I Still Can't Dance: Learning to Squint

This is the first column I've ever written on the subject of "being over 55." It's not a stretch, as I have six years experience in the age range; but as an over-55 boomer living in a world of over-55 boomers, I feel a little like a fish asked to do 750 words on water, or a brontosaurus asked to knock out a short piece on extinction.

Age, of course, is a lot different than how old we are.  A couple of years ago I was conducting a journalism workshop in a town in Armenia where most of the trainees were in their early 20's. During a break I mentioned to my translator that I would soon be 60. She protested that I must be kidding and then brought the class to attention to ask if anyone believed I was that old. The consensus was that I must be exaggerating because I barely even looked 50 years old maybe 45.

To put my age into perspective, the 60-year-olds these kids knew had lived through collapse of the USSR which destroyed their economy, left them surrounded by unfriendly countries, cut off their supplies of  gas and heating oil for three frigid years. During that time the people came close to deforesting Armenia to provide fire wood. Then just when it looked like things couldn't get worse, an earthquake killed tens of thousands of people and destroyed nearly one out of six housing units in the entire nation then assassins invaded the Armenian parliament and killed the Prime Minister and several other reform leaders.

Given the wear and tear the average Armenian sexagenarian has endured, the average American 60-year-old is a low-mileage model in like-new condition.

But none of us is totally immune to the decay that comes with each passing year. A couple of decades ago I attended the 50th birthday party of a TV news anchor I worked with. As a career journalist I knew full well that, contrary to popular belief, there are such things as stupid questions, so I swung for the fence and asked him, "How does it feel to turn 50?"

He locked his thoughtful gaze on me, leaned so close that I could feel the pull of his gravitas, and he said, "You don't turn fifty. Fifty grabs you by the ears, kicks you in the groin and throws you on the ground."

I know people my age who are wizened husks who haven't had an original thought in decades, while others, just as old chronologically are still out running marathons and shifting paradigms. This weekend I visited a 66-year-old friend who is leaving the security of a senior position with a billion dollar foundation in Chicago to open a new business. A 70-year-old friend of my wife's here on San Juan Island announced recently that she was selling her house and moving to the mainland because she had "done every unmarried guy on the island" and wanted a larger pool of social partners.

I put myself somewhere in the middle of the age versus aging scale. Sometimes I feel like I'm still a kid and sometimes I'm ready to believe that every time I have a sore joint or aching back,  it's destined to be with me for the rest of my life. Later, when it dawns on me that the pain has gone away, I go out and jog a little, shoot a few baskets, then check the mirror to make sure my youthful spirit isn't being followed around by an old man's butt. I find it helps if you squint.

Ask a fish what he thinks about water and it would probably say, "It's freakin' water, what's to think about?"

 Ask me what it's like being over 55 years old and I'd have to say, "It's just freakin' like yesterday and the day before and the day before that, all the way back to when I was eighteen and couldn't muster the courage to ask Gina Berkley to go to the prom until it was too late."

When she told me she had just, moments earlier, agreed to go with someone else, it dawned on me that I would never, ever in this life have another opportunity to ask her to go to a prom with me. That was the day when I started to understand the nature not of growing older but of growing old.

About Stan

Stan Matthews spent twenty years in television -- news photographer, reporter, producer and executive producer -- in Missouri, Florida and Texas. After pulling a Howard Beale, he moved to Portland, Oregon where he worked with several political campaigns and in Gov. Barbara Roberts' administration. When the governor left office, he and his wife, Susan, founded C&E Systems, which provides software and financial management services for progressive political campaigns.

Stan is now the communications manager for San Juan County, WA where he resides with Susan and Marv, the dog. He also, from time-to-time, writes as well as travels abroad for USAID and the UN to help emerging democracies.

Participate in Life ... Online

We have lots of ways to converse with others who are in similar situations as yourselves -- others who have aging parents, children in college, are unemployed or underemployed or want to figure out their purpose in life. We offer programs, events and networking events like our Affinity Groups, Coffee and Conversations and our class Discover, Design and Engage.

AARP offers a few options as well, including an online option surrounding a blurbs on NBC's Today Show called "Your Life Calling." They also have chat (real-time, online discussion) as well as blogs and discussion forums. For more, go to AARP.

Resources on Choosing a Financial Planner

Life planning is not financial planning ... but your finances affect your life and your life affects your finances. We've heard questions from nearly every classes about finances, particularly, "how do I choose a financial planner?"

