Organic Growth

We often read about how large American corporations have done such a great job of cutting back expenses and strengthening their balance sheets. And yet, our economy continues to languish. Many attribute this lack of growth to unemployment and unwillingness of corporations to open their pocketbooks and invest in growth, for fear of the financial crisis in Europe and our own “fiscal cliff.” In short, fear and perhaps a lack of ideas on where to go from here are holding us back. After all, no track offers a guarantee of success.

The latest quarterly earnings reports reveal that corporate profits rose for the 10th consecutive quarter.1  But as a recent article at Harvard Business Review points out, a lot of the net profit in recent years has come from reduced operating costs. According to the article, “CEOs can’t rely on cost-cutting to keep their profit momentum going – it’s gone about as far as it can at most companies.”

The author proposes ways companies can jumpstart real organic growth – as opposed to acquisition growth – into their balance sheets. One recommendation is to pursue a targeted strategy instead of throwing money at every new initiative. The result should not just be a greater ROI (return on investment) but ROE – a greater return on effort.

1[CLICK HERE to read the article, “Getting Back to Growth” at Harvard Business Review, June 22, 2012.]


Peter Cappelli, a professor at Wharton, recently published a book on hiring issues titled, Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It. Cappelli addresses the claims that companies have jobs available but that there’s a severe lack of talent available and America’s universities are rolling out a new generation of unqualified candidates.

Do you remember your first job? Was there much you learned in college that honestly prepared you or contributed to your ongoing success? I remember grads who didn’t know how to work a copy machine (although fixing them seems to be the real skill).

Cappelli slaps down these claims with some aggressive observations. For example, to the claim that companies want experience but say they can’t find qualified people who will accept the salaries offered he responds, “Don’t call it a skills gap – you’re just being cheap.” This explains why older workers can’t get jobs (at their previous salaries) and younger workers (with no experience) can’t get in the door.

He also criticizes the “gutting” of HR departments and lack of human judgment in finding candidates. Due to the ramp-up in resumes received, automation is necessary. However, some savvy applicants have learned to “game” the automation system, getting their resumes pushed up the pike while other, less-savvy but more qualified applicants are weeded out. Cappelli observes, “Is that really who you want to be hiring? People who can game the system? I suppose it tells you something about people, but it doesn’t tell you much about who has the requisite skills.”

He’s got an interesting take on why unemployment numbers aren’t improving, with suggestions to bridge the hiring gap. Cappelli says the first thing companies should do is determine the cost of keeping a job vacancy open while searching for the perfect candidate.

[CLICK HERE to read the article, “Why Good People Can’t Get Jobs” at Knowledge@Wharton, June 22, 2012.]


In addition to job growth, there are multiple forward-thinking issues America’s companies must face to drive organic growth. In a recent article he penned for the BBC, the CEO of Coca-Cola put forth five “mega trends” that will influence market demand in the future. The list is below; note that most of these trends are already highly prevalent – it’s just that they will become massively prevalent in a few short years.

      1.      Mass urbanization – requiring the modernization of infrastructure and supply delivery logistics

2.      The aging demographic – baby boomers drive mass demand (as usual)

3.      The global middle class – largely comprised of emerging market countries

4.      Consumer domination – social media gives consumers a voice in how we conduct business

5.      Green issues – sustainability will no longer be a nice-to-have, it will be expected/assumed

[CLICK HERE to read the article, “The five consumer mega trends shaping tomorrow’s customers,” at the BBC, June 21, 2012.]

As we all know from Darwin’s theory of evolution, the strongest will survive. It’s up to our corporations to figure out the best way to meet the demands of consumers and grow organically – while at the same time benefiting our country with domestic jobs and innovation. It’s up to the rest of us to figure out which companies are poised to do that best. Please contact us if you’d like some help with that.

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.



A Post-Apocalyptic World

Perhaps the U.S. subprime mortgage debacle that kicked off economic recessions, debt crises, and job losses all over the world can’t quite be described as an apocalypse. However, the world may seem a bit apocalyptic if you’ve lost your house and have been out of work for a year and a half.


