What To Do With That Rock?

Guest post by: Burt White, Chief Investment Officer, LPL Financial

Burt White

As a kid, there was nothing that I liked more than going to my grandparents’ farm in West Virginia. The animals and acres of open land offered many opportunities for a youngster to have some serious fun and, from time to time, find a bit of trouble to get into. However, I never understood springtime on the farm. Every other house along the four-hour drive from my home to the farm looked so green and adorned with flowers, while my grandparents’ farm in the spring consisted of acres of dirt as far as the eye could see. It certainly didn’t look like spring.

My grandfather would always remind me that on a farm there are three distinct milestones on the farmer’s calendar: the time to plant, the time to grow, and the time to harvest. Sure enough, underneath that springtime dirt were the seeds of future growth. By the summer, when other yards were brown under the scorching sun, the farm was alive with the growth of those springtime plantings that continued well into the fall harvest.

I believe the same can be said for investments. There is indeed a “planting” season when it comes to investment opportunities. The harsh winters on a farm serve as a means to refresh the acres of dirt tired from a season of growth to get ready for the spring plantings, which is similar to how tough economic environments, stock price declines, and recessionary periods cultivate the investment landscape for the next potentially great investment “harvest.”
 
There has certainly been much to be concerned about over the last few months, which could be the “winter” that opportunistic investors have been waiting for. While the childish bickering in Washington, the concerns over the debts of many nations in the developed world, and Europe’s seeming inability to unify to find solutions to their economic challenges are presenting a significant headwind to economic prosperity, what typically comes out of challenges are opportunities.



What are you going to do with that rock?

 
My grandfather used to always remind me that one of biggest enemies of any farmer are rocks — they can damage the plow and reduce the effectiveness of the land. During the spring, when most kids were on an Easter egg hunt in colorful flower beds and green yards, I would have a different game that I would play with my grandfather in those dirt fields. Instead of eggs, we would go on a search for rocks.
 
Click here to read the rest of Burt's article.
 

The Financial Value of Networking

By Steve Davis, CERTIFIED FINANCIAL PLANNER ™

It used to be that there were two types of people in the world: the haves and the have-nots. Today, there are three: the haves, the have-nots and the have-not-paid-for-what-they-haves. While we might smile at this description, it really isn’t funny. One of the most important, if not most difficult, principles of finance is to spend less than you earn.

So how do you do that in today’s economy? Many folks focus on trying to cut costs; they skip their morning Starbucks in favor of coffee brewed at home, for example. But really, how much does this help when gas prices go through the roof? Admittedly, there are some ways to cut significant monthly expenses by refinancing to a lower home mortgage rate, or switching insurance coverage for your home, auto or health. But there is only so much you can do to cut your spending. Earning more income, however, may be a better option to meet the goal of spending less than you earn.

One way toward increased earnings is through building better relationships. Long before Facebook and LinkedIn, a wise man once said, “It’s not what you know, but who you know that makes the difference.” The reality is that income is often derived from the relationships we build and nurture. Think about it for a moment. What happens if your relationship with your boss and your coworkers sours? You lose your job – your income goes down. What happens if you build stronger relationships with your boss and your coworkers? Your income goes up – you get raises and promotions. For many families, adding income means taking a second job or starting a small business – and there is nothing better than having a strong network of friends and associates to help you get the interview or find more clients.

Jen Vondenbrink is co-host and producer of the upcoming “Not Business as Usual” networking conference. She says, “The key to networking -- whether it’s online or in person -- is to enjoy it. Gone are the days of merely collecting business cards. Today, networking is about demonstrating your willingness to give and add value before ever asking for anything in return.” With some willpower and effort, developing an extensive network of friends and business partners is attainable. Having good relationships -- true friendship and reliable business partnerships -- is one secret to happiness, wealth building and career success.

Here are two tips to get you started:

1. Talk to people. Surround yourself with people by going to where the people are. Attend conferences and conventions and meetings.

• The Chamber of Commerce offers all sorts of opportunities such as small seminars and a monthly networking event called “Business After Hours”. They’re currently holding a membership drive too so now is the time to join if you’re not already a member.
• The “Not Business As Usual” Conference will be held at the Mansfield Holiday Inn on October 27 and according to Vondenbrink, promises to “connect you with innovated strategists, business professionals and industry experts who will inspire you to “take-action” towards growing your business and becoming more profitable”.

