As we move toward the end of January, there’s lots of attention on making resolutions happen (financial, personal, etc). Recently, a free webcast offered by the Harvard Business Review website featured Heidi Grant Halvorson, a psychologist who has done widespread research in the areas of motivation and achievement. In that interview, she discussed some of the traps that stand in the way of achieving your goals … and also outlined a proven strategy to make your key objectives happen.

The power of positive thinking

In Norman Vincent Peale’s The Power of Positive Thinking and the well known saying by Napoleon Hill: “What the mind can conceive and believe, it can achieve.” Halvorson’s research revealed you need to add a second element to that – To maximize your chances of success, you need to also anticipate the difficulties and challenges of achieving your goal.

Quite simply, people who believe their goals will be difficult expect to have to work hard and as a result put in more effort, plan more and take more action. The result should be no surprise – if you anticipate that a goal will be challenging and work harder as a result, your chances of success increase significantly.

A five-minute exercise in mental contrasting

From this research, Halvorson identified the optimal strategy to achieving goals:

First, think positively about what life would be like when you achieve your goal.

Then, think realistically about what it will take to get there.

To achieve this, she recommends a strategy called mental contrasting, designed to bring into focus the rewards of achieving a goal as well what you need to do to achieve it.

Here’s how mental contrasting works:

1. On a clean piece of paper, write down a goal and describe what life would look like and the benefits if you achieved that goal.

2. Then, write down the obstacles and barriers to achieving that goal.

3. Then write down another benefit.

4. And another obstacle.

Continue this process until you’re out of benefits and obstacles. Then look at what you’ve written down – and ask yourself whether you’re prepared to truly commit to this goal. One of the advantages of this exercise is that it helps you identify objectives that are unlikely to happen and to abandon unrealistic fantasies.

The evidence is clear cut – a five-minute investment in mental contrasting leads to better planning, energy and effort – and greater success as a result. Before finalizing your key goals for 2012, run them through this test – and then reassess whether these goals are right for you.

As a side note, Halvorson’s research also confirms that the best goals are also difficult and challenging – difficult goals engage the subconscious in ways the easy ones don’t. So you may need to set more ambitious objectives for 2012

Click here to listen to a short interview with Heidi Grant Halvorson.

Howard and Chrissie Jones both turned age 50 this year, and they’re looking ahead—and they’re concerned they haven’t saved an adequate amount for retirement.

It’s not that they’ve been financially careless. They both earn a decent living, jointly making $200,000 a year, and they have devotedly contributed to college savings plans that will pay for their children’s higher education. They just haven’t been able to save as much for the future as they would have liked. In other words, they’re in the same situation as many other people their age.

Howard and Chrissie have $100,000 in savings in a taxable account, and another $200,000 in tax-deferred retirement plans. They’d like to retire at age 65 (15 years from now). According to an online calculator, the couple would have to sock away $75,800 annually from now until retirement to be able to count on 80% of their current yearly income after they stop working, a typical goal for retirees. That’s an annual savings rate of 37.9%—a highly doubtful suggestion.

But there are a few ways the Joneses can perk up on that situation. If they continue to do most of their saving in tax-deferred accounts, such as 401(k) plans and IRAs, their money will go further, and their future Social Security benefits will also reduce the amount they have to save. For 2012, 401(k) participants can direct up to $17,000 of salary into their accounts ($22,500 for people over 50), and they can put an additional $5,000 ($6000 for people over 50) in an IRA (though at the Jones’ income level, their IRA contributions won’t be deductible).

For simplicity’s sake, assume that Howard and Chrissie remain in a 28% federal income tax bracket and a 6% state income tax bracket for the next 15 years. They’ve already saved $300,000 in their assorted accounts, and if together they contribute another $20,000 a year to their 401(k) plans until age 65, and they earn a hypothetical 5% rate annually on all of their investments, they will accumulate a total of $1.53 million (inflation-adjusted to $968,000 based on an annual 3% inflation rate).

