Millennials, they're not so bad.

Millennials get a bad rap and some of it for good reason. They are, it seems, spoiled, entitled, and feel that the world owes them a big break. They have grown up in the world of reality TV, hip-hop, hedge funds, and overnight billionaires who have created an app that brings a car to you (what’s up with that?).

You can see that from a distance it is easy not to like them. I am afraid, though, that I am changing my tune. I recently moved into a new office—or workspace, as they call it. It is full of millennials who have started new businesses, some who are freelance designers, and others who do stuff with the World Wide Web. I hear them discussing their work with each other but still don’t understand how clicks on a Web page generate revenue, but according to them, the checks come in. Damn, I sound old.

Work for my generation involved a desk and a telephone. We sat at our desks, most likely in a cubicle, and we did our work. Eventually, they gave us a computer. We went to lunch, worked some more, and then we went home.

Millennials come to work with their MacBook Air, an iPhone, and a headset, and they are working. They can be in an office, a conference room, or a coffee shop, but they are working and producing. They Skype, Facetime, or use another technology to communicate face to face. My generation spends hours in meaningless meetings. It’s what we were taught. How unproductive.

I am in awe of this younger generation and am glad to be around it. They are smart and resourceful. They get stuff done. Fast.

Really?

The price of oil has dropped to a five-year low, hovering near $67 a barrel. The drop has sparked a frenzy of discussion about the impact this will have on global economies. Here in the United States, there seems to be an enthusiasm among economists and Wall Street talking heads that it will create an uptick in consumer spending, creating more demand for consumer goods—Mr. and Mrs. Jones will have more money in their pocket because they are spending less at the gas pump.

There has even been discussion that the gas war is over and that demand for bigger SUV’s will soon start to surface.

 

As a country and members of the human race, can we really be this shortsighted? It was just a few years ago that oil was over $100 a barrel, and the emphasis was on building electric cars and cars fueled by natural gas and expanding our electric rail system.

Climate change is real: you don’t have to look very far to see that our weather patterns are changing, ice caps are melting, and where there was once land it is now covered by water.

Like investing for your retirement or a child’s education, you can’t make long-term decisions based on short-term reactions. If you go back and look at a chart of oil prices over the last one hundred years, you’ll see they have gone up and down more times than Pinocchio’s polygraph test. (Don’t you love that Geico commercial?) Oil may have temporarily receded, but as soon as the oil barons of Saudi Arabia, Iran, and North Dakota decide to cut production, prices will rise again.

If we learned anything over the past five years since the financial crisis, it’s that you have to be positioned for both good and bad times. A portfolio must have the right mix of stocks, bonds, and cash to weather a storm. We still need to save more, and just because we are saving a few dollars each time we fill up the gas tank, that doesn’t mean you can now buy that 75-inch flat screen you have been eyeing or upgrading to that new Chevy Tahoe SUV. If you remain consistent in your lifestyle while tapering your spending habits, it will be a lot easier to ride the waves of up-and-down oil and stock market prices. More important, if we maintain an outlook of continuing to reduce our carbon footprint and not getting sidetracked by lower oil prices, the planet will be around longer for future generations to enjoy.

Shortsighted reactions = Bad long-term decisions

Taxes and Wine

Yikes, it’s that time of year when we start saying, “I can’t believe it’s that time of the year again.” Starting next week, holiday decorations will adorn office building lobbies, stores, and your neighbors front lawns. You won’t be able to escape the endless loop of holiday commercials. I dread that Lexus commercial so much—who wakes up on Christmas morning with a new car in the driveway?

It also that time of the year to make your year-end tax moves.

·        Max out your 401(k), if you are older than 50, you can contribute up to $23,000. If you are self-employed and have a Simplified Employee Pension (sep) ira, you may be able to put away more. You have until December 31 to set up a sep for 2014.

·        If you are over 70½, you need to take your required minimum distribution (rmd) from your ira. Failure to do so by December 31 can result in a penalty.

·        Tax-loss harvesting: if certain investments didn’t work out, take the loss. You can use the loss to offset gains or carry it forward to offset future gains.

·        Give to charity. Aside from the good that comes from supporting your college, hospital, or social cause, your donation can help lower your taxes. If you have highly appreciated securities, they are great investments to donate; you avoid paying the capital gains tax, and you get the deduction for the charitable donation. It’s not a bad idea to set up a donor-advised fund for your charitable giving. A donor-advised fund is essentially a vehicle that accepts your donation (cash, stock, real estate, etc.) and allows you the flexibility to distribute funds to the charities of your choice over time.

·        If you have children or grandchildren, you can contribute to their 529 accounts. We all know how fast the cost of college is growing. Grandparents can contribute to an existing 529 account or set up their own, naming their grandchildren as beneficiaries.

