Tuesday, September 30, 2014

What's Your Viewpoint?

The other day, I was thinking about something that has never happened to me personally. I have never been fired from a job in my life. Going all the way back to my first job slopping food at the local hospital through today. What struck me about it was the fact that I have no idea what it is like to be fired. I have been on the other side of the table however. I have been the one doing the firing. In fact, over my lifetime, I have fired several people. Of course, I am sure that I was the villain in each of the firings from the point of view of the person being fired. However, they would be wrong, because I never fired anyone who did not deserve to be fired. Most of the time, it boiled down to two or three issues.

  1. They failed to show up for work regularly;
  2. They failed to come anywhere near their performance metrics; or
  3. They were stealing something from the company.
Of course, there are those people who are victims of corporate downsizing, too. I have never been involved in one of those personally, but know people who have been subject to it. In fact, quit a few people that I know have been downsized. Some have a hard time with it and others accept it and move on.

For what it is worth, I wanted to give some advice on this subject of being fired or laid off. If you believe in God, then you have heard the quote from the Bible that "God has a plan for you". Forgive me for paraphrasing. The burning question is do you believe this? I mean do you really believe this?

If you were fired or laid off and if you immediately get mad, blame others, refuse to accept any responsibility for it, then you do not believe that God has a plan for you. It is a question of faith. You lack faith. There is no disputing it either.

On the other hand, if you look at it as part of God's plan for you, then you will realize that there are other things that you are meant to do. If so, then why spend another day at that old job? If your faith lends you to believe in God's plan for you, then you will never get mad, blame others, nor refuse to accept responsibility for your actions. Instead, you will rejoice at the new opportunity in front of you.

There are really just two ways to handle being fired or laid off. Dwell in the house of despair and dysfunction or look forward to great things.

Wednesday, September 24, 2014

Legal Zoom Effect

Did Legal Zoom replace estate planning attorneys? Not hardly, but they did make life difficult for them. I can remember about 10 years ago when attorneys were getting as much as $5,000 for a revocable living trust with all the ancillary documents. Today, I think most attorneys will charge somewhere in the $1,000 to $2,000 range for the same services. A lot of attorneys will not waste their time for anything less than $1,000. It is simply not worth it to them. Legal Zoom had a fee compression effect on attorneys' fees.

I have a story in my book, Meet Wally Street, The Reason You're Stupid about people who use online legal document preparation firms. What most people do not think about when they use these online legal document preparation firms is that all they are doing is part of the equation. Yes, they are creating the documents at a discounted price from most attorneys, but they are failing to consider a lot of factors in their decision. One of those being...

Is this going to work?

How do you know the documents that you created online are going to work in your state and county? You can never be sure until you actually try and use them in a legal situation. I cannot tell you how many times that I have seen people prepare legal documents via some online legal document preparation firm and fail to dot an "i" or cross a "t". Most all of the mistakes that I see are in two main areas.

1) They fail to give the trustee the right powers; and
2) They fail to update their legal documents due to their death or disability of their trustees, successor trustees or beneficiaries.

Let me give you an example to ponder as to why you should always use an estate planning and an elder law attorney to draft and update your legal documents. This is an example of a lady who only had a will that she created online and never updated it.

In this example, an elderly man's unmarried adult daughter passes away with only a will that she created online. Her beneficiaries included her elderly father in addition to her two siblings. At the time the will was written, the elderly father was in good health. Fast forward a few years and the adult daughter gets ill with cancer and eventually succumbs to it and dies. While she was dying of cancer, her elderly father goes into a nursing home with dementia. The elderly father had a will leaving everything to his three children one of which just passed away. Now what?

Well, since the elderly father is now not legally competent and he doesn't have someone appointed by the court to handle his affairs, then someone has to go hire an attorney for him to obtain his share of his adult daughters estate which will have to go this route to get back to the two living siblings. Since the elderly father is in the nursing home with dementia, he is burning through all of his cash and runs out of all his cash. He didn't believe in Long Term Care Insurance. He sure could use the proceeds from his adult daughter's estate to help pay his nursing home costs, but unfortunately he has to have a legal guardian or conservator appointed first.

