10 Reasons Why This is the Best Place in the World

Oct 26, 2020 David Kennon

I figured with the election and other craziness in the world, it’s time to lighten things up a bit.   Let’s talk about why Sarasota is the best town in the country.  (Don’t let out-of-town friends read this article.  We don’t want the secret to get out.)   Let me know if you think I missed anything in this list.    Let’s start with the obvious.  Sunny, blue skies almost every day of the year.  You do realize that people travel from all over the world to visit here, right?    Small town feel.  Sarasota has a small town feel with all the amenities of a big city.  While things can get a little busy during “season,” once the snowbirds go home we get to enjoy all the cool stuff built just for them.  Restaurants, golf courses, cultural centers, shopping- all designed for tourists and seasonal visitors- enjoyed by all of us year round.    Unique Vibe.  It doesn’t have the “pre-fabricated” feel of some beach towns around Florida.  We have history, diversity, and culture that can’t be found in Naples, Ft. Myers, Cocoa Beach or Ft. Lauderdale.    Uhh…have I mentioned the beaches? As I’m sure you know, Siesta Key is an award winner, but let’s not forget about Lido, Holmes, Anna Maria and more!    No need to fly for vacation.  You are a couple hours drive from countless vacation opportunities.  Disney, Busch Gardens, Key West, Boca Grande, Captiva Island- all places people come from all over the world to visit.    Traffic isn’t too bad.  I’m sure some of you will argue this point- and, yes, things can get a little hairy in February and March.  But have you spent any time in Orlando or Atlanta or Chicago? THAT is traffic. We complain if we need to wait for more than one traffic light.    Amazing architecture.  Not only do we have gorgeous waterfront homes, but we also get to enjoy historic landmarks like the Ca d’Zan Mansion, the Ringling Museum, Selby Gardens, the Rosemary District, and the Sarasota County Courthouse.    A great airport.  Have you flown out of the Sarasota International Airport?  If you haven’t, you are missing out. Short security lines, easy parking, all within a small and convenient facility.   Top-notch hospitals.  Sarasota Memorial and Doctor’s Hospital are among the best in the nation.  We have some of the best cancer and heart specialists, as well as world-renowned orthopedic surgeons.   Really cool people!   Not many people are from Sarasota, as most of us came down here because…. well, just look at the rest of the list. Sarasota is filled with adventurous and friendly spirits who were willing to leave their birthplaces to make a new life for themselves here.   Be Blessed,   Dave

 

How to Get Your Dream Vacation for Free

Oct 19, 2020 David Kennon

If one thing could be said about Betty Brown is that she was a hard worker.  At age 15 she started working at a drugstore counter, and for the next 43 years, she continued to work a hodgepodge of various jobs.   Betty never went to college and never found employment that paid her a decent wage, but she was tenacious.  She worked overtime whenever she could, and would often work another job on the weekend.   Besides a strong work ethic, Betty had also developed one additional habit.  She saved money.  Oh boy, did she save.  Throughout her entire working life, she meticulously put away as much money as possible.  She learned how to live on an incredibly slim budget.  Betty, financially speaking, had done everything right.   I first met her in her late fifties.  She looked tired.   “My job is killing me,” she lamented.  “They expect more and more work each month without any more help.”   “How much are they paying you?” I inquired.   “$17 an hour.  I haven’t had a raise in three years.”   “Betty,” I suggested, “You have nearly $750,000 saved up here.  Between social security and the investment income you can derive from the money, you will have plenty each month. In fact, you will have much more money coming in if you quit work and ‘retired’ than you do now.”   “I don’t know Dave, it just doesn’t seem right,” Betty lamented.  “I guess I might be ok, but I think I should work a few more years just to be safe.”   Four years later, Betty came in to see me.  “Dave,” she said grimly, “I have pancreatic cancer. The doctors are not optimistic, they think I only have a few months to live.”   The doctors’ heartbreaking prediction came true, and within two months Betty passed away and went home.  Her $750,000 sat untouched, unused, and unenjoyed.   As Betty had no children, she named her husband as the primary beneficiary on her accounts. But, during the last few weeks of her life, the inheritance became more and more important to her.   She literally spent some of her last days on Earth perfecting her complex and generous contingent beneficiary list:  Nephews, nieces, the aunt and uncle who raised her, friends in need… Bob Brown, her husband, was in full agreement.   After he were to pass away, he kept talking about how he wanted to maintain her wishes.  He even told her how he planned to help important people in her life now.   Unfortunately, when Betty passed away, as Bob was primary beneficiary, he got all the money.  The contingent beneficiaries meant nothing.   Betty’s husband came in to see me shortly after her death. Bob and his wife had never seen eye to eye on their money. In fact, Betty hid most of her financial information from her husband, fearing he may wastefully spend it.   When Bob showed up in my office, along with his brother, I knew Betty’s wishes were in serious trouble.  Not only did Bob change all the beneficiaries according to his wishes, but the questions his brother was asking caused me great concern.   “Betty had some sort of hangup about spending money,” Bob’s brother scoffed. “We think differently.”   “We”? Since when was Betty’s brother-in-law involved with any of this? In fact, Betty and the brother-in-law had not spoken in years. Betty did not trust him and did not like him.   And now her husband and, ostensibly, her brother-in-law, had her money.   You can guess where this is going. The money was gone in a couple years.   Bob, his brother, and a bunch of their buddies spent a couple months traveling around the world. Classic cars were purchased, gambling losses were significant, bar tabs were large.  Good times.  They didn’t even have to look at the price.   Betty. A lifetime of struggle. A lifetime of labor.  Gone.  In hindsight, it was almost like Betty existed as an indentured servant to provide funds for her in-law’s debauchery.   Even as I write this, I feel anger welling up inside of me.   Morals of the Story: 1. Money brings people out of the woodwork. 2. Life rarely moves in a straight line. 3. If you don’t use your money, someone else will. And oftentimes heirs do not use the money the way you had intended. 4. While running out of money in retirement can be a scary prospect, don’t forget that there are other possible conclusions.   What Can You Do? Create a sensible and logically plan that allows you to spend more now, while not mortgaging your future.

