A reader recently suggested on Twitter that, even though our government borrows almost one dollar for every two we spend, we need to spend even more because 25% of Americans are in poverty.

That brought up several questions for me: Are 25% of Americans really poor? How do we define “poverty?” And how does poverty in the U.S. compare with that in other countries?

I found some answers in a paper, “How Poor are America’s Poor?“, published in August 2007 by Robert Rector, a senior research fellow with The Heritage Foundation. First, the numbers. Rector cites data from the 2005 Census Bureau showing the U.S. with 37 million poor people, or 12.6% of our population—about half of my Twitter correspondent’s estimate.

Then the definition. I think of “poor” as being unable to meet basic needs for nutritious food, adequate housing and clothing, medical care, and transportation. In a 2005 poll taken by the Catholic Campaign for Human Development, the overwhelming majority of responses agreed with that definition.

This perception of poverty certainly squares with that promoted by politicians and others desiring more help for the poor. The Census Bureau, however, defines poverty as a family of four having a household income of less than $22,350 a year.

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Financial Advisor magazine, a well known trade publication in financial planning, released its list of the 350 largest financial advisory firms in the nation in 2011. Kahler Financial Group made the cut!  We are pleased and blessed to have grown and flourished here in Rapid City South Dakota. Thank you to all of our clients that have put your faith in us to help guide you along your financial path. We hope to continue to do so for many years to come.

Just a reminder, we will be hosting a teleclass titled “Buying Your Next Home – Tips From A Seasoned Professional”, featuring Dave Kahler this Thursday as 2:00pm MST.

Buying a home is something that most of us will do at least once in our lifetime.  It’s one of the more major purchases we ever make, and yet few people take the time to really prepare and educate themselves.  We are excited to have Dave Kahler, a 30 year real estate veteran, explain to us what you need to know before you start looking for a house.

One area he will cover is why you need to be sure any professionals you engage have a fiduciary duty to put your interests first, rather than the seller.  Join us for an intriguing presentation featuring one of the area’s most seasoned real estate experts.

Click here to register for the teleclass.

The looming debt ceiling crisis is the topic of tomorrow’s “Dakota Midday” on SDPB at 11:00 am (MT) Wednesday, July 20th, with Paul Guggenheimer.   Join Michael Keller, the Dean of South Dakota University’s Business School, and Rick who will  be discussing the potentials and possibilities of the debt ceiling crisis. They will also be taking callers questions, so if there is anything you would like to discuss, be sure to listen in.

We may be about to hit the ceiling. Unless Congress and the President come to some agreement sooner, on August 2 the United States will reach the legal limit of its borrowing capacity. The usual response from Congress when we come close to the debt ceiling is to pass legislation that increases the allowable amount of debt.

This year, however, the President and members of Congress seem more inclined to raise the roof than raise the ceiling. Both Democrats and Republicans want any bill that increases the debt ceiling to also reduce the deficit. While they argue over the best ways to accomplish this, the August 2 deadline is creeping steadily closer.

If the deadline passes before a debt-increase bill does, the U.S. government won’t have enough money to pay all of its bills. If that happens, what should you do?

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For months politicians have threatened to not raise the debt ceiling, but not many people thought it would get this far. In just under 3 weeks, the US will hit the “debt ceiling,“ which is our country’s borrowing limit.

Both Republicans and President Obama want to reduce the deficit as part of raising the debt ceiling.  How they want to accomplish that is where they find great differences.

Democrats are asking to simply vote on raising the ceiling and then deal with the deficit in a different vote. The President and Democrats want to balance the budget largely with tax hikes to help pay down the deficit.

Republicans demand that there be no increase in the ceiling without equivalent spending cuts.  They oppose tax hikes to reduce it. Continue Reading »

When it comes to transparency and understanding who represents whom, the financial service industry could learn a lot from the real estate industry.

When you are a customer, the salesperson’s job is to sell you a product or a service. While salespeople and their companies have a duty to be honest and fair with you, they don’t have a duty to put your interests ahead of theirs. It’s your job to evaluate their claims and products, then to make an informed decision whether or not to buy.

A client relationship is much different. In this case you are typically buying, not a product, but the wisdom and services of an advocate. This is similar to the relationship you have with people in the legal, medical, and mental health professions. It’s the job of the professionals to put your needs above theirs. When professionals call you their “client,” it means they have a fiduciary duty to put your best interests first and be your advocate.

In some cases, like buying or selling a house, you get to choose whether to be a customer or a client. Continue Reading »

We’re pleased to feature a guest post from Kathleen Fox, co-author with Rick of Conscious Finance.

Would you like to be rich?

This might seem like a stupid question with a no-brainer of an answer. “Well, duh—of course. Who wouldn’t?”

Quite a few people, apparently, judging from the comments on a couple of Rick’s recent columns.

It’s a paradox. The last time I checked, financial success was still an important component of what we consider the American Dream. Young people are encouraged to work hard and get an education so they’ll qualify for well-paying jobs. Employees expect to be rewarded for good work with raises. Business owners expect to be rewarded for their risks and efforts with profits. Making a good living, we’re taught, is part of making a good life.

Yet at the same time we’re encouraged to work toward becoming wealthy, we are immersed in a culture of resentment and hostility toward those we perceive as wealthy. Apparently we’re supposed to be proud of trying to do well, but ashamed if we actually accomplish it.

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Watching a bride and groom walk down the aisle at the end of their wedding ceremony is a joyful moment. As a wedding guest, you can’t help but smile and wish the new couple a long and happy life together.

Of course, if you happen to be a financial planner, you might also be thinking, “I wonder if they have a prenup?”

Prenuptial agreements used to be pretty much reserved for the very wealthy. They still are most important in a situation where one spouse has significantly more assets or earning power than the other. In today’s world, though, with increasing numbers of two-career couples and blended families, prenups may be appropriate for many newlyweds.

Does this mean many couples use them? Nope. My guess is about half of couples who intend on entering into a prenuptial agreement don’t end up signing one.

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