Returning

So, it has been nearly one-year to the day since I last posted. And, what a year it has been! Since my last post "Housing Hooplah", many people have experienced first hand how over exuberance can hurt. And, hurt bad it has. Examples range from the woman who can't retire because she can't sell her house to a real estate client of mine who went bankrupt (sometimes, it's too little, too late). I won't delve into the plethora of statistics describing the overall credit crunch or housing market crash. There has been enough out there. For an idea see this HousingPANIC.

The interesting thing is that many people want to blame others for the situation. While lenders, developers, real estate agents, etc. are partly to blame I can't help to ask "haven't you learned your lesson yet?" Of course, there will always be people who blame the president. Politics aside, I am a firm believer that our actions are imbedded in pyschological tendencies we all have. Sure, everyone says that our main motivators are greed and fear (which we see all the time), but it is much deeper than that. There is a deep-seeded money psychology that allows people to follow the herd, make irrational and oftentimes uneducated decisions, and fail to follow time-tested financial techniques. A sign of unhealthy financial standards is then to BLAME others for what ultimately was one's personal choice and decision. It's about time we reevaluate the psychology behind our actions and take personal responsibility for OUR decisions rather than blace blame, wait for a government bailout, and wonder if we learned our lessons. Do you play the victim or are you educating and learning by these challenging times? Markets of all kinds ebb and flow, markets correct to a more natural equalibrium, and fads come and go. How do you choose to react?

Housing Hooplah

For the last couple of years I have been experiencing "deja vu all over again". Am I the only one that has seen the eerie similarities between the stock market of the late 90's and the most recent housing market? Does anyone remember the term "irrational exuberance?" and how dangerous it can be to get caught up in market trends?

I didn't think I needed to remind people, but in the late 90's people were so confident they could make quick, easy money in the stock market that they were buying stocks with little to no earnings, little research, and in on or two sectors alone. And, we all know what happened. People paid the price and paid it dearly. In fact, we experienced one of the largest losses in personal wealth in history soon after that.

Isn't this the same as what we have been seeing in the real estate market? How many people do you know that have changed their career to that industry, abandoned prudent investing philosophies to strike it rich in the real estate market, or simply think that making money in real estate is the best and only way? Real estate has an allure, but in fact real estate has not performed as well as stocks over the long-term and there are many risks of which people are either unaware or choose to minimize. Luckily, I am not alone in seeing this trend.

Robert Shiller, a finance and economics professor at Yale, sees the same trends in housing prices (which is no real surprise given the nation-wide softening) and warns that getting rich on real estate is usually overrated. If you recall, Mr. Shiller wrote the book called, you guessed it, "Irrational Exuberance", which forecasted the end of the 90's stock bubble.

In a recent Money Magazine interview, Mr. Shiller points to a few interesting facts: from 1890 to 1990 the return on real estate was just about zero after inflation, since 1986 its been about 6% or 3% after inflation, and that over investing in real estate is a recipe for disaster. At this point he has about 60% of his portfolio in stocks, he is very light on real estate, and continues to have a lot of holdings outside of the United States.

Money Magazine also ran a similar story on real estate versus stocks. They compared performance, costs, diversification, and effort needed to expand as an investor. In their analysis, stocks won. The only place that real estate wins is in the area of leverage. Most people know that it is the power of other peoples money or leverage that makes real estate investing powerful. However, the data suggests that this added leverage is oftentimes consumed by taxes, closing and purchasing costs, maintenance and other associated expenses. In all, people we continue to run after one trend or another. The smartest, however will avoid the hooplah or the "irrational exuberance" in any market. It's your choice.

What is the real risk?

