Finding Your Beach

The Journey Starts with That Important First Step

by Gary L. Fisher

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‘Find Your Beach’ is a metaphor that I use liberally to define both the journey and the destination to what we call ‘retirement’. It’s not about stopping your life and remaining in stasis. Rather, it’s about transitioning your life from one state of mind and being, to another. It’s about new beginnings, not endings. It’s about new challenges, not the ending of all challenges. It’s about conquering new goals, exploring new frontiers, and seeking adventure and fulfillment.

The destination can be an actual beach, or whatever you picture yourself doing in retirement, whether it’s spending all of your time with your grandchildren, fishing off a dock in Northern Michigan, or seeing the world. So the first step is setting a goal: getting clear about what you want to achieve. Most important of all is knowing about why you want it. Then you need a path that is designed to lead you there.

Think about it: No ship sets sail without a plotted course, no jet takes off without filing a flight plan, no football team takes the field without a game plan, and no family or business should contemplate a successful journey without some sort of focused, holistic, and comprehensive strategy. My role is to help people create such a plan and then help guide them through the realization of that plan, year after year, until you find YOUR beach. I approach all of my client relationships with the idea that we are in it together…and we’re in it for the long haul.

People can be confused, intimidated, or even annoyed by trying to figure out just what exactly it means to work with a Financial Advisor and address such a broad topic as ‘your financial life’. After all…it sounds like a big job…and it is, but that shouldn’t scare you. In fact, I hope it inspires you! Conceptually, it’s pretty easy to visualize, and in the end, the results can be orders of magnitude more valuable than the effort and energy that went in to it’s creation.

Creating a road map for your financial game plan can be one of the most exciting, and empowering things you’ll ever do. Some of our clients say it provides them with a sense of accomplishment second to none. It’s no wonder…how would you feel if you no longer were alone in planning for your retirement, long term care, or managing your investments on a day-to-day basis?

The process starts with a simple and complimentary consultation where we determine if you need help, if we should work together, and if so, at which level of service. Then, we start plotting your course. At subsequent meetings, we formally implement your plan, and thereafter, we meet to review and make course corrections as needed.

It’s simple, and it’s easy to get started. Ancient wisdom says that ‘the journey of a thousand miles starts with but a single step’. When you, or someone you care about are ready to take that first step I’ll be ready to lend a hand.

If you are ready to take that important first step, please give me a call! 810.603.9100

Book Review: While America Aged

 by Gary L. Fisher

while-america-aged-imageRalph Nader coined the phrase ‘unsafe at any speed’ in his scathing indictment of the Corvair. If he had written a book about the General Motors business model of the time, he might have called it ‘Unsustainable at Any Speed’. The Ron Lowenstein’s book “While America Aged’, in my view, is one of those rare gems that not only explains a controversial subject in a terrific storytelling format, and in my opinion, it also happens to have the weight of being prescient and accurate.

I first read this book back in 2008, and it made an incredible impact on my thinking in how I viewed the trajectory of our nation at the time. In conjunction with other personal research, I made significant changes in my client’s portfolios, and my own personal financial life, that turned out to be extremely valuable.

Growing up in the birthplace of General Motors, and living nestled between the automotive enclaves of Flint and Detroit as I do now, the fate of the auto industry has always been a top-of- mind issue for me, as it impacts my life daily. In fact, 100 years of my family story has involved General Motors. Dating back to my Great-Grandfather John Pyne, who worked at the original Buick Motor Division and GM plant, under founder Billy Durant, and Buick leader ,Walter Chrysler, through my grandfathers, grandmothers, dad, and even my mom, who worked for a firm whose #1 client was GM.

Lowenstein’s book isn’t all, or even mostly about the auto industry. Rather, it is broken into three parts, exploring the impact of legacy costs on the public and private sectors. It’s a chilling tale of greed, selfishness, and outright stupidity that has, and will likely continue to impact all Americans for generations to come. It’s a book that predicts, in 2007, events that were to happen all to soon in 2009, and prognosticating the realities of over-promising and under-delivering on pension and health care legacies. These are issues that are now becoming frequent headlines as it becomes clear that the foolish and short-sighted decisions of the past predicted to likely undermine the innocent recipients of that legacy in the future.