 

What do Volkswagen’s and Personal Trainers Have in Common?

Oct 12, 2020 David Kennon

Often times the information I give you, while interesting, is very academic and sterile.   But you see, what we discuss each week, is NOT an academic subject.  We are talking about real people living real lives.   I often discuss generosity. What I’ve discovered is everyone wants to be generous.  Who doesn’t want to be open handed?  Humans have been designed to serve and help their fellow man.  So why don’t more retirees show generosity during their retired years?  It’s not because they don’t want to give.   It’s because they are worried about running out of money.   How can you be a giver when you fear your own survival?   Hopefully by now, you agree with my argument that spending 5% of your retirement savings each year will not make you go broke.   Now if you are retired and living “paycheck to paycheck” on your monthly investment checks, you cannot be overly generous.  You need to take care of yourselves first.   But let’s take a look at Linda and Larry, who found a way to live fearlessly and lived a retirement to be proud of.   This example is pretty extreme and few of you have the endurance of Linda and Larry.  But I’m trying to make a point.   In 1990, Larry and Linda both retired at age 65.  Together they had about $500,000 in retirement savings.    They entered their retired years with the same core beliefs as me: They invested in a diversified portfolio of stocks and bonds. For this example, we will suppose they had their money invested in a generic portfolio of 60% stocks1and 40% bonds2. They started taking out 5% of the original account value ($25,000/yr). They did not watch the financial news. They understood that long term investing has worked time and time again throughout history. They focused on living their best life possible. Or more specifically: In 1990, with the money, they hired a personal trainer and a nutritionist.  It wasn’t cheap, but it got them in the best shape of their lives.   In 1991, with the money, they hiked the Appalachian Trail.  They pampered themselves by staying at several hotels along the way.   In 1992, they paid for the down payment for their son’s first home.  His wife and four kids needed a bigger place and were struggling financially.   In 1993, with the money, they took up fishing and hired a charter boat (with captain) each month.   In 1994, with the money, they renovated their kitchen.   In 1995, with the money, they started education funds for their grandkids.   In 1996, with the money, they rented an RV and traveled to every state in the U.S. (expect Alaska and Hawaii).   In 1997, with the money, they took a month-long luxury Alaskan cruise.   In 1998, with the money, they helped out their struggling daughter who lost her job.   In 1999, with the money, Linda volunteered for a battered women’s shelter and sponsored over 20 women to get back on their feet.   In 2000, with the money, they went to several shows in the theater district, and paid for their grown kids to go with them (they needed some culture).  They saw shows in a few different cities.   In 2001, with the money, they turned their yard into a landscaped tropical paradise.   In 2002, with the money, Larry bought a pristine 1972 Volkswagen Super Beetle.   In 2003, with the money, they put $6500 into each child’s Roth IRA to jump start their retirement and teach them the importance of starting early.   In 2004, with the money, they took a river cruise through Europe (Budapest was their favorite part).   In 2005, with the money, they sent their granddaughter to England to study for a year in Oxford.   In 2006, with the money, they took up photography.  Linda became especially skilled and developed an interest in tropical birds.   In 2007, with the money, at age 82, they decided to take up tennis in order to stay active.  They got a membership at a country club, took lessons every week and played with their friends on Tuesday and Thursday mornings.   In 2008, with the money, they helped their grandson with the down payment on his first house.   In 2009, with the money, they hired a concierge doctor.  The best medical care money could buy.   In 2010, with the money, they organized a huge family reunion, bringing together several generations from all over the country.   In 2011, with the money, Larry published his memoirs and Linda published a book about her passion for photographing nature.   In 2012, with the money, they supported a local charity that helped feed hungry children in the area.   In 2013, with the money, they supported missionaries from their church working in Guatemala.   In 2014, with the money, they tipped every waitress with a crisp one-hundred dollar bill, no matter how much the meal cost.   In 2015, they both passed away.   So did they run out of money while having all of this fun?   No.   What was their account balance based on historical index returns at the end of their life?  $2,056,427   They started with $500,000, spent $625,000 generously over 25 years and died four times wealthier (which they used to create a trust to help future generations of the family).   Be Blessed!

