Cultivating Prosperity

The Future is Your Decision

2011-07-27T09:30:00.002-04:00

From our July 2011 Creating Confidence Newsletter.

Last Tuesday the 12^th, I spent the morning at the Vistage All City meeting. Our speaker was Brian Beaulieu, a respected economist from the Institute for Trend Research. Brian’s talk, The Future is Your Decision, offered perspectives for CEOs and individual investors based on his trend research.

I found his information useful and have summarized his thoughts below.

Overview

There are 3 mega-trends to be considered when making decisions about your businesses or when investing:

Demographics, the World and the US have increasing population. More people = economic growth
Inflation, not hyperinflation, but easily 4.5% to 6%
Taxes are going up

2011 and 2012 will be periods of modest growth, with continued high unemployment. At the same time, it will be increasingly difficult to fill certain knowledge based positions because our workforce is a) immobile due to being unable to sell their existing homes and b) inadequately trained for the type of jobs available.

2013 and 2014 will likely be a modest recessionary period like the early 1990’s but not as deep as 2008.

Commodity prices are on a temporary rest. 2012 will see increasing commodity prices on items such gold, copper, oil and agricultural products.

The US represents 26% of the world economy. While we are the largest economy in the world, our share of the pie is growing smaller and opportunities exist in emerging economies for investment and doing business. Think Brazil, Australia, and India.

There will be ongoing weakness of the US dollar.

Housing will no longer be in recession but will not be in recovery. Over the next 5 years people will rent and not buy.

Interest rates will remain low and may creep up in 2012 and 2013. A 2014 recession may provide a temporary restraint on rates. Currently we have the lowest rates we will see in our lifetime. Borrow long term, taking advantage of fixed rates now and repay with cheaper inflated dollars.

Remember that normal today is tomorrow’s abnormal.

For Businesses

Look for customers in these growth segments:

Exporters
Alternative Energy
Health care
Professional services such as law and accounting
Higher education
Overseas in India, Brazil, Canada and Australia

Inflation will hit the labor market in 2012. You will need a strategy to employ a mobile workforce. Training programs are more critical than ever, given that you may not be able to find the skill you want in the workforce.

This is a good time to buy other businesses. If you have not positioned your business for sale, you likely do not have time to do so before the next recession. The next good selling season will be 2017 and 2018. Position now to be ready.

Do not let the pain of the past color your vision for the future. Find a sector of your business that is entrepreneurial and expand that segment.

In periods of inflation, metrics and monitoring are critical.

If you cannot raise prices, sell that business unit. Raise prices more frequently and in smaller increments. Think 1% to 1.5% per quarter instead of 4% a year.

For Individuals

The stock market will continue to be volatile thru 2011. Brian is bullish on 2012 and then expects a lackluster market. Position portfolios to take advantage of the 3 megatrends noted earlier.

Invest globally and position your portfolio to include commodities and other investments that do well in periods of rising interest rates and inflation.

Refinance your home if you have not already done so. If you are young and have equity in your home, consider borrowing the equity and investing it outside your home.

Summary

Brian closed with a quote from Dr. W Edwards Deming. “It isn’t necessary to change, survival is optional.”

That sort of says it all. If you can’t love change, at least accept it and position yourself for it. As with any of these ideas, it is best to a) run the numbers for your personal situation and b) consider the impact based on your personal goals.

As your Wealth Advocate, we are here to guide you and your business thru the coming changes. If you have questions or need our assistance, please contact me at Mackey@MackeyAdvisors.com or our team at 859-331-7755.

May prosperity be yours,

Mackey

Fixing Social Security

2011-07-27T09:27:00.003-04:00

From our July 2011 Creating Confidence Newsletter.

These days, as Congress debates the debt ceiling issue, Social Security is suddenly front page news again. If you want to see the lighter side of the debate, click here: http://www.youtube.com/watch?v=OAnI6y-xC84&feature=related.

The first thing to understand is that there IS a solvency problem with Social Security. Alice Munnell, Director for the Center for Retirement Research at Boston College University points out that, according to the Congressional Budget Office, the Office of Management and the Budget and the Government Accountability Office, the benefits promised to future retirees exceed the scheduled taxes that are projected to be taken in. In fact, last year, Social Security began paying out more in benefits than it received in payroll taxes--years earlier than projected, due to the 2008 Great Recession.

The second thing to understand is that Social Security is not going away; too many people today and in the future depend on it for a crucial part of their retirement income. Munnell notes that Social Security accounts for 87% of non-earned income for the poorest third of households over age 65, 70% for the middle third and 37% for the highest third.

So the question becomes: how can Congress bring Social Security back into revenue balance. To help illustrate some of the trade-offs, the American Academy of Actuaries web site includes a game that allows all of us to fix Social Security--you can make your own adjustments here: http://www.actuary.org/socialsecurity/game.html and discover a variety of ways to balance the books, some more painful than others. You could, for example, move up by one year the day when people have to wait until age 67 to claim maximum benefits, and after that index the retirement age to maintain today's ratio between expected retirement years and work years. This, alone, would solve 20% of the funding problem, and some would argue that it should have been done years ago.

As an alternative, you could reduce the annual cost of living adjustments in Social Security payments by half a percentage point. This would reduce the projected deficiency by 40%. Of course, it would also erode the purchasing power of elderly people who count on Social Security for a significant part of their income.

We could reduce benefits by 5% for future retirees, which would solve 31% of the problem.

Or we could reduce the benefit formula for the top half of earners, who theoretically are less dependent on Social Security in retirement. That would solve 43% of the projected Social Security deficit. It would also mean that people who are able to fund a comfortable retirement will get much less out of the system than they put into it.

On the other side of the ledger, we could incrementally increase the revenues going into the Social Security system. For instance, if we raised the payroll tax rate from the current 6.2% to 6.7% for employees and employers, 48% of the shortfall would go away. As an alternative, we could tax Social Security benefits like we do IRA and pension benefits, which would make up 14% of the projected shortfall.

As you can see, none of these proposals, by itself, will bring Social Security back to fiscal health. If you're looking for an out-of-the-box solution to add to the mix, consider an article in the Christian Science Monitor, where former U.S. Secretary of Labor Robert Reich notes that a big (and largely undiscussed) problem with Social Security is the shifting balance of workers paying into the system to retirees collecting from it. Forty years ago, he says, there were five workers for every retiree; today, there are three. In 20 years, perhaps less, the ratio will be 2:1--that is, every two workers in America will have to pay whatever is required to support one retiree's Social Security benefits.

How would you fix this problem? Reich proposes that we allow more immigrants into the U.S.--that immigration reform

As the deficit debate goes forward, you'll hear a lot more about how to "fix" Social Security. Consider this a cheat sheet on the options that various parties will eventually put on the table. We would love to hear your thoughts on how to solve this and other issues. During our planning process we put our heads together to come up with solutions that make lives better and more successful. Let’s encourage our government to do the same. If you have a good idea, let us know!

Sources:

Alice Munnell: http://blogs.smartmoney.com/encore/2011/07/11/saving-social-security-raising-taxes-vs-cutting-benefits/?mod=wsj_share_twitter

Robert Reich: http://www.csmonitor.com/Business/Robert-Reich-s-Blog/2010/0411/Immigration-Could-it-solve-Social-Security-Medicare-woes

Banking News You can Use

2011-07-27T09:20:00.003-04:00

From our July 2011 Creating Confidence Newsletter

Your regularly scheduled Go Green article has been interrupted for this important announcement…..

Last week I attended Vistage’s All-City Meeting. It’s a day of great presentations & great networking opportunities. One of the last speakers of the day was Mike Prescott, President of US Bank. I believe he was supposed to speak about the recession, but what I got from him was so much more valuable.

First & foremost he spoke about four cheap services that can protect your bank accounts from fraud. I honestly didn’t even know these existed, but now that I do you can bet your sweet bibby Mackey Advisors will be utilizing these services!

1. ACH Block: ACH blocks are the simplest of all the products to use. They allow companies to notify their banks that ACH debits should not be allowed on certain accounts. With a block in place, no ACH debit, even one that is authorized, will be able to get through on a given account. Everyone is advised to put blocks in place on all accounts where ACH activity is not likely to be used. Quoted Source

2. ACH Filter: An ACH filter allows organizations to give their banks a list of companies authorized to debit their accounts. The banks will then “filter” incoming debits and allow through only those that are on the list submitted earlier. This filter does not check for dollar amounts or whether the particular transaction has been authorized, only that the company doing the debiting is on the approved list. Quoted Source

3. Positive Pay: Positive pay is a service whereby the company electronically shares its check register of all written checks with the bank. The bank therefore will only pay checks listed in that register, with exactly the same specifications as listed in the register (amount, payee, serial number, etc.). This system dramatically reduces check fraud. Quoted Source

4. Reverse Positive Pay: Reverse positive pay is similar to positive pay, but the process is reversed, with the company, not the bank, maintaining the list of checks issued. When checks are presented for payment and clear through the Federal Reserve System, the Federal Reserve prepares a file of the checks' account numbers, serial numbers, and dollar amounts and sends the file to the bank. In reverse positive pay, the bank sends that file to the company, where the company compares the information to its internal records. The company lets the bank know which checks match its internal information, and the bank pays those items. The bank then researches the checks that do not match, corrects any misreads or encoding errors, and determines if any items are fraudulent. The bank pays only "true" exceptions, that is, those that can be reconciled with the company's files. Quoted Source

Secondly, he spoke about 8 questions to ask yourself when choosing a banker. I feel you should ask all of these questions about any company or person you go into business with, whether personal or professional.

Do I trust this person?
Do I like this person?
Does he/she understand my business?
Does he/she add value to my business?
Is this person an Advocate for me & my company?
How is this individual viewed within his/her company?
What sales method are they using? Is there transparency in the sale?
What is this person’s next job (e.g., promotion within current company, move to a similar company, retiring, changing career paths)?
(Personally added) Does this person align with my values?

Thank you Mike Prescott for handing down your worldly banking wisdom. It will not soon be forgotten.

by: Gracie Mohr

Creative Ways to Cut Costs

2011-07-27T09:14:00.004-04:00

From our July 2011 Creating Confidence Newsletter.

1. 1. Go paperless

Choosing email over mail, and electronic file storage over printing, can save you money on paper, ink, postage and more. There are free online project management tools that can help you organize your documents and share them with your team members, making your business more efficient.

2. 2. Pay bills on the due date

When you pay late you incur fees, but when you pay early you’ve unnecessarily limited your cash flow. Pay on time, every time, and maximize cash.

3. 3. Tackle your receivables

Identify your slow-paying customers and get proactive. Offer an incentive to those who pay quickly. If you accept credit cards, you should shop around for the best price on payment processing. And send out invoices as soon as the product has been delivered or the service completed. Why wait?

4. 4. Hire a student instead

College students will work for less, or just for course credit, and you can hire them on a short-term or as-needed basis. Set one to work and you might just be getting a bargain.

5. 5. Review your insurance coverage

Are you still paying to insure assets that have been sold? Are you over-insuring on the ones you still have? How much might you save by increasing your deductibles?

6. 6. Don’t make seminars a group event

Instead of having several people attend a seminar, save money by designating one person to go, and then report back to the team on what they learned.

7. 7. Program your thermostat

You may have heard this before (thanks Grace!) but it works just as well in the office as it does at home. And while you’re at it, make sure everything is turned off when no one’s in the office.

8. 8. Make your advertising expense go further

Whatever your chosen method of advertising, make sure you include a coupon, special code or offer and encourage people to use it. That way you will know which marketing strategies are the most effective, and you can eliminate the ones that aren’t.

9. 9. Make the most of your office space

Consider cutting back on non-essentials and moving into a smaller office space. And if that isn’t feasible, you can rent out that extra desk to a local entrepreneur for some extra cash.

10. 10. Design and print your own business cards

Save money and make a statement. This would be a good project for that new intern.

11. 11. Compare profit margins

Calculate the gross profit for each product or service you sell. Then focus on the ones with the lowest margin and consider discontinuing them, allowing you to focus your efforts on your more profitable segments.

12. 12. Assess your inventory

Do you have old or obsolete inventory? See if it can be sold, or even re-worked into something useful.

For continuing assistance with cutting costs and growing your business, consult your Wealth Advocate at Mackey Advisors.

by: Laura Pratt

Investments and the Debt Ceiling Debate

2011-07-15T12:38:00.000-04:00

You may be concerned about the impact of the debt ceiling on investments. Polls are showing that 70% of Americans do not want the debt ceiling raised. This is interesting, and completely untenable. The US government currently has a structural deficit. It spends more than it takes in each day. Sadly, this is not new. This has been our post WWII practice for the most part in times of recession or expansion.

We cannot afford to default on our debt as this would send interest rates the federal government pays on its debt skyrocketing, making the deficit worse. With the world economy in malaise, the US is currently benefiting from the worldview that we are the safest place for money. This means around the globe investors have been willing to buy US debt at every low interest rates. That is an advantage we want to keep.

The only short term option is to raise the ceiling. Politicians know this. What you are seeing in Washington is political maneuvering to determine who gets the blame and who gets the credit in the next election.

No one is strong, be it governments, companies or individuals, when they continually spend more than they make. The most practical way to reduce our deficit is to cut spending and raise taxes. US income tax rates are at historical lows, and are full of inequitable loopholes or more correctly stated, pot holes.

We have to look to all parts of the budget for cutting and sacrifice. We cannot all have our part of the pie unscathed. This is the price of binging on debt. When individuals do it, they must ultimately tighten their belts and do without until they reduce their debt. The government must to do the same.

The media loves to point out that Social Security is going broke. Yet study after study shows that fixing Social Security is pretty easy. If we eliminated the wage ceiling on taxes and meaningfully raise the retirement age, the Social Security issue would be solved for years to come. The answers are within our grasp. They are unpopular and require Congress to act in ways that may not play well in the next election.

We also need to restore the power of the President to cut pork spending that Congress pads into legislation. Every President, Democrat or Republican needs this power. Congress has proven incapable of compromise that does not include favoring those who put a price on their votes by adding pork for their districts. This must be stopped.

At Mackey Advisors we use a diversified, asset class approach to investing. That means your portfolios are well balanced, holding a variety of asset classes, from large cap US stocks, foreign stocks, real estate, commodities and bonds. Our current bond allocations US Treasury debt, corporate debt, foreign debt and mortgage debt.

Our investment approach is to look for long term trends that add value to certain market sectors and to overweight those sectors. Short term, markets will do what they will, and in times of uncertainly that means volatility. Historically, patient investors are rewarded for being non-reactive to the short term noise. We advocate and encourage this path.

What can you do?

Call or write your Congressman and deliver a clear and concise message that you want to see the debt ceiling raised, along with a bi partisan plan for significant and meaningful debt reduction.

It Takes All Kinds

2011-06-20T09:39:00.002-04:00

With so much content coming at us on a daily basis from TV, Magazines, Radio, Websites & Blogs it’s hard to know where to turn for valuable, honest & entertaining information. I have scoured (googled) the internet for the best (first page results) green blogs out there and this is what I found….

Coming in at numero uno on the hippy hardcore scale is "No Impact Man" a blog started by Colin Beavan in 2007 when he and his family decided to go off the grid for 1 year in the middle of NYC. Since then there has been a "No Impact Man" book & movie. Below is a link to an article on how to setup & maintain your own worm composting operation.
- No Impact Man: Worm Composting
  http://noimpactman.typepad.com/blog/2011/05/slimy-pets-to-eat-your-garbage-and-entertain-your-kids.html
Second on my list is a hard-working DIY blog called "Young House Love". Sherry & John Petersik are full-time bloggers. They do not consider their site a green blog, but they have a love of reuse & a fair amount of articles they wrote about how to make your own rain barrel.
- Young House Love: How to Make a Rain Barrel
  http://www.younghouselove.com/2009/03/how-to-make-a-rain-barrel/
Last, but not least is a fun, free spirited blog composed of small, crafty activities to keep you and/or your children entertained. The link below goes to an entry on how to make your own bat house. Bats are a great green way of keeping the unwanted insect population down around your home.
- Crafting a Green World: Build a Bat House in Your Backyard
  http://craftingagreenworld.com/2011/06/13/how-to-build-a-bat-house-in-your-backyard/

Whatever your green goals are there is a blog out there for you. Go toTechnorati.com to find more blogs that may tickle your fancy.

Gracie Mohr

The Price of Dying

2011-06-20T09:39:00.001-04:00

We're going to talk about death and dying in a moment, so you might want to prepare yourself with a short break that you might find entertaining. You might even try dancing along with this video by motivational speaker Sean Stephenson: http://www.youtube.com/watch?v=TAibh3SqRUo.

Funeral costs have risen so far and so fast lately that people who have been through it tell what may be the unfunniest joke in history: they say that dying has become so expensive that nobody can afford it any more.

One reason for these cost increases is that many people fail to plan for the funeral, the burial plot or cremation, the flowers and everything else before the fact. Suddenly, the grieving family has to make complicated arrangements, and in the highly-emotional moment, they are in no mood to bargain over the cost. In fact, it was so easy for funeral directors to sell unnecessary add-ons during these moments of vulnerability that the Federal Trade Commission created a "Funeral Rule" which requires mortuaries to present a price list of services to consumers before showing them products such as caskets. More recently, the FTC has created not one but two brochures, one that summarize the rights of consumers (http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro26.shtm), another that functions as a guide to planning funeral arrangements from a consumer standpoint ( http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro19.shtm). Among the little-known regulatory provisions: a funeral provider may not refuse, or charge a fee, to handle a casket you bought elsewhere.

Why do people fail to plan? Children of aging parents are often reluctant to bring up the difficult subject of death, even though in many cases the parents would greet the discussion with relief. Spelling out the funeral preferences is not normally part of a person's will or estate documents, and few people understand their choices, which can be complex. Do you want a traditional full-service funeral which includes a viewing and formal funeral service (the most expensive option), a direct burial (no viewing and therefore no embalming) plus a graveside memorial service, or a direct cremation?

And if you do use a funeral home, which one should you use? The nonprofit Funeral Consumers Alliance (FCA) has estimated that the exact same package of services at different providers can cost anywhere from $2,500 to $6,000. The FCA is offering a new book, "Final Rights," which offers tips on how to navigate what it calls the "death industry," which takes in $15 billion a year.

Having this conversation could not only save money for the heirs of loved ones; it could also reduce the confusion and emotion around making difficult decisions at a time of grief. It can be part of the discussion about a medical power of attorney – another important safeguard of everyone's well-being.

by Andy Pulsfort

Leverage Technology to Increase Productivity

2011-06-20T09:38:00.001-04:00

If you are looking to increase productivity (and who isn’t?), consider upgrading the use of technology in your business. Implementing and learning to use new software and hardware will be well worth the investment of your time. Just ask one of the many trailblazing small business owners who have already done so. Here are three options:

Mobile Apps
- According to a recent survey conducted by TechnoMetrica for the Small Business & Entrepreneurship Council, an estimated 1.28 million small business owners are saving 372.8 million owner hours a year by using mobile applications or “apps”. They’re also saving an estimated $17.6 billion on employee payroll. [1]
- Mobile apps allow you to perform a variety of office functions from your mobile device, leading to increased revenue and more time to devote to other tasks.

Cloud Storage
- Have you heard of the cloud? It’s what we call online or virtual servers that store your information so that it can be readily accessible from anywhere with an internet connection. It also ensures that your data is protected in the case of computer failure.
- A recent survey by cloud provider Egnyte, Inc. reveals that small businesses have led the trend toward cloud file storage, but larger businesses are starting to follow suit.[2]

Social Media
- In the past few years social media has emerged as a great way to quickly and cheaply advertise your business and increase your marketing scope. The key is not only to have a presence in media networks like Facebook but to incorporate it into your marketing plans.
- According to The Business Journal, 68% of business owners over 40 use a social network, but only 47% incorporate social media into their marketing plans.[3] Put your business above the crowd by making social media work for you!

