Wednesday, April 28, 2010

7) Being Green, Seeing Red




n this essay, you will read about Responsibility.  Key words include: 'Show me the money', ‘green’ = social responsibility, ‘green’ = ‘wet’/new/inexperienced, ‘green’ = money, ‘Moolah’, ‘green-backs’, ‘wet-backs’, ‘saw-bucks’ ($5), ‘two-bits’ (25¢), ‘green-eyed monster’ (jealousy), 'Being Green’, ‘Seeing Red'.  You have as much time (i.e. a lifetime) to complete the questions.  Please use a No. 2 pencil in case you wish to change your answers.  Please show all work in the margins.  Warning: Anyone caught cheating might be expelled; if you are not caught, you might be rewarded - Big Time.

          'Round up the usual suspects', the famous, intriguing line at the end of 'Casablanca' that represents a convenient excuse for misrepresentation and a misleading abuse of power, but that also honorably protects a greater good, shows compassion, and performs a personal favor.

            When are we responsible?  To whom are we responsible?  How do we act responsibly?  How can we BE responsible?

            We live in a Democratic society (government); we live in a Capitalist society (economics).

(‘Democratic’ ( Unabridged/Random House Dictionary): “pertaining to or characterized by the principle of political or social equality for all”, from Greek)

(‘Capitalism’ (Investopedia Financial Dictionary): “An economic system based on a free market, open competition, profit motive and private ownership of the means of production.  Capitalism encourages private investment and business, compared to a government-controlled economy.  Investors in these private companies (i.e. shareholders) also own the firms and are known as capitalists.”)

Due to human nature, Capitalism tends to, not only promote self-interest, but often exaggerate it.  A healthy person balances mind-body & spirit, doing with being, and being loyal, simultaneously, to both one's self and society (it is assumed that people are a social being, requiring the company and help of others).

            In addition, modern Peoples have a Social Contract with their government; the government is there with the permission of the People, to promote the interests of those they govern.

            (‘Govern’ ( House): “to rule over by right of authority”, whose derivation/etymology comes from the Greek “to steer a ship”).

Government is comprised of members of society who have pledged their fiduciary commitment to the good of the people, above their own.

(‘Fiduciary’ (Merriam-Webster's Dictionary of Law, © 1996): “one often in a position of authority who obligates himself or herself to act on behalf of another (as in managing money or property) and assumes a duty to act in good faith and with care, candor, and loyalty in fulfilling the obligation”.)

In the USA, as Abe Lincoln so eloquently recited it at the end of his, rather short, Gettysburg Address in 1863, “-- and that government of the people, by the people, for the people, shall not perish from the earth.  (BTW, the anniversary of his assassination was April 24th; just a few days ago.)

            Individuals have freedoms, and enjoy civil rights that extend only to the point at which they might infringe upon the rights of others.  Corporate Citizens possess all of the same rights and responsibilities as a ‘Real Person’ (with the possible exception of its inability 'to plead the Fifth').

However, in the mad rush for newfound honor and integrity, many companies, want to show you 'green' in order to attract your 'green'.

            Right now, they may be addressing the greater good, but I fear we must remain vigilant.  Vigilance is our citizenry responsibility, as humankind, governments, and Corporate America all have dubious histories.

            In order to ensure our evolution, we must foster the concept of Responsibility. I, for one, prefer not to see society stagnate, or devolve, or disintegrate and become extinct.  (I've spent far too much time taking care of, and improving myself!)

            I believe in living for today, while planning for tomorrow, and being true to myself.  I like to do 'my part', 'the right thing', help people, and animals, and be a good person, a good neighbor, and a good citizen; all the stuff we were taught in grade school, like that the police are our friends, and that we should vote, pay our taxes, serve on juries, and ‘cross at the green’.

I also believe that there's enough money out there to be made legally, ethically, and responsibly, to go around.

            And maybe, one day, our reward will be to no longer need money, except as coin collectors, historians and competitors in my Annual Monopoly Championship of the Universe.

            Unfortunately, almost daily, we seem to hear of Real Persons and Corporate Citizens who seem unenlightened and selfish to the point of infringing on their neighbor’s rights, or actually harming others -  whether it be an individual, a company’s shareholders, his/her constituency, society and even non-US Citizens of the World.

            So how do we put our capitalist investment money where our mouths - or hearts - or higher selves are?  Here’s one idea.

A Mutual Fund is a form of corporation.  Instead of operating a regular business, it mutually pools the money of many investors, to invest, based on a stated objective.  So long as it pays out 90% of its profits, it does not have to pay corporate income taxes (which would reduce the amount of profit available to distribute to you).