Next week is Thanksgiving, and I thought I would close out this post with a few wine and beer selections to complement your turkey feast. I am a firm believer that there is no “right” wine to drink with your dinner. Drink what you like, and who cares what your pretentious uncle has to say.

·        2012 Slingshot Napa Valley Cabernet. I love this wine! It’s soft, with a lot of fruit, and not terribly oaky. It will definitely not overpower your bird or pumpkin pie.

·        2012 Montinore Estate Pinot Noir. I wrote about this Oregon wine earlier in the year and still consider it my go-to pinot. Pinot noir is the traditional red wine of Thanksgiving because of it softness and earthy flavor. While I have not tasted Montinore’s Almost Dry Riesling, I have read great things about it. Riesling is a superb white wine choice with turkey because of the richness of flavor and slight sweetness on the finish.

·        2012 Argyle Pinot Noir. This is another Oregon pinot noir that is peppery and full-bodied enough to take on that overcooked turkey.

As I said earlier, I believe in drinking the wine you enjoy. But if you really want to impress someone on Thanksgiving this year, bring a gewürztraminer to dinner. Gewürztraminer is a grape varietal that is grown all over the world but is most prolific in Germany and the Alsace region of France. There are many fine American gewürztraminers, many from wineries in northern Michigan, specifically the Leelanau Peninsula. One of my favorite gewürztraminers comes from a California winery, Gundlach Bundschu. This is the ultimate turkey wine—luscious, viscous, and packed with aromas to complement everything on the table. Trust me!

Last but not least a Thanksgiving beer, and it’s an obvious one. While some pumpkin beers can be overpowering, too much cinnamon and clove, Southern Tier Brewery located in western New York State makes a winner called Pumking. This beer comes out before Halloween, but you should still be able to find bottles at your favorite retailer.

 

 

Enjoy your Thanksgiving with friends and relatives. Cherish the time off, watch some football, eat until you can’t eat any more, and most important, if you are traveling, travel safe. Happy Thanksgiving.

 

A Guide to Great Service

I am a good service junkie. Some people love cars or watches. I love a great customer experience. Whether in a restaurant, grocery store, or a doctor’s office, a superb customer experience is a work of art and makes me want to come back again and again.

We have all experienced the worst in customer service: your local cable provider is as bad as it gets, followed closely by your bank. Having someone apologize for lousy service doesn’t make it any better.

I first learned about the art of the customer experience at a seminar over 20 years ago at the world-renowned deli Zingerman’s.  Yes, a deli, in Ann Arbor, Michigan.

From the moment you walk into Zingerman’s, you are king. There are samples of food displayed everywhere. Enthusiastic sales people are scrambling to answer any question you have. If you want to taste a Sicilian olive oil, they’ll crack it open. They know that an engaged customer is a happy customer who will come back time and time again.

If you want to read about the art of giving great service, I suggest you order a copy of Zingerman’s Guide to Giving Great Service by Ari Weinzweig, www.zingermans.com/Product.aspx?ProductID=P-ARI-7.

What prompted me to write about great customer experience was a trip I took with my daughter to her dermatologist. Granted, this is a fancy Upper East Side dermatologist who does not take insurance, but the experience was great—you almost don’t care that you have to remortgage your apartment when you check out.

When you enter this doctor’s office, you are immediately made to feel relaxed and happy. The walls and carpet are a rich cream color, there is beautiful comfortable furniture to melt into, and your favorite music is playing on a super chill Pandora playlist (think Dave Matthews meets Van Morrison.)

While my daughter was being treated, the doctor noticed a burn I had on my wrist from a cooking mishap. She didn’t like the way it looked, and without saying a word, her nurse began bathing my wrist in hydrogen peroxide. A baggie of bandages and “special” antibiotic cream was prepared for me. All of this with no words exchanged.

After we were done, we walked over to settle our bill. We were greeted by a very pleasant young exchequer, and there on the counter beside her was a glass vase filled with the best caramels I have ever had. I popped one in my mouth and eyed my daughter, signaling her to throw a few more in her pocket.

 

My daughter thinks I am crazy to feel so happy about a trip to the doctor, but this was an unbelievable customer experience. Who ever says they had a great experience at the doctor’s office? Usually the waiting room has uncomfortable generic furniture, torn-up old copies of People magazine, unhappy receptionists, and no Van Morrison playing in the background. Certainly no delicious caramels. This doctor has made every effort to wow you from the moment you walk through the front door. You are happy to be there.

If you are in the service business, think about your customers’ experience. Have you thought about every possible step and how it might be improved? Are you meeting or surpassing your customers’ expectations? Do your customers value your service, your expertise? Do customers rave about you to their friends and colleagues? If not, it’s time to think about how you really want to be treated and do that for your customers.