2. Follow up and Keep in Touch. If you say you’re going to do something, by all means do it. Otherwise you’re just another schmoozer. According to local business coach Greg DeSimone, “Sharing information – whether it’s a website, article, report of referral -- builds your credibility. When you meet someone you would like to keep in touch with, send a quick follow-up email inviting them to connect with you on LinkedIn.” DeSimone continues, “You build relationships by being useful to the other person and helping them. If you can do that consistently without expecting anything in return, a funny thing happens -- people reach out to help you.”

This article was written by Steve Davis and appeared in the column "Talking with Davis about Money Matters" found at http://mansfield-ma.patch.com/

Financial Routines for Financial Success

By Steve Davis, CERTIFIED FINANCIAL PLANNER ™


There’s a different routine in my house these days. I’m writing this on the first day of school for my younger two boys and over the past few weeks my older two sons have gone to their respective colleges (VCU in Richmond and MassArt in Boston). The lazy days of summer are over and the kids are going to bed early and getting up at the crack of dawn. And with the older boys out of the house, there is no more having to wait up until they’re safely in the driveway after a night out with friends. It’s great!

For many families, the beginning of the school year marks the start of new routines -- packing lunches in the morning, extra-curricular activities in the afternoon and homework at night. At dinner tonight, our family talked about the day’s events and about the changes to our schedules and routines. We spoke about how success in the classroom often starts with having a good attitude toward school. And this got me thinking about personal finance and how simple changes in one’s attitude and routine can often have a profound effect.



Eat Your Brocolli



A lot of people view personal finance as complete drudgery, a task to be avoided in favor of … pretty much anything else in life. For folks who keep that negative attitude, personal finance success will be very difficult. Instead, we should view it as a personal challenge – just like eating our broccoli. Who knows, if you go into it with a positive attitude, maybe you’ll find it isn’t that bad after all. It took me a long time, but I finally realized broccoli doesn't taste so bad; in fact, I think it's delicious.

 

Perhaps you’ve got the equivalent to cold broccoli sitting on the corner of your empty dinner plate. I can’t begin to tell you how many people I meet who have sizable amounts of money saved up in their old company’s 401k plan, but who never really pay any attention to the portfolio; it just sits there neglected. Simalarly, you'd be surprised at how many times bank CDs get automatically rolled over at ridiculously low interest rates just because individuals don’t take the time to explore their options. If you’re ready to start a new financial routine, you need to start with a checkup.  

Create Habits to Handle Personal Finance

Take a moment and think about how you currently handle your personal finances. Do you have a system for paying your bills on time? Letting a bill sit on your desk even one day too long can cost you in hefty late payments or lost discounts. How about your investments? Do you check your portfolio regularly and know what you’re investing in? What about the way you budget for vacations or big ticket purchases or expenses? After some self-examination you should be able to determine whether your existing financial habits are good ones or bad ones in need of change.

The goal, of course, is to create good financial routines which become habits that are burned into your subconscious – things you do because you’ve trained your mind to do them automatically. It is financial routines like this that play a huge role in financial success.



This article was written by Steve Davis and appeared in the column "Talking with Davis about Money Matters" found at http://mansfield-ma.patch.com



The 2011 Pan Mass Challenge Recap

By Steve Davis, CERTIFIED FINANCIAL PLANNER ™

It has been a month since my most excellent adventure and I can happily tell you that I’m fully recovered. I’m writing this note to offer my heartfelt thanks to those who supported my ride in the Pan Mass Challenge. Thanks to you, we are able to contribute $6,500 toward the expected $35 million total for the weekend; that’s more than half the Jimmy Fund’s annual revenue. Wow!

Hannah’s Huckleberries

I’ve been riding the PMC for 14 consecutive years and I thought it would be appropriate to share some thoughts and descriptions of this year’s four day, four hundred mile bike ride.

Our Pedal Partner: Hannah Hughes

For me, this year was particularly memorable because of a little girl named Hannah Hughes. Only eight months earlier Hannah had been diagnosed with a fast-growing cancer that required her family to routinely travel 200 miles each way from their home in Ballston Spa NY to the Dana Farber Cancer Institute where Hannah could receive treatment. While at the Jimmy Fund clinic, Hannah learned about the PMC and its “Pedal Partner” program which matches young patients with teams of cyclists. I ride on team Huckleberry which is comprised of a group of friends who routinely start the PMC a day early and ride from West Stockbridge so we can cross the whole state in a true Pan-Mass Challenge. Our team was honored to adopt Hannah and because her commute to Boston is so long, we thought it only made sense for us to bring the PMC to her.