Invest the Proper Time When Choosing Your Adviser/Broker

One of the most difficult tasks in life is to choose a business professional to help you, whether for your physical, financial, or investment management health.  You must entrust someone with your physical or financial well being, as well as your family's, and mistakes can be very costly on many levels.  The process is very similar to hiring a new employee in a work environment.  Time is required on the front end to select potential candidates, review their work experience, verify their credentials, conduct interviews, and after completing your "due diligence", make a deductive choice.  This process has stood the test of time, but mistakes still occur.  No process is perfect.

Choosing an investment adviser should require the same "hiring steps" as above.  However, seminar leaders that instruct people on how to choose their advisers in a prudent fashion are always amazed at how little time we invest in selecting such an important business partner in our lives.  A common introductory exercise is to ask people to raise their hands, and then drop them if their present adviser was referred by a friend or family or was met in a casual situation.  The unexpected result is that all hands drop.

The Internet has been the great enabler of our times, but it has lulled us all into a false sense of trust when dealing with "invisible" business partners.  Trust should not be so easily given.  There are numerous websites that provide good advice on this topic, and the Securities and Exchange Commission (SEC) also has very informative web pages devoted to this very subject.  In every case, you are counseled to invest the time it takes to make the best decision you can.  You actually have a lot of money riding on it.

If you truly do not feel up to the task of managing your own investments, then start your investigative work now.  Read up on the topic from every source you can access.  Preparation is key.  In the meantime, here are a few of the common pitfalls to avoid:

• Lack of Comparison: Believe it or not, most people find a potential candidate and stop there.  A single interview candidate does not provide a basis for comparison.  The interview process is to educate you as much as to review your potential adviser.  Interview a minimum of three people;
• Lack of Reference Checks:  Advisers dress well, have nice offices, and attempt to appear in local media, all to convince and impress you that they are your perfect choice.  Don't be so easily impressed.  Check their backgrounds and references.  Many sites exist which provide independent reviews of advisers and brokers.  Check them out;
• Decisions based on Fees Alone:  The cheapest adviser may not be the best.  You do get what you pay for sometimes.  Many advisers, mutual funds or insurance companies charge exorbitant fees for their products and services.  Don't be duped by these either.  More fees means less to invest;
• Credentials are Not Everything:  You are hiring a "person", not a "credential".  There are so many credentials in the market today, some illegitimate, that making a choice based solely on an impressive list of letters is less than prudent.  It may actually have been obtained 30 years ago and is no proxy for current performance success.
• Firing based on Results:  You are looking for a long-term business partner, one who will work with you to achieve long-term investment goals.  Pension funds require a minimum of five years before they make performance-based decisions related to termination of a fund manager.  You should consider a longer time horizon when measuring and appraising results;
• Losing Control:  You must participate in the management process with your partner.  Too often, people hand over their entire account to their financial manager only to learn of bad news when it is too late to change anything.  You must take charge of the process.  Your adviser is your "employee";
• Choosing Relatives or Friends:  The old maxim that "friends and business do not mix" evolved for a reason.  Personal biases will cloud your, as well as your adviser's, judgment.  Unscrupulous types like Bernie Madoff take advantage of situations such as these.  Mistakes here are a double-edged sword and mean not only the loss of money, but also the loss of a friend as well.

Managing one's own investment portfolio can be a daunting task.  You can always elect to go with the larger, nationwide firms, and if your portfolio is 7-figured, they will have special managers who only deal with high net worth individuals.  In any event, you already know to take time before buying a stock, commodity, or currency.  You must spend more time when choosing your adviser/broker.  It will be time well invested.

Article by: Tom Cleveland, a market analyst for Forex Traders. Visit Forex Traders for a complete guide on currency trading*

Searching for the Right Investment Advisor is a Process

If you have decided that you need professional help with your financial affairs, then you have made the first step in a process to find the right investment advisor for your needs.  Unfortunately, as with any other profession, there are good ones and the kind you want to avoid.  Ones to avoid include thinly disguised salesmen who will try to force their high cost schemes on you or those that do not have the training, background or experience to offer you truly comprehensive service.  Preparation is key in this search endeavor.  It is your future and financial wellbeing that is in the balance.

A helpful "anagram" to guide and remind you that there are many steps in this process is "DECIDE".