[1] “Saving Time and Money with Mobile Apps.” May 2011. .Conducted April 21-27, 2011. A total of 304 surveys were completed with an overall margin of error of +/-5.7 percentage points at the 95% confidence level.

[2] “Small Businesses Trail Blazers in Cloud Storage.” June 6, 2011. . 6,500 users were surveyed across the United States, and 4.5 million file operations were tracked in a 24-hour period.

[3] “What’s Age Got to Do With It? Plenty.” June 6, 2011. .

9 lessons from Jell-O about High Performing Teams

2011-06-20T09:36:00.000-04:00

In my Vistage meeting a few months ago, a fellow CEO spoke about his theme for the year. The idea resonated with me, so I spent some time thinking about what “theme” would support Mackey Advisors in reaching our goals for the year. What I can up with is, To Gel.

We have tons of talent and initiative. We have great technology and systems. It seemed to me that the only possible roadblock to achieving our goals was to move from being a group of fantastic individuals to a high performing team. Thus the theme, To Gel.

I kicked off the campaign by purchasing a package of Jell-O for every person in the office. It was Valentine’s Day and I arrived early and put all the packages of Jell-O out on the conference room table, so people would see them when they came in for the Monday team huddle.

To make it fun, I decided to make it a participative opportunity. So I announced the theme, To Gel, and went on to explain that each week we were going to explore the question, what does Jell-O have to do with a high performing team?

When it was your turn, you would give us your ideas on how Jell-O modeled a high performing team and you would make a package of Jell-O. Not only did we learn a lot about high performing teams, we also learned a lot about each other. The insights were great and it was fun!

Here is quick rundown of the lessons we learned from Jell-O:

Commitment: Jell-O is committed to sticking together and hanging onto its shape. -Mackey

Structure is required: Jell-O needs structure to give it shape just like we need policies and procedures to let us do our work more easily and efficiently. -Grace

Team mentality: Jell-O sticks together to hold its shape. -Tom

Resilience: Jell-O bounces back. -Andy

Be more than just Jell-O, be unique: you can use Jell-O in many ways to create different things, just like we are not just accountants. -Natalie

There’s something for everyone: we don’t offer just one service like Jell-O doesn’t come in just one flavor. -Justin

Consistency based on manuals: anyone can make Jell-O if they follow the directions, just like our manual allows anyone in the office to work on any of the different projects because we know exactly what needs to be done by having directions. -Laura

Marketing and branding: not everyone likes Jell-O but through their excellent marketing and branding they can have many different types of products all associated with the brand name, just like we have many different services under our name. -Caroline

Be a star: Jell-O takes something ordinary and allows it to be shaped into a star just like we can take someone ordinary and help them to become a star in their own life. -Julie

Who knew Jell-O had so much to teach us at work?

May you find the theme to rally your troops and achieve your 2011 goals. As always, we are here to serve you in expanding and growing your wealth and prosperity. Please let us know if we can help.

Mackey

Practical Prosperity: May 2011

2011-06-16T16:38:00.002-04:00

The Unexpected Recovery

Did you know that the Internet can now read minds? Here's the proof: http://www.youtube.com/watch?v=Hc1WXBtum2o&feature=related.

Just two months ago, the world celebrated an unusual two-year anniversary: 24 months from the low point in the global markets, the point of maximum pain and panic following the 2008 economic meltdown and so-called Great Recession.

On March 9, 2009, the S&P 500 had fallen to its low of 676, which is about where it had been in October of 1996--13 years before. Since then, the S&P index has gone up about 107%, bringing it within 13% of its record high in 2007. The Russell 2000 index, which tracks small cap stocks, has gone up 139% in the same period, and the MSCI Emerging Markets Index is up 149%.

If you look back at the economic forecasts and market reports in March two years ago, you don't find, anywhere, a prediction that the markets would recover as they have. There was even some doubt whether the U.S. economy would survive intact, and the most common prediction was deflation, continued recession and more downside in the stock markets.

In retrospect, this most frightening time was the ideal time to shove all the chips on the table and bet everything on a stock market recovery – but who had the intestinal fortitude for that? After the losses that virtually all investors had sustained, no matter where they had deployed their assets, few had the stomach, or the heart, to bet on a robust recovery. This is a terrific lesson in the value of disciplined investing; the consensus and our own gut feelings are often wrong and inevitably point us in the opposite direction from where the returns are going to come from next. In the past, every long-term upturn has been greater than the losses sustained in the prior bear market. We don't know how this one will end, but it seems to be following the same seemingly unlikely, but not unusual, course.

As an investment advisor, it pleases me to see that clients stayed the course with us. The investment world is more complicated now than ever, which makes it even more fearful for many. High yielding, United States value stocks are still great investments, however as the United States slips in world market share, dozens of additional asset classes must be considered part of the mix.

At Mackey Advisors™, we would love for those of you who have not been introduced to our investment philosophy to stop in and see us. For those of you who take the “do-it-yourself” approach, never leave a stone unturned. There is opportunity abounding everywhere, even in a changing global economy, so seize the moment and let prosperity thrive.

By Andy Pulsfort

How do you find the time?

2011-06-16T16:37:00.000-04:00

When I tell people of my interest and involvement in local food, cooking, herbs and gardening, their response is almost always the same: ”How do you find the time?”

Since I have the same 24 hours a day that we all receive, I really have no idea. The truth is I focus on what is important to me. I nurture the activities that give me energy, generate fulfillment, inspire enthusiasm and feel like a contribution to others. Somehow time takes care of itself.

We have learned to think of life as two dimensional, divided into work time and play time. “Work” is generally regarded as something we show up to do every day for a paycheck. We work at our businesses or job and we play when we are not at work. I do get a paycheck at work, but with the exception of that detail the lines between work and play are very blurry for me.

Yes, I work. Sort of. I have an office, title, a company to run, clients to take care of, and strategy to implement. These are just a few of my roles at Mackey Advisors. Yet, except for the fact that calling it work is a habit, it does not feel like “work”.

I love what I do. As the Mackey Advisors’ team works with clients, I witness them gaining more financial freedom, confidence and power. The results are enlivening and fulfilling. Being part of a team achieving results like this does not feel like “work” to me. I feel blessed by what I do because I know that others are blessed by our work. If I had 30 hours a day suddenly given to me, I would spend more time and energy at Mackey Advisors just because it is fun.

Then there is the part of my life called home, fun, play. That is enlivening too. To be a part of RedSunflower Farm is also what many people would call “work. “ I “work” in the greenhouse and plant in the raised beds. I cook amazing food grown in our annual and perennial beds. I get to walk and play with my three big dogs, Wiley, Jedi and Baxter. Since there is always something to do, I rarely sit down at home except to eat or read. But it doesn’t feel like “work.”

I feel blessed to be surrounded by an ever-changing portrait created by Mother Earth each day. When I think of RedSunflower Farm, I think of nurturing not only the land, but also my own body and soul. This is not “work.” It is enlivening and fulfilling.

I have been blessed with the opportunity to create a life filled with soul. This means that every facet of my life gives me energy, nurtures me in some special and unique way, and brings me joy. Living life from this perspective, time takes care of itself.

May you always have time in your life for those things that enliven and nurture you,

Mackey

Go Green: What Shade of Green do you want your Home to be?

2011-04-15T10:48:00.007-04:00

Color is such an expression of who someone is, and what message they want to send into the world. We can be bold, innocent, happy, sad, or just plain blah depending on the colors we use in our lives. So can our homes express themselves in color? I think so…..

Do you get giddy over a bold Kelly Green:
Francie Rehwald bought 55 acres in Malibu, California and is building her new home out of a decommissioned Boeing 747 Jumbo Jet with the help of architect, David Hertz.

More Pictures & article here: http://www.shelterpop.com/2010/11/09/plane-home/

Or would you prefer a tradition Hunter Green:
Scottsdale, Arizona based Meritage Homes has brought green to traditional suburban living. Meritage Homes is the only top-10 homebuilder that’s 100% Energy Star qualified at no additional cost. All of the homes they build feature: Energy Star Certified appliances, minimum SEER 14, Low-E windows, low flow faucets, programmable thermostats, and low VOC paints and finishes.

Article here: http://www.earthtechling.com/2011/04/new-green-homes-come-to-texas/

How about an earthy Moss Green:
In Festus, Missouri there is a home that has been sold on eBay twice since 2003, but that’s not all that makes this modern home famous! It features a natural stone roof, 17,000 square feet of living space, and costs as much to heat and cool as a 2,000 square foot home. Oh, and it’s built into a CAVE!!!

More pictures & article here: http://dornob.com/huge-cave-house-unique-modern-underground-mega-home/

I know! Maybe you prefer a relaxing Sage Green:
This 3,500 sq. ft. San-Francisco adjacent hilltop home has a LEED Platinum certification, and feels as if you are in the quaintest of country cottages. SB Architects really focused their attention on not only making the environmental impact of the home as small as possible, but also on designing a home that would aesthetically be in partnership with the environment it was built upon.

More pictures & article here: http://freshome.com/2011/04/08/sustainable-residence-by-sb-architects-nestled-in-the-hills-of-mill-valley-california/

By: Gracie Mohr

Practical Prosperity: April 2011

2011-04-15T10:46:00.001-04:00

Springtime is as good of a time to clean up your finances, as well as your home and yard. One piece that often gets overlooked even after extensive financial and investment planning, is your credit report and score. These are important pieces of your financial picture that can benefit from occasional monitoring.

You are entitled to a free credit report from the three reporting agencies once a year and can obtain this information at www.annualcreditreport.com. Here you will see your payment accounts and your status with each. Electric bills, parking tickets, credit card bills, home mortgages, and more show up on this report. Use this to check that no one has reported a late payment or unpaid balance this is incorrect. If something doesn’t look familiar, check it out to make sure someone hasn’t opened a credit account in your name!

Fair Isaac Corporation takes this information from the three agencies and creates your credit score or FICO score, which ranges from 300 to 850. This number will allow credit card companies, automobile lenders, and mortgage lenders to decide how much to lend you and at what interest rate. The score is based on a combination of your payment history, the amounts you owe, the length of your credit history, how many accounts you have recently opened, and the types of credit available to you.

The best rates on a loan or credit card are given to scores over 700, so it is important to know where you fall. Before applying for a loan, check your credit report and score. If something is incorrect, submit it http://www.blogger.com/img/blank.gifto the agency for investigation and get the issue corrected BEFORE applying for the credit.

If you are not going to be shopping for credit anytime soon, the annual check of the report should be okay for you, however getting your actual FICO score from www.MyFico.com is important if you are looking for a new car or home.

As a general rule, paying at least your minimum payment, on time, and restricting your credit balances to less than 1/3rd of the credit available to you, will keep your score high and your interest rates low. This means more money in your pocket and continued financial prosperity.

by Andy Pulsfort

The Journey to a New Building: Part 1

2011-04-15T10:41:00.001-04:00

Over a year ago, we began looking for a new home for Mackey Advisors. If I had known how difficult this journey would be, I would have likely said, “I think I will pass.” The road to our new space has been filled with potholes, detours, missing map pieces and lots of orange barrels!

We have two goals. The first is to have a space that is simply large enough! We have grown, and subsequently become terribly cramped for space in our current location. We are short of conference room space and have people tucked into every possible corner. Our second goal is to occupy a space that is a living example of our brand.

The first objective was easiest to approach. Taking the number of people times the amount of square feet equals how much space you need. The second goal, creating a living example of our brand, has been a much more challenging task. Naturally, it requires that we have a fundamental understanding of our brand from the inside out.

We began the journey in Covington and Newport with two old and potentially beautiful buildings. We eventually chose not to pursue the one in Newport because it had the misfortune of being located next to a bar painted in the bright orange and black of the Cincinnati Bengals. We were all in agreement that this themed décor did not shout “Prosperity!”

In Covington we found an old bank building and decided to focus our attention there. Sadly, after investing much time and energy into the project we could not make the financials work on the building. Cost effectiveness and conscious spending are two components of Prosperity, so the bank building was soon off the table.

At this point we found ourselves going back to the drawing board. As we continued to look we found spaces that were too big and just as many that were too small. Like Goldilocks, we were having a difficult time finding one that was “just right.”

Unable to find a home in Covington or Newport, we began to broaden our horizons and the small community of Bellevue soon caught our attention. After looking at several buildings we stumbled upon one that, with an addition, would be just right. For the last few months we have been designing, attending public hearings, going through inspections, applying for financing and attending to the many details involved in making this building a new home for Mackey Advisors. If all goes to according to plan, we will be closing by this time next week! We will still have much to do, starting with demolition and ending with a complete remodel.

Along the weaves and turns, we also learned more about our brand, Prosperity. We have always known that Prosperity is more than just money, but usually we are looking at Prosperity from an individual point of view. Throughout this process we had the opportunity to look at it from a business and community point of view.

The building in Bellevue makes financial sense. While Prosperity is not just money, if the money doesn’t work, nothing else does either. With the financials handled, we looked at the larger picture. Prosperity for Mackey Advisors means convenience for our clients and being just off I-471 was a perfect location. Long term, as our clients continue to grow outside the region and our work becomes more Internet based, we know that the building will primarily serve our team.

As we looked at what our team needs to be prosperous, we knew we needed green space. Our new office will have two green spaces, a courtyard and a deck. We will also have a large break room and kitchen. All of the spaces will be designed around the idea that our team needs a place to gather, commune and relax.

We know that the next generation is our future, and they will want to live and work in walk-able communities. Bellevue is one of the few completely walk-able communities in our region.

At Mackey Advisors, we believe Prosperity is for everyone, not just for the well to do. Bellevue has $100,000 homes and $1,000,000 dollar plus condos. It is a community for everyone, from those recently setting out on their journey to Prosperity to those who have been on the path for many years.

Over the next few months we will post pictures so you can follow our progress on our web site and Facebook page. We will also post what the process teaches us about Prosperity along the way.

As always, we welcome your comments and encourage your feedback.

May prosperity invade your space!
Mackey

Go Green & Red this Holiday Season

2010-12-09T13:40:00.000-05:00

Tis’ the season for giving gifts, spreading joy & living in excess!

Here are 10 tips on how to become a lean, green holiday machine.

-We all love getting holiday cards in the mail, but this year save a tree and some money by sending out e-cards to your loved ones.

-If your family will gather around a tree this year why not make it a potted, living tree that you can either keep around for next year, or plant in the backyard as a reminder of a great holiday spent together?

-Purchase LED lights to make your tree sparkle! I will admit they take some getting use to, but you will be thankful when you energy bill comes due.

-Make your own ornaments from dough. This is a great activity for the whole family to take part in, and it only costs pennies.

-Pine cones can be used in all sorts of nifty ways. They can be made into a beautiful, inexpensive centerpiece with just a little spray paint or glitter, you can make bird feeders out of them with some peanut butter & bird seed, or you can give them as gifts by dipping them in candle wax to be used as a fire starter.

-Plan a holiday decoration swap meet! Invite your friends and family over to exchange their unwanted decorations. This is a great way to have fun, save money & get new-to-you decorations!

-Buy carbon offsets as a gift for friends & family who are traveling for the holiday season.

-Green your gift giving by hand making your own, re-gifting items, or buying LOCAL and/or battery-free gifts.

For more green gifting ideas you can visit treehugger.com and look through their 2010
Gift Guide.

After acquiring all of your groovy, green gifts remember to go light on the wrapping. Get inventive with your wrapping techniques. Use items around the house to make your own wrapping, or buy recycled wrapping paper.

Happy Holidays everyone!

Gracie Mohr

Practical Prosperity

2010-12-09T13:39:00.000-05:00

December 2010

“Lucy – Incidentally, I know how you feel about this Christmas business, getting depressed and all that. It happens to me every year. I never get what I really want! I always get a bunch of stupid toys, or a bike, or clothes, or something like that.

Charlie Brown – What is it you want???

Lucy – Real estate!”

It’s the holiday season and I thought it would be perfect to quote one of my favorite holiday shows “A Charlie Brown Christmas”. Whatever holiday you celebrate this month, Lucy may just have a sound solution to your gift giving problems.

Real estate is cheap and buyers are still in command of the market. This year has been an interesting year in terms of the economy. Many expected real estate to have turned a corner and the unemployment rate to be falling. While manufacturing is up, corporate profits are strong, and prices are being held in check, our economy is still not firing on all cylinders yet. Let’s take a quick look at where we are as of November 30, 2010.

GDP (Gross Domestic Product)
2% - 2.50%
Inflation (Core CPI)
0% - 1.50%
Unemployment Rate
8.00% - 9.00%
Federal Funds Rate
1.00%
S&P 500 Return
8.16%
Bond Market Returns
4%

While it is shaping up to be a decent year for stock market returns, GDP and unemployment are still just barely hanging on. This prompted many to begin speculating a double-dip recession might be on the horizon. (We don’t believe that is the case.) What is most important is to remember, that things are growing. We may not be happy with unemployment and GDP, but they are slowly improving. Marrying these improvements with a reasonably priced stock market and strong corporate earnings, 2011 may also be shaping up for a pretty good year.

The amount of debt consumers took on was massive and we will see continued deleveraging for a number of years, however the savings rate is beginning to level off from its previous skyrocket. That means more money to put into the economy and if consumers feel good, that will happen.

On that note, its time to get merry! Let’s follow up on a tip I gave you in our December 2008 newsletter. Buy stock. Your $50.00 holiday gift would be worth this today:

Dow Jones $66.56 up 33.11%
S&P 500 $69.36 up 38.77%
NASDAQ $83.60 up 67.20%
Emerging Markets $92.89 up 85.77%

With return figures like that, if you were the lucky recipient, you should be quite merry. Giving a gift like this to a child or grandchild not only keeps on giving, but it teaches a great and necessary financial lesson.

Finally, each December it is also fun to take a look at the annual Christmas Price Index calculated each year by The PNC Financial Services Group. After little movement last year, the index had its 2nd greatest year of inflation in 2010, rising 9.2%. Gold rings surged 30% on rising commodities, and ladies dancing must be in high demand as their prices soared 15%. For some holiday cheer click here and waste an hour on a cold day laughing your way through an economics lesson.

So once again my calling, if you are just totally stumped on someone’s holiday gift, buy stock. Whether you have $50.00 to spend or $50,000 to spend, now is the time. Efficiently priced markets perform well independently of stellar economic returns. This is our environment and we should make the best of it. One of our missions at Mackey Advisors™ has always been for you to continually be prosperous. Whether that means giving gifts, volunteering time, hosting the family dinner, or helping a family in need make it your mission too this holiday season. A most safe and happy holiday to you and yours.

Andy Pulsfort

Partnership and Win/Win as a new Business Model

2010-12-09T13:38:00.000-05:00

The growth of Mackey Advisors has brought us to the threshold of buying our own building. Just recently, I found a fabulous, unique space and I was prepared to make the purchase, as I could see Mackey Advisors growing and thriving there. After weeks of exploration and negotiation, I sadly walked away. Negotiations involve give and take, but it seemed that Mackey Advisors was doing all the giving and the developer was doing all the taking. As I step back, I realize that fundamentally, we have different approaches to doing business.

Business has traditionally been conducted as a win/lose venture. I have something to sell to you. You want a bargain. The deal is consummated when one of the parties feel they have the upper hand. I have not conducted business in this way for many years. My attitude is one more aligned with partnership, where both parties’ needs are heard, respected, honored, and met to the fullest extent possible. Compromise is the name of the game.

If I am in need of a product or service, I want to exchange my resources with a vendor who will meet or exceed my expectations at a fair price. AND I want the vendor’s price to support their operation and to allow a profit. After all, if they do well, they will continue to provide the valuable service of being attentive to and meeting my needs.