On Wednesday, Sandy and I drove to Saratoga Springs, New York in anticipation of rendezvousing with several of my teammates the next morning. We had a wonderful evening together walking up and down the streets of that famous horse racing town. There was a big event scheduled at the track that weekend so the place was buzzing with activity. Main Street was lined with art galleries, restaurants and all sorts of interesting shops. Only later did we learn that the place once received the “Great American Main Street” award – who knew such an award even existed?! We found a nice restaurant where we could both do some serious people watching and where I loaded up on carbohydrates.  

Thursday morning dawned with clear skies and soon Sandy and I were off to meet the Hucks at a local Dunkin Donuts so that we could then travel together to Hannah’s home. It was fun for me to have Sandy there; she was able to meet a bunch of guys I’ve know and hung out with every summer, buy many of whom she had not yet had the pleasure to meet. Shortly after 9am, we all piled back into our cars and drove the short distance to Hannah’s home. We were greeted enthusiastically by Hannah, her mom and dad, her younger sister, and all sorts of neighbors, friends and extended family – they had all taken the morning off from work and gave us a warm welcome. For all the years I’ve ridden the PMC, I’ve always had a personal motivation to do so. When my mom was first diagnosed, it gave me an outlet; when friends were diagnosed or died from this terrible disease, it gave me an opportunity to ride in their honor… or their memory. This time, however, I was riding for someone I had just met and it added a new dimension to the PMC. I can’t imagine what it must be like for Hannah’s parents Jeff and Rana. For all the heartache they surely must be enduring, it gave my friends and me a great deal of joy to be able to show them support and hopefully buoy their spirits. And Hannah? She was vibrant, expressive and seemed genuinely happy. After an hour of warm conversation, our team prepared to leave for the first leg of our journey. Before we did, however, Hannah presented each one of us with a purple bandana embroidered with the words, “Love, Hannah”. I pray that God will heal this child and her family.  



Hannah and her mom, Rana



Hannah's Dad Jeff, Hannah, Huckleberry Hound
and Team Captain Dave Grossman



Ballston Spa NY to West Stockbridge MA

Hannah’s Huckleberry’s lined up in her driveway and after I gave Sandy a goodbye kiss and a few final hugs and high-fives to everybody else, we were off. There were thirteen of us riding in a single paceline following a route planned out and downloaded to a few bicycle GPS computers owned by some members of the team (very cool). We headed west across the Hudson River and then south parallel to the MA border until we finally crossed the state line in West Stockbridge. The route was nice, but one of the things those fancy GPS units can’t do is distinguish between dirt and asphalt roads. A few times we were surprised when the roads turned to gravel, but nothing was more surprising than the time I was bombing down a hill toward the finish at 35+ mph when the smooth decent turned to gravel… Yikes.



Paul Davis on the Summit of Mt Whitney



When I look back on the ride that day there were two things that stand out. First, when we crossed the Hudson, several of us spotted a huge American Bald Eagle. I had never seen one in the wild so it was pretty thrilling to see the majestic nature of this remarkable bird. Next, as we were approaching our lunch stop, I could feel my cell phone vibrating in my jersey pocket; it was an incoming text from my son Paul (who previously had joined me on three PMCs). Paul was hiking the 200-mile John Muir Trail from Yellowstone National Park through the Sierra Nevada mountain range and since there is no cell coverage along the trail, it had been several days since I last heard from him. Once we stopped for lunch and I pulled out my phone, I was thrilled to not only see that it was Paul who had texted, but that he included a photo from the summit of Mt Whitney, the highest point in the Continental US. I’m thankful that my teammates humored me while I acted like a proud dad and passed my phone around so they too could see my boy safe, sound and on top of the world. I imagine my feelings of relief were in stark contrast to the anxiety faced each day by Hannah’s dad and mom.



Dinner at the Shaker Mill Tavern





We arrived at the finish around 4 o’clock. In most years, the members of team Huckleberry drive out to West Stockbridge early Friday morning, but because we were all there Thursday night, we had the unique opportunity of sharing dinner together. This really was a lot of fun and is something I hope we can repeat in the future. I’m sure the proprietors of the Shaker Mill Tavern hope this same group of hungry cyclists makes it a recurring event too.