Failure to Fail

My 10^th grade daughter has more homework each night than I had each week when I went to high school. It is astounding; she is up until 1 or 2 o’clock in the morning doing homework. She is not a procrastinator or busy multitasking on Facebook and Instagram. She may get a late start because she runs cross-country, but I don’t think she starts her homework any later than most 10^th graders.

The state of education in this country and maybe other developed countries is simply abysmal. I am not an expert on education, and in all fairness I have never attended a PTA meeting in my life. What I can tell you is that schools are failing to really educate our children. Schools do a really good job of giving homework and preparing students for standardized test, but are we educating our children?

In a recent New Yorker article on this subject, Nathan Heller writes about whether elite colleges are “bad for the soul.” Much of the article is about William Deresiewicz and his essay in the American Scholar, “The Disadvantages of an Elite Education,” and book Excellent Sheep: The Miseducation of the American Elite and the Way to a Meaningful Life.

According to Deresiewicz, the system “manufacturers students who are smart and talented and driven, yes, but also anxious, timid, and lost, with little intellectual curiosity and a stunted sense of purpose: trapped in a bubble of privilege, heading meekly in the same direction, great at what they’re doing but with no idea of why they’re doing it.”

Why are we still having students memorize facts instead of teaching what they really mean or don’t mean? My daughter is asked to read the front page of the New York Times every day and then quizzed on random facts. Wouldn’t it be better to discuss the front page and ask students what they think of a story or have a discussion about how they’re dealing with the stories about ISIS or Ebola?

I constantly see T-shirts or bumper stickers advertising the importance of failing, getting up, dusting yourself off, and trying again. But are we really teaching our children this approach to life? If they are only focused on their grades and knowing what they are supposed to know, are they learning the importance of failing, figuring out what it might take to find a different way, and then trying again (and again)?

If we really believe in the importance of failing, then we have to encourage our kids to be okay with failure, to take risks and experience a full range of outcomes, both good and bad.

This idea of learning through tests has crossed over into college. This is a time in young adults’ lives when they should be exploring every opportunity. Deresiewicz writes, “The job of college is to assist you, or force you, to start your way through the vale of soul-making. Books, ideas, works of art and thought, the pressure of the minds around you that are looking for their own answers in their own ways: all of these are incitements, disruptions, violations. They make you question everything you thought you knew about yourself.”

We are truly failing our children if we don’t start letting them know it’s okay not to get an A if it means they are really engaging with what they’re learning. If they’re studying in order to get an A but fail to really know, feel, or understand the material at hand, it’s not an A. It means they are robots.

Slow Mo

 As I have noted in several blog posts, before I was an investment advisor, I imported wine, olive, and balsamic vinegar. The balsamic vinegar that I imported was produced by a friend of a friend in Modena, Italy. His name is Massimo Bottura. Massimo is a chef, and his restaurant in Modena has been awarded three stars by Michelin for the past few years. Massimo has become quite a famous chef and recently published a book called Never Trust a Skinny Italian Chef.  

Massimo turned me on to a growing movement in Europe at the time called “Slow Food,” which caught on here in the United States many years ago. Slow food was a reaction in Europe to the rising number of American fast food chains then spreading across the Continent. The tipping point came when McDonald’s opened a store at the base of the Spanish Steps in Rome.

Slow food is a state of mind; it’s about eating food that is fresh and healthy, food that is pesticide and chemical free and accessed in a way that is beneficial to all.Slow food is also a lifestyle choice; it’s about slowing down and enjoying the proverbial roses. 

I view investing in a similar fashion. Like the Slow Food movement, it’s organic, and it needs time. Wealth is created slowly, by saving and riding out the ups and downs. Investing should be boring.

When Warren Buffet was once asked how the average person gets rich, he answered: “Spend less than you make, always be saving something. Put it into a tax-deferred account. Over time it will amount to something. This is such a no brainer.” I love Buffet’s mantra, “Boring is beautiful.”

It is hard for me to believe that the man I was driving around Emilia-Romagna with tasting balsamic vinegar is now one of the world’s most famous chefs. In the last few weeks he has been on Charlie Rose and Jimmy Kimmel. He even created a special hamburger for Shake Shack. When interviewed by Charlie Rose, Massimo spoke of the concept of “making simple the difficult thing.” As a purist and true believer in simplicity, I love that idea. Whether we are talking about food, wine, life, or investing—keeping it boring and simple, that is the road to success.

Take Me Away

Okay, somebody call a time-out. Things are getting a little too edgy. Everybody back to their corner, now! We know that we live in a 24/7 news cycle world. It never stops—they’ve got to keep you scared and interested so you don’t change the channel or stop looking at the screen. 

