$35,000 commode!

John Thain, former Chief Executive of Merrill Lynch, has agreed to repay the $1.2 million for his office renovations, including his $35,000 commode and $87,000 area rug!

A more serious breach of shareholder fiduciary responsibility revolves around the payment of discretionary bonuses to key executives as Merrill posted a larger than expected fourth quarter 2008 loss…. and of course, just before asking for US taxpayer bailout money!

Click here for the New York Times story

I read this stuff and I get just plain angry. How is an investor suppose to gain confidence in the financial markets, when this kind of abuse and disregard for the responsibility of a CEO to uphold the shareholders interest are so common in today’s society?

As an independent advisor, I have a fiduciary duty to my clients which means, their interests come before my own. I take this duty very seriously. In addition, I know my clients, and for me that means, “it is just business” does not compute. It is always personal.

When corporate scandals present the possibility of jeopardizing my clients’ financial futures, I have to question, am I doing enough? Am I doing the right thing?

How did society develop to this place? Where are we going from here? How soon can we get there?

There is a long standing movement to values based decision making in business. In the investment world it is called Socially Responsible Investing (SRI). (learn more at www.SocialInvest.org)

Simply put, SRI means, that in addition rigorous financial analysis, consideration is given to corporate policies and governance issues. In other words, how a company impacts the environment, how it treats its employees, excessive CEO compensation, and the like are considered in addition to the financials before making a decision to own a stock or bond of a particular company.
When I first learned of this idea, I thought it was a bit out there. After all, isn’t business just business?

Not at all. If you want to know what is happening, follow the money. If you want to make an impact, change your behavior with your money. It is a really simple and powerful idea.

Now that I have been a part of the SRI community for years, and continue to see the damage done to individual investors in cases like Merrill Lynch, Enron and World Com, I have come full circle. How can we NOT consider the corporate policies and governance issues before investing? Why would we turn a blind eye to values in the name of greater profit? Why have we let money run our lives for so long, without proper conscious?

In this time the world is calling out for change. Paying attention to how you receive, spend and invest your money is one of the most important areas in your life that needs changing. Step up. Step in time with your values. Give money its due place, equal in line with your values.

May prosperity be yours,

Mackey McNeill, CPA/PFS IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com

The world is different

Things have been changing and until this recession few were noticing. The recession is a wake up call. Especially for those of us in business. We must begin to think differently.

I recently received an e mail with a Tom Peters post that said it well.

click here to read the post

May prosperity be yours,
Mackey McNeill, CPA/PFS

President and CEO

Mackey Advisors

525 W 5th Street Suite 318

Covington KY 41011

859-331-7755

Mackey@CultivatingProsperity.com

Bargain hunters beware!

With Circuit City going out of business, Macy’s closing 11 stores, and other retailers likely to do similar, going out business sales are everywhere.

If you are not careful, the financial pain of the retailer could become your pain.

Shopping isn’t a recreational activity that pays dividends. Those giant SALE signs can be a magnet for your attention.

Remember who comes first in your world – you! It is certainly in the retailer’s best interest that you buy something from them. The question is, is it in your best interest?

First, ask yourself this basic question – what do I really need?

Take a stroll thru your house and closet and ask yourself, do you really need anything? Is your house (and your rented storage facility) already packed to capacity? Think of all the things that you own that you are still paying for via your current credit card debt and ask yourself one big question. What happens to the fun of shopping when the credit card statement comes in the mail?

Develop new habits. Get a note pad and write down things that you need, as needs arises. For example, you stain your white blouse and it doesn’t come clean, so you need a new one. You notice your favorite black shoes have a hole in them, so you write, “black shoes” on the list. Once you have your list, and the money saved and in hand for your purchases, go on a buying trip. Notice I did not say shopping trip. Go in search of what you need.

Take shopping off your recreational activity list. Find a new way to fill your leisure time. Go to the park, the library, call a friend, or volunteer at the local soup kitchen. These are great ways to spend your day, and save your pocket book.

