Rick Kahler's Financial Awakenings

CLICK HERE TO LISTEN TO RICK’S WEEKLY COLUMN: Download 11306_south_dakotaa_wealthfriendly_state.mp3

Our first quarterly workshop scheduled for tomorrow, Wednesday, February 1, is full!  There is still time, though, to register and participate via teleconference.  You won’t want to miss this informative session, as in the morning we will be discussing and showing you what you need to know about how to access and use all the new technology enhancements here at KFG. 

The afternoon session will feature a leading expert discussing the new Medicare Part D.  She will cover the basic information about the Medicare prescription drug coverage, what it is, who can get it, and why you should or should not get it.  She will also go over information on the costs, coverage, and how to select a plan that meets your needs. 

To register for this class via our speakerphone connection, please call Licia or Michele at 605-343-1400. 

I know a lot of you have enjoyed the two books I co-authored last year, Conscious Finance and The Financial Wisdom Of Ebenezer Scrooge.  The sales of each have been steadily rising on Amazon.com, but I can’t say either is a best seller yet!  However, there is something you could do that would help us to get our message out. 

If you liked either book, you could really help out each book’s ratings on Amazon by leaving a positive comment for either book on the Amazon.com website.  It is a pretty easy task and will take you aboutfive minutes.  We’ve been told that a lot of positive ratings are a factor in the ranking of a book on their site.

So, accuse me of groveling or begging (and I am), but I would really, really, appreciate it (and I know my co-authors join me in that appreciation) if you took a moment and said a few good words. Of course, if you didn’t like either book, you can stop reading now! 

At the end of this posting I will give you two links to each book on the Amazon site.  When you get to that page, scroll down until you get to the section called "Product Details" and look for this line:

Average Customer Review: based on 2 reviews. (Write a review.)

Click on "write a review" and if you are already an Amazon customer you will be asked for your ID and password and taken to a page where you can leave your review.  If you are not an Amazon customer, you will be given a chance to pick an ID and password and then taken to the review page.

Below is a link to each book on Amazon.

Scrooge is:  http://www.amazon.com/gp/product/0757303544/ref=pd_kar_gw_1/103-3611443-1800644?n=283155

Conscious Finance is: http://www.amazon.com/gp/product/0966554310/qid=1138559150/sr=2-1/ref=pd_bbs_b_2_1/103-3611443-1800644?s=books&v=glance&n=283155

Thanks for your time, support, and efforts to further our work!

CLICK HERE TO LISTEN TO RICK’S WEEKLY COLUMN: Download 01272006_why_do_you_have_insurance.mp3

CLICK HERE TO LISTEN TO THIS ARTICLE:  Download 01272006_why_do_you_have_insurance.mp3

Paul (not his real name) is in his 50′s, never married, with no children. His net worth is around $2,000,000, he has no debt, and his portfolio produces enough for him to live a comfortable lifestyle and pursue his interest in the geology of the Black Hills. Paul also has a "die broke" philosophy—if on the date of his death he finally spends his last nickel, his financial planning will have been a screaming success.

At one of our financial planning reviews, Paul took his seat in my office and said, "Well, I’ve got good news! I called a life insurance agent; I am going to update my policy and add another $100,000 to it."

"Well, you sound excited about that," I replied. "Tell me again, Paul, why do you have insurance?"

He stared at me as if I had just asked him why he needed to breathe. It was obvious he had never answered that question before.

After several seconds of silence, he said, "Well, I have it because everyone has it. I mean, everyone needs life insurance, right?"

His eyes opened a bit wider when I replied, "No, everyone doesn’t need life insurance, and you may be one who doesn’t."

The biggest reason people need life insurance is to replace their income earning potential. If the death of a person would not create an economic hardship on loved ones, partners, or creditors, then that person probably doesn’t need life insurance.

You typically need life insurance in the following situations:

• You have minor children and your net worth is not sufficient to replace your income.
• Your spouse relies on your income to support his or her lifestyle.
• You have large mortgages or other indebtedness.
• You wish to leave an estate to heirs or organizations that is larger than your actual estate.
• You want to reduce the erosion of your estate by federal income taxes.

You typically don’t need life insurance if:

• You are not married and don’t have any children.
• Your spouse’s lifestyle or financial future would not suffer as the result of your death.
• You have sufficient net worth to replace your income for the balance of your spouse’s life.
• You couldn’t care less about leaving more than you have to heirs or organizations.
• You have no large debts, or you have sufficient assets to pay off the debts and still fund heirs’ needs.
• Your estate isn’t large enough to incur federal estate taxes or your “after tax” estate is sufficient to fund the needs of your heirs.

