Oct. 18, 2010

Teaching kids to swim in the deep end - Part 1

The Blunt Truth #4 - Money doesn`t grow on trees so don`t leave it to the birds to show your kids how to manage it.

Evening Everyone,
I was meeting with a client this morning.  If you notice, I only met with one client.  That`s because my meetings last about 2 hours on average and these clients happened to live about an hour from my office so there goes the morning.

The reason it takes me 2 hours is I am thorough in my analysis of the client scenario.  I take the financial as well as the psychological elements of the client into account when I do plans.  A fundemental concept in the financial services industry is the ``know your client`` rule which states that you must understand your clients cricumstances and objectives to properly advise them.  I don`t believe this can be done in 5 minutes.

Anyway we got to talking about the diffeneces between generations.  This led a discussion in instilling in our children the value of money.  The clients were facing a problem in regards to their son`s attitude towards money.  In a nutshell, the mother felt the son was not learning the value of money and was expecting to be given all that he desired.  This was not the first time that I have had this conversation and it does not seem to be limited to well off families.  The frequency that this is occuring is unsettling.  There seems to be an entire generation of individuals that think that mom and dad will provide for them endlessly, that they are entitled to live a lifestyle equal to their parents without having worked for it, and that it is their right to have their lifestyle subsidized by the parents.  Sorry folks but this is no way to teach kids about financial responsibilty and those that are on this path may very well be in for a rude awakening.  Here are a few examples from real life:

- I met a woman who had accumulated about $20k worth of debt behind her husbands back because she was indulging the kids.  The husband found out 2 months before his retirement date and he thought he was going to retire debt free.
- I met a couple who renegociated their mortgage 3 times in 5 years.  When I asked them why they were in debt, it finally came out that the mom couldn`t say no to her daughter`s every whim.
- I met a woman in her 50`s of limited means who tried to save her son from bankruptcy.  Against my advice she gave him $10k.  He went bankrupt 3 months later.

These are just a few examples I could think of off the top of my head.  I have dozens more.  I understand the situation parents find themselves in and I am not judging their intentions, but I do question their judgement. What is this teaching these kids?  How are kids supposed to learn from their mistakes if they never are allowed to live the consequences of their actions?  It doesn`t make any sense that someone planning for retirement in 5 years be covering someone who has 45 years to build their wealth.  Kids have time, many parents don`t.  And the kids know that no matter how they behave, they have a personal connection to the executive suite at Ma&Pa Savings and Loan.

Life is tough and for good reason.  When you work hard to earn something you value it.  When you get something for nothing that is what it`s worth to you: nothing.  I have been poor in my life and I`m proud of it becuase I learned I never want to be poor again.  I learned the value of money.  It wasn`t fun and to be blunt, it sucked badly!!  I suffered and it hurt, but I survived and I learned how to bail myself out  That lesson alone was worth the price of admission.  A client of mine had a daugher that was deep in debt.  He had the money to bail her out but he refused to do so until the last possible moment.  He told me something that I`ll always remember:  ``I love my kids and I`ll never let them drown, but are they ever gonna learn how to swim in the deep end before I pull them out.`` 

Oct. 17, 2010

Boys should be boys

The Blunt Trust #3 - There is a huge difference between equality and sameness.  Men and women should be equal with respect to opportunity, but to try and make them the same is irrational.

Evening everyone,
I picked up a copy of the Globe and Mail today as I`m getting ready to pick some stocks.  The cover story was about the gap between male and female enrollment in univeristy with the female population at 60% and the male population at 40%.  Prior to 1982 when the enrollment was 50/50, boys had outnumbered girls.  The article went on to describe several reasons why this was happening and quoted several `experts`voicing their opinion on what should or should not be done.

For the recored, I was raised by a single mom and am married with 3 daughters and a son.  I am far from being against feminism and given my family situation I would be a fool to believe that my girls are not equal in capacity, intellect and potential to my boy.  I strongly believe that an even playing field should exists in which every individual in our society ise able to compete based on their abilities in a fair and unbiased process  to determine the outcome.  I am a strong supporter of ``may the best person`` win.  You may not like what comes next, but someone has to come out and say it so let the chips fall where they may. 

Based on this article and many other reports that I have read, my own observations and commentary from various individuals both in and out of the educations field, it seems to me that we as a society value girls more than boys.  From TV shows, to commercials, to cartoons, to Hallmark cards, to the classroom, the prevailing perception is that men are red neck Neanderthals or whiny wimps that can`t think for themselves while women are self assured, intelligent, thoughtful beacons who have all the answers.  I  have no problem with women being portrayed in this positive light, but I have a BIG issue with boys and men being portrayed as inferior.  And that is exactly what is going on in our society.

Go to any school and you will find that boys are being diagnosed with ADHD and literally drugged into passivity, competition is no longer accepted as everybody has to win.  The books that they read are geared towards girls.  Women`s groups and the Feminsit movement have tipped the scales by creating a variety of programs to promote girls in science, math, and computers with no programs for boys to deal with their weaknesses in reading and writing.  The vast majority of teachers at all levels are women who do not relate to the boys as easily as they do to the girls.  We have and continue to emasculate our boys to try to get them to act as girls by having severe resitrictions on anything that is aggressive in nature Everything from sports, to language, to attitude, to behavious cannot exude one iota of aggressive stance.  There is a big difference between violence and aggressiveness people.  Boys are aggressive by nature compared to girls, but not all forms of aggressiveness are necessarily violent.  The system has a favorable bias towards girls to the detriment of the boys.  This approach has permeated the airwaves, the movies, the sitcoms, the magazines, the office, the social clubs, to the point that people see men in a negative light.