I’m taking a breather. This week no market volatility discussion, no recession talk, no Ebola—let’s sit back and open a nice bottle of wine and breathe. Ahhhh, relax, and let’s enjoy the weekend.

A long time ago I gave up drinking chardonnay, especially that overly oaken beverage they claim is wine. Did you know that some California wine producers actually soak their juice in wood chips to get that oaky flavor? 

Recently I have been drinking one of France’s treasured wines, Muscadet. Muscadet is sometimes confused with the sweet wine muscatel, from the grape varietal muscat. Muscadet is a dry white wine from the Loire Valley. The wine is made from the muscadet grape, sometimes called melon. It is bone-dry with a little bit of a mineral taste, in a good way. There are several growing regions within Muscadet; the most famous wines come from Muscadet Sèvre et Maine.

What I love about Muscadet is that you can taste the fruit. It is not overpowered by oak or wood chips. It is subtle and elegant. Muscadet is best served with shellfish, but at a recent lunch I enjoyed a glass with Pork Milanese and a frisée salad—perfection!

Muscadet is best enjoyed young, so purchase a bottle from a recent vintage (within the last two years). Another great thing about Muscadet is that it is cheap. You don’t have to spend more than $12.00 for a good bottle.

Two bottles that I have enjoyed recently were from Château de la Chesnaie 2013 and Domaine de la Tourmaline 2012.

Go ahead, put your worrying on hold, or better yet, let it drift away and buy a few bottles of Muscadet this weekend. Prepare a pot of mussels or buy some fresh oysters and shrimp and Muscadet—take your troubles away.

 

Wouldn't It Be Nice

October is here: autumn foliage is getting into full gear; it’s time for apple picking, pumpkin carving, drinking pumpkin beer; and the stock market is getting a bit more volatile. Statistically speaking, 25 percent of all 6 percent moves in the stock market (up and down) have occurred during the month of October. What does that sentence mean, and what does that mean for your portfolio? Simple answer: absolutely nothing!

We have all grown a bit complacent following the financial crisis of 2008–9. Since then, global markets have rebounded nicely, and one begins to wonder, “Why don’t I just own stocks? Why don’t I just own GoPro or Alibaba?”

I like to tell clients that it would be great if stocks went up every day, but they don’t. You have to accept that with up comes down. Over the past few months I have been reminded of the importance of asset allocation. Headlines announcing the current geopolitical risks—Hong Kong, ISIS, Ukraine—have heated up, making the daily swings in the stock market more pronounced.

Now is a good time to ask yourself some questions: Have my views about investing changed? Can I stomach another downturn? Have I become too conservative? Do I need to rethink my portfolio construction? It’s also a good time to review your savings goals: Do I have enough saved for retirement? Can I put more money away? Have I saved enough for my kids’ college tuition? What do I want my legacy to be? What kind of charitable contributions can I make?

I am not negative about the stock market; I am actually agnostic about it. No one knows from month to month what will happen. I do know that over time the market goes up more than it goes down. And I know that at some point I would like to retire, have a nicer bicycle, and play more squash. How about you?

It’s true, we can’t control the markets—but we can control our goals, and we can do a lot to create the outcomes we want and need.

Like No Other Market

From time to time I will look at stock prices of companies that I like or whose products I use. The great fund manager Peter Lynch wrote a book called One Up on Wall Street many years ago. Lynch preached the message of buying stocks of companies that you know—whose products or services you actually use. So, for example, if you like Big Macs, buy McDonalds stock; if you use Band-Aids, buy Johnson & Johnson.

This strategy may or may not work. I have never back tested the stock prices of the companies that I like or whose products I use. Quite frankly, that doesn’t sound too interesting, and my hunch is that they have probably performed worse than a broad base index fund.

A few years ago Fairway Market went public. Fairway is an iconic specialty food store here in New York City with fifteen or so stores in the metro New York area. It is an amazing store of fresh produce, cheeses, olives, hams . . . It is a food lovers’ paradise. The stock went public at 13 and climbed higher. Many New Yorkers who shop at Fairway bought the stock because they used the product. Of course this is a great company, "I shop there." As of today, Fairway stock trades below $4, nearly a 70 percent drop in price. Is Fairway’s business off 70 percent from two years ago? I doubt it.

Sure, there are cases when a company you feel good about performs well on the stock market. But overall there is no foolproof correlation between stock price and how much you like or use a product. Peter Lynch is a very smart guy, and his fund, the Magellan Fund, was a great fund for twenty years at Fidelity. And then it wasn’t.

All this week the financial news has been filled with headlines of the largest IPO in history, Alibaba. Alibaba is the Chinese version of Amazon, Facebook, and Google all rolled up into one company. Everyone thinks this stock is their ticket out of here to happy street. They think they know something that no one else does and they are going to cash in on this one. The problem is that everyone is thinking the same thing. Alibaba knows this and therefore keeps raising the price of the stock it is going to IPO on Friday.