• Define:  In this step you must define your goals and exactly what it is that you need.  Investment advisors can do everything from preparing a financial plan and recommending investment vehicles to managing your entire portfolio and doing estate planning.  Invest the time and read up on the subject.  Decide if stocks, bonds, commodities or currency trading is for you.  When you begin to look for someone to match your needs, there are search engines on the Internet such as WiserAdvisor and GarrettPlanningNetwork, but you never know if the citation was purchased for a fee.  The preferred national associations are the Certified Financial Planner Board of Standards, the American Institute of Certified Public Accountants' Personal Financial Planning Center, or the Society of Financial Services Professionals.  Each should be able to provide you with several names of competent advisor/planners in your locale.
• Examples:  You should be aware that there is a double standard in the industry.  Recent reform legislation attempted to rectify the difference, but lobbyists won the day.  Advisors can be either a "fiduciary" who is sworn to look out for your best interests, or a "broker/dealer" who may sell you anything he deems "suitable." The former appears to be the better choice.  Verify this distinction.  Credentials can also be very misleading, and many are bogus.  Of the 250,000 financial planners out there, only 23% of them have earned the mark of Certified Financial Planner (CFP), the best known of the title designations.  A smaller number have qualified for a Chartered Financial Consultant (ChFC) or Personal Financial Specialist (PFS).  Each title is conferred by their respective organization listed in the previous section.  However, credentials are not proof of capabilities.  Competency is related to experience, ongoing education, integrity and ethics, each of which may take years to develop and perfect.  Large firms may have many professionals, but the best will be serving high net worth individuals.
• Compensation:  Professionals cost money.  A fee-based advisor may remove the conflicts-of-interest that pertain to commissions, but much of compensation in this industry is hidden, so you must ask questions.  Ask for a fee schedule for specific services like preparing a financial plan or managing your investments.  Fees of $150-$200 per hour are not unreasonable, and rates are usually negotiable.  Management fees based on the size of your portfolio are commonly stated on a sliding scale.  Expect 1% to be average on an annual basis.  However, depending on the types of assets purchased, there may also be hidden costs for those also.  If you are told that there are "no fees", be extra cautious.  This may be a warning sign that the advisor will make commissions or kickbacks on whatever he advises you to buy, and it is doubtful that these offerings will be suitable for your situation.  If he immediately pushes load mutual funds, whole-life insurance, or variable annuities, then walk the other way.
• Interview:  Most people only review one candidate.  Big mistake!  You should interview at least three people.  The interview process will also educate you on how varied the industry is, what you really want, and allow you to make a comparison.  Get references, and verify them along with credentials, work history, and code of ethics.  Talk with long-term clients, if he has any, another warning sign.  You should be prepared to discuss your family and financial situation, net worth, sources of income, and your expectations of service.  These would include types of services offered, related fee schedules, planning process, investment strategy, reporting, tax efficiency, online access, and responsiveness.  When speaking to a candidate, regard the initial meeting as a mutual interview with give and take from both sides.  As for questions, the National Association of Personal Financial Advisors (NAPFA) has compiled a set that can be accessed on their website.  Make sure to print out these questions to take with you to the interview.
• Discipline:  Your advisor must have a disciplined approach.  If he appears disorganized or lacking in direction, then you may want to reconsider.  More importantly, you need to know if he has had any disciplinary actions against him in his work history.  If he has hopped from job to job, he may be trying to hide something.  Visit your local courthouse to see what lawsuits may have been filed.  Contact your state's insurance department and securities regulator or with one of the groups listed earlier to see if your potential advisor has a disciplinary history.  Then check with the National Association of Securities Dealers and the SEC.  This step in the process requires time.  Invest it wisely.  Your future wellbeing is at stake.
• Evaluate:  You should not hire or fire based totally on performance expectations.  Good financial planners concentrate on making sure their clients are well diversified and their financial affairs are in good order.  Understand that competent and complete financial planning doesn't ensure higher-than-market returns.  However, a plan should allow you to improve your credit, keep your taxes at a minimum, protect your assets, take care of your heirs and grow your wealth.  Give your advisor a minimum of three years to prove his mettle.

 
Hopefully, this "DECIDE" process will provide the guidance necessary to start and complete your own search for the right investment advisor for your financial situation.  Remember to invest the proper time required in the effort, and at all times, remember that you are the Boss and that it is all about your future wellbeing.

Article by: Tom Cleveland, a market analyst for Forex Traders. Visit Forex Traders for a complete guide on currency trading*