Giving to others in need adds a humbling perspective to your life. Wants and needs get real clear when you meet people who don’t know where their next meal is coming from. Try on rewards of the heart, and save your pocket book and your peace of mind along the way.

If you have the money in hand, do take the opportunity in these times to save money on things you need. Take one basic question with you on your buying trip. Do I love it? Do you beyond a shadow of a doubt, absolutely positively, love it? Not like it, do I love it? Do not buy until the object of your attention gets a resounding yes to this question. Without this criterion, your “bargain” will still be in your closet with the tags still on a year from now. Buying something you don’t need is no bargain.

To summarize:
Replace recreational shopping with a more pocket book friendly activity.
Don’t make a purchase until the money is in hand.
Keep a list of what you need, and go on a buying trip to find it.
Ask yourself, Do you really love it?
Enjoy the feeling of empowerment that comes when you pay cash!

May prosperity be yours,

Mackey McNeill, CPA/PFS IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com

Obama, remaking America

As I watched the President’s swearing in ceremony and speech, more tears came. The ideals of which he speaks resonate deeply for me. Transparency, inclusion, collaboration, cooperation, prosperity and service just to name a few.

He spoke of transparency as the vehicle to trust between people and their government. Transparency is the vehicle to real trust between any two people or a person and an institution. We practice transparency in our office and with our clients. Each day as I read blogs and understand more about social media, I also learn more about the power of transparency. The changes that will spring forth from just this one change in government are immense.

The President also spoke of “extending prosperity to every willing heart.” Ever since Ronald Reagan was elected President we have seen government policy shift toward unprecedented aggregation of wealth in the top 1% of our citizens. And while I hold no ill will for anyone who achieves great wealth, the era of greatness for our country, was when our policies and values were aligned with shared prosperity. It fills my heart with hope to know we are returning to these values of holding the American dream for each and every American.

My most favorite thing about the new President is that the day before his inauguration, he called the nation to a day of service. It says volumes that not only did he call on people everywhere to serve, he himself served.

Hope and change feel real and alive for me today. Finally! Yahoo!

May prosperity be yours,
Mackey McNeill, CPA/PFS IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com

2008 Predictions .. in retrospect

Business Week published its top 10 Worst Predictions of 2008 last week.

http://www.businessweek.com/magazine/content/09_02/b4115015697841.htm

As I read the list, many thoughts and emotions arose: sadness, horror, confusion, betrayal, stupidity, just to name a few.

Predicting the future is always a shot in the dark. Good people, with good intentions, attempt to give us a peek into the future. Some will be correct and some will not. We will only know in retrospect who was correct.

Sadly, a large portion of the population uses these questionable predictions to make financial and investment decisions. There is a better way. First, we have to give up our goal of timing the market and knowing specifically what the future holds. The future has not yet been created. Our future is created from the choices we make today and it is tied to the collective. We are all making choices and our individual choices for how we spend, invest, and make money impacts the big picture. All those small choices add up to the world economy.

Often I hear people condemning “big business.” It is those “big businesses” that lie, cheat and steal, and make a mess of the economy for the rest of us. Of course there is an equal camp that shouts it is “big government” that is the problem. Were it not for “big government” our economy would work and everything would be rosy.Well the last time I looked, both “big business” and “big government” were run by people.

You may not think of them as people like you and me, but I can guarantee, that they get up in the morning and put their pants on one leg at a time like everyone else. They have families, fears, worries and joy, just like you and me. And their decisions are all part of the collective as well.

Without a blue print of the future, who can you create a prosperous future?

Follow my top 3 tips for the New Year and use my five never forget rules.

