Rick Kahler's Financial Awakenings

Most people with Individual Retirement Accounts open them with a bank or brokerage firm (the custodian) that limits what investments can go into the account. These custodians typically limit your investments to stocks, bonds, and mutual funds with whom they have distribution agreements.

A little-known option that allows owners of an IRA to have unlimited control of the investments they can hold is the self-directed IRA. Assets permitted in self-directed IRAs include real estate, promissory notes, mortgages, tax lien certificates, US gold coins, and private placement securities.

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“Even the checkbook-challenged, filing system-deficient and perpetually messy can take steps to shore up their finances without undergoing a major personality overhaul.”

In a January 18 article at CNBC.com titled “How the Financially Disorganized Can Budget and Save,” financial writer Dinah Wisenberg Brin has some suggestions for keeping track of your spending without a detailed budget. She cites Rick’s suggested strategy to “remove everything of importance — taxes, insurance, car and house payments, vacation and emergency savings, retirement funds — from the paycheck before it hits the bank.”

You can read the entire article here.

Jannie Wu wanted a better life.

I met Jannie on a recent trip to China. After earning an undergraduate degree in English, she took a teaching job paying 1000 Renminbi, or RMB, ($150) per month. In China, obtaining a student loan is not an option. Her parents funded her education, which cost 40,000 RMB ($6,500), and one of her goals was to pay them back.

Jannie’s lifestyle didn’t include eating out much, going to movies, or buying the latest clothes. “My rent was 300 RMB, my food was 300 RMB, I spent 100 RMB on other necessities and a few pleasures, so I was able to save the rest.” That was 300 RMB a month or $45. Still, repaying her parents would take about seven years. Jannie found a better way, moving 100 miles from her small village to Beijing and becoming a tourist guide. While it was hard leaving her family and the move ended her relationship with the man she was dating, it was worth it to her.

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“South Dakota, with its chilly winters and long stretches of desolate land, may be pretty far down on your list of places to retire. But with the average married boomer facing a retirement savings shortfall of $30,000, advisers say the Mount Rushmore State is worth a look, given its low prices on everything from real estate to food.”

That was the opening paragraph of a January 12 article by Catey Hill at SmartMoney.com. The magazine is currently running a series, “Retire Here, Not There,” featuring affordable retirement alternatives in various states. This week’s article featured South Dakota and recommended four retirement destinations: Rapid City, Sioux Falls, Pierre, and Hill City.

Rick was among the sources interviewed for the article, which you can read here.

After all the Christmas giving and end-of-year donations, January might come as a welcome breath of fresh, cold air. We can take advantage of the break from charitable solicitations and appeals.

Or maybe we can take advantage of the opportunity to consider ways to give more consciously and deliberately in the coming year. One organization that is a strong example of conscious giving is Black Hills Area Habit for Humanity.

Most of us probably know at least vaguely that Habitat’s mission is to build houses for low-income families. What we may not be aware of is the relatively high success rate for Habitat homeowners. Continue Reading »

A recent article on MSN Money reports there are nearly 176,000 people who call themselves financial advisers.

As with any profession, there are plenty of bad apples and weeding through them isn’t easy. After the Bernie Madoff Ponzi-scheme scandal and the latest complaints about Ameriprise Financial (which is accused of investing employees’ 401k’s in underperforming mutual funds), there is good reason you will want to thoroughly check out any financial adviser.

A June 2011 survey from the Certified Financial Planner Board of Standards, the regulatory organization for advisers, found that few Americans have a written financial plan. If you’re in the market for a financial adviser, proceed with caution and consider these nine caveats. Read more here.

Here’s a new twist on an old New Year’s Resolution: If you want to give yourself the security of financial independence, try budgeting the way many wealth accumulators do.

The secret? They don’t budget.

Your first reaction might be, “Of course these people don’t budget! They have so much money, they don’t need to.”

That may be true for some of those who have money today, but I’m referring to people who want to remain wealthy or those who are “wealth accumulators.” These are people who don’t start out with money, but who build up significant wealth over time.

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In a December 16 article in the online magazine Mainstreet, Kristen Colella discusses some innovative ways to give financial gifts. She goes beyond ideas like college funds or cash for grandkids to consider stocks, collectible items, and even remodeling projects. Rick is one of the financial planners she interviewed for the piece. It offers some creative suggestions for last-minute Santas, especially those who have generous budgets for stocking stuffers.

Read the entire article here.

Salvation Army bell ringers. Angel trees. Appeals in the mail from charities, churches, and community organizations. Office and club gift exchanges. The family Christmas list that expands year by year.

This time of year, the spirit of giving gets a serious workout. For some of us, it can quickly turn into a spirit of frustration as we feel overwhelmed by requests and obligations.

Maybe one answer to make the season more manageable is to become more conscious about your giving by creating a “giving portfolio.”

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“People aren’t always rational when it comes to their financial decisions.” This statement by Dr. Sonya Britt, cited in a December 12 online article in The Wall Street Journal, certainly won’t come as a surprise to any financial planner. Dr. Britt, an assistant professor of personal financial planning at Kansas State University, is president of the Financial Therapy Association.

Financial reporter Veronica Dagher uses examples from several therapists and financial planners, including Rick, in her excellent piece on financial therapy. She describes financial therapy as a “growing field . . . which seeks in part to help clients understand the emotional triggers and experiences that may prompt them to make poor financial decisions. Financial therapy may help clients communicate better about money, uncover irrational financial fears and empower them to follow their adviser’s recommendations.”

Read the entire article here.