West Stockbridge to Sturbridge



In 1999 my good friend Jim Boyko and I planned to ride the PMC. It would be my second year riding and Jim’s first. He suggested that we start a day early and ride from the New York state line. Somehow Jim discovered that a few other guys had a similar idea and beat us to the punch by riding from West Stockbridge the year before. We were invited to join them and this was the genesis of Team Huckleberry. Since Jim grew up in Western Mass, he was able to tweak the original route and helped us discover some great roads and a terrific lunch stop (Atkins Farm in Amherst). But before lunch, we needed a place to grab a mid-morning snack – the place was a bakery in Huntington called Huckleberries. The food was great, the owner a doll and the locals even welcomed our group of sweaty stinky cyclists by putting PMC donations into a coffee can on the counter. A few years ago, the shop sadly closed down, but we keep its name alive.



The official Team Huckleberry jersey



Steve Siegel at the Huckleberry Bakery in 2004



 Since the beginning, we have always started our ride by lining up in front of the “Welcome to New York” sign so that we can capture a group photo. This year’s photo was different from all the previous ones because this year we posed wearing Team Huckleberry jerseys. After all these years, we finally had an official jersey! For the next 100 miles we managed to stay together throughout the day and finally arrived in Sturbridge as one. Our paceline was smooth and fast, plus we looked really good too!

  

The 2011 Team Huckleberry: Steve Weiss, , Tom Tinory, Steve Davis, Mark Stockwell, Mark Dolny, Jon Siegel, Ellen (Huck Chick) Kirk, Steve Siegel, Mike Lucas, Rawson Hubbel, Dave Grossman, Tim Conry, Joel Bard, Remy Evard, Scott Taylor

  

One of the most shocking things for me during the entire weekend was riding along Route 20 just west of Sturbridge. It was here that the June 1 tornado touched down and left a scar of devastation. In Brimfield, a ½ mile swath of broken trees extended for what is said to be 20 miles; our route went right through the middle of it.   



Aerial photo of tornado devastation along Rt 20 -- How did this house survive?

The PMC festivities take place at the Sturbridge Host Hotel and it is here that thousands of PMC riders converge to register, receive their PMC jerseys, and take place in the annual carbo-loading dinner and opening ceremonies. Lance Armstrong was one of the 5,227 riders taking place in the event. While everyone was celebrating and catching up with old PMC buddies, I received a somber phone call from Sandy. My grandmother, Gladys Davis had died earlier in the day. Nanny was 98 years-old and lived a good long life. I have such fond memories of Nanny and was always impressed with her enthusiastic outlook. In recent years, her mind had started to go and one of my last memories was visiting Nanny in her nursing home – Sandy and I were preparing to say goodbye when Nanny looked directly at us and said, “I’m SO happy.” It was the story of her life. We should all live to be her age.

 



Great Nanny and my dad



The Pan Mass Challenge: Sturbridge to Bourne

My friend Mike Lucas and I share a room together each year and Mike is in charge of the alarm clock. It went off at 4 am. Ugh. The PMC starts early in an effort to beat traffic. We’re up before sunrise and amazingly the hotel is buzzing with volunteer activity even at that hour. Folks are serving the riders Dunkin Donuts coffee and muffins, mechanics are pumping tires and performing last-minute adjustments, and hundreds of supporters line the start to cheer us on. Once all the cyclists are up, the place becomes a zoo. Not only do we need to eat, but we need to find our bikes and place them in the correct corral so the fast riders aren’t mixed in with the pedestrian riders (and vice-versa).



Thousands of cyclists crowd the starting line



This year, I made a huge mistake. Because the place was so crowded I decided to skip breakfast and fuel up at the first water stop 20-miles into the ride. Not a good idea, especially when my tank was near empty from riding the previous two days. You would think I was a rookie!