They say what goes up must come down, but surely the opposite is true – what goes down eventually goes back up. We were all caught off guard by the severity of our latest economic downturn. Perhaps it would be prudent not to be so caught off guard when the financial world rights itself back up. Perhaps we should plan for this eventuality.


As is often the case, opportunities exist even in troubled areas. For example, the eurozone continues to dominate negative financial headlines these days. However, Europe is a very important market for U.S. multinational corporations – not to mention the rest of the world. This is something we should remember as we plan for a post-apocalypse portfolio.


According to a report published by the Center for Transatlantic Relations, over the last 10 years at least half of U.S. global foreign direct investment has gone to Europe. Even now, the region is still the most profitable in the world for U.S. companies. In 2011, U.S. affiliate income reached $213 billion – twice the earnings in Asia and South America combined.

[CLICK HERE to read the report, “The Case for Investing in Europe” at the Center for Transatlantic Relations, 2012.]

Bear in mind, too, that the performance of many large European companies is more tied to global growth than to EU economies. As is noted in an upcoming article in Kiplinger’s Personal Finance magazine, where a company is based isn’t necessarily the same as where it sells or produces its products.

[CLICK HERE to read the article, “The Case for Investing in Europe” at Kiplinger’s Personal Finance magazine, August 2012.]

In this year’s World Economic Forum report, European-based companies represented 25% of global Research & Development spending – more than China (13%) and Japan (11%) combined. Even now, seven of the top 10 most competitive countries in the world are located in Europe and, as a beacon for the future, Europe has the most science and engineering college graduates.

[CLICK HERE to readThe Global Competitiveness Report, 2011-2012″ from the World Economic Forum, 2011.]

So sure, Europe may be down but it is by no means out. As for the U.S., there are plenty of signs that indicate we’re in the last innings of this downtrodden game. But just as America’s favorite pastime (baseball) returns season after season, we’ll be back. Europe will be back. And it’s time to think about the future.


What would (or should I say “will”) you do when prosperity returns? Take a long-awaited, long-planned expensive vacation? Buy a second home? Invest more aggressively? Stay within your current budget and stash away all extra money for retirement? Convert a portion of your portfolio to an annuity contract that says it will guarantee* your income in the future?


Give us a call. We can help you make a plan that best suits your goals – both short and long term.



*Life insurance and annuity product guarantees rely on the financial strength and claims-paying ability of the issuing insurer.


If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.





Let’s Talk Pensions

It used to be (just a few years ago) that if you worked for a company that offered a pension, you were one of the lucky ones. That retirement income was reasonably secure compared to workers contributing to a 401(k) or other defined contribution (DC) plan.

Not so much anymore though. First of all, government and corporate assets managed for pension payouts have underperformed in recent years due to rising costs, increased beneficiaries and economic instability, putting these plans at risk. In May, the funded status of the typical U.S. corporate pension plan fell by 6.5 to 69.8 percent, the lowest level since 2007.1

For state government pension plans, shortfalls mean that other funded services such as education will be shortchanged to shore up pension fund deficits and costs moving forward. Both corporate and government plan sponsors are looking at changing retirement plan structure for new hires in the future, including eligibility requirements and/or transitioning to a defined contribution plan.

1 [CLICK HERE to read the article, “Funded Status of U.S. Pensions Declines to Lowest Recorded Level, According to BNY Mellon,” at, June 7 2012.]

So on one hand, pension assets at their scheduled level of payouts are at risk. On the other, pension sponsors are changing the structure of plans to offset these risks. For example, some plans are offering new retirees the choice between annuity benefits paid out every month for life or a lump sum of the projected value of the lifetime pension payouts. A lump sum means you’ll need to manage your own income for the rest of your life, and there are tax issues to consider. You could come out ahead if you select financial vehicles wisely and interest rates/market performance goes your way. Or, you could run short of money before you run out of retirement.

[CLICK HERE to read the article, “Deciding Between a Lump Sum and an Annuity,” at The Pension Rights Center, June 5 2012.]

If you choose a one-time payout, you should get up to speed on fixed index annuity (sometimes called “hybrid” contracts that combine regular payouts with the guarantee of lifetime retirement income, called guaranteed* lifetime withdrawal benefits (GLWB).