In all of our ways of “coming together” financially, as vendors, customers, business partners, or even spouses, we can do so from a place of win/lose, or we can adopt a win/win form of “partnership.” Not partnership in the traditional sense, but partnership in the sense of mutual respect, knowing that we are both in this together, and that we both have needs that must be met. It’s still competition, but with a cooperative twist. After all, if I thrive at your expense, where does that leave me the next time I need to partner with someone to accomplish my goals?

From this place, where each party looks to find a way to support, cooperate with, and meet the needs of the other, win/win is created. You might call it “cooperative negotiation”, and it is a transformational place from which to conduct business. In this place of win/win, both parties thrive. In the place of win/lose, one or both parties are damaged by the relationship. Think of all the dysfunctions that occur around money because one person is trying to get more than the other. Think of the possibility in a world where business is conducted in a place of win/win. What world do you choose? It is yours to create!

Mackey McNeill

Go Green

2010-11-18T12:05:00.000-05:00

The weather outside may be frightful, but here are a few ways to keep the inside delightful and not break the bank. With just a few changes in your lifestyle you can save the planet by cutting down on your energy use and save a little pocket change.

Energy Saving Tips for the Winter Ahead:

Close up rooms that are not used on a regular basis, like a guest bedroom. Close the vents, turn down the thermostat, and close the door. There is no sense heating a room that is not occupied
Turn down the thermostat and use space heaters in frequently used spaces. Turning down your thermostat even 1 degree can save you 3% on your energy bill!
Minimize the use of ventilation fans. A bathroom fan can suck all the heated air out of the average home in little more than an hour.
Keep your furnace, heat pump, or other heating equipment maintained and running as efficiently as possible. Look into purchasing a maintenance agreement. In the long run it could save your family lots of money.
Ceiling fans do more than keep you cool during the summer; they can warm during the winter. It’s as simple as flipping a switch to change the direction of the blades, which pushes warm air down.
Keep the water heater temperature at 120 degrees or cooler.
When washing clothes always wash full loads and use cold water whenever possible.
We all love those long hot showers in the winter, but by cutting your shower time in half you can save 33% on hot water costs.
Let Mother Nature lend a warm hand. Open up the curtains and blinds on all South facing windows during the day and let the sunlight heat the house naturally. But be sure to close them before the sun goes down to keep the heat within the house.

Gracie Mohr

Practical Prosperity

2010-11-18T12:04:00.000-05:00

November 2010

If you feel that 2010 has breezed by quickly, you are not alone. Many Americans have had an exciting year of ups and downs in their financial lives. We soared into the year with a rising stock market and signs that housing and unemployment were on the verge of being on much better footing.

Spring and summer however began to instill doubt in many investors. As incentives expired, home sales once again became tepid and unemployment seemed stuck as census jobs began to diminish. Thankfully this fall has brought on a newfound sense of optimism and markets are moving again, housing prices are stabilizing (in many regions), and slowly but surely jobs are being created.

It is only appropriate in this season of thanks that we be thankful for the things that the stock market can’t take away from us. We can also be mindful of ways we can have a great season without compromising the savings we have set aside for our future goals and dreams.

Let’s take a trip to your local auto showroom. If your car needs to be replaced, year end is a great time. If you don’t need “2011” on the sticker, there are deals galore to be had. Many dealers are “advertizing” the invoice price (their price to purchase from the manufacturer) as the sale price. This is where negotiations start, as dealers take losses to clear the lot. If you can swallow some pride, your wallet will swallow more car.

With home sales still crawling out of the deepest of doldrums, now is still a time to buy. Government incentives may be over; however sellers are eager to do just that, sell. Consider this. Its January, its 20 degrees, streets are slushy, and the sky is gray. Homes look awful, buyers aren’t out, and some people have taken their home off the market until the weather improves. Find your new home now, before this happens. It might make for hectic holidays, but sellers do not want a house on the market through the depths of the winter. A house on the market in December is often doomed until at least April. Deals are to be had!

It is also a great time to be shopping for home items, clothing, and gift items. Sales are in abundance as demand to clear inventory increases. If your accounts can handle it, consider some of your need expenses, not just holiday gifts. If you have some less than fresh suits in the closet, a threadbare sofa, or a television that won’t tune, this is a great time to find your replacement. Prices are marked down; coupon deals are available by the thousands online; shipping is being touted as free. Take advantage of this! You might be able to replace your worn out microwave by purchasing one on sale, with an additional 25% off, shipped to your door for free. How is that for savings and convenience?

It is about being smart, not cheap. The time and money saved means more resources for what is really important. You will spend more time with family, save for that dream vacation, and have an overall sense of prosperity. If you have taken advantage of the concepts mentioned, or found others, let us know. We would love to share your stories of abundance no matter how they manifest. Your efforts might also empower confident action in your friends and family to do the same.

Here’s to you and your family for a very warm, enjoyable, and prosperous season of thanks!

Andy Pulsfort

Getting Naked

2010-11-18T12:03:00.000-05:00

I would never have purchased the book Getting Naked: A Business Fable About Shedding The Three Fears That Sabotage Client Loyalty by Patrick Lencioni, as the title does not speak to me and I was not familiar with Mr. Lencioni’s previous work. However in early November, I had the pleasure of hearing him speak. As I listened, I found myself challenged, aligned and ready to read anything Mr. Lencioni had written.

The essence of the book is about being vulnerable. Sounds simple enough. I certainly think of myself as an authentic person, willing to be real and vulnerable. Yet in business and in life, being vulnerable can be challenging for many people. Sometimes it requires that we admit to our lack of knowledge and our mistakes. It might also mean we have to tell the truth when a white lie would be much easier. It can also mean turning a client away when you are not the right fit.

In Getting Naked, Mr. Lencioni describes three fears we must walk through to deliver naked service:
Fear of Losing the Business - Worrying about losing a client's business may cause service providers and consultants to avoid the very things that ultimately engender trust and loyalty.
Fear of Being Embarrassed - Rooted in pride, this fear can lead service providers to withhold their best ideas from clients.
Fear of Feeling Inferior - To avoid feeling irrelevant or being overlooked, consultants try to achieve and preserve a high level of importance in clients' minds.
As he spoke about the fear of losing the business, I remembered my own experience:

An acquaintance called and asked me if I would work with her mother. I agreed. Both mother and daughter came to the appointment. After only fifteen minutes, I was clear that the daughter really wanted me to help her mother. And I was equally clear that what her mother really needed was to work with her local banker, someone she dearly trusted and with whom she felt safe.

At the end of our conversation, I looked at the mother, who had been sitting next to me with her arms crossed and with a scowling look on her face the entire meeting, and said, “I hear that the money you have is really important to you as a safety net. I also understand you want to use this money for special things in life, and you do not need it for everyday living. As you have spoken, it seems clear that you really trust your local banker, so I am curious as to why you would not continue to work with your banker.” Surprised, she relaxed, smiled and said, “Do you really think I should work with my banker?” “Yes,” I replied.

She told me how much she appreciated our meeting and gave me a big hug. She left my office with a clear plan on how to work with her banker. As she was leaving, she asked me what she owed me for our time today. “No charge” I replied.

The mother came to see me to make her daughter happy. I know that we could have done a great job for the mother, except that she wanted something else: to work with her banker. This meeting did not earn me any new business or revenue. Yet what I gained was priceless. I went to sleep that night knowing I had done the right thing. I had been willing to listen, to be vulnerable and say, “We are not the best fit for your needs.”

Being vulnerable does not mean throwing caution to the wind and dismissing the wisdom we have gained throughout our lifetime. But it does mean having an open mind, and speaking the truth when the truth is what serves the highest good of everyone. That is how strong, trusting relationships develop between us.

To continue learning about Mr. Lencioni’s book and to download his model, visit his web site at:

http://www.tablegroup.com/books/gettingnaked

One of the things I most love about being a successful CEO is being vulnerable enough to say “I don’t know it all”, which means I am open to the teachings and wisdom of others. That creates a world of endless possibilities! I hope you enjoy learning about Getting Naked much as I did!

Mackey McNeill

College Board Releases New College Cost Figures

2010-11-08T10:32:00.001-05:00

On October 28, 2010, the College Board released college cost figures for the 2010/2011 academic year in its annual Trends in College Pricing report.

Here are a few highlight from the reports:

Four-year public colleges (in-state students):

Tuition and fees increased an average of 7.9% to $7,605
Room and board increased an average of 4.6% to $8,535
Total average cost* for 2010/2011: $20,339

Four-year public colleges (out-of-state students):

Tuition and fees increased an average of 6.0% to $19,595
Room and board increased an average of 4.6% to $8,535
Total average cost* for 2010/2011: $32,329

Four-year private colleges:

Tuition and fees increased an average of 4.5% to $27,293
Room and board increased an average of 3.9% to $9,700
Total average cost* for 2009/2010: $40,476
*"Total average cost" includes tuition and fees, room and board, books and supplies, transportation, and other miscellaneous costs.

The report also notes the estimated average amount of grant aid and federal education tax benefits that full-time college students received for the 2010/2011 year: $6,100 for students attending public colleges and $16,000 for students at private colleges.

Smart Holiday Shopping

2010-11-02T09:57:00.002-04:00

Smart Holiday Shopping

Many people tend to forget or forgo their financial plans during the holiday season for the sake of their loved ones. However, there are a few simple financial rules that can help you get the most bang for your holiday buck.

- Set your budget before you turn the computer on! It is very easy to get carried away. Try to make a list of exactly what you are looking for before shopping. Know your limit.
- Google offers a “Google Product Search.” This search is designed to find a particular item at the lowest price, taking a variety of retailers into account. Don’t forget to factor in shipping! Sometimes a low price on an item may end up being offset by a costly shipping fee.
- Websites like http://www.retailmenot.com list coupons and web deals for thousands of retailers. You can simply search for an item or a specific store.
- Keep an eye out for “free shipping” specials. Sometimes buying two of an item and receiving free shipping will result in a lower total cost.
- Check Facebook and other social media. Smaller and local retailers often post specials and coupons that can be used to save money.
- Don’t inadvertently blow your budget by purchasing things for yourself! If you find items you want, add them to your own holiday list.
- When shopping online for out of town relatives, it is generally more cost effective to have the item shipped to them. The alternative of having it shipped to you and repackaging it results in paying shipping costs twice. Plus you can usually have it shipped wrapped as a gift with a gift receipt.
- Shop early so you have plenty of time to use the lowest cost shipping. Waiting until the last minute can cause you to need express shipping, which can be very expensive.
- Keep your recipient in mind. Check the return/restocking policy and be sure to include a gift receipt.
-And as Jody Robinson puts it, "...shop local independent businesses where your money reinvests in
the community!"

Above all, Try to remember that the holiday season isn’t all about exorbitant consumerism. Focus on family, and don’t forget your budget!

A Celebration of Abundance

2010-10-26T08:29:00.002-04:00

William McDonough, author of Cradle to Cradle, spoke at Xavier last night to a packed house, including me. I was enlivened by his message of abundance, hope, and the promise of great design.

Below are some of the key points of his talk, as I heard and recorded it.

We need a Revolution. Revolutions are based on values. We need to change the way we act based on a new set of values, not a new set of metrics. To cause a revolution, you must have 5% of the thinking population aligned with your values. We are almost there.

New design is required. When we have regulations, it is a signal of design failure. Mr. McDonough is an architect, so he focuses on design. We have to ask ourselves, "What is our design for our species?"

Renewable energy is the answer. Sunlight is the only true income that the earth has. We need to celebrate renewable energy and get on it, now.

The earth belongs to the living. Life is abundant. We need to stop thinking in terms of limits of resources and design our world to mirror nature, a truly abundant renewable system. We need change now and we need it fast.

Nature is not a tool. We are part of nature. Nature is a treasure to be celebrated, not a resource to be used.
Natures design is:
• Waste is food
• Use
• Celebrate diversity
• Anticipate evolution

We can do better than recycle, we can upcycle. Upcycling is to take something toxic and make it pure.
Values are our starting point, followed by principles, goals, strategies, tactics and actions.
Monoculture is backward. Poly-culture is forward. Build the soil.
Be an optimist.
Don’t settle for doing less bad. Instead, actively strive to do more good.

I resonated with the values comments, as when we are taking clients thru The Prosperity Experience, we start with values. Everything springs forth from values and it changes the dynamics of everything that follows. If we lived all our lives that way, what a different world it would be.

What can you do? His answer was "Follow your bliss", but do it using the principles outlined. Use nature as your guide, celebrate abundance and expect evolution.

A new discovery is like fire, it has no chance but to spread.

Go Green this Halloween!

2010-10-22T08:50:00.001-04:00

Holidays are a great way to spend time with your family & friends, but it is also a time for buying excessive decorative items & clothing you don’t need. Here are a few ways to green up your Halloween…

1. Instead of buying new costumes and decorative items this Halloween organize a swap with your friends, neighbors and family.

2. To reduce your carbon footprint take your kids trick-or-treating in your own neighborhood, or carpool if it is necessary to travel.

3. Use your plastic grocery bags, reusable shopping bags, or old pillow cases to carry the kiddo’s candy stash.

4. If you choose to give candy, try to buy locally! Check out Findlay Market, or Schneider’s Candy for some yummy Cincinnati treats. If you are looking for non-candy treats pick up some temporary tattoos, stickers, or crayons.

5. Keep Mother Earth clean and teach your kids a lesson in littering by having a separate bag to pick up rouge candy wrappers while trick-or-treating.

6. Make homemade Halloween decorations from household items like tin cans, glass jars, plastic containers and toilet paper rolls. Click here for some ideas.

7. And don’t forget the greenest decoration of all! Jack-o-lanterns!

By Gracie Mohr

The Future

2010-10-22T08:39:00.002-04:00

Mackey Advisors was pleased to host David Houle, www.DavidHoule.com for our Corporate Fall Education event. It is our goal to offer our corporate clients the best in innovative thinking so they can thrive and prosper. This is our fourth annual Fall Education Event, and David certainly delivered. Everyone left jazzed and with a bit of trepidation about the future.

After giving a review of the pace of historical change, David presents the current time as The Shift Age, a time when change becomes part of our everyday environment. In other words, the constant is change.

There are three fundamental forces in The Shift Age:
1. The flow to Global. More than ever before, we are global citizens. We are personally impacted by global events as never before due to instant access on the Internet. Our problems must be considered and solved on a Global level.
2. The flow to the Individual. The power of institutions is in decline. We no longer define ourselves by the institutions we belong to. We want our products and services personalized.
3. Accelerated Connectedness. Particularly from the rise of the use of cell phones, we can be connected to virtually anyone in the world in just a few seconds.

Change equals disruption, confusion, chaos and a tremendous opportunity for wealth creation. But to gain wealth, not lose it, we have to lead with more vision than ever.

David gave us five attributes leaders need to use and master to navigate The Shift Age with success. Below are the five attributes along with my personal take on what we as CEO’s can do now to embody them.

Adaptability
-With the speed of change increasing, every CEO needs a daily, weekly and monthly score card. Historical and trending key performance indicators are a must. Your numbers will give you guidance on the changes needed.
-Know your core business and align your marketing with that core.
-Set aside time to work ON your business. As the CEO, you cannot adapt without being aware of the big picture.

Resilience
-Lower your fixed cost, and keep your capacity strong by replacing those costs with variable costs. Design a business that can ebb and flow with change and be profitable on many levels.
-Monitor your liquidity You must know where you cash is at all times. You cannot afford to be asset rich and cash poor.

Collaborative on-going reorganization
-Transform your business. If you have a buggy whip business, you can be the best one ever and still have no market.

Trust and change of “authority”
-Social media is here to stay. Learn it, love it and use it.
-Make your product custom and personal
-Adapt to the new work force; it won’t adapt to you.

The Morph Corp
-Know the emotional content of your brand and your intellectual property value.
-Treat your business like your greatest asset (it probably is) and look at what needs to happen to maximize its return on investment.
-Look global.

If you missed this event, I encourage you to pick up David’s book, The Shift Age and make time to read and understand the new future. We cannot afford to be complacent or static.

Natalie, Karen, Andy, Grace or I would be happy to meet you at your office or for lunch to talk about these changes and how you can ready your business for the future.

As your wealth advocate, we are committed to your prosperity, now and in the future. Onward!

By Mackey McNeill

Tips For Boosting Your Credit Score

2010-09-22T10:44:00.002-04:00

In this economy, many seek to improve their financial well-being. One effective measurement of the health of your prosperity is your credit score. When seeking to improve your score, you must keep in mind that there is no “quick fix” for a problematic credit history. However, there are several things you can do to ensure that your score is headed in the right direction.

• Keep track of your credit score. Credit scores run from 300 to 850. Your personal score is based on the information that the three big credit bureaus (Equifax, TransUnion and Experian) have on file for you. Be sure to check your credit report on a regular basis as mistakes can be made that can adversely impact your financial health. http://www.AnnualCreditReport.com is a government-run website which
allows you to access your credit report annually at no cost.
• Be smart with installment plans. Your credit score is based on how much unused credit you have compared to how much you currently owe. If you are often late or very close to your maximum credit line on your account(s) this will impact your credit score in a negative way. One way to take care of this problem is to take out an installment loan to pay off your credit cards. Get a second mortgage or line of credit and take care of these cards quickly. Note: If you are committed to your financial health this is not generally considered a desirable move. However, improving your credit score and making good long-term financial decisions do not always go hand in hand.
• When in doubt, pay off the cards closest to their maximum balance. The intention with this technique is to free up as much credit as possible. A general rule of thumb is that you want to owe 30% or less than your available credit.
• Using old cards is a good credit-building practice. Paying off an older credit card and never using it again can actually harm your credit score. Regularly charge a small balance and pay it off quickly. The key here is to resist charging more than you can pay off at the end of the month.
• Don’t close accounts. Closing a card once you pay it off can actually lower your credit score. As stated above, it is better to shake the dust off that old card and charge a small amount on it, then pay it off before it collects interest.
• Increase your credit limit. Remember the rule of thumb: having a large amount of available credit does wonders for your score. The key here is to have as much difference as possible between the amount of credit available and the amount you owe.
• Take advantage of automatic payments. Often, late or missed payments are the product of a memory lapse.
• Beware late payment penalties. Even a late fee from your local library can impact your credit score.
• Don’t get sent to collections. It is more beneficial to you to pay that extra $30 fee you don’t agree with than to have your score damaged as a result of stubbornness.

Boringly Powerful

2010-08-26T15:18:00.000-04:00

In the financial planning world, we're all trying to get better at what we do, and so whenever we get together at conferences, we trade thoughts and ideas and insights.

One of the most informative stories you're likely to hear came from an advisor who told the audience that he hosts yearly client appreciation dinners. Lately, he's been grouping the guests according to how long they've worked with him. At one table, those who've retained his services for the past five years. Another, people he's been advising for ten years. There's a 15-year table, 20 years, 25 and, at the table in front, people who he's worked with for 30 years.

"As I looked over at the 30-year table," he said, "I saw people who, when we first started out, were not wealthy and never expected to be." Now they're worth millions and (more importantly) able to live their life on their own terms.

One woman in particular caught his eye, a school teacher who had come to him in the first year of her teaching career. She had gotten into the not-unusual habit of spending a little more than she made. She was in debt, and one of the first things they talked about was whether she could afford an expensive car that she'd talked to the local dealer about.

The advisor's advice, which she took, was to buy a much more affordable, serviceable vehicle. He worked with her to pay off the credit cards, and over the rest of her teaching career, he encouraged her put the maximum into her 403(b) plan and save ten percent of her income and managed her growing retirement portfolio. The change in lifestyle was not dramatic, but it had a huge impact on her life: the year of this particular dinner, she had accumulated enough that she could afford to retire and travel the world.

"What's interesting," the advisor told the audience, "is that when she told the other teachers that she was going to quit work, their first question was: how can you afford it? The other teachers," he continued, "were still in the habit of spending a little more than they made, living year-to-year, and couldn't afford to retire."

