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15 Ways to Pass Your Values On to Your Kids

October 25, 2016

This was written and posted by Frank Sonnenberg at and I want to share it with you. I know Frank and his weekly posts are “out of this world” – check them out.

When kids are young, they’re totally dependent on their parents. But as they grow older, their peers and their surroundings exert a greater influence on them. How does that make you feel? Are you passing your values on to your kids?

Are you comfortable with the impact that tough kids on the block, trash-talking athletes, or raunchy pop stars have on your kids? How about reality-TV celebrities, greedy business executives, or politicians masquerading as “role models”? Do you know how much time your kids spend listening to gangster rap, watching violent movies, or seeing obscene chats on social media? If you don’t know, you’d better wake up. The fact is, if you don’t pass your values on to your kids, someone else will.

How to Pass Your Values On to Your Kids
If you don’t play an active role in raising your kids, you’re leaving it all to chance. Here are 15 ways to pass your values on to your kids:

  1. Prepare your child for life. Communicate the importance of character, values, and personal responsibility.
  2. Stand for something. Share your beliefs and values in a consistent manner reinforced in many ways. Leave nothing to the imagination.
  3. Encourage exemplary behavior. Inspire your kids to do their best AND to be their best.
  4. Set an example. Show, not tell. Be the person you want your kids to be. As Robert Fulghum, the author, said, “Don’t worry that children never listen to you; worry that they are always watching you.”
  5. Manage expectations. Establish clear boundaries and encourage your kids to live within them.
  6. Give responsibility. Give your kids the freedom to make their own choices –– but teach them that with independence comes accountability.
  7. Make yourself available. Be available, not just present. When kids are ready to talk, be there to listen. Gifts are not a substitute for caring.
  8. Communicate more. Create an environment in which open and honest communication is encouraged. Remember, when kids grow up, they’ll hear your voice in their subconscious.
  9. Provide discipline. Be tough, but fair. Let your kids know when they step out of bounds. The fact is, saying nothing says everything.
  10. Keep good company. Encourage your kids to surround themselves with positive people who possess strong moral character.
  11. Monitor the media. Observe how your kids spend their free time and whether they’re being positively/negatively influenced by others, including celebrities, music, TV, and social media.
  12. Cultivate skills. Treat every experience as a learning opportunity in which feedback is welcomed, mistakes are tolerated, and failures are viewed as hurdles rather than as roadblocks.
  13. Expose your kids to diversity. Teach your kids to be open-minded to others’ viewpoints and beliefs.
  14. Spend quality time. Make time to create fond memories and bond as a family.
  15. Celebrate excellence. Recognize and reward your kids’ exemplary behavior with praise coupled with added responsibility.

Great parenting role models are never too tired after work to spend quality time with their kids, never too busy with their own social life to give their kids the time of day, and they never outsource their “job” to others — rather they accept responsibility for raising their kids with sound values. The fact is, they sacrifice everything, and I mean everything, to raise good kids. Of course, even great parenting doesn’t guarantee that kids will grow up to become happy, productive, and well-adjusted adults –– but the odds are clearly in your favor.

Whether you like it or not, your kids will be influenced by others. So your choice is to play an active role in passing your values on to your kids –– or roll the dice. The truth is, raising good kids doesn’t happen by chance. Behind every good kid are parents or caregivers who understand the importance of raising them that way.

You can subscribe to Frank’s blogs at or you could go there for additional goodies. Frank is the real thing!

Stephen Bollenbach $750,000,000 Man

October 21, 2016

Steve Bollenbach passed away last week. I did not know him, but he factored into a wonderful day and continuing dialogue I had and have with my son Rick.

Rick always had a keen interest in the stock market. In 1994 when Rick was home for a Christmas break from college he owned some Capital Cities/ABC and Walt Disney Company stock and received a notice of a stockholders’ meeting Disney was having that week in Manhattan to discuss the Cap Cities acquisition by Disney. He asked if we could go, and we did.

At the meeting were the usual people including Michael Eisner, the then Chairman and CEO. Steve Bollenbach, Disney’s CFO, made a presentation explaining how Disney would finance the acquisition and handle the debt service. After the meeting Rick said to me that Bollenbach was a very impressive person and we discussed the role of a CFO and some of his financing maneuvers.

Sometime afterwards, I read in the NY Times that Bollenbach was to be named CEO of Hilton and immediately called Rick to tell him and see if he wanted to buy some Hilton stock. The announcement was made after the market closed on a Friday and on Monday the stock opened up 15 points. There were 50 million Hilton shares outstanding so, on the announcement of Bollenbach being named CEO, Hilton’s market cap increased $750 million. Super impressive! Rick spotted a winner, but held off buying the stock since it had already priced in Bollenback’s expectations.