[CLICK HERE to read the article, “Retirement income review: GLWB / GMWB,” at, May 24, 2012.]




There is increasing recognition and concern that DC plans will not be able to provide the same level of benefits as a defined benefit (DB) plan. Therefore many of today’s employers are beefing up their DC plan options to help their employees better secure retirement income. According to a recent survey of more than 500 large employers, 16 percent now offer a retirement income tool such as a GLWB within their 401(k) plan, with another 22 percent likely to adopt one in 2012.

[CLICK HERE to read the article, “401(k) Income Options Coming Your Way,” at, May 15, 2012.]

It certainly feels like the economy and the burgeoning senior population has taken a toll on nearly every component of retirement that, in the past, was rendered strong and dependable. Things like pensions, Social Security benefits and home equity. Now everything is on shaky ground and it’s like trying to tiptoe by an erupting volcano to get to the other side – retirement “paradise.”

If you’re tired of wondering if the government and/or your employer are going to be able to hold up their end of the bargain and would like to secure some retirement income funds of your very own, please give us a call. We can help you with that.

*Insurance and annuity product guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.[RC1] 

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.



 [RC1]This is a TX requirement. It means a copy of each of these resources should be printed off and kept on file while the book is available (and five years thereafter).


Euro Blues

This line was recently floated across social media sites: “Greece is collapsing, Iran is getting more aggressive, and Rome is in disarray. Welcome to 450BC!”

Indeed, the similarities are interesting to note. And with the 2012 Olympic Games in London on deck alongside news of Greek austerity rebellion, it’s easy to recall the days of toga robes and laurel leaf crowns, speeches and betrayals.

The Greek government is expected to run out of cash next month if it doesn’t receive more bailout funds. However, the country is revolting over requisite austerity measures in return for the money, so now the biggest question is whether Greece will exit the Euro. But that’s not the worst of it. In addition to the threat of economic collapse and ongoing political instability, there is a break down in infrastructure that may fail to meet basic human needs–such as providing electricity and preventing the spread of infectious diseases. These conditions are bound to continue if not worsen civil unrest within the country.

[CLICK HERE to read the article, “Greece’s debt woes mutate into energy crisis” at Reuters, June 1, 2012.]

[CLICK HERE to read the article, “Greece on the breadline: HIV and malaria make a comeback,” at The Guardian, March 15 2012.]

Europe on the Brink

Unfortunately, Greece is just part of the problem. Other European countries such as Italy and Spain are not far behind. The number of Spanish companies filing for bankruptcy climbed by 21.5 percent in the first quarter. In Barcelona, the government failed to sell 26 buildings because a bidder wanted a clause that required rents to be paid in dollars should the euro break-up.1

In its twice-yearly global economic outlook, the Organization for Economic Cooperation and Development (OECD) recently cautioned that the 17-country Eurozone risked falling into a severe recession. The organization–which monitors economic trends for the world’s most developed economies–warned that the Eurozone economy could shrink anywhere from 0.1 to 2 percent this year and predicts a mere 0.9 percent growth rate in 2013.

[CLICK HERE to read the article, “The pain in Spain that threatens the Eurozone” at, May 31, 2012.]

1 [CLICK HERE to read the article, “Europe in limbo: Home and dry” at, May 26, 2012.]

2 [CLICK HERE to read the article, “Eurozone warned ‘severe recession’ looming,” from Associated Press, May 22, 2012.]

In contrast to the Euro blues, the OECD projects the United States to grow 2.4 percent this year and 2.6 percent in 2013. Japan is projected to grow 2 percent in 2012 but just 1.5 percent next year. China is expected to jump from 8.2 percent in 2012 to 9.3 percent in 2013.2

It just goes to show you that there is still credibility in global diversification: Where one area of the world falters, others are on the rise. If you’d like assistance to help you evaluate your financial situation  for areas of relative strength, please contact us for a mid-year analysis.

If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.


The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.    



Good News in Real Estate

Hope…it may be the most powerful force in the universe. Evidence shows time and time again that when people receive just a glimmer of hope that they may be able to achieve something, that hope is the driving force that can move mountains, end wars and, apparently – increase home property values.


Dare we hope? The most recent news coming from the real estate industry gives us reason.


