Is it just me or have the recent appointees to President Obama's cabinet been playing hooky with their taxes? First, it was Tim Geithner, a mastermind at the Treasury, who is going to be the savior of the economy. Now it's Tom Daschle, the guy who's going to rescue the country from the healthcare crisis.
I wonder how many more powerful, well-connected people have hidden money that we desperately need and the only reason they're disclosing it is because they're being considered for Cabinet level positions.
And you thought this article would be about shaming them. Actually, it's not. If these whiz kids and super intellectuals are having issues with their taxes, can we really blame Joe six pack for failing to disclose income from that side job mowing lawns in the summer or shoveling snow in the winter? Let's all give the President one word of advice: Simplify, simplify, simplify. (they say if you repeat something three times, it works!). I think John McCain had a good idea when he wanted to come up with an alternative, simpler tax system. I'm hoping Obama adopts something along the same lines. In the meantime, keep all those records from banks and brokerage firms. Remember, they have a tendency to update them and send new ones out, correcting errors on the previous ones. So, wait a while, and file your taxes in March or April. And make sure you get a good CPA!
Monday, February 2, 2009
Thursday, October 23, 2008
Humor reflects Reality
This is the funniest article I've read in a long time!
Zubin J. Bomanshaw
Portfolio Manager
Integrity Investment Advisors, Inc.
NEW YORK—Wall Street investors experienced a sudden surge in optimism Tuesday when, after six tumultuous weeks that saw record drops in the Dow Jones industrial average, a $1 bill was spotted on the floor of the New York Stock Exchange.
The dollar bill was discovered in the northwest corner of the trading floor at approximately 12:05 p.m., and its condition was reported as "crinkled, but real." Word of the tangible denomination of U.S. currency spread quickly across the NYSE, sending traders into a frenzied rush of shouting, arm-flailing, hooting, hollering, and, according to eyewitnesses, at least one dog pile.
"With credit frozen and the commercial paper market poised on the brink of collapse, this is the most promising development I've seen on Wall Street in months," said floor trader Tim Formato, one of hundreds who gathered around the $1 bill and excitedly called their clients to inform them that they were looking at actual U.S. tender. "I think I touched it."
According to witnesses, the trading floor was soon abuzz with energy, as traders pointed at the dollar and repeatedly shouted "Look!" and "Money!" A proposal to divide the $1 note into 1,300 equal pieces and distribute them amongst investors was considered, but ultimately rejected. Early reports estimate the dollar may have passed through as many as 65 hands before disappearing in the late afternoon.
The bill's absence, however, did not deter the growing enthusiasm from those on the trading floor. By 2:15 p.m., more than 60,000 shares had been purchased in the new publicly traded asset, DLR, after brokers placed a flurry of calls advising their investors to buy into the booming single-dollar market.
By the close of day, economists were estimating the dollar bill's net worth at just under $270 million.
"We couldn't be in a better situation right now," trader Patrick Kady said. "Unless of course it had been a euro."
However, some financial advisers are warning against the rampant speculation the dollar has caused on Wall Street. Many have cautioned investors not to make rash decisions, such as liquidating all their low-risk government bonds in order to sniff the green paper bill for just a minute.
"I bet it smells like rose petals," mutual funds specialist Ken Stoute said. "My friend's friend Tim Formato? He's on the board at Westminster Securities and he says he touched it. He said it was warm and soft and wonderful. He said he knows where it is now, and I can put in an option on seeing it tomorrow for only $85."
Since the appearance of the dollar, the Dow has spiked an impressive 993 points—its largest gain ever. Initial numbers are showing the most sizable rises in technology stocks, a trend some are attributing to Microsoft's CFO Chris Liddell, who toured the trading floor Tuesday morning with the bill stuck to his left shoe.
The overall projection for the market following the incident has been positive, with many analysts claiming that the $1 bill may be an indication of other spare change lying around. This, coupled with reports out of Europe that there is a German college student who has not yet hit her credit card limit this month, could be enough to stabilize the Dow and jump-start the global economy once again.
"This is just another sign that the U.S. economy is as strong and resilient as it has ever been," said Richard Fuld Jr., former CEO of Lehman Brothers. "I'm just glad we finally have these credit and subprime mortgage loan crises behind us. This $1 bill will carry us through another 10 years of reckless, unregulated borrowing."
