How do you compare life insurance companies? What features do you examine? What criteria do you use? How do you know what to look for? Making sure that your insurance company is financially sound is an important part of helping to ensure family security.

Fortunately, there are a number of independent companies that make these evaluations. These rating companies carefully examine each insurance company in the areas of profitability, debt, liquidity, and other factors. From the results of these examinations, they then issue overall ratings.

Looking up a company’s rating will provide you with a snapshot of that company’s financial … Read the rest

If you own a business, chances are you’ve at least thought about the conditions under which you will leave the business and who is going to take over after you’re gone. Business continuation is difficult enough under normal circumstances, but if it takes place following the unexpected death of a key person or owner, the complications can increase exponentially.

Company-owned life insurance is one way to help protect a business from financial problems caused by the unexpected death of a key employee, partner or co-owner. If the covered individual dies, the proceeds from this type of insurance can help in … Read the rest

If you receive a distribution from a qualified retirement plan such as a 401(k), you need to consider whether to pay taxes now or to roll over the account to another tax-deferred plan. A correctly implemented rollover avoids current taxes and allows the funds to continue accumulating tax deferred.

Paying Current Taxes With a Lump-Sum Distribution

If you decide to take a lump-sum distribution, income taxes are due on the total amount of the distribution (except for any after-tax contributions you’ve made) and are due in the year in which you cash out. Employers are required to withhold 20 percent … Read the rest

Are you saving for retirement? For your children’s education? For any other long-term goal? If so, you’ll want to know how inflation can impact your savings. Inflation is the increase in the price of products over time. Inflation rates have fluctuated over the years. Sometimes inflation runs high, and other times it is hardly noticeable. The short-term changes aren’t the real issue. The real issue is the effect of long-term inflation.

Over the long term, inflation erodes the purchasing power of your income and wealth. This means that even as you save and invest, your accumulated wealth buys less and … Read the rest

There are many types of employer-sponsored retirement plans.

One that may appeal to small businesses and to self-employed individuals is the savings incentive match plan for employees (SIMPLE) because, as the name implies, it is easy to set up and administer, and employers are allowed to take a tax deduction for the contributions that are made.

SIMPLEs can be established by small businesses that have 100 or fewer employees (who were paid at least $5,000 or more in compensation during the previous year) and do not maintain other retirement plans. They can be structured as an IRA for each eligible … Read the rest

Before making any investment decision, one of the key elements you face is working out the real rate of return on your investment.

Compound interest is critical to investment growth. Whether your financial portfolio consists solely of a deposit account at your local bank or a series of highly leveraged investments, your rate of return is dramatically improved by the compounding factor.

With simple interest, interest is paid just on the principal. With compound interest, the return that you receive on your initial investment is automatically reinvested. In other words, you receive interest on the interest.

But just how quickly … Read the rest

By taking steps in advance, you have a greater say in how questions regarding your estate are answered. And isn’t that how it should be?

Wills and trusts are two of the most popular estate planning tools. Both allow you to spell out how you would like your property to be distributed, but they also go far beyond that.

Just about everyone needs a will. Besides enabling you to determine the distribution of your property, a will gives you the opportunity to nominate your executor and guardians for your minor children. If you fail to make such designations through your … Read the rest

As an investor, you know it’s important to have a portion of your holdings in savings. Opinions differ, but most financial professionals agree that adequate savings should form the basis of any sound investment strategy. There are a number of savings alternatives that could help you accumulate adequate savings and earn a reasonable rate of return.

Certificates of Deposit

Certificates of deposit are really just short-term loans to a bank, credit union, or savings and loan. They offer a moderate rate of return and relative safety because they are insured by the FDIC for up to $250,000 per depositor, per … Read the rest

As with virtually all financial matters, the easiest way to be successful with a cash management program is to develop a systematic and disciplined approach. Spending a few minutes each week to maintain your cash management program can help you keep track of how you spend your money and pursue your financial goals.

Any good cash management system revolves around the four A’s — Accounting, Analysis, Allocation and Adjustment.

Accounting quite simply involves gathering all your relevant financial information together and keeping it close at hand for future reference. Gathering all your financial information — such as income and expenses … Read the rest

You just received a representative contract from a potential new principal. The product line looks like a winner. You read the contract. You look at the territory, the commission rate, the length of the contract, and the reasons for early termination. You may also look to see if you are to be compensated if the principal undergoes a change of control. Hopefully, you look to see if there is a non-competition provision that prevents you from selling competitive products while the contract is in effect and after it ends.

Another provision that should be carefully read is the one that … Read the rest

Legend has it that Sicily’s King Hiero of Syracuse once commissioned a new royal crown for himself, for which he provided an ample supply of solid gold for the goldsmith to use. When the finished crown arrived, the good king had suspicions that the goldsmith may have used only a portion of the gold provided, keeping the unused portion for himself and adding sterling silver to balance the crown to the correct weight.