The benefits can include: 1) professional investment management (i.e. they are trained & work full time), 2) diversification (i.e. safety through numbers’ by having many more investments than you could afford yourself), 3) lower investment minimums, 4) tax-management (e.g. record-keeping & strategic trading to keep taxes low), 5) liquidity/marketability (i.e. you can get in and out easily), 6) lower costs (e.g. economies of scale for better prices on trading or other discounts), and 7) opportunities that may not be available to you otherwise (e.g. reserved offerings, new issues).

Many mutual funds cater to various forms of social responsibility; the investment category is referred to as SRI - Socially Responsible Investing.

            The category includes everything from avoiding 'Sin' stocks (e.g. Alcohol, tobacco, pornography) or the Defense industry, to supporting religious values (e.g. Christian, Muslim), or workplace values including executive compensation caps, or clean/renewable/sustainable energy (e.g. solar, water, wind).

                Many corporations are ‘jumping on the bandwagon’ and touting their 'greenness' and social responsibility.  In return, they hope to attract your ‘green’.  But ‘caveat emptor’ (buyer beware).


            Nevertheless, maybe the travails of the last decade shall help to us to ‘turn a corner’ or ‘reach a new plateau’ in human development.  Have you heard of ‘Capitalism II’? (Not the game; see Prof. Nassim Nicholas Taleb, Investment Strategist, Philosopher & Author (recently: ’The Black Swan’) on Charlie Rose:

Then again, since all things are cyclical, could that simply mean we will face new challenges such as World War or some other destructive force?  I know not - which is why I live for today while I still plan for tomorrow.

             (SFN, BTW, always has and always will be 'green' - by any definition you choose.  It’s what we do; it’s who we are.  It’s a high bar.  (

Thursday, April 22, 2010

6) Breaking Up is Hard to Do

Ahhh, spring is here and I just finished tax season.  So, I'm addressing anniversary cards and realizing that two of the four friends with May anniversaries have split!  One is already divorced since this time last year, and the other is in the middle of mediation.  I suspected neither at this time last year.  One friend, who is older than me, gave me much hope for remarriage (or a domestic partnership - I do divorce financial planning) and kids.  After all, we're re-writing the rules on longevity.  (See for the London Times article on Cambridge's geneticist Dr. Aubrey de Grey).
Time to whip out Neil Sedaka and reflect.  Or have a good cry.

            I'm a romantic at heart.  And not just in the amorous sense.  I enjoy heroism (e.g. Hercules), chivalry (White Knights cloaking puddles for maidens), music & the arts, Brotherhood, idealism, choking up during a death scene, you name it.  But marriage is a difficult one.

            How many relationships (e.g. marital, familial, work, friendship, business) do you know of, that last a lifetime, much less that are practical or functional - or, dare I say, happy?

            Historically, marriage was a practical consideration.  Someone worked to provide food and shelter, the other tended children, clothing and the home.

            It wasn't until the 19th century that a romantic notion crept in.  And popular society didn't really embrace it until the 20th century - when the word, divorce, entered the daily lexicon.

            Yet about 50% of all US marriages end in divorce.  Second marriages end two-thirds of the time and third marriages end at a staggering 75%!  Women are the petitioners 60% of the time.  Some industrialized/European nations lead us (e.g. Sweden), others, follow suit.

So, is the heart the best compass?  Is it the only one?  Should one's heart be tempered by the mind and a moral compass, and be subject to difficult decisions rather than naive or selfish ones?  (Then, again, does the concept of ‘should’ really exist?)

            Has marriage outlived its usefulness?  What's its place in modern society?  How does it fit into our lives?  Is it for romance, children, finance?

            In the last few years, more Domestic Partnerships have been created for heterosexual couples than homosexual ones.  It seems to be a growing trend.  How many couples have you heard of that spent years together 'in sin', only to have ‘him make an honest women of her', and then to almost immediately break up?  There must be all sorts of perceived, if not actual, pressures.

            And with women having achieved more equal rights and equal opportunities in the work force (puncturing the corporate glass ceiling), the military, fraternities, and starting businesses more frequently and successfully than men, combined with increased life expectancy and increased desire for independence and happiness, and increased access to information and other women for the exchange of ideas and support, is it reasonable to expect a relationship to last?  We individually evolve and change.  It might be nice for our relationships to change with us while retaining the intimacy, but what if it doesn't?  The lifetime paradigm of marriage may not be practical.

            It's romantic: a white dress and a wedding day, and dinner parties to show off the home and stemware; growing old together and caring for each other in front of the fireplace with the grandchildren.  But it's a tall order that requires much commitment and work, especially when the inevitable challenges arise for which we are ill prepared and didn't see coming.  Relationships require bilateral commitment, two-to-Tango, commitment that is too often lacking and not forthcoming in our throw-away, immediate-gratification society.