Looking at this one person at the 30-year table, sitting among other people with stories like hers, he was struck by the huge difference a small course correction and a little financial coaching can have on somebody's life over longer periods of time: the difference between squeaking by financially and retiring with millions.

His first insight (which made the audience laugh) was: "I don't charge nearly enough for my services."

His second was: even though he worked hard to manage the portfolio efficiently, her rate of return was just about equal to what the market offered. That, in itself, is surprisingly extraordinary; according to data compiled by the Morningstar fund tracking organization, mutual fund investors, on average seem to get about half of market returns--because people tend to buy hot funds right before they cool off, and sell out of underperforming funds right before they hit a hot streak. By staying consistent with the schoolteacher's investments, the advisor added far more value than you'll likely find in any kind of fancy investment strategy.

But the real point--the most important insight--is that the difference between a table full of millionaires and their peers who spent thirty years spinning their wheels is a boringly powerful formula: consistent savings habits, avoiding debt, and living within their means in a world that constantly tempts us to overspend. When you reduce all the spreadsheet analyses, forecasts and formulas down to their purest essence, this is what most financial planners are trying to help people achieve in their lives. For the people at some of those 20-30 year tables, the real challenge now is how to use their excess money to have fun, and who they want to leave the excess to at the end of their lives.

Andy Pulsfort

Sustainable Homestead Tour: August 14th

2010-08-02T15:39:00.001-04:00

Join the Kenton County Conservation District on Sat., Aug. 14, 2010 between 10 a.m. and noon to tour Red Sunflower Farm, Kenton County’s self-sustaining homestead in-the-making. Learn how to use permaculture principles and the three pillars of sustainability – reduce, reuse and recycle – to design, create, and steward Earth-friendly indoor and outdoor living spaces. Allow about an hour for your visit, with tours led by owners Mackey McNeill and Barry Schlimme. You will see the Energy Star-rated home, the gardens and the recreational area along beautiful Banklick Creek. Children are welcome. The farm is located on Webster Road. Visit www.redsunflowerfarm.com for directions (directions provided by internet map searches are not accurate). Sponsored by the Kenton Co. Conservation District. Please pre-register by contacting the Kenton County Conservation District at 859-586-7903.

Kentucky Conservation Districts are governmental subdivisions of the state, organized under Kentucky Revised Statute 262. Conservation Districts are responsible for protecting our soil, water and other natural resources. The Kenton County Conservation District was established in 1942 following a referendum of the citizens of the county. Seven locally elected officials, who serve a four-year term without pay, govern the Conservation District. The Conservation District makes technical and financial help available to reduce soil erosion, prevent water pollution, and maintain and improve the quality and productivity of our farmlands, forests, and other natural resources. Assistance is available to everyone in dealing with natural resources issues, including farmers, homeowners, businesses, schools, organizations, agencies, cities and local governments.

For information about this news release, contact Mary Kathryn Dickerson, District Coordinator for the Boone, Campbell and Kenton County Conservation Districts at 859-586-7903 or 859-635-9587 or e-mail: mary.dickerson@ky.nacdnet.net.

Weekend Getaway on a Budget

2010-07-26T08:41:00.000-04:00

How To Take a Weekend Getaway Without Breaking the Bank

Often our lives get so hectic that we realize that we could really use a little time out of our daily routine in order to reboot and reenergize for the coming week. One tried and true method of accomplishing this recharge is the weekend mini-vacation. There are however, many financial drawbacks to these types of vacations, mainly because they are often booked at the last second. Here are a few tips to help reduce the cost of your mental health weekend:

• Check the internet for deals. Simply typing in the destination name on Google or a similar search engine can yield coupons and discounts you would probably have never known about. When you find rates, do not assume that the price quoted is the best deal. Often, booking through the lodging company will result in lower rates because you can see if they will provide a better deal. For example, if you are traveling with multiple people, ask if there is some deal that includes lodging and free breakfast. There are also packages that include other activities as well.
• Travel to off-season locations. Going to the beach at the end of summer rather than smack in the middle can result in much lower prices. Remember to be flexible…the much hyped locations are the most expensive. Take the opportunity to travel somewhere a little more off the beaten path.
• When considering your accommodations, look at the cost of renting a condo in the area for a short time. While the condo may be more expensive on paper, taking the cost of eating out every meal in a hotel versus being able to cook in the condo may make a big difference in the money you spend daily.
• Be conscious of local events in your destination area. If there is a big event going on lodging may automatically be more expensive. If the event holds no interest for you, consider rescheduling to another time.
• Plan with a budget. Look at how much money you will need to spend everyday (including lodging) and add 10% for unexpected expenses. If the total is a figure that you can pay from savings without adding to your debt, then its affordable. If it’s too expensive, consider holding off until you can build enough savings to cover it.
• Getaway weekends are great, but remember, lodging, meals and activities may cost more on the weekend. Turning your weekend retreat into a mid-week mini-vacation can end up saving you some serious money.
• To estimate fuel cost for the trip, check out www.fuelcostcalculator.com or www.costtodrive.com .
• There are often perks involved with being a member of certain “clubs.” For instance, more than 100 museums, zoos and science centers offer free admission on the first weekend of every month to people who have a Bank of America ATM, credit or check card. Check out what you may have to help you hold onto your cash.
• Join a bed and breakfast club. You can end up paying only $10-$20 for a room with breakfast, in the homes of other travelers. In return you offer your spare room to people on the road.
• Pack a cooler. If you drive during a trip this will save you a considerable amount of money.
• Consider traveling to visit family and friends. This will drastically cut down on your daily expenses since relatives generally let you stay for free. Just limit your stay to three days or less.
• Plan for picnic lunch or dinner. Stopping at a grocery store to pick up picnic fare for a family is much cheaper than feeding that same family at a restaurant…and its much more fun! Find a nice spot and dine while you enjoy some local natural beauty.
Ultimately, taking a vacation, however small, is always taxing on finances. But planning smart and saving the money to go beforehand can render your last minute mini-vacation stress free and much more enjoyable for everyone!

Mid-Year Financial Check Up

2010-07-13T10:29:00.002-04:00

At this point in the year there are a few very simple steps to check that you are progressing along your financial path in a way to achieve and even exceed your expectations.

• If you do not have a financial plan in place, this is a great time to begin! There are many ways planning pays dividends. One thing to remember is that people make moment to moment decisions with their emotional brain, while long term decisions are made with their analytical brain. Some refer to it as the old brain and the new brain. Regardless of what you call it, it is a fact of how we make decisions. Without a plan, we simply move moment to moment, making decisions with our emotional brain. We later justify these decisions with logic in an attempt to convince ourselves that we were acting with our analytical brain. When you establish a financial plan you engage your analytical brain, the one that deals with the future. This brain is logical, linear and uses language. This financial plan is a great way to keep our emotional brains in check, creating accountability. For example, your financial plan calls for saving $2000 a month, but you decide to go on an impromptu vacation that lowers your savings to $500. Without a plan there is no accountability. With a plan, we can look into the mirror and say “Well, I said I wanted to be financially independent and that requires $2000 per month. I saved $500 last month, so I either need to change my plan or hold myself more closely to it.” The feedback loop between your everyday action and the plan is what makes the greatest impact on behavior. Everyone who has wealth or wants to have wealth needs a plan. Sadly, many people believe that plans are only useful for those who have already achieved wealth and this is not the case.

• Review your asset allocation. Determine whether you are comfortable with your risk/return profile.

• If you already have a financial plan, call your planner and communicate with them about any updates or changes that need to be made. Keeping your plan up-to-date and current to your life is a way to ensure accountability.

• Talk to your partner about money. Over 50% of divorce is due to money issues. Find out how your partner thinks about wealth. If you are in a partnership (married or not) that means both partners consistently require that their needs are met to the highest degree possible. That means that you need to come together and communicate about how you each see money and what you individually need. After this meeting of the minds you can then begin the compromise phase and eventually joint goals can be developed. Without this sort of clear and conscious communication, the relationship can become riddled with conflict, resentment and passive aggressive behavior, all of which are destructive not only to your wealth, but your relationship in general.

• Lastly, learn something new. Find an area of wealth that you desire to gain knowledge in. Take a class, read a book, sit in on an online seminar, find a friend who has knowledge to share, spend time researching points of interest on the internet, and so on. Make yourself a more educated buyer and you will take the knowledge gained with you on your life journey.

Corrections Unsettling, Not Unusual

2010-05-26T16:39:00.001-04:00

By Andy Pulsfort

The last month has brought an increase in volatility to stock markets and investment accounts. As global and domestic issues work out, it is important to keep a clear head and take a focused approach. The S&P 500 was up 80% from its low before the recent tumble. A correction in equities was overdue and we are experiencing that now.

One important fact is that global financial markets are in much better condition now than they were a year ago, so we did enter this recent uncertainity on much better footing.

We are 14 months into the current bull market, which is close to the average time for the first correction (17 months). It is usually found that markets begin to correct after a 60% recovery. In 2009 and early 2010 we blew past that threshold by a third again as much. This welcome, but unsustainable return suggested that any correction would be swift and perhaps a bit more significant than others.

What defines a correction? Most financial gurus consider a decline of 10% or greater as putting the market into correction mode. So far we are a bit over -12%. This can be expected from the greater than average run up in value. The success of the market recovery also caused the one clear area where this market correction differs. in that generally it takes 54 days to reach the -10% mark, and in this case it took only 27.

While no one has enjoyed seeing their earnings relinquished, it is important to remember that the activity we are seeing now is normal. Stock markets progress better when operating efficiently, which means investors making choices based on sound financial knowledge. Since 1928, 70% of the years have experienced a correction at some point.

While its important not to ignore what is occuring around the globe, it is also important to continue taking prudent approaches to investing. Many will even argue it is time to buy.

Never Lose Hope

2010-05-24T12:25:00.002-04:00

by: Harvey Mackay

In Greek mythology, Pandora opened her fabled box and let out all evils except for hope, which the Greeks considered to be as dangerous as the world's other evils. Soon they discovered that without hope to offset their troubles, humanity was filled with despair. So Pandora let out hope as well. In the myth, hope was more potent than any of the other major evils.

In modern times, we consider hope to be anything but evil. It's what gets many of us through our worst days. Lingering unemployment, foreclosures, dwindling retirement funds, businesses folding -- any of these could make a person lose hope.

Fortunately, Pandora recognized the relevance of hope -- an element that is critical to our very existence. In the current business climate, hope is what keeps us from throwing in the towel. I'm a realist, but I'm also an optimist. And while hope and optimism are not exactly the same, they are intrinsically linked.

For example, I am optimistic that the economy will eventually improve, and I am hopeful that we can learn lasting lessons from events that led to our business challenges. But I can't just wait and hope. I have to help things happen.

Hope looks at what is possible and builds on that. As former television executive and author SQuire Rushnell (yes, that's the way he spells his name) puts it, "Take the 'imp' out of impossible!" Instead, he says, read it as "I'm possible."

In one of my favorite inspirational books, Tough Times Never Last, but Tough People Do, my friend Robert Schuller offers up this observation: "Understand the power of this word: impossibility. When uttered aloud, this word is devastating in its effect. Thinking stops. Progress is halted. Doors slam shut. Research comes to a screeching halt. Further experimentation is torpedoed. Projects are abandoned. Dreams are discarded. The brightest and the best of creative brain cells turn off. In this defensive maneuver, the brain shelters itself against the painful sting of insulting disappointments, brutal rejections, and dashed hopes.

"But let someone utter the magic words, it's possible. Buried dreams are resurrected. Sparks of fresh enthusiasm flicker. Tabled motions are brought back to the floor. Dusty files are reopened. Lights go on again in the darkened laboratories. Telephones start ringing. Typewriters make clattering music. Budgets are revised and adopted. 'Help wanted' signs are hung out. Factories are retooled and reopened. New products appear. New markets open. The recession has ended. A great new era of adventure, experimentation, expansion and prosperity is born."

This advice, penned more than 25 years ago, is just as pertinent today. In fact, when you consider the advances of the past quarter century, look at how we have changed the face of businesses: Did anyone have a website in 1985? What was your cell phone number? Were you video-conferencing with your South American office with the touch of a button?

What will the next 25 years hold? I suspect that coming generations will use their technologies in ways we are just beginning to imagine are possible. I am certain that products will be developed that will make life easier, safer, and better. I have every hope that we have the brainpower and the will to do just that.

But we cannot accomplish much at all if we don't have hope. Hope is believing that every cloud has a silver lining, and when that cloud rains, it makes things grow. And then the sun comes out again.

British anthropologist Jane Goodall has spent more than 50 years conducting landmark research on wild chimpanzees and great apes and observing the tremendous power of nature to restore itself. She shares these thoughts:

"I carry a few symbols with me … to remind me of the hope that there is in the world: the human brain, with the technology that we are now working to try and live in greater harmony with the environment; the resilience of nature; the tremendous energy, commitment, excitement, and dedication of young people once they know what the problems are and we empower them to act to do something about it. And finally, the indomitable human spirit, those people who tackle impossible tasks and won't give in … that are shining inspiration to those around them."

Mackay's Moral: Hope for the best and then find a way to make it happen.

[This article appears courtesy of Early to Rise ]

Despite Market Swells, Advisors Maintain Allocations

2010-05-24T12:22:00.001-04:00

By: Donna Mitchell
May 21, 2010

The financial planners at Seattle-based Moss Adams Wealth Advisors knew how to respond to the ongoing European sovereign debt crisis, which included the punishing market dip on Thursday. Largely, they did nothing, and that was alright with their clients.

There was no dumping of equities across the board. They did not pull up stakes and hunker down in cash positions. “We don’t change our allocations based on the markets dropping or increasing,” said Sheryl Rowling, a San Diego-based partner at Moss Adams Wealth Advisors.

The company generally takes a passive approach to investing, and uses institutional mutual funds for their low costs to investors. The firm does believe in using talented managers when the markets are less efficient, Rowling said, but there was no overwhelming sense that clients were clamoring for change.

After the so-called flash crash on May 6, and leading up to the $1 trillion debt bailout extended to Greece, Moss Adams emailed letters to its clients assuring them that such market upheavals happen, and that they should not react by changing their positions. “Not surprisingly, we got zero phone calls and emails expressing concerns,” Rowling said. “They understand that the market will be volatile, and they understand that what they have is a long-term strategy to meet goals in the long run.”

Certainly, the markets have given advisors and clients enough to spur them to action. The MSCI EAFE Index, a benchmark used by many international mutual funds, was down 13% through Wednesday night. Negative currency exchanges made matters worse, says Alec Young, an international equity strategist at Standard & Poor’s. On Monday, the Euro was down 20.3% against the dollar, and by Wednesday had hit a four-year low below $1.22. Early Friday, the Euro had recovered briefly against the dollar.

“That is more currency risk than clients are used to taking,” Young said. S&P, which lowered its recommendation on international stocks from overweight to marketweight, now says clients should hold back on making new investment decisions. “We are not recommending initiating any new positions.”

Further upstream, executives at asset management firm PIMCO, based in Newport Beach, Calif., say independent advisors on a whole are not shifting their portfolios around dramatically. Instead, they are making changes on the margins. They are hedging for inflation by picking up Treasury Inflation-Protected Securities. To ensure that clients will have money on hand for short-and longer-term needs, they are buying staggered durations of money markets, Doug Ongaro, a managing director at PIMCO, said in a phone call. Ongaro is head of its registered investment advisor channel and a member of the management team for the firm’s global wealth management group. Aside from that, advisors are mainly asking a lot of questions about what their appropriate allocations should be. “They have strategic allocations and methodologies that they stick with,” Ongaro said. “They are trying to be smart about what those allocations mean, and they are trying to be more flexible, in terms of what the markets are providing.”

But some professionals, like the ones at Rockingstone Advisors, a wealth management firm that manages separate accounts for high-net-worth clients, felt they had the answers to those questions: overhaul the portfolio. Rockingstone, based in Larchmont, N.Y., slashed its European equity positions, holding on to just one stock, the AerCap Holdings [AER] the Dutch aircraft leasing company. Emerging markets positions, which used to account for 15% of its clients’ holdings, were also dumped. But it did hold on to emerging market government bonds from markets like Chile and Vietnam. It kept long positions on large-cap technology companies like Apple [AAPL] and Intel [INTC], said Brandt Sakakeeny, the firm’s managing partner.

The market was disappointed with the $1 trillion debt bailout, and felt that Greece should have been allowed to default and leave the Euro, Sakakeeny said. But Germany’s unilateral ban on naked short selling of securities two weeks later really undermined the market’s confidence in European leadership during the crisis. In that practice, a trader sells assets he or she does not own hoping to buy them back cheaper at a later date.

“I confess, we were on the long side of this,” said Sakakeeny. “We thought the initial European response would have been sufficient, but clearly it was not.”

Hiring Children to Work in the Family Business can Generate Tax Savings

2010-05-20T15:57:00.001-04:00

When times were better, many college students looking for summer employment and graduates looking for permanent jobs thought of working for the family business only as a last resort. In today's tough job market, however, the family business may be the only place for some kids to find work. As this Practice Alert points out, employing a child may generate tax-savings regardless of how the family business is organized. Although the focus is on seasonal or part-time employment, the rules in the article also apply if the child works for the family business full-time.

Income shifting. Regardless of how a business is organized, its owners may be able to turn some of their high-taxed income into tax-free or low-taxed income by employing their children. The work done by the children must be legitimate, and the amount that the enterprise pays them must be reasonable for the wages to be deductible.

RIA illustration: A business person in the 33% tax bracket for 2010 hires her 17-year-old son to help with office work full-time during the summer and part-time into the fall. He earns $5,700 during the year (and doesn't have earnings from other sources). If that $5,700 otherwise would be paid to the business person, she saves $1,881 (33% of $5,700) in income taxes at no tax cost to her son, who can use his $5,700 standard deduction for 2010 to completely shelter his earnings.

Family taxes are cut even if the child's earnings exceed his or her standard deduction. That's because the unsheltered earnings will be taxed to the child beginning at a rate of 10%, instead of being taxed at the parent's higher rate.

Kiddie tax implications. The kiddie tax applies to the child if he or she does not file a joint return for the tax year and (1) hasn't reached age 18 before the close of the tax year or, (2) his or her earned income doesn't exceed one-half of his support and the child is age 18 or is a full time student age 19-23. (Code Sec. 1(g)(2)1). Thus, employing a child age 18 or a full-time student age 19-23 could cause his or her earned income to exceed more than half of his or her support. This, in turn, could help to avoid the kiddie tax on the child's unearned income (there is no earned income escape hatch from the kiddie tax for children under age 18).

Even if the kiddie tax applies, it only causes a child's investment income in excess of $1,900 (for 2010) to be taxed at the parent's marginal rate. It has no impact, however, on the child's wages and other earned income, which can be sheltered by the child's standard deduction.

Retirement plan savings. Additional savings are possible if the child is paid more (or works part-time past the summer), and deposits the extra earnings into a traditional IRA. For 2010, the child can make a tax-deductible contribution of up to $5,000 to his or her own IRA. The business also may be able to provide the child with retirement plan benefits, depending on the type of plan it uses and its terms, the child's age, and the number of hours worked.

Tax savings via education credits. Additional intra-family tax savings in the form of education credits may be available.