Meanwhile, while that is going on, the elderly father suddenly passes away. So, now the money from the adult daughter cannot be paid until her elderly father's estate goes through the probate process. The nursing home had to advise the family that they needed an attorney to get him qualified for Medicaid towards the end of his life. Nursing homes cost around $6,000 to $7,000 per month. If Medicaid pays it, then they want their money back when they can get it. In this case, Medicaid wanted their share of the proceeds of the adult daughter's estate! You see the elderly father ran out of funds while he was in the nursing home and had to go on Medicaid for about a year.

Now, the other siblings who thought they were the beneficiaries of their sister's and their elderly father's estates are going to get nothing from their father's estate. It is all going to pay back Medicaid and the probate attorney who had to step in and clean up this mess. Plus, they had to use some of the money that they inherited from their sister to pay for the attorney for their dad's guardianship, then later his estate and his burial, too. He didn't believe in life insurance either.

The moral of this story is that there are several things that could have happened to preserve family assets. The adult daughter could have hired an attorney to update her legal documents with a revocable living trust and keep them updated. In that document, it would have provided for contingencies. Anytime someone gets a serious illness, then those legal documents should be reviewed immediately. In addition, an elder law attorney could have saved most of the elderly father's estate with proper planning in advance. Further, the money from the sister's estate could have bypassed her elderly father's estate entirely once he went into the nursing home and gone directly to the two remaining siblings instead. However, one-third of their sister's estate which should have ended up with the two surviving siblings was gone like the wind to Medicaid.

Like I say in my book, estate planning and elder law attorneys are worth every single cent you pay them. The same cannot be said for doing your legal documents online and never updating them.

Do you realize that I may have just saved your family tens if not hundreds of thousands of dollars by telling you this? And, you thought that I was just another financial advisor.




Tuesday, September 2, 2014

Understanding the Anti-War Sentiment

It is probably not a good idea for any American or ally of America to send any journalist to the Middle East or Africa for the foreseeable future. Sadly, another American, Steven Sotloff was shown to be killed by ISIS in a Internet video. His mother begged that he be released, but they killed him anyway. Her quoting the Koran did no good. It is my belief that he was killed on the same day that James Foley was killed. They probably killed both men that day and just held back the video on Steven Sotloff until they wanted to release it. God bless both men and their families.

You simply cannot ignore this type of terrorism. I do believe that ISIS/Al Qaeda or the current Jihad name for the day will attack us in America at some point. They will probably try car bombs and suicide bombers at first. Later they may become more brazen and do more targeted mass killings with a group of terrorists where a large gathering of people are formed. I hope it never happens, but hope is not a defensive strategy.

President Obama knows that most Americans are tired of war and want nothing to do with it. He knows this and feels that he is complying with the American people's wishes. However, this ISIS problem is too big to be ignored. It doesn't matter whether we want war or not. We got it. Like it or not. Just because the American people don't want war, doesn't mean a thing. Your evidence is James Foley and Steven Sotloff.

I like to watch documentaries on wars and look at how decisions were made and why one side or the other won or lost. I have studied World War I, World War II, Vietnam, Irag and Afghanistan wars through documentaries. In every case, the side that lost or surrendered finally were put in a position where they had no choice but to give up. In other words, they lost their will to continue.

I am not a military person, but I know that if you don't have the will of Harry Truman during war, then you will likely fail. Think about the will of Harry Truman and his decision to bomb Hiroshima and Nagasaki. If he didn't have the will to do that, then the war in the Pacific would have continued to go on throughout the islands of the Pacific at great cost to both sides. President Truman made a conscious decision to kill innocent civilians in exchange for ending the war. Japan didn't surrender after the first bomb. It took two bombs for Japan to surrender.

The greatest generation as they are known, the soldiers of World War II, fought for our country and many died for our country. Some of those also fought in World War I. This generation of Americans understood war and got behind the war effort. They were American heroes who understood the danger of doing nothing. They sacrificed their lives for our country.

The baby boomers however are a different story. They grew up in the sixties with the war in Vietnam which was started by John F. Kennedy, a Democrat. The Vietnam war continued under Lyndon Johnson, also a Democrat and dragged on until it was finally ended by Richard Nixon, a Republican. During the sixties and seventies, there were numerous protests against the Vietnam war. These protests were all over the television and they helped to shape the anti-war sentiment of the baby boomers. Soldiers coming back from Vietnam were not hailed as heroes like the greatest generation were when they came back from World War II. These soldiers who fought and died in great numbers were treated horribly by a large group of these protesting American people. Vietnam veterans never received the respect and admiration that they deserved.

Fast forward to today and you must understand that we are losing more and more of the greatest generation every day. The baby boomers are a large demographic and they grew up with the Vietnam war. Is it really any surprise that fifty years later they are still adamantly against war of any type? Not to me.

If you talk to the military leaders of Vietnam, they will tell you that America was winning the Vietnam war and would have won it, if not for the demands of the American people and the lack of will. This same demographic of American people, the old protesters from the sixties and seventies are the ones today who do not want us to do anything other than limited action in Iraq, Syria and Africa. Just fire a few drones and be done with it, they think. They do not want us sending any troops over there at all. Unfortunately, this is the kind of thinking that got millions of Jewish people killed during World War II. No one had the stomach for war at first in World War II, but when we got attacked at Pearl Harbor everything changed. What bothers me is that James Foley and Steven Sotloff were brutally executed and no one seems to care. They don't care about the 150 or so Syrian solders who were stripped down to their underwear and shot and killed in the desert. They don't care about the 20 civilians in the Gaza strip killed by Hamas, because they were thought to have collaborated with the Israeli's. They don't care about the Yazidi's in Iraq who were murdered. They don't care about the many Christians who were murdered in Iraq and Africa. They simple do not care, because they foolishly believe that it doesn't affect them.

I wonder about those protesters from the sixties and seventies who seem to have so much influence over President Obama. I wonder will their attitudes change when there is no doubt that ISIS has come to American shores and carried out their terrorist activities? For America's sake, I sure hope so. In my opinion, it is better to kill them in Iraq and Syria than to kill them in New York City or Washington, D.C.

God bless America.


Friday, August 1, 2014

Finally! A Market Dip!

Finally, we are seeing a little bit of a pull back in the domestic stock market. This is very healthy for the overall market to continue to grow. We were at a point from a chart perspective that showed a top compared to past markets. Generally, the market tends to turn south after it hits this area and that is precisely what has finally happened. Thank goodness, because this brings stock valuations down to more attractive levels, then in turn this further attracts investments.

Nothing to worry about as far as the stock market is concerned in an election year. Typically, election year stock market returns do well. In fact, we are on a pace for the best year since 1999 for both total and private job growth.You can see by this chart from www.CalculatedRiskBlog.com that we have come a long way back up since the recent bottom.

Year-over-year change employment 















State and local governments have turned the corner as it relates to jobs, too. They had declined for four years in a row, but have recently turned the corner and our climbing once again.



State and Local Government


















Housing continues to rebound. Serious delinquencies continue to decline at a fast clip. We should be back at the historical serious delinquency rate of under 1% in 2015 or early 2016 according to Calculated Risk. We are not there year, but we are rapidly approaching that 1% level. This kind of proves the cold hard facts that it takes 7 to 10 years to fully recover from a market bubble. It started in 2007 and by the time we get to 2016, it will have been 9 years to recovery.

Fannie Freddie Seriously Delinquent Rate
















 

We might have a flat quarter, or even down a little bit, but as we get closer to the election we should see people getting excited about their side winning. This typically helps the market go up. The point is that it is important to stay invested. It is not smart to get out of the market right now. The underlying economy is doing well. Stay the course.

Thanks to Calculated Risk Blog.