[CLICK HERE to read the article, “Hope springs a trap,” at The Economist, May 12, 2012.]


The chief economist for the National Association of Realtors (NAR) believes the housing recovery is underway. In April, new home sales rose 3.3% to a seasonally adjusted annual rate of 343,000. Home resales hit a two-year high and, compared to April last year, sales were up nearly 10%.[1]


Many believe home values have bottomed out. Despite the number of foreclosures and short sales in today’s market, the  NAR reports that the percentage of investors picking up distressed homes is getting lower, indicating a stronger return to normal home buying – surely a reflection of renewed hope for the economy. In fact, foreclosures and short sales accounted for only 28% of sales in April, down from 37% in April 2011. Foreclosed homes are selling for an average 21% discount and short sales an average of 14% below market value.


Some areas (Washington D.C., North Dakota, Phoenix, Seattle, Miami, Naples, Florida and Orange County, California) are actually seeing the return of a seller’s market, due to a shortage of inventory.


[CLICK HERE to read the news release and video, “April Existing-Home Sales Up, Prices Rise Again,” from the National Association of Realtors, May 22, 2012.]


[CLICK HERE to read the article,US home prices jump 1.8%” at Crain’s New York, May 23, 2012.]


[CLICK HERE to read the article, “New-Home Sales Climbed in April, Building Optimism,” at The New York Times, May 23, 2012.]


Lending Still Tight for Prospective Homebuyers

In a recent speech at the Conference on Bank Structure and Competition in Chicago, Federal Reserve Chairman Ben Bernanke gave a relatively positive overview of today’s current banking conditions with one glaring exception: residential lending. According to Bernanke:


“Residential mortgage lending has been particularly sluggish. Tight lending standards and terms remain especially evident…even when the loans were accompanied by a 20 percent down payment, many banks were less likely to originate loans to borrowers with given GSE-eligible [government-sponsored enterprises] credit scores, despite the originating bank’s ability to sell the mortgage to the GSEs.”


Bernanke indicated that most banks are reluctant to accept mortgage applications from borrowers with less-than-perfect records because of the previous requirement that they buy back a defaulted loan if the underwriting or documentation is judged deficient.

[CLICK HERE to read Ben Bernanke’s speech, “Banks and Bank Lending: The State of Play,” at the Federal Reserve website, May 10, 2012.]

Considering your home may represent a large portion of your total net worth, please contact us if you’re interested in a mid-year assessment of your overall financial picture.




[1] New York Times, “New Homes Sales Climbed in April, Building Optimism,” May 23, 3012.


Lower Cost Health Care in Sight?

While there is ongoing debate over whether The Patient Protection and Affordable Care Act can mandate that every American must purchase health insurance, just about everyone from insurers to employers to health care providers to patients can agree that the health care system in the U.S. needs major reform.


Fortunately, reform is already underway. Even if the Supreme Court declares the insurance mandate unconstitutional, the times – they are a-changing. Our traditional one-size-fits-all manner of delivering health care and fee-for-service model of paying for it just isn’t getting the job done anymore.


The new concept for reform is called value-based insurance design (VBID). VBID seeks to remove barriers to quality care, such as paying high fees for doctor visits or prescription drugs. As for payment, VBID pays a bundled fee to the provider based on the health outcome of the patient, not for each individual service rendered to achieve it. Thus, patients receive top quality care at a lower price. Ideally, if the care is appropriate and effective the first time, cost savings are realized when there are no repeat visits or ongoing care expenses.


[CLICK HERE to read the article, “Health reform at 2: Why American health care will never be the same,” at, March 24, 2012.]


The first goal of the VBID concept is to improve health outcomes for patients, while the secondary goal is to reduce the cost of providing that medical care. Even before health reform legislation was passed, the health-care industry was moving toward a more value-based system. But the Patient Protection and Affordable Care Act (PPACA) has played an important role in advancing the VBID concept by soliciting volunteers to be paid via bundled fees, creating certain related mandates, and spurring a flurry of innovative programs currently being tested for their effectiveness.


