Smude & Associates

Your Value?

Sitting at the University of Michigan Hospital right now - my sister is undergoing some surgery.  Although my sister will no doubt be fine, you start to think about those that won't leave the hospital...the emotional and financial wreck that they will leave behind for those that care about them the most.

Emotionally - not much you can do about that.

Financially, well that is a different story.

Will Rogers said this: "A man (or woman) who dies without adequate life insurance should have to come back and see the mess he (or she) created."

According to LIMRA International, about 68 million Americans have no life insurance whatsoever.

Damn shame.

You one of them?

No excuse.  Shame on you.

Here's my list of the excuses you may have for not having life insurance:

1. Don't have the money.  B.S.  Insurance is cheap.  You can pay monthly.  I bet if I look through your cash flow I'd come up with the money that you are blowing on other shit instead of insurance.
2. Don't want to take a physical.  B.S.  There are insurance companies that don't require peeing in cup or giving blood.
3. Too busy.  B.S.  You have time.  Turn off Dances With Stars one night, sit down and make some decisions.
4. Your health isn't good.  B.S.  Get the insurance anyways.  Get in shape and then take the physical again a year from now to lower your premiums.

5. You'll pay premiums and never get your money back.  B.S.  Some insurances allow you to build up cash, other insurances allow you to get all your premiums back if you don't use the insurance.

6. You won't die until you are old.  B.S.  This is just as bad as "it'll never happen to me".  Call me, I'll give you too many stories of people that die unexpectedly, too young, too soon, with a wife/husband and kids behind.

7. You don't care about the financial mess you leave behind.  Well, then you are just an idiot.

Here's what I suggest: make getting insurance a New Year's Resolution.

EXCEPT: Get it started today.  Don't wait until the new year.

Election

Thought I'd throw my two cents in about the election - not who you should have voted for, there are plenty of talking heads that did that and will continue to do so.

As I was driving into the school parking lot yesterday to vote I was overcome with this feeling of pride & gratitude.  You see, kids were playing football, the sun was out and we were having the right to cast our ballot, to have our say on who we want to lead us.

That's a pretty amazing thing when you think about it.

There was no protesting.  No buildings burning.  No flags burning.  No guns shooting. 

There was peace.  And opportunity.  And freedom.  And safety.

About a mile down was a Kroger - shelves filled, produce available, beer, cigars, wine to purchase.  Heck there is even a Starbucks there giving away free coffee.

This country we live in is a pretty amazing thing when you stop and think about it.

Know that we live in the greatest country in the world, know that you can choose, do and become whatever you want.

So take a moment today - even if it is a very brief moment - and take it all in.  Look around you and see what you have.  Take a moment of gratitude.  I guarantee you'll feel better.

Enroll

Some of you may be in the middle of enrollment for different work benefit programs (are there any left?)...such as healthcare, retirement plans, etc.

Here's a couple of pointers on the retirement planning:

1. Be careful of "target retirement funds".  A simple way of picking your retirement year and letting the fund managers manage everything for you using different sub-mutual funds.  Here's the catch: often these funds are way conservative - maybe more conservative then you want/need.  They would rather error on the conservative side than expose your money to a market crash and a subsequent letter from your lawyer from firm name "Wesueem, Fast & Hard".  Plus these target funds often have an extra layer of fees in addition the funds fees (management, transactions, mortality, etc.).  You don't think they do this out of the kindness of their hearts do they?

2. Don't assume a tax deduction today is in your best interest.  The industry as a whole, including CPAs have told you for years to contribute to retirement plans to get a tax deduction "today".  That's cool if you plan on being in a lower tax bracket when you retire and start pulling your money out of the plan...but what if you are in a higher tax bracket later on?  Don't think you will be?  Hmmm...ask yourself this question: between now and the time I retire, do I think taxes will be lower, the same or higher?  So think about what many of you are doing - taking a tax deduction today so you can defer (this is the key word) taxes to a later date, whereby there will be a very, very good chance taxes will be higher, and you will be paying taxes on a larger amount of money that you've saved.  Does this make sense??  Now I know why the financial services industry encourages you to do this: fees, commission, big yachts, country clubs and BMW750s.  Why do CPAs tell you to do this?  That's a great frickin' question, one that stumps me.  They're so used to looking in the rear view mirror at things that have already occurred that their idea of future planning goes no further than whether to have a Whopper or Big Mac for lunch.

BTW, if you ask the 401k knucklehead advisor who "runs" your retirement plan at work about the above...just remember what his/her compensation is tied to (hint: your contributions to the 401k).

Hanging

Was speaking to a lady yesterday who's tired of losing her money in the market.  She has no one in her life to give her financial advice besides her current broker - her husband has long passed, her best friend now has dementia - so she relies on her broker for advice.