In this case, the Joneses should to be able to do better than a $1.53 million nest egg. Presume they manage to double their annual 401(k) and IRA contributions to $40,000 a year. Assuming that same 5% annual interest rate on all investments, after 15 years, the Joneses will have amassed $1.96 million (inflation-adjusted to $1.24 million), making it possible for them to enjoy a more comfortable retirement.

(Customary Disclaimer: Of course, the returns cited here are for illustrative purposes only and are not indicative of any particular investment or strategy. Any investment includes inherent risks and there is no absolute protection against loss of principal in a declining market).

When it comes to your personal circumstances, there may be a number of ways to improve the odds of retiring comfortably.

You could make augmented regular contributions and “catch-up contributions” to your retirement plans. These are permissible for those who are age 50 or over. For 2012, they can defer an extra $5,500 for their 401(k), while IRA owners can kick in $1,000 more than the 2011 $5,000 limit. These figures are indexed annually for inflation and should continue to rise.

Re-examine your investment mix. There’s a tradeoff between risk and reward, and your portfolio should balance your need to preserve your savings with the possibility of attaining goals more quickly by adding investments that might achieve higher returns. Of course, this is generally not recommended if retirement is right around the corner.

Think about working a little longer. For example, the Joneses can’t receive their full Social Security benefits until age 67, and staying on the job those two extra years will allow them to save more; at the same time it decreases the number of years during which they’ll have to depend on retirement income. Even such a fairly small shift can make a key difference in a retirement scenario. More importantly, their Social Security benefits would not be reduced for life.

Everyone’s circumstances is unique, and coming up with a retirement plan that works for you may involve allowing for several alternative scenarios and mixing and matching a combination of factors—your saving rate, your investment strategy, your retirement needs, when you’ll leave the work force—to come up with a plan that works for you. We can provide expert guidance. A great place to start is our FREE On-line Road Map (Click HERE)

Do you think the US glory days are over or, at a minimum, that we're on the verge of a new downturn? In a good review from Businessinsider.com, they summarize some reasons to be more optimistic (HERE for full article):

In his weekly note, Raymond James' Jeff Saut offers up a great batch of history for those who think the US is facing some crisis of historic proportions.

He starts off with this quote, which sounds very familiar…

“We are suffering just now from a bad attack of economic pessimism. It is common to hear people say that the epoch of enormous economic progress which characterized the century is over; that the rapid improvement in the standard of life is now going to slow down; that a decline in prosperity is more likely than an improvement in the decade which lies ahead.”

It turns out, that was from John Maynard Keynes, and it was said in 1930.

Then Saut passes a long a message from a London-based investor, pondering the last time the US was at risk of a double-dip recession.

“In 1994… If my memory is correct, the term ‘double-dip’ was coined at this time as the U.S. was still suffering the hangover from the Savings & Loan crisis that had exacerbated the 1991 recession. Despite this background of doom and gloom the S&P 500 advanced by 34% in 1995.”

Lest you think there was much less to worry about back then, here are some of the headlines:

Nov 1994 – Norwegian voters decide not to join the European Union.

Dec 1994 – Boris Yeltsin orders troops into Chechnya.

Dec 1994 – Mexican Tequila Crisis – ‘unleashing the Tequila effect on global financial markets.’ The U.S. agrees to a bail-out.

Jan 1995 – Kobe Earthquake in Japan. Feb 1995 – Barings collapses due to speculative trading by Nick Leeson.

Apr 1995 – Oklahoma City bombing kills 168 people.

Jun 1995 – Iraq disarmament crisis. . . .

So there was plenty to worry about.  Saut's bottom line for the week?

This is not the time to be bearish. The turtle makes no progress until it sticks its neck out; Saut has been sticking my neck out since Thanksgiving, believing the Santa rally was beginning. More and more positive news comes out each day – better than expected Chinese GDP growth (+8.9% vs. +8.7%E), a worldwide interest rate easing cycle, the largest jump in German investor confidence ever, a decent Spanish bond auction, and hints of another round of quantitative easing.

The result has the S&P 500 moving higher – Saut thinks it is a mistake to become too bearish . . .A different perspective I thought you’d find of interest.