Added Fuld, "Just for God's sake, don't invest it in the stock market."
-www.theonion.com
Zubin J. Bomanshaw
Portfolio Manager
Integrity Investment Advisors, Inc.
Friday, September 26, 2008
How did it come to THIS?
Apart from the few of you who have been living in the rain forest or meditating in the Himalayas, the rest of us have not only heard, read, felt, discussed, and been lectured about the current financial crisis, but may also have been fired or directly affected in some other way.
HOW DID IT COME TO THIS?...where the smartest people with degrees from the fanciest schools, legions of consultants, billions of dollars, and decades of experience PERPETUATED this biggest of all PONZI schemes? Who was asleep at the switch that keeps the lights on in the global economy? Who was steering this financial Titanic when the looming iceberg was barely a speck on the horizon? Will the real perpetrators please stand up?
Alas, for many people looking to lay blame, the answer is close at hand. Go look into a mirror and stare really hard at the cause of this monetary destruction. If you took out a no-doc loan that you couldn't afford, if you were flipping homes or real estate feeling really good about yourself because real estate can only keep going up, if you ran a bank and turned on the risk to goose up your profits, if you were in elected office and could have raised the alarm but kept the party going because of increasing state or local revenues. The list goes on and on....right from the highest levels of governments and central banks that didn't tighten regulations, the insurance companies and brokerage firms that repackaged and sold these mortgages, to the end consumer who went out on a limb and gorged on cheap debt by loading up on expensive houses, cars, and other consumer goods.
The interconnectedness of the global economy only exacerbated the problem. Countries with high savings rates and therefore surpluses were only too eager to purchase the safest currency in the world - US Treasury debt. And the cycle inexorably continued, as domestic banks awash with cash, low rates, and light lending terms distributed it to a voracious public. I'm reminded here of the John Donne line,
"Each man's death diminishes me,
For I am involved in mankind.
Therefore, send not to know
For whom the bell tolls,
It tolls for thee".
To a greater or lesser degree, a lot of us contributed to this mess, and we're the ones who'll need to pull ourselves out. There is no other way. We cannot depend on the $700 billion bailout, the next President, elected officials, company bosses, or family members to pull us out.
For the lay person, I would recommend a back-to-basics strategy. Read and re-read George Clason's timeless classic 'The Richest Man in Babylon'. This book encapsulates the most basic tenets of financial prudence. In fact, it ought to be mandatory reading for all school students, and maybe even for adults. A little re-education might not be so bad after all.
Keep a cash reserve on hand. I would recommend about a 6 month to a 1 year reserve.
Re-evaluate your savings goals, your expenses, your 401k contributions, and other investments.
Simply put, spend less, save more, especially if you're used to maxing out those credit cards.
Although it might be difficult in the current economic environment, seek a part-time job or extra hours at work if possible. Enroll in a class to learn new skills or go back to school for a new degree.
It is tough in this time of dire need not to want to lay blame and punish those responsible. That will come, hopefully, in due time. And the clean up is not going to be easy, cheap, or painless. There needs to be more bloodletting and I predict more despair before this is over. But, humanity has suffered greater tribulation, and we'll emerge from it stronger, wiser, and more resilient. Hopefully, we don't lose the humanity in us along the way.
Zubin J. Bomanshaw
Integrity Investment Advisors, Inc.
HOW DID IT COME TO THIS?...where the smartest people with degrees from the fanciest schools, legions of consultants, billions of dollars, and decades of experience PERPETUATED this biggest of all PONZI schemes? Who was asleep at the switch that keeps the lights on in the global economy? Who was steering this financial Titanic when the looming iceberg was barely a speck on the horizon? Will the real perpetrators please stand up?
Alas, for many people looking to lay blame, the answer is close at hand. Go look into a mirror and stare really hard at the cause of this monetary destruction. If you took out a no-doc loan that you couldn't afford, if you were flipping homes or real estate feeling really good about yourself because real estate can only keep going up, if you ran a bank and turned on the risk to goose up your profits, if you were in elected office and could have raised the alarm but kept the party going because of increasing state or local revenues. The list goes on and on....right from the highest levels of governments and central banks that didn't tighten regulations, the insurance companies and brokerage firms that repackaged and sold these mortgages, to the end consumer who went out on a limb and gorged on cheap debt by loading up on expensive houses, cars, and other consumer goods.
