Say you’re driving down the road in your much-loved older car that you know — you just know — is gonna last you for many, many more years. And say you’re smiling to yourself about how the car has only gotten better with age because it’s been your good buddy through many an adventure and your faithful companion through many tens of thousands of miles, just the two of you twogether, so to ~~speak~~ spell, when all of a sudden WHAM! some idiot staring down at a mobile phone while driving too fast perfectly T-bones you, rendering your dear friend . . . er . . . car . . . forevermore incapable of doing that thing which all cars must do to be deserving of their title, which is to say: drive.

So you get out of your car and, one quick glimpse later, head hanging low, you know — you just know — that your good buddy is dead, gone, done, finished, expired, no longer with us and not merely resting, or, as they say in this context and no other, totaled, because fixing it will cost more than the car, once fixed, would be worth. It’s a total loss.

So you’re just fine, but your car is totaled. What’ch’ya gonna do?

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When a Vig Equals Ownership: The Forever-Cost of a 401k Plan

Tuesday, June 3, 2014 at 2pm
By John Friedman

Wall Street — by which I mean the overall business behemoth that makes its money by holding investments of other people’s money and by trafficking in investments and money generally — is vigging all of us to death.

I mean this pretty much literally, i.e., I mean that, from the moment we are born until the day we die, the price each of us pays for storing our saved-up money, for our own use later on, consists of Wall Street taking its little slice — its vig — off the top, every moment of every day of every week of every month of every year, forever and ever, the scale of which is totally disassociated from any value Wall Street delivers unto us. Wall Street owns the market, and, in many ways, it also owns our investments in that market.

Wall Street thus owns the Asset of All Assets — the King and the Queen and all the Princes and Princesses of Assets, and t’is a very nice thing to own, indeed.

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First year property class in law school is all about what it is to own something. For instance, it talks about what sorts of rights an owner of land has relative to the rights of those who live next to the land. And it talks about who owns a fox that is fair game but happens to be on another person’s land. More broadly, it also talks about how ownership is, in essence, a bundle of rights that can be enforced in a courthouse. Seen in this light, ownership is the very bedrock of the law we know and kinda-mostly love.

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The Fee-Only vs. Fee-Based Financial Planner Dustup: Much Todo About Something?

Tuesday, May 6, 2014 at 5pm
By John Friedman

Quick: what’s the difference between a “fee-only” financial planner and a “fee-based” financial planner?

You haven’t a clue, right?

Well, that means that the financial planning community hasn’t done a great job educating the public at large about what these labels mean, which is too bad because helping the public be smart about choosing a financial planner is what this fee-only vs fee-based distinction is supposed to be all about.

So the public doesn’t get any content out of these labels. Zilch. Nada. But, my oh my and gosh a’mighty, do financial planners ever get a lot out of ’em! Why, within the industry these “-only” vs. “-based” labels are fightin’ words, and are often the talk of the inside-baseball town, resulting in lawsuits and abrupt, something’s-not-right-here departures of head honchos and the like.

So it’s all Montagues and Capulets, with the “-only” camp viewing the “-based” camp as impure and overly commercial and the “-based” camp viewing the “-only” camp as smug and overly self-righteous.

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So what are these labels and the distinction between the two all about? In a word: money. This fee-only vs fee-based distinction is all about the avenues through which a given financial planner has money coming into his or her coffers. …more ►

Using the California Statutory Will

Tuesday, April 22, 2014 at 1pm
By John Friedman

No part of financial planning flummoxes and bedevils people as much as estate planning. It makes the powerful weak and the merely-average absolutely-incapable. It makes proactive folks sheepishly cower, waiting . . . waiting . . . . . . waiting. And it makes high-output folks stare vacantly into space — zombie-like, non-productive, mouth agape, doing what Basset Hounds, Bullmastiffs and especially Saint Bernards do.

Contemplating death can do that to a person.

And that’s what estate planning is mostly about for most people: it’s mostly about deciding who gets your stuff when you die, and putting those decisions into a document that can make that happen. And that means going there, where there equals the world without you. And if you’re like most human beings, then you much prefer the world as it currently exists, i.e., with you, thank you very much. And so people stay away from estate planning in droves of droves and droves of droves.

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Estate planning lawyers — lawyers who help their clients have wills and such — are of little help. Most want to work with only rich people. Normal folks (NFs in JFF parlance) need not apply.