To find out if this was true, the king turned to his jack of all trades, Archimedes — the Greek mathematician, physicist, engineer, inventor and astronomer — … Read the rest

What I really dislike about the first few weeks of the New Year is that everywhere you turn — from the front page of the newspaper to the business magazines to the financial channels on cable — you’ll probably be subjected to some wide-eyed “market expert” spouting ridiculous stock market predictions for the coming year.

Those financial gurus, talking heads and media pundits all begin with a comprehensive review of what’s happened over the course of the past year. Armed with that enlightening data, they then try to play Nostradamus and predict what will happen over the next 12 months.… Read the rest

There’s a story that’s told of an old farmer who had toiled in his fields for many years. One day his horse ran away. Upon hearing the news, his neighbors came to the farmer’s house to console him.

“Such bad luck,” they said sympathetically.

“Maybe,” the farmer replied.

The next morning the horse returned, bringing with it three other wild horses.

“How wonderful!” the neighbors exclaimed.

“Maybe,” replied the old man.

The following day, his son tried to ride one of the wild horses, was thrown, and broke his leg.

The neighbors again came to offer their pity on his … Read the rest

As strange as it sounds, there are many parallels that can be made between savvy investing and fantasy football.

While it’s fun to piece together these make-believe teams and compete amongst friends, there’s a lot to be learned about controlling emotions and managing expectations through fantasy football, and how that ultimately relates directly to investment habits.

Allow me to set this scene: At the end of August you’ve drafted what you believe to be a stellar group of football players who together comprise the best team in your fantasy league — at least on paper.

But when it’s early November … Read the rest

“Fire Hue Jackson!”

The calls are flooding into the airwaves of 1480AM, WHBC in Canton, Ohio. Hosts Kenny “The Roadman” Roda and Jeff “J.T.” Turk are getting an earful from frustrated and angry fans. The Cleveland Browns are again in the basement of the AFC North and the overwhelming call is to fire the coach.

The team definitely needs to shake things up and send a message, but does firing the manager or coach really have any significant effect on a team’s overall performance?

The answer is a decisive, not really.

John Charles Bradbury of Kennesaw State University published a … Read the rest

One of the world’s most popular global sporting events began earlier this summer. On June 14th the 2018 World Cup kicked off in Russia with much fanfare and anticipation. The World Cup is so popular, it’s been reported that in 2014 more than a billion television viewers worldwide watched Germany’s 1-0 win over Argentina in extra time at the Maracana Stadium in Rio de Janeiro.

For the uninitiated the World Cup begins with 32 national soccer teams competing for the cup. Like the Olympics, the World Cup is held every four years and alternates among different host nations across the … Read the rest

In the investment world there’s usually a large chasm among stock market forecasters about the future direction of the stock market.

The “Bulls” point to the recent tax cuts, earnings and other far-off ideas emanating from their Ouija boards. The “Bears” point to the volatility, retail woes, future interest rate hikes, and political uncertainty, among other things. And again, as always, the investor is left trying to separate wheat from chaff.

With this scenario as a backdrop, I thought it would be useful to share one of my favorite fables.

The Hedgehog and the Fox was written by Sir Isaiah … Read the rest

Have you ever had the opportunity to watch the program Who Wants to Be a Millionaire? The premise of the hit TV show focuses on a contestant who selects one of four multiple-choice answers to a trivia question. The more questions they answer correctly, the more money they can win.

But, of course, the questions get progressively more challenging, so the contestant is offered three “lifelines” when they’ve become stumped on a particular question. One lifeline is called “50-50” where the computer takes away two of the wrong answers and leaves the contestant a 50-50 chance of guessing the … Read the rest

“What are the best stocks to own?” “What are the best markets for me to be in?”
“Should I be a value investor or a growth investor?”
“Should I be a trader?”

I love it when folks ask me these questions and the ensuing conversations. Those talks are always fun and interesting because, in general, most investors (and their advisors) often put the cart before the horse when determining investment strategies. They’re seeking tactics without first formulating an objective.

So my standard reply to these questions is, “Overall, what are you trying to accomplish with this pile of money?”

I … Read the rest

Much has been published and much is still to be published on the impact of the new federal tax law recently made effective generally as of January 1, 2018. Based on our experiences with the operation, management and sale of manufacturers’ rep agencies, here are some thoughts on the new tax laws.

S vs. C Corporation

For a number of years, the S corporation has been the entity of choice for manufacturers’ representatives because S corporations themselves generally are not taxed. Instead, the income or loss of an S corporation rep agency is taxed at the shareholder level. In addition, … Read the rest

Contested in February, The Daytona 500, also known as “The Great American Race,” is regarded as the most important and prestigious race on the NASCAR circuit. And obviously, the big question every NASCAR fan alive is asking is “Who will win the race?”