I hear it all the time: investing is risky and it is not a sure thing. I just read a good article by The Motley Fool that discusses how investment volatility is almost always associated with risk. Beta, as one measure of risk. measures how much more a particular investment (namely a stock) deviates from the actual returns or movement of the overall market. While I do not agree with the articles slight suggestion that we throw Beta and other volatility measurements out the window, I would agree that investment volatility and downside risk is NOT the biggest risk we face. The article does a good job of addressing the fact that the biggest risk we face in achieving any financial goal and more specifically or retirement goals is the risk of outliving our assets or drastically undermining our lifestyles due to a loss in purchasing power. As you know the costs of goods and services go up over time - around 4.1% on average per year to be exact. What does that meant to you? Your money must be growing to outpace that average or your purchasing power is losing value. They warn that many people avoid the investment risk associated with volatility and they make the grave mistake of socking away money in investments that are way too conservative like money markets, CDs, and short-term bonds. Don't be fooled and buy into the fear that investment risk is to be avoided at all costs - it is really the risk that you will lose your purchasing power or, worse, outlive your assets, that is the biggest risk of all. Stocks continue to be the best hedge we have against inflation. Almost everyone should have some portion of their assets in stocks to help mitigate inflationary erosion.

Love her or hate her

Despite how you personally feel about Suze Orman she probably does more good than harm. As a financial professional, I will begrudgingly admit that I have, on occasion, enjoyed listening to her and have even caught a glimpse of her on TV. Shhh - don't tell anyone. You simply cannot deny that she has a tremendous reach and I suspect her impact on improving overall financial literacy ranks her in the top five. However, I have heard that she told her listening audience that the stock market was too risky and she did not trust it for her long-term money. Whoa - hold on a second!

I think we need to clarify this a bit. Yes, the stock market is risky and, yes, it is not for everyone, however, the investment risks associated with the stock market are less so than the risk of significantly reducing the purchasing power of your savings and outliving your assets! Let me give you a very simply example. If you wanted a nearly risk-free investment you can expect to earn about 4% a year on average (higher or lower depending on current market conditions). If the average annual inflation rate (increased costs of goods and services) is approximately 4% how much are you really making? I am no mathematician, but that would be approximately ZERO! What about bonds, you ask? Well, since you are assuming a bit more risk than money markets, CDs, and other cash equivalents Bonds tend to fair better over time. On average the bond market has returned about 6% on average per year which helps out pace the ugly head of inflation by some (see Templeton Financial Services Blog). Investing in the stock market does not come with risks, however, it still remains on of the best inflationary hedge there is. Even those nearing or in retirement should have a decent portion of their portfolio in stocks/equities. Many people are living 20-30 years in retirement and inflation plays a big part. The key is to manage risk and find ways to obtain most if not all of the potential return/rewards of the stock market with the least amount of risk. Certainly one way is to lime exposure to you the market by having a mix of stocks, bonds, and cash appropriate to your situation. In addition, diversify your assets to include large cap, mid and small cap, and international as a way to mitigate risk. Overall, however, I think Ms. Orman misses the mark when suggesting people avoid the stock market all together. To achieve the necessary growth and to out pace inflation, stocks are necessary in everyone's, young and old, portfolio. Smart strategies and risk management, however, remain paramount.

Merrill Lynch Rule

Have you heard of the Merrill Lynch Rule? Have you heard of Merrill Lynch? For the most part, the ruling has a lot to do with industry standards and regulations that protect the public. The financial industry is not as transparent as one would think. Knowing what kind of advice you are truly getting is difficult. For your reference here is a few answers to some common questions.

What is the difference between how brokers and fiduciary registered investment advisors are regulated?

The public is protected in two very different ways from any malfeasance by these professionals. Brokers must submit to what is called "compliance," which basically means they have to "comply" with the rules governing their sales activities. Meaning? For instance, that means if they recommend a mutual fund that is owned and operated by their firm, and which pays them an extra commission, they have to make sure that this is disclosed somewhere in the fine print of the many documents they give to the customer. Registered investment advisors are held to a fiduciary standard, which basically means that they have to put the customers' interests ahead of their own or that of the company they work for.

