Rick Kahler's Financial Awakenings

Tune in and listen to author and financial planner, Rick Kahler, CFP, discuss his thoughts on the possibility of a ‘W’ recession.  Rick will appear during “The Morning Show,” on Thursday, at 9:20 am, CDT.  You’ll be able to tune in the “The Morning Show” online on Thursday morning by clicking here.

The U. S. is facing a super subprime crisis that will make the current crisis seem like a cakewalk. That was the depressing news from David Walker, former Comptroller General of the United States and currently president and CEO of the Peter G. Peterson Foundation, when he spoke to financial advisors attending the national NAPFA convention in Washington, DC, in June.

It is well known that the current crisis was produced largely by consumers spending more than they made, funded by reckless borrowing. As a nation, however, we are doing the same thing. Continue Reading »

SmartMoney ran a story today on the financial considerations divorcing couples need to address when it comes to the children. While I’ve never paid any attention to the “Jon and Kate” reality show, I’ve heard about it over the past few days. Anyway, the article contains some good information for couples contemplating divorce. You can read more here.

Do you work more than 40 hours a week? Do you have enough money for retirement? Do you wash your hands after you use a public bathroom?

Yes, these three questions do have something in common. They’re all related to the difference between what we say we do and what we actually do. Let’s start with hand-washing. According to Steven D. Levitt and Stephen J. Dubner, authors of Freakonomics, 75% of men surveyed said they washed their hands after using the bathroom. However, researchers who camped out for hours in a number of men’s restrooms found only 10% of men actually washed their hands.

Our tendency to overestimate isn’t limited to just bathroom hygiene. Continue Reading »

On the surface, it looks like President Obama’s overhaul of the financial system has one very good plank, to require brokers to adhere to a fiduciary standard when working with consumers. This proposal seems to be an end run around Mary Schapiro, the new head of the SEC and former FINRA executive, who is a proponent of continuing to allow brokers to escape having a fiduciary duty to consumers. Whether Congress and the President will prevail, or what actually becomes law is anyone’s guess. At least this is a hopeful start. Here is a WSJ article on the proposal that is an excellent recap of the past issues and the proposed regulation. Click here.

This father’s day, how about giving dad an hour of financial planning? That was a gift suggesting that SmartMoney.com’s Lisa Scherzer talked about with Rick in her column today. You can read what Rick had to say here.

Is now the time to prepare for the possibility of a huge market downturn later this year? It may be.

A number of market prognosticators I’ve been reading think there is a good probability we will have a “W” shaped economic recovery. This theory suggests that the first dip in the “W” was the global stock market crash last fall, and the upward rise in the middle of the letter is the current market rise. The next phase will be another crash, equal to or deeper than what we saw in the fall, before we see a sustainable recovery. Continue Reading »

Ever wondered what some of the nation’s most respected financial experts use for credit cards and why? Sara Aase, Creditcard.com, interviewed six financial professionals, including The New York Times’s Ron Lieber, MSN Money’s Liz Pullam, and Kahler Financial Groups’ Rick Kahler.

Asse notes, “Great credit card offers may not be making headlines right now, but they’re still out there — and what better place to look for leads than in financial experts’ wallets? Here are the current favorite picks of six personal finance experts. Find out why they love these cards, why their picks may (or may not) be right for you, how to qualify for them, and which cards have fallen out of their favor.”

To read the whole article, click here.

The principles of capitalism are everywhere. Just ask Steven D. Levitt and Stephen J. Dubner, the authors of Freakonomics. Not long ago I attended a talk where these two authors shared their eclectic brand of economic research.

One area they discussed was the structure of drug cartels and the “salaries” paid to their members. The typical cartel employs around 5,000 people. At the top is the “board of directors,” who each typically make about $500,000 a year. Next are “regional governors” at about $350,000. Under them are the local leaders with exclusive territories. They typically earn 20% of gross revenues, meaning they net perhaps $75,000 to $100,000. Finally, there are the foot soldiers, who typically are teenagers selling crack for around $5 an hour. Continue Reading »

Last week’s column discussed the belief of social anthropologist Dr. Jennifer James that the United States is currently in a society-wide “moral void” when it comes to the economy. By moral void, she doesn’t mean a lack of morality, but rather a time of panic and inability to make logical and common-sense decisions.

During periods of fear and stress, such as the current economic crisis, the part of the brain that uses logic and facts to make decisions is overwhelmed by the more primitive part of the brain that operates emotionally. The result is individual and collective financial decisions made out of fear and panic.

What we call “society” or “culture,” of course, is actually the accumulation of a great many people’s individual beliefs. Changing our cultural beliefs about money and the economy, then, starts with changing our individual beliefs. Continue Reading »