The Dean of Diversity

History is rife with poor fools who put all their eggs in one basket. And then the basket exploded, fell off a cliff, and was run over by a Mack truck.

Former employees of Enron, the defunct Texas energy company, lost much of their life savings because they loved their company so much that they bought only Enron stock to fund their retirement. This is stupid.

First, as we know, Enron's spectacular profits were proven to be entirely fabricated. For more read here: http://www.nytimes.com/2002/01/20/business/20WORK.html?pagewanted=1

And secondly, no one should ever, ever rely solely upon his or her company for support and stability. Businesses have one organizing principle, and it is not "Look out for employees at all costs." It is "Maximize profits".

More recently, we learned that Bernie Madoff took all the trust and loyalty folks handed to him, along with their millions of dollars, and stomped on all three of these things. He operated a pyramid scheme. Simply put, a pyramid scheme does not thrive by growing the value of its existing assets. The operator of a pyramid scheme thrives by convincing more and more people to make investments in the scheme; he then pays this newly-acquired money to the earlier investors, while lying that the value of the existing assets has grown. Repeat. For more, read here: http://online.wsj.com/article/SB124604151653862301.html

So how did all these rich, supposedly sophisticated investors get taken? In part, because their greediness allowed them to believe that a stock/bond investment account could credibly return 10 to 12 percent each and every year, even in down years. If the manager of the investment fund is on the level, this is highly unlikely.

The lesson is: find several places to put your money. Fortunately, there's no shortage of these.

Saving For Retirement

This should be the goal of each and every person.

Many, many things can be funded via loans -- mortgages, car payments, college educations, etc. etc. -- but there's no such thing as a loan for retirement.

And do not ever assume that you could work your entire life, even if you wanted to. People get sick and disabled. Skills become outdated. The job pool shrinks.

No matter what your financial obligations look like, and no matter how they expand and contract, always, always be thinking of how you can sock more money away for retirement.

I Do Not Want to End Up Incapacitated and Diagnosed via Videotape by a Member of Congress.

Good. Me neither.
http://www.washingtonpost.com/wp-dyn/articles/A48119-2005Mar18.html

If you don't want anyone but you, your doctors, and your loved ones making decisions about whether you'll live or die, you need an Advance Health Care Directive, otherwise known as a Living Will.

In the event of your incapacity, or vegetative state, or coma, or something like that in which you can't express your wishes, you can instruct certain people to do certain things.

You can provide that only a certain person make decisions about the care that you get or don't get. Here, you want to designate one person and then designate one more person as backup in case your first choice is dead, also incapacitated (same car accident?), or otherwise unavailable.

Or, you can provide that you would like certain procedures, like a feeding tube, or that you do not want other procedures, like a respirator.

Some states require that these documents contain specific language, so there's no confusion. These states thus provide forms that are worded in the way that the state statutes require.

Thus, it is not advised that you simply pull a form off the internet and cross your fingers. Find a form used by your state so there's no extra anguish and expense of using a court to decide. End-of-life decisions are grueling and costly enough as it is.

Is a Probate a Body Part Susceptible to Cancer?

No. Then what the heck is probate? Probate is the name for the court's administration of a person's will after death. (Thus, without a will, there is no probate.)

Probate can take months. The executor named in the will is responsible for

1) filing the will with the court
2) taking control of the assets of the estate and using them to pay outstanding debts and taxes
3) filing an accounting of those payments with the court
and
4) distributing what's left, in accordance with the will.

However, most people benefit from a will, for the reasons outlined in the "You Probably Need a Will" posting.

Fortunately there are many ways to make probate -- a necessary evil -- shorter and cheaper. More to come.

Here's a teaser: Estates valued under a certain amount (it varies by state), can qualify for a very simplified probate process.

You Probably Need a Will

Anyone who does not

1) want the state to decide what will become of her assets after she dies
2) want the state deciding who will look after her children, should she die
3) want her loved ones to agonize about what to do should she reach vegetative state

needs some sort of a will.

A simple will can achieve objective #1.

A simple will with a guardianship provision can also achieve objective #2.

An advance health care directive, otherwise known as a living will, can achieve objective #3 and can stand alone or as part of the simple will. This is the document that Terri Schiavo lacked, and its absence enabled her husband and parents to litigate against each other for years, arguing about whether to remove her feeding tube. With a living will in place, her wishes would have been clear, and much of that time, expense, and anguish would have been avoided.

I don't recommend doing this job via Google. Pay a bit of money and feel better about the legitimacy and legality of the documents you've created:
http://www.amazon.com/Quicken-Willmaker-Plus-2009-Essentials/dp/141330902X

The First Posting

We need a philosophy to encompass the blog in a nice warm embrace of caramel. It is:

Money Isn't Everything, But It Has No Substitute.

courtesy of my penny-pinching, World-War-II fighting grandpa, Daddy Alan.

Now Let's Get Fiscal!