The interconnectedness of the global economy only exacerbated the problem. Countries with high savings rates and therefore surpluses were only too eager to purchase the safest currency in the world - US Treasury debt. And the cycle inexorably continued, as domestic banks awash with cash, low rates, and light lending terms distributed it to a voracious public. I'm reminded here of the John Donne line,
"Each man's death diminishes me,
For I am involved in mankind.
Therefore, send not to know
For whom the bell tolls,
It tolls for thee".
To a greater or lesser degree, a lot of us contributed to this mess, and we're the ones who'll need to pull ourselves out. There is no other way. We cannot depend on the $700 billion bailout, the next President, elected officials, company bosses, or family members to pull us out.
For the lay person, I would recommend a back-to-basics strategy. Read and re-read George Clason's timeless classic 'The Richest Man in Babylon'. This book encapsulates the most basic tenets of financial prudence. In fact, it ought to be mandatory reading for all school students, and maybe even for adults. A little re-education might not be so bad after all.
Keep a cash reserve on hand. I would recommend about a 6 month to a 1 year reserve.
Re-evaluate your savings goals, your expenses, your 401k contributions, and other investments.
Simply put, spend less, save more, especially if you're used to maxing out those credit cards.
Although it might be difficult in the current economic environment, seek a part-time job or extra hours at work if possible. Enroll in a class to learn new skills or go back to school for a new degree.
It is tough in this time of dire need not to want to lay blame and punish those responsible. That will come, hopefully, in due time. And the clean up is not going to be easy, cheap, or painless. There needs to be more bloodletting and I predict more despair before this is over. But, humanity has suffered greater tribulation, and we'll emerge from it stronger, wiser, and more resilient. Hopefully, we don't lose the humanity in us along the way.
Zubin J. Bomanshaw
Integrity Investment Advisors, Inc.
Monday, July 21, 2008
Zubin J. Bomanshaw awarded membership in the Edelman Financial Network
Zubin J. Bomanshaw Awarded Membership in The Edelman Financial Network
Affiliation in Elite Group Gives Investors Opportunity for Better Returns with Lower Fees and Risks
For immediate release Contact: Zubin J. Bomanshaw
July 7, 2008 858-523-0093
zjb@iiadv.com
(San Diego, CA) —Zubin J. Bomanshaw announced today that he has been awarded membership in the prestigious Edelman Financial Network, allowing his clients access to one of the most popular and fastest-growing investment management programs in the nation.
Clients of EFN-member firms may invest in the Edelman Managed Asset Program, the state-of-the-art portfolio management program developed by financial advisor, author and radio host Ric Edelman. Based on Modern Portfolio Theory, EMAP enables individual investors to invest in portfolios that feature as many as 19 separate asset classes and market sectors. This extensive diversification is obtained through institutional funds and exchange-traded funds that feature astonishingly low fees, offering the investor reduced risks while enjoying the opportunity to obtain the competitive returns offered by the global financial marketplace.
“Through EMAP we now can give individuals and families access to the same
investments previously available only to multi-million dollar institutional investors, pension funds, and endowments,” said Mr. Bomanshaw, Portfolio Manager of Integrity Investment Advisors . “We’re pleased to have been chosen to represent EMAP and to begin offering this powerful investing tool to clients.”
Since it was established in 2005, investors across America have established more than 17,000 EMAP accounts, investing more than $3 billion. The program’s popularity led to the creation of the Edelman Financial Network, so that a small, elite group of experienced and talented financial advisors around the country can provide EMAP to consumers. Applicants must undergo a rigorous screening process, including a background check and a review of their regulatory history. Final approval is granted by Edelman personally.
“Admission to the Edelman Financial Network reflects an advisor’s exceptional
record, knowledge and ethical standards, demonstrated through years of practice,” said Edelman. “Advisors in the Network have the ability to dramatically improve the services and advice they offer their clients. Participation in the Network will be beneficial for Mr. Bomanshaw and, most importantly, for his clients.”
About Integrity Investment Advisors/Zubin J. Bomanshaw
Zubin J. Bomanshaw began his career in finance in 2000 as an equity research analyst. He currently manages investment portfolios for individuals, businesses, and foundations at Integrity Investment Advisors, Inc based in San Diego, CA.
