Thoughts, ideas, suggestions and education from financial adviser Jim Ludwick, Founder of MainStreet Financial Planning, Inc. of Odenton, MD; Washington, DC; New York City, and Santa Barbara, CA

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Wednesday, July 27, 2011

Important Message from Jim Ludwick

Wednesday evening, July 27, 2011

Dear clients, prospective clients, colleagues, friends and relatives:

My friend and fellow advisor Rob Oliver said I could pass along his advice to his clients today since it mirrors our feelings and recommendations:

"You may be wondering what all the debt ceiling hubbub is all about. I've heard from some of you with questions about its implications for your planning and investments.

I hate to sound like broken record, but I encourage you to keep your sights set on the long-term and ignore the short-term buzz. In my opinion, the debt ceiling issue will get resolved and any fluctuations in the market due to the debate surrounding it will be short-lived. My advice is to stand pat with your portfolio and turn off your television.

Having said that, I believe that the debt ceiling debate represents deeper rooted budget issues that the US needs to resolve. Some form of higher taxes and lower spending is coming. What should you do about it? Continue down the prudent path:

- Rebalance your portfolio at least semi-annually.
- Pay yourself first through automatic savings.
- Avoid unnecessary debt.
- Mitigate risk with insurance and estate planning.

If you would like to learn about the debt ceiling, I suggest you check out
the US Dept of Treasury's description and Vanguard's analysis:

-- Jim Ludwick  jim@adviceonly dot net  (740) LUDWICK 

Saturday, July 23, 2011

Keep close eye on credit card charges

Woke up this morning and was viewing my personal emails via iPhone. Noticed a 1am email from a "former" anti virus vendor charging my credit card on a renewal. Been over a year since I've used that service. Made a mental note to object to the vendor which uses a third party to sell its goods.

After sending a form objecting to this charge I went online to my account where both my business and personal credit cards reside. I did note that the third party vendor customer service was only open Monday through Friday. Am I too cynical that the charge was rendered at 1am Saturday morning?

My online session included looking over the pending charges on my business card where this soon to be disputed charge resided to see what else was going on. I picked up the phone to call Chase and complain about the charge when I got the fast beeps that alerted me to a call on voice mail.

Guess who? Chase fraud department wants to talk to me. I call. It's about my personal credit card. Some charges in Georgia. One was approved and one was declined. We go over my transactions and there is one a few days prior for 9.95 for something called Publications Development. Seems that's how it got started.

The bad guys put through a small charge after duplicating your credit card number on a fake card. No objection after a few days? Then they move on to bigger charges. The first for $229 when through. Then they tried $319 several hours later. Bells went off at Chase.  The call was made. The purchase declined.

Two results and two thank yous.

Got an email back within an hour from the third party that they had received my disputed virus monitoring renewal charge. Moments later the vendor sent an email asking to confirm my request for a refund which I did and they acknowledged immediately. Thank you.

Chase cancelled my personal credit card. OK. No big deal. I have to notify three businesses that automatically charge my card monthly that there is a new number.  It is Saturday and Chase said my new card would be here on Monday via UPS. After I get my new cards, I will notify my three business partners of the change. Thank you.

What did I learn? Both my wife and I have agreed to check online at least once a week to review our charges. We charge almost everything for airline points so we must be more vigilant about checking for bogus charges, even little ones.

Will it become a habit? I'm making it a weekly task on my automated to do list. We'll see.

If readers have one more ideas for us, we're open.  Email Jim at advice only dot net and forget about the open spaces. Just trying to keep those bad guys away too.


Thursday, July 7, 2011

Why are you so smart, or are you just lucky?

The headline on this article is a nice question to ponder.  Although no client or prospect has outright asked me this question in my nine years of private practice, I suspect it was on their mind.

In reflecting on my own implementation of my personal financial decisions over this same time period, I have mixed results. In many cases, our clients have outperformed my own portfolios.  In fact, my wife takes great pride in the fact that her investment performance exceeds mine by several percentage points, and I manage her investments!

This piece seems to be taking on a confessional direction, but my purpose is to let readers know how I prepare to help them make better financial decisions. I would like to answer the question about being smart.  Answer: I have lots of smart help.