Clearly, Paul—with no spouse, no children, and no debts—had little need for insurance. He was relieved to know that, not only did he not need to obtain a new insurance policy, but he could cancel his old policy and go to Denver for the weekend on the savings.

How about you? Are you paying for insurance you don’t need? Or do you need insurance you don’t have? I probably run into far more people who need more insurance than those who don’t need it. My rule of thumb if you have children is that you should have a minimum of $500,000 to $1,000,000 of life insurance. You don’t need to mortgage your home to buy it, either. If you are in relatively good health, term insurance is typically inexpensive and adequate for most people.

The important thing is to ask yourself the question I asked Paul. Why do you have insurance? Don’t just assume you need life insurance. Instead, decide whether you need it after you consciously evaluate your particular situation.

We just found out that during the week of February 27, 2006, Dr. Laura Schlessinger will feature our new book, The Financial Wisdom of Ebenezer Scrooge. The Dr. Laura Show features a book every week on the nationally syndicated show and as part of her giveaway program on her website.  You can see the website by going to http://www.drlaura.com/reading/.  We are really excited and honored that, of the 50,000 books printed annually, The Financial Wisdom of Ebenezer Scrooge was one of 52 selected by Dr. Laura as her "book of the week!"

  Click here to listen to this artice: Download 01202006_medicare_prescription_plansthe_d_is_for_difficult.mp3

There’s one thing about Medicare Part D that isn’t confusing—its name. The “D” clearly stands for “Difficult.”

One of my associates has done some research on Part D on behalf of an elderly parent. Here are her suggestions to guide your own research.

Anyone on Medicare should have received a booklet called “Medicare and You, 2006.” Read this for an overview of Part D. It also should have a list of plans available in your state.

If you already have Medicare Supplement insurance, ask your insurance agent for information on a Part D plan. If you belong to organizations such as AARP, you probably received information on their plans. It’s a good idea to get information on three or four plans and then compare them.

Compare more than just monthly premiums and deductible amounts. Before you choose a plan, you need to know the answers to three questions:

1. Will this plan cover the drugs I take?

2. How much will my co-pay be for those drugs?

3. Will my pharmacy accept this plan?

In order to answer those questions, the first thing you need is a list of all the drugs you take. If necessary, you can get that list from your pharmacy.

Secondly, ask your druggist what plans the pharmacy accepts. Larger chain drugstores will accept almost all the major plans. If you use a locally-owned pharmacy, you need to find out specifically whether that store will accept a plan you are considering.

Probably the most complicated step is to find out whether a plan covers your prescriptions. Each plan has its own list of approved drugs. In most cases, those lists are then divided into three or four tiers. The first tier, with the lowest co-pay amount (often $5), covers common generic drugs. The second tier, covering common brand-name drugs, has a medium co-pay amount from about $25 to $35. The third tier covers more expensive brand-name drugs, with a higher co-pay that may be about $50 to $75. A fourth level may cover high-cost specialty drugs, with the co-pay a percentage of the prescription cost rather than a set amount. Other drugs may not be covered at all by a particular plan.

You need to check each plan to find out which of your drugs are covered and at what level they are covered. To do this, you can talk to your insurance agent, call the company offering the plan, or look up the plan online. If you are comfortable using the Internet, or can get help from someone who is, this is probably the fastest and easiest way to check your prescriptions against a particular plan.

Once you have figured out a plan’s coverage of your prescriptions, there is one more puzzle piece to be aware of—the “coverage gap.” Most plans will cover your drugs for approximately the first $2250 of your total prescription costs for a calendar year. If you go above that level, you will need to pay 100% for your prescriptions until the yearly total reaches about $3600. Then the insurance kicks in again, usually with lower co-payment amounts.

The key to learning about Part D is to ask for help. Start with your pharmacy, your insurance agent, or a community senior citizens’ center, then follow the leads they give you. Enlist a family member or friend who can help you wade through the details and find out what you need to know. KFG clients can attend, in person or online, our Part D workshop on Wednesday, February 1, at 10 am MST (lunch will be served). Call or email Licia at 605-343-1400 or lindsay@kahlerfinancial.com to reserve your seat.

Sign up for a plan before May 15, or you’ll pay more to enroll later. In spite of its annoying complexity, Medicare Part D will probably save you money. Good luck as you fight your way through the Part D thicket.

Our first teleclass of 2006 was held Thursday, January 19th, at 4 pm MST, 6 pm EST.  Rick discussed our latest managerial change in our market neutral asset class.  After five years, we will be dropping Caldwell and Orkin Opportunity Fund.  Rick went through all the reasons we are dropping the fund, and he introduced the new manager.