One of the most difficult parts of the Saturday ride is the mile long Muggett Hill in Charlton. This is early in the ride when thousands of riders are still bunched together and all too often a slower rider overestimates their abilities and starts with the fast group but then slows to a crawl on the uphill. When this happens it can become dangerous with riders changing their lines to get past the bottleneck. I came across one such rider on Saturday and asked her if she’d like some help. “What do you mean” she asked. At that point I placed my hand on the small of her back and pushed her up the hill while riding alongside. She was able to keep pace with the group and kept thanking me over and over as we rode along. No sooner had we reached the top that I realized my expending more energy on the climb was causing me to *really* wish I hadn’t skipped breakfast. The first rest stop couldn’t come soon enough – I was starting to bonk and wondered how in the world was I going to ride 112 miles today.



Riding in the Paceline behind Steve Weiss aka "Big George"



I ate a sensible amount at the first rest stop and then suffered alone for the next 20 miles since the number of cyclists, all wearing identical PMC jerseys, made it next to impossible to find the other members of my team. When I arrived at the next rest stop, my friend and teammate Ellen Kirk saw me sitting on the grass by one of the food tents. She could tell I was struggling and without saying much, picked up my bike and rolled it over to the area where the rest of Team Huckleberry had started to congregate after finding one another. “No Huck left behind” has been a motto for our group and on this day I got to understand what a wonderful sentiment that really is. For the rest of the day, I rode easily in the slipstream of my friends and gradually recovered enough to finish the ride feeling strong. It’s said that one uses up to 30 percent less energy when riding in the back of a paceline. Thanks Ellen!

Team Huckleberry at the cemetery with Mike

 

I’m so happy that I was able to hook onto the Huckleberry train because the rest of the day was so memorable and I was pleased to be able to share it with them all. First, we took a planned ¼ mile detour off the PMC route so that we could visit the cemetery in Berklee where Mike’s wife and mother were buried after having lost their battles with cancer many years ago. The team rode quietly into the cemetery and stopped giving Mike an opportunity to share a few thoughts with us all. Coincidentally, another good friend (and PMC rider on sabbatical), Seth Dillingham also has family members buried at this cemetery too. All who ride the PMC have been touched by cancer in one way or another. Standing silently in that small private graveyard certainly reminded us once again of the reason for the ride.



The Davis' in Lakeville -- Mom wearing her Living Proof Button

After rejoining the PMC route, we rode to Lakeville where a Pedal Partner Picnic was scheduled for Hannah and all the other Jimmy Fund patients adopted by other teams. Sandy and the boys along with my folks planned to join us there too. Seeing my mom on Saturday has become a PMC tradition for me and it’s always an emotional experience for both of us. And once again, mom would be wearing the “Living Proof” button that I had given her after my first PMC in 1998. As we neared the water stop, the road was lined with posters of the children participating as Pedal Partners and was another telling reminder of the reason for the ride. Seeing my boys interact with Hannah – Dan playing catch with a beach ball, for example – made me feel that my kids “got it”. That it is important to be compassionate and kind to everyone, especially those in need. We spent at least an hour in Lakeville making sure that the Hughes family got a taste of what the PMC is all about. In the end, my friends, family and I came away having received more from Hannah than we could possibly have given. She and her family are a wonderful example of strength and courage.

A high-5 with Hannah before heading out on the road again

While my body was feeling better as Saturday’s ride progressed, something began to go wrong with my bike -- it developed an annoying click with every rotation of the pedals. At 90 revolutions per minute and with a couple of hours left to ride, it was driving me crazy and undoubtedly driving my teammates even crazier. Click, click, click… In any event, we arrived safe and sound in Bourne and would soon shower, change and enjoy plenty of food and beer. But first, I took my bike over to the Landry’s bike shop repair tent and they completely overhauled the drivetrain on my bike and fixed the problem. The pedals turned smooth as butter and were quiet too. Awesome!

Look Ma, no pedals

Saturday’s ride ends at the Mass Maritime Academy and the school grounds are turned into party central. There is a tent that would make Ringling Brothers’ big top look small. Thousands of riders and volunteers mill about eating hamburgers, clam chowder, pizza, baked potatoes, and just about anything else you can think of. Live bands play set after set of music and hundreds of massage therapists volunteer to help ease the aches and pains in the riders’ legs and backs. Over the years, the PMC has gotten bigger and bigger and one of the downsides to this growth is that it sometimes becomes hard to find your friends. It was impossible to use cell phones because so many riders inundated the towers and consequently the lines were jammed. My friend and Mansfield neighbor, Tony Bretti, rode the Wellesley to Bourne route and while he was under the tent the whole afternoon, we never saw each other once. Go figure. 