There really isn’t one villain in this story, and even fewer heroes. Rather, as Lee Iacocca said in a Chrysler boardroom during the 80’s Chrysler bailout, blame lays on “the three of us”, meaning corporations, unions, and government. In my opinion, the book very clearly explains this in an extraordinarily balanced and fair manner. It essentially confirms my own beliefs as to how we got into this mess, and it goes a long way to explaining what it will likely take to extract ourselves going forward.

Lowenstein reinforces the reality that when it comes to retirement in the 21st century, there is simply no substitute for self-sufficiency, holistic retirement income, and financial planning. Hoping for bailouts, government intervention, and paternalistic unions and corporations to come to the rescue just might be a bigger fantasy story than the latest Star Wars installment. One sure take-away from “While America Aged” is that taking control of your own financial future has never been smarter, more urgent, or more crucial in pursuit of a sustainable and prosperous retirement.

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Securities offered through LPL Financial ember FINRA/SIPC. Investment advice offered through Oak Point Financial Group, a registered investment advisor. Oak Point Financial Group and My Retirement Mentor are separate entities from LPL Financial.

Billy Durant

The Man Who Invented the Future

by Gary L. Fisher

Billy Durant.pngWhen I was a freshman in college, I was given the assignment to write about the most famous person from my hometown. I etched out a profile of a man, who, ultimately, really didn’t fit the bill. In fact, he wasn’t famous—at least not any longer—and certainly not in 1983, when I was writing my essay. In truth he hadn’t been famous for a very long time. Indeed, he has been largely forgotten, even in his own hometown of Flint, Michigan.

However, to me he was famous. Or, at least he should have been famous, by all normal laws of fame and glory. This particular individual had had a massive impact on my life, and on the lives of millions of people around the world. Yet, few knew his name. He was a super salesman—maybe the best that ever lived. He was a marketer extraordinaire, perhaps the most prolific in industrial history. He was a genius with organizational development, a master talent scout, and most of all, he was a brilliant alchemist, turning wood and steel into dollars and cents, and neighborhoods, and roads, and largely creating the 21st century in a myriad of ways.

He was responsible in full, or in part, for inventing, developing, or creating from whole cloth: Buick, Chevrolet, Frigidaire, GMAC, GMC , Pontiac, Cadillac , DELCO, AC Spark Plug, and other companies too numerous to name. He mentored Charles Stewart Mott, Walter Chrysler, Charles Nash, Charles Kettering, Albert Champion, David Buick, Louis Chevrolet, among many others.

This man, known in fact as “THE MAN” in his day, envisioned a world that was largely science fiction back then. Iconic industrialist J.P. Morgan called him an ‘unstable visionary’, others called him ‘crazy’, but all who knew him well, eventually called him a genius.

The Man” was William C. “Billy” Durant. The most famous man no one has ever heard of. In fairness, many more today have heard of him than in 1983. My Freshman Comp teacher responded to my essay with a ‘Billy Who?’ notation, when I told him of my planned work.

How he wound up so anonymous is an enduring mystery, as his achievements are prolific. Durant was the first to use vertical integration in manufacturing, invented North America’s first franchise dealer network for automobile sales, and built the world’s largest sales team in recorded history. Moreover, (and contrary to popular belief), he was the first to use the assembly line for mass production in his carriage business (Henry Ford’s hired consultants put the assembly line into motion first in Ford plants).

According to the legendary management guru, Peter Drucker, the company Billy Durant crafted out of thin air, General Motors, imposed a productivity might that was the primary reason that the allies were able to crush both Hitler, and Hirohito. The union movement, white collar management, automobile sales, and the plethora of automobile-related engineering and design careers—their histories and growth are linked to his entrepreneurial machine (Durant referred to GM always as ‘his baby’). General Motors was created with a deft blend of labor, management, bureaucracy and entrepreneurialism, and in many ways, helped to sculpt the vaunted American middle class.

His creations fueled the American Century, transforming our lives in ways we scarcely appreciate today. He was strong enough to stare down J.P. Morgan (the actual man, not just the company), and Henry Ford, provide guidance to Pierre DuPont, counsel President Hoover about how to avoid a Great Depression (Hoover didn’t listen), rub shoulders with kings and queens, princes and presidents, while still being humble enough to play checkers with elevator operators.

He saw things that didn’t exist and brought them into reality. He once told an interviewer during a time when horses and buggies were still being used:

“Most of us will live to see this whole country covered with a network of motor highways built from point to point as the bird flies, the hills cut down, the dales bridged over, the obstacles removed. Highway intersections will be built over or under the through lanes and the present dangers of motor travel, one after another will be eliminated.”