Don`t believe me?  Why don`t you test your own perception.  Which of the following characteristics would you attribute to boys and which to girls:

Aggressive  Boisterous   Excited  Kind Physical  Smart  Loud  Rough Gentle  Inatentive  Genernous  Lazy
Violent Quiet  Rebellious  Well Mannered    Respectful  Crude Honest  Sweet   Cute  Civil  Team Oriented

As the pillars of male organizations (Boy Scouts, YMCA, sport teams) get integrated with girls and the breakdown in the traditional role of men in the family becomes less common, the boys of our society are losing the ability to have the role models to teach them how to become good men.  What are the attributes of a good man?

Honor Courage Loyalty Generousity  Discipline  Service  Sacrifice  Responsibility  Achievement  Humility  Obedience Pride  Honesty  Perseverance  Empathy  Resourcefullness  Leadership

When the last time you heard of these values being taught in school?  Are we realizing just how much we are losing by painting girls and boys with the same colored brush?

Oct. 15, 2010

When is enough enough?

The Blunt Truth #2 - Government by their very nature are expansionary.  They will grow indefinitely and will take from  taxpayers until there is nothing left to take, or until taxpayers tell them to stop and deliver the message personally.

It`s been an interesting time in Europe recently. Various groups in Greece and France have taken to the streets in protest to how the government has implemented austerity measures to balance their budgets.  From what I can gather this is just the beginning for them.  The reasons why this is happening are complicated, but in short, the government is cutting spending and raising taxes while simultaneously taking away benefits from large segments of the population.  This is considered unacceptable by the masses and they are showing their government that enough is enough.
We have not heard much in Canada about these events as we have been paying attention to more important things:  how is Lindsay Lohan doing,  who`s ahead on So You Think You Can Dance, how could Canada have lost our bid for a seat on the UN Security Council, and so on.

Meanwhile, at least in Ontario, the provincial Liberal government Premiere DaDinky has been to sticking it to us for years.  The Health Premium(nice word for a tax!!), the HST. E-Health scandal, higher energy rate for going green, the lottery scandal, huge severances at Hydro One, record deficits, Eco fees, police investigations at several government ministries for fraud, and the list goes on.  I can see the leaders of France and Greece wishing their citizens were more like Canadians: passive and gullible!!  If the events mentioned above were happening in either of those countries there would have been riots in the streets a long time ago and a change of government or atleast a change in leader would have occured.

I for one am livid at the circumstances.  Just hearing the name Dalton get me going(I feel bad for all 3 people named Dalton`s out there) and to be quite honest I just can`t pay anymore.  I`m seriously thinking of taking to the streets before the government puts me out there for good.  I`m all for spreading the wealth around, but the kind of abuse that these jokers have been inflicting is beyond belief.  And DaDinky is serious about running for a third term!!!  The man is either living in a dream world or has no conscience( I vote for the latter).  How much longer are people going to roll over and take this from those who are supposed to represent our interests?  How much longer before enough is enough?


Oct. 13, 2010

Call them like I see them

The Blunt Truth #1 - The guy on the other side of the desk who is supposed to have all the answers to your financial questions maybe alot dumber than he actually looks.

Evening folks,
My wife decided that it would be a good idea for me to start a blog.  She said I had alot of interesting comments about all sorts of issues and that I should share them with the world.  I think she`s feed up of me forcing her to listen to my rants and wants me to vent to the rest of the world and leave her alone!!!!  I knew I married a smart woman!! 

I work in the financial services industry and alot of my comments will have to do with my experiences in the field.  To be honest with you (I always will!) I feel really sorry for the average Canadian who deals with the average advisor out there.  Many of you are definitely not getting the advice you deserve and are paying a hefty price for it.  As an insider with 15 years in the business, I have seen it all.  I am currently in a position where I advise advisors on how to deal with all of their clients needs and focus on more than just selling the product.  I trust you will pray for my sanity as I need all the help I can get!!!!

Don`t get me wrong here folks, there are alot of good advisors out there, but there are alot more who are not.  Unless you have alot of money, you are not getting the best advice.  Case in point:

I got to the bank a few months ago to activate my daughter`s debit card.  I run into a former colleague who I trained (or atleast I tried to train him) when he joined up.  I was a financial planner when he got hired and was managing about $50 million after a dozen years in the business so I knew what I was doing.  Anyway we get to chatting and he tells me that he`s going to be filling in for my replacement as she is taking a year off for personal reasons.  This guy didn`t know the difference between an investment and a debt and now he`s managing millions!!!   I was shocked!!!  I don`t know who to feel sorry for in such a lose/lose/lose situation:  the client who is going to freak when this guy opens his mouth, the guy who has got to realize at some point that he`s in over his head, or the bank who obviously can`t find competent people to handle their clients.  I`ve already got two calls from former clients who can`t believe this is their advisor.  Isolated incident your say?  Stick around as I see this stuff every day of the work week.