Rather than selling high-commission products, Integrity guides its clients and manages their financial resources by providing personalized and professional fee-only advice.
About Ric Edelman
Ric Edelman has been providing investment and financial advice to consumers for more than 20 years. His weekly radio show is heard nationwide via the ABC Radio Networks, and he is the author of six books including the current bestseller The Lies About Money. He writes a weekly newspapers column and is a frequent media commentator on investing and personal finance.
Edelman Financial Advisors is the sponsor of the Edelman Managed Asset Program.
Affiliation in Elite Group Gives Investors Opportunity for Better Returns with Lower Fees and Risks
For immediate release Contact: Zubin J. Bomanshaw
July 7, 2008 858-523-0093
zjb@iiadv.com
(San Diego, CA) —Zubin J. Bomanshaw announced today that he has been awarded membership in the prestigious Edelman Financial Network, allowing his clients access to one of the most popular and fastest-growing investment management programs in the nation.
Clients of EFN-member firms may invest in the Edelman Managed Asset Program, the state-of-the-art portfolio management program developed by financial advisor, author and radio host Ric Edelman. Based on Modern Portfolio Theory, EMAP enables individual investors to invest in portfolios that feature as many as 19 separate asset classes and market sectors. This extensive diversification is obtained through institutional funds and exchange-traded funds that feature astonishingly low fees, offering the investor reduced risks while enjoying the opportunity to obtain the competitive returns offered by the global financial marketplace.
“Through EMAP we now can give individuals and families access to the same
investments previously available only to multi-million dollar institutional investors, pension funds, and endowments,” said Mr. Bomanshaw, Portfolio Manager of Integrity Investment Advisors . “We’re pleased to have been chosen to represent EMAP and to begin offering this powerful investing tool to clients.”
Since it was established in 2005, investors across America have established more than 17,000 EMAP accounts, investing more than $3 billion. The program’s popularity led to the creation of the Edelman Financial Network, so that a small, elite group of experienced and talented financial advisors around the country can provide EMAP to consumers. Applicants must undergo a rigorous screening process, including a background check and a review of their regulatory history. Final approval is granted by Edelman personally.
“Admission to the Edelman Financial Network reflects an advisor’s exceptional
record, knowledge and ethical standards, demonstrated through years of practice,” said Edelman. “Advisors in the Network have the ability to dramatically improve the services and advice they offer their clients. Participation in the Network will be beneficial for Mr. Bomanshaw and, most importantly, for his clients.”
About Integrity Investment Advisors/Zubin J. Bomanshaw
Zubin J. Bomanshaw began his career in finance in 2000 as an equity research analyst. He currently manages investment portfolios for individuals, businesses, and foundations at Integrity Investment Advisors, Inc based in San Diego, CA.
Rather than selling high-commission products, Integrity guides its clients and manages their financial resources by providing personalized and professional fee-only advice.
About Ric Edelman
Ric Edelman has been providing investment and financial advice to consumers for more than 20 years. His weekly radio show is heard nationwide via the ABC Radio Networks, and he is the author of six books including the current bestseller The Lies About Money. He writes a weekly newspapers column and is a frequent media commentator on investing and personal finance.
Edelman Financial Advisors is the sponsor of the Edelman Managed Asset Program.
Wednesday, June 25, 2008
Employers: Navigating the 401(k) Underworld
The average person might be forgiven for associating the term 'Underworld' with gangsters, evildoers, and criminals. But, the truth is that one of the largest assets of US Households is also managed by one of the least transparent industries - cloaked in the guise of legal language, tons of paperwork, and hidden fees and charges.
US retirement assets were close to $18 Trillion in 2007, according to ICI, the trade association of the mutual fund industry. A large portion of these assets are managed by the big insurance companies, and for a lot of them, it has been business as usual. Although technological advancements have been made, the fees charged to participants are rarely disclosed, and plan employers have NO IDEA just how much they're paying for the service!
If you went out and bought a car, you know exactly how much it costs. There's a breakdown of the cost with taxes, extra fees, and other charges very clearly listed. Unfortunately, there's no law dictating that financial firms provide this clear cut breakdown for their 401(k) products. While some legislation has made it through, it's still up to the employer to take an active role in determining exactly how much he or she is being charged. Often, fees and charges are removed directly from the account, and participants don't receive a bill for these. As a result, they NEVER know how much they're being charged. In a recent post, I linked to a Bloomberg video that did some investigative reporting on this very subject.