For 2010, taxpayers may claim an American opportunity tax credit (AOTC)/Hope scholarship credit equal to 100% of up to $2,000 of qualified higher-education tuition and related expenses plus 25% of the next $2,000 of expenses paid for education furnished to an eligible student in an academic period. Thus, the maximum AOTC) Hope scholarship credit is $2,500 a year for each eligible student. (Code Sec. 25A(a)(1), Code Sec. 25A(i)(1))

The AOTC/Hope credit may be elected for a student's expenses for 4 tax years, and only for students who have not completed the first 4 years of post-secondary education as of the beginning of the tax year. (Code Sec. 25A(b)(2), Code Sec. 25A(i)(2))

Subject to an exception, 40% of a taxpayer's otherwise allowable AOTC/Hope credit for 2010 is refundable. No portion of the credit is refundable if the taxpayer claiming the credit is a child subject to the kiddie tax under Code Sec. 1(g) or a resident of a U.S. possessions (who instead claim the credit where they reside). (Code Sec. 25A(i)(6))

Taxpayers may elect a Lifetime Learning credit equal to 20% of up to $10,000 of qualified tuition and related expenses paid during the tax year. The maximum credit for a tax year is $2,000, regardless of the number of students. (Code Sec. 25A(a)(2), Code Sec. 25A(c)(1)) For 2010, the credit is phased out ratably for taxpayers with modified AGI from $50,000 to $60,000 ($100,000 to $120,000 for marrieds filing jointly).

Where a parent pays the college education expenses of a child whom he claims as a dependent, only the parent may claim the education credits (if otherwise eligible). However, if a parent is eligible to but does not claim a student as a dependent, the student may claim the education credit for qualified expenses paid by him or the parent. (Reg. § 1.25A-1(f)(2), Ex. 2; IRS Publication 970, 2009, pg. 15)

RIA recommendation: It may pay for a parent not to claim the student as a dependent if (1) the parent can't claim education credits because of high modified AGI, and (2) the student pays or is deemed to pay the expense and has sufficient tax liability (e.g., from summer or part-time employment) to claim the credit.

RIA illustration: Mr. and Mrs. Green have AGI of $250,000 and are in the 33% bracket. For 2010, claiming their college-freshman son as a dependent would save $1,204.50 in taxes (33% of $3,650 dependency exemption for the son). The Greens spend $24,000 on the son's AOTC/Hope-credit-eligible qualified tuition, and the son has $10,000 of taxable income from his salary working for the family business. The Greens can't claim an education credit for their child because of their high income and would be better off not claiming their son as a dependent. This way, the son may completely eliminate his $1,081.25 tax liability (10% of $8,375 taxable income, plus 15% of the $1,625 balance). He also may claim a refund for another $1,000 of the AOTC/Hope credit (40% of $2,500), so the total credit (and total savings to the child, is $2,081.25, versus the $1,204.50 the Greens would save if they claimed their son as a dependent.

RIA caution: If a parent is eligible to claim child as a dependent but doesn't, the child still cannot claim an exemption for himself.

Income tax withholding. Regardless of how the family business is organized, it probably will have to withhold federal income taxes on the child's wages. Usually, an employee who had no federal income tax liability for the prior year, and expects to have none for the current year, can claim exempt status. However, exemption from withholding can't be claimed if (1) the employee's income exceeds $750 and includes more than $250 of unearned income (such as dividends), and (2) the employee may be claimed as a dependent on someone else's return (whether or not he actually is claimed). (Instructions to Form W-4 for 2010) Keep in mind that the child probably will get a refund for part or all of the withheld tax when he or she files a return for the year.

FICA and FUTA. Employment for FICA tax purposes doesn't include services performed by a child under the age of 18 while employed by a parent. (Code Sec. 3121(b)(3)(A)) This can generate some savings for a parent who runs an unincorporated business. For example, let's say a sole proprietor who usually takes $120,000 of earnings from the business pays $4,750 to her 17-year-old child in 2010. The sole proprietor's self-employment income would be reduced by $4,750, saving her $137.75 (the 2.9% HI portion of the self employment tax she would have paid on the $4,750 shifted to her child). This doesn't take into account a sole proprietor's income tax deduction for one-half of his or her own social security taxes. That's on top of the $363.37 (.0765 × $4,750) in employee FICA that the child saves by working for Mom instead of someone else. A similar but more liberal exemption applies for FUTA, which exempts earnings paid to a child under age 21 while employed by his or her parent. The FICA and FUTA exemptions also apply if a child is employed by a partnership consisting solely of his parents.

However, there is no FICA or FUTA exemption for employing a child in an incorporated business or in a partnership that includes non-parent partners. The children are subject to the same rules that apply to all other employees.

RIA caution: The Hiring Incentives to Restore Employment Act (HIRE Act, P.L. 111-147) carried two valuable incentives for employers that boost payroll this year: a payroll tax holiday for employers that hire unemployed workers; and an up-to-$1,000 tax credit for keeping such new hires on the payroll for at least one year. Neither of these tax breaks is available for hiring a child (see Federal Taxes Weekly Alert 05/06/2010).

Source: Federal Tax Updates on Checkpoint Newsstand tab 5/20/2010

Success Through Goal Setting

2010-05-17T11:42:00.001-04:00

By Brian Tracy

Becoming an expert at goal setting and goal achieving is something that you absolutely must do if you wish to fulfill your potential as a human being. Goals enable you to do the work you want to do, to live where you want to live, to be with the people you enjoy, and to become the kind of person you want to be.

Yet, according to the best research, less than 3 percent of Americans have written goals, and less than 1 percent review and rewrite their goals on a regular basis.

Why do so few people set goals? I think there are five basic reasons:

1. They are simply not serious.

Whenever I speak with a man or woman who has achieved something remarkable, I learn that the achievement occurred after that person decided to "get serious." In other words, until you become completely determined about your goals, nothing really happens.

2. They don't understand the importance of goals.

Young men and women who begin setting goals very early in life invariably come from families in which the importance of goals is emphasized.

3. They don't know how to do it.

One of the greatest tragedies of our educational system is that you can receive 15 to 18 years of education and never once receive a single hour of instruction on how to set goals.

4. Fear of rejection. The fear of rejection is caused by destructive criticism in early childhood and is manifested, in adulthood, in the fear of being criticized by others. Many people hold back on setting worthwhile goals because they have found that every time they do set a goal, somebody steps up and tells them that they can't achieve it or that they will lose their money or waste their time.

5. Fear of failure -- and this may be the most important reason of all.

People don't set goals because they are afraid they might fail. In fact, the fear of failure is probably the greatest single obstacle to success in adult life. It can hold you back more than any other psychological barrier.

If you can overcome all of these obstacles and set well-defined goals, it will enable you to channel your efforts and focus your energy toward something that's important to you. Goal setting gives you a target to aim at and enables you to develop the self-discipline to continue working toward your target rather than becoming distracted and going off in other directions.

Let me share with you five keys that will help you do that. Each of these keys starts with one of the letters in the word "goals." Whenever you find yourself getting off the track, simply repeat the word "goals," and think about how each letter stands for a key that just might apply to your current situation.

The first letter is G, and it stands for "Get to it."

Sometimes, the only difference between a successful person and a failure is that the successful person has the courage to get started, to do something, to begin moving toward the accomplishment of a specific goal.

The second letter, O, stands for "Opportunity."

Successful people do not wait for opportunities to turn their goals into reality. They make their opportunities, because they are perfectly clear about the kind of life they wish to create. Once you have taken the time to decide exactly what you want, you will experience an endless flow of opportunities that will help move you in that direction.

The letter A stands for "Ability."

Many people hesitate to set high, challenging goals because they lack the ability to turn those goals into reality. But remember that we all lacked knowledge and experience when we started out in our careers or fields of expertise. Since you gain the ability necessary for high achievement through knowledge and experience, if you increase the speed at which you acquire both of those, you increase the speed at which you move ahead.

The letter L stands for "Leadership."

Leadership is simply the ability to get results. And you begin to get results when you accept full responsibility for yourself, for your job, and for the outputs required in your position. You demonstrate leadership when you refuse to make excuses or blame anyone or anything for the problems you are having. The acceptance of the responsibility of leadership enables you to move ahead and take action.

The final letter, S, stands for "Stay with it."

This is the resolution to persist in the face of adversity until you succeed. Between you and every goal that you wish to achieve, there is a series of obstacles. The bigger the goal, the bigger the obstacles. Your decision to be, have, and do something out of the ordinary entails facing difficulties and challenges that are out of the ordinary as well. Sometimes, your greatest asset is simply your ability to stay with it longer than anyone else.

When you look around you, you will see that all achievement is the triumph of persistence. You will see men and women everywhere who are struggling with and overcoming adversity in order to accomplish something that is important to them. And so can you.

G-O-A-L-S. That's what you have to remember. And "G" is the first thing: "Get to it!"

Join Me in Being Outraged

2010-05-13T13:50:00.002-04:00

As oil continues to pour into the Gulf of Mexico we are killing an entire ecosystem. Since April 20th the day of the explosion, I have avoided looking at the photographs. This has been my way of insulating myself from the horrors we as human beings are perpetrating on the plant and animal life in the Gulf of Mexico.

I went onto Yahoo today to find the latest oil spill news. In the top stories of the day only one pertained to the spill, it was about the Congressional hearing and holding oil executives accountable. As I searched further, ads from litigation attorney’s popped up asking if I was damaged in the oil spill. There was more news about celebrity homes, clothes, babies and cars than the Gulf story. Where are our priorities?

I asked a friend recently, “If the incident in the Gulf of Mexico is not sufficient to create a national outcry for alternative energy, what does it take?” His response was, “Personal hardship.”

As I reflect on this statement, I know he is correct. When the price of gasoline rises, it makes headline news. When we destroy an ecosystem, we turn our attention elsewhere.

Over the last few years I have altered my life substantially to reduce my carbon footprint. Most of those changes seemed awkward at first, but over time they have become part of the flow of life. I have reaped priceless rewards, in terms of my physical, mental and emotional health, in the connection with like-minded community sharing a common vision of a life lived in harmony with the natural world, and in my heightened appreciation and respect for the natural world.

What most of us do not realize is the personal power we each have to make a difference. We cannot change our lives overnight to be oil independent. Yet, we can make simple changes that add up.

Tonight, I will walk out to my raised beds and pick greens for my salad. The average item on a grocery store shelf has traveled 1500 miles to get there. Add to that the average 10 miles a person drives to get to the store, and my simple act of planting a few lettuce seeds, will save 1510 miles. Not bad for a little lettuce seed.

Don’t like to garden? Join a local CSA (Community Supported Agriculture) or buy from your local farmers market.

What is so incredible about focusing on sustainable living is that it produces so many other unintended positive outcomes. For example, buying local also means the money stays in the local economy. Eating local means your food has a higher nutritional content, so your physical health improves. As your physical health improves, your mental acuity increases. As you slow down your life you spend more time in community, creating heart connection with others, enhancing your emotional health. There are benefits for your pocketbook as well, as most things that reduce carbon footprint save you money.

Here are some simple ways you can make a difference in your carbon footprint today:

Drive a smaller car or hybrid. Car pool or take public transit to work or school. If you live close enough to work or school try biking. It lessens your dependence on oil and is a nice workout.

Unplug your appliances when not in use, your TV, microwave, electric blanket, etc use electricity even if they are not on. Unplug, be green and save some money.

Turn down your hot water heater a few degrees.

Get a clothes line. Hanging your clothes out can save you as much as 6% on your electric bill.

Plant your favorite vegetable. Front yard, back yard, etc, pick a place and turn it into a place of bounty in your yard.

Grow your own herbs. Most are perennial and will come back each year. They produce large bounties and are easily dried by simply hanging them upside down in a well ventilated area.

Join us the 3rd Sunday of any month for our monthly pot luck and farm tour. You’ll get even more ideas. If you live out of town, we have 2 guest rooms ready and waiting. Learn more at www.RedSunflowerFarm.com

Start or join a transition movement in your community, www.transitionus.org

Green your portfolio, there are many green screened investments available. Learn more at www.SocialInvest.org , call Andy or I at 859-331-7755 or e mail me at Mackey@CultivatingProsperity.com

What is happening in the Gulf of Mexico isn’t about someone else, somewhere else, it is about you and me. Let others do the finger pointing. Use your energy for personal change. Join me in being outraged, step up and make a difference, in your own life and in the future generations to come.

Do you get a payroll tax holiday and retention credit for hiring your spouse?

2010-05-03T16:51:00.001-04:00

Practice Alert

The Hiring Incentives to Restore Employment Act (HIRE Act, P.L. 111-147) carried two valuable incentives for employers that boost payroll this year:

· a payroll tax holiday for employers that hire unemployed workers;

· and an up-to-$1,000 tax credit for keeping such new hires on the payroll for at least one year.

Practitioners have raised the question as to whether these tax breaks apply if a business person hires his or her formerly unemployed spouse. As this Practice Alert explains, the answer in many instances will be “yes.”

Background. Under Code Sec. 3111(d), as amended by HIRE Act Sec. 101(a), qualified employers are exempted from paying the employer 6.2% share of Social Security (i.e., OASDI) employment taxes on wages paid in 2010 to a newly hired qualified individual. This is an individual who:

1. begins employment with the employer after Feb. 3, 2010 and before Jan. 1, 2011;

2. certifies by signed affidavit, under penalties of perjury, that he or she hasn't been employed for more than 40 hours during the 60-day period ending on the date employment begins with the qualified employer;

3. does not replace another employee of the employer (unless that other employee left voluntarily or for cause); and

4. is not related to the qualified employer in a way that would disqualify the individual for the work opportunity tax credit (WOTC) under Code Sec. 51(i)(1). (Code Sec. 3111(d)(3))

The payroll tax relief applies only for wages paid with respect to employment beginning on Mar. 19, 2010 (the day after the HIRE Act was signed into law by the President) and ending on Dec. 31, 2010. The payroll tax holiday doesn't apply for wages paid during the first calendar quarter of 2010. Instead, the amount by which the qualified employer's OASDI tax for wages paid during the first calendar quarter of 2010 would have been reduced if the payroll tax holiday had been in effect for the first quarter is treated as a payment against the employer's OASDI tax for the second calendar quarter of 2010.

A qualified employer is any employer other than the U.S., a state, or a political subdivision of a state (i.e., a local government, or an instrumentality). (Code Sec. 3111(d)(2)(A)) However, a public institution of higher education is a qualified employer even though it is a government instrumentality. (Code Sec. 3111(d)(2)(B)) A qualified employer may elect, in the manner that IRS requires, not to have the payroll tax holiday apply. (Code Sec. 3111(d)(4)) Unless the employer elects out of the payroll holiday, wages paid or incurred to a qualified individual won't qualify for the WOTC during the one-year period beginning on the date that the qualified employer hired the individual. (Code Sec. 51(c)(5))

Popping the question. Does the payroll tax holiday apply if the taxpayer (e.g., a sole proprietor or someone operating a business as a corporation) hires a spouse as a bona fide employee? Although it's not clear that Congress intended this result, the answer is “yes,” assuming the conditions highlighted above are met.

Reasoning. Under condition (4), above, an individual cannot be an “individual described in Code Sec. 51(i)(1) (applied by substituting 'qualified employer' for 'taxpayer' each place it appears.” The fact is that while Code Sec. 51(i)(1) casts a very wide net in preventing related parties from qualifying, it does not include a spouse within its rule.

The portions of Code Sec. 51(i)(1) that are most likely to be relevant (i.e., situations other than those dealing with estates and trusts) are as follows (applied by substituting 'qualified employer' for 'taxpayer'):

· Under Code Sec. 51(i)(1)(A), an individual can't bear any of the relationships described in Code Sec. 152(d)(2)(A) through Code Sec. 152(d)(2)(G) to (1) the qualified employer, or, (2) if the qualified employer is a corporation, to an individual who owns, directly or indirectly, more than 50% in value of the outstanding stock of the corporation, or, (3) if the qualified employer is an entity other than a corporation, to any individual who owns, directly or indirectly, more than 50% of the capital and profits interests in the entity, (determined with the application of Code Sec. 267(c)).

· Under Code Sec. 51(i)(1)(C), an individual can't be a dependent (described in Code Sec. 152(d)(2)(H)) of the qualified employer, or, if the qualified employer is a corporation, of an individual described in Code Sec. 51(i)(1)(A).

Code Sec. 152(d)(2)(A) through Code Sec. 152(d)(2)(G) enumerate the taxpayer's children or their descendants, siblings or step-siblings, parents or a parent's ancestor, step-parents, nephews, nieces, uncles, or aunts, and in-laws. They don't mention a spouse. Also a person's spouse isn't his or her dependent, so Code Sec. 51(i)(1)(C) doesn't apply. So there's no rule in the Code barring the payroll tax holiday from being claimed for a person just because he or she is a spouse.

This conclusion is bolstered by IRS's recently issued Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, which newly hired, but formerly unemployed, workers must sign (or its equivalent) in order for their new employers to treat the workers as qualified individuals (see Federal Taxes Weekly Alert 04/15/2010). The brief instructions to the Form essentially restate the Code Sec. 51(i)(1) restrictions and don't mention spouses. If IRS thought spouses shouldn't qualify for the payroll tax holiday, presumably it would have said so.

Retention credit applies, too. HIRE Act Sec. 103 also provides employers with an up-to-$1,000 tax credit for retaining qualified individuals, as defined for payroll tax holiday purposes. The workers must be employed by the employer for a period of not less than 52 consecutive weeks, and their wages for such employment during the last 26 weeks of the period must equal at least 80% of the wages for the first 26 weeks of the period. If a spouse is a qualified individual under the payroll tax holiday rules, and works for the requisite period of time, then the retention credit also should apply to him or her.

RIA caution: Depending on family relationships, there may be situations where a spouse will not qualify for either HIRE Act tax break. For example, if Dad owns 60% of a corporation, and Son who runs the company owns the 40% balance, then the corporation can't claim the payroll tax holiday or the retention credit if it hires Son's wife. In this situation, the wife is treated as “related” to a more than 50% owner of the qualified employer and therefore is ineligible under (Code Sec. 3111(d)(3)(D) and Code Sec. 51(i)(1)(A).

Source: Federal Tax Updates on Checkpoint Newsstand tab 5/3/2010

5 Most Important Money Lessons for Kids

2010-05-03T16:26:00.002-04:00

1. Life isn’t about stuff. The most important lesson a child needs to learn to lead a healthy money life is that stuff isn’t the most important thing. A great way to teach this to your children is to lead by example, and have conversations with your kids about what their perceptions of rich and poor are. It’s sometimes shocking what comes out. Another way to instill this important principle is by giving gifts for birthdays & other special events that aren’t things but memories to make. A family play day at a park, or hosting a sleep over for friends.

2. Money is earned! Kids have a completely abstract concept of money. They need or want something and money appears to acquire whatever that something might be. Instead of just purchasing something for your child make them earn it. Everyday they make their bed, take out the trash, or put their toys away they earn money toward their new toy.

3. You can’t always get what you want. Instant gratification is not just a problem for children. Many adults have to deal with it too. This is why so many people end up with mountains of credit card debt. Instead of buying them a new video game when they see it in the store make them wait a week and see if they still really want it. Most of the time they have already forgotten about it.

4. Save for big ticket items. Too many adults rely on credit to buy a new big screen TV. If they want a new bike have them save for it. Get your child a savings account. ING has a free one online. See if they will start saving on their own, and as an extra incentive match what they save. Every month sit down and look at how much they have saved, how close they are to their goal and how much interest they have earned.

5. Have a rainy day fund. My mother always said, “keep a quarter in your pocket so you can call home.” This is obsolete now, but the idea is still important. This is a hard lesson to teach children since we want to make sure our children are taken care of. But next time the unexpected happens, the air conditioner breaks or the car needs repaired sit your children down and talk to them about how you financially deal with the unexpected.

By: Gracie Mohr

Goldman Sachs vs. SEC - Missing the Point - It's About Fiduciary Duty To Your Clients - R.W. Roge - April 22, 2010

2010-04-25T15:06:00.001-04:00

Clearly this is the most critical issue in delivery of financial services today. Mainly because the public does not understand the regulatory differences in advisors. Education yourself about the fiduciary standard before you engage a financial professional.

Goldman Sachs vs. SEC - Missing the Point - It's About Fiduciary Duty To Your Clients - R.W. Roge - April 22, 2010

Free paper recycling in Cincinnati

2010-04-16T22:16:00.001-04:00

Cintas is sponsoring free document shredding in honor of Earth Day. I have a huge pile and thought maybe you would also have piles to shred. Pass the word to anyone you think might like to participate – Cintas is working to shred 400 tons of paper to celebrate Earth Day’s 40th anniversary on April 22.