 

As the day turned to evening, the tent thinned out as riders started to retire to their sleeping quarters. Some stayed in dorms, others in tents. I stayed on the training ship and slept in the lowest level berth with 40 plus other guys. The beds were stacked three-high and so cramped that the sailors call them coffin bunks. It didn’t bother me at all and I think I fell fast asleep by 8:30.

The Pan Mass Challenge: Bourne to Provincetown

Reveille came early. At 4 am we were awake and soon learned that it was pouring outside. I joined the throngs heading to the breakfast tent – there was no way I was skipping breakfast today! I grabbed an egg and ham sandwich and stood silently under the tent watching the rain pour down and puddle on the grass. Was it starting to slow down? Yes! By 5:00 the rain was a drizzle and soon it stopped altogether, just in time for our 5:15 departure. Riding over the Bourne Bridge is a big effort on a bike. It’s a steep climb and is crowded with tons of cyclists who are elbow to elbow trying to share space with one another and the occasional car and truck making an early escape to the beach. Once over the bridge, we ride along the Cape Cod Canal and eventually head down Route 6A. It’s a beautiful ride and one of the highlights each year is in Brewster. There, hundreds of campers at the Cape Cod Sea Camp line the street and cheer loudly and enthusiastically as wave after wave of pacelines make their way past the hedge in front of the camp. It’s an amazing feeling and creates quite a surge of adrenalin in me every year. So cool!





Jack and Paul

Right after the camp, the route turns into Nickerson State Park and every year I have ridden the event, a boy named Jack has greeted us. The first year I rode his parents stood there pushing a baby carriage and holding a sign that said, “I’m two because of you.” The first time I saw Jack and his parents, I cried. And in each succeeding year the little boy got older and the sign changed. When Jack turned 8, he passed out little plastic medals to any and all cyclists. Mine still hangs in my office and reads, “Thank you, from Jack.” In 2006 when my son Paul was 15 (the minimum age for riding the PMC), he met Jack at the Brewster stop and I recall commenting to Jack that it wouldn’t be long before he would be old enough to ride too. Well, this year Jack turned 15 and for the first time he wasn’t in Brewster to greet us – he was riding! I saw him on the road too and get this; he was riding with one foot in a cast. He broke his foot trying to land a 360 on his BMX bike a few months before the PMC. Jack was no longer a little boy with cancer. He was a normal teenager doing all the things that 15 year-old kids do. That’s the hope that I have for Hannah too.

Home

Team Huckleberry stayed together all weekend and we arrived in Provincetown around 10:30 Sunday morning. We celebrated another completed PMC and before too long, we were all off on our separate ways. I took one of the fast ferries from Provincetown to Boston and was greeted at the dock by Sandy.  We drove back home to Mansfield where I crashed on the couch feeling both exhausted and exhilarated. The PMC was over, but its memories will continue.



A Happy Group of Friends at the Provincetown Finish Line



Boston Skyline from the PMC Fast Ferry

Sign greeting riders at the dock in Boston



Thanks again for your continued support.  It means so much to me and I'm convinced now more than ever that the contributions we make and the time we spend is making a world of difference in the lives of many.   

 



5 Money Tips Every College Freshmen Should Know

By Steve Davis, CERTIFIED FINANCIAL PLANNER ™


For many college freshman and their parents, the next few weeks will be the beginning of a new adventure. I should know since another one of my boys heads off to college this year. The freshmen are leaving home, orientation is in full-swing and the students are sizing each other up and getting used to their new surroundings. Similarly, parents are getting acclimated to new surroundings too – an unusual silence in the home and questions about how best to fill the hours that were previously spent with our sons and daughters watching their sporting events and attending their school activities.

Saying Goodbye: Toy Story 3                        © Disney/Pixar

As a parent, I have conflicting emotions; I eagerly anticipate the wonderful experiences my son will enjoy over the next four years, and like Andy’s mom in Toy Story 3, I have feelings of melancholy and longing. Parents of college freshmen will fondly remember reading bed-time stories and taking their sons or daughters to the soccer fields on Saturday mornings. For those of us who can’t comprehend that it has already been 18 years since our kids were born, they will quickly show us that the next four years will go even faster.