He was loved by his workers (labor strife was rare in his plants), his colleagues, and his friends (thousands of which he made wealthy beyond their wildest dreams). Despite his mercurial and sometimes self –focused behavior, no one doubted that he ultimately had their best interests at heart in the end. And so he did, having been ousted not once, but twice, from the helm at GM by a cabal of bankers and backstabbers. He went bankrupt during the Great Depression trying to guarantee investments made in his companies, and while legions of his friends were rich, he died broke.

In the end, despite his massive economic set backs, he had new goals and new dreams, and in his 80’s was planning a chain of bowling alleys, thinking that families would flock to them (he was right), and years before Ray Kroc got the smart idea to team with a couple of brothers named McDonald, Billy envisioned a chain of fast food restaurants with ‘good food served fast through a window” to accommodate the legions of automobile shoppers he had helped to create. When asked by his wife Catherine why he couldn’t ‘just rest’, he replied “We are not given enough time, Mama.”

His spirit can be embodied in his own words, words of advice given to others in the face of difficult circumstances. It’s sage counsel for anyone chasing a dream, building a business, or trying to save a city.

“My advice to you and all others is to keep working…Forget mistakes. Forget failures. Forget everything except what you’re trying to do now-and do it.”  –Billy Durant

A Conversation with Art Laffer

President Reagan’s Chief Economic Advisor

by Gary L. Fisher

Art Laffer.jpgArthur B. Laffer’s economic acumen and influence in triggering a world-wide taxcutting movement in the 1980s have earned him the distinction in many publications as “The Father of Supply-Side Economics.” The Laffer Curve is one of the main theoretical constructs of supply-side economics, illustrating the tradeoff between tax rates and actual tax revenues.

Dr. Laffer was a member of President Reagan’s Economic Policy Advisory Board for both of his two terms (1981-1989). He was a member of the Executive Committee of the Reagan/ Bush Finance Committee in 1984 and was a founding member of the Reagan Executive Advisory Committee for the presidential race of 1980. He also advised Prime Minister Margaret Thatcher on fiscal policy in the U.K. during the 1980s.

A 1999 Time Magazine cover story “The Century’s Greatest Minds” deemed the Laffer Curve one of “a few advances that powered this extraordinary century.”


Taken from a conversation in 2015.  

I had the opportunity to spend some time in Las Vegas with one of the giants of the economics field, Dr. Art Laffer. Initially I expected to maybe ask Dr. Laffer a few quick questions but after learning that I was a University of Michigan graduate he took the opportunity to razz me about Ohio State’s recent dominance of my alma mater’s football team (Laffer is an Ohio native). This led to a much longer conversation, and during it we talked about President Obama’s agenda, the similarities between Laffer’s hometown of Youngstown, Ohio and mine of Flint, Michigan.

Laffer feels strongly that the nation’s tax policy is both part of the problem and fixing it could be a signifcant step towards a real recovery. Dr. Laffer said “The principle of levying the lowest possible tax rate on the broadest possible tax base is the way to improve the incentives to work, save and produce—which are necessary to reinvigorate the American economy and cope with the nation’s fiscal problems.” When I asked him how we could take concrete steps to repair the national economy he said “We know how to fix it, by the way, a low rate at tax, spending restraint, sound money, free trade.”

“Have you ever heard of a poor man spending himself into prosperity? It`s just dumb on the outset. Government spending, as [economist] Milton Friedman always said, is taxation,” he continued. “Government doesn`t create resources, it redistributes resources. And this government spending stuff is why we had the Great Recession.”

Laffer declined to lay all the blame on President Barack Obama, noting that former President George W. Bush started the spending binge, which he said led to the so-called “Great Recession” beginning in 2008. (President George W. Bush) did just as bad a job as did Obama [President Barack Obama], but Obama has continued that bad job for four straight years. And this is the result,” he added.

Laffer stressed the importance of a low tax policy, one less onerous, in helping to stimulate the economy while increasing government revenues at the same time.

Recalling his years as one of President Reagan’s top economic advisers, Laffer said Reagan actually cut the highest tax rates. He said “we made a mistake” by phasing in the cuts, which he said caused the 1981-82 recession. But he said the economy took off in 1983 when the cuts went into full effect.