For every ton of paper recycled, you help save 17 trees, 7000 gallons of water, 4000 kw of energy and 3 cubic yards of landfill space.

Here’s where to go:

April 17 10am – 2pm Ft. Wright Police Dept 409 Kyles Lane, Ft. Wright
April 17 10am – noon Cinti Financial Corp 6200 S Gilmore Road, Fairfield
April 24 7:30am – 5pm Miami Twshp Civic Center; 6101 Meijer Drive Miami Township

Just for Laughs

2010-04-12T12:40:00.003-04:00

These were sent to us by one of our clients with a great sense of humor. Hope you enjoy.

Simple Wisdom

2010-04-07T09:28:00.001-04:00

by Spencer Sherman & Brent Kessel

It happened again last week. I met a well educated investor (a Master's degree in finance) who knew better than to put all his eggs into one basket--but did anyway. He lost 30 years worth of accumulated savings and his residence.

I meet people regularly who invest in complicated and undiversified strategies and deals in the hopes of retiring early or beating the market. While most of these investors have a lot of formal financial education, it is common sense and bringing awareness to our fear and greed that creates financial success. If we all just followed these adages, we would eliminate investment stress, avoid cotastrophe, and most likely make more money:

Don't put all your eggs into one basket.

Invest for the long-term.

Diversify. (Unless it's a very diversified index mutual fund, put no more than 2%-5% of all your money into any one investment, one piece of real estate, one stock)

Start investing on an automatic monthly basis even if you're over your head in credit card and other debt. Start with $50 per month for example. Don't wait for your finances to improve--take advantage of the magic of compounding for a longer stretch of time by acting today rather than tomorrow.

Simple. And rarely followed. But if you want to be one of the few and NOT follow the herd, follow these rules and enjoy financial freedom.

Investing is an inside game

2010-03-24T21:54:00.003-04:00

I read this March 20, 2010 post on The Research Puzzle blog with interest. It explains very well why investing is an inside game.

Investing for you is about your goals, your cash flow, your dreams and your financial status. Read and enjoy

http://researchpuzzle.com/

Investing Luck vs. Skill

2010-03-24T16:04:00.003-04:00

Friends,

At Mackey Advisors™ we are always looking for ways to keep our clients educated on what we do and why we do it. I have included this latest piece for your enjoyment.

Thanks,

Andy Pulsfort

Investing Luck vs. Skill

Periodically, we hear about this or that person who called the market top, who predicted a major downturn--or, sometimes, a mutual fund manager who managed to beat the market by some astronomical amount. Last year was no exception: for example, the Encompass Fund was up 122.05% in 2009 according to Morningstar--which, of course, means that its investors would have doubled their money if they'd invested at the start of the year and held on for the next 12 months. The Birmiwal Oasis Fund was up 102.94% last year.

These people are geniuses, right?

Usually not. The simple law of averages says that somebody, somewhere, will have a streak of correct predictions or hold, for a year, maybe two, stocks that dramatically outperform the markets. Certain unsavory people who hung out at race tracks knew how to make money at this game; they would go around the track telling some people that Horse A was going to win the next race, others that Horse B was a shoo-in, and still others to put their money on Horses C, D and E.

Then, if horse D won the race, the unsavory tout would go back to the people for whom he had "correctly" predicted the outcome, and offer to give them more "inside tips" for a generous fee.

To see how the normal patterns of luck can bring about even the most extraordinary results, imagine that instead of managing investment portfolios, we were talking about people who flipped coins in a huge nationwide contest. On Day One of the contest, 300 million people flip their coins, and those whose coin comes up tails are out of the contest. By the law of averages, 150 million (or so) people will be able to play the game on Day Two, and after they flip, the number of contestants will have shrunk to 75 million.

Then come Day Three (37.5 million left), Day Four (18.75 million), Day Five (9.4 million)--and by the end of three weeks, the amateurs have been weeded out, and there are only 144 people left. In newspaper accounts, these are all described as remarkable coin flippers who somehow managed to throw a coin in the air and have it land on heads 21 consecutive times. This is exactly what would be predicted by the law of averages, but now, suddenly, reporters in each city are interviewing their local champion, asking about their "winning techniques." And, of course, the local champions are starting to believe in their own remarkable coin-flipping skills, telling their friends and the press about their wrist movements and the preferred height of the coin toss.

The next day, only 72 of these highly-skilled coin flippers are left, and the following day, just 36, and as the number diminishes, as the number of consecutive flips goes up, the media attention becomes frenzied. Eighteen, then nine, then four finalists are flown to Hollywood for the nationally-televised coin flipping face-off, and all America believes in the skills that allowed these remarkable people to consistently cause a coin to land with the head of the coin facing up.

Finally, two flips later (maybe three), there is a winner--and who can seriously believe that this person managed to get a coin to land on heads 29 or 30 consecutive times without a tremendous amount of coin-flipping skill?

When one or two of the 8,000 mutual funds break dramatically from the pack in any one year, this is no more than what the law of averages would predict. Yet investors flock into these funds, believing in their stellar investment skill. The next time these winning managers confidently flip the coin, it just as likely turns up tails, the performance falls back into the pack, and experts call it "mean reversion," which just means that the luck ran out and the statistics caught up with the process. Investors put their money in too late to catch the first remarkable flip, but just in time to catch the fall, the return to normalcy. It is the oldest trap in the book, and it sucks away millions, perhaps billions, from consumer retirement portfolios.

There ARE excellent fund managers, but you rarely see them break from the pack, and if they do, they will be the first to tell you that there was as much luck as skill involved. Sometimes, a great manager will experience a terrible year, for the same reasons. Investing is a game where you take the luck that is offered you, and inevitably you give something back when the luck runs out. Those investors who are diligent and careful and humble in the face of this reality, who don't chase the hot coin flipper right after a great run, will usually win more often than they lose--because, unlike a casino, the odds in the investment markets have, over most historical periods, tended to favor the patient investor. The markets go up more than they go down, and so you can have more than your share of coin flips going your way with no more skill than the patience to stay invested.

Advisory services offered through Mackey Advisors, LLC, a registered investment advisor.

5 Credit Score Killers

2010-03-24T14:22:00.002-04:00

By: Blake Ellis
CNNMoney.com

As banks shy away from making risky consumer loans, a mediocre credit history just won't cut it anymore. To get the best rates on mortgages, credit cards and auto loans, you need a killer score.

Your FICO score is a numerical measure of your creditworthiness that ranges from 300 to 850. While there are a few different credit scoring systems available, it's the FICO score, created by the Fair Isaac Corporation, that most lenders look at when they check your credit.

Lenders have already raised their standards by about 20 to 40 points this year, according to Barry Paperno, consumer operations manager at FICO. So while a score in the 720 to 740 range would have gotten you the best rates on a mortgage in the past, you now need a score of at least 760 to snag the best loans.

"Requirements are higher than in the past so you're going to have to be more diligent this year," said Paperno.

FICO focuses on five categories when calculating your score: How much debt you have, your payment history, your debt utilization ratio (how much you owe in relation to your credit limits), how far back your credit history goes and your mix of various types of credit.

Here are a few things that can wreak havoc on your score and wreck your chances of getting an affordable loan:

1. Making late payments

A single late payment on a credit card or other loan could ding your score by as much as 110 points if you already had a great score and 80 points for someone with an average score. So the best thing you can do to improve your score is make payments on time.

"This continues to be the number one reason scores are lower," said Paperno. "In addition to being a heavily weighted part of your score, if you're late on a payment, it's going to continue to appear on your credit report for about seven years."

If you've made mistakes in the past, you can't change them, but you can outlive them. The longer it's been since you were late on a payment, the less of an impact it will have on your score, but "your history does follow you," said Paperno.

Since payment history accounts for about 35% of your total score, it's really important to start paying on time.

2. Carrying a big balance

Your debt utilization ratio accounts for almost 30% of your score. So carrying too much debt will not only cost you a fortune in interest, it can also destroy your credit rating.

"The best thing to do is pay your bills on time and pay as much of the balance as possible to try to keep your debt utilization ratio down and raise your credit score," said Bill Hardekopf of Lowcards.com.

As part of the CARD Act that went into effect last month, credit card issuers must now include a chart with your bills that shows how long it will take to pay off your balance if you only make the minimum payments. The chart will also display how much you need to pay each billing cycle in order to completely pay off your balance in three years.

Hardekopf thinks the new information will be a huge wake-up call for most consumers, and even he was alarmed by the calculations on his own statement.

"It was shocking," he said. "This is going to have a dramatic effect on how much people are paying when they see it in black and white, and will be a positive move for their credit score."

3. Closing a credit line

As credit card companies jack up interest rates and add inactivity fees to compensate for lost revenues, it's tempting to just close your accounts.

But closing a line of credit could impact your debt to utilization ratio, said Hardekopf.

For example, if you have two credit cards with a limit of $1,000 each and a $400 balance on one card, closing the other account will immediately double your debt to utilization ratio from 20% to 40%.

But the negative effect varies greatly. Closing one card could have a very small impact if you have lots of other high-limit cards.

You can also counteract some of the impact by opening up a new line of credit. But beware: that can also impact your score.

4. Opening a credit line

"When you open a new account, you'll knock some points off your score," said Paperno. "The reason why is that the people who open new accounts tend to be of a higher risk level immediately after opening a new account."

In order to open a new account, a credit card company will need to check your credit, and a typical "hard" inquiry like this will lower your score by about five points, plus the cost of opening a new line of credit typically ranges from five to 15 points.

But the temporary ding only lasts about six months, so if you're in a stable financial situation, the score reduction could be worth it, said Paperno.

"You can look at it as a long-term strategy and go in with the idea that you might lose a few points now but in the long run you might be better off because you'll have more credit available," he said.

5. Defaulting

Defaulting on a loan is the single worst thing you can do for your credit, said Rex Johnson, founder of credit union consulting firm Lending Solutions Consulting. And given the down economy, more people are damaging their credit scores through foreclosures, credit card charge offs and bankruptcies.

A home foreclosure, for example, might dock about 200 points off your score and a short sale could cost you around 80 to 90 points, said Johnson. Declaring bankruptcy could lower a good score of 750 by up to about 250 points, Johnson said.

While most negative information stays on your report for seven years (bankruptcies can stay on for 10 years), it's never too late to start rebuilding your credit.

"People have been hit hard by the economy and those who had really good scores now have scores in the 500s and want to just give up," Johnson said.

But certain good behaviors like making on-time payments, taking out a small loan and paying it off and keeping a low balance, can get your score back up in the mid-600s or low 700s in a little over 2 years, said Johnson.

Tax Provisions in the Health Care Act

2010-03-23T13:36:00.002-04:00

From the Journal of Accountancy

MARCH 22, 2010
The Patient Protection and Affordable Care Act (H.R. 3590), passed by Congress on Sunday, contains numerous tax provisions.

The Reconciliation Act of 2010 (H.R. 4872), which also passed the House on Sunday, contains many other tax items, including extending the general exclusion for reimbursements for medical care expenses under an employer-provided accident or health plan to any child of an employee who has not attained age 27 as of the end of the tax year and codifying the economic substance doctrine. The reconciliation bill has not yet passed the Senate.

Among the many tax provisions in the Patient Protection and Affordable Care Act are the following:

Premium Assistance Credit

The act provides for refundable tax credits that eligible taxpayers can use to help cover the cost of health insurance premiums for individuals and families who purchase health insurance through a state health benefit exchange (which each state is required to establish under section 1311 of the act). Under new IRS § 36B, an eligible individual will enroll in a plan offered through an exchange and report his or her income to the exchange. Based on the information provided to the exchange and his or her income, the individual will receive a premium assistance credit. Treasury will pay the premium assistance credit amount directly to the insurance plan in which the individual is enrolled. The individual will then pay to the plan in which he or she is enrolled the dollar difference between the premium tax credit amount and the total premium charged for the plan.

Eligibility for the premium assistance credit is based on the individual’s income for the tax year ending two years prior to the enrollment period. The premium assistance credit is available for individuals (single or joint filers) with household incomes between 100% and 400% of the federal poverty level (for the family size involved) who do not received health insurance through an employer or a spouse’s employer. The credit amount is determined by the Secretary of Health and Human Services, based on the percentage of income the cost of premiums represents, rising from 2% of income for those at 100% of federal poverty level for the family size involved to 9.5% of income for those at 400% of federal poverty level for the family size involved.

The premium assistance credit will be available for years ending after Dec. 31, 2013.

Small Business Tax Credit

The act provides tax credits for small businesses and individuals designed to increase levels of health insurance coverage, as part of the IRC § 38 general business credit. Small businesses—defined as businesses with 25 or fewer employees and average annual wages of less than $40,000—would be eligible for a credit of up to 50% of nonelective contributions the business makes on behalf of their employees for insurance premiums (new IRC § 45R). Tax-exempt organizations would get a 35% credit against payroll taxes.

Employers with 10 or fewer employees and average wages of less than $20,000 would get 100% of the credit; it would be phased out, up to the 25-employee limit. The $20,000 average annual wages figure will be indexed for inflation after 2013. Five-percent owners under the section 416 top-heavy plan rules and 2% S corporation shareholders are not included in the definition of employee, but leased employees are counted.

This credit is available for tax years beginning after Dec. 31, 2009.

Excise Tax on Uninsured Individuals

The act creates new IRC § 5000A, which requires U.S. citizens and legal residents to maintain minimum amounts of health insurance coverage. Minimum essential coverage includes various government-sponsored programs, eligible employer-sponsored plans, plans in the individual market, grandfathered group health plans and other coverage as recognized by the Secretary of Health and Human Services in coordination with the Secretary of the Treasury. This requirement would not apply to individuals who are incarcerated, not legally present in the United States or maintain religious exemptions.

Individuals who fail to maintain minimum essential coverage will be subject to a penalty equal to $750. The fee for an uninsured individual under age 18 is one-half of the adult fee. The total household penalty may not exceed 300% of the per-adult penalty.

The penalty amount will be phased in over the years 2014–2016 and will be indexed for inflation after 2016. However, liens and seizures are not authorized to enforce this penalty, and noncompliance will not be subject to criminal penalties.

This provision is effective for tax years beginning after Dec. 31, 2013. The reconciliation bill if enacted would change the amount of the penalty.

Tax-Exempt Health Insurers

The act provides for a program administered by the Department of Health and Human Services that will foster the creation of qualified nonprofit health insurance issuers to offer health insurance. Insurers receiving federal grants or loans under the program would be exempt from federal tax (under IRC § 501(a)) for periods when the insurer complies with the terms of the program.

Reporting Requirements

The act requires insurers (including employers who self-insure) that provide minimum essential coverage to any individual during a calendar year to report certain health insurance coverage information to both the covered individual and to the IRS (new IRC § 6055).

The information required to be reported includes: (1) the name, address, and taxpayer identification number of the primary insured, and the name and taxpayer identification number of each other individual obtaining coverage under the policy; (2) the dates during which the individual was covered under the policy during the calendar year; (3) whether the coverage is a qualified health plan offered through an exchange; (4) the amount of any premium tax credit or cost-sharing reduction received by the individual with respect to such coverage; and (5) such other information as the Secretary may require.

This requirement is effective for calendar years beginning after 2013.

Medical Care Itemized Deduction Threshold

The threshold for the itemized deduction for unreimbursed medical expenses is increased from 7.5% of AGI to 10% of AGI for regular income tax purposes. This is effective for tax years beginning after Dec. 31, 2012, except that for 2013, 2014, 2015 and 2016, if either the taxpayer or the taxpayer’s spouse turns 65 before the end of the tax year, the increased threshold does not apply and the threshold remains at 7.5% of AGI.

Cafeteria Plans

The act makes premiums for coverage under a qualified health plan offered through an exchange a qualified benefit under a cafeteria plan. This provision applies only to cafeteria plans established by a small employer that elects to make all its full-time employees eligible for one or more qualified plans offered in the small group market through an exchange.

This provision is effective for tax years beginning after Dec. 31, 2013.

Additional Hospital Insurance Tax on High-Income Taxpayers

Under the act, the employee portion of the hospital insurance tax part of FICA, currently amounting to 1.45% of covered wages, is increased by 0.9% on wages that exceed a threshold amount. The additional tax is imposed on the combined wages of both the taxpayer and the taxpayer’s spouse, in the case of a joint return. The threshold amount is $250,000 in the case of a joint return or surviving spouse, $125,000 in the case of a married individual filing a separate return, and $200,000 in any other case.

For self-employed taxpayers, the same additional hospital insurance tax applies to the hospital insurance portion of SECA tax on self-employment income in excess of the threshold amount.

The provision applies to remuneration received and tax years beginning after Dec. 31, 2012.

Employer Responsibility

Under new IRC § 4980H, an “applicable large employer” that does not offer coverage for all its full-time employees, offers minimum essential coverage that is unaffordable, or offers minimum essential coverage that consists of a plan under which the plan’s share of the total allowed cost of benefits is less than 60%, is required to pay a penalty if any full-time employee is certified to the employer as having purchased health insurance through a state exchange with respect to which a tax credit or cost-sharing reduction is allowed or paid to the employee.

An employer is an applicable large employer with respect to any calendar year if it employed an average of at least 50 full-time employees during the preceding calendar year.

An applicable large employer who fails to offer its full-time employees and their dependents the opportunity to enroll in minimum essential coverage under an employer-sponsored plan for any month is subject to a penalty if at least one of its full-time employees is certified to the employer as having enrolled in health insurance coverage purchased through a state exchange with respect to which a premium tax credit or cost-sharing reduction is allowed or paid to such employee or employees. The penalty for any month is an excise tax equal to the number of full-time employees over a 30-employee threshold during the applicable month (regardless of how many employees are receiving a premium tax credit or cost-sharing reduction) multiplied by one-twelfth of $2,000.

An applicable large employer who offers, for any month, its full-time employees and their dependents the opportunity to enroll in minimum essential coverage under an employer-sponsored plan is subject to a penalty if any full-time employee is certified to the employer as having enrolled in health insurance coverage purchased through a state exchange with respect to which a premium tax credit or cost-sharing reduction is allowed or paid to such employee or employees.

This provision is effective for months beginning after Dec. 31, 2013.

Fees on Health Plans

Under new section 4375, a fee is imposed on each specified health insurance policy. The fee is equal to two dollars (one dollar in the case of policy years ending during fiscal year 2013) multiplied by the average number of lives covered under the policy. The issuer of the policy is liable for payment of the fee.

For any policy year beginning after September 30, 2014, the dollar amount is equal to the sum of: (1) the dollar amount for policy years ending in the preceding fiscal year, plus (2) an amount equal to the product of (A) the dollar amount for policy years ending in the preceding fiscal year, multiplied by (B) the percentage increase in the projected per capita amount of National Health Expenditures, as most recently published by the Secretary before the beginning of the fiscal year.

The issuer of the policy is liable for payment of the fee.

In the case of an applicable self-insured health plan, new IRC § 4376 imposes a fee equal to two dollars (one dollar in the case of policy years ending during fiscal year 2013) multiplied by the average number of lives covered under the plan. For any policy year beginning after September 30, 2014, the dollar amount is equal to the sum of: (1) the dollar amount for policy years ending in the preceding fiscal year, plus (2) an amount equal to the product of (A) the dollar amount for policy years ending in the preceding fiscal year, multiplied by (B) the percentage increase in the projected per capita amount of National Health Expenditures, as most recently published by the Secretary before the beginning of the fiscal year. The plan sponsor is liable for payment of the fee.

The fee is effective with respect to policies and plans for portions of policy or plan years beginning on or after Oct. 1, 2012.