Here they are:
A. Stop trying to predict the future.
B. Accept, learn and use my five never forget rules of money:

1. Cash is Queen/ King – Always have a backup plan that includes cash reserves. Always live within your current cash flow. If you are retired, make sure you have enough cash and bonds to sustain your lifestyle for at least 3 or better, 5 years.
2. Use debt wisely. Just because you can get the credit, doesn’t mean it is in your best interest to use it. You have to earn a minimum of $1.30 to pay off $1.00 in debt. This makes debt, easy come, not so easy go.
3. Investment markets are volatile. Great investors develop an asset allocation plan, diversify among asset classes, and stay the course in good times and bad.
4. Investing is a long term game. Forget about picking a home run. You may get lucky, but more likely you will be broke. Long term is 10 to 15 years. Look ahead and stay out of the news drama of the day.
5. Don’t follow the herd. Sheep make lousy investors. If you follow the herd you will sell low and buy high. Making money requires that you buy low and sell high, avoiding the stampede of the herd. (You can get killed out there!)

C. Create your own personal Prosperity Plan™ today. Do not wait. Do not tally. Your future is created by the choices you make today.

What choices are you making? Are these choices moving you toward what you really desire?

The Prosperity Planning™ process gives you these answers and more.

May prosperity be yours,

Mackey McNeill, CPA/PFS IAR

President and CEO

Mackey Advisors

www.CultivatingProsperity.com

859-331-7755

Mackey@CultivatingProsperity.com

Smart college decisions, no is sometimes the best answer

According to the Bureau of Labor Statistics, the amount families pay for college, after adjustments for financial aid, has risen 439% since 1982, compared with a 108% increase in the consumer price index. As a result, many college plans are underfunded, and the stock market decline didn't help matters.

It has become the norm in our society to take our teenagers from campus to campus so they might select a college. These teenagers (considered legal adults in most states at age 18) choose their college based criteria that is rarely rooted in good financial judgment. If they can get student loans to pay for college, they assume that it will all work out. Rarely have I encountered a young adult who had thought thru the consequences of the loans they were taking, before they were deeply in college debt.

The results are young adults paying hundreds of dollars a month for years. These same young adults then have to deal with the consequences of the debt they created by delay having children, postponing their first home, under funding their 401(k) and the like.

The truth is our kids would be much better off if they were told no. No, you may not attend a college beyond your financial means. No, you may not spend the first two years of college out of state when you can get those credits at 1/4th the cost at the local community college while living at home.

Are kids really better off to have fun with their friends for four years only to be saddled with debt well into their 30’s? Is the party really worth it?

It is time we began to look at college as an investment like any other. We need full disclosure of the risks, rewards and long term consequences before we invest. My suggestion is that before student loans are handed out, the student be required to work and pay their own expenses for two years prior. This way they have firsthand experience in what it really takes to get a job, pay your bills and make ends meet. At the very least, young adult should be required to do the math for themselves by creating their post education budget before they take their first dollar of debt.

Our favorite debt is usually the one we did not take on. Do your kids a favor and tell them no. They might be upset in the short term, but they will thank you in the long term.

May prosperity be yours,
Mackey McNeill, CPA/PFS IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com

Listen and Watch - Financial News

Today was a busy day. This morning I taped a segment on the AICPA (American Institute of Certified Public Accountants) FeedThePig initiative. This iniative is geared toward improving financial literacy in the 25 to 34 year old age group. The site, FeedThePig.org is a fun and free site, with no commercial advertising.

Learn more by watching the interview with Alison Montoya on WLWT , the NBC affliliate in Cincinnati, tomorrow morning between 7AM and 9AM.

Crystal Faulker and her business partner and husband, Tom Cooney, host a radio show on wnku. Listen next week for the segment on Tips for Surviving and Thriving in the current economic climage.

May prosperity be yours,
Mackey McNeill, CPA/PFS IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755

Clean up your mail box, clean up your debt

The best way to not have the credit card blues is to use credit cards wisely.

For many people that means fewer cards and avoiding unsolicited credit offers.

Just like when you go on a diet, you don't keep cookies and pop in the house, the best credit card management involves keeping the cards from coming in your home in the first place!

It is easy to do. Here is how:

The credit bureaus offer a toll-free number that enables you to “opt-out” of having pre-approved credit offers sent to you for five years. Call 1-888-5-OPTOUT (567-8688) or visit http://www.optoutprescreen.com/ for more information. When you call, you’ll be asked for personal information, including your home telephone number, your name, and your Social Security number. The information you provide is confidential and will be used only to process your request to opt out of receiving pre-screened offers of credit.