Investing is not a sport, and it should not be a form of gambling. There is no easy ticket, and the idea of investing in companies because you use the product is not logical, or at least it does not make sense to me.

There are a very few who get rich quickly from the stock market. Imagine if you were employee number 10 at Microsoft or number 55 at Walmart. For most of us wealth is built over time, with a diverse portfolio designed to handle the ups and downs that the world throws at us.

You Complete Me

The other night I watched my favorite movie of all time, Jerry Maguire, for the hundredth time. Despite what some may think, Jerry Maguire is not a chick flick. Jerry Maguire is a movie about a person who decides to reexamine his life and live it according to the terms that he wants. It’s about making a decision about who you truly want to be.

As I come up on my two-year anniversary of launching Clearfront Advisory, I thought I would have my Jerry Maguire moment and write my own manifesto.

My tipping point, what pushed me to leave the bank world, where I was working, was seeing that banks and brokerage firms don’t care about their clients. Advisors within brokerage firms and banks are not fiduciaries; they are salespeople. If you have heard this story before, I apologize. I was sitting in a “sales” meeting, and the “sales” manager was talking about the concept of grabbing more “wallet share” from clients. My stomach churned hearing the phrase “wallet share.” It sounded like stealing to me. The “sales” manager went on to discuss credit cards, mortgages, and having clients leverage their securities and borrow against them to pay bills. I thought we were supposed to help clients save more, not spend more. If you weren’t aware, banks make money lending money—it is much more profitable than managing client assets.

Two years ago I planted my flag and went out on my own as an independent financial advisor. It was one of the best decisions I have ever made. When you start your own business, people invariably will think you are crazy. I don’t know why. There is nothing more liberating than waking up each morning and knowing there is no one else to depend on than you. As one client put it when I left banking, “There is nothing better than betting on you.”

I did not pull an all-nighter or do handstand push-ups like Tom Cruise did in the movie while penning his manifesto. But I have given a lot of time and thought to what I want and what I want Clearfront Advisory to be.

·         Keep Clearfront small and intimate. We want to know each client and want them to know us. Bigger isn’t better; bigger creates bureaucracy and distance.

·         Stay true to the simple concept that our clients are everything. We may be investing or advising on their lives’ savings. Treat their money like our own.

·         We don’t want to work with everyone. Not everyone is a good fit. We want to work with clients who believe in us and what we stand for.

·         Keep clients diversified in their investment decisions. Be cost sensitive in investment selections and the fees we charge. Be tax aware when making decisions—remember, it’s not what you make; it’s what you keep.

·         Coach each client to have the discipline to stay the course and not worry about what they can’t control. Focus on what you can control and on what is truly important.

·         Markets work and are efficient; it is fruitless to try to time markets or think you are smarter than the market. A vast majority of professional money managers fail to beat their benchmarks each year.

·         Have a simple and transparent fee structure so that clients know exactly what they are paying for and what services we are providing.

·         This is not a zero-sum game; there are no winners or losers. Everyone should succeed.

·         Be modest. If you hire me to beat the market, you will be disappointed.

At Clearfront we want to be held accountable. If there is something you are not getting from us, tell us. This is a relationship, yin and yang; communication is paramount and a cornerstone of what we believe in.

Thank you for your support and loyalty. We look forward to continuing this journey.

Happy Second Anniversary!

 

Back to School

I just got back from dropping my kids back at college. When—or a better question is why—did this become such an undertaking? Not to sound like one of those grumpy old guys who yearns for the "good old days," but when I went to school, I think I had my stereo, speakers, albums, typewriter, and two duffel bags of clothes. I probably had two pairs of sneakers (they call them tennis shoes in Michigan), a few pair of jeans, shorts, t-shirts, a sweatshirt, and maybe a nice sweater in case I was going out to dinner. My parents dropped me off at the dorm, then they were on their way back home.

Not so much today. I can’t tell you how many trips I made to Bed Bath & Beyond. It is beyond belief! Retailers have done a great job convincing kids and parents that they need a lot of stuff. Mostly you need a lot of stuff to hold all of the stuff that you have. If you want to invest in a stock, invest in the companies that make the containers that hold all of this stuff.

Most of my financial clients’ greatest concern, aside from retirement, is paying for college. I advise clients to save as much as they can, and after they come up with that number, save more. College is really expensive. The rate of inflation for college tuition is over three times that of the general rate of inflation in this country. If someone were really smart, they would come up with an investment vehicle that returned the rate of inflation of college tuition each year!