Brokers will tell you that they have to comply with so many rules that their protections are better, but this argument is seriously weakened by all the scandals that brokers have been involved in over the years. Anybody who reads the papers the last few years knows that this "compliance" standard somehow didn't stop the brokerage firms from having their research departments recommend initial public offerings even though they knew they weren't sound, or the brokers from recommending them to customers. It hasn't stopped brokerage firms and insurance companies from misleadingly selling variable annuities and life insurance contracts as retirement plans.

In fact, under this compliance regimen, there have been so many problems with customers that 36,379 different arbitration claims have been filed against brokers and their firms over the five years ending December 31, 2006.

Why are brokerage firms fighting so hard against having to act as fiduciaries?

The brokerage business model is founded on what we in the profession call "conflicts of interest." The company manages its own in-house mutual funds, which charge above-average fees--AND the company's brokers recommend mutual funds to their customers. (Guess which ones often come highly-recommended?)

The company sells initial public offering shares to the public AND the company's brokers recommend that their customers buy IPO shares. (How many tell their customers that these are often poor investments right out of the gate?)

The company has its own life insurance subsidiary AND the company's brokers recommend that their customers buy life insurance coverage.

The company owns stocks, just like other investors, in its own investment account AND the brokers recommend stocks to their customers. (Is it possible that the brokers are told to recommend stocks that the company wants or needs to dump because the analysts have discovered a problem with the company's earnings?)

If brokerage firms were held to a fiduciary standard, instead of a lot of paperwork requirements, all of these recommendations would be examined in light of whether they really were best for the customer. Every expensive in-house fund recommendation, every IPO recommendation, every piece of advice regarding insurance or stocks would have to primarily benefit the customer, not the broker or the brokerage company's bottom line. Brokers would be forced to recommend the better (often no-load) investments, and the company's in-house products would languish.

AND these companies would be required, by law and by the SEC, to fully-disclose their conflicts of interest in plane language to their customers--who would, of course, have a strong hint that they're being sold something that is less than ideal for their situation. That's why the brokerage firms see this fight as a life or death struggle.

Is there a solution that would allow the brokerage firms to survive, but still offer adequate protection to the public?

The brokerage firms, in their advertisements and in their sales pitches, are slyly positioning themselves as financial advisory firms, making it seem as if they're giving independent advice. The traditional brokerage role has been to sell investments and insurance to customers who were fully aware that they were involved in a sales process, or get people to buy or sell a stock or bond in return for a commission.

One uncomplicated solution would be to have the brokerage firms publicly acknowledge that their brokers serve in a sales capacity, just like the people who work at car dealerships--and you should no more expect them to sell you a low-cost mutual fund than you would expect a person working at a Ford dealership to tell you that the Toyotas down the street are better cars for the price.

The solution is to make them stop pretending to be something they're not. It really is that simple.

Is there an easy way for a consumer to know whether a "financial advisor" is held to a fiduciary standard or not?

The easiest thing to do is ask the person if he or she is a registered investment advisor or is registered with the SEC. If this person says that "a division of the company is registered," that means that he or she is probably not held to that standard, and can recommend awful investment products, so long as they fill out the right paperwork.

You could also ask if this person is willing to be held to a fiduciary standard in his or her recommendations, and whether he or she would be willing to put that in writing.

In addition, you could look at the name on the door. If the "financial advisor" works for a large brokerage firm, the way things stand now, that person is not a registered investment advisor.

One last question: why did the SEC allow brokers to be exempt from the fiduciary rules in the first place?

There's a very long answer to this, but the short answer is that brokerage firms have an exemption from registering as registered investment advisors, in the Investment Advisers Act of 1940, but only if their advice is solely incidental to their brokerage activities (which was selling investments and clearing stock and bond transactions) and only if they were not receiving special compensation for their advice (meaning advisory fees).