“This place just went like a rocket ship,” he said. “I think we had 7.5 percent growth in 1983 and 5.5 growth in 1984, just this boom that lasted for years and years.”

“We have the highest corporate tax rates in the world and one of the lowest corporate tax revenues as a share of GDP in the world. Go figure. It’s just you`re taxing them out of business.”

Laffer said the economy last year grew by about 2.1 percent, a poor performance that he described as “the worst single recovery in the history of the U.S.”

When I asked Dr. Laffer about the prospects for turning around rust belt cities like Flint, Detroit, and his own hometown of Youngstown he said , “It’s amazing, isn`t it? We spent $5.8 trillion in the last couple of years, and this is what we get for it? It’s tragic.”

 

The opinions voiced in this material are for general info only and are not intended to provide specific advice or recommendations for any individual.

Retirement Reality Check

Let’s Take a Look at the Costs of a “Bare Bones” Retirement

by Gary L. Fisher

Golden Piggy.jpgAmong the myriad of considerations we have to examine when it comes to planning for a sound and happy retirement are the basics. Things like health care, prescription drugs, long-term care, food, clothing and shelter. That sounds like a tall order, and it is. Certainly those are things that range from stuff we’d rather not think about, all the way to stuff we take for granted.

The most elemental of these factors is food. Gotta eat to live right? You cut that out of the budget and you won’t have to worry about a long retirement! So what does the potential for food expenses look like during your retirement? Let’s take a look:

If you and your spouse live to your life expectancy of age 83, and if you retire at 65, you’ll eat 39,430 meals in retirement. That’s breakfast, lunch and dinner, 365 days a year over 18 years for two folks. If each of these meals costs a mere $5 you’re looking at a budget of $197,100 on food. If you want to eat something other than Ramen noodles and Chef Boyardee in retirement, let’s make it $10 per meal. Now our budget is nearly $400,000! 

What are your odds of living long enough to spend that kind of dough on food? Well, according to the Social Security Administration, one out of four 65-year-olds will live past the age of 90.  One out of ten will live past the age of 98.  So that’s a lot of Early Bird specials at Denny’s to plan for.

How about “working until you drop”, as I’ve heard some proclaim that they will do? Sounds good…well actually it sounds pretty awful…but it’s probably not something that most could do even if they wanted to. In truth, 41% of Americans retired earlier than they planned for various reasons. Health issues are usually the culprit. This situation is exacerbated greatly when people either have no long-term disability insurance through work, or privately purchased. Or they have it, but it’s inadequate. Of course, sometimes people have just had enough of work, and believe it or not, age discrimination is a real thing. Bottom line?  Planning on being the 85 year old guy at the office isn’t really much of a plan.

Like food, the out-of-pocket costs for medical expenses can be astronomical, as well. According to Fidelity, $220,000 is the amount of money a couple can expect to pay for health care in retirement. 

Lastly is the reality of long-term care. I could write a book about this one, and maybe I should. Since this is a topic most people enjoy as much as a funeral, I’ll be brief. The facts are: 7 out of 10 people over the age of 65 will need some form of long-term care at some point in their lives. Medicare does not pay for long-term care insurance.  According to the most recent Genworth Cost of Care Report, the cost of a semi-private room in a long term care facility is $90,703. The average cost for Assisted Living facilities is $43,200 per year. At a 4% increase per year rate (which Genworth say’s it is currently in Michigan) these costs will double in 18 years.  That’s a cost that few are prepared to handle without a plan.  (Source 2015 Genworth Cost of Care Survey @ https://www.genworth.com/…/cost-of-care.html)

I don’t know a lot of people who love to buy insurance….okay I don’t know anyone (myself included) who actually enjoys paying premiums. However, when compared to the costs of being unprepared there’s really not much to think about if you have the health and wherewithal to take action. Similarly, when it comes to planning for retirement income. The roadblocks are clear: Health considerations, living longer/longevity risk, inflation, and taxes all play a part. We could also toss in common issues like providing ongoing financial support for children, divorce costs and expenses, paying for aging parents, and unpredictable government intervention and geopolitical events. In truth, no one sane plans to fail, but countless people fail to plan. It’s really human nature. None of us want to confront our own mortality. But to do so can become a liberating, and life–affirming move. Mitigating our risks of living longer than our money can be a smart move in uncertain times.•