Health care costs are rising like a bad fever, and reform may not be enough of a cure.  A balanced healthcare system is supported by three legs: quality of care, access to care and cost of care. Balancing cost, quality and access is tricky as they are all interrelated. Increase or reduce one and it affects the others. For example, it’s very difficult to lower costs without reducing access or quality. Increase access, and you will increase cost or lower quality.

In the United States, the first two legs are in relatively good condition. It’s the third one, cost, that is threatening to collapse. Right now, as the healthcare reform debate thunders on, the system seems ready for the critical list. Even with the new law, it seems that the same old problems will remain, at least for the next few years. So let’s take a careful look at what’s at stake.  Read more from this month’s issue of Financial Planning magazine here…..

Not long ago I read a Wall Street Journal article, focused on proposed tax increases on those earning over $250,000 a year, which profiled a Colorado dentist who earned around $300,000 a year. The dentist was quoted as saying she didn’t consider herself rich, but upper middle class, because she worked for a living. Continue Reading »

Your doctor isn’t the only professional you should see for an annual checkup.  You need to be visiting with your financial planner, too.  Tara Siegel Bernard, a reporter with The New York Times, recently spoke with financial planners, including South Dakota financial planner Rick Kahler, about what you need to look at annually to be sure you keep your financial health in tip-top shape. 

Rick suggests a person needs to ask, “What has changed in your life in the last year?”  Big life events can disrupt even the best strategies. Getting married, having a child or even becoming eligible for Social Security or Medicare will require that you make many financial decisions.  A person may need to have more or less insurance, update their estate planning, switch investment philosophy, or save more or less for retirement.  For some good financial advice, read the entire article here.

Many entrepreneurs are finding that stricter underwriting guidelines make it nearly impossible to get a loan today.  “The negative to a bank is that the loan can often be very hard or next to impossible to obtain,” says Rick Kahler, a certified financial planner with Kahler Financial Group in Rapid City, S.D. “Also, most bank loans are ‘recourse,’ meaning if there is a default, the bank can go after your personal assets as well as any collateral secured by the loan.”

There is some great financial advice on eight ways you can get a small business loan in this excellent article by Karin Price Mueller for the Business Insider War Room.  You can read the whole article  here.

Ron Lieber, who writes the “Your Money” column for The New York Times, wondered what kind of tough questions clients were asking their financial planners after last year’s financial crash. To find out, he moderated a panel with five of my financial planning colleagues at last fall’s FPA convention in Anaheim, CA.

Lieber asked the financial planners three questions:
1. Did their clients feel they should have seen the crisis coming?
2. Did they feel the philosophy of asset allocation failed?
3. Because of scandals like the Madoff debacle, were clients trusting them less?

The planners’ responses (No one really saw this coming; asset allocation didn’t fail; there are thieves in every profession.) didn’t surprise me. Some of the reader comments did. If these comments indicate what the public understands about financial planning, the profession has a lot of educating to do. Continue Reading »

The next time you’re tempted to give into your child’s requests for a few extra bucks, whether its $10 or $10,000 keep in mind that enabling children can lead to dependency, which usually kills the child’s self esteem and initiative.   Furthermore enabling prolongs the inevitable, and is usually seated in the guilt and obligation of the parent. Enabling can keep a parent poor, and from enjoying financial independence.

Learn more financial advice about how and when to say “no” to your kids, and what fee only financial planner Rick Kahler has to say about it, by reading an excellent article by Sheryl Nance-Nash of The Faster Times here.

The health care bill is now law of the land and the bitter fight for its passage is behind us. It is the biggest transformation of the U.S. health care system in my lifetime. I thought it might be helpful to recount the promises our President and Democratic members of Congress made to us about the benefits of this legislation. 

1. All Americans will now receive affordable, or free, quality health care.
2. No one will ever be denied coverage.
3. No one will ever go into bankruptcy because of the costs of health care.
4. There will be increased access to health care for 95% of Americans.
5. There will be no decline in the quality of health care.
6. Health care costs will go down.
7. Health insurance coverage will be affordable to the middle class.
8. If you currently have health insurance there will be no change in your benefits.
9. There will be no decline in Medicare benefits.
10. Insurance premiums will decline for the middle class.
11. It will unleash unprecedented entrepreneurial opportunity and stabilize the economy.
12. The deficit will decline, saving taxpayers $1.3 trillion.
13. It will cut $500 billion of waste, fraud, and abuse out of Medicare.
14. No government funds will be used to fund abortion.

The trade off for these benefits is a tax increase of $562 billion over 10 years, including a Medicare tax on dividends, rents, interest and investment income of 3.8% on individuals and small business earning over $250,000. The bill will mandate all Americans and business buy health insurance.

Save this post and re-read it on election day. If the majority of these points have come to pass, I suspect Democrats will strenghen their majorities in both the House and the Senate for many years to come.

This presentation is a necessary primer for all KFG clients.  It lasts about 35 minutes. I urge all KFG clients to listen to this presentation prior to your next review.

Where do you invest in a world of increasing government spending, high unemployment, struggling economies, high taxes, and deflation and inflation? What does a portfolio need to look like going forward to produce sufficient returns?   

The past few months I’ve pondered the effect of the most recent financial and political events and how they will affect a person’s portfolio for the next decade.  While I have many thoughts on this, one is the addition of a new asset class to the nine I am currently using, which is managed futures. 

Even though the first managed futures fund came about in the 1970’s, this is not a well-known asset class.  Surprisingly, educational material on this alternative investment vehicle is not yet easy to locate.

Click here to listen to my teleclass on managed futures.

By this time next week I fully expect we will have a new health care bill.  With the full court press from the President and the Congressional leadership being put on wavering representatives to pass this legislation by using any means available, I fully expect they will get the last four votes they need. 

It will take weeks, maybe months, for experts to read the 3,000-page bill and make sense of the consequences. As they do and I get bits of information about how this bill will reshape the lives of Americans, I will  inform you of items you need to pay attention to that will affect your financial planning.   Continue Reading »

The past few months I’ve pondered the effect of the most recent financial and political events and how they will impact a person’s portfolio for the next decade.  The question I’ve attempted to answer in light of the soaring sovereign debt and global instability is, “What does a portfolio need to look like going forward to produce sufficient returns?” This is a piece of financial advice that I think is both timely and useful. Continue Reading »