions and principles I applied in previous articles about how to choose a trusted financial advisor must apply to your banker also.

Big chuck may not have been “directly” stealing from you but nevertheless he was stealing from you.  The TARP Program money is your tax dollars.  So he is indirectly stealing from you.  This will not be the last we hear of this kind of behavior from financial people.  With the huge amounts of money involved and the ineptness of our government agencies you can bet that there are a lot more “Chucks” out there plotting and scheming of ways that they can take your money.

Chuck may be the first of the dirtbag crooks out there to get caught but you can bet he won’t be the last.  It’s your hard earned money!  What do you want to do to protect it?

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

•  Please ask your questions of In Simple Language and we will answer you as soon as possible in the comments section of the blog article you asked about.
•  Please give In Simple Language your comments and suggestions about this post and/or future topics of interest to you.
•  Like what you read?  Send it to a friend.  Click on “share this post” right above leave a comment below.
•  Did you remember to bookmark this blog?

 Thank you for taking the time to visit In Simple Language.   

  Copyright © 2008-2010 “All Rights Reserved”

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

 Check out the “SERVICES” tab above the beginning of the post for all available services.

• Leave a comment... (0)

Because it hasn’t been in the news lately, most of us have probably forgotten about Bernie Madoff and other financial advisors who have bilked the general public and many institutions out of billions of dollars. 

With the wars and health care reform and crazy congressional people doing weird things, crooked financial advisors have not been on our radar screens lately.  But that doesn’t make it less important. These crooks affect each and every one of us directly in our financial wallets and pocket books.

However, it looks like FINRA (Financial Regulatory Authority, Inc.) is coming to your rescue.  It seems FINRA, which is a self policing regulatory body for the financial industry, is proposing to expand its “BrokerCheck” system. (See my previous blog articles of January 13, 2010 titled “Let’s Fix This” and August 25, 2009 “How Well Do You Know Your Financial Advisor” for further information).

If you go to the FINRA site at www.finra.org you can check out the broker check system they have currently in place.  Using the broker check system is a must do when you are switching to a new financial advisor or are having “problems” with your current financial advisor.  It’s your money…take care of it.

Current System

Under the current FINRA system, you can go to FINRA’s site and look back two years to see if your current or any registered financial advisor has had any complaints lodged against them.  The new proposal by FINRA will expand that look back to ten years, up from the current two years.  That is a significant change.

I totally agree with this new change because it will give you the opportunity to check out your new or current advisor more effectively to see if there has been past problems.  This will allow you to be more effective in making your decision to retain your current financial advisor or move to another financial advisor who you are considering.  Bernie Madoff clones beware!

Too much information in this case is a good thing.  But keep in mind, as I have said in previous articles, everyone makes mistakes and the information on the FINRA broker check system may not be totally accurate.  Don’t judge until you get all the facts.

Other Updates

FINRA is also proposing that financial advisor’s records remain public for up to ten years even after they get out of the business.  This would allow you to check on a financial advisor that has left the business for a number of years and is now working for a new employer. The possible crooked financial advisor won’t be able to hide their past indiscretions so easily anymore.

FINRA is also proposing to expand the information that is available on financial advisors to include such information as civil judgments that were filed because of a financial advisor’s past sales practices.  Also expanded would be information on the financial advisor’s arbitration awards, any criminal convictions, or guilty pleas.  We will have to follow the course of FINRA’s actions to see where all of these proposals are going.

One thing is for sure.  More needs to be done to protect you from the likes of the Bernie Madoffs of the world.  There is too much secrecy in the financial world and the welfare of the investor is still in jeopardy.  In Simple Language will do its best to keep you informed.

Keep in mind that most of the financial advisors in the world are honest, hardworking individuals who do have your best interests in mind.   I know a lot of them and I used to be one.

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

•  Please ask your questions of In Simple Language and we will answer you as soon as possible in the comments section of the blog article you asked about.
•  Please give In Simple Language your comments and suggestions about this post and/or future topics of interest to you.
•  Like what you read?  Send it to a friend.  Click on “share this post” right above leave a comment below.
•  Did you remember to bookmark this blog?

 Thank you for taking the time to visit In Simple Language.  

Copyright © 2008-2010 “All Rights Reserved”

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

 Check out the “SERVICES” tab above the beginning of the post for all available services.

• Leave a comment... (0)

Back in May, 2008, I posted my first “Target Date Mutual Fund” article.  Including today’s blog post, I have done a total of eight blog posts on “Target Date Mutual Funds”.  You can look at the other posts by putting “target date funds” in the search box feature on “In Simple Language”.

Why have I written so much about these particular mutual funds?  Based on my recent research, target date mutual funds, by the year 2018, only eight years from now, will grow to almost $3 trillion.   This will amount to almost half the total assets in defined contribution plans.

Remember, defined contribution plans are your 401(k) plans used by for profit companies and 403b plans used by non-profit organizations like schools and hospitals.  It seems that target date mutual funds are becoming even more popular today than they have been.  This is even after the fact that there have been some “serious” issues with the way target date mutual funds have been managed.  Go back and read my previous posts and you will better understand what I am referring to.

Jumping on the target date funds bandwagon

Unless you have been living in a cave for the last twenty years, I am sure you have heard of Wal-Mart…the largest retailer in the world.  It looks as though Wal-Mart is introducing target date mutual funds to its more than 1 million 401(k) plan participants. 

It sounds as though Wal-Mart did its homework on target date mutual funds because it didn’t just accept any old target date mutual funds, Wal-Mart decided to get their own custom made target date mutual funds.  This is a prudent business decision because Wal-Mart, like everything else it does, likes to control its costs.  By having these specially made funds they will be able to do just that.

