Ms. Morrison Speaks Money

Hi everyone!  Just back from entertaining three of my aunts whom I grew up with in Western PA as well as my Mom, my sister, and my cousin (daughter of one aunt in attendance), at my Florida condo.  It’s a tiny little condo, mind you, yet we all made do, sleeping on the 3 beds, plus blow up mattresses and I chose to sleep on the chaise lounge on the deck, my favorite place!  I had suggestions of tourist attractions, yet at the end of the day, they simply wanted to sit on the beach, eat out, and take in some wonderfully discounted shopping.  (Ok, we also frequented Steak-n-Shake a lot, too!)

It all started the week before Easter, when I got a call from a long-time client–she’d been with me for over 20 years–saying that she was diagnosed with cancer.  Wow…how shocking was that news?  I felt sickened and began praying for her and her family immediately.  The very next day, another of my over 20 yr clients called me to say she had been diagnosed with cancer!  Successive days, I heard news of significant health challenges to two wonderful women, whom are more than clients, they are my friends, and moreover, I consider them family.  I went to bed that night saddened, yet determined to help them in any way I could.

I got up the next day with what I called a “harebrained idea”.  I would use my American Express points to fly my aunts down to Florida, and we would just kick up our heels and have fun for a long week-end.  But would they come, I wondered?  I mustered my courage and called my 88-yr old aunt, who has long been adventuresome, and she loved the idea.  “I’ll pull my suitcase out and start packing!” she gushed.  I was tickled pink!  I then phoned each one of them, and gained their acceptance and went about planning our little family reunion vacation.

Here we are at the beach, just enjoying the ocean, and each day’s entertainment–various toddlers who would tempt the receding water levels and then scurry back up to dry sand when the next wave hit!  It was downright hilarious to watch the varying levels of fear in these little kids.  Yet, one-by-one, they all faced down their fears, and eventually, they all went into the water, with plenty of reserve at first, then almost scaring their parents with their apparent abandon.

I began to muse how we mature women face down our fears, in much the same way as these toddlers did; trust and verify.  The kids needed to trust their parents that no real harm would come their way, and then they needed to cautiously step into the water, a toe at a time, to verify that “it was ok, after all”.

I am asking you mature women to trust the messages of your fee-only financial planners, and me, of course, in saying that it’s not too late to learn about our money.  In fact, it’s a downright necessity, so why not come aboard on this learning journey with me.  I’ll make it fun and empowering for you, just like our little Morrison Aunt reunion on the beach.

Another highlight was that my aunt Janet, 88-yrs young, was a Wave in the Navy as a young woman.  I knew she loved the water, so I took her down to the water’s edge, steadied her as we got accustomed to the tide receding, taking the sand out from under our feet, and then I coached her onto a boogie-surf board I’d taken down, and she lay down on the board and hung onto both sides, and I guided her as she rode a couple waves.  It was so exciting, and she had such a grin on her face.  I’ll never forget it!  Nor will she.  We posed for everyone to take our picture, and I said, “once a wave, always a wave”!   

I’m not able to offer you all a free wave ride, yet I am offering you a free call tomorrow evening, Tues, April 28th at 8pm Eastern Standard Time, to give more helpful information about discerning what’s noise and what’s important financial information these days, and what action we may need to take, and MUCH more.  I’ll also be outlining what we’ll be offering on our upcoming 6-week teleseminar series, beginning on Tuesday, May 5th, also at 8pm EST.  Commit to joining us, will you?

Posted by Debra in Debra's Travels | 1 Comment

Well the only good thing about a stock market decline is that we owe LESS taxes on the earnings…ahem, I mean on the lack-of-earnings.  In fact, it gets better.  We can (and should) take up to $3,000 of losses over and above those which offset our capital gains, as a tax loss.

For example, that means that if you had $1,000 in capital gains in 2008, and you also happened to have $1,000 in capital losses last year, that loss counterbalanced that gain, resulting in no taxes owed.  If you had that same $1,000 in capital gains and $5,000, for example, in capital losses  (you needed to have sold out your loss positions which in investment speak is “realized losses”, versus just seeing the value go down on paper) you could have offset the $1,000 in capital gains and then taken an additional $3,000 in capital losses against both your Federal and State income tax returns, thereby offsetting even ordinary income.