It’s that time of year again when we all look back on 2011 and look ahead to 2012. We always say you can’t Predict, but you can Plan for the future. Liz Ann Sonders, Schwab’s guru, has a similar philosophy that disciplined investing is the key to long-term success, not prognostication. She has an end of the year wrap up that I found a good read (HERE)

I’ll summarize below:

A market full of "sound and fury, signifying nothing" – When all was said and done, the S&P 500 and the Dow did eke out gains for the year. Yet, investors may not feel that way as most asset classes around the globe ended the year negative (the US was actually the “best” performing equity market).

Lower inflation, higher real growth – Given the improving outlook for inflation in the first half of this year, and a lower deflator, expect real GDP to have an upward bias.

Under-exposed investors will likely climb "wall of worry" – As we head into 2012, Liz Ann thinks the market "wants" to go up, and the first trading week certainly supports that view. Hedge funds are under-exposed to stocks, according to ISI's survey, with net-long exposure only slightly greater than it was back at the March 2009 market low. Individual investors' exposure to stocks also remains low relative to historical norms, with the bias in terms of fund flows having been heavily fixed-income-weighted over the past five years or so. And sentiment conditions remain supportive, with the "wall of worry" very much intact. Corporate profits are set to continue growing, albeit at a slower pace, driven by contained labor costs and low interest rates.

Expect the unexpected – Although the eurozone crisis may keep volatility elevated short-term, 2012 is looking like a better year. In Liz Ann’s view, this mirrors more the 1998 currency crises emanating from the Thai baht devaluation, Asian market collapses, and economic carnage throughout Southeast Asia and Russia. Unless there's a Lehman moment in Europe, she thinks the US economy will not be infected significantly from Europe's economic malaise

Liz Ann Sonders believes markets are likely to remain volatile in the near-term, but she thinks 2012 could be a year of easing volatility, lower correlations and better returns for stock investors.

A great way to start you year is to see if you’re retirement is "On Track."  We have a FREE tool you can use to start your analysis / review (Click HERE for your FREE on-line Road Map).

One of the most popular New Year's resolutions is to put together a budget and stick to it. Yet many people don't accomplish even the first step. Just 58% of Americans track their spending against a monthly budget, according to a Bankrate.com survey.

Want this year to be different? You’ll need to make a commitment to spend a little time getting started. After that it’s a cinch, especially with all the new Apps that can help you keep track.

Regular Monthly Payments – make a list of all your monthly expenses. Mortgage, utilities, internet, etc.

Day-to-Day Spending – track your spending for at least a week. You can use an App, a notepad, a spreadsheet. Anything that works for you, but keep track of every nickel for a week to see where it all goes.

Needs and Wants – now it’s time to separate Needs from Wants (entertainment, for example). Then goes through the list and decide what you can trim from your “wants”.

My favorite App or website to use for this is Mint.com. It’s free & helps easily keep track of money coming in and money going out. It’s a “push” technology, I like to say. Once you set it up, every time you log in (I suggest weekly), Mint.com has all the info already in there & categorized for you (they’re not perfect, and you can adjust the categories). It’s easy to see the “big picture” – how much came in & how much went out on a monthly basis. Make this year different! Try something different! Mint.com is a great place to start.

In a recent article in USA Today (HERE) they talked about common nightmares people have – the one where you’re back in high school and haven’t studied for an exam. They draw a parallel to retirement – here it is and you’re not ready for it!  I’ve read where most people spend more time planning for an annual vacation than they spend planning for their retirement.

The “hurry-up retirement” involves trying to eliminate debt, save as much as they can, and then invest in high-risk investments to catch up, which may lead to retirement disaster – running out of money.

There is simply no substitute for advanced financial planning when it comes to retirement.  However, the good thing is that there is a “plan” and you just have to take action and follow it. As a start, maybe take 10 minutes to get a FREE financial road map to see if you’re retirement is “on track” (Click HERE). Take time to plan for your retirement, just like you’d take time to plan for a fancy vacation

Dave Ramsey is an author and radio personality who talks about beating debt and building wealth.  This year over the holidays I reviewed his book and his website. His keys are simple – get out of debt the same way you learned to walk – one step at a time; Baby Steps. Dave’s Baby Steps are a 7 Step process, which I’ll summarize below.

