You never know the power of a hand-written thank you note. I was reminded of this yesterday reading about a thank you note Julia Child wrote before her death. She thanked Roger Berkowitz, president of Legal Sea Foods, for a clambake he had sent to her. It was a special note for Mr. Berkowitz. Julia Child was a loyal customer and a family friend. Their relationship went back to the days when his family ran the fish counter in Cambridge, MA. "We were her fish store," recalls Berkowitz. The note is framed and hangs in his office. I'm sure it reminds Mr. Berkowitz every day. It's a … [Read more...]
Tax Day: Top 20% Pay 80%
As if April 15th wasn't depressing enough the WSJ reminds us that the top 20% of earners pay 84% of the income tax. The bottom 20% get's paid by Uncle Sam. Who pays what in income taxes? With April 15 just around the corner, filers may be curious about where they fit into the system as a whole. The individual income tax remains the most important levy in the U.S., providing nearly half of federal revenue. This is unusual: On average, developed nations get only one-third of their revenue from income taxes. Typically they also impose national consumption taxes, such as a value-added tax, … [Read more...]
Fidelity’s Winning Edge
You can see Fidelity’s winning edge is alive and well through its CEO Abigail Johnson. She runs it like a family business—for the long-term. It’s private, not publicly traded. She doesn't have to answer to the whiny Wall Street analysts every quarter. When I worked at Fidelity I remember how the Johnson family had their finger on the pulse of their company. Chairman Edward "Ned" Johnson III believed and lived by the philosophy of Kaizen—constant improvement. There was never a shortage of money to invest in making Fidelity’s technology platform better. It’s the best in the business. Last … [Read more...]
Do-It-For-Me 401(k)
You have more opportunities for success today with your 401(k) than ever before. The reason why is that more and more plans are offering a managed account option. A managed account is one for which you can hire a professional to do the investing for you. No more worrying about what funds to buy or getting hit by big mistakes. The biggest mistake I see is that too many young professionals have their 401(k) invested in their company stock. I like the confidence—I realize it’s hard to diversify (sell company stock) when you believe in your company—you should believe in your company. But … [Read more...]
Big Ass Fans
Great story about a small company making big fans. Forbes' Karsten Strauss writes: Within a year of launching the HVLS Fan Co. back in 1999, Carey Smith began the process of changing the company’s name to Big Ass Fans . Why? Because that’s what his customers were calling it. “We would answer the phone and say, ‘This is the HVLS Fan Company,’ ” remembers Smith, smiling behind his neatly trimmed beard. “ They would inevitably pause and say, ‘Are you those guys that make the big-ass fans?’ ” They do indeed make big-ass fans – their largest is 24 feet in diameter and starts at $4,850 – and … [Read more...]
Millennials Shun Boomers’ Stuff
I came across this article thanks to the folks over at WSJ Adviser. Apparently the kids don't want all of your stuff. A seismic shift of stuff is underway in homes all over America. Members of the generation that once embraced sex, drugs and rock-and-roll are trying to offload their place settings for 12, family photo albums and leather sectionals. Their offspring don’t want them. As baby boomers, born between 1946 and 1964, start cleaning out attics and basements, many are discovering that millennials, born between 1980 and 2000, are not so interested in the lifestyle trappings or … [Read more...]
Nasdaq Missing the Boat: Part II
While the Nasdaq has nearly reached its all-time highs in nominal terms, when adjusted for inflation, the index has actually fallen in real value by 33.1% from its peak on 3/10/2000. Read Part I by clicking here. … [Read more...]
The Forgotten Depression
You can get a glimpse into a beautiful economy by looking back to the early 1920s. James Grant, founder of Grant’s Interest Rate Observer, has written a book called The Forgotten Depression. In it he describes how an economic crash in 1921 cured itself mainly because the government did nothing. Sound advice indeed. Listen to Grant’s talk to the Cato Institute here: … [Read more...]
NASDAQ Missed the Boat
NASDAQ crossed 5,000 for the first time in 15 years. That’s a long-time to wait, especially if you’re not getting paid. Back in 2000, when it peaked, NASDAQ yielded one-tenth of the S&P 500 or 0.12%. Imagine investing for 15-years and getting paid. I’ll use a 4% yield as an example, which was hard to do but it was doable. 4% compounded over 15-years multiplies your money by 1.8x--$1million becomes $1.8 million. 15-years is a long-time—a big chunk of your retirement to get nothing. You can’t afford to miss the boat this time around. But it’s amazing how quickly … [Read more...]
Lawyers 1, Savers 0
President Obama’s latest financial regulation on retirement accounts will not help savers. But it will help the lawyers. What the White House is trying to do is force savers to work with investment advisors, not brokers, when rolling over their 401(k). I’ve long been a proponent of investments advisors for my own obvious reasons—I am one. But this rats nest of regulation will steer money to big Wall Street, not Main Street. Read here on the fiduciary standard and why a fiduciary should be your guide when looking for investment advice. … [Read more...]
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