Is inflation going up? Are we likely to see deflation instead? Will we continue the current environment of low inflation? The jury is still out. Still, it’s not too early to begin educating yourself as to what investments you may want in your portfolio given each economic possibility.

Even if you have a diversified portfolio of stocks and bonds, the wrong investment mix could cost you upwards of 2% a year. This is according to an article by Peng Chen, “The Inflation Scenario,” in the September 2010 issue of Financial Planning.

If we have an extension of the current environment where the inflation rate stays under 2%, this favors a more traditional mix of global stocks and bonds.

A prolonged “Japanese” style deflation, where prices decline year after year instead of climbing, presents a different challenge. In this case stocks, commodities, and real estate will probably do poorly while government bonds are the better choices.

However, if we return to a more normal economy where inflation averages 3.5%, the Chen study suggests that in addition to the normal mix of global stocks and bonds you will want to add commodities to your portfolio.

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Due to a scheduling conflict, we’ve had to postpone the couples financial therapy workshop until Spring 2012.  I know there are several of you who expressed interest in that workshop.

As an alternative, we are opening our April workshop up to both individuals and couples.  That workshop, “Financial Wellness Workshop – Integrating your money with your life,”  is a three-day weekend workshop on April 14 to the 17th.   

This will be the only financial therapy workshop I offer in 2011, so I highly recommend you attend, especially if you are a therapist or financial planner wanting to add financial therapy to your practice.  You can learn more and register here.

If recent trips to the store are telling you that inflation is higher than what you read in the press, you may be right. According to Michael Kitces, editor of the financial newsletter The Kitces Report, inflation may be much higher than the modest rate the government claims.

Kitces explains that the way the government calculates the Consumer Price Index (CPI) has repeatedly changed. What previously measured the price increase in a basket of goods now measures the cost of living. The difference may seem subtle, but the impact is significant.

If a loaf of whole wheat bread costs $3.00 one year and $3.30 a year later, the price increase to the consumer is 10%. In the past, the CPI was simply calculated as the average price increase (or decrease) of the entire value of a basket of goods like clothing, gasoline, rent, and groceries.

However, in 1984 the Bureau of Labor Statistics began to modify the way it calculated the CPI. Continue Reading »

Recently, Alan Moore, a graduate student from the University of Georgia, joined us as a financial planning analyst. Some of our clients may remember him from when he interned with us last summer.

I’ve wanted to add a CFP professional to our staff for a long time.  After literally years of looking, Alan seemed to be the right fit.  Having another CFP professional gives KFG added capacity and depth, which will result in enhanced service to our clients.

Alan is working toward completing his M.S. in Financial Planning and is a Certified Retirement Counselor.  He also recently passed the Certified Financial Planner (CFP) examination. Until joining us, Alan taught undergraduate financial planning courses at the University of Georgia while a graduate student. He also worked in a financial therapy clinic designed to help low income families with both their financial and relationship struggles.

Alan will assist our team with all aspects of financial planning for our clients.  We welcome Alan to our KFG family.

Rick will speak to the Rapid City Downtown Association on “Theft Proofing Your Assets” on March 25 from 8:00-9:00am at Alternative Fuel, a downtown coffee shop.

Many people think their assets are protected because they have liability insurance, only to find out that insurance is not always enough.  That’s what Rick discovered when he was faced with a frivolous lawsuit that lasted nine years.

Find out what you can do to protect your business, real estate, and liquid assets when your insurance company either won’t pay your claim or goes bankrupt, or when your coverage just isn’t enough. This is mandatory information if you are in a high-profile profession, own a business or real estate, or have a net worth over $1 million.

You can register for the meeting by sending an RSVP to beth@downtownrapidcity.com

While growth is important in any business, unbridled growth often can tax a business’s infrastructure and end up doing more harm than good.  At KFG, we monitor our growth carefully so as to not compromise the highly personal service we give each of our clients.

For several years we’ve limited our growth to 12 new clients annually.  So far in 2011 we’ve taken on four new clients, leaving eight spots open.  If you are contemplating hiring a fee-only financial planner, give us a call or drop us an email to schedule a free consultation.   Our overriding concern is not that you become a client, but that the needs you have and the services we provide are a good match.

You can start the process of investigating whether our services are right for you by emailing Darla at darla@kahlerfinancial.com or giving her a call at 605-343-1400 x113.

Your house. It holds your precious personal possessions and memories of holiday gatherings, get-togethers with friends, and time spent with your family. It’s your home, your castle, your refuge.

Until the time comes to sell it. Then it becomes a piece of property on the market. Once you put something up for sale, it doesn’t belong to you any more. It’s a commodity in the public marketplace. At least that is the financially healthy way to see it.

One of the most challenging aspects of selling a home is letting go emotionally of your attachment to it. Back when I was selling real estate, I saw scores of deals collapse, not because buyers and sellers couldn’t agree on the purchase price, but because both of them wanted a fixture such as a painting on the wall or a chandelier. As a financial planner, I also have seen bitter battles in divorce settlements over personal property that has little financial value but huge emotional value.

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I will be the guest of my brother, David Kahler, on his radio show today on KOTA radio 1380 at 9 am MT.  We will be talking about social security. I hope to help lend some clarity to this program and give some suggestions about what you can do to make your golden years a bit more secure.

I spent three days last week in New York City, the first I’ve been there in about 15 years.  The main purpose of my trip was to make a presentation to the annual conference of the American Group Psychotherapist Association (AGPA).  As far as I am aware, it’s the first time this group has ever taken a risk and invited a financial planner to speak at their function, so I was honored to accept. 

While speaking to the AGPA was satisfying, the highlight of my trip was a 10-hour course I took at the AGPA on the fundamentals of group psychotherapy.  The group leaders were Nancy Fawcett and Kieth Rand, both veteran group therapists who practice in Los Angeles, CA.  I learned a lot of helpful information on how to facillitate change in individuals through the group setting.  Since I’ve co-facilitated financial therapy groups for about 8 years, I figured a little more knowledge from the pros couldn’t hurt! Continue Reading »

What stops us from saving for retirement? It isn’t our lack of awareness of the need, but our inability to go into action. One problem is that we see the risk of retiring without enough money as a distant possibility, rather than an inevitable reality that will arrive sooner than we think.

The truth is less than 5% of Americans have enough net worth to be financially independent in retirement. Sixty-eight percent self-assess they aren’t saving enough for retirement.

Employers can help change these dismal numbers by influencing the way their employees make investment decisions. The most popular retirement savings plan is the 401k plan. Most employers require their employees to make a decision to opt-in to the plan. Opting-in actually plays into the “inability to go into action” of most employees, as only 37% of employees actually sign on to the plan.

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