Anyway, I am done lecturing and reminiscing. My point is, maybe another way to save for college is to not buy as much stuff. In the long run, not spending money on things we don’t need probably has a greater return than some investments we make.

Ooh La La

 A few weeks ago I was out cycling with a good friend and we were discussing the concept of life having a reset button. He was referencing a job that he wished he had taken a few years ago. Sometimes we get stuck in a rut or just feel stale—wouldn’t it be great if we could press a button and reset where we are, how we feel, or just see something differently than we did the first time?

I am sure there are many of you saying that life is full of mistakes and it is from those mistakes we learn. My father-in-law once told one of his daughters that there are no bad decisions: one decisions leads you down a path that leads to another path. We figure stuff out along the way.


Personally, I like the idea of the reset button, like the Easy Button from Staples. As I was thinking about this, the old Rod Stewart song "Ooh La La" came on Pandora (granted I was on the Rod Stewart channel). If you are not familiar, the chorus is "I wish that I knew what I know now / When I was younger." Yes, reset me please!

Couldn't Stand the Weather

Have you ever noticed the similarity in forecasting the weather and financial markets? Why do we worry about the two, when both are out of our control?

The winter of 2014 was cruel in most parts of the country, with record cold temperatures and heavy snowfall and, to top it off, something called a polar vortex. When winter finally ended, many people were lamenting, ”Oh boy, we are going to pay for that winter with a brutally hot summer.” That didn’t happen; it has been a pretty mild summer, with below-average temperatures in many places. The same could be said about the financial markets: when the year began every financial “expert” and talking head were predicting that interest rates would be higher this year. Well, here we are, almost at Labor Day, and the yield on the ten-year Treasury bond has fallen from 2.6% to nearly 2.4% this year. Not near the 3.5% yield most “experts” were predicting.

What would have happened if you sold all of your bonds at the beginning of the year because you thought rates were going higher? You would have missed out on a pretty good return on your investment.

While forecasting keeps many meteorologists and economists employed, predictions are useless. When it comes to investing your hard-earned money, what matters is your plan. When will I need this money? How much of a rollercoaster can I stomach? When it comes to the weather; own an umbrella, a warm coat, and a pair of winter boots. Control what you can control, and don’t worry about all the other noise.

Two Thoughts

Financial planning can mean a lot of different things, and it can be as in depth or light as you want it to be. There are some people who budget every dollar and others who don’t worry about money until the sh*t hits the fan.

Two recent planning events made me sit up and want to share. First, the super in my building became ill. We found him in the basement passed out and completely incoherent. An ambulance came and took him to St. Luke’s–Roosevelt. Our super has a complicated family, and I’m not going to get into that, but we did not have an emergency contact for him. When I went to visit him and check on his status, the hospital said it didn’t have a telephone number of a family member to call and consult. Since I was not family, the hospital could not share any information with me. Our super was essentially in a coma, and no one could make a medical decision for him. That is a very scary thing. If you don’t have a healthcare proxy, someone to make decisions for you if you cannot, choose one and get it in writing as soon as possible.

The other event spurred a thought more than actual advice. I met a couple from Michigan shopping for a second home in New Hampshire. “Isn’t it cold enough in Michigan?” was my immediate response, but the answer is much simpler. New Hampshire does not have a state income tax, and Michigan does. This couple, who are two years away from retiring, were figuring out a way to have more money in retirement. Many times we think about saving more or being more aggressive in our investments, but the devil can lie in the details: reducing expenses can be easier than saving more. 

I am not advocating that we all leave New York, Michigan, or California and head to New Hampshire, Wyoming, or Florida, but I’m offering food for thought when planning for retirement.

Why I Ride

Each August for the past seven years, I have ridden the Pan-Mass Challenge. If you are not familiar with the Pan-Mass, it is a 192-mile bike ride from Sturbridge, Massachusetts, to the tip of Cape Cod, Provincetown. It is a two-day challenge that raises money and awareness for the Dana-Farber Cancer Institute in Boston.

This is the 35^th year of the Pan-Mass, and collectively, its riders have raised more than a half-billion dollars for Dana-Farber. Yes, I repeat, well over a half-billion dollars. Each year the Pan-Mass is the largest contributor to Dana-Farber. For the people of Massachusetts and the rest of the country, Dana-Farber is a very important place if you have cancer.

As we ride along back roads and through small towns, hundreds of people come out to encourage us and say, “Thank You.” They hold up signs reading, “Thank You for Saving My Life,” or “Thank You, I’m Cancer Free for Three Years.” Unfortunately, not every sign is happy or uplifting—there are plenty of photographs to remind us of children and adults who have not been as fortunate.

About this time every year, with about two weeks to go before the ride, I say to myself, “I don’t think I’ll be able to finish this year. I haven’t trained enough. I drink too much wine and snack too much. I’m just not in shape.”  