Unnecessary Care

Another aspect of the VBID strategy is to cut costs by discouraging doctors from ordering tests and treatments that are either unnecessary or low-value relative to the health outcome of patients. It is believed that the volume of unnecessary services constitutes about 30% of health care expenditures.1


1 [CLICK HERE to view the video news story, “U.S. Health Care: The Good News,” at, February 2012.]


In the spirit of cutting costs and health care reform, nine medical societies representing approximately 375,000 physicians have published tests and treatments they believe should no longer be automatically ordered for patients. A sampling of these services is listed below; you can check the full lists at


·         Repeat colonoscopies within 10 years of a first test

·         Early imaging for most back pain

·         Brain scans for patients who fainted but didn’t have seizures

·         Antibiotics for mild- to-moderate sinusitis unless symptoms worsen or last for seven or more days

·         Bone scan screening for osteoporosis in women younger than 65 or men younger than 70 with no risk factors


[CLICK HERE to read the article, “Are You Choosing Tests Wisely?” at Medscape Today, May 16, 2012.]


Medical Loss Ratio

The industry term “medical loss ratio” refers to how much of your premium dollar is considered a loss to the insurance company because it must be used to pay your medical benefits. The rest of your premium goes to the insurance company’s “overhead.” Industry experts project that “overhead” amounts represent approximately 25 to 30 percent of the nation’s expenditures on health care.2 


However, thanks PPACA, starting in 2011 insurance companies were required to reduce their overhead in order to lower the premiums charged to consumers. The companies that did not meet their overhead target are now required to compensate their members via a rebate. The Kaiser Family Foundation estimates that $1.3 billion will be rebated to both employers and consumers this year.2


2 [CLICK HERE to read the article,What is a Medical Loss Ratio?” at, May 15, 2012.]


It seems that if we scaled back unnecessary care and “overhead” charges by insurers, we could save up to 60% on health care costs as a nation. Which is kind of what we do in our own lives when we need to tighten the belt – lower our “overhead” and cut out any unnecessary expenses.


Please give us a call if you could use some help reviewing your insurance and/or financial situation to help trim the fat and save money.




Newton’s Law of Economics: The Power of Sentimental Investors

Newton’s Third Law of Motion (for every action there is an equal and opposite reaction) may well apply to the correlation between investments and investor sentiment.


For example, the nation’s largest bank, JPMorgan Chase, recently announced that instead of posting $200 million in profit, as it had previously estimated, it had actually lost $2 billion. In a conference call to analysts and investors, CEO Jamie Dimon blamed the losses on a complex hedging strategy the firm had engaged in over the past six weeks and warned that the company could lose more.


[CLICK HERE to read the article,JPMorgan suffers big loss,” at, May 11, 2012.]


On the day of the announcement, the company’s stock plunged 9.3%, as you might expect. But the interesting thing is that other investment banks also took a hit – Morgan Stanley fell 3.7 %, Goldman Sachs fell 3.3%, and Citigroup dropped 3.8%. Why? Because investors are concerned that other large banks may have made the same mistake. When pressed as to whether the losses were due to flawed execution or if broader market forces may have played a hand (that could impact other firms), Dimon responded, “Just because we’re stupid doesn’t mean everyone else was.”


[CLICK HERE to hear the audio, “Miss Jamie Dimon’s conference call? Hear it here,” at, May 11, 2012.]


[CLICK HERE to view the video discussion, “JPMorgan discloses $2B in losses in ‘flawed’ hedging strategy,” at, May 11, 2012.]


If you apply Newton’s Third Law toward economics, investors ran in the opposite direction. It happens all the time.


In fact, new research from the Wharton School reveals that investor influence has a whole lot more impact on stock market pricing – and mispricing – than previously believed. The paper purports that investor sentiment influences stock prices up or down to a degree that cannot be explained by fundamentals like earnings and revenues. Furthermore, stocks are more likely to be overpriced when enthusiasm is high than underpriced when it is low – meaning that “irrational exuberance” has a more powerful impact than pessimism. Or, bulls can move market prices higher than bears can lower them.


[CLICK HERE to read the article, “Investor Sentiment and Stock Prices: Explaining the Ups and Downs,” at Knowledge@Wharton, May 9, 2012.]


