Hanging on to the Fiscal Cliff

At the annual Schwab conference a couple of weeks ago, many of the expert speakers and panelists offered a similar take on our precarious financial situation. The good news is that, while a number of difficult decisions have to be made, a political consensus can lead us to a reasonable fix of what ails us. The bad news, of course, is that we are reliant on politicians to make the necessary hard choices. We are also reliant upon a public willing to accept them.

The most impressive presentation came from Alan Simpson and Erskine Bowles, who warned of the dangers of our country's tremendous deficit. While you may not agree with their plan for fiscal responsibility, they do offer a sobering perspective.

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Business Coaches — Addressing the Myths

In an interview with Jeff Miller, a business coach at Action Coach, we discuss how business owners and executives can benefit from independent guidance.  Click the video to hear a discussion that busts some of the myths surrounding coaches.

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The Problem with Low Interest Rates

While economists and politicians hotly debate the efficacy of the Federal Reserve targeting low interest rates to boost the economy, less attention is being paid to the impact on investors. Don Phillips at Morningstar calls such interest rate policies a "War on Savers." He boldly asserts:

"These policies represent a massive transfer of wealth from savers to debtors. To cushion the blow for the millions of Americans who lived beyond their means over the past decade, the Fed continues to penalize those Americans who kept to a budget and set money aside for the future. The cost of these subsidies is in the billions of dollars and puts the retirement security for millions of prudent Americans unfairly in jeopardy."

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Find the Cost of Freedom — Notes from St. Petersburg

The city of St. Petersburg is quite impressive—the canals, the architecture, and the history make it a wonderful place to visit.  The city is also economically vibrant, which is a far cry from the Russia of old, with long lines for a limited supply of food and necessities.  But economic success has not translated into political freedom. Disdain for the government has not overcome the fear of being jailed for protesting.

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Confounding Consumer Conundrums

Let's say that 100 bottles of beer on the wall typically cost $100. Which would you rather have—150 bottles for the same $100 or 100 bottles at a 33% discount? A recent study indicates that most people would choose the 50% increase in quantity over the 33% discount. In actuality, you get the same result in either case—one bottle of beer would sell for $0.67 instead of the regular price of $1.00.

In describing the study, The Economist states that shoppers "prefer something extra for free to getting something cheaper. The main reason is that most people are useless at fractions." Ouch!

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