So, what's a business owner to do to keep abreast of the situation? If you have a 401(k) plan or are thinking of sponsoring one, make sure you get a DETAILED ESTIMATE of all costs, fees, and expenses. The Department of Labor has created a worksheet for you to submit to financial service companies. Get bids from about 3-5 different firms. Have them fill it out and then compare the total costs to make sure you're looking at an apples-to-apples comparison for similar services. A copy of this worksheet can be accessed on the DOL's website at:
http://www.dol.gov/ebsa/pdf/401kfefm.pdf
If you have a current plan, send the form to them anyways. This will help satisfy your fiduciary obligations that require you to be aware of plan costs and to ensure that they're reasonable for the services provided.
It's preferable to have someone who's compensated on a fee basis manage your plan. If a broker is going to be paid a commission, is he going to put you in funds that perform better or that give him a higher payout? It's best to avoid such conflicts of interest. The more you learn about your plan, the better off you'll be. While you have many priorities as a business owner, ensuring you have a good 401(k) plan will not only mean you're paying reasonable fees, but also keeping your employees happy.
US retirement assets were close to $18 Trillion in 2007, according to ICI, the trade association of the mutual fund industry. A large portion of these assets are managed by the big insurance companies, and for a lot of them, it has been business as usual. Although technological advancements have been made, the fees charged to participants are rarely disclosed, and plan employers have NO IDEA just how much they're paying for the service!
If you went out and bought a car, you know exactly how much it costs. There's a breakdown of the cost with taxes, extra fees, and other charges very clearly listed. Unfortunately, there's no law dictating that financial firms provide this clear cut breakdown for their 401(k) products. While some legislation has made it through, it's still up to the employer to take an active role in determining exactly how much he or she is being charged. Often, fees and charges are removed directly from the account, and participants don't receive a bill for these. As a result, they NEVER know how much they're being charged. In a recent post, I linked to a Bloomberg video that did some investigative reporting on this very subject.
So, what's a business owner to do to keep abreast of the situation? If you have a 401(k) plan or are thinking of sponsoring one, make sure you get a DETAILED ESTIMATE of all costs, fees, and expenses. The Department of Labor has created a worksheet for you to submit to financial service companies. Get bids from about 3-5 different firms. Have them fill it out and then compare the total costs to make sure you're looking at an apples-to-apples comparison for similar services. A copy of this worksheet can be accessed on the DOL's website at:
http://www.dol.gov/ebsa/pdf/401kfefm.pdf
If you have a current plan, send the form to them anyways. This will help satisfy your fiduciary obligations that require you to be aware of plan costs and to ensure that they're reasonable for the services provided.
It's preferable to have someone who's compensated on a fee basis manage your plan. If a broker is going to be paid a commission, is he going to put you in funds that perform better or that give him a higher payout? It's best to avoid such conflicts of interest. The more you learn about your plan, the better off you'll be. While you have many priorities as a business owner, ensuring you have a good 401(k) plan will not only mean you're paying reasonable fees, but also keeping your employees happy.
Tuesday, June 24, 2008
Dude, where's my 401k?
“Say hello to my little friends”. Sounds familiar? Does your mind picture guns blazing and bullets flying? Well, I have a new arsenal of friends too, but they’re virtual. Kind of.
If you’re new to this country, you wouldn’t be chastised for thinking that my friends might be characters in the same league as C-3PO and R2D2. But, they’re the best kind of friends – they make you rich! What’s better than a generous friend? They have varied names such as 412i, 529, 403b, and top dog 401k, who you might have heard about. Call me suspicious, but maybe someone at the IRS is an RPG geek.
We’re now around the corner for the next Prez election. Among the myriad promises for Universal health care and a new pool in your back yard, I’m still not quite clear where all this money is going to come from. And the best part is, the powers that be don’t even ask nicely for your money. They take it out even BEFORE you get a hold of your paycheck! You’ve probably noticed the legal mumbo jumbo – the small print that takes out big dollars before the measly portion that you can actually call yours is given to you. They call them “withholdings”. They should call it “taxes that cost an arm and a leg”. Where the hell does all that money go anyways? And what the hell is it spent on? Better roads, less traffic, more parks, better schools? The only thing I’ve noticed are those new cameras at traffic lights, that nonchalantly take your picture as you desperately put pedal to the metal.