With the rise of the discount brokerage companies, the business of handling stock and bond transactions has become much less profitable--essentially a break-even business. It looks like the SEC was trying to give the brokerage firms a little time to evolve their businesses toward more of an advisory model, to make their money on fees rather than on transactions or selling in-house products.

Unfortunately, the brokerage firms decided, instead, to charge fees AND sell in-house products--to try to have the trust of a fiduciary, but still be free to make profitable or conflicted recommendations.

As the Appeals Court said in its ruling, the brokerage firms were never intended to have it both ways:

"A fundamental purpose, common to these statutes, was to substitute a philosophy of full disclosure for the philosophy of caveat emptor, and thus achieve a high standard of business ethics in the securities industry..."

Why should investors voluntarily settle for anything less than full disclosure and advice that is designed to benefit them?

Why indeed.

What is financial planning?

Many people do not understand what financial planning really is. Of course, it is is easy to blame the plethora of financial titles and designations out there. We have all heard them: financial advisor, broker, financial consultant, CFA, CFP, ChLU, etc. No wonder it is so confusing. But, all titling aside financial planning is really more than about investing or any other specific financial area. Sure, many financial planners have their specialty but a financial planners role is really to act as the "quarterback" of your team. Armed with broad based technical knowledge, their fundamental role is to follow a process to help you clarify and define goals, research and recommend solutions, recommend other specialized professionals, help you implement a plan, and assist with monitoring the plan. No where is there mention of financial products. Sure, financial products, specifically insurance, investment, or estate could be part of the process, but they are not by any means the beginning and end of a true financial planner. Be wary of those that lead with products or have the miracle financial system to help you realize all your financial dreams. In reality a financial planner is a confidant and coach that helps you clarify your goals and priorities and to help you sift through the financial landscape to find viable solutions for your personal circumstances. And, they can offer some accountability to if you need to be kept on track. So, before you hire or work with a financial professional in any capacity do your homework and educate yourself. The Financial Planning Association is a great place to start!

Money Relationships

I recently gave a talk on money and relationships. Specifically, it was about minimizing marital/relationship money squabbles. What is important about this? Well, a lot of us and our relationships suffer not because of lack of money or a financial disaster (though that can certainly be a factor), but because of the symbols money represents. Money certainly represents underlying values. How you relate to and use money is typically very similar to how you relate to yourself and others. Think of your money personality, for instance. Are you a spendthrift, a risk taker, or a hoarder? Everything we do with money sends a message to ourselves, our loved ones, and the world at large. If you are a penny pincher, for instance, it may be fear of not having enough or fear of an impending emergency. You may also be telling yourself this is the best way to provide for yourself and your family and the payoffs warrant the sacrifice. While these may be the messages you are transmitting to yourself, you may erroneously be transmitting to your loved ones and the world that you are rigid, cheap, or even selfish. These are quite different messages and one needs to be careful how money behaviors may send the incorrect messages to those we care about. I encourage people to gain greater insight into the way they handle their finances. Look at the way you have spent, saved, invested, and gifted money in the past. Track your behavior for a month or more as a conscious observer to experience how your behavior may send messages to yourself and others. Have you not purchased new shoes in a while because of money or because deep down there is a self-worth issue? Money and personal finance has so much more to do with psychology than technical mechanics. Only by blending behavioral psychology and financial knowledge can we improve our relationships with money, ourselves, and our loved ones.