 

Michael Jackson is still getting sued. And he died ten years ago.

Oct 5, 2020 David Kennon

Let’s talk about the importance of wills and other important financial documents. 

 

Note:  I am not an attorney.  I know just enough to give you the basics. 

 

When it comes to legal documents there are four basic items.

 

Your Last Will and Testament.

Your Health Care Advance Directive   

Your Durable Power of Attorney

Your Trust documents

 

Is this stuff fun to think about?  No.  Is it something you’ve been putting off for years?  Probably.  Do you know it is important?  Yes.  

 

Your Last Will and Testament.  All of you know what this means.  It basically tells everyone who gets your stuff.  For example, your may wish that all of your assets are split between your three kids.  

 

Now, whatever passes through the will has to go through a process called “probate.”  Probate seems to be a scary word to people, but the concept is very simple.  Before the money can be passed on to the beneficiaries, creditors get a chance to collect any unpaid bills.  

 

The “Executor” or “Executrix” handles this process.  If you have gone through this process, it’s not a lot of fun.  You should be very proud of yourself for putting up with the hassle.  For large estates, this process can last for a year or more.  Smaller estates can expect about six months before the assets are distributed.  Remember, IRA’s, 401k’s, life insurance, and annuities do not go through probate.  They go instantly to the heirs.   

 

Quick Dave Note:  Homes, farms, and other real estate properties are notoriously a mess to leave to heirs.  Probate is complicated.  Kids fight.  You need to have specific instructions as to what you want to be done with the house.    

 

Health Care Advance Directive.  Here’s something that is super fun to think about.  Who gets to make medical decisions for you if you are unable to do so for yourself?  This document better allows your loved ones to advocate on your behalf.  It gives them access to all your medical records and allows them to authorize medical procedures.  And of course, this document outlines when it is time to pull the plug.  (like I said, not real fun document)

 

Durable Power of Attorney. A durable power of attorney simply shows who can handle your financial affairs if you are unable to do it for yourself.  Often a spouse is put into this position. You would be surprised at how many things a spouse cannot access without a power of attorney in place.  Does Mom need money sent from her IRA to her checking account for important expenses if she is not capable?  Without this document, you cannot make that transfer. 

 

A common example is selling Mom’s primary residence upon her entering into an assisted living facility contract on her behalf.  You need to have the ability to act as her representative. 

 

This doesn’t only apply to elderly parents. It can also apply to a spouse with a sudden injury where he/she is unable to communicate their wishes.  

 

Trusts.  I’m sure you’ve heard the term “Trust Fund Baby.”  What does that actually mean?  Trust documents give you control of your money from beyond the grave.  Instead of dumping your money into the laps of kids all at once, a trust gives you control over how and when they receive the money.  

 

Examples:

 

“Upon my death, my son gets 25% of the money when he turns 25, 25% when he turns 30, and the rest when he turns 35.”

 

“Upon my death, my children may receive 5% of my trust value per year.”  (This is a common strategy for charitable trusts.  If the money is invested, the portfolio should make an average of 5%, so that the trust fund will last forever).

 

Not only do trusts allow you to control your assets beyond the grave, but they can also protect your money from getting in the hands of people you don’t like.

 

“Upon my death, these trust funds may be paid out to my daughter and her children.  In the event of a divorce, my son-in-law has no rights to this money in the trust.”  

 

Why is this important?  If you dump a lot of money into your child’s lap when you die, and your child then gets divorced, her ex could go after half of the assets, including the inheritance.  If the money stays in the trust he has no claim against those assets. 

 

And how about…

 

If one child gives all the care to elderly parents. Do they get more of the inheritance?  These documents would spell this out. These clear directions could stop any fighting between the kids. 

 

What if your kids face a lawsuit?  Trusts can help protect those assets.

 

What happens if your child dies, and their spouse gets all the money?  Are you ok with that?

 

I hope this at least gets you thinking about your own death.  I’m just kidding.  Don’t think about that. 

 

It is so easy to ignore these issues.  Just do it!.  Get it out of the way.  Do you know who didn’t have any of these documents upon his death?  Michael Jackson.  Can you imagine the mess?  Can you imagine people coming out of the woodwork trying to get their “share” of the loot?   He died ten years ago and court battles continue and will continue to go on for years and years.