            Maybe, like a driver’s license, marriage should include education, written and practical exams, and insurance or posting a bond, and expiration/renewal - not just a cash & carry license.  (Shouldn't credit cards and guns require the same?)

            Marriage is a contract - a contract before the State, if not God!  Isn't it almost as sacred as life?  Is your word, your bond?  Do you practice the Golden Rule and do the ‘right thing’?  Judaism has a marriage contract, the Ketubah.  It also has a respectful, short process for dissolution without explanation.

Binding, legal contracts must contain ‘consideration’, the exchange of value to each other.  However, if you let the State in, you are subject to their laws; for example, in NYS, probably the last state to require grounds for divorce, each partner is entitled to sex with the other once per year; if not, you have grounds for divorce known as Constructive Abandonment (vs. Abandonment - where one party cannot be found).

            Do you want a judge, who has to listen all day to problems and who, resentfully, might make less money than you and who may know little about money and taxes, make decisions about your finances for you?  And to decide the fate of your children?!

            Businesses have all sorts of partnership agreements that address dissolution, sale, retirement, death & disability.  Why don't marriages with its dissolution rates?  We’ve all heard of pre-nuptial agreements and post-nuptial agreements.  By identifying and dealing with these potential scenarios, can we not focus more on the good and the positive, and attempt solutions - or at least make any dissolution easier?

            People study business in school, should we study marriage?  We study the food groups, sex ed, literature, money.

What motivates us?  Love?  Peer pressure?  Parental pressure?  Pregnancy?  Fairy tales?  Madison Avenue?  De Beers?

Love may be the starting point, but it is obviously not the end all.  Maybe the starting point isn’t even love!

            So why marry?  Love, romance, sex, children, family issues, companionship, money, insurance, security, taxes, immigration, appearances?  What are each party's responsibilities?  Might you wish to enumerate them in a marriage plan with role descriptions, an annual meeting, and an updated manual?  Should there be a strategic planning meeting with a SWOT analysis (strengths, weaknesses, opportunities, threats)?  Is to 'love, cherish, in sickness and in health' specific enough?  And even if it is, how often is it reviewed, discussed, analyzed, practiced, and used as a guide?

            Does marriage belong in your Faith rather than the State?  Is a Domestic Partnership or a Civil Union the wave of the future?  Do they fit better into the division of Church and State?  Do they fit better into your life?  There's less pressure and either party can unilaterally dissolve it.

            Should you ask for help like in taxes, medicine, investing, business, driving directions?!  Isn’t it as important?  The Courts are beginning to require mediation and prefer the various methods available outside the courtroom.

            Should you have to have a pre-nup or post-nup agreement?  Should you have to renew your license?  Should you have to take a refresher course to get a discount on your insurance?  Is it fair to clog up the courts when you want out?  Are you taking the easy way out?  Have you been responsible and held up your end of the bargain - to yourself, your partner, your family, your community (in front of whom you may have taken sacred vows), your country and society?  After all, you are party to a Social Contract.

            If you do split, how?

·         Detente, a marriage of convenience where you stay married but lead separate lives?  This might keep up appearances, save the children, maintain your financial status quo and self-esteem.

·         Negotiate - do it yourself

·         Abandon your spouse

·         Litigate - give your money to the attorneys, clog the courts (even though the vast majority of cases settle outside the court room), torture your spouse and use the kids and money as weapons and pawns to avoid the real issue - your emotional pain, hurt, and suffering?

·         Mediate - have a neutral third party help you structure your own divorce by helping each party 'be heard' and become educated?  The courts will most likely stamp it.

·         Collaborate - each have an attorney who is contractually obligated to 'make nice' but advocates for their own client.  Or even engage in interdisciplinary collaborative divorce whose model, additionally, offers at least two 'coaches' (mental health pros - and maybe a third for the kids) who support each party, plus a neutral financial professional who offers advice on budgets, ‘maintenance’ (as the courts call it; alimony, as the IRS calls it), child support, and how to divide assets with the best tax advantages for the couple's financial planning goals in homes, career, kids, colleges and retirement.

            Emotionally, divorce will take its toll - probably more on the partner left behind.  Divorcees feel like we failed, we’re embarrassed, hurt, injured, angry, maybe vengeful; our trust has been violated, and our hearts crushed.  The healing process can easily take 2-5 years+.  (This adds to another US epidemic - depression.)