Sleigh Bells Ring

I saw the emergence of the first Christmas trees of the season today and am reminded of the traditional joy, family reunions, and feasting most Christian (and non-Christian) American families will enjoy in the coming months. It makes me think of my youth when I wole up at 4:00 or 5:00 a.m. with my older sisters so we could go see all the presents glowing and calling to us under the Christmas tree. I guess, in retrospect, there were many holidays with few gifts, but my parents seemed to do the best they could. It is interesting that they still try to compensate for it now with more presents even though we are all adults. Isn't his true of many families? It is amazing how important presents are to holidays and how often many of us use money and purchased gifts to express love and other emotions. I can't help feel that there must be another way to express these emotions. Year after year families go into debt to give presents to loved ones. Is is because they do not adequately show their love the rest of the year? Is it because they have not fostered deeper relationships with people to simply enjoy their presence and unconditional love? Is it because we need to keep up with everyone else and show that we too have the newest fashions or the neatest gargdets on the market? Whatever the reason, all this spending and the marketing that corporate america uses seems to perpetuate our dangerous spending habits, causes us to frquently miss the point of the holidays, and invokes the misconception that holiday spending is a symbol of love and other emotions. Isn't a heartfealt meal, a family heirloom, or a self-crafted gift from the heart more meaningful and worth while. Do we really need more stuff and more debt?
There is much to be said of the "softer" side of finance. I would encourage that everyone develop and understand their money personality and the psychology of money in a way to foster a better relationship with money. Having this insight helps us discover why or why we have not manifested our financial success. However, if you have decided that purchasing lots gifts is still important to you and your loved ones, please keep these ideas in mind: stick to a budget by limiting how much you are willing to spend on the holidays, shop earlier rather than later to avoid paying more on things because it is last minute, avoid using dredit cards - if you can't pay it with cash you shouldn't buy it, start saving extra money now so you can purchase gifts within your budget, and look to shop online as this can save time and money. These are just a few of the several ideas to enjoy the holidays and maintian your financial health.

Stop the insanity

We all have seen it. You are driving down the road and someone is weaving in and out of traffic trying to find the fastest lane. Temporarily, he or she may find it, but remarkedly that person is next to you at the next stop light. Even if this person were to arrive at his or her destination faster than you, I am sure it would not be by much time and they incurred more risky driving conditions. We also see this in investing time and time again. Instead of constantly changing lanes to find a better one, many investors chase returns. The actual research has escaped me, but I recall reading that the average stock investor has made about 2% a year while the stock market in general has returned on average about 10.5% a year. Why? Because, they tend to buy and sell their investments far too frequently. In fact, the average investor tends to sell off investments that are underperforming (sell low) and accumulate investments that are already performing (buying high). Haven't we all heard the adage of buy low and sell high? A lot of this certainly has to do with the emotional responses of greed and fear, but also is a huge indication of how fickle and cyclical the markets are. What is today's winner is tomorrow's loser and vise versa. If anything, we should be adding money to those investments that are underperfoming and shaving off a bit from those that are outperforming. As I say time and time again, set up a properly diversified asset allocation for your personal needs and leave it alone. Please don't buy all the investments that performed the best this year. Please don't chase the high flying stocks and/or mutual funds. Please stop the insanity! Didn't we learn this in the late 90's?

Start Early

I was at a business development meeting at Shared Vision Network http://www.sharedvisionnetwork.com this morning and was discussing my business with someone I just met. After talking, he and I agreed that financial literacy is simply not appropriately taught. Though the typical working adult is usually my audience the same things can be said about our youth: schools and parents consistently fall short of teaching and passing along the virtues of proper financial management and money stewardship. Many students, for example, continue to graduate college in more credit card debt than ever before. Of course, I blame the credit card companies for their aggressive marketing efforts to this segment of society (it is far too easy for a college student with little to no job history to qualify for credit), but that is for another segment. I encourage all parents to start talking with your children about money and proper money management. Get them involved in handling the day to day payment of bills, share your household budget with them (you do have a budget, right?), let them see how your investment accounts look and experience the stock market first hand. Most of all, help them develop money beliefs and values that foster financial responsibility and empowerment. Teach them how money works as an instrument to further their souls evolution rather than something to be mismanaged and squandered early and they will be more adequately prepared for adulthood. Part of the problem, however, is that most parents have not been taught, or have failed to take the time to learn, the intricacies of proper financial budgeting, planning, saving, and investing. And so, the cycle continues.

Listen up! But, to whom?

