Friday, May 30, 2014


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 21st 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 21st birthday, I say: be happy, be generous, be kind, know who you are, and most important, Jeggings are for women.

Monday, May 19, 2014

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.

Tuesday, May 13, 2014

Money ain't nothing

For the second year in a row, the New York Times presented the best college essays from incoming freshman on their relationship with money. Last year columnist Ron Lieber asked high school seniors to submit their college essays that specifically addressed class and money. 

It’s difficult enough for adults to discuss class and money, so imagine how challenging it would be for teenagers to open themselves up about the subject. Money is an even more complicated thing these days as the moat between the haves and the have-nots widens. These essays are honest and remarkable; hopefully, you’ll click through and have a chance to read some of them.

This blog is about living and investing simply. With respect to money, I am reminded of the quote: ”There are two ways of being rich: One is to have all you want, the other is to be satisfied with what you have.”

Friday, May 9, 2014

Savers vs. Spenders

Ladies and Gentleman, in this corner wearing the blue trunks and weighing in at 500 pounds is Saver! And in this corner, wearing the red trunks, also weighing 500 pounds, is Spender! Yes, the 500-pound gorilla whose there beside you in the living room or on the way home from work is Saver or Spender—which one is accompanying you? Or does it really have to be one or the other? Is it possible that the two of them can peacefully, productively coexist?

As a financial advisor, my job is to help you get from point A to point B. Point A is now, and Point B could be college for your child, retirement, or buying a vacation home. In order to get to point B, you’ll need to save money and invest it at a rate that will outpace inflation. In order to have that money to invest, you need to save. In order to save, usually you have to not spend the money.

There is the dilemma: save or spend. Saving is boring; spending is fun. Maybe your grandmother was a saver—she never went out to eat, she clipped coupons, and she never paid retail for shoes. She had a lot of money in her savings account, but she never put it toward her own enjoyment. Did it just bring her comfort knowing it was there?

If you are in your forties or fifties, you probably like to spend. We’re different from the generations that came before. You want to go on vacation or out to dinner, so you do, or you pay full price at Bloomingdales. If you don’t have enough to pay for it all this month, you run a balance on your credit card or dip into the home equity line. This makes it very difficult to save—and, damn, you’re behind the eight ball again.

I confess, the Cohen family budget could use some attention. Budgeting and tracking your spending really helps you control the frivolous or unnecessary purchases it’s so easy to make. Many banks and credit card companies have tools on their websites to help you track your spending habits. And there are dozens of money management apps available.  It’s really worth keeping track of how many times a month you’re going out to dinner. And do you really use the gym? Why are you going to the grocery store so much? Are you buying too much food so that some of it gets thrown out? Can you consolidate your cable and phone providers and negotiate a better rate? Analyzing your spending habits will reveal all sorts of ways to save money.

It’s good to ask yourself every time you make a purchase: is this a want or a need? It’s a big and tough question, but if you pause and ask yourself this question each time, it will in time become a habit—a good habit—and will undoubtedly keep you from buying a lot of unnecessary stuff. And voilĂ —you have savings! You now have money to put toward your goals, whether they be lofty ones like college for your children or traveling the world or more practical ones such as having a long, comfortable retirement.

You’re probably familiar with the story about when Albert Einstein was asked what is the greatest invention in human history. He replied, “Compounded interest.” I don’t know if Einstein truly said that, but it is indeed a powerful force that we don’t often realize. Vanguard has a very good illustration of the effect of compounding interest.

I hate the common financial planning advice that tells you if you don’t buy that Frappuccino each day or the six-pack of beer on the weekend, in twenty years you will have saved $100,000. So what? If I don’t eat, I’ll lose weight. You don’t have to be miserable to curb your spending habits. You just have to be smart and disciplined.

What this all boils down to is that saving and spending can exist together, but they both need care and attention.

Change comes with baby steps. If you would like to explore this topic more, there is a great website,, that discusses ways to save money so you can retire sooner. Some suggestions might be too extreme, but they’ll probably stir up your own good ideas.

