The Future is Your Decision

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:

1. Demographics, the World and the US have increasing population. More people = economic growth
2. Inflation, not hyperinflation, but easily 4.5% to 6%
3. 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

Banking News You can Use

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.

1. Do I trust this person?
2. Do I like this person?
3. Does he/she understand my business?
4. Does he/she add value to my business?
5. Is this person an Advocate for me & my company?
6. How is this individual viewed within his/her company?
7. What sales method are they using? Is there transparency in the sale?
8. What is this person’s next job (e.g., promotion within current company, move to a similar company, retiring, changing career paths)?
9. (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

Strategic Decision Making

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.

The Top 10 Reasons People Don’t Live a Prosperous Life

By: Sandra Baptist

If it were easy, everyone would do it; everyone would have it. That “IT” is prosperity and we’re all trying to achieve that stage in our lives where wealth, health, success are a daily part of our lives.

So what’s the problem? Why aren’t some of us living a prosperous life? Read on, my friends…

1. Clarity: Many people don’t know what they truly want in life. They have not clarified exactly what they desire and where they want to be within a year, 5 years, or even 3 months. Because they don’t know where they are going they drift along with the daily grind, totally forgetting that they want to attain true prosperity.

2. A Clear Path: There are some that have a goal for their life, yet they do not know how to attain it. They go through the motions daily and never actually make a conscious decision to attain their goal.

3. Struggle: Many are desperately trying to live a life of happiness, wealth and success. They are focused on achieving true prosperity, but yet constantly find themselves struggling to attain it. It is this struggle that actually prevents them from being truly prosperous.

4. Fear: False. Evidence. Appearing. Real. This one four-letter word prevents us from going forward to achieve all that we desire. What will our family think? Will our friends still like us? A very high percentage of persons fear success because of how it will affect us and our relationship with others.

5. Conditioning: As children and young adults our environment affects a great deal of our “conditioning” and has a profound effect on the way we think, act and live. Our environment here could include our parents, our friends, television, politics, religion, school courses and our job. For example, the TV may constantly bombard us with images of prosperous persons as unhappy, as crooks or gangsters or as lonely and selfish. If we really believe this, who would want to lead a prosperous, successful life?

6. The Norm: “I can’t be bothered. This is too much work. It’s too hard” Some people cannot be bothered to achieve prosperity. They live each day in a trance, in a numb existence, going along with the status-quo and have no desire to change their lives for the better.

7. Out-Grow Your Peers: Some people don’t want to change. You may be hesitant to achieve your dreams, goals, your vision because once you do achieve true prosperity it may reduce your inventory of what is actually possible for you. It may mean that you grow beyond your partner, your friends and your family. What will that mean for you?

8. Negativity: Our lives are stuck by the negativity we are drawn to in our daily lives. A large percentage of people want to out do their co-workers or friends with the amount and magnitude of problems that they have. Most of us live our lives in total lack and shortage and that prevents us from achieving true prosperity.

9. Courage: It takes courage to be prosperous. It takes courage to make that change! We need to focus our thoughts towards our vision of true prosperity and hold to that vision. Once we have the courage and the beliefs, there is nothing we cannot achieve.

10. Beliefs: “It can’t happen to us. Prosperity is for other people. They were born with a silver spoon in their mouth”. We are programmed to think that being poor equals happiness. Our belief system totally affects how we live our lives. It is these beliefs that hold us back from our true potential and our true prosperity.

www.hinduwebsite.com

Intergenerational Wisdom

I remember driving through town with my Mother, passing the Dairy Queen. “Can we stop for ice cream?” I asked. “We have ice cream at home,” was my Mother’s response. My Mother was raised in the midst of the Great Depression, and she knew how to stretch a dollar. Going out to eat anything, even something as simple as an ice cream, was a treat reserved for special occasions.

Most of my media requests are requests for tips for ways to reduce spending. When you get into the specifics, there are so many ways you can cut your spending. However, to be effective for the long term, it begins with changing our perspective and thinking.

We have to learn to think like our grandparents or great grandparents. We have to tap the wisdom of our great aunts and uncles.

The challenge really isn’t finding a new way to save money. The challenge is to find a new way of thinking about spending money in the first place.

Try this on as an opportunity. Make a date with an elder in your family. Sit with them and listen. Ask about their lifestyle, how they spent and saved money. Ask their opinion about debt and how they managed without it. Not only will you garner invaluable wisdom, you’ll warm the heart of someone that really matters in your life. There is nothing like a good listening to, to feel important. So go out there are make someone’s day. And in the process, change your prosperity, forever.

May prosperity be yours,
Mackey McNeill, CPA/PFS IAR

President and CEO, Mackey Advisors

www.CultivatingProsperity.com

The Power of Peers

Last week I was blessed to spend the day in a study group of CPA's that specialize in financial planning. The AICPA (American Institute of Certified Public Accountants) began the group to offer CPA's an opportunity to share best practices and learn from each other.

The take aways were amazing, as many shared their varied gifts, talents and insights.

We live in a time when information is free and available with the touch of a key stroke. Wisdom is another matter. Wisdom is the application of knowledge and experience with common sense and insight. I am delighted and blessed to be in a group full of wisdom, readily available and freely shared.