Currently the annual limit that one can take over and above offsetting equal dollar gains, is $3,000., yet if you had more than that, like $1,000 more in our example above, you can carry those unused losses forward on your Federal Income Tax return for use in future years.  (I don’t know of any states that allow unlimited capital loss carryforward though, so any 2008 unused losses do expire, relative to your state income tax return.)  So, that’s a bit of tax trivia; i.e., salve perhaps on the wounds of recent portfolio losses.

While some of you will as a matter of principle, wait till tonight, and then begrudgingly deliver your income tax returns to the post office that stays open the latest, others of us will file at least one extension, if not two.  Yet, April 15th typically evokes some emotion, not much of it pleasant.

Well, all the more reason to treat yourself to something for nothin’.  Yes, here are some links to a couple sites’ advertisements for today’s freebies:

http://finance.yahoo.com/taxes/article/106920/18-Deals-That-Offer-Some-Tax-Day-Relief

http://www.usatoday.com/money/industries/food/2009-04-13-restaurants-tax-day-discounts_N.htm

What mature woman doesn’t love a deal.  Now we can feel good again, even for a day, right?  No, as you all know, I say we can feel good every day, despite the chaos that swirls around us.  It’s up to us what we focus on.  I’ll leave you today with this Winston Churchhill quote, which I really find fitting:

“We are still masters of our fate.  We are still captains of our souls.”

With so much piracy present today–literally off the coasts of Africa, and metaphorically with our news media preying on our minds–it is indeed incumbent upon us to captain our minds to focus on our well-being, and on the well-being of our family and friends–both those we’ve met and those we have yet to meet.

Let’s all practice random acts of kindness, starting with ourselves.  We Can Do It Women!

Posted by Debra in Investing | No Comments

Posted by Debra in Miscellaneous | No Comments

Here I am on the right, with Abby Carter, esteemed author of Alchemy of Loss, a brilliant book depicting Abby’s loss of her husband Aaron Dack in the World Trade Center tradegy on September 11th, 2001 and her many victories in living through her pain, and that of her children.  Somehow Abby adeptly weaves humor into the book such that it is not only readable, everyone I’ve given a copy to describes it as an absolute page turner, often reading it in one sitting, because of it’s power and passion.

Abby received the Woman of Strength award last night at the Yale Club in New York City, from the organization Tuesday’s Children.  I was delighted to attend this ceremony and honor Abby.  (I also bought yet more copies of Abby’s book, which she kindly autographed.)  Her award, which she’s holding really resembled an Oscar, or what I’ve seen on television as such.  It really felt heavy.  I immediately drew an analogy of the heaviness of Abby’s loss, yet she’s put one foot in front of the other, as soon as the afternoon of September 11, and has accomplished so much since 2001, especially in raising her two children in a way that astonishes anyone who knows her.  She was fearful, yes, yet she held her fear in a way that propelled her forward, into the next day, and then the next.  Financially she was fearful at the beginning, yet she listened and learned and now is quite remarkable in her mastery of her money.

She is a marvel, and is a fine example of what women can do in the face of adversity.  Congratulations Abby!

She joins me in my mantra, We Can Do It Women!

Posted by Debra in Celebrating Life | No Comments

Many women fear becoming a bag lady in this troubled economy and are searching for ways to spend less to better ensure their money lasts as long as they do.Because we cannot control the economy or the stock and bond markets’ rise or fall, we may be tempted to live our lives as if this current state of contraction would last our lifetimes.  Surely it will not.

What we can control then is how we respond to our fears and how we take care of ourselves during times of economic turmoil. Becoming more vigilant about how we invest and what we spend our money on can help us build prosperity or at least conserve principal, even in times of uncertainty.  Additionally, we can also choose to control how we react to negative financial news and stories of economic distress that are reported hourly on the major news networks and radio.  For one, we can stop tuning in. Removing this negativity from our lives will allow us to concentrate on our hobbies and activities and our relationships–all of which can bring us joy and peace.

Having a positive outlook is not the same as ignoring the problems going on around you. It is simply a tool that you can use to limit the paralyzing grip that fear may otherwise exert over you.

When you stop allowing fear to control you and start managing your fear by 1) putting it into proper context, and 2) remembering how resourceful you’ve been and how resourceful you are as a mature woman, you’ll be amazed at what you can achieve.  You’ve already overcome many fears and seemingly unsurmountable odds, and yes, you can do it again.

I invite you to ask HOW questions to formulate a strategy of living amidst fear.  How will I handle my fear at 2pm; how will I handle fear if it occurs at 2am, how will I manage my mind and emotions when faced with uncertainty.  The best source for these answers, of course, is to reflect back on how we’ve done this in the past.  Yes, we’ve all had successes in the past, and we can learn from ourselves, as well as those around us who have shared their victories.