Here's the problem: she explained that her account is at a large wire-house (one that was recently "merged" with a bank) and that it was recently valued at $135 thousand.  Current value: $85 thousand.

The advice her current advisor gave her?

Hang in there.

By the way, she's 90 years old.

Humbling

My buddy Duane sent this video to me, a must see (grab a tissue): Ben Comen

What does this have to do with financial planning or the markets?  Not much.

A lot to do with life however.

P.S.Duane credits Simon at www.simonsinek.com for sharing this video.  Thanks Simon!

Charities

Like most individuals and businesses, charities are feeling the challenging times.

Let's not forget to help those that help those most in need.

If you are involved with or belong to a charity that would like some ideas on how to increase donor contributions (other than asking for cash), give us a call (248 593-9517) or email: sbruce@smude.com

We are working with a number of organizations - showing them there are alternative (and better) ways to simply asking for more.

In-Service

Tired of getting hit hard inside your 401k?

Tired of the limited selection of funds?

Some company plans allow for in-service rollovers - allowing you to "roll" or transfer some of your 401k money to an IRA without any penalties or taxes while still employed. 

Having this ability opens up the universe of investments to you, allowing you greater choice, flexibility and freedom when it comes to your money.

Contact your H.R. department or the plan administrator to see if your 401k plan allows for this type of transfer.

Feeling A Bit Taxed?

Today's Schedule:

• Wake up in bed (taxed)
• Turn on light (taxed)
• Turn on cable t.v. (taxed)
• Feed dog his food (taxed)
• Oatmeal, apple and coffee (all taxed)
• Brush teeth, shave, shower, flush toilet (taxed, taxed, taxed, etc.....)
• Drive daughter to school (car taxed, gas taxed)
• Turn on laptop (taxed) begin work for pay (taxed way too many times)
• Emails (not taxed...yet)
• Call clients on phone (taxed)
• Client wants to sell something at a profit (taxed)
• Lunch (taxed)
• Buy new pair of walking shoes (taxed)
• Head back to work (payroll taxes, business taxes)
• Dinner (taxed)
• Beer (taxed)
• Take kids to volleyball & soccer (car, gas taxed)
• Sit down to good book (taxed)
• Put on Mickey Mouse PJs w/footies (taxed)
• Collapse in bed (taxed)

Enough please.

Resources

Looking for ways to tighten up the budget and save some - if not a lot of - money?  Don't forget about the some of the major things you pay for: auto & home insurance, health insurance, mortgage, etc.

Over the years we've established terrific, trusting relationships with folks that cover the following areas:

• Auto & home insurance

• Mortgages

• Health insurance

• Banking services

• Tax services

• And many more

It may be the perfect time to shop these services around.  Best of all, the folks we work with will do all the work.  And you'll get all the savings.

Call us at 248 593-9517 or email: aturner@smude.com  Tell us where you would like some help.

If I Were A CPA

Since many folks are looking to change careers, here are my two cents if you are considering becoming a CPA:

1. Don't be cocky and arrogant.  Just because you hack away at numbers doesn't mean you can cop an attitude.

2. Don't drive a BMW 750IL.  At least don't drive it to your client's offices.  Feel free to drive it to your country club - but not to see the folks who are paying your bills.  Cocky and arrogant.  And flagrant.

3. Don't use fancy form numbers with your clients.  "Ah, yes, have you completed your form 8879 for us yet in order to facilitate the exchange of information via the thing -a-ma-jig?"  Stop.  No one knows the forms - it is your job to simplify.  Tell us what you want, we'll get it for you.

4. Speak English.  Forget the industry jargon you and your cronies use in your boring team meetings.  Speak clearly and speak in a language that your clients understand.

5. Try to add an ounce of value.  What you're forgetting is the value you provide isn't in the number crunching - any 22 year old, wet-behind-the-ears college grad can do that.  What clients want is leadership, creativity and clarity.

6. Know your client.  Try this type of questioning instead of what you normally do (thanks Dan Sullivan): "What concerns do you face that need to be eliminated?  What opportunities do you want to take advantage of?  What strengths do you possess that need to be captured?"  And then sit quietly and listen to their answers.

7. Don't send your expensive bill before the taxes are complete.  How about this: if someone is getting a refund, don't send the bill until after they get their refund. 

8. Buy some stamps.  Place a stamp on the return envelope if you need something back from your client.  Bury the cost of the stamp in the expensive fee you charge - no one will know the difference - and at least you won't look like a cheap ass and your client won't be pissed.

9. Send a referral.  Instead of always standing there with open hands why not send out a referral for once?  At least this would off set your expensive fees a bit.

10. Lastly, be very, very cautious.  There is this little country called India that has a bulls eye on you and your industry.  They have MBAs and Doctorates and work like hell all day and all night.  And they'll charge $150 bucks or maybe less plus the cost of a fax to do exactly what you are doing.