Excise Tax on High-Cost Employer Plans

New IRC § 4980I imposes an excise tax on insurers if the aggregate value of employer-sponsored health insurance coverage for an employee (including, for purposes of the provision, any former employee, surviving spouse and any other primary insured individual) exceeds a threshold amount. The tax is equal to 40% of the aggregate value that exceeds the threshold amount. For 2018, the threshold amount is $10,200 for individual coverage and $27,500 for family coverage, multiplied by the health cost adjustment percentage (as defined in the act) and increased by the age and gender adjusted excess premium amount (as defined in the act).

The provision is effective for tax years beginning after Dec. 31, 2017.

Tax on HSA Distributions

The additional tax on distributions from a health savings account (HSA) or an Archer medical savings account (MSA) that are not used for qualified medical expenses is increased to 20% of the disbursed amount, effective for disbursements made during tax years starting after Dec. 31, 2010.

Tax on Indoor Tanning Services

The act imposes a 10% tax on amounts paid for indoor tanning services (new IRC § 5000B). Like a sales tax, the tax will be collected from the person tanning when payment for the tanning services is made. The provision applies to services performed on or after July 1, 2010.

Flexible Spending Account

The act mandates that the maximum amount available for reimbursement of incurred medical expenses of an employee, the employee’s dependents, and any other eligible beneficiaries with respect to the employee, under a health flexible spending account for a plan year (or other 12-month coverage period) must not exceed $2,500. The provision is effective for tax years beginning after Dec. 31, 2012.

SIMPLE Cafeteria Plans for Small Business

The act establishes a SIMPLE cafeteria plan for small businesses. Under the provision, an eligible small employer is provided with a safe harbor from the nondiscrimination requirements for cafeteria plans as well as from the nondiscrimination requirements for specified qualified benefits offered under a cafeteria plan, including group term life insurance, benefits under a self insured medical expense reimbursement plan, and benefits under a dependent care assistance program. Under the safe harbor, a cafeteria plan and the specified qualified benefits are treated as meeting the specified nondiscrimination rules if the cafeteria plan satisfies minimum eligibility and participation requirements and minimum contribution requirements.

The provision is effective for tax years beginning after Dec. 31, 2010.

Expansion of Adoption Credit, Adoption Assistance Programs

For 2010, the maximum adoption credit is increased to $13,170 per eligible child (a $1,000 increase). This increase applies to both non-special needs adoptions and special needs adoptions. Also, the adoption credit is made refundable. The new dollar limit and phase-out of the adoption credit are adjusted for inflation in tax years beginning after Dec. 31, 2010. Also, the scheduled sunset of EGTRRA provisions relating to the adoption credit is delayed for one year (i.e., the sunset becomes effective for tax years beginning after Dec. 31, 2011).

For adoption assistance programs, the maximum exclusion is increased to $13,170 per eligible child (a $1,000 increase). The new dollar limit and income limitations of the employer-provided adoption assistance exclusion are adjusted for inflation in tax years beginning after Dec. 31, 2010. The EGTRRA sunset of provisions relating to adoption assistance programs is also delayed for one year (i.e., the sunset becomes effective for tax years beginning after Dec. 31, 2011).

Charitable Hospitals

The act establishes new requirements applicable to section 501(c)(3) hospitals, regarding conducting a community health needs assessment, adopting a written financial assistance policy, limitations on charges, and collection activities.

Information Reporting

The act requires employers to disclose on each employee’s annual Form W-2 the value of the employee’s health insurance coverage sponsored by the employer, effective for tax years beginning after Dec. 31, 2010.

The act requires businesses to file an information return (e.g., a Form 1099) for all payments aggregating $600 or more in a calendar year to a single payee, including corporations (other than a payee that is a tax-exempt corporation). The provision is effective for payments made after Dec. 31, 2011.

Return Information Disclosure

The act allows the IRS, upon written request of the Secretary of Health and Human Services, to disclose certain taxpayer return information if the taxpayer’s income is relevant in determining the amount of the tax credit or cost-sharing reduction, or eligibility for participation in the specified state health subsidy programs.

Upon written request from the Commissioner of Social Security, the IRS may disclose the certain limited return information of a taxpayer whose Medicare Part D premium subsidy, according to the records of the Secretary, may be subject to adjustment.

Yes, finally Health Care Reform

2010-03-22T23:05:00.003-04:00

I have worked with many people over the years who are stiffled in their life by health care. They are stuck in jobs they dislike becuase of access to health care. They continue in jobs when they would rather own their own businesses because of the cost of health care. They tetter on the edge of bankruptcy becuase of an unexpected illness.

Don't misunderstand me. I believe we need to spend more time teaching people how to stay well, by eating whole foods, preferably locally grown, cooking their meals, getting adequate exercise, staying away from cigarettes and excessive alcohol. We all have a responsiblity to our own health.

There are times when through no action of our own we fall ill. That is what insurance is all about, taking care of us when we are victims of an unexpected event. We also have a responsibility to each other. I am pleased we have finally gathered the political will to take action toward health care for all.

Ecocommerce

2010-03-16T14:21:00.002-04:00

I saw this article (credit noted) and found the idea of ecocommerce exciting. We all benefit when resources are used sustainably. How do we design a economic system that supports sustainabiliyt?

The Next-Generation Ecoservice Market
Today’s ecoservice markets
By Tim Gieseke

Seventy-five years ago, the U.S. Department of Agriculture (USDA) placed value on soil resources with the creation of the Soil Conservation Service, now known as the USDA Natural Resources Conservation Service (NRCS), creating incentive programs to encourage producers to conserve soil.
Several decades later, the U.S. Environmental Protection Agency implemented a regulatory approach to resource conservation.

Both efforts succeeded to a point. However, their shortcomings have initiated ecoservice markets.

After a decade of progress, ecoservice markets seemed to backslide in 2009. Relatively few of the nearly 80 water quality credit markets in the United States have generated viable trades and function as true market systems.

Sequestered carbon credits are worth about a dime per ton on the Chicago Climate Exchange, and the cap-and-trade system to address climate change is losing support. U.S. House Agriculture Committee Chairman Collin Peterson, who played a major role securing rural lawmakers’ support for cap-and-trade legislation last summer, said in early January 2010 he would vote “no” if a similar bill returned to the House for final passage.

From a producer’s perspective, for the most part, these markets have not been a legitimate business opportunity, relative to the traditional commodity markets. The lack of legitimacy is not just due to fluctuating or low prices, but is related to a lack of market organization.

Illusive ecoservices

We define ecoservices as public goods generated by conservative land management: practices yielding fertile soil, clean water, wildlife habitat and carbon and nutrient sequestration. Those striving to encourage these markets find it difficult to identify buyers and sellers and place a price tag on those items.
Imagine trying to sell the corn produced in a 40-acre field without the ability to measure volume or weight. Creating a market for soil stewardship, clean water, habitats and other ecoservices faces a similar challenge. Further complicating the situation, beneficiaries are not a specific processing plant or farm operation, but society as a whole, which benefits from a healthy ecosystem. And, don’t forget agribusiness, which relies on enduring soil productivity.

After decades of developing natural resource monitoring methods that prove marginally successful, we might conclude direct measurement of non-point source pollution, and most ecoservice quantities and sources, is not only difficult, but likely impossible.

Because proponents designed most existing ecoservice markets from the perspectives of policymakers and ecoservice buyers, the markets’ frameworks tend to serve their self-interests. They describe an ecoservice demand “package” that meets their accounting and oversight needs, and trades ensue. However, the discussion of ecoservice supply and demand interaction is absent.

Organizing an ecocommerce structure

The next-generation ecoservice market must allow producers to take advantage of the multiple benefits of a singular conservation practice, recognizing the many benefits to society. And, the ecoservices must be placed within the context of the landscape.

Both market attributes can be created by using agro-ecological indices that measure the immeasurable. The USDA NRCS, universities and institutions across the nation have developed and implemented agro-ecological indices for the purpose of quantifying ecoservices. These include the soil conditioning index, habitat suitability index and various methods to score water quality.

Ecoservice portfolios and their values become the ecocommerce process as described in EcoCommerce 101: The Emergence of an Invisible Hand to Sustain the Bio-Economy.
Graphic courtesy of Gieseke.
For someone not versed in the language of indices, these measurements may seem daunting. Most or all of the agro-ecological indices have been developed independently of each other, and the language describing them today is more like the “Tower of Babel,” rather than a common language.

In the future, ecocommerce indices could be created using similar indices, but with a coordinated effort and standardized units. This language can then develop landscape intelligence as it pertains to management of watersheds and biofuel sheds, and it could provide the foundation for a sustainability index, such as what is now proposed by Walmart.

According to Walmart’s Web site, the company developed a sustainability index initiative in order to meet customers’ requests for more efficient, longer-lasting, higher-performance products. The company’s goal is to create a more transparent supply chain, driving product innovation and providing customers with information to assess products’ sustainability, the site says.

Because the value of ecosystem services is generated by resource management outcomes, rather than the cost of conservation practices, a role reversal occurs. Farmers become the conservation supplier for ecoservice demands, rather than the conservation customer for government programs.

Imagine a farmer sitting down to evaluate his production plan for the year. He considers the price of traditional agricultural commodities and how to produce these in certain quantities.

Now, add a value for soil conditioning, water quality, habitat and carbon sequestration indices.

For example, what if a water quality score of 80 meets the criteria for multiple beneficiaries? It may meet the objectives of a USDA incentive program, and/or an EPA Total Maximum Daily Load regulatory assurance requirement. It also may provide market access via Walmart’s sustainability index, generate a tax rebate from the local watershed district, or become an eligibility requirement to engage in a water quality trading program for a wastewater treatment plant.

A compilation of these resource indices becomes the farm’s ecoservice portfolio that can be recalculated yearly.

These ecoservice portfolios and their values, applied by public and private stakeholders, become the ecocommerce process as described in EcoCommerce 101: The Emergence of an Invisible Hand to Sustain the Bio-Economy.

The ecoccommerce process is significant, because it is more than a compilation or organization of ecoservice markets. It also provides the framework to build an ecological intelligence system, allowing the public arena of commerce to define sustainability.

Jerry Hatfield, Director, National Laboratory for Agriculture and the Environment, wrote in the EcoCommerce 101: The Emergence of an Invisible Hand to Sustain the Bio-Economy foreword, "… this [intellectual framework] is a unique feature because what has been lacking in the discussions of ecosystems or their monetary value has been a framework from which the value could be evaluated.”

He also says EcoCommerce 101: The Emergence of an Invisible Hand to Sustain the Bio-Economy will be a valuable tool to understanding the emergence of this ecoservice economy, especially to policymakers and traders who will serve as the driving force for the development of policies related to ecosystem services.

To learn more about this book, visit www.ecocommerce.us.com.

About the Writer: Tim Gieseke farms part-time in southern Minnesota and through Ag Resource Strategies, LLC provides agro-environmental assessment services. His book is titled, EcoCommerce 101: The Emergence of an Invisible Hand to Sustain the Bio-Economy and is scheduled for release in May 2010.

Go Green: The 4 Day Work Week

2010-03-11T11:18:00.001-05:00

Being a worker bee myself the idea of a 4 day work week makes me giddy, but for upper level management and senior staff it probably makes their stomach churn. After doing quite a bit of research I believe this idea will be the future of the American working landscape because of the benefits it offers to not only the employees, but the company and Mother Nature.

The traditional 5 day 8 hour work week was instituted by the Fair Labor Standards Act passed in 1938. 70 years ago this was a vast improvement for the many Americans who worked 10 plus hours and 6 days a week. In a time when change now comes daily how is it that this is a model that has endured? Innovation has become a must in today’s working environment, and Utah just might be the innovators we all need to change our reality from living to work to working to live.

In 2008 the state of Utah implemented a 4 day work week for it’s 17,000 state employees. Utah state workers now work 10 hour shifts 4 days a week, which has cut energy use by 13% and saved employees as much as $6 million in gas cost. The state is estimating it will cut green house gas emissions by more than 12,000 metric tons a year. In 2006 the United States green house gas emissions were 7,181.4 million metric tons. Comparing the two numbers makes 12,000 look like small potatoes, but if a 4 day work week was implemented on a national scale just imagine the impact we can have on the planet. The force behind this mandate was to reduce energy costs for the state, but the extra incentives are what will keep the initiative trucking along.

The benefits of a 4 day work week for companies and employees go hand in hand. With the implementation of a 4 day work week comes a sharper focus and more productive workplace. In 2007 salary.com did a survey and concluded the average employee spends 2 work hours a day surfing the internet or interacting with friends. That is your 5th work day, so why not just cut it out all together? With more personal time employees might not feel the need to create personal time on the clock. In 1930 W.K. Kellog decreased his companies work week from 40 hours to 30, and had this to say about it, “The efficiency and morale of our employees is so increased, the accident and insurance rates are so improved, and the unit cost of production is so lowered that we can afford to pay as much for six hours as we formerly paid for eight.”

Happy employees are efficient employees and study after study has proven this. With an extra personal day a week employees are less distracted by tasks they need to get done at home, play “hooky” less, and need less time off during working hours for doctor’s appointments and the like.

The last benefit I would like to point out is the benefit to your customers. The state of Utah saw an unexpected benefit to the 4 day work week. Having longer office hours 4 days a week made Utah’s government offices more accessible to people who in the past had to miss work to get there in time.

4 day work weeks might not be something every workplace in America will be able to implement, or implement right away. But with advances in technology and mobilization soon many companies will not even need a physical office and will move to a virtual one. 4 day work weeks or less in office work time creates healthy employees, a healthy bottom line and a healthy earth.

By Gracie Mohr

Sources:
http://www.time.com/time/magazine/article/0,9171,1919162,00.html
http://www.groovygreen.com/groove/?p=2223

Will March bring the Luck of the Irish?

2010-03-11T11:13:00.001-05:00

This week marked the 1 year anniversary of the current bull market. In the 13 bull markets experienced since 1930 that have lasted a year, return averaged 153% and total length averaged 4.4 years.

According to these statistics, the market has 54% more to go over the next 3+ years. This is one case where no one will complain should history choose to repeat itself! Happy investing.

Wills: The Cornerstone of Your Estate Plan

Alright, I admit I went to the archives for this one. What can I say, its tax season and everyone is a bit busy around here. I hope you don’t mind my knocking the dust off of this ever so important issue of estate planning.

During this month of St Patrick’s Day, I have taken a few minutes to reflect upon the vast changes that have occurred in how we view, accept, and move on after death. For many years, and even still today in some Irish villages, death was viewed as a new beginning for the unfortunate sole it had come to take. When reading old newspaper clips from Ireland, death often came in some dramatic fashion; a fall from the roof top, a trampling of a farm animal, or often in the midst of a jig and a good pint at the local pub.

A few days later, the entire town would parade through the village, following the deceased, wailing all the way to the final resting place. Within an hour of the burial everyone was back at the pub toasting and remembering Uncle Liam whether he really deserved it or not. They celebrated the grand afterlife, cherished the thought of the old bloke watching over them, and the family inherited what was rightfully theirs within days and moved on. Things are needless to say, much different now.

Today, if you care about what happens to your money, home, and other property after you die, you need to do some estate planning. There are many tools you can use to achieve your estate planning goals, but a will is probably the most vital. Even if you're young or your estate is modest, you should always have a legally valid and up-to-date will. This is especially important if you have minor children because, in many states, your will is the only legal way you can name a guardian for them.

Wills avoid intestacy and distribute property according to your wishes

Probably the greatest advantage of a will is that it allows you to avoid intestacy. That is, with a will you get to choose who will get your property, rather than leave it up to state law. State intestate succession laws, in effect, provide a will for you if you die without one. This "intestate's will" distributes your property, in general terms that may not be what you would have wanted. Wills allow you to leave bequests (gifts) to anyone you want. You can leave your property to a surviving spouse, a child, other relatives, friends, a trust, a charity, or anyone you choose.

Wills allow you to nominate a guardian for your minor children

In many states, a will is your only means of stating who you want to act as legal guardian for your minor children if you die. You can name a personal guardian, who takes personal custody of the children, and a property guardian, who manages the children's assets. This can be the same person or different people. The probate court has final approval, but courts will usually approve your choice of guardian unless there are compelling reasons not to.

Wills specify how to pay estate taxes and can help minimize taxes

The way in which estate taxes and other expenses are paid can be directed by your will. To ensure that the specific bequests you make to your beneficiaries are not reduced by taxes and other expenses, you can provide in your will that these costs be paid from your residuary estate. Or, you can specify which assets should be used or sold to pay these costs.

A will also gives you the chance to minimize taxes and other costs. For instance, if you draft a will that leaves your entire estate to your U.S. citizen spouse, none of your property will be taxable when you die (if your spouse survives you) because it is fully deductible under the unlimited marital deduction. However, if your estate is distributed according to intestacy rules, a portion of the property may be subject to estate taxes if it is distributed to heirs other than your U.S. citizen spouse.

There are many other advantages to having a will, and even more should one choose to complete the package with living wills and health care directives. These additions will protect your rights and desires should you ever become incapacitated or unable to communicate. So while things are much different today than they were years ago on the “Isle of Green” there is still much we can do to keep our legacy prosperous and easy to administer. So this March, take a few minutes to get your affairs in order. I for one like to imagine my heirs and well wishers toasting the night away at my wake then mired by taxes, intestacy, and family strife. The traditional lyrics below bring to mind the contentment one with only a will could have. Happy St. Patrick’s Day!

Oh all the money that e'er I had, I spent it in good company
And all the harm that e'er I've done, alas, it was to none but me
And all I've done for want of wit to memory now I can't recall
So fill to me the parting glass, good night and joy be with you all
~Traditional Irish Tune

by Andy Pulsfort

The Rip Off

2010-03-11T11:09:00.002-05:00

Two weeks ago, I was in Washington DC speaking to a CEO roundtable. At the end of my talk, one of the participants said to me “I am sure you are worth every penny you charge, but I have been ripped off by a financial advisor and don’t know if I can ever trust another one. Do you have a case study on how to recover from a bad advisor?”

Great question. If you don’t want to be ripped off by an advisor or the financial system in general, you first have to start thinking about these things differently. Finding the right advisor is about personality, communication and knowing what you need. Do you need a wealth advisor to assist you in creating sustainable wealth? Or are you your own wealth advisor, and just looking for some special expertise in a narrow discipline?

Most of us are unknowingly looking for wealth advisors and hire specialty advisors. Let me explain.

Here’s a common scenario. I need tax advice, so I seek out a tax specialist, i.e. a CPA. My need for insurance is met by a specialist - my insurance agent. My new will is drafted by my legal specialist – my attorney. My investments are handled by another specialist – my stock broker. Question: Who is handling my wealth?

We treat all these facets of wealth management as separate…and they’re not. Creating sustainable wealth is most effectively done by beginning with the end in mind – the end being the freedom that comes with planning for a prosperous future.

If asked “Do you want to leave a legacy for your children?” your answer might be “Yes, absolutely.” But what if funding that legacy means you have to shave 10% off of your annual spending? Is that really what you want? The answer may still be ‘yes’, but without looking at the whole wealth picture, you would not have considered all the consequences to answering one narrowly focused question.

A good wealth advisor begins the process with a plan. He or she may call it a financial plan, a wealth plan, or in our case, The Prosperity Experience®. This plan is not a one-size-fits all; it must be tailored to meet the goals and intentions of the client. It includes a decision-making model that supports the person or couple in reaching their full wealth potential.

Specialty advisors like insurance agents, investment advisors and estate planning attorneys are brought in as needed to provide detailed expertise in a focused area. The wealth advisor may have these professionals in-house or they may be available via contract. Either way, the wealth advisor coordinates their work and uses the planning process with the client to facilitate decision making.

If you have been ripped off, there is nothing to do but get back on your horse and begin again, with the wisdom you gained from the experience. Take it slow. Trust your intuition. Do your homework. Find out who you are talking to.