Remember my past posts on risk, reward, trust, and fear and use the information I’ve shared to stop your fear in its tracks.  We’ve all done it before, and we can all do it again.  Yes, We Can Do It Women!

Posted by Debra in Bag Lady Fears | No Comments

Representing Executive Women's Concerns in NJ

I am convinced of Governor Corzine’s commitment to women in leadership positions because of his track record. On several occasions Governor Corzine has invited the Executive Women of NJ to his residence at Drumthwacket to discuss strategies to improve joblessness and increase business opportunities in New Jersey. Unfortunately budgetary constraints and a burgeoned deficit that preceeded him have hampered some ideas in the near term, yet I have confidence that he is using his business acumen well. That said, he cannot control everything, of course, so scandels in NJ continue to abound as they do in Republican and Democratic watches.
His countless hours of service to our state are noticed and appreciated by many of us, especially when he only accepts a salary of $1.00 per year! Thanks Jon!

Posted by Debra in Gender Differences | No Comments

Warren Buffet was quoted over the weekend saying the economy is in shambles and that it will last for the rest of this year.  Not sure that’s news, yet it’s surely captured headlines.  In fact, Buffett may have needed (he surely wanted) to refocus some of the VERY negative spot light on him, given that his investments, including Berkshire Hathaway suffered the worst year in it’s history, by a VERY large margin.  Don’t get me wrong, I like Warren Buffet, yet I’m NOT sure this is a time for him to be spouting off; perhaps he should stick to his knitting.

Anyway, the Asian and European markets sold off this morning, and then today the US stock markets sold off big time: the DOW closed today at 6763, down 299.64, which is lowest level since May 1, 1997 and the S & P 500 is down 16% in 11 days and 22% in 2009.

Specifically, the S & P 500 ended at 700, which is the lowest close since Nov 1996.  (While some traders have pegged 700 as a critical point level, which if reached would indicate a new low of 600.  While it happens to interest me, I don’t believe anyone knows whether this is the bottom, or, if not, where it is.  They haven’t in previous months, nor have they called the myriad 10-20% gains that various asset classes—including those of DFA—have posted over several weeks during the past months.

There is GREAT NEWS TODAY.  Oddly enough, while neither of these numbers was forecast, consumer spending was up in January as was consumer income.  How long that will last is questionable, given the rapidity of over-projection unemployment claims, granted.  Yet I suspect you may be receptive tonight to GOOD NEWS!  Oil also dropped 10%, so hopefully we’ll continue to see lower gas prices at the pump.

It’s also interesting that we do see emerging markets and tech both up over these past days and weeks, in general, and these don’t typically happen in “normal” bear markets.

We are clearly in a trader’s market, and in a derivatives and shorting market—none of which I participate in as a Certified Financial Planner at Capital Financial Advisors incidentally.

Hey, the new flood of derivative products each time new credit is created makes copulating rabbits look lazy.  Yes, all this betting on gloom and doom, and especially all this continued packaging of non-transparent product is CRAZY!

Yes, we are in what some refer to as a “great” recession; different surely from the Great Depression of 1929.  Yet a great recession will not show immediate promise.   Whether the economy recovers in 2009 is still negotiable, yet the stock market could very well recover before the broader economy does.

I’m praying for the day to come soon where the market’s blood-letting produces transparency.  Once that is restored, and only when that is restored can we expect some positive traction, and consumer confidence and recovering markets.

I am not a trader, let alone a short-term trader.  I have either harvested, or am in the process of harvesting tax losses in my clients’ portfolios in order to “bank” these capital losses that will be used to offset future capital gains.  As you may know, President Obama’s budget plans call for increased capital gains rates from 15-20% beginning in 2011.  So, there is clear value in shielding future capital gains from tax.

I did NOT recommend hedge funds, nor did I receive their fat fees and commission paychecks.  Yes, most hedge funds exacted exhorbitant fees, WITHOUT performance.

I don’t recommend or promote  esoteric financial vehicles that I don’t understand.  My advice particularly to mature women investors is to not invest in anything you can’t understand, or be taught to understand.

While the asset classes in which I invest are down, they ARE able to be defined.  Index-like investing with a Value and Small cap bent principally in Dimensional Fund Advisors, an institutional money management firm.  Real companies, in no-load, razor thin expensed institutional mutual funds.  No Madoff, no Ponzi scheme shenanigans.