Last week, while riding in New Jersey, I saw another rider with a Pan-Mass jersey on. I whined to her about how I am just not that into it this year and not motivated. With a smile she said, “You know why you ride,” and then proceeded to tell me that she had been diagnosed with cancer two years ago.

It clicked, as it probably does each year—we ride to save lives and to help those who need support. Every dollar we raise goes to research or treatment. We ride to support clinical trials and experimental treatments or maybe to help a family member of someone facing cancer who really needs someone to talk to.

If you have not watched Stuart Scott’s speech from the other night at the Espy awards, here is the link, http://usat.ly/WiPPcw, warning: It will make you cry—but that’s okay. Scott is an ESPN announcer who has been battling cancer for seven years. He continues to work, travel, and challenge his body in an insane fashion. Like the now famous “Never give up, never ever give up” speech by Jim Valvano, Scott’s speech will leave you breathless. To those affected with cancer, he says, “Live, and when you are too tired, rest and let someone else take care of you.”

We often talk about those who have cancer as victims. They are unfortunate, but they are not victims. Victims feel alone. Someone, or a family, who is battling cancer should never feel alone. Those of us who are fortunate enough to be healthy have the ability to help. We can comfort, be a friend, or do something as simple as ride a bike and in the process raise a lot of money.

So, yes, thank you to the woman I met last week out on the bike path, I do know why I ride. Live!

 

Summer Wines

Before I was a financial advisor, I was in the wine business. For over a decade I worked in retail, wholesale distribution, and importing. I was in my late twenties / early thirties, and the wine business in the United States was about to explode. It was an exciting time, and I had a chance to meet many of the major icons of the wine industry—Robert Mondavi, the Gallo brothers, and members of the Antinori family.

After college and before moving back to New York City, I worked for a chain of wine stores in the metro Detroit area called the Merchant of Vino. The owner of the chain was a man named Eddie Jonna. I think he is the greatest retailer I’ve ever met. He and his sons were very generous and never hesitated to crack open a good bottle of wine to try. To this day, when people ask me, “How do I learn about wine?” I say, “Drink it.”

While I no longer read Robert Parker’s newsletter and I let my subscription to the Wine Spectator expire, I still enjoy drinking a glass or two of wine every evening with dinner. My friends still consult with me before buying a nice bottle for a gift or text me when confused by a restaurant’s wine list.

My feeling about wine is similar to my views on investing, keep it simple. Don’t get caught up in and confused by the media. Drink what you like and understand. You don’t have to spend a lot of money to find a great bottle of wine.

As we head into the Fourth of July weekend and the summer gets into full swing, I thought I would share some of my summer selections with you.

It’s summer, and that means it’s time for rosé from the south of France. I am really enjoying Miraval rosé from Provence. This is the winery that Brad Pitt and Angelina Jolie own along with the Perrin family. The Perrins are famous winemakers from the Rhône and own the famous Château Beaucastel in Châteauneuf-du-Pape. Miraval is light and perfect for those steamy, muggy nights. Another rosé that I have been quaffing is Peyrassol rosé, also from the Côtes de Provence. This wine is fuller bodied than Miraval and has a bit more fruit to it. This wine can easily accompany anything you may be grilling up. The last rosé that I’ll recommend is a wildcard from South Africa, Mulderbosch rosé. This one has a lot of fruit but is still fairly dry. Don’t be put off by the first whiff—it smells like fresh strawberries.

If I am not drinking rosé in the summer, I’m drinking pinot blanc from Alsace. Pinot blanc is grown all over the globe and goes by other names in different parts of the world. Pinot blanc is probably best know as one of the main grapes used in the blending of champagne. I love pinot blanc because it’s dry and has just enough fruit to make it interesting. It doesn’t overpower you like chardonnay. Truth be told, the wines of Alsace are my favorite white wines on the planet. Boom, that’s right Burgundy! Last night I drank an incredible 2010 pinot blanc from Schoffit. It was rich and gooey like honey. I drank it with a steak, and it held its own.

I recently was turned on to an interesting wine called Shebang! It comes from a small California winery that produces a sauvignon blanc, a white cuvée, and a red cuvée. A cuvée is a blended wine made from several varietals. The price point is perfect at about $12 a bottle, and it comes with a screw cap. There is nothing pretentious about Shebang! These wines are fun and easy to chug. A friend of mine calls the red his “pizza wine.”

A little bit pricier, at about $18 a bottle, is a great Oregon pinot noir from Montinore Estate. Forgive me for the wine-speak, but this is a smoky, dark, and full-bodied pinot noir. It is perfect with a steak, lamb, and even a hamburger. I may be late to the party with this wine—a few months ago the New York Times rated it one its best summer wines under $20. If you can still find it, stock up.

