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Buying in Bulk Doesn't Always Save You Money

By Bob Brooks

March 2, 2015

There is the misconception that buying in bulk aways saves you money.  It is that concept that has made companies like Costco and Sam’s very profitable  Kiplinger Magazine put out an article today debunking that notion.  Here were a few examples:

Cereal - You don’t need to buy in bulk to get the best deal on cereal. Just stock up whenever it’s on sale at the supermarket. The sale price for cereal is often less per ounce on smaller boxes at supermarket. For example, a large, 30-ounce box of Kashi Organic cereal usually costs $3 more than two smaller 16.3-ounce boxes (32.6 ounces total) on sale at the supermarket.

 

Cooking Oil Cooking oil might seem like a great bulk buy, but it has a shelf life of six months. Unless you’re frying food daily, you might not be able to go through a gallon of vegetable oil before it goes bad.

Liquid Bleach and Detergent Bleach has a shelf life of about six months once you bring it home from the store. After that, its effectiveness naturally degrades. So if you don’t use a lot of bleach, opt for smaller bottles of low-cost generic brands or store brands from the supermarket over bulk-size name-brand bleach.

For the full article, visit: http://www.kiplinger.com/slideshow/spending/T050-S001-worst-things-to-buy-in-bulk/index.html.

 
My Go-To Reading List

By Bob Brooks

February 26, 2015

 

Through the years, I have interviewed many authors who written some great books.  Then there are the books that I would call the authority on a subject.  Said another way, if you want to learn everything about a certain subject, this is the book to read. 

I wanted to start this list and update as I encounter more books.  So, this week I wanted to start the list

 

 

Taxes

 

 

The IRS Problem Solver by Dan Pilla

I have known Dan for well over a decade.  Dan is considered one of the foremost authorities on the IRS.  This is by far is best most complete book on dealing with the IRS.  He gives step by step instruction on just any problem or situation you can encounter with the IRS. To listen to the interview with the author, go here.

 

How to Win Your Tax Audit by Dan Pilla

This is Dan’s latest book.  If you are facing an audit, this is a must read.  You will be prepared to defend and protect yourself after reading this book.  If you want to listen to the interview on this book, go here.

 

 

 

Social Security

 

 

Getting Paid to Wait - Brian Doherty

Most people don’t understand how social security works.  This book details everything that you need to know about social security.  There are strategies where you can maximize your social security benefit.  The book goes through every one of them detail by detail.  It also thoroughly answers the biggest question about social security.  When do I take it?  If you want to listen to the interview on this book, go here

 

Student Loan Debt

Graduation Debt – Reyna Gobel

This is a field that is constantly changing. Reyna Global has written the most complete guide that I have come across.  She goes into great detail on managing student loans and all of the options that are available to get lower interest rates and relief from high payments.   If you want to listen to the interview on this book, go here.

Debt

 

Deceptive Money – Bob Brooks

 

OK, it might seem a little self-serving to add my book to a list of books that I call authorities on a subject.  The reality is that Deceptive Money covers every single detail that you need to know and understand to get out of debt.  It was written as a how to book and covers everything from dealing with debt collectors to improving your credit score to understanding the game that the credit industry plays with consumers.    

 

 

 

 

Investing – Trading

Trade Mindfully – Gary Dayton, Psy.D.

I realize that most of my listeners and readers are not trading investments.  However, for those of you who are, this is a must read.  This is all about the psychology of investing and trading.  It will increase your ability to make better decisions and make better trades. Most importantly, it will help you understand yourself when it comes to trading.  Hands down the best book I have encountered on trading. If you would like to listen to the interview, click here.

 
Is your Broker’s Recommendation in your Best Interest?

By Bob Brooks

February 25, 2015

Well of course your broker/advisor has your best interest at heart….right?  Aren’t there laws that protect the individual investor?  Well, actually, not really.  It depends on the type of advisor.

To understand the level of protection you have as an investor, you have to understand two standards.  There are fiduciary responsibility and suitability standards.  The fiduciary standard is the highest standard for an advisor and carries the highest responsibility.  This states that the advisor is required to do what is right for the client.  Securities regulations states that advisors who are part of Registered Investment Advisory firms (fee based firms) are fiduciaries for their clients.   

Commissioned brokers/advisors are not required to meet that standard.  They are only required to make recommendations that are considered suitable.  Suitability is a much easier standard to obtain.  This is where the rub comes. 

