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Major Difference between the Madoff & Stanford Frauds The ongoing news about Bernard L. Madoff and R. Allan Stanford frauds is uncovering some very important distinctions investors should be aware of. The Wall Street Journal reported last week clients of Madoff who took money out of their accounts over the past six years have been sued to return these monies to be divided among all the investors who have a claim against the firm. Of course, current Madoff clients do not have the ability to get money at the moment. There is precedent in a similar fraud in 2005, the Bayou hedge fund, with past investors having to pony up principal and profits. more
A Decade of Loss The stock market as measured by the Dow Jones Industrial Average or Standard & Poor's 500 index still has yet to break even over the last almost ten years. With the Dow down over 7% and the S&P 500 down over 18%. The NASDAQ stock index is down over 45% for the last five years! Although past performance is not indicative of future results, clearly it is time to evaluate asset allocation. more
401(k) Plans for One? Up until recently, it didn't make sense for the self-employed to establish 401(k) plans. Small-business owners could usually just as much as a 401(k) through a Keogh, SEP or SIMPLE IRA - without the costly setup and maintenance fees, complex rules, and burdensome administration associated with 401(k) plans. Owner-only businesses can now establish solo 401(k) plans that in some cases allow them to put away two to three times the amount allowed by other tax-deferred plans. more
The Financial Planning Profession Because the Financial Planning profession is still developing, there are huge differences in the services of those holding themselves out to be "Financial Planners". One of the main differences is how financial planners are regulated. While those planners, registered as advisers, are regulated as fiduciaries, the vast majority are not. Even though planners may be duly licensed and credentialed, they are not held to a fiduciary standard to act in the best interest of the client and provide full disclosure unless they are also registered as advisers. more
Are You Self-Employed? There may be a Defined Benefit Plan in Your Future If you are self-employed, you know that planning for your retirement is entirely your responsibility. And if you've experienced financial success as a self-employed professional or small business owner, you know how hard it is to keep your money in the face of high marginal tax rates. Perhaps it's time to consider an aggressive approach to both funding your retirement and cutting your taxes significantly by starting a Small Company-DB Plan--a defined benefit pension plan. The good news with defined benefit plans is you can select the investments... more
Estate Planning Pyramid: Can you trust your trust? Have you written any Crummy letters lately? The vernacular of estate planning is rife with confusing terms and puzzling strategies. This confusion often leads to estate plans that are hard to explain to others and understand. Many estate plans may not meet client's objectives because of lack of follow-through, life changes and reallocation of assets. Estate plans that are incomplete or lacking repair can cause unnecessary family grief, estate taxes, income taxes and other settlement costs. more
Can Your House Be Considered "Investment Real Estate"? Many homeowners have often considered their home the best investment they ever made. This perception is fostered more by the long-term holding period of most homes than the increasing value of older homes. Unlike most securities, homes are not priced regularly. There is no boy pacing on the front walk wearing a sandwich board saying the value of your home just went up or down since yesterday creating a possible emotional reaction and subsequent decision to act on that information. The illiquidity and relative lack of marketability of homes compared to other investments, lends to better investor understanding the long-term nature of real estate investments in general. more
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