Wal-Mart also made another savvy business decision as to the structure of the special target date mutual funds.  They opted to have the funds be designed to take care of their employees-not just until the time that they retire-all the way through retirement.  Way to go Wal-Mart.

What I would be concerned with is whether or not specific investment help is going to be available for the 1 million plus Wal-Mart plan participants that will not understand what a target date mutual fund is or how it works.  If they believe that most of the plan participants will understand how these funds work…good luck!

All mutual funds have their own inherent complexities and need to be explained In Simple Language.  I would venture to guess that the majority of people working for Wal-Mart do not have a financial background or are familiar with financial terms and their meanings.  So if someone is advised to go into a target date mutual fund and they start reading the prospectus about what it is, how it works, and what makes up the target date fund…once again good luck.

HELP! Is on the way

Maybe help is on the way, not just for the people at Wal-Mart but also everyone else who has an interest in being involved in target date mutual funds.  It seems that the United States Labor Department and the Securities and Exchange Commission (SEC) are working on a type of consumer alert information that will be available to help you make a more informed decision.

This information is intended to clarify what a target date mutual fund is and how it may or may not fit into your overall investment goals.  Let’s hope that they do a good job and write it In Simple Language.  We all know how easy to understand most government information is.

Unfortunately, no timeline has been set as to when these guidelines will become reality.  We can only hope it will be timely.

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

•  Please ask your questions of In Simple Language and we will answer you as soon as possible in the comments section of the blog article you asked about.
•  Please give In Simple Language your comments and suggestions about this post and/or future topics of interest to you.
•  Like what you read?  Send it to a friend.  Click on “share this post” right above leave a comment below.
•  Did you remember to bookmark this blog?

 Thank you for taking the time to visit In Simple Language. 

Copyright © 2008-2010 “All Rights Reserved”

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

 Check out the “SERVICES” tab above the beginning of the post for all available services.

• Leave a comment... (2)

We have been hearing a lot lately about health care reform.  President Obama and some members of congress were recently on television trying to agree on parts of the democratic health care bill…consisting of some 2600 or so pages.

I watched this “performance” for about two hours and finally had enough.  Neither democrats nor republicans appeared to want to give an inch in getting some type of health care bill passed.

Hopefully they will get their act together and get something done and soon.  We all understand the importance of the spiraling cost of health care.  Yet I do not hear anything about the hidden tidal wave that is rolling towards the 76 million baby boomers in the United States.  Isn’t this what we were just talking about? No!

Long Term Care

What I am talking about is not health care for boomers, which is Medicare.  What I am talking about is long term care, such as Medicaid, for boomers and many others.  They are different and separate.  Let me repeat that. Health care for boomers-Medicare, and long term care for boomers-Medicaid, are different.

An online poll done in October, 2009 with 1,000 Americans surveyed showed that only 10% would use long term care insurance to take care of their long term care needs.  Long term care needs are bathing, dressing, continence, eating, toileting, and transferring or commonly referred to as the activities of daily living.  Mental impairment would also be included.

Almost 25% of those surveyed said they were going to rely on family and friends to help with their long term care needs.  Another part of the survey said they would use their savings and social security to pay for their long term care needs.

Which program should I use?

Close to 20% of the people surveyed thought that they would use Medicare, which is a health insurance program and not long term care, to take care of their long term care issues.  Medicare provides some initial long term care but only if certain conditions are met and only for a specific period of time.  Mostly you are on your own.

What about Medicaid?  If you are destitute you may qualify under your state’s Medicaid program…although many states are having a difficult and sometimes impossible time maintaining their Medicaid programs.

 Some people surveyed mistakenly think that they private health insurance policies will cover their long term care needs.  There is a lot of confusion among the American public.

 Costs of Long Term Care

Now you may say to yourself that you will worry about long term care if and when it occurs.  Statistically one out of two people over the age of 65 will need some kind of long term care help.  As I have mentioned in previous blog posts, my brother, who passed away in January, 2009, was under long term care for almost five years.  If he didn’t have military service and wasn’t covered by the Veterans Administration, his widow may have suffered enormous financial problems.

No one is immune from long term care.  It can wipe out all of your assets in a very short period of time.  The median annual cost of a private room in a “nursing home” is estimated to be just under $75,000. 

So you say you are not going to go to a nursing home.  The median annual cost of “home care” with a certified Medicare home health aid is over $105,000 annually.  So you say to yourself that you don’t need anything fancy and don’t need a lot of home care.  The average median annual cost of just basic home long term care is slightly less than $39,000 per year.  How long will it take to wipe you out?

I have often heard this one.  These costs are exaggerated and my spouse or children will take care of me.  Is your 95 pound spouse going to lift your 230 pound body in and out of the bathtub or on and off the toilet?  Do you want your son or daughter giving you a bath because your spouse can’t handle you?  These are not things I am making up.  These are things that I saw and did with my brother, who by the way, lived 600 miles away from me.  I could only help when I came to visit.

I am trying to scare you into realizing that long term care is a very serious issue that is not being addressed enough in this country… I don’t know about other countries.  Contact your state’s department of insurance and request information on long term care and get information from your local insurance agent.  Educate yourself today.  Don’t wait until it is too late and you can’t qualify for long term care.

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

•  Please ask your questions of In Simple Language and we will answer you as soon as possible in the comments section of the blog article you asked about.
•  Please give In Simple Language your comments and suggestions about this post and/or future topics of interest to you.
•  Like what you read?  Send it to a friend.  Click on “share this post” right above leave a comment below.
•  Did you remember to bookmark this blog?

 Thank you for taking the time to visit In Simple Language. 

Copyright © 2008-2010 “All Rights Reserved”

 Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

 Check out the “SERVICES” tab above the beginning of the post for all available services.

• Leave a comment... (3)