Inflation: How (in the US) it is Officially Measured

Presented by Mark Phillips

We are hyper concerned with long term inflation and its degrading effect on the value of money in the future. I have often been asked where does this CPI increase come from. Well, this audio documentary does a good job of uncovering the method by which the CPI is calculated.

Planet Money Episode #222: The Price of Lettuce in Brooklyn

Released Jan 07, 2015

Originally released in October 2010 in this episode of Planet Money, the investigator goes shopping with George Minichiello.  George is one of hundreds of federal employees who goes to stores all over the country and record the prices of thousands of different things. A bag of romaine lettuce. A boy's size-14 collared shirt made of 97 percent cotton. A loaf of white bread.  Their work drives the consumer price index, a key economic indicator known to its friends as CPI. The index measures inflation in the U.S., and it influences everything from Social Security checks to the price of school lunches to how big your raise will be next year.

With this in your brain I would recommend the following as a next chapter on spending and inflation thinking:

#586: How Stuff Gets Cheaper

Memory: Is Mine Normal?

Presented by Mark Phillips

How is your memory these days? Do you remember your grocery list from last week or even the name of a friend you met a month ago? In this AARP magazine article, we find that approximately 5.4 million Americans suffer from Alzheimer’s disease, and researchers predict the number will nearly triple by 2050. These should be startling statistics but the good news is there is hope to improve cognitive function with proper rest, nutrition. To read more please click the article link below.

Click here for article

Cash-only Doctors Abandon the Insurance System

Presented by Mark Phillips

There is an interesting trend captured by this CNNMoney article. A small but growing number of doctors are opting out of the insurance system completely and accepting cash only for services. The business proposition offered by insurance companies to doctors is becoming so difficult that this seems to be a growing trend. This is a move that the majority of dentists have already made.

While I have a concern for the impact of high cost Concierge offices, some of the more modest flat fee programs (as reflected in the fees charged by Dr. Nunamaker), when combined with a high deductible insurance plan and an HAS account, may prove much more cost effective and conducive to a healthy doctor/patient relationship.

Please consider this trend and how this might be an opportunity, rather than a threat, to you.

Click here

From A Six Figure Salary To Minimum Wage: A Story Of Bad Planning

Presented by Nick Bautista

Sometimes the stories we hear can mean more than words we read from any text book. Such is the case for Tom Palome. A man who was an executive earning a six figure salary most of his lifetime and now has to work two minimum wage jobs due to inadequate savings.  I define the unretired 77 year old as a failure to plan. He had a total of $90,000 saved for retirement. All I can think is, really? Of course, he can still enjoy life but how would you like to live to 77 and be flipping burgers instead of pursuing the dreams you have had your entire life?

To me it comes down to the most fundamental question of all. How much do you need in retirement to live the life you want to? As of 2011 the median retirement account had a value of $120,000. So tell me how that works for 30 years in retirement?

Maybe Tom Palome can help you get a better picture of what that looks like. Read the entire story here…

http://www.businessweek.com/articles/2013-09-26/former-executive-tom-palome-spends-his-retirement-flipping-burgers

Why Are You Listening To The News?

Presented by Nick Bautista

Marketwatch had a bad headline the other day. “Key Market Indicator Now Generating a sell signal.” The article goes on to describe an indicator that was created in the 1970s and is used to supposedly tell investors when to buy and sell. The indicator looks at companies that make up the index and creates a spread based on the companies who are reaching their highs along with companies reaching new lows. If the indicator sees that companies are moving to these highs and lows it can predict where the market is heading.

Not but two days later the same author came out with this article, “Buy and hold strategy wins again.” Both articles were big type, front section headliners and the content inside couldn’t be more polar opposite. (BTW the author is Mark Hulbert)

If you are listening/reading the majority of investment news you are making a poor decision. News companies are in one business, the get viewers business or more specifically the entertainment business. Sure the numbers are factual for stock prices and the like, but does Mark Hulbert have your specific and best interest in mind? Of course not, no financial advisor would have such a short term outlook, let alone flip strategies from sell, to buy and hold.

The news will always be entertaining because that’s how they make money, but in truth they don’t have your best interest in mind. Think about your emotions related to your money, are you letting the news dictate what you are feeling? If so, you need to stop listening to the news and start listening to your advisor. Your advisor should know your specific situation and can help you secure your financial future through financial planning.