Rick Kahler's Financial Awakenings

“Barack Obama declared war on Wall Street,” proclaimed a story appearing in Saturday’s January 23, 2010 edition of the London Times.  The Times reports that in his “pugnacious lunchtime” speech on Friday, Obama introduced a “sweeping series of measures aimed at checking the behavior of banks” which will be the “biggest regulatory crackdown on the banks since the 1930’s.”  The markets responded with the largest three-day decline since the market bottomed in March of 2009.

The notable aspect of the President’s new offensive to limit the profit and pay of financial institutions and their employees is not its content but its timing and intent. Obama’s attack came just two days after the Massachusetts Senatorial election. The Times says Obama’s hurried offensive was aimed to draw attention away “from the loss of the late Teddy Kennedy’s Senate seat — a defeat that threw his domestic agenda into turmoil and sent fear through Democrats.  Mr. Obama hopes that the move will reset his flagging presidency.”   Continue Reading »

One of my clients, on a recent trip to San Francisco, visited the King Tut exhibit. She said it made her wonder whether the ancient Egyptians gave so much attention to the afterlife that they never got around to living their lives. Their culture seemed almost obsessed with preparing for death.

Our culture, on the other hand, seems to believe death is something we shouldn’t talk about or think about. Even when we do estate planning, we tend to avoid the details of death itself.

Maybe the ancient Egyptians had a point. I’m certainly not saying it’s a good idea to focus on death instead of living life. Still, making some plans around the end of life can be extremely helpful for our families. Continue Reading »

Kathleen Burns Kingsbury posted a story from the Boston Globe that caught my eye.  It’s on the differences between coaching and therapy.  This is something I’ve written about extensively in the past in the books I co-authored with psychologists Ted Klontz and Brad Klontz.  It’s a good summary of the differences between the two disciplines.  You can read the story here.

I recently polled my clients (Jan 14-17) on the health care bill wending its way through Congress and received responses from about 33% of them. 

When asked if the health care legislation will achieve the stated goal of reducing health care costs, 72% said that not only will it not meet that goal, it will actually increase health care costs.  Only 12% said they thought it would actually lower costs.

Another concern of Americans is the quality of their health care.  Only 8% of my clients felt the bill will improve the quality of health care and 24% think there will be no change in the quality.  The majority of respondents (68%) feel the quality of health care will decline.  

One of the benefits of the legislation touted by Congress and the President is that it will reduce the national deficit.  Apparently KFG clients don’t agree, with 84% believing that the health care bill will actually increase the deficit.

I asked clients to tell me the good portions of the bill.  The resounding one-word response was “nothing.”  One client did say it was a step in the right direction.

When I asked what they would like to see Congress do to reform the system, the responses were varied.  The most popular response was a wish that Congress would start over and come up with a more bi-partisan approach.

Economically, the first decade of the 21st Century has been, to put it mildly, “interesting.” It’s been a bit like riding a bobsled down a Black Hills slope, scooting up the other side, going off a steep cliff, and landing softly in a haystack. Continue Reading »

KFG clients, I am interested in your thoughts on the health care plan.  Please take 5 minutes and let me know your thoughts.  You can click here or go to the “Take Our Latest Survey” box on the upper right of the blog homepage.  I’ll only have this survey up until Sunday, so if you can do this as soon as possible, I would appreciate it!

Baltimore Sun reporter, Eileen Ambrose, writes about things the past decade should have taught small investors.  In her article, Rick talks about what we should have learned about investing and diversification.  Click here to read the article.

Whether you support or disagree with the inevitable health care plan coming out of Congress, it will be wise to pay close attention to the financial consequences of the legislation.

Consequence One: Higher Taxes. The House bill puts an additional 5.4% tax on singles earning over $500,000 a year or couples with over $1 million. The top tax bracket is already scheduled to rise from 35% to almost 40% in 2011. With the medical surtax, the top federal bracket will be 45% in 2011. Continue Reading »

Just after the failed terrorist attack on Christmas Day aboard a Northwest airliner, I announced to my family that the TSA had banned all moving around in the cabin for one hour prior to landing and turned off the entertainment systems.  I explained the reason was because the terrorist got into his overhead luggage and went to the bathroom within an hour of landing (presumably to ready the hidden bomb in his underwear).  Continue Reading »

A story done by Dirk van Dijk, CFA for Zack’s Investment Research, compared Ronald Reagan’s first year in office with Barack Obama’s. Both presidents inherited a sick economy: Obama a meltdown of the financial system and Reagan runaway inflation. Of course, the situations were different, but both were significant financial threats to the economy. Continue Reading »