[CLICK HERE to read the research paper, “The Short of It: Investor Sentiment and Anomalies,” from University of Pennsylvania – The Wharton School; National Bureau of Economic Research, March 12, 2012.]


Isn’t it interesting how investors as a group can have so much impact on market performance when investors as individuals have so little? If you could use some help devising a plan for the financial matters that you can control, please give us a call.




Financial Infidelity

Are you cheating on your spouse? Financial infidelity is another way of saying you spend household money without telling your other half about it. It happens all the time. In fact, according to a new survey by The American Institute of CPAs (AICPA)1, three in 10 adults who are either married or living with a partner admit to buying big-ticket items without discussing it first and stashing away purchases so their significant other doesn’t realize they’ve been shopping.

It’s understandable to want to go out and splurge without permission – particularly after operating under a tight budget in recent years. But spending an inordinate amount of money without your partner’s knowledge is not a great idea. Part of the reason is because household finances may continue to be tight and, even if they’re not, budgetary discipline is important for long-term financial security. But another reason it’s not a good idea is because of the damage it can do to your marriage.


About 27% of couples have outright arguments over money. According to the AICPA, money is the most volatile topic in a marriage, beating out other heated arguments over child rearing, division of chores, and time spent with and/or choice of friends. More than half (58%) of financial arguments are over how one partner’s definition of “needs” and “wants” differs from the other’s2. For example, some women can’t live without a new pair of shoes, while some men need to buy the newest cell phone the day it hits the market. Are these needs or wants?


The answer to that will vary in every relationship. Part of being in a relationship is negotiating what is acceptable and what is not – like flirting with a waitress or bartender. The same goes for money. As a couple, it’s important to sit down and define necessary versus discretionary spending. Be prepared to negotiate these points. Even set aside a specific amount of discretionary spending for each spouse to cover individual preferences like tickets to sporting events or a day at the spa. 3


1[CLICK HERE to read the article, “Lying to your spouse about money? Join the club,” at, May 4, 2012.]

2 [CLICK HERE to read the news release, “AICPA Survey: Finances Causing Rifts for American Couples,” from The American Institute of CPAs, May 4, 2012.]


3 [CLICK HERE to read the article, “Marriage Maintenance When Money Is Tight,” at The New York Times, March 30, 2012.]


Work Woes

Whether staying home by choice or not, nearly one in five (18%) Americans between the ages of 35 and 54 are not participating in the workforce. If a couple decides together that one spouse should stay home while the other one works, it can put a strain on the marriage but at least it’s a mutual choice. However, when this scenario is not by choice it can wreak havoc on the relationship.


According to the Brookings Institute, there is a strong correlation between changes in earnings and changes in marriage. In fact, men that experience the most adverse economic changes also experience the largest declines in marriage. The economy has not only increased stress and arguments among married couples, it’s contributed to many singles simply putting off marriage altogether until they are more financially secure.


No matter how you look at it, managing money when you’re in a relationship can be a difficult proposition. The AICPA recommends working with an advisor as a neutral third party to help you establish and reinforce financial goals, pay bills, monitor accounts and bring up the topic of unusual spending patterns. This might work better than a spouse having to broach the topic of excess spending – or worse yet – not bringing it up at all and stifling any feelings this scenario may ignite.


If we can help you in any way manage the financial situation in your household, please contact us.


[CLICK HERE to read the article, “The 86 million invisible unemployed,” at, May 4, 2012.]


[CLICK HERE to read the article, “The Marriage Gap: The Impact of Economic and Technological Change on Marriage Rates,” at The Brookings Institution, February 3, 2012.] 




We’ve been waiting so long for good news that we are expecting one day, one report or one leading indicator to come out that will announce: “It’s over! Prosperity is here! Go out and buy a home and ask your boss for a raise. The good times are here again!”


Much like your golf game doesn’t convert overnight, neither will our economy. It will take a lot of hard work on consumers’ part to diligently save for retirement and pay down debt. It will take fiscal austerity and enormous compromise between party lines to cut back government spending and keep taxes at a manageable level for middle Americans. It will take a lot of hard work, and it will not happen overnight. So much for the hole-in-one shot.