The most logical answer is the driver who drives in the straightest line. Everyone knows that the shortest distance between two points is a straight line. In investing, a straight line is everything working out exactly as you expected, and you know that doesn’t happen too often.

When you’re driving your car from “point A” to “point … Read the rest

Continuing a discussion on how a sales rep might recover post-termination sales commissions under a terminable representation agreement, and having previously discussed Procuring Cause, I turn now to Bad Faith (BF).

Bad Faith

A claim for BF in a principal-agent relationship will be more readily available. First, because there are fewer limitations on bringing such a claim, such as the limitation on a PC claim if the contract at issue addresses post-termination commission rights. With a claim for BF, a principal may follow a contract’s termination provisions to a tee, but a claim for BF may still be a winning … Read the rest

Would you like to have your investment portfolio or your workplace 401(k) managed by the top 15% of all money managers in the world?

It’s a serious question: Having a professional who is considered to be in the top 15 out of 100 money managers in the world managing your money.

When I ask this question most investors say, “Sure, that would be great! How can I do this?”

The answer is very simple. Just invest in the Standard and Poor’s 500 Index (S&P 500). In the past 14 years the S&P 500 beats 85% of all money managers out … Read the rest

Imagine this scenario: You haven’t been feeling well, so you decide that a trip to your doctor is in order. After the exam, your doctor writes out a prescription for Drug A. You then proceed to the local drugstore to fill your prescription.

Two weeks later, you discover that your doctor moonlights as a pharmaceutical sales representative for the same company that makes Drug A. So by prescribing Drug A for you, that doctor received a commission from the drug company.

What’s your first reaction? Is it one of skepticism? Do you question whether or not you really needed Drug … Read the rest

I’m starting to get a reputation in this industry for talking a lot about my market indicators. From my “Two-Minute-Tuesday” weekly update videos to normal conversations with clients, I somehow always revert the discussion back to the indicators.

It’s time to reveal what my indicators are.

First, let’s clean up a major misunderstanding. The indicators I use are not on/off switches. I don’t have any flash-in-the-pan indicator that says, “Hey last week the President tweeted this and that, which will most likely be well-received by the markets. So you need to go all-in, Mr. or Mrs. Client.”

My indicators don’t … Read the rest

We’ve all heard the old fable about the “Boiling Frog.” In the story a frog is placed in a large pot filled with cold water. He’s very content with not a care in the world. Then someone comes by and fires up the burner. The water in the pot slowly begins to get warmer and warmer. But the frog is not concerned, as he finds the warmth refreshing. The heat keeps gradually rising until the frog has become so relaxed he falls asleep, never to awaken.

This story reminds me of today’s investors, including individuals with IRAs, 401(k)s and other … Read the rest

I recently received an interesting text from a client which inquired “In your weekly ‘Two‑Minute‑Tuesday’ video market round-up, you stated that your main intermediate indicator had shifted from ‘Offense’ to ‘Defense.’ Given the election last fall, I’m nervous. Should we just sell everything and go to cash?”

The short answer to that insightful question is “No.”

You see, selling all of your investments and converting to 100 percent cash is an aggressive move. But for me to make this bold move, there would have to be absolutely nowhere to hide and no hope for the any of the six primary … Read the rest

Imagine a scenario where the market drops 20 percent this year. Sounds drastic, but in fact it did just that in 2001, and again 2002 and once again in 2008. Back then, many investors used the majority of the next big move up just getting back to even instead of making money. (See my article, “Two Beers, a Napkin and a 401k,” May 2013, Agency Sales).

But suppose in this scenario you were able to avoid the “big hit” and experience a flat return or just a minuscule loss. Wouldn’t you agree that you’d be in good shape going … Read the rest

To best explain what an Exchange Traded Fund is, let me first explain what a mutual fund is. Mutual funds, like ETFs, are a basket of investments typically made up of stocks, bonds, commodities and/or currencies.

When you invest in a mutual fund, you’re investing in terms of dollars, not shares. The reason for this is that you never know exactly what price you’re going to pay because you get the closing price of the fund on the day that you buy it. So you say, “Okay, let’s put $10,000 into this mutual fund.” You don’t say, “Let’s buy 217 … Read the rest

One of the most frequent questions I’m asked in the course of my business is, “Why does the market behave the way it does?”

There is an old saying on Wall Street that the market climbs up the stairs but comes down on the elevator.

That’s really a true picture. I have found in more than 28 years as an investment advisor that the market, in its same old boorish way, slowly and steadily grinds up until…BAM! Five percent down in a couple of days or 10 percent down in a week. It happens. Maybe you’ve experienced this phenomenon yourself … Read the rest