May prosperity be yours,
Mackey McNeill, CPA/PFS, IAR
President and CEO
Mackey Advisors
Mackey@CultivatingProsperity.com
859-331-7755

Got the credit card blues?

One of the most important components of living in prosperity is to have freedom and joy around your cash flow. And the biggest impediment to this is credit card debt.

So for this new year, why not try a new year’s resolution that really works to unhook your credit card addiction forever!

Here is my sure fire, never fails, pay off your credit card rules:

1. You gotta wanta. Credit card debt is easy come not so easy go. If you only want to sort of, not really, then you will fail. This is a challenging task and you must ask yourself some serious questions. Are you willing to get a plan and stick to it? Are you willing to make changes in your life? Such as: Give up dying your hair, do your own manicures, make your own coffee, cook your own dinner? Are you willing to find ways to being happy that have nothing to do with the latest clothing, car, or fad? Are you willing to choose to be happy wearing last year’s fashions? Are you able to say no to that great looking new bedspread on the January white sale? Seriously, get down and dirty and look inside and ask yourself if you are really willing to change. If so, your first commitment is to NO new debt. Ask a trusted friend or family member to hold your credit cards for you while you are paying them off. Tell them your plan (see details below on how to prepare a plan.)
2. During this entire process, (which may take years – yes years – being realistic is important) bless the debt and find out how it has blessed you. Find a point of peaceful gratitude with your debt. What you resist persists. If every time you think of your credit card debt, it is in the context of things like: self loathing, blaming yourself, putting yourself down, feeling hopeless, etc, all this negative internal self talk is just going to make it very hard to pay off your debt. By coming to the debt with gratitude, you will face your debt with a positive attitude making your likely hood of success much, much greater. Keep a journal about your feelings toward yourself for being in debt and about your credit card debt itself. When all your credit cards are paid off, have a ceremony to burn the journal. A bon fire may be in order!
3. Make a list of your credit cards in a columnar format. Account name, limit, outstanding balance, minimum payment, payment you are making, interest rate.
4. Take the smallest debt and focus all of your available cash flow (except the savings amount noted on point 5) on this debt. Make only minimum payments on everything else. Once this debt is paid off, take all the money you were applying to the smallest credit card balance, and add it to the minimum payment on the second smallest credit card until it is paid off. Continue this practice, always focusing on the smallest balance first. Celebrate wildly with each card you pay off. Wildly as in do something fun for yourself, like a walk in the park or a having a friend over for movie night. Not wildly like going out and spending a bunch of money on an extravagant purchase or dinner. Appreciate yourself for being so focused and committed to your financial health. Check in with the person who is holding your cards, and share your success. Write yourself a “thank you for being a financial success” card. Mail it to yourself.
5. Start a savings program. Most people get into credit card trouble because they have no savings for everyday big ticket items, like tires, a wrecked car, a new furnace etc. So it is imperative to begin saving money for a rainy day as you pay off your debt. Do NOT wait until your debt is paid off to begin saving. Start saving immediately. This is not money going into your 401(k). These funds are put in an everyday simple, no fee, savings account. The amount of interest you earn on the balance is immaterial. What is important is that you begin and are successful with a savings plan. First set yourself up for success. Look at your budget and pick an amount you can save every pay period, no matter what. It can be as little as $5. It is critical to start with an amount that you can, no matter what, save successfully. Save this amount for 1 to 3 months. Notice how good you are feeling about savings. Once you have this down, save a little more. Do this for another 1 to 3 months. Save a little more. Etc. By setting yourself up for success, you win and feel good about yourself. This makes savings fun, and a source of positive self esteem. Give yourself permission to use your savings account for emergencies if needed. Watch out.. savings can be addictive. And if this happens, just enjoy it. You are learning to live debt free and it is fun!

May prosperity be yours,
Mackey McNeill, CPA/PFS, IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com