Here's his process:

Baby Step 1 – $1,000 to start an Emergency Fund

An emergency fund is for those unexpected events in life that you can’t plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, and the list goes on and on. It’s not a matter of if these events will happen; it’s simply a matter of when they will happen.

Baby Step 2 – Pay off all debt using the Debt Snowball

List your debts, excluding the house, in order. The smallest balance should be your number one priority. Don’t worry about interest rates unless two debts have similar payoffs. If that’s the case, then list the higher interest rate debt first.

Baby Step 3 – 3 to 6 months of expenses in savings

Once you complete the first two baby steps, you will have built serious momentum. It’s time to build your full emergency fund.

Baby Step 4 – Invest 15% of household income into your retirement

When you reach this step, you’ll have no payments—except the house—and a fully funded emergency fund. Now it’s time to get serious about building wealth. [This is the "pay yourself first" concept others refer to]

Baby Step 5 – College funding for children

By this point, you should have already started Baby Step 4—investing 15% of your income—before saving for college. Whether you are saving for you or your child to go to college, you need to start now.

Baby Step 6 – Pay off home early

Now it’s time to begin chunking all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments.

Baby Step 7 – Build wealth and give!

It’s time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. It's really the only way to live!

That’s Dave’s plan in a nut-shell. You can learn more in his books or website (HERE’s his website). His way isn’t the only way, but it IS a way to get yourself on sound footing. The real key is Planning – Put a Plan together & stick to it through time. As Warren Buffett says “it’s the sticking to it that’s the hard part.” Find out if you’re on track – Click HERE for your Free Financial Roadmap. Let us know if we can help.

Businesses function by controlling their expenses and try to turn a profit. This is a notion that can also be applied to your own finances. Think of yourself as a business – “Me Incorporated.” To make your business run smoothly, you need to take a look at your books. The investigation starts with a look at your income and expenses. In this article we'll show you how to relate business money-managing ideas to your own financial situation. We now have access to a Free Roadmap that can also be helpful to evaluate your current situation. Click HERE for your Free Roadmap.

Burn Rate

The rate at which a company's cash is being spent is referred to as the "burn rate." By tracking the speed at which the money is being burned up, it's easy to tell how long the company can survive.

Applying this idea to your personal finances is easy. Think about your paycheck as funding for your retirement – amassing money for retirement is your ultimate goal. If you "burn" through your money too fast, you won't have any left for your savings and you will be headed in the wrong direction, having to dip into your existing savings.

If you net $120,000 per year and spend $135,000, you are operating at a $15,000 loss. How long could you possibly last if you are burning though $15,000 in savings each year? It just doesn’t add up!  You may think it's not you, but money is a “habit” – we all can learn some “good habits”.

To get your personal retirement on track, you need to put your money into investments, not credit card payments. Shrinking your “burn rate” is the key to making that happen.  Simply “spend less than you make.”

Profit

Making a profit is key to being a successful business person. It’s the same in the personal finance world.

The first step in figuring your profit is to review how much money you earn each month. The next step is to add up how much you spend. The spending category includes everything – mortgage/rent, cars, credit cards and trips to the cash machine. You've got to subtract the expenses from the income to get your “profit” – this profit is what you could put into your retirement.  Mint.com is a great place to start this exercise. It’s a Free service that helps you track monthly expenses. Check it out! HERE.

Also, just because you have some left over funds at the end of the month, doesn't mean that your business is in good shape. To examine your situation further you must look at where that money goes too.

Why Are You in Business?

Look at your “profit.” You worked all year to earn it, and now is the time to view the results. Your profit is the net accumulation of all of your efforts. Are you happy with the number? Is it enough? Is your retirement “on track” with that amount of annual profit?

To answer these questions, you need to have a plan. You need to know how much money you will require to turn your retirement dreams into reality. Recall the commercials – “What’s your Number?”  You may need help with this one. Check the web or ask your personal financial team.