Steve Bollenbach was a very impressive person with a varied and renowned career. Prior to joining Disney he engineered the plan that kept Donald Trump from having to file for personal bankruptcy; was Treasurer and CFO for Marriott and CFO for Holiday Inn among other positions. When he left Disney to join Hilton he became the first nonfamily member to hold their CEO position. He retired when Hilton was acquired by the Blackstone Group in 2007.

I consult with a lot of businesses about their value and the trigger points that create and add value. Here was a $750 million increase in value just on the announcement! I hope he locked up his stock options beforehand!

Bollenbach was a master of corporate finance, debt structuring and planned bankruptcy and he was involved in some of the biggest deals of his time. He is also a link to my memory bank of a wonderful day I spent with my son because we also made the rounds of some of my Wall Street clients giving Rick a glimpse into what brokers, traders and investment bankers do.

There is no average investor

October 18, 2016

My blogs are directed to the average investor, but there is no “average” or “typical” investor.

I do not write for the active stock trader or people set on making a killing or those that jump on the latest fad or high flyer. I write primarily for the long term investor concerned about securing their financial position and cash flow and attaining their goals.

I also do not believe there is an average investor. There is, but that is not important because each of us is the primary and important investor that you should be concerned about. For you, you are the average or typical investor. Because of this, the rules of investing cannot be generalized, but need to be customized to what suits you based on your goals, cash flow requirements, temperament, propensity for risk, how long you want to work or whether you want to retire sooner, willingness to alter what you are spending or adapt as major things change, and your knowledge of the tools of investing. There is no average or typical. Each person needs to do what is best for them.

For that reason, I ask each of you to become very selfish. You need to look at every investment recommendation with skepticism and should ask each time an investment is proposed “What’s in it for me?” WIIFM! What’s in it for you should be:

  • a defined risk that is clearly explained and which you understand and are willing to accept
  • a potential for growth if you invest in equities
  • a very high potential to get your money back at a set term if you invest in fixed income
  • predictability of sustainable cash flow in the form of interest and/or dividends
  • liquidity meaning you can easily convert your investment into cash should the need arise, BUT if there is a distinct possibility you might need the cash sooner rather than later, then I suggest you should pass on the investment and keep your money in short term funds.

Investing is confusing. Planning for specific goals and your financial security is also confusing. Combining the two is confusing. Further, many pass on even the slightest effort to become familiar with what is recommended to them in effect delegating their important decisions to people that might not have their best interests in mind. Don’t settle. Do not be an average investor. Be a concerned and selfish investor. Know what’s in it for you. Ask, understand and know WIIFM!

How the Election Will Affect the Stock Market

October 13, 2016

Everything affects the market – on a short term basis. That is why there are wide fluctuations, sometimes within a single day. However, when investing for long term financial security, the daily changes are not relevant. What matters are the long term trends – of stock values and dividends.

So my question to you is “where do you think the stock market will be in 10 years?” A second question is “do you think dividends in dollars paid out will be higher or lower in 10 years?” Here is a technique to use for your evaluation:

Get a piece of any type of graph paper. Mark a spot in the left most column midway between the top and bottom of the page. Next set off to the right 10 groups of columns for the rest of the page with each group representing a year – so you have 10 years represented. Now start with your mark and draw a line across the page of how you feel the S&P 500 Index will perform over that ten year period. Is it straight, upward or down?

Repeat the process for dividend payments. Is it straight, upward or down?

These are your guesses, but they indicate how you feel the stock market and dividend payments will trend. No one knows, but your feelings are as good as anyone else’s and should make you at least think about how you can assign your investments to take advantage of, or ward off the negative effects, of what you believe the long term trend will be.

If your trend line is up it indicates you believe the stock market and/or dividends will increase over the next ten years. This means you should consider allocating part of your investments to stocks. If the trend line is down you should not add to your stock holdings, and should consider selling either what you have, or reducing your allocation to stocks. You might not want to get out of stocks altogether because you could be wrong. The downward trend line would indicate that you think stocks are overpriced and/or that the dividend payments will drop.

You may have no opinion and not know what to do. That’s OK. Do not invest in the stock market, but I suggest you make a serious effort to learn about it.

How you feel should be integrated into a comprehensive plan and this includes a thorough asset allocation integrated with all your accounts. This includes individual accounts of each spouse, if you are married, bank accounts, annuities, retirement accounts and 401k or 403b accounts managed through your employer and other investment assets.

I am not telling you how to invest. I am suggesting a method you can use that can help you decide for yourself.

To get back to my original question, if you are a long term investor I do not believe it matters how the election will affect the stock market, if at all.

What Happened to the Stock Market Blogs?

October 11, 2016

I had nothing new to add to what I’ve already written.

My blogs are written in response to issues my clients have. When a client expresses a concern and I can respond by sending one or more previous blogs, I do. I have a tremendous amount of stock market and investing blogs and have been sending these regularly to clients with questions. Only when I am asked something new that I feel would benefits others in similar circumstances do I write a new blog. Instead I have been addressing other issues clients have.

Just because I haven’t posted new investing blogs in a while does not mean there is no interest. Actually the interest is as active as ever, just that I haven’t come across anything requiring further clarification or elucidation. At some point I think it would be helpful to put all my investing blogs in a single file to distribute. Like everything, it takes time and unless I think the interest is there, I would rather spend the time on other endeavors.

Some points I would like to reiterate are:

  1. The reality is that there isn’t much new in investing strategies for those that are concerned primarily about their long term financial security.
  2. There are many “new” investment strategies that are advertised and promoted, but I do not see them as viable or replacing or being more effective than what I have already said.
  3. Some promote their investing strategies as exciting, or cutting edge, or a way to obtain higher than market yields. Investing is not an activity that should create excitement. It should be approached with the utmost seriousness given that the goals should be to attain long term financial security with safety of principal and reasonable predictability of necessary cash flow. When you invest you should following the time tested tried and true methods and not seek the current flavor of the month gimmick. A general rule is that as yields increase so do the risks. If higher yields were that secure, then everyone would jump on them thereby driving the yields down. There is no such thing as a free ride. High yields have to carry high risk. Stay away from them.
  4. You should seek out a financial advisor that will be honest with you. The proposed Department of Labor fiduciary rules legislating honesty has caused an upheaval in the financial services industry with some major providers of product leaving the business and many financial advisors lobbying their Congress people to force the DOL to back down claiming they will no longer be able to make livings. Think about this – the DOL requiring honesty is a threat to the way many do business – and then you hire these people for honest advice. Does this make sense?
  5. You should always fully understand what you are investing in and how you can make money and how you can lose. Also, how your advisor is compensated. These should be your basic rules.

Investing for your long term financial security is a serious undertaking. Be serious about it.

Batting Averages

October 6, 2016

The regular baseball season is over and the playoffs have started. This Summer I posted Babe Ruth’s pitching stats and now I am posting his batting stats with comparisons to some of the more exciting New York batting champs plus Ted Williams (a great benchmark in spite of his playing on Babe Ruth’s first team) and Hank Greenberg (a Bronx native). I abstracted certain statistics and sorted the list based on batting average. I only used the regular season stats which easily came from .

If you are a baseball fan, enjoy the comparisons. If not, thanks for putting up with this and the next blog should be more interesting and useful to you. BTW, Babe Ruth led the American League in home runs 12 seasons and in four seasons led in both walks and strike outs.


Mishmash of Dates to Open a Business Retirement Plan

September 29, 2016

The logic of the tax code is beyond understanding. If you want “proof” just look at the mishmash of deadline dates when the various retirement plans can be opened. Note that in some cases these deadlines do not apply to businesses formed after the deadline dates shown below.

SIMPLE Plan (Savings Incentive Match Plan for Employees) Individual Retirement Account, SIMPLE 401k and Safe Harbor 401k
Deadline to establish plan: October 1 of the fiscal year.
Contribution deadline: Due date including extensions of the tax return for which the deduction is claimed. It is sooner for contributions by participants.

401k including solo 401k and Roth 401k
Deadline: December 31 of the current fiscal year.
Contribution deadline: Due date including extensions of the tax return for which the deduction is claimed. It is sooner for contributions by participants.

SEP (Simplified Employee Pension Plan)
Deadline: Due date including extensions for the tax year for which the deduction will be claimed. With extensions this can be as late as October 15 of the year following the year the deduction is claimed.
Contribution deadline: Due date including extensions of the tax return for which the deduction is claimed.

IRA and Roth IRA
Deadline: Due date (not including extensions) for the tax year for which the deduction will be claimed. This can be as late as April 15 of the year following the tax year.
Contribution deadline: Due date (not including extensions) for the tax year for which the deduction will be claimed.

Keogh (HR-10), money purchase, profit sharing and defined benefit pension plans
Deadline: December 31 of the current fiscal year.
Contribution deadline: Due date including extensions of the tax return for which the deduction is claimed.

As can be seen, there is no consistency and in some cases no logic to the differences in deadlines to establish the plans and to make contributions. However, these plans can provide great tax benefits and defer the income tax due on substantial income if used in the right situations the right way. To benefit you must be informed. I suggest discussing with your accountant or tax preparer how you might benefit from using the retirement plans listed above.

As to the mishmash – it is what it is and we just need to abide by the deadlines. Someday perhaps Congress will get its act together and simplify nonrevenue generating rules such as indicated here.

Brian Lovett, CPA, JD, partner at Withum assisted in the preparation of this listing.