Sustainable wealth creation is a lifelong process. While no single decision may change the trajectory of your wealth and prosperity, any single decision can. Don’t wait until you have made that one big, bad decision to begin again.

Mackey McNeill

Employment tax examinations to begin; 2000 tax payers to be selected each year

2010-02-25T11:33:00.001-05:00

American Payroll Association offers audit tips as detailed IRS employment tax examinations about to begin: The IRS National Research Program (NRP) study on employment taxes is scheduled to begin by the end of March. The IRS will randomly select 2,000 taxpayers for comprehensive, random employment tax examinations each year for the next three years. The Spring 2010 edition of the SSA/IRS Reporter includes an article by the American Payroll Association (APA) that offers tips on how to prepare for an IRS audit.

Before the first meeting. The APA advises employers to establish an internal team before the IRS meeting. The team should consist of payroll, accounts payable, accounting, human resources, internal auditing, general counsel, and outside tax professionals. A person (point person) should be appointed by the internal team to manage the examination and supervise the input from employees. The point person should assemble and regulate the flow of information between the IRS and the employer. The point person should review all information before it is turned over to the IRS and be present during tours and interviews of employees. The APA believes that this type of setup will increase the likelihood that the information provided to the IRS is organized, complete, and focused. The APA cautions employers not to try to restrict or hide information.

Information requests. The IRS requests information that it would like to look at during tax examinations on Form 4564, Information Document Request. The requests should be given to the point person. The APA notes that employers are required to provide the IRS with all the information that the Service is legally allowed to request. However, employers are not required to provide any information that is not specifically requested by the IRS.

Problems with the IRS agent. The APA says that it is perfectly acceptable to have unresolved audit issues with the auditors. The APA recommends that an audit be stopped if an employer feels that an agent is not conducting himself/herself professionally. The matter should then be discussed with the auditor's supervisor.

Appeals. Unresolved tax examination issues that are not part of the closing agreement may be appealed to the IRS Appeals Office. Open audit issues that cannot be resolved with the Appeals Office may be litigated through a formal trial. The APA believes that this option should be chosen only as a last resort because of the time and expense involved with the litigation of tax disputes.

Thrifty Thursdays: You gotta have fun!!

2010-02-18T17:08:00.003-05:00

7 Ways to Save in the Cincinnati Scene

1. The Cincinnati Art Museum: Did you know that the art museum is free everyday!! That is 60,000 works of art all for the low, low price of $0. If that isn't a bargain I don't know what is! www.cincinnatiartmuseum.org

2. The Contemporary Arts Center: Monday's from 5pm to 9pm the CAC is free. Grab a friend and unwind while winding through Zaha Hadid's magnificent building. And don't forget to check out the unMuseum! www.contemporaryartscenter.org

3. Fountain Square: There is always something going on at Fountain Square. From ice skating to karaoke to live music this is a great place to hang out and have some fun. Most events are free! www.myfountainsquare.com

4. Cyclones Hockey: The Cyclones are all about their fans having fun on a budget. Most of their home games feature some kind of $1 special, pizza, beer, hot dogs, and even pulled pork sandwiches. To see the schedule of events go to www.cycloneshockey.com

5. Dollar Fridays at Turfway Downs: By Friday most of us are ready for some fun. What better way than to head to Turfway Downs for $1 Buds and hotdogs. There is live racing and live music from some of the best cover bands in the city. www.turfway.com

6. 5 for $5: The bars of Covington have found a great way for people to still go out and have a few cocktails without breaking the bank. On Wednesday evenings Cosmos & Mulligan's feature 5 for $5 well drinks or bottled beer, and on Thursdays Molly Malone's & Keystone offer the same.

7. And for more ways to hang out in Cincinnati on the Cheap go to www.CincinnationtheCheap.com

By: Gracie Mohr

Feed The Pig's Weekly Savings Tip...Online Bill Pay.

2010-02-17T08:50:00.000-05:00

The internet has given us many modern conveniences, including online bill pay. Paying bills online can save you the effort of writing checks and stuffing envelopes, and ensure that your bills are always paid on time. Unsure if your bank offers online bill pay? Speak to your bank about available options and if any fees are involved.

Here are some advantages to online bill pay.

• Many banks have a database of companies to choose from when setting up your online bill pay, making the setup process easier. Additionally, you only need to enter a company's information once and it will be saved to your account, as opposed to manually writing checks for each bill.

• Avoid late fees and processing fees by setting up automatic payments. If you know your bill will be the same amount each month, taking advantage of automatic electronic payments will give you one less thing to worry about.

• Paying your bills online reduces the chance for human error and conveniently groups all your bills into a single location, giving you control over every aspect of your bill paying process. Just a few clicks and you're good to go!

Visit www.FeedthePig.org for more money-saving tips.

Buyer beware - Roth Conversions are Hot!

2010-02-09T11:27:00.002-05:00

I just got a spam e mail with these headlines:

ROTH CONVERSIONS ARE HOT!
Millions of dollars are being transferred!
HUGE commissions are being generated!
Here's how to get your share of this exploding market.

Doesn't this just make you sick? Where is the client in this headline? What about the impact to the client on their goals, dreams and the cash flow to make it all happen?

Obviously the person who spammed me did not know that Mackey Advisors is a fee only firm, and so generating commissions is not our gig.

So my advice is buyer beware. Proceed with caution on Roth conversions. Do the math and see if it makes sense for you - does a Roth conversation make it easier or more difficult for you to reach your goals? This is the question that you must answer before taking action.

Do not go into fear over tax rates of the future. Take a breathe, run the numbers, do you homework. Then take action.

May prosperity be yours,
Mackey McNeill, CPA/PFS
CEO and President
Mackey Advisors
www.CultivatingProsperity.com

Solar energy, does it work for you?

2010-02-09T09:59:00.003-05:00

Check out this article and imbedded spreadsheet to determine if solar is viable for you financially.

If the Return on Investment (ROI) is convincing, consider starting soon to get your project complete in 2010 and therefore your tax credit in 2010.

If the ROI for you is not spectacular, and your budget can accomodate the cost, consider solar as part investment for today and part an investment you are making for your grandchildren's future in a cleaner planet. Making a difference has its own ROI, the one in your heart.

http://tinyurl.com/ycsxeyy

May prosperity be yours,
Mackey McNeill, CPA/PFS
President and CEO Mackey Advisors
www.CultivatingProsperity.com

5 Beavers

2010-02-08T21:35:00.002-05:00

A month ago at the Kenton Conservancy meeting (I am Chair of the Board) it was reported that the City of Independence had gone onto our property, Woolsing Trails (see great pictures of Woolsing on Facebook) and destroyed a beaver dam due to its interference with a low water bridge.

Needless to say the members of the board were unhappy. The purpose of the Conservancy is to preserve lands of natural, historical and cultural significance to the county. It follows that one of the reasons to preserve property is to allow for natural habitat, such as beavers. I was assigned the job of calling the City of Independence Administrator and requesting a different approach in the future. When we spoke, he apologized for going onto the property without contacting us and said he would most definitely contact us in the future. He also told me that the beavers had rebuilt the dam.

I hung up the phone very pleased that nature had won. Or so I thought. Tonight (a month later) at the Conservancy meeting I learned that a trapper had trapped, and killed all 5 beavers who resided in the creek. Supposedly he entered the creek from someone else’s property, not ours. No matter how he got there the beavers are gone.

I was at first filled with rage. Then I was just sick, with a heavy feeling in my heart. Is it possible for people to live in concert with nature? Why must we trap, kill, mine or gather every living and natural resource available? Why can’t we just see the beauty and leave it alone? Or see the beauty and leave it for the next person? When will we ever have enough? Will we wait until all the animals are all gone to mourn their loss?

Call me a tree hugger, an environmentalist, an eco-nut, honestly I don’t care. What is true is that I am a lover. A lover of nature and all that it offers. While my efforts seem insignificant and useless on days like this, I know that tomorrow, I will get up and get focused again, on preserving what is left of the natural and wild spaces of Kenton County Kentucky.

Mackey McNeill, CPA/PFS

President and CEO of Mackey Advisors

www.CultivatingProsperity.com

AICPA's "Feed the Pig" Weekly Savings Tip

2010-01-20T12:04:00.001-05:00

Charitable Giving

In light of the recent devastating earthquake in Haiti, many people are looking to make a donation to help the victims and many organizations are trying to make it easy to do so. Here are a few things to keep in mind when making a charitable donation to help ensure your kindness gets to those who need it most.

• Check to see if the charity is classified as a 501(c)(3) organization by the government (the designation means the organization has been set up for charitable purposes). Click here to search a listing of charities in the U.S.

• Check the Better Business Bureau Web site for information about the charity's mission, compensation, expenses and rating.

• Guidestart.org can also help you find some of the top rated charities and direct links to make donations. You can also check Guidestar for the charity’s most recent Form 990 to calculate what percentage of the charity’s donation go directly to those in need and what percentage goes to overhead.

• Do a little research online to see if there are postings, concerns or adverse ratings about the charity you are considering donating to. A lot of negative comments online could mean the charity is not what they represent themselves to be.

• When in doubt, give to a charity you are familiar with, such as the American Red Cross or your local community foundations or religious organizations. There are a lot of organizations who have already mobilized volunteers in Haiti to help those in need and could use your support.

Don’t let these few extra steps change your mind about making a donation—there are so many easy ways to help out. Even small donations contribute to the effort to help those in need.

Strategic Decision Making

2010-01-18T10:08:00.001-05:00

by: Mackey McNeill

Throughout New Year’s Day, I began to emerge out of “holiday time” and into “business focus time.” As the possibilities of the new year began to take shape in my mind, I found myself both excited and overwhelmed. In my entrepreneurial world, there are always so many options and possibilities.

The really good news is that I love what I do and the people with whom I work. For me, this means that the lines between work and play are sometimes blurred, as work is a joy. The downside is that I can get carried away by my enthusiasm, over-commit to action and put my entire team into overwhelm. This quickly turns joy into chaos.

Over the years, I have created chaos more times than I care to admit. Thankfully, I have also matured in my entrepreneurial capacity. Wisdom has come with age, along with the ability to use it consciously and deliberately to shape my future. I have developed three qualifying questions to sort through my ideas before committing to action.

First, I ask myself: Does the idea forward our strategic plan and is it in alignment with our three, five and ten year goals? Most of my ideas fail to survive this question. They may be exciting, fun and innovative, but do little toward meeting the firm’s goals for the coming year or beyond. They are quickly dispatched to the round file.

For ideas that survive the first cut, I ask: Do we have the capital in terms of money, personal time and team time to take this idea from imagination to results? If I am unable or unwilling to commit the necessary resources, this tells me that while it is an interesting idea, I lack the passion to make it successful. Again, to the round file.

My third question revolves around balance and fairness: Is the idea fair to those who are impacted by it? This question is especially important when I am faced with decisions brought on by recessionary pressures like those in 2009. In that particular case, when all other options are exhausted and the decision comes down to cutbacks in wages, benefits or hours, I ask: Are the cut backs fair and balanced across all levels of the organization?

Those ideas that survive my three-pronged attack move into the action realm. What must I do over the next three to five years to make this idea a reality? What must I do in 2010? What must I do in the first quarter of 2010? What must I do tomorrow?

Once an idea turns into an action plan, it may or may not manifest. If the energy builds as it develops, we nurture it into reality. If the momentum wanes, we let it fade without forcing or subsidizing it.

At the end of this process, I am left with a few precious, well deserving seeds that, when planted, will create an abundant future for Mackey Advisors.

May the New Year bring you an abundance of ideas, and a few precious seeds deserving or your time and attention. May your prosperity increase with grace and ease in 2010.

COBRA Premium Subsidy Program Extended

2010-01-15T17:46:00.001-05:00

On December 19, 2009, President Obama signed into law the Department of Defense Appropriations Act, 2010, which extends the 65 percent COBRA premium subsidy to February 28, 2010.

The American Recovery and Reinvestment Act of 2009 provided a government subsidy of 65 percent of the cost of COBRA coverage for employees (and their eligible family members) who lost their health insurance coverage due to involuntary termination of employment in 2009. In addition to the subsidy being extended to 15 months, employees who lose their jobs in January or February of 2010 will still be eligible.

For more information on the American Recovery and Reinvestment Act of 2009, visit the U.S. Department of Labor Web site. Visit the Life Crisis section on the 360 Financial Literacy Web site for additional information on receiving unemployment benefits.

May prosperity be yours,
Mackey McNeill, CPA/PFS
www.CultivatingProsperity.com

Four Money Mistakes You Can Learn From

2010-01-15T17:41:00.001-05:00

Great article from www.360FinancialLiteracy.org

It's hard to know when the economy will truly recover, although there are signs that things are headed in the right direction. But if you want your own finances to stabilize over the long term, you'll need to evaluate what you've been doing right, and wrong. There's no magic bullet, but avoiding these four money mistakes may help you survive and ultimately thrive in any turbulent economy.

Mistake 1: Expecting things to stay the same

It's a familiar tale. Economic times were good. The stock market went up, up, up. Home values (and real estate prices) soared, credit was flowing, and the job market was robust. And then the bottom fell out.

At the heart of all economic bubbles is the euphoric, yet ultimately mistaken, idea that the good times are here to stay. And when the economic news is bad, it's just as easy to assume that the tough times will remain. But your own financial recovery will ultimately depend on you not jumping on any bandwagon. Instead, take a proactive, rather than reactive, approach to financial planning, no matter what economic news you're hearing. Prepare yourself for a variety of financial scenarios and avoid basing money decisions on emotion, or you may find yourself making the same financial mistakes over and over.

Mistake 2: Only saving your leftovers

Do you worry that you're not saving enough? Do you routinely rely on credit rather than cash to pay for the things you want or need? Rather than blame your financial inertia on your income, look a bit deeper, because the real culprit may be the lack of financial priorities. If you don't know exactly how you're spending your money and you haven't set financial goals, it's unlikely that you'll see much financial progress.

Go back to basics by preparing (or reviewing) your budget. If you tend to save only what you have left over every month, you can put yourself on a more disciplined course by having a fixed amount taken out of your paycheck automatically for retirement. Or, you can set up automatic transfers from your checking account to a savings or investment account.

Mistake 3: Not having an emergency fund

One of your savings priorities should be an emergency fund. An emergency fund isn't glamorous, but this underappreciated work horse really pulls its weight during hard times. Having cash on hand that you can use for an unexpected expense, or to pay bills if you lose your job or become disabled, is vital because it can help you avoid having to rely on credit or tap your retirement savings. Without emergency savings to fall back on, worse financial trouble may lie down the road.

Mistake 4: Not asking for help

Even if your finances are in good shape right now, you may be overdue for a checkup. A close look at your financial plan will help you identify potential strengths and weaknesses. If you're already in financial trouble, don't let fear or shame prevent you from asking for help. Facing financial problems early may help you make a full recovery. Many creditors are willing to work with you, but this may be much easier while your credit is still good, and while you still have time to turn things around.

The 360 Degrees of Financial Literacy Web site offers general information for managing personal finances and does not recommend specific financial actions. For financial advice tailored to your situation, please contact an expert such as a CPA or a personal financial advisor

Thrifty Thursday: Putting Savings in Perspective

2010-01-14T15:13:00.003-05:00

Saving is hard. Especially for those of us who are prone to instant gratification. It is all too easy to spend that dollar on a delicious candy bar today and forgo the savings tomorrow. Below is a little article written by Spencer Sherman and Brent Kessel. The statements below really help put saving in perspective.

It is useful to keep in mind that the biggest determinant of financial success is your level of spending relative to your income and/or assets.

The reason is that you need about $20 saved in an investment portfolio for every $1 you're going to spend once you stop working and your earned income stops. So if you cut your spending by $1, you've actually just lowered your required savings by $20.

For example, if you can reduce your annual spending from $36,000 to $34,800 or by $1,200 ($100 per month), you've decreased your required savings by $24,000. Instead of needing a nest egg of $720,000 (twenty times $36,000), you only need $696,000 (twenty times $34,800).

How do you reduce spending by $100 per month?..... Keep reading Thrifty Thursdays! Every week we will be posting a savings tip that you can really use.

Getting Organized in the New Year can Save You Cash!

2010-01-13T10:19:00.001-05:00

If you are a really unorganized, slightly messy pack rat getting organized could not only save you money but make some!

1) Organizing a shopping list to take to the grocery cuts down on expensive impulse buys.

2) Keep a shopping list in your kitchen. Write down what you need as you get low on things. Same benefit as #1

3) Organizing your checkbook or online banking might enable you to see how much money you waste on ATM fees so you can make changes to avoid that.

4) Organization in general, cuts down on repetition. This might mean keeping cabinets and medicine chests organized so you don’t buy items you don’t need.

5) Organize all of your DVDs, books, and video games and any you no longer want you can sell to half priced books, on Amazon, eBay, or craigslist.

6) Getting your space organized can save you money by finding long lost items like phone chargers, batteries, screwdriver, light bulbs.

7) Organizing your closet can help you find old clothing to mix and match into your newer clothes.

8) Scan old photos onto the computer. It saves spaces and gives you a task to do instead of going out and spending money. (Could also be a great gift idea for family and friends that is inexpensive).

9) Keep a space in your home where you put things you want to donate. A large plastic storage box is a good idea. When it is full, make a list and donate. You will get a tax deduction is your itemize.

10) Budgeting is a way of organizing and it saves money because you make conscious choices about your money before you make or spend it

11) Organizing your pantry makes it easier to cook at home, saves money, and less chance you will buy something you don’t need

12) Living an organized life gives you more time, and you can either 1) enjoy more leisure or 2) take up a hobby that produces income

THRIFTY THURSDAYS: 15 Ways to Save while Staying Fit

2010-01-07T12:24:00.003-05:00

1.Are you a loner or do you need the impact of a friend/team? Some of us are great at setting goals and just doing it. Others need to get a buddy to be accountable to. What is your nature? Design you system around this first.

2. Swap Workout VHS/DVDs with friends. Almost everyone has a workout tape sitting at home. Get a group of friends together to swap tapes weekly to keep your workouts interesting and your body guessing.

3. Gather a group of friends. Go to the park and play flag football, soccer, basketball, tennis or even a high energy game of freeze tag.

4. Share a Wii Fit with friends. So many people have Wii Fits now, get a group together for a weekly Wii yoga session.

5. Have a Dog? Get in shape with your favorite furry friend! They need to stay strong and fit too. Throw around the frisbee, run around the dog park or take walks in the park. If you don't have a dog ask to borrow your neighbors. They will thank you for it!

6. Learn to use your body as your strength training weights, there is no need for expensive equipment. And there are lots of video resources on youtube.

7. Walk or run your way to health. All you need is a good pair of running shoes.

8. Walk at lunch. During the winter, it is often too cold or dark to walk in the morning or evening, so go into work early and then walk at lunch when the sun is out and more palatable.

9. Buy used equipment on Craig's list, eBay, or other online merchant. Often people think they will like a certain kind of workout, but really don't.

10. Shop around for a fitness club. What is most important to you? A pool? A basketball court? A sauna? Many clubs give you 30 days free or a certain amount of free visits. Try them out in the winter. Assess you budget, if your purse strings can hold out go for it. If not, once the winter breaks go back to your walking shoes.

11. Go to the mall in bad weather. Its warm and free, but be careful of the window displays!

12. Take the stairs at work and try to make it a challenge with your co-workers. Who can take the stairs the most times in a day/week/month?

13. Ask friends if they have old workout equipment lying around you could borrow, swap, or trade for. Get fun and creative with the payoff, like I get your treadmill and in return I will cook you dinner once a week for 6 weeks.

14. Some of us need that extra boost of a personal trainer to keep us motivated. To cut down on the cost see if your personal trainer will train you and a few friends. This way you could split the cost in half or even thirds!

15. Go dancing! Its a great way to meet people, stay in shape and have fun. Check craigslist or a local event site to check out the different venues and types of dances there are in your area.

by: Gracie Mohr