Having a mentor or mentors is very important. In our industry of personal financial advice, it’s relatively easy to have one since we tend to be a very giving profession. I found mine in Kansas via the internet. She wrote a book, formed a group and offered people like me the opportunity to put our experience and desire to work in a new delivery mechanism of personal financial advice by the hour, on an as-needed basis. Then she added consultants to our group to help us on a periodic basis via conference calls, and now webinars, along with an annual in-person retreat.
Consultants help me in marketing, compliance, and business planning. No man is an island. I’m wise to the ways of others though these experienced and focused experts who see the best of the best and pass it along to those of us who want to improve. I owe them a lot.

Money managers help me help our clients. Over the years we have helped clients select several top notch money managers since investment management is not a service we deliver directly. We watch what they do, read what they write, and pay attention to their advice, their decisions and their rationale.  It helps us develop a more dynamic perspective of active or passive investment management by seeing it happen in real time.  Real time to us is usually quarterly or annually, by the way.

Clients have ideas for us too. Over the years we have used several clients as sounding boards for new ideas and tools to deliver or expand our service.  They have been invaluable. In many cases, clients helped us avoid a mistake since we were enamored with an idea that had no place to go in our world.  They told us that in no uncertain terms. Thank you. You know you who are.

Colleagues have added to our tool chest in many different ways. We participate in two national discussion groups as part of our association memberships. Here no man is an island pops up again. We can’t possibly know it all, but a simple posting usually brings several suggestions in hours, if not minutes. Only yesterday, as I write this, I posted the referral need for a specialized business appraiser in the mid-Atlantic region. Within two hours, I had three potential providers as a solution to a client request.  I was in communication with two of the three referred providers before the end of the day.
Colleagues also write a lot of articles on the myriad of topics, close to a hundred, that certified financial planner practioners are expected to know and understand. They write magazine articles, blogs, and tweets. I pass along a lot of their ideas and suggestions by re-tweeting them to colleagues, clients, prospects and others who follow me on this social media platform called Twitter.

The financial news media is also a good source of information and ideas for me since they frequently report on what other advisors and consumers are doing and saying on all sorts of financial topics. I always seem to be looking at a stack of magazines on the bookshelf and emails in my inbox. I’m guilty of information overload and look forward to airplane and train rides to try and catch up.

Lastly, but by no means least, is my long time associate Anna Sergunina, and our relatively new assistant Holly, who lovingly bombard me with error correction suggestions, along with articles and tools they found to help our clients and our practice.

So now you know the answer. I’m smart because I associate with a lot of smart people who are willing to help me deliver the very best recommendations to our clients so they can make the best possible decisions about their financial lives, and sometimes just about their lives in general.

I’m also lucky to have the best wife, Carol,  family, friends, clients and colleagues imaginable.  Thanks for being in my life.

(Now, if you have an interest in what I read on a daily or periodic basis, I’ve posted an non-exhaustive list. Many can be viewed without a subscription. View the list by clicking here: )

Jim Ludwick's Reading List 7.7.2011

1. Google
2. Yahoo Finance
3. (free and premium subscription)
4. (subscription)
5. (subscription)
6., Fidelity,com,,,,,
11. (subscription)
12. Twitter (follow a number of financial advisors and consultants which leads to their blogs)
13. The Simple Dollar (blog)
14. Seeking Alpha (blog)
15. (subscription)
18. Investment News (subscription email and weekly periodical)
19. Investment Advisor magazine
20. Financial Planning magazine
21. Journal of Financial Planning magazine
22. Kiplinger Personal Finance magazine
23. Money magazine
25. (online and magazine)
28. (subscription for computer, iPhone app and paper version)
29. Journal of Indexes
30. Research magazine
31. Registered Rep. (subscription)
32. Life Insurance Selling (subscription)
33. Forbes magazine (subscription)
34. Bloomberg BusinessWeek magazine (subscription)
35. NewYorkTimes iPhone app and daily email summary
36. Time Magazine iPhone app
37. (subscription online and paper)
38. Vanguard Independent Advisor newsletter (Dan Weiner by subscription)
39. Fidelity Independent Advisor newsletter (Don Dion, by subscription)
40. ETF Report (Don Dion, by subscription)
41. ETFconnect, now something else, look it up!!! For closed end funds
42. (business)
43. (business)
44. (business)
45. Institutional Investor ETF Daily by email
46. Advisor Perspectives by email
47. Financial Planning (online and magazine)
48. Accountants World News by email
50. LinkedIn special interest groups (5)
This list is not all inclusive. 7.7.2011