And so it is that estate planning lawyers are one of the big reasons people don’t get their estate planning done. In the name of wicked high fees, they bottleneck the population from being able to take care of this very important business, rather than shepherding people towards using their services and helping them do the right thing towards their loved ones. Estate planning lawyers, when taken as a whole, then, present a huge hurdle to people getting their estate planning done, and a but-for cause of much post-mortem blues. Oh the irony of it all! Oh the irony of our system!

And so the world in which we live is one where the evidence suggests that something like half of the people we see on the street each day do not have any of their estate planning done — no wills, let alone the living trust and the powers of attorney and the medical directives and the HIPAA release and all the other various and sundry pieces of paper that go into a comprehensive estate plan.

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And don’t you go thinking that great, talented people with plenty of time to take care of this sort of business are immune. Abraham Lincoln, for instance, himself a lawyer and no spring chicken upon his untimely and murderous demise, left this mortal plane without having a will, as did Pablo Picasso, who’d been exceedingly wealthy for many decades and therefore had plenty of time to get his estate planning act together before his untimely death at the age of 91.

The human being animal is simply not good at getting this stuff done.

And so it is: fallible animal, meet kludgey estate planning system, and say hello to dying without a will.

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It’s a truly wonderful thing, then, when government — yup, that gub’in’mint, that gub’in’mint thing that many people see as being keystone-cop-like incapable of doing anything helpful — steps into the void by cutting the lawyers out and lending a hand to folks who need as few barriers between them and their completed wills as possible.

California, through its Statutory Will — a fill-in-the-blank form that you can download from the Internet and then fill in all by yourself — has done just that. Thank you, you Golden State you.

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This piece is all about the California Statutory Will — what it is, how to use it, and how you can get yours done with little muss or fuss. It also includes a step-by-step guide to the California Statutory Will form itself.

Reading this piece will take you, say, twenty or so minutes — half an hour at the outside. Filling out your California Statutory Will should also take you about twenty minutes — half an hour, tops. In total, then, learning about and completing a California Statutory Will can take considerably less than one hour. Why, I bet you spend more time each year keeping your car clean and shiny!

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90 Days of Rush Limbaugh: It’s Enough to Make Me Miss Dave Ramsey

Thursday, April 3, 2014 at 1pm
By John Friedman

It’s been 90 days since I first heard Rush Limbaugh come out of my radio where once Dave Ramsey had been.

Pre-2014, I’d been doing here and there 15-minute Dave Ramsey listenings as a part of my morning twa-let, and can quite unequivocally state that, even though I often disagreed with Dave, especially when he banged his one size fits all debt-is-bad drum, I’m the better for it. Dave has a charm to him most of the time, and he knows how to give good radio. He’s a skilled pro.

Come 2014, though, the very moment I turned on the radio for that first work-a-day day of the new year twa-let, I thus did come to find myself abruptly thrust deep into EIB-land.

When you listen to Rush, you hear much mention of EIB. It’s all the EIB Network this, and the EIB Network that.

EIB stands for Excellence in Broadcasting — a labelI always took to be the name of Rush’s distributor or syndicator or something or other, but which, after a couple of minutes of online research just now, looks to be a rather mysterious thing — more like a simple dba sort of branding term . . . or something or other. It’s not clear what it is. But he sure does say it a lot.

My initial impression back then was that the Excellence in Broadcasting phrase was terrifically ironic. Broadcasting? Yes, for sure this was that. But excellence in broadcasting? This was not that. Rush, as far as I could first discern, did not give good radio. I heard sloppy transitions and aimless monologues aplenty, and missed cues and “where’s the sound clip?”s fairly often. Plus, for the life of me, it seemed like the only thing I could hear during any of the fifteen-minute chunks I caught was a swarm of commercials (a good many of which had an unintelligible hyper-fast-talk CYA legalese boilerplate blast at the end, part of which usually indicated that the advertised product or service might not be available in all states . . . ). Why, Dave didn’t have this many commercials! And Dave, he also spoke in paragraphs! And he — Dave — always seemed to have a plan for where he wanted the show to go during the rest of the hour, let alone during the next five minutes!

Thus did it come to be that the switch over at the new year, from Dave to Rush, was quite jarring. Dave was all tight language and tight radio. Rush was all blah blah blah blah and slop slop slop slop.

And so it doth came to be that, one month into 2014, after many an attempt to cozy up to El Rushbo in all his EIB’ness, I hadn’t caught much Rush content at all. Just empty calories.

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