Take for example Jack and his client Bill.  Investment Product A and Investment Product B are both suitable for Bill.  Jack, the investment advisor, makes 7% on investment Product B and only 3% on Investment Product A.  Jack knows that the fees are lower on Investment Product A and that the return probability is better.  Yet, he convinces himself that Investment B is better and he gets the higher commission.  Since both investment products are suitable and since Jack doesn’t have fiduciary standards to meet, the only thing keeping Jack from the higher commissions is his conscience versus a requirement.

To be fair, suitability standards do weed out some transactions that are clearly in the best interest of the advisor versus the client.  This is not to say that commissioned advisors are inherently bad and recommending products based on commission size.  Unfortunately, when introducing these higher commission products to advisors, the industry does a pretty good job of convincing the advisor community that they are doing the right thing and getting paid handsomely for doing so.  It removes the need for the advisor to go through the ethical Q and A in their mind.  You commissioned based advisor that you want is one that holds themselves to fiduciary standards even though the law does not require it.  Fortunately, there are many out there who do. 

So what is the moral of the story?  First, investors need to be aware of these two standards.  Second, this just emphasizes that investors need to be extremely careful with who they select to help them on the journey of investing. 

Regulators are currently fighting with the industry to change the rules and make ALL advisors fall under the fiduciary standard.  However, as long as the industry has deep pockets and lobbyists in the pockets of lawmakers, it is going to be an uphill fight. 

 
What is Your Risk Level? Find out for Free

By Bob Brooks

February 18, 2015

 

 

 

I believe that understanding your financial DNA when it comes to risk is critical to long-term success with investments. In fact, I am addressing it thoroughly in my latest book that I am writing. So, I want to make you an offer.

In order to thoroughly research this idea of risk and financial DNA, I need real time research. So, I created a very quick questionnaire that helps identify your financial DNA when it comes to risk.

 

 

 

So, if you take a few moments to answer the survey as well as give me any feedback on questions you don't understand, I am happy to offer this as a ministry resource and send you a written analysis of your risk assessment. This will tell me your tendencies and what could influence your decision making in the future. Understanding your tendencies will help you make better financial decisions.

Further, I will include your financial strengths and weaknesses. It is important to be aware of them. This information will also help you analyze whether or not you are taking too much risk with your retirement money.

 

 

 

From all of this research and your feedback, I can make this writing project a better resource and help further the cause of prudent stewardship.

Just go to this link and fill out the information. It won't take very long. Incidentally, the only reason we ask for your phone number is in the event we aren't able to connect with you via email.

 

 

CLICK HERE FOR THE QUESTIONNAIRE

 

 
Your Financial DNA - A Strength or a Liability

By Bob Brooks

February 17, 2015

 

There is a psychology that lies underneath investing.  In fact, psychology influences everything when it comes to money and investing.  Why do we make the decisions that we make?  Why do we react either with fear or greed?  Why do we hang onto investment losers?  Everyone has an investment DNA.  At the heart of that DNA is our ability to interpret risk. 

In step 2 of my 5 step approach, I talk about evaluating your strengths and weaknesses and discovering your financial DNA.  A lot of that has to do with how we interpret risk.  This ability can either be a strength or a weakness.

 

 

 

Some of the key questions:

 

How do you react to losses and gains?

Most people don’t know that there is such a thing as acceptable losses.  Further you might have a few investments that are losing money in your portfolio and it makes no sense to sell them while there are extremely profitable ones in your portfolio that should be sold.  Do you ever see a gain and experience disappointment? 

 

 

Do you look at results with your investments in terms of percentages or dollars?

This is a key question.  You can only effectively evaluate your progress with investments by looking at your investments in terms of percentages.  Dollar gains and losses are only key one time of year.  Percentages are important every day.  By strictly looking at results in terms of dollars, you could be coming away with the wrong interpretation.

 

 

How do you know if the risk you are taking is ultimately effective? 

You might be making money hand over fist and at the same time taking the wrong kind of risk.

 

 

How often do you evaluate your investments?

If you say daily, you need a very high tolerance for risk.  Without the right financial DNA, daily checking of your investments will create emotional investors.  Evaluation of investments should only occur 4 times a year.

 

 

Do you ignore your investments?

The most conservative investment in the world could turn into an aggressive investment simply because you are ignoring it. 

 

 

These questions are just a sampling of the information you need to know about yourself to determine your Financial DNA.  Your ability to understand your Financial DNA is either going to help you or hurt you.  Beyond starting this series to help you, I am also going to roll out a Financial DNA Survey. 

 

 

This will be a free resource where you can answer these questions and a written analysis will be sent out to you. This analysis will outline potential weaknesses, help you be aware of them, and resources to strengthen your understanding. 

 

 

A dramatic shift could be ahead in the investment world. Those who understand their Financial DNA will whether that storm much better than those who do not. 

 

 
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