Increase Your Profits

One you've figured out your profit and your retirement goal, it's time to do some fine-tuning. If your profit doesn't provide enough to fund your retirement, it's time to trim your expenses. Look at all you discovered in your burn rate and profit (maybe using Mint.com) and see which expenses can easily be cut. Like anything, change takes time.

If your profit is good enough, increasing it will allow you to retire early, or add a cushion for any unexpected bumps in the road. Being financially independent can be a great feeling, so why not get there as sooner rather than later?

Unlike people, businesses aren't emotional. A solid business is set up to make a profit. Simply breaking even doesn’t cut it. In your personal life (“Me Incorporated”) simply paying the bills won't work either. Get past the emotions, focus on the numbers, and approach it like a business.  Success in business starts with a Plan! Why would your personal success be any different?

In this article we'll show you how to apply business money-managing ideas to your own financial situation. Click HERE for your Free Roadmap to see if you’re running your personal finances like a business.

Another end of year article, adapted from an old Kiplinger piece (Kiplinger.com) to help you find the secrets to financial success. As Warren Buffett would say “it’s the sticking to it that’s the hard part”:

Number 1 Money Generator – You!

Your own earning power is the most valuable asset you'll ever own, and it can't be wiped out in a market crash. Keep your earning power growing through continuous education, training and personal development.

Borrow sparingly

Use credit only to purchase things of lasting value: a home, education, maybe a car. Even better, take advantage of the credit card company's free 30-day loan by charging responsibly and paying off the bill in full every month. Very few people get into financial trouble when they have little / no debt (sounds like Dave Ramsey commercial)

Pay yourself first

This year, try reversing the bill-paying process. Make the first check you write each month a deposit to your investment account. Then pay all your regular monthly bills, finishing up with the credit card bill. If you're having trouble paying that last bill, trim your discretionary spending — but keep paying yourself first.

Don't go for the home run

Home run hitters strike out a lot too, and their lifetime batting average — average annual total return — suffers accordingly. So don't try to time markets, because no one does it consistently well. Use dollar-cost averaging to invest regularly in markets good, bad and lackluster. Have the patience to wait out the occasional (and inevitable) bear markets.

Diversify, diversify, diversify

Successful investors have always known that any one class of assets — stocks, real estate, bonds, cash — will have its day in the dirt and its day in the sun. That's why you've got to own all of them, in a mix that's right for your age, income, family responsibilities and tolerance for risk.

Protect yourself and your loved ones

Prepare for the “what if’s” in life. Make sure you have enough insurance against life's big risks — serious illness, disability and early death. Most people are woefully underinsured.

Live simply today for a more comfortable tomorrow

Delayed gratification is no fun, but it's the only way I know to fund your long-term goals — college for your kids or grandkids, that vacation home you've always wanted, early retirement. Take a close look at your current lifestyle, and if you see a lot of spending that is dispensable, consider it found money for the bigger dreams in your life.

Here’s a FREE On-line tool you may find helpful, when it comes to the secret of your success.

The end of the year is a good time to reassess your life – both personal & financial. Here are some ideas to help you simplify your financial life and possibly save both time and money in the process.

On-Line Bill Pay

Finally, this is the year! Start paying a few bills on-line the first month, and then add a few more each additional month.  Before you know it you’ll be completely on-line & freeing up that bill paying time for more enjoyable things. 

Consolidate your accounts

Too many accounts scattered among multiple providers creates a twofold problem: It’s harder to track your investments, and you may be paying more in fees. Consolidating your investment accounts, makes managing your financial affairs that much easier.

IRAs: all for one and one for all

The IRS looks at all your traditional IRAs as one, & so should you.  If you have more than one traditional IRA, consider consolidating them into a single account. And if you have an old 401(k) still sitting with a former employer, consider rolling it over into your traditional. Again, you’ll find it easier to keep track of your investments and you might even end up paying less in fees overall.

Filter the noise

Unfortunately, access to lots of financial information doesn’t always lead to wise decision-making – it may lead to decision overload!