Do you have that suspicious nagging feeling that the rich pay less in taxes? If you’ve formed your own corporation, you get all sorts of little and big perks. But, if you’re an employee, suck your thumb. At least that might give you some comfort. There might be a way to lessen the pain, however. If your company offers any type of retirement plan, go bow down and kiss the feet of your HR admin person, even if she’s as old as your grandma. If it’s a guy, well, use your imagination. Then, ask her (or him) to explain in ‘simple English’ what your options for the plan are. Keep an ear out for the word “matching”. In HR speak, “matching” = free money for you. Unless you’re absolutely drowning in debt because of that new condo you just bought or that Lexus that parks itself, it’s a good idea to contribute to your company’s plan. Make sure you’re well diversified. That’s more HR speak that translates into “Don’t put all your eggs in one basket”.
So, the next time you’re on a date and you’re being quizzed about the economy, you can toss in comments like, “Short term economic variables have a disproportionately magnified effect on stock market prices, but I’m a disciplined long-term investor with a diversified global portfolio”. Even if you have no idea what you just said, it sure sounded cool.
If you’re new to this country, you wouldn’t be chastised for thinking that my friends might be characters in the same league as C-3PO and R2D2. But, they’re the best kind of friends – they make you rich! What’s better than a generous friend? They have varied names such as 412i, 529, 403b, and top dog 401k, who you might have heard about. Call me suspicious, but maybe someone at the IRS is an RPG geek.
We’re now around the corner for the next Prez election. Among the myriad promises for Universal health care and a new pool in your back yard, I’m still not quite clear where all this money is going to come from. And the best part is, the powers that be don’t even ask nicely for your money. They take it out even BEFORE you get a hold of your paycheck! You’ve probably noticed the legal mumbo jumbo – the small print that takes out big dollars before the measly portion that you can actually call yours is given to you. They call them “withholdings”. They should call it “taxes that cost an arm and a leg”. Where the hell does all that money go anyways? And what the hell is it spent on? Better roads, less traffic, more parks, better schools? The only thing I’ve noticed are those new cameras at traffic lights, that nonchalantly take your picture as you desperately put pedal to the metal.
Do you have that suspicious nagging feeling that the rich pay less in taxes? If you’ve formed your own corporation, you get all sorts of little and big perks. But, if you’re an employee, suck your thumb. At least that might give you some comfort. There might be a way to lessen the pain, however. If your company offers any type of retirement plan, go bow down and kiss the feet of your HR admin person, even if she’s as old as your grandma. If it’s a guy, well, use your imagination. Then, ask her (or him) to explain in ‘simple English’ what your options for the plan are. Keep an ear out for the word “matching”. In HR speak, “matching” = free money for you. Unless you’re absolutely drowning in debt because of that new condo you just bought or that Lexus that parks itself, it’s a good idea to contribute to your company’s plan. Make sure you’re well diversified. That’s more HR speak that translates into “Don’t put all your eggs in one basket”.
So, the next time you’re on a date and you’re being quizzed about the economy, you can toss in comments like, “Short term economic variables have a disproportionately magnified effect on stock market prices, but I’m a disciplined long-term investor with a diversified global portfolio”. Even if you have no idea what you just said, it sure sounded cool.
Monday, June 23, 2008
Bloomberg Video on Hidden Fees in 401(k) Plans
http://www.blinkx.com/video/the-truth-behind-hidden-fees-in-401-k-plans/eRJhAzXCFV94aG1CH6pc_A
This is a great investigative report on how ridiculously high fees can really affect employees' 401(k) investments. Employers need to realize that some of them could get sued if they aren't aware of exactly how much they're paying for their plans.
Zubin J. Bomanshaw
Portfolio Manager
Integrity Investment Advisors, Inc.
This is a great investigative report on how ridiculously high fees can really affect employees' 401(k) investments. Employers need to realize that some of them could get sued if they aren't aware of exactly how much they're paying for their plans.
Zubin J. Bomanshaw
Portfolio Manager
Integrity Investment Advisors, Inc.
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