Try doing a google search for personal finance and you will soon be overwhelmed by the myriad of options out there. Everyone seems to have their own strategy, ideology, and even agenda. The important thing is really to try to avoid those who are selling products and stick with those that are offering information and educational resources. Some of your best bets are your local newspaper columnists that aim to inform and educate their readership. I have been following Russ Wiles in the Arizona Republic for some time. Russ has teamed up with Yvette Armendarez in a relative new "MoneyWise" Blog that you can find at (http://www.azcentral.com/blogs/)
They cover a variety of topics including credit, investing, and their take on current financial news. It is a great place to start and get some unobjective financial information. That's where I got the information on Money Market Yields and information from Crane Data (www.cranedata.us). I also like The Motley Fool (http://www.fool.com/), for their general core philosophies. Some like Bob Brinker (http://www.bobbrinker.com/), but I would tend to shy from the short-term perspective and timing he seems to foster. I do like his favorite fund family that he frequently recommends. Others love Warren Buffett (http://www.buffettsecrets.com/). I also like the tenets discussed in Burton Malkiel's book "A Random Walk Down Wall Street" (http://www.princeton.edu/~bmalkiel/). These are time-tested, core philosophies to which every investor should adhere. He also has several other books that build upon these concepts. In thinking about this, though, it is important to figure out what your core money beliefs may be and find people that seem to reflect them in their writing and approach. Either way there is much to learn from these seasoned veterans.

Tis the Season

...for corporate profit reports. But, what does that really mean? To most analysts and avid Wall Street watchers, corporate profit reports generally indicate the productivity and growth of the overall economy. They are also frequently used to try and determine why the markets acted the way they did (i.e the market was up or down). Just take a look at popular news media like MSN Money http://www.msn.comwhere they give in-depth coverage of daily and weekly market reports. While earning reports may be one part of the plethora of economic data available to surmise economic health, it really has little to do with us, the individual investors. Those who have seasoned the ups and downs of the market for many years, know that trying to guess when the market is going to be up or down in any given day, week, or year even is futile. The best recipe for success, experience and data both clearly show, is to stay the course and to not worry about short-term events and media-driven hype of where the market may or may not be going. Avoid worrying about the short-term prospects of the markets, whether they are stocks, bonds, real estate, and maintain you properly diversified portfolio. What is in favor today is likely going to be out of favor tomorrow and vise versa.

Where should I invest?

In talking with people from all walks of life, I am frequently asked where I would recommend they invest. With the plethora of articles and books available today, it comes as no surprise it is confusing when trying to figure out where to invest. Of course, before embarking on any investment strategy you must ensure they are adequately insured, have adequate emergency reserves, and clearly identified goals. If those things are all in order, you are probably ready. Investing is not, however, about picking THE best investment at this point in time (as that changes rapidly), but really finding the best mix of investments that may fit your needs.

Keep it simple: mutual funds are probably hands down the best investments for most people. They offer professional management, liquidity, and diversification (for a relatively small initial investment) that you are unlikely to achieve on your own by buying individual securities. They also have mutual funds for almost every asset class out there. The key is to use mutual funds to to gain access to the major and minor asset classes. Major asset classes include stocks, bonds, and real estate. The minor asset classes include large, medium, small, domestic, and international stocks and short-term, intermediate-term, long-term, high--yield, corporate and government bonds. Remember it is important to gain access to all of these asset classes and to not try to figure out which on is the best at any given time. Diversification is key.