Focusing on the long term becomes easier when we learn to ignore this sort of arm-waving. Be discerning—seek sources of information you find truly informative, reliable and worthy of your attention, then tune out the clatter.

When, if ever, can I Retire

We spend more time planning vacations than we do planning our retirement. Here’s a FREE On-line tool that will help you start to answer that question.  It will also help you to prioritize your goals (retirement, college funding) & find out if you are on track. It’s scary, I know, but you need to start somewhere – You can’t Predict the Future, but you can Plan for it.

The KISS Principle (Keep it simple, sweetheart)

Wall Street is forever coming out with all kinds of fancy financial products. Do you really need to concern yourself with the latest products? Perhaps not, especially if you believe that the simpler you can structure your financial life the better.

Of course, “simpler” should not be confused with “simplistic.” Simplification doesn’t mean you ignore the sound principles of investing, and keeping things simple should never lead to neglect.

Why not choose a diversified asset allocation that fits your personality, goals and objectives, implement it as simply and efficiently as you can, resolve to revisit your plan periodically to keep it on track, and then just relax? It might be nice to just go on vacation once in a while without having to worry about how your portfolio’s doing at any given moment in time. Wouldn’t it?

Part of our research is to read / research topics not covered by the main stream – try to find out what’s going on behind the headlines. 

We know the negatives on the market – US Political environment and the European debt crisis -> which may lead to slow growth in the US & Europe. However, as we know from a previous blog post, there is no direct correlation between stock market returns and GDP growth. The stock market is much more correlated to corporate earnings. There is a growing amount of evidence that behind the headlines of the US & Europe that corporations & consumers are doing well.

A recent US Today article pointed out that despite stock market’s roller coaster ride and slow job recovery, companies’ profits are on a tear. Corporations set another recorded for quarterly earnings in the 3^rd quarter, topping the previous record set in the 2^nd quarter.

While growth expectations may be subsiding for 2012, investors are still expecting record profits. Even if profit next year increases by 8.7%, that's still going to represent extremely strong, and record, corporate profits.

The key point – US Corporations are making money, have less debt & more cash than any other time in history.  That could lead to improvements in stock returns. The next key to look for is “Merger Mondays” – companies buying other companies, showing even more confidence in their business. (click HERE for full article)

According to Morningstar data released this month (click HERE for full report), retail investors redeemed $18.2 billion from U.S. stock mutual funds in October, the LARGEST outflow for the asset class since July, when equity mutual fund investors redeemed $22.7 billion.

Yes, it’s true we’ve had a volatile couple of months in the equity markets. BUT THE S&P 500 WAS UP 10.9% in October; the best one-month stock rally since 1974!!! 

Retail investors infamously buy high & sell low. According to Morningstar, some of October’s outflows were likely investors reacting to September’s loss.

No one will argue the fact that it’s hard to time the market. Academics say it’s a fool’s game. But still, investors are struggling to maintain their income and are complaining that there is nowhere to achieve returns, yet many just missed out on one of the best performing months for the stock market in years?

Warren Buffett, the “Oracle of Omaha”, said that to succeed at investing all you need is a plan, and stick to it…it’s the “sticking to it” part most people have trouble with.  Don’t “follow the crowd” – do what Buffett suggests & put a plan together & stick to it. If you need help, there are people like me out there that can help you with the “sticking to it” part. You can’t Predict the Future, but you can Plan for it.

Most of you have probably heard that Warren Buffett has decided to buy over $10 billion of IBM stock.  The investment makes Berkshire Hathaway IBM’s largest or second-largest shareholder. This is reminiscent of his announcement of to buy back Berkshire Hathaway stock back in September.  Many think it’s another endorsement for US Stocks.

Buffett's IBM splurge means he has paid near-record prices for the shares, much like he did on his winning 1988 investment in Coca-Cola Co.  IBM becomes Berkshire's second-biggest holding behind a Coca-Cola. Buffett invested about $1 billion in Coke by the end of 1989 and made purchases of almost $300 million in 1994.