And why do we call our former spouses, our ‘Ex’?  That’s somewhat ugly, and not PC; it’s like we had them ‘rubbed out’.  Besides, maybe it wasn’t a mistake; maybe we changed or outgrew the relationship.  Or maybe something bad happened outside our control, like the inability to have kids or the death of a child.

Nevertheless, we may be changed forever.  And the financial ramifications can be life-long.  Therefore, divorce is probably the single most important financial decision of a lifetime.

            If so, didn't your contractual dominos start at marriage?  Weren't you educated or aware enough to have seen and considered this possibility, in spite of your cultural inculcation?  Maybe.

            So where does marriage fit?  I don't know; I really don't.  I certainly don't have your answers.  I know the process and mechanics for divorce; Simons Financial Network provides Divorce Financial Planning with 'Equitable, Honorable Solutions'; 'We Advise, You Decide'.

            So in the words of the ‘70's TV commercial, 'What's a woman to do’?  (Not to mention the poor men who love them - but that's a story for another time.)

Friday, April 16, 2010

5) Your Money and Your Life

Financial Planning: Managing your finances effectively to achieve what you want out of life.
            Unlike the other natural needs of humans (e.g. food, clothing, shelter), there’s money.

Money was invented by humans.  It is a totally abstract concept; you no longer traded grain for meat, you had easy-to-carry currency.  It ‘s a tool; but it is one of the most enigmatic and powerful tools, if not weapons, we have.  It scares people, it motivates people, it motivates people to ‘cut corners’, to do wrong, to harm others.  It is pervasive through modern times in almost every culture.

People will talk about the intimate details of their sexual escapades, drugs, and medical health sooner than their finances.

From an early age, we might be told not to discuss finances in  the polite company of others, or even in the family - or at the dinner table, or in school - or ever.  Even Bugs Bunny is caught spanking ‘Babyface Finster’ (Alias Ant Hill Harry, notorious bank-robber’) for ‘playing with the dirty money’’ (

It seems to be something we can never have enough of, and yet even 12-Step programs bestow the wisdom of ‘take what you need and leave the rest”.

What are our societal values?  Isn’t good health and good company enough?  Isn’t art, performing, and sports enough?  Isn’t ‘love all we need’?

But I wax poetic, philosophical, and I am guilty of ending my sentences with prepositions.  But I digress.  Therefore, from a more practical vantage, I must bestow the virtues of financial planning upon you, and profess and enumerate the many benefits of such:

·         A financial plan will help you make money

·         A financial plan will help you save money

·         A financial plan will help you spend money wisely

·         A financial plan will help you invest money wisely

·         A financial plan will help you count your money (I wear a crown when I’m in the ‘Counting House’)

·         A financial plan will help you understand money

·         A financial plan will help you become comfortable with money

·         A financial plan will help you monitor your money

·         A financial plan will help you manage money

·         A financial plan will show you where/what you can get with money

·         A financial plan will help you relieve stress

·         A financial plan will help you be relaxed

·         A financial plan will help make you happy and fulfilled

·         A financial plan might help you like money!

·         A financial plan will help you become prosperous (and may you ‘Live Long and Prosper’)

·         A financial plan will help you become wealthy& wise (wealth - that to which a person aspires e.g. health, satisfaction, long life, family, helping others, being a good citizen, being a good neighbor, being liked, being a good person).


Five Phases:

1.    Ascertain where you are

2.    Determine where you want to go

3.    Manage daily finances

4.    Ensure you can’t fall backward

5.    Move forward

The Six-Step Financial Planning Process (CFP Board of Standards website as of 6/2/08):

1.    Establishing and defining the relationship with the client

2.    Gathering client data

3.    Analyzing and evaluating the client's financial status

4.    Developing and presenting the financial planning recommendation(s)

5.    Implementing the financial planning recommendation(s) and

6.    Monitoring

Initial Consultation: Client Homework

1.    List of Goals (e.g. financial, career/business, personal)

2.    List of Assets (everything you own):

A.    Financial (e.g. bank accts, investments, retirement accts, etc.)

B.    Non-financial Assets (real estate, autos, businesses, jewelry, art, etc.)

C.   Insurances (asset-protection!  Health, disability, LTC, life, HO, auto, pro, etc.)

3.    List of Liabilities (everything you owe)

4.    Tax returns (recent; personal & business, if business owner)

5.    Summary of income/inflows (e.g. job/business, IRA, SS, investment, rent, trust)

6.    Budget (annual or monthly; including irregular expenditures such as X-mas/ Hanukkah & vacations)

7.    Legal Documents (e.g. will, living will/ health care proxy, durable power-of-attorney, trusts, divorce decrees)

8.    Credit Reports (i.e. 3 Bureaus: Equifax, Experian, TransUnion; Free 1x/yr: