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Too many books…too little time

July 24, 2018

There are many books I would like to read, but cannot because I lack the time. I found a shortcut or might I even say, a loophole. It is a three volume set called The Graphic Canon edited by Russ Kick.

The three volumes contain summaries and graphic representations of over 190 literary works in over 1600 pages by 130 contributors. They are presented in chronological order and contain virtually every classic and what is considered great literature. Obviously this is not a substitute for the originals, but each rendition provides a quick read with great illustrations providing excellent interpretations of the originals.

I would like to say I read most of the books covered but haven’t, but reading them here was enjoyable. The first volume covers from The Epic of Gilgamesh through to the end of the 1700s with Dangerous Liaisons. The second covers the nineteenth century with Kubla Khan to The Picture of Dorian Gray and the third from Heart of Darkness through Infinite Jest published in 1996. Most of the books are still published in updated versions and are also available at local libraries which is where I get most of the nonbusiness books I read. My local library had two of The Graphic Canon volumes and through a 30 library consortium they are a member of, I was able to check out the third volume.

I periodically check out one of the volumes and read parts of it. I have no overwhelming desire to own these books, but noticed they are available from and separately and in a three volume set. There are also additional volumes on crime and mystery and children’s books.

If you want to see and read something interesting, check these books out.

I recommended a “bad” book

July 19, 2018

I read a lot and have favorite authors. One of the books I read about a dozen years ago I not only could not put down, but I’ve been recommending it ever since and have even gotten copies for friends that have been recovering from illnesses or operations. No one has ever told me they enjoyed the book.

I liked the book so much that I wanted to reread it and recently purchased a copy at a used book fair, and quickly immersed myself in it. Well, I can understand why no one commented on it – the beginning was tedious, verbose and drawn out. I did not remember it that way, but remembered the story line in the middle and through the end and the strong character the author developed. The book also became the first of a five book mini-series featuring that character. Rereading it made me realize that no one I gave it to would have gotten past the first 50 or 75 pages. My bad! Obviously I will not continue to recommend this book.

I recommend a lot of books because I enjoy sharing what I like. Most of this is done one-on-one but I also use this blog to share information about books I’ve read and liked. In retrospect, I’ve written quite a few blogs in the past 6½ years recommending books. Following is a listing and the dates the blogs were posted. Read some, and let me know if you’ve enjoyed them as much as I indicated in the blogs.

  • Managing the Elephant by Louis V. Gerstner, Jr Jun 14, 2012
  • Micro by Michael Crichton Jun 28, 2012
  • Damn Good Advice by George Lois Aug 1, 2013
  • Corporate Lifecycles by Ichak Adizes Nov 5, 2013
  • 11/22/63 by Stephen King Nov 26, 2013
  • Book of Ages by Jill Lepore Feb 18, 2014
  • Getting Things Done by Edwin Bliss May 20, 2014
  • The Peter Principle by Dr. Laurence J. Peter and Raymond Hull May 22, 2014
  • Autobiography of Benjamin Franklin Jan 20, 2015
  • MONEY: Master the Game by Tony Robbins Feb 19, 2015
  • Ireland’s Professional Amateurs by Andy Mendlowitz Mar 17, 2015
  • Gutenberg’s Apprentice by Alix Christie Jun 23, 2015
  • The Emperor’s New Clothes by Hans Christian Andersen Aug 18, 2015
  • 50 Plus! / Critical Career Decisions By Robert L. Dilenschneider Nov 19, 2015
  • The Wright Brothers by David McCullough Feb 18, 2016
  • Parkinson’s Law by C. Northcote Parkinson Mar 29, 2016
  • Just Kids from the Bronx by Arlene Alda May 24, 2016
  • The Secret Chord by Geraldine Brooks Jun 2, 2016
  • Who Killed Change? by Ken Blanchard et al Sep 6, 2016
  • How the Post Office Created America by Winifred Gallagher Oct 27, 2016
  • The President is Dead! By Louis Picone Dec 22, 2016
  • First Entrepreneur by Edward G. Lengel Jan 19, 2017
  • The Checklist Manifesto by Atul Gawande Apr 15, 2017
  • Am I Being Too Subtle? By Sam Zell Aug 15, 2017
  • Chief Value Officer by Mervyn King and Jill Atkins Oct 19, 2017

Books I wrote:

  • Power Bites
  • Getting Your Affairs in Order
  • Call Me Before You Do Anything (my professional autobiography)

There are other books I mentioned or referred to that are too numerous to list. All of the above are recommended. I also posted some reviews on before I started these blogs that you could check out. I also present a speech, Growing from Other’s Experiences, with 200 bullet points from 42 books.


If you don’t believe me, read Barron’s

July 17, 2018

I suggest that the “average” investor buy index or exchange traded funds rather than individual stocks. On June 6th I posted a blog providing my reasoning for this. Here is a link:

This week’s Barron’s July 16, 2018 issue has a cover story with 34 stocks their experts chose of what to buy now. That piqued my interest about how their previous picks did. Well, the nine “experts” picked 49 stocks in January and the price changes from Jan 5 through Jun 29 were shown. 25 stocks declined and 24 went up. The average gain for the 49 stocks was 1.5% with the gains averaged 16.3% and the losses 12.7%. The average gain of 1.5% is lower than the gains in an S&P 500 fund. The article also provided the total return which was higher since that included dividends. However, that is taking me away from the point of this column.

The nine stock pickers are recognized pros and, better still, they are among the best of the better known investment pros; and I want to use their choices to illustrate why the average investor should stay away from picking individual stocks.

This group presented their “best” picks for this article and they were wrong with half of them. Of the nine, four had losses in all of their picks. Two had no losses in any of their picks. The highest loss was 52% and highest gain was 52.3%. Six of the 24 gains were over 20% while four of the losses were over 20%. The two that had no losses did very well averaging 21.8% and 10.7% for each stock they chose. The other seven pros had varying and erratic results.

If the experts cannot do it, then how can nonprofessionals have any hope they could choose stocks that will outperform the market. I think sticking with funds that track the major averages works best for most investors.

BTW, this is a contest or news event and it is possible that these picks were for stocks expected to jump up in a short period. If that was the case, then trying to emulate this portfolio would make no sense since you will not be told when to sell. This article seems to substantiate what I have been suggesting for years: picking individual stocks doesn’t work.

Barron’s has a full analysis on-line for their subscribers in case you want to look further than the cover story.

NFPs with a related Foundation

July 12, 2018

There are many not-for-profit organizations (NFP) with an independent Foundation whose function is to obtain contributions to support certain unbudgeted activities of the NFP. Usually the Foundations hold substantial assets that generate cash flow that is also used to support the mission of the NFP. The entities have separate Boards, management and obtain separate tax returns and separately audited financial statements. Question frequently arise about whether the boards should be merged. My partner Ruben Cardona, CPA, recently met with the separate boards of related entities and here are some of his considerations.

  1. A multi-structure provides a degree of asset protection for the assets held by the Foundation separate from the NFP.
  2. With only one board overseeing both entities, a consolidated financial statement would be prepared reducing some costs.
  3. If consolidated statements are prepared, income generated by the Foundation might be required to offset the potential amounts to be reimbursed or contributed by overseeing, support, governmental or nongovernmental agencies.
  4. If the current structure was approved by the Attorney General, then permission of the AG might be required to make any changes.
  5. Based upon state regulations, a merger of the boards might need acquiescence of the state attorney general.
  6. If a disastrous even occurred exposing the assets of the Foundation, a question could arise concerning why the boards merged in a way that exposed the Foundation’s assets without a compelling or regulatory reason.
  7. In considering a potential merger of the entities, consideration should be given to a persuasive rational purpose for such a merger other than just for the convenience of administering the entities.

Many times there are multiple bodies serving different functions for the same end result. The above illustrates two entities, but many times there are much more than that and questions arise continuously about the efficacy of some of the obvious duplication.

Ruben also recommended that legal counsel should be consulted before any actions are taken, and to also verify his recommendations. The above illustrates some of the issues that need to be considered, and while any number of entities more than one usually has some duplication, many times there are sound reasons for the structure. This needs to be reviewed when a new purpose, activity or fund raising method is decided upon causing consideration of a separate entity; where substantial fund raising for a specific long term purpose will be initiated; or there is or will be an endowment fund or substantial restrictions of funds and the funds will be separately and independently maintained or managed. Further, regardless of the structure, it should be reviewed annually by the Board to determine if the present structure is still necessary

If you have any questions about the above or any NFP governance issues you are welcome to reach out to me at or Ruben Cardona at

Predetermined percentage withdrawals

July 10, 2018

The previous blog gave a prescription for retirement income withdrawals. A few people emailed me asking why I didn’t recommend a predetermined percentage withdrawal rate such as 4% a year or a similar percentage. Here are some of my reasons.

  1. My blog gave a plan of how to withdraw the money and where it should come from, not how much should be withdrawn.
  2. My blogs suggest that all plans should be based on needed cash flow and the asset base that will provide it in addition to the other sources of retirement cash flow such as Social Security.
  3. I also provide suggestions of what to do if there is a short fall of cash flow.
  4. I do not believe predetermined formulas work; and consider that one of the many of the clichés that I wrote about in the May 15, 2018 blog.
  5. Each person is different and a cash withdrawal plan should be customized based on their entire circumstances. I do not think that using a predetermined formula would work in most situations or that it would really provide the necessary cash flow and financial security most retired people need.
  6. Formula provisions are based on current short term and long term interest rates and investment yields and depend on the asset allocation and a predetermined rebalancing formula (which I do not think works), asset location in taxable and tax deferred accounts, estimated stock market dividend rates and growth, or ugh, declines, the amount of any part time income, life expectancy of the retiree and their spouse, if married, whether an investment manager is engaged and the economy, inflation and tax rates. Too many moving parts to be locked into a predetermined formula that really has no basis for most individuals that retire or are retired.

Preparing and planning for your future financial security takes thought, effort and work to give you a chance for it to be right. If you cannot do it yourself, find the right advisor who will treat it with the proper care you deserve, and need. Do not be misled by clichés or canned formulas.

Investment Withdrawals During Retirement

July 5, 2018

A good investment plan was posted on May 15, 2018 (see link below) and this is an amplification of where the money will actually come from. For many people it is unwieldy to withdraw the interest and dividends and possibly some principal from each account, so this is a “how to” plan for them.

  1. If you need to take required minimum distributions (RMD) from your retirement accounts, then that amount would be the first place where you would start withdrawals.
      1. If your interest and dividends in the retirement accounts are less than your RMD, then you will need to sell some of your securities there to get the necessary cash for the RMD.
      2. If the RMD is less than your total interest and dividends (plus necessary principal withdrawals) from all your accounts, or if you are not required to take minimum distributions, then continue with #2.
      3. If your interest and dividends in the retirement accounts are greater than your RMD, that is good, and invest the excess interest and dividends.
  2. Choose one or more accounts to withdraw the total of your interest and dividends. You do not need to withdraw the interest and dividends from each account, but you can if you wish to. If you withdraw more than that account’s interest and dividends you will need to liquidate some investments. You should then use the unwithdrawn interest and dividends in the other accounts to purchase similar securities to what you sold to for the withdrawal. When this process is completed, your total position should be similar to what it was before the sale and purchase; and the total reduction in all your accounts would equal the interest and dividends and any planned withdrawals of principal.
  3. When selecting stocks to sell, try to choose those with a high basis so your taxes would be minimized. If you are taking the funds out of a money market or other savings account, then taxes should not be an issue.
  4. You should try to manage your investments to coincide with your withdrawal pattern to minimize disruption in your investment plan. You can also arrange for regular monthly transfers to your checking account; just make sure the cash is available. A suggestion is to work three or four months ahead of the withdrawal schedule so you will need to manage the funding three or four times a year instead of monthly.
  5. What you can also do is buy laddered bank CDs that come due at 3 month intervals, maximizing interest on the funds waiting to be withdrawn. At today’s interest rates you can set up the ladder for up to three to five years to assure the cash supply without disrupting your investment strategy too much. Note than many brokers now maintain an inventory of “brokered” CDs and some have provision for you to set up the ladder anyway you want.
  6. The above assumes you have sufficient investment assets and cash flow that will provide the retirement cash flow you need. If you do not, then read the suggestions in my May 15, 2018 blog on how to deal with that. Here is a link to that blog.

This plan works. When you begin, do one step at a time and it will quickly come into focus. Once the pattern is established, it will need very little effort sustaining it. Of course, continuous cash flow, spending and investment monitoring is also essential. Good luck and enjoy a secure retirement!

30 Year Anniversary with Peter Weitsen

July 3, 2018

July 1 was the 30th anniversary of my partnership with Peter Weitsen. Little did I know when we started that it would be the beginning of a permanent friendship and partnership.

When we started we decided to target high quality clients that demanded preferential services from their accountants who would also be extremely knowledgeable and with the ability to apply their experience to them and be readily available, and we did that and were pretty successful at it.

As owners of a small business, Peter and I needed to run the business while also performing substantial services and giving preference to the latter. Over time we came upon a four part method that enabled us to run our business effectively that worked very well for us.

  1. We had lunch together whenever we were both in the office. When Frank joined us, he then was included in every lunch and meeting. The lunch break gave us time to discuss our business and also to update each other on what was going on with our clients.
  2. We had an offsite meeting once a month to discuss our business. We started at 9:30, and took a break at 11:30 and 1:30 and ended at 4:30 so we had time to return clients calls, respond to emails and speak to staff if necessary. This gave us about 6 hours of concentrated time to work on our business. We rented a small conference room in a local hotel, and also had lunch there.
  3. Each night our bookkeeper gave us a sheet showing the daily and month-to-date deposits and disbursements and bank balance so we had a handle on our cash and cash flow
  4. On the last day of every month before our bookkeeper went home, she gave us monthly profit and loss statements and a balance sheet, a detailed schedule of accounts receivable and the monthly fixed fee and retainer bills that would be in the mail the next day. We got the time run two days later and then prepared those bills which went into the mail that evening. We were two minutes from the post office always catching the last pick up so our bills were not delayed an extra day by placing them in a mail box for a morning pickup.

We walked the talk. A lot of this is what we advise our clients to do. The above was very effective in dealing with our practice and kept us current on what we needed to know. It also did not cut into time that we needed to spend on client matters. It also helped that we liked each other. I know many businesses where each owner or partner has lunch at their desk, alone, gulping down a quick sandwich or salad. Too bad for them.

Thirty years is a admirable and proud milestone and my pleasure in being able to spend it with Peter. Happy anniversary Brother.

I posted another 30th anniversary column yesterday on and here is the link.