Yields are back

Money Market Mutual Funds are yielding about 5% for the first time in many years (www.cranedata.us). Not too long ago Money Markets were yielding only around 1% or less and forced many investors to look elsewhere to stash their cash. While the higher yield is good, remember that Money Market Funds are not really intended to be vehicles to maximize return. Money Market Funds and their equivalents (very short-term bonds, CD's, and savings accounts) are really designed for money with shorter-term goals. Even while a safe investment offering 5% sounds good, it is hardly enough to out pace inflation and help meet your long-term goals. In the investment world, its all about risk versus reward. Money Markets offer liquidity and stability. With little risk, you tend to have little potential for return. These vehicles are really best suited for your short term emergency reserves (ideally at least 3-6 months of living expenses) and other short-term expenses, while your other assets should be invested elsewhere to maximize your long-term returns. Vanguard, Fidelity, Dreyfus, and others all offer competitive yields. Just remember, that cost counts and that is why Vanguard typically offers the highest yield of the bunch.

What are Your Money Messages?

As a way to introduce some of my thoughts to my fellow bloggers, I am including an article I recently had published in a local newspaper.

Modern society constantly inundates us with conflicting messages — especially when it comes to money. On the one hand, advertising touts the allure of bigger and better homes, the fastest cars, and the coolest new high-tech gadgetry. On the other hand, we repeatedly hear financial gurus attempting, seemingly in vain, to spread the wisdom of zero debt, sound budgeting and saving, and intricate retirement planning.

So, which message is right?

Most of us think to ourselves that the financial goals we so often hear about make logical sense; however, we seem to reach this conclusion begrudgingly, or put that awareness on the incessant back burner. Even as we know what we should do, we continue to find ourselves mired in the financial trappings of modern-day consumerism. Why?

For the most part, our schizophrenic financial behavior occurs because both of these messages miss the mark when explaining proper money use, and the conflict feeds on sometimes hazardous emotional responses. The first belief feeds on our immediate desires. It plays into the culture that tells us we need things to feel successful, accomplished or normal, or that we work hard so we deserve “nice” things, regardless of their cost. The latter belief draws its power from our fears — fear of lack, fear of being unable to support ourselves and eventually retire, or fear of being unable to properly care for our loved ones. It is no wonder that most of our relationships with money are bipolar, at best.

Our typical money messages fail to remind us that money is simply a tool to help our souls evolve. Money, as a form of energy, is an instrument used to pursue fuller, richer and more purposeful lives. In his book, Women, Men, and Money, William Francis Devine puts it eloquently when he states, “[M]oney is an instrument of personal evolution and the power in it lies not in taking possession of [our funds] but in how we behave with them.”

This is not to say that we should ignore the money messages that encircle us; rather, we should question where those messages fit into our human evolution. Saving for retirement can be a wonderful thing for some people; however, it becomes a Pandora’s box for others. We can become so fixated, addicted even, to the misconception that life will blossom if we simply follow a program. Such a fixation encourages us to deny the frustrations of not living on purpose or settling for work that fails to fulfill our passion in the present. In order to find fulfillment, we must do something satisfying with the funds our work and savings afford us.
Even if our investments yield in excess of 20 percent for years to come, the act of sending money to our favorite investment firm — and waiting for it to yield a profit — does nothing to further our connection with yourselves, build rapport with our partners or cultivate our inherent talents. The traditional investment vehicles in which we constantly are told we should participate do nothing to cultivate our souls.

Using money as an instrument through which we enrich our souls involves avoiding the three-pronged dilemma promulgated by the so-called American dream, one which threatens our souls’ very vision: buying a grander home than we either need or can afford, doing work we are not fitted to, and saving, saving, saving with that retirement carrot as our incentive. While they are seemingly important cornerstones of the dream to which most Americans aspire, perhaps we should also become just a little bit skeptical about these pervasive financial messages, realizing that these goals can trap us and severely limit our human evolution. In describing the energy of life’s intentions, Albert Einstein said, "All means prove but a blunt instrument, if they have not behind them a living spirit." And so it is true of the instrument of money.

Welcome to my Blog

My intention is to comment on current issues and financial events that help individuals take more control over their personal finances and their lives. I mix psychology, spirituality, and socology with my technical financial training to educate and empower. I will be linking with other bloggers and financial resources as appropriate. Together we can Build Knowledge, Create Confidence, and Gain Control.