Tomorrow Bernanke testifies and Treasury Secretary Timothy Geithner makes his first appearance speaking to the House Ways and Means Committee.  I will be watching and listening, of course, as I have been, low these past months.

The market’s news however didn’t compare to the recent sad news of Paul Harvey’s death at age 90.  What a WONDERFUL man whose rich baritone voice extoled the “the rest of the story” week after week.  May he rest in sweet peace!

As investors, we await the “rest of the story” in the markets.  Yet, my caution is that any short-term myopia about medium and long-term investments is surely misfocused.

Posted by Debra in Investing | No Comments

Yes, you read right.  I partnered with my Internet marketing guru, Michael Tasner, at a business development conference in San Francisco.  We stood 6 feet apart, rested each end of a 6 foot long Rebar Iron bar in the soft spot located in the front of our throats, just under our adam’s apple.  We looked into each other’s eyes, and concentrated on both our current power, as well as having drawn up former powerful images of ourselves by the instructor.

We each uttered the words, “I’m ready”, and then on the count of three, we began to walk towards each other, and UNBELIEVABLY, yes, right in front of our eyes and throats, that 6 foot long once-stiff iron bar bent into a U shape between us, the belly of the U-ed iron bar touching the ground.

What a glorious, and exciting illustration that our minds have incredible power, if only we can channel it.

So, my message today to my mature women who may fear that they can’t understand their money.  We Can Do It Women.  We can use the power of our minds, and sprinkle in some of my assitance through education and empathy to master our money.

Both Michael and I are even more committed believers in the magnificent and almost unbelievable powers of the mind.  Let’s use our minds women.  Let’s overcome whatever may have stopped us before to get in the financial game women, and make our dough rise!

Posted by Debra in Celebrating Life | 1 Comment

As much of the nation’s focus is on the soon-to-be-passed Stimulus Bill, and the tragic Buffalo plane crash, there’s other news that bears notice.

This week, corporations have rushed to take advantage of the opportunity to raise capital, in order to pay down their spiraling debts.  They’ve done so by creating a raft of new high yield, low-rated bonds.

While yield-starved investors—including mature women, whom I seek to inform and empower financially–are likely to attack these as would a shark sensing blood in the water, allow me to issue a warning that there will be blood in the proverbial streets if/when these bonds default.

Remember what our mothers taught us.  If it sounds too good to be true, it probably is.

Let’s start with some definitions first.  There are two major bond ranking agencies; Standard & Poor’s and Moody’s.  “Junk bond” is the slang term for Lower Rated/High Yield Bonds.  Technically a bond that is rated a letter rating lower than BBB- by Standard & Poor’s and rated below Baa3 by Moody’s is called High Yield, or Junk.  US Treasury Bonds are rated triple AAA by comparison.

So while the excess “spread” between the yield of US Treasuries and Junk Bonds has narrowed to a whopping 16%, having been almost 22% in mid December, investors need to exercise extreme caution, IF they purchase junk bonds at all.

The rating systems were designed to act as an indicator of credit worthiness, and bond ratings would generally be thought of as welcome information, providing education to bond purchasers.  That is, people who actually research this information before they buy.

However, many commission starved bond dealers and brokerage house registered reps tend to SELL investments to their clients; with nowhere near as much regard for suitability as that of their percentage commission unfortunately.  Yes, it’s true.

Granted, many of us in the fee-only financial advisory business have been sorely disappointed (if not a far stronger word) in the failure of Moody’s and Standard & Poor’s to issue adequate or accurate warnings for many of the world’s companies that have since gone quite South.  However, Moody’s has just revamped their predictions of global bond defaults as soon as this November to over 3 times that of the current rate, an already high 15.1%.

So, don’t be duped by this week’s flood of high yield bonds.   While I hate to be redundant, pigs get fatter, hogs get slaughtered!  You will have long forgotten where you spent that extra short-term yield, once your junk bond defaults and not only is the income lost, but the principal right along with it.

Please invest responsibly!

Posted by Debra in Investing | No Comments

I also read yesterday that one in five Americans aged 18-34 is obese!  Yes, I have noticed the spread widening on Americans as we sidle up to yet our next buffet or super-sized fast food meal.