Which is perhaps why it’s so hard when we see the latest reports that the U.S. economy grew more slowly in the first quarter of this year compared to the end of last year. Once we get good news, we want it to continue, however slowly. These back steps are painful and it feels like we’re having an emotional roller coaster relationship with our own economy.


[CLICK HERE to read, “A Weaker First Quarter Doesn’t Mean a Weak Year,” at, April 27, 2012.]


Global Warming Is Doing Its Part

Interestingly, consumer spending managed to accelerate to an annual rate of 2.9% in the first quarter. The strength is largely attributed to the relatively mild winter that got people outdoors and casing car lots on Saturday afternoons – as apparently the greatest increases came from robust growth in auto sales.


One surprising highlight of the first quarter was spending on home construction and renovations – also attributed to the milder weather. Residents may be fixing up their homes in anticipation of a stronger real estate market, which certainly indicates renewed hope. Experts anticipate housing to contribute to growth this year for the first time since 2005.


Overall, most agree that the first-quarter slowdown is only temporary. Growth is expected to settle in at about 3% by the end of 2012, with expectations that stronger job growth will induce more consumer spending.


Facebook Is Doing Its Part

There’s a lot of press right now about the upcoming Facebook IPO. We’ve learned more about the company’s financials and plans for its future from its S-1 financial statement filed – and amended several times – with the SEC. For example, the company has added 1,500 hundred jobs in just the last 12 months – 43% of its current workforce (although many of those jobs are overseas). The satellite Facebook app industry, which has rapidly taken off during the course of this multi-year recession, employs between 129,000 to 182,000 workers.[1] The wages and benefits they earn range from $1.2 billion to $15.7 billion. Furthermore, Facebook has virtually doubled its spending in the last year thanks to hiring, acquiring and building data infrastructure.


[CLICK HERE to read the article, “Facebook Creates Jobs, Study Finds,” at Smith Business, Spring, 2012.]


[CLICK HERE to view the video, “Facebook Revenue Revealed: The Metrics That Matter,” at Yahoo Finance, April 24, 2012.]


[CLICK HERE to read, “Facebook Growth Stats for 2011-2012,” at Internet World Stats, April 24, 2012.]


You Can Do Your Part

If you’re worried that you’ve gotten behind on your retirement savings, a recent paper from Boston College’s Center for Retirement Research indicates that there are strategies you can employ other than taking on riskier investments to reach your goals. For example, working longer, using a reverse mortgage, or spending 5% less can all have about the same impact as investing your retirement assets in a higher risk, all-stock portfolio. In fact, simply delaying when you start drawing Social Security benefits can have a sizeable impact on your quality of life in retirement. Monthly benefits are more than 75% higher at age 70 than at age 62.


[CLICK HERE to read the article, “The top factors in retirement planning,” at, April 24, 2012.]


[CLICK HERE to read the working paper, “How Important Is Asset Allocation to Financial Security in Retirement?” at the Center for Retirement Research, April 2012.]


Please give us a call to help you devise a plan to potentially increase your economic security in retirement. After all, we should be doing something other than “puttering around” waiting for the economy to rebound.



[1] University of Maryland, Smith School Business, “Facebook Creates Jobs, Study Finds,” Spring 2012.



Today’s economic environment is more complex than ever before, and achieving financial success can be an incredibly confusing process to even the most experienced individuals. That’s exactly why we’ve created this blog – to provide a forum for discussion, a portal for helpful information and resources and an ongoing stream of expert insights to help you make informed decisions about your financial future.

What are your biggest financial concerns? If you’re like many individuals preparing for or actively enjoying retirement, you may be wrestling with any number of pressing issues that keep you up at night.  Many find themselves asking questions such as:

Have we really saved enough?
How do we make up what we’ve lost over the past 2-3 years?
What are the right moves to make in today’s uncertain economy?
What should we be doing with our IRA and 401(K)?
Are there ways to reduce what we’re paying in taxes each year?
How do we create the most meaningful legacy possible for our children and grandchildren?
Will we outlive our retirement savings?

We’ll use this blog to provide valuable insights into each of these areas and more, so take a look around, check out the most recent posts and be sure to offer feedback or post a question if there are topics you’d like to see addressed!

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