There’s my list, short and sweet. I hope you have a chance to drink some of these wines over the next few months. Let me know what you think.

Let's Do This

I like the Home Depot commercial that shows people getting fired up to start a home improvement project. The tagline is, ”Let’s do this.” That how I feel, let’s do this—let’s get our summer going. Let’s pick some projects we want to get done this summer. Let’s roll up our sleeves and let our hair down.

It’s summer, and hopefully your pace at work slows down, the kids are out of school, and generally you have more “time” on your hands. “Time,” that’s a concept, a concept you need to make more of.

So, what do I want to accomplish this summer? Here is my list:

1.       Learn to fish. We have a weekend place on a small lake in upstate New York. I see people out in their rowboats and along the shore casting their poles in and out of the water. It looks so relaxing and peaceful. 

2.       Improve my paella cooking skills. Paella seems like one of those dishes you can prepare so many different ways and you would never get tired of it. Along those lines, I’d like to learn more about and drink more Spanish wine. Of all of the great “Old World” wine regions, I know very little of the wines of Spain.

3.       Organize my papers. I am not as organized as you think. I keep things tidy, but that often means jamming papers into folders and promising myself I’ll file them. Those folders are getting full, and it’s time to either file or toss them.  I also want to implement my use of Evernote. Evernote is a Cloud-based storage system that allows you to file, photograph, and categorize everything into different notebooks. Imagine having all your car repair bills in one place! Evernote is free, and you can use it from your computer, tablet, or smartphone.

4.       Consolidate my credit cards. I wrote earlier about the changing landscape of accumulating reward points. I see no reason not to consolidate everything, with one card earning all of the rewards.

5.       Use my iPad more. The iPad must have so many more uses than watching Netflix or reading a book. I want to learn how to make presentations and connect to a large television monitor for client reviews.

There is my list, what’s yours? Let’s do this.

21

Sorry folks, I’ve been absent from the blogosphere for a few days. I had the pleasure of going to Las Vegas with my family and friends over the Memorial Day weekend. We were all celebrating our oldest child’s 21^st birthday. We had made this pact many years ago, pre–Hangover the movie, and that day was finally here.

I want to pat myself on the back and my wife too! We’ve done a really good job—and so has our son. What a delight to witness the responsible, intelligent, and funny young man he has grown into.

When your children are young, you don’t know what to expect. To a degree, I still don’t know what to expect, but I like the road he is on. Parenting ain’t easy. It’s like driving: instinctually, you know when you should accelerate or brake, but you don’t always do that. With your children, it is challenging to know when to step in and when to lay off.

In these times of helicoptering parents, kids don’t always get to learn to make their own decisions. Parents want to decide for them. Learning to make decisions is important, not just because it gets you to think for yourself but because you put yourself out there. You get to test the waters. Sometimes you make bad decisions and learn from them.

A lot has been written about the importance of failure recently. It must be a graduation theme this year. We all have read and know the importance of failure—it teaches us to get up and keep moving, to persevere through adversity.

One of the best lessons that I learned early on is that life ain’t fair. The spoils don’t always go to the winner. People cheat, live beyond their means, or just get lucky. So be it.

So, on my son’s 21^st birthday, I say: be happy, be generous, be kind, know who you are, and most important, Jeggings are for women.

 



Choosing a guardian or trustee

 

Sometimes people beat you to the punch, and sometimes another can put into words what you want to say but does it a whole lot better. Regardless, we live in a world of sharing and transparency, so why not share ideas that you think are worthwhile? I think that is the business model for Twitter, but that’s an entirely different discussion.

Brad Jenkins, who is an advisor with Buckingham Asset Management in St. Louis, wrote a very good and concise article on appointing trustees and guardians. Like most people, my wife and I struggled over this question when we had our wills drafted several years ago. No one likes to think about the what-ifs, but unfortunately, what-ifs happen, and it’s better to think them through than not.

Jenkins’s article raises three very good points to think about when choosing a trustee or guardian. In a nutshell:

1.       Make sure you ask those you wish to appoint as either trustee or guardian if they are willing and able to take on the responsibility.

 

2.       Make sure you have a contingency plan in case someone is unwilling or unable to fill the role.

 

3.       Take the necessary time to discuss any provisions or restrictions you’d like your documents to include before consulting an attorney.

 

I always tell clients it is better to have something in place than nothing at all, and as Jenkins notes, you can always amend your legal documents. My wife and I have changed trustees and guardians several times over the years. People get divorced, your brother isn’t “the guy” you thought he was, or maybe the person you originally appointed has passed away. As with any insurance, it’s a good exercise to revisit these things every year to make sure you are covered, just in case.