 “When he started to accumulate the Coca-Cola stock it was like, 'Boy, this is very unlike Buffett because of the valuation,'” said David Rolfe, chief investment officer of Berkshire investor Wedgewood Partners Inc. IBM “is a behemoth, compared to even where Coke was back then. But it is certainly a company that can grow.”

Buffett is considered by many to be one of the wisest investors out there. So, the “Oracle of Omaha” is buying IBM stock, which many are interpreting as being bullish on the US Stock Market. “If he thought the possibilities of a recession were on the horizon, then he'd wait to do this?”

 Click HERE to read more

As mentioned before, we spend many hours each week reviewing a variety of the very best sources for new insights. This article has gone “viral” on Washington Post’s website. It’s written by Barry Ritholtz, who publishes a blog (The Big Picture) that I read each week.

The article sites his reasons for the Financial Crisis of 2008 & what he calls the “Big Lie” to cover the truth up. Here’s the link to the article (HERE), you may need to sign up for the Washington Post, but it’s FREE & has other good resources.

I’ll summarize below, but encourage you to read his full article.

The Big Lie, according to Barry, is that there are many “causes” of the crisis; yet each group claims to be a victim & blame another group. For example, Wall Street blames Congress; Congress blames Wall Street; the protesters blame…well I’m not sure

Some of Barry’s causes of the crisis include:

• Fed Chair Alan Greenspan dropped rates to 1 percent…for too long.
• Low rates meant investors turned to high-yield mortgage-backed securities; yet didn’t understand what they owned or the risks inherent.
• Credit ratings agencies — Moody’s, S&P and Fitch. They had placed an AAA rating on these junk securities, claiming they were as safe as U.S. Treasurys.
• Derivatives were/are exempt from all oversight / reserve requirements. This allowed AIG to write $3 trillion in derivatives while reserving precisely zero dollars against future claims.
• The SEC changed the leverage rules for just five Wall Street banks in 2004. The “Bear Stearns exemption” replaced the 1977 net capitalization rule’s 12-to-1 leverage limit. In its place, it allowed unlimited leverage for Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns. These banks ramped leverage to 20-, 30-, even 40-to-1. Extreme leverage leaves very little room for error.
• Sub-prime mortgages were dominated by non-bank originators exempt from most regulations (ie. They had weak standards). The Fed could have supervised them, but Greenspan did not.
• Congress radically deregulated the financial sector, encouraged home ownership to those who may not qualify & allowed Wall Street to self-regulate.

Interesting thoughts that’s gone “viral” on the Washington Post – now you can say you’re “in the know”.

Research tells us that there are six major concerns that investors are looking to solve:

• Preserving wealth. In one study of more than 1,400 high–net–worth investors who work with advisors, nearly 90% were quite concerned about losing their wealth. Today, given the market's sometimes severe volatility, investors are anxious about their retirement prospects and intensely focused on preserving their wealth.
• Minimizing taxes. Mitigating income taxes is a concern of more than 90% of investors with a new worth of between $1 million and $3 million. For those in the higher net–worth range, estate and capital gains taxes are also major concerns.
• Wealth protection. A significant number of affluent investors are worried about keeping wealth safe from potential creditors, litigants, and children's spouses and potential ex–spouses, as well as from catastrophic loss. For example, being sued is a key concern of nearly 60% of investors.
• Estate and gift transfer. Ensuring that heirs, parents, children and grandchildren are taken care of with minimal difficulty and cost, in accordance with the investor's wishes, is cited by more than 80% of affluent investors.
• Charitable gifting. Helping to facilitate and increase the effectiveness of their charitable intents is very important to a sizeable percentage of high-net-worth investors.
• High–quality financial advice. During the downturn, however, many affluent investors grew increasingly unhappy with their current advisors. Example: A full 81% of investors with at least $1 million said that they planned to take money away from their current advisor.

Clearly, investors today are competing with a wide range of challenges that can affect every aspect of their lives.  We at Mosaic Wealth Management do what few advisors do – help investors tackle ALL their important Wealth Management issues.