{"id":1661,"date":"2007-07-15T21:15:23","date_gmt":"2007-07-16T04:15:23","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=1661"},"modified":"2007-07-15T21:15:23","modified_gmt":"2007-07-16T04:15:23","slug":"missed-fortune-and-the-wall-street-journal-the-value-of-a-50-cent-financial-planner-isabout-a-half-a-buck","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1661\/missed-fortune-and-the-wall-street-journal-the-value-of-a-50-cent-financial-planner-isabout-a-half-a-buck\/","title":{"rendered":"Missed Fortune and the Wall Street Journal: The Value of a 50 Cent Financial Planner Is…About a Half a Buck"},"content":{"rendered":"

One of the tenets of financial advisory is the principle of fiduciary responsibility<\/a>. Today, Wall Street Journal reporter, Jonathan Clements, openly criticizes the strategy Doug Andrew outlines in his best-selling book, Missed Fortune. Mr. Clements’ article, When the “Self” in Self-Interest Isn’t You<\/em><\/a>, attacks the strategy as being completely self-serving for the financial advisers who recommend it.<\/p>\n

The author is trapped in the mindset I call “Boomer Economics<\/a>“: paying down the home and socking away as much as possible in employer-sponsored, qualified retirement plans. The problem with Boomer Economic Thinking<\/a> is that it is becoming dangerous. The economy dramatically changed on September 12, 2001. We saw a shift of wealth from financial assets to hard assets, hyper-fueled by leverage.<\/p>\n

Doug Andrew advises people to redirect monthly contributions for retirement. He advises that they fund a 401-k plan only to reap the benefit of employer matching. He advises that the remaining monthly contribution be earmarked for variable universal life insurance contracts so that the withdrawal from those assets is tax-free. Mr. Clements suggests that this advice comes from “unscrupulous advisers”.<\/p>\n

Equity harvesting<\/a> is another principle promoted in Missed Fortune. It is recommended because home equity fails the litmus test of sound investing. It is illiquid, volatile, and it has absolutely no return. Equity harvesting protects property owners from volatility. Kris Berg describes the challenges experienced Realtors face with panic selling<\/a>, induced by illiquid property owners and inexperienced sellers’ agents. An equity harvesting strategy, invested in a side bucket to provide liquidity, can mitigate that risk. Mr. Clements directly attacks that principle as being a fee-driven recommendation and misapplies a disclosure offered by the NASD in 2004<\/a>.<\/p>\n

It is a brave new world with extraordinary challenges for the under-60 population. The World War Two generation was able to rely on the paternalistic retirement plans<\/a> offered by the government and growing corporate America (Social Security and defined benefit pension plans). The Boomer generation presented the government with a distinct threat to those plans. The government answered with a tax-banking Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

One of the tenets of financial advisory is the principle of fiduciary responsibility. Today, Wall Street Journal reporter, Jonathan Clements, openly criticizes the strategy Doug Andrew outlines in his best-selling book, Missed Fortune. Mr. Clements’ article, When the “Self” in Self-Interest Isn’t You, attacks the strategy as being completely self-serving for the financial advisers who […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,26],"tags":[],"class_list":{"0":"post-1661","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-investment","7":"category-lending","9":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1566,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1566\/how-do-you-get-to-carnegie-hall-practice-how-do-you-get-to-the-wall-street-journal-online-genius\/","url_meta":{"origin":1661,"position":0},"title":"How do you get to Carnegie Hall? Practice! How do you get to the Wall Street Journal Online? Genius . . .","author":"Greg Swann","date":"June 22, 2007","format":false,"excerpt":"Michael Cook's post on Private Equity investing was picked up as a related-info link by The Wall Street Journal Online. We've been linked from a lot of interesting places, but I think this is the new high-water mark... Technorati Tags: blogging, investment, real estate, real estate marketing","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14788,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14788\/wall-street-journal-a-home-is-a-lousy-investment\/","url_meta":{"origin":1661,"position":1},"title":"Wall Street Journal: “A home is a lousy investment.”","author":"Greg Swann","date":"July 12, 2011","format":false,"excerpt":"Ahem: \"Today's young people would be foolish to imitate their parents and view ownership as the cornerstone of personal finance.\" From the Wall Street Journal:At the risk of heaping more misery on the struggling residential property market, an analysis of home-price and ownership data for the last 30 years in\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1697,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1697\/ive-been-working-too-hard-ask-the-wall-street-journal\/","url_meta":{"origin":1661,"position":2},"title":"I’ve Been Working Too Hard! Ask the Wall Street Journal.","author":"Kris Berg","date":"July 25, 2007","format":false,"excerpt":"Thanks to Athol for this definitive guide on how to sell your own home without all of the inherent hassles and baggage of dealing with a professional real estate agent. And, I do mean \"thanks\" since, being a wee-bit short on discretionary reading time this week, a Permalink has to\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":13385,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/13385\/bofa-is-back-in-the-foreclosure-business\/","url_meta":{"origin":1661,"position":3},"title":"BofA is back in the foreclosure business…","author":"Greg Swann","date":"October 18, 2010","format":false,"excerpt":"Wall Street Journal. Flip side: Pimco, NY Fed Said to Seek BofA Repurchase of Mortgages.","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":18604,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/18604\/overnight-news-when-the-wall-street-funded-real-estate-ventures-finally-bleed-out-they-will-have-made-no-difference-whatever\/","url_meta":{"origin":1661,"position":4},"title":"Overnight News: When the Wall Street-funded real estate ventures finally bleed out, they will have made no difference\u00a0whatever.","author":"Greg Swann","date":"November 17, 2021","format":false,"excerpt":"People have been sending me clips from their local TV news stations about the devastation Zillow is leaving behind it, as it exits the flipping business. 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