I personally was in the Las Vegas audience last week when Karl Rove could hardly contain his chortling as he belittled the obesity epidemic we have in America.  His slick one-liners rolled easily off his tongue mocking the attention and funds that President Obama’s stimulus plan allots to addressing one of America’s costliest and most debilitating ills.  It surely didn’t surprise me that Karl apparently doesn’t care that this generation is the first that is scheduled to live less years than their parents, principally because of obesity.

I say arrest this obesity epidemic now, and yes, earmark funds for public awareness programs and treatments.  We need to lead by example, as adults and as a nation.  We do want our bodies to last as long as our hearts keep pumping, and we do hope to remain vibrant in our golden years.  Wedo want to be able to move with, and play with, our grandchildren or nieces and nephews.  There is hope!  The TV blockbuster, Biggest Losers is key evidence that with personal will power and the support of others we can winthe fight against obesity.  We Can Do It Women! and men too, of course.

Apparently the State of New York heard me and others calling for a healthy America, in recently instituting an obesity tax on certain sugared soft drinks.

Even the military is weighted down with ineffectiveness these days, rendering our very national security more vulnerable.  The number of service people diagnosed as obese has more than doubled since the 2003 invasion of Baghdad, Iraq.

At the end of the day, we are talking about a slippery slope with regard to so much of America’s and the globe’s appetite, greed, addiction and/or depression.

I listened to a reformed, yet once-convicted securities representative give an ethics lecture last Friday.  He carefully explained that he went step-by-step deeper into oblivion believing he would give only this one kickback; and then never again.  Further, how he never figured he’d get caught.  His was an addictive game of greed and egotism.

He admitted that the beloved women in his life—both his mother and his wife—warned him of his errant ways, yet he willfully broke their hearts, as well as that of his young sons, by continuing his slide into the grips of greed, eventually losing his family relationships and his possessions, and being imprisoned.

Time will tell the full story of Bernie Madoff, and the myriad other Ponzi scheme architects, yet I suspect that decisions became more and more laced with optimism about add-water-and-stir wealth.

Little attention was paid to the prospect of getting caught.  The aire of being above the law permeates a crook’s decision making, and in Madoff’s case, nary a care about the individual’s and foundation’s throats he stomped on.

For the record, I’ve never been bankrupt, never committed a felony (or even a misdemeanor) never accepted kickbacks, consistently voted in local and national elections, always worked at least one job (often 2-3) have an exceptional FICO score, great employment history, and haven’t cheated employees or family members.   Not sure that’ll make headlines, nor could I be a wildly successful public speaker in the opinion of some yet I do know right from wrong, and I attempt to live by the Golden Rule.  Boring yet beautiful.  Simple and proud of it.

Values still remain, and a majority of American’s still uphold them.  The media needs to search out those who would balance out the negative headlines and showcase the many ball players, military, and business people that play by the rules and enjoy a lifestyle befitting them and their labor/contributions.

So, hearty congratulations to all my readers who achieve greatness in their fields, in their families in their communities and in this fragile global network  It all starts in our heads, you know.  If we believe we can do it, we can.  With the continued commitment towards personal excellence, and with the support of our loved ones we can achieve massive victories.

Congratulations to all my mature women readers who are pushing past their personal fears to begin to understand money and the role it plays in their lives.  I am eager to throw a life preserver to you in the form of education and cheer leading regarding your money.  With over 30 years of experience investing client’s money, I can help you sift through the mountains of financial information to cull what’s important to your financial future.  Your past accomplishments are fodder for your money successes. We’ll use a combination of common sense, history, and future thinking to forge ahead and ultimately ensure that your money will last your lifetimes.

No, we will not succumb to paralysis about our money any longer.  We’ll say no to our Bag Lady fears that otherwise rob us of rich moments of our lives when we could be creating memories with our loved ones.  We will face our challenges head on, step by step with a winning plan.  We will resort to our resolve and discipline and reap the rich rewards, all without ever needing to cheat.

Congratulations on reintroducing the word NO back into our language, and meaning it.  No to unlimited buffets, no to unlimited profits, no to drugs, no to unfair business practices, no to dog-eat-dog greed, no to becoming addicted, and no to staying addicted.

In essence then, once our NO is taken seriously—principally by us—then our YES begins to have much more meaning.  Yes to HOPE, yes to continued hard work, yes to pitching in, yes to opportunity, yes to education, yes to studying something new, yes to mastering our money, yes to health, yes to living our lives fully, yes to giving back.  Yes, yes, yes, We Can Do It Women!™

Posted by Debra in Bag Lady Fears | No Comments