Monday, May 5, 2014

To be mentored

We all know the value of mentoring, right? Mentors help others along their career paths or guide them in making important life decisions. What about the flip side—the value of being mentored? I am so grateful to have two mentors who have really helped me define my practice over the past few years (they may not even know this).

I have been a financial advisor for nearly eighteen years. I came up through the ranks of E. F. Hutton. Some of you are might remember their indelible tagline, “When E. F. Hutton talks, people listen.” Remembering those days is fodder for a future post. Let’s just say that training back then was more about selling than advising.

My investment philosophy and outlook for financial planning has really been influenced over the years by Larry Swedroe, Carl Richards, John Bogle, and a number of bloggers, including Roger Nussbaum. Larry Swedroe has written numerous books, but the one that really opened my eyes is What Wall Street Doesn’t Want You to Know, published in 2004. Another great book is The Investment Answer  (2011) by Gordon Murray and Dan Goldie. Mr. Murray was a Wall Street executive who was diagnosed with terminal brain cancer in 2010 and wanted, before he died, to write a book about investing that would seek the truth and demystify the jargon and nonsense of Wall Street. His coauthor, Mr. Goldie, is an advisor. It is a wonderful book that can be finished in one night and should be required reading for all college seniors.

My investment process over the years has been greatly influenced by Vanguard, iShares, and most recently Dimensional Fund Advisors. Dimensional Fund is a money management firm that was founded on the research of academics like Eugene Fama, Merton Miller, Myron Scholes, and Robert Merton. The firm is run by David Booth, for whom the Booth School of Business at the University of Chicago is named.

A few years ago I was listening to a podcast of Jim Schmidt being interviewed by Tom Dorsey, of the market research firm Dorsey Wright. The podcast had very little to do with market forecasting but was heavy on the journey that Jim Schmidt took to redefine, rebuild, and strengthen his practice. This was all done when he was probably in his fifties and during the financial crisis of 2007 and 2008. Jim has gone on to be one of the most successful advisors with Raymond James and has really helped me over the years to figure out my role as an advisor and to value process.

My other mentor, and a rather new one at that, is Paul Solli, one of the founders of the Aperio Group, in San Francisco. Paul has had a long career on Wall Street and is one of the early adopters of index investing. I became familiar with Paul after reading his article “The Best Investment Advice You’ll Never Get.” The history of this now famous piece revolves around the investment advice that Google employees received prior to the company going public. In 2004, as hundreds of newly minted millionaires were about to be unleashed to the Wolves of Wall Street, senior Google executives brought in some of the heavyweights of the investment world—Bill Sharpe from Stanford, Burton Malkiel of Yale, and Jack Bogle of Vanguard Funds—to counsel their employees before the Wolves could sink their teeth into them.

Wall Street can make investing and planning a polluted game, with expensive fees, sensationalized returns, and misaligned interests. Investing in fact can be a very simple thing. Diversify your holdings (cash, stocks, bonds, and real estate), capture market returns, and keep your costs down. If you follow these simple principles, you should be successful.

Where most people need help is in saving themselves from themselves. A good advisor helps turns off the noise, keeps you invested when markets get ugly, keeps you rational when markets go up (no, you are probably not a genius—the stock market is up), and most importantly, manages your assets to be as tax efficient as possible.

I want to thank Jim and Paul for their mentoring—even if they didn’t even know they were mentoring. They are instrumental in the way I think and act as an advisor.

For all of you who have mentored, continue helping—somewhere down the road you will make a difference. For all of you who have been mentored, thank your mentors—they are part of the fiber of who you are. If anyone is looking to be an advisor or just getting started in a new career and is looking for a mentor, you know where to reach me.

Have you had a mentor, or have you been a mentor to someone else? Has someone provided invaluable guidance but might not even be aware of the impact it’s had on you? Talk to me—I’d love to hear what mentorship means to you.