To hear a recording of the call or to download it to your MP3 player, go to the KFG website at www.kahlerfinancial.com and click on the KFG Clients Only section.  Enter your ID number and password and follow the prompts to the January 2006 Teleclass – Market Neutral Managerial Change.  If you don’t have your ID and password, call Licia at 605-343-1400 to get signed up.  You should also be able to download from the website the Morningstar Reports that will have all the information on the two funds covered in the call.

KFG clients will have the option of choosing between two first-quarter workshops.  Each workshop features a 90-minute interactive session and a 60-minute informative presentation by a guest lecturer.  We will either serve breakfast or lunch, depending on the starting time of the workshop.  We’ve divided our workshops into two tracks, one for clients interested in increasing their net worth, our Wealth Builders group, and one for clients interested in their legacy, our Legacy group.

Wealth Builder’s Workshop

Our first-quarter Wealth Builder’s Workshop will feature an important interactive session on "Creating The Life You Want," followed by lunch in our dining room and a presentation on Asset Protection Trusts.

"Creating The Life You Want," will be presented by Rick Kahler and Laura Longville.  Rick will be using some of the exercises and information contained in his two books to help you "think out of the box" in creating the life you really want.  This is an important session for KFG clients, as we will incorporate the results of your work into your financial plan and discuss it at your next one-on-one meeting.

Lunch, prepared by Dee "The Fab Cook" Adams, will follow this session.  If you haven’t had a meal by Dee in our new dining room, don’t miss this chance!  We will guarantee you that at the least, the workshop will be worth attending just for lunch.

Following lunch we will have a presentation by Tom Simmons, Esq, on the new asset protection trust law.  South Dakota becomes only the sixth state in the nation to allow trusts that help high profile and net worth individuals protect their assets from fraudulent lawsuits.  Tom is on the leading edge among South Dakota attorneys to have researched the new law.  In this presentation, Tom and Rick will show KFG clients how this new law could bring a new level of asset protection to their real and personal property.

The dates of the workshop are February 22nd, Wednesday, at 7 am MST (breakfast will be served) and March 29th, Wednesday, at 10 am MST (lunch will be served). Call or email Licia at 605-343-1400 or lindsay@kahlerfinancial.com to reserve your seat today.  KFG clients have the option of attending the Wealth Builder’s Workshop in person, or via webinar.  Each class is limited to 8 "live" participants and 23 "webinar" participants.  Even if you are a webinar participant, you will need to call to obtain the website passwords so you can obtain the correct phone number on the day of the workshop. 

Legacy Workshop

Our first quarter Legacy Workshop will be one you don’t want to miss.  This workshop will show you what you need to know about how to access and use all the new technology enhancements here at KFG.  If you need to know more about how to use your computer, the Internet, and email, this is your session!  Lynell Parrot, a retired teacher, will give you clear and concise instructions for maximizing the KFG website, emails, and webinars.  Of course, if you can’t be in attendance physically you can be present via our speakerphone connection.

Lunch, prepared by Dee ‘The Fab Cook’ Adams will follow this session.  If you haven’t had a meal by Dee in our new dining room, don’t miss this chance!  We will guarantee you that at the least, the workshop will be worth just coming for lunch.

Following lunch we will have a presentation by a guest speaker on the new Medicare Part D.  He will cover the basic information about the Medicare prescription drug coverage, what it is, who can get it, and why you should or should not get it.  He will go over information on the costs, coverage, and how to select a plan that meets your needs.  If you are a senior, you don’t want to miss this presentation.

The date and time of the workshop is February 1st, Wednesday, at 10 am MST (lunch will be served). Call or email Licia at 605-343-1400 or lindsay@kahlerfinancial.com to reserve your seat today.  KFG clients have the option of attending the Legacy Workshop in person, or via webinar.  Each class is limited to 8 "live" participants and 23 "webinar" participants.  Even if you are a webinar participant, you will need to call to obtain the website passwords so you can obtain the correct phone number on the day of the workshop. 

Again, it’s nice to know you’re doing something right. We were pleased and flattered to see that the Wall Street Journal has selected my book Conscious Finance: Uncover Your Hidden Money Beliefs and Transform the Role of Money in Your Life for its "Recommend Reading" for 2006. When I co-authored Conscious Finance with Kathleen Fox, we were determined to write a book that was effective and easy to understand, and the Wall Street Journal agrees. Here is what they had to say:

"Conscious Finance is clear and concise and contains a variety of personal anecdotes that I think help consumers better understand the importance of realizing our biases toward money and how they affect our management of it. Readers can relate to the personal accounts."

For more information on "Conscious Finance" or to order a copy, visit us here: http://www.kahlerfinancial.com/Books.htm