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 Personal Money Planning'se-Newsletter for May 21, 2011
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Dream A Little Dream
"All men dream: but not equally. Those who dream by night in the dusty recesses of their minds wake in the day to find that it was vanity: but the dreamers of the day are dangerous men, for they may act their dream with open eyes, to make it possible."
- Lawrence of Arabia
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Disclosure | |
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This newsletter is produced by Gary Silverman, dba Personal Money Planning, a registered investment advisor located in Wichita Falls, Texas.
Information in this newsletter is believed to provide accurate and authoritative information in regards to the subject matter covered. However, the accuracy, timeliness, or applicability of the information is not guaranteed and is provided with the understanding that we are not rendering legal, accounting, tax, or other professional advice or services.
This publication should not be construed by any consumer and/or prospective client as Personal Money Planning's solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Nor should links provided to other sites be construed as the recommendation of the services or products mentioned on those sites. If such services are required, the help of a competent professional should be sought.
Remember that past performance may not be indicative of future results. Therefore, you should not assume that the future performance of any specific investment, investment strategy, or product made reference to (directly or indirectly) on this Website will be profitable or equal to indicated performance levels. Different types of investment involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for your investment portfolio.
Historical performance results for investment indexes and categories generally do not reflect the deduction of transaction or custodial charges or the deduction of an investment management fee, the incurrence of which would have the effect of decreasing historical performance results.
A copy of Personal Money Planning's current written disclosure statement discussing Personal Money Planning's business operations, services, and fees (known as an ADV Part II) is available from Personal Money Planning upon written request (and can be downloaded from our web site).
Personal Money Planning does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Personal Money Planning's web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
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Conference Worthwhile
Friday a week ago, the Dallas/Fort Worth chapter of the Financial Planning Association had their annual Symposium. This is a one-day educational conference covering a wide variety of financial planning, insurance, and investment topics.
The Symposium is one of the ways I keep up with the latest trends, techniques, and research in my field. I'm kind of a nerd that way...always wanting to learn just a little bit more.
As with any conference, this one had some good sessions and those that would have been better spent taking a nap. An advanced insurance topic seemed interesting: It purported to go over sophisticated business planning techniques. Instead, it was a life insurance agent telling us some of the many ways that we has able to cross-sell a client more policies.
That waste of time was more than made up for by a great talk about research on and recommended strategies in low or rising interest rate environments. On the next break I was able to pin down the senior analyst who gave the lecture and further discuss with her some of the nuances of the studies.
All-in-all it was a day well-spent. I've already been hard at my spreadsheets to incorporate much of the knowledge I gained, as well as following up on those areas that have whetted my appetite for more.
Gary Silverman, CFP®
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| gary's newspaper column | Newspaper Articles You May Have Missed |
From the Wichita Falls Times Record News
Tough Love This is the first article in a series outlining the debt problems our country faces and the difficulty in solving them. Gary skips the spoonful of sugar, so it may not taste so great going down.
Debt Creates Illusion of Prosperity Unwise spending made the economy look good, and now it's time to pay the debt. What should we do? |
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Article links from |
The Economist |
Microsoft And Skype: Worth It?
The Rules
The Economist provides an overview of the various rules governments place on budgets and how they succeed or fail in following them.
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This Day In History: May 21
1929: The first automatic stock quotation board was put into operation by Sutro and Company of New York City.
1918: House of Representatives passes amendment allowing women to vote.
1954: Amendment to give 18-year-olds the right to vote is defeated.
1908: The first horror movie (Dr. Jekyll & Mr. Hyde) premieres in Chicago.
(Sources: 440 International and HistoryOrb.com) | |
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| parting thoughts
Good Debt, Bad Debt
In some recent newspaper columns, I have talked about debt. Specifically, I've discussed how debt can be used for good, but often it just leads to trouble. Since I almost never talk nice about the Federal debt, I thought I'd give you an example to show that not all of it is a bad thing.
One of the gems that this country provides its industry is research. This is done through grants given to various universities. While it can be argued that some of this is wasted and that the professors should be teaching rather than researching, it can also be successfully argued that many of the products you use daily are the direct result of this research (the Internet you are currently using is just one example).
Research takes money, money we don't have. So to do the research, we might get China to give us a loan. We then take this money and use it to fund research. As an example, let's say we research new ways to deliver electricity more efficiently. While this is going on, we pay China interest on the debt.
Assuming the research is successful; our manufacturers use this information to build better transmission systems. This makes them money which they pay taxes on. The new equipment allows electricity to be delivered for less cost while using less energy. That saves consumers, business, and industry money. It also gives us a better quality of life.
The savings and greater efficiency raise the country's GDP. The loan is paid off. In all, the gain is worth many times the cost of the loan.
Just as in personal or business debt, if the debt is used to create more wealth than it costs, that is good debt. Research and development is just one example of good debt; there are others. But here are some that are not all that good: Defense, Social Security, Medicaid, legislative salaries, funding for the arts, etc.
No, I'm not saying we should not do these things...I'm okay with every one of them (though I would like to see some changes). But we shouldn't borrow for them. They should be paid for from current income or saved for in advance, just like a vacation or new furniture for your home.
So I'm not against debt. I'm just against the wrong kind of debt.
Have a great week.
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Gary
Gary Silverman, CFP®
Personal Money Planning
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