By JLP | September 24, 2013
I’m not a CFP, but I have been following what’s going on with the CFP Board and their members who use “fee-only” as their compensation method.
Apparently, the board removed “fee-only” from all members’ profiles after it was reported that certain individuals were calling themselves “fee-only” when they were not.
Now people are claiming that the “fee-only” rule was too vague.
It’s pretty simple, really. If you are “fee-only,” you are FEE-ONLY! Meaning, your fees are paid directly by the client. That’s it. If you get paid by a third party (other than portfolio management fees through Schwab or Fidelity), then you are not fee-only.
It doesn’t surprise me that stock brokers would move to call themselves “fee-only.” The compensation method is gaining in popularity as the public becomes more aware. I’m sure brokers are losing business to “fee-only” planners. What better way to combat the loss of clients than to simply call yourself a “fee-only” planner?
It’s sad and it only confuses clients.
So, the CFP Board should inspect their licensee’s compensation method and fine or revoke the licenses of those who are lying. Pretty simple if you ask me.
By JLP | September 12, 2013
From today’s WSJ:
The Obama administration plans to block the construction of new coal-fired power plants unless they are built with novel and expensive technology to capture greenhouse-gas emissions, according to people familiar with a draft proposal.
The person and others briefed on the rule said such stringent limits would ban new coal plants, which generally release about twice as much carbon dioxide as the proposed limits. Even the newest, most advanced coal-fired power plants in the world would fall far short of that revised standard, they said.
Someone stands to make a lot of money installing all this new technology. That’s what this is really about. It’s not about the environment.
The American people should be allowed to vote on things like this. There should be a rigorous objective study done that will show how much these proposed changes will add to our monthly electric bills. Then, we should vote on the bill. Better yet, it should be a STATE ISSUE!
Have a great day, everyone.
By JLP | September 11, 2013
I bought a new scanner. I have decided to go as paperless as possible. During my scan, throw away or shred exercise, I have run across papers that I had forgotten about.
One of those papers was my Strengths Finder report.
I actually took the survey twice (once in January 2009 and again in July 2012). I found both reports and surprisingly, they have different results:
I will admit that the first report had me scratching my head. I have never considered empathy one of my strengths. I showed that list to my wife and even she couldn’t see it (we have been married over 20 years so she should know). Dissatisfied with those results, I decided to take the quiz again–not to get different answers, but to clarify. Well, it turns out the second list seemed more inline with what I expected. Analytical and Responsibility took the place of Communication and Empathy.
Here is the summary for each of the strengths in my report:
Your Analytical theme challenges other people: “Prove it. Show me why what you are claiming istrue.” In the face of this kind of questioning some will find that their brilliant theories wither and die. For
you, this is precisely the point. You do not necessarily want to destroy other people’s ideas, but you do insist that their theories be sound. You see yourself as objective and dispassionate. You like data
because they are value free. They have no agenda. Armed with these data, you search for patterns and connections. You want to understand how certain patterns affect one another. How do they combine? What is their outcome? Does this outcome fit with the theory being offered or the situation being confronted? These are your questions. You peel the layers back until, gradually, the root cause or causes are revealed. Others see you as logical and rigorous. Over time they will come to you in order to expose someone’s “wishful thinking” or “clumsy thinking” to your refining mind. It is hoped that your analysis is never delivered too harshly. Otherwise, others may avoid you when that “wishful thinking” is their own.
You look for areas of agreement. In your view there is little to be gained from conflict and friction, so you seek to hold them to a minimum. When you know that the people around you hold differing views, you try to find the common ground. You try to steer them away from confrontation and toward harmony. In fact, harmony is one of your guiding values. You can’t quite believe how much time is wasted by people trying to impose their views on others. Wouldn’t we all be more productive if we kept our opinions in check and instead looked for consensus and support? You believe we would, and you live by that belief. When others are sounding off about their goals, their claims, and their fervently held opinions, you hold your peace. When others strike out in a direction, you will willingly, in the service of harmony, modify your own objectives to merge with theirs (as long as their basic values do not clash with yours). When others start to argue about their pet theory or concept, you steer clear of the debate, preferring to talk about practical, down-to-earth matters on which you can all agree. In your view we are all in the same boat, and we need this boat to get where we are going. It is a good boat. There is no need to rock it just to show that you can.
Your Responsibility theme forces you to take psychological ownership for anything you commit to, and whether large or small, you feel emotionally bound to follow it through to completion. Your good name depends on it. If for some reason you cannot deliver, you automatically start to look for ways to make it up to the other person. Apologies are not enough. Excuses and rationalizations are totally unacceptable. You will not quite be able to live with yourself until you have made restitution. This conscientiousness, this near obsession for doing things right, and your impeccable ethics, combine to create your reputation: utterly dependable. When assigning new responsibilities, people will look to you first because they know it will get done. When people come to you for help—and they soon will—you must be selective. Your willingness to volunteer may sometimes lead you to take on more than you should.
You love to learn. The subject matter that interests you most will be determined by your other themes and experiences, but whatever the subject, you will always be drawn to the process of learning. The process, more than the content or the result, is especially exciting for you. You are energized by the steady and deliberate journey from ignorance to competence. The thrill of the first few facts, the early efforts to recite or practice what you have learned, the growing confidence of a skill mastered—this is the process that entices you. Your excitement leads you to engage in adult learning experiences—yoga or piano lessons or graduate classes. It enables you to thrive in dynamic work environments where you are asked to take on short project assignments and are expected to learn a lot about the new subject matter in a short period of time and then move on to the next one. This Learner theme does not necessarily mean that you seek to become the subject matter expert, or that you are striving for the respect that accompanies a professional or academic credential. The outcome of the learning is less significant than the “getting there.”
You love to solve problems. Whereas some are dismayed when they encounter yet another breakdown, you can be energized by it. You enjoy the challenge of analyzing the symptoms, identifying what is wrong, and finding the solution. You may prefer practical problems or conceptual ones or personal ones. You may seek out specific kinds of problems that you have met many times before and that you are confident you can fix. Or you may feel the greatest push when faced with complex and unfamiliar problems. Your exact preferences are determined by your other themes and experiences. But what is certain is that you enjoy bringing things back to life. It is a wonderful feeling to identify the undermining factor(s), eradicate them, and restore something to its true glory. Intuitively, you know that without your intervention, this thing—this machine, this technique, this person, this company—might have ceased to function. You fixed it, resuscitated it, rekindled its vitality. Phrasing it the way you might, you saved it.
I have to say that nearly everything in that report fits me perfectly. I’m a little wary of harmony. I never considered myself harmonious. Maybe I am and just didn’t know it.
If you have never taken the Strengths Finder assessment, you should. Go to GallupStrengthsCenter.com, create an account and take the assessment for $9.99 (FYI, I am not getting paid to send you over there, nor am I getting paid to write this post). Once you discover your strengths, please come back and share them with us.
My next step will be to learn about what careers would be a good fit for my strengths.
By JLP | September 7, 2013
August was a rough month. See below…
By JLP | September 6, 2013
The fine print says:
Requires 20-month 0% APR installment agreement & qualifying credit. Sales tax due at sale. Qualified wireless service plan req. If you cancel wireless service, remaining device balance is due. Qualified devices only. Limit two finance devices per wireless account. Available at select locations only. If device is returned, restocking fee up to $35 for smartphones or 10% of tablet sales price may apply. Upgrade after 1 yr: Req. min. 12 monthly installment payments & acct. in good standing plus trade-in of current financed device in good & functional condition & purchase of new qualified device/wireless service plan. After upgrade, remaining unbilled installment payments are waived. Terms subject to change. Visit a store or att.com/next to learn more.
The catch: you have to pay full price for the device (if the device costs $500, that’s $25 per month in addition to your wireless contract). It also doesn’t appear that the iPhone is on this plan (at least I don’t see an iPhone on their landing page.
I bet this is a way to start weaning people off the discount-with-a-contract way of doing business. You think?
By JLP | September 4, 2013
It’s September, folks.
Did you know…
September is the ONLY month with an average NEGATIVE total return since 1926?
It’s true. The average total return for the month of September is -.67%. Of the 87 Septembers I have data for, 42 of them were negative and 45 were positive.
I found this interesting and decided to investigate a little more. I looked at the January-August YTD total returns for all years and then see what happened in the following September. The findings, which you can see in the chart below (click on it to see a larger version), were interesting.
This year, the S&P is up 16.15% YTD through August. Of the 11 times the S&P has had a return in that range, it averaged a 1.04% in the following September. We shall see what that means (if it means anything at all) for this September.
One thing I found interesting was when the S&P had a 20% to 25% YTD total return. Notice that it happened 12 times. Ten of those times were followed with a positive September return (an average of 2.24%, which is very high).
Let me clear: this is an exercise in fun. I’m not sure how useful this information is real life.
By JLP | September 4, 2013
The other day I was grocery shopping at H-E-B. I stopped by the orange juice section and noticed something new. Tropicana had changed up their packaging and was now offering a “Family Size.”
Upon on closer inspection, I learned that it was a 118 oz. container, or 10 oz. short of a gallon. So, the GALLON was gone and the replacement was called “Family Size.” Apparently, Tropicana thinks their customers are stupid.
Oh, and guess what…
The price was STILL $6.49.
So, customers now get 10 fewer ounces and pay the same price, which equates to an 8.47% price increase. I guess jacking the price up from $6.49 to $7.04 would be too much for customers. Better to go the sneaky route.
Grocery shopping is so frustrating these days.
UPDATE: A friend of mine pointed me to this article as to the reason why orange juice prices are rising: Incurable Disease Threatens US Citrus Crop.