Members of this year’s freshman class, most of them born in 1993, grew up just as the internet was starting to take off. This was incredibly helpful for parents like me who often turned to their kids to get tips on how to use the “interweb” or how to fix their computers. Yet for all the help our kids have given us, we are still their parents and can offer valuable advice too – even if they won’t recognize our wisdom for a few more years. As Mark Twain once said, “When I got to be 21, I was astonished at how much the old man had learned in a few short years.” 

Here are five money tips every college freshmen should know.

1. Go to Class. While it may be tempting to sleep-in and skip that early Monday morning English 101 class, doing so is like throwing money out the window. I hate to state the obvious, but college is expensive. According to a newly released Sallie May study, college costs last year averaged $21,889, and some schools like Northeastern University cost more than $50,000 per year. Assuming a schedule of four classes that meet three times per week over a fifteen week semester, each class skipped costs between $120 and $275. That’s some expensive shut-eye.

2. Don’t get a credit card. Sure, the guys sitting behind the sign-up table may be offering some free t-shirts and cool merchandise as an enticement to get you to apply for their credit card, but they’re not there to help you. College campuses are where many young Americans are introduced to credit and the possibility of spending beyond their means – a problem confronting the nation as a whole. If you must use a credit card, avoid non-academic debt. It might seem like a good idea to put that restaurant tab or your new iPad on a credit card, but it’s not. Learn to save, and then splurge.

3. Don’t hang out with big spenders. You’re a college student, so live like one. Don’t pretend to live a lifestyle you can’t afford. Some kids have parents with deep pockets while others are on their way to financial ruin. Hanging out with these free spenders can lead you to spend more than you can afford. Instead, socialize in the dorms, learn to cook in your apartment, use your student ID and take advantage of campus activities and student discounts.

4. Have a Spending Plan. Set a weekly budget for spending categories like food, entertainment, road-trips and the like. At the start of each month, estimate how much income you’ll receive and decide how much you want to allocate to each category. If you anticipate taking a date to an expensive restaurant, skip your morning cup at Starbucks that month or reduce spending in other areas. It is amazing how little things can add up. A couple of energy drinks, lunch at the local Chipotle, several ATM fees and a couple of apps for your iPad means that at the end of the month you may find yourself looking at a large part of your budget going towards “inexpensive” things you splurged on without thinking. Spend less than you earn.

5. Get a job. Being broke in college is no fun. If you would like to spend more, you’ll need to earn more. If you need or want a job, look for ones that you can eventually put on your resume or will bolster your internship options later on. Alternatively, seek out positions that add to your personal development. Like to mountain climb? Work at a rock gym. Enjoy cooking? Get a job in a restaurant. Want to help people? Try a non-profit. Finally, remember the story of Facebook and consider starting your own business. It could be that you have an idea that might be the next big thing, but it could equally be a simple babysitting service, tutoring, or buying and reselling stuff on eBay. Above all, remember that your first “job” is to graduate on time. Earning some extra cash each month is great but those semesters of school don’t come cheap.

Now stop worrying about money and get out there and have some fun. I’ll see you when you come home for Thanksgiving!



This article was written by Steve Davis and appeared in the column "Talking with Davis about Money Matters" found at http://mansfield-ma.patch.com/articles/five-money-tips-every-college-freshmen-should-know

Does the Stock Market Have You Worried?

Buy Low; Borrow Low.

By Steve Davis, CERTIFIED FINANCIAL PLANNER ™

The huge swings in the stock market last week may seem all too familiar. Perhaps you’re worried about a repeat of the 2008 financial crisis. Before you dump your holdings and run for cover, consider this surprising fact. According to the Employee Benefit Research Group, most retirement plan account balances have bounced back to pre-2008 levels. Account balances didn't recover entirely from the strength of the market -- those automatic paycheck deductions helped a lot too. Investors who cashed out and remained on the sidelines missed out on the profitable years since the crash. Still, the roller-coaster volatility we have experienced recently with the Dow dropping 600 points one day and rallying back 500 points the next is enough to cause some participants to consider getting out of their plans all together. For many people, this could be a big mistake.


Buy Low: Legendary investor Warren Buffett once counseled, "Be brave when others are afraid, and afraid when others are brave." If you want to heed Buffett’s advice, the best time to buy low is when everyone else is scared. It is their collective fear and the group-think selling that drives stocks to deeply-oversold bargain prices. History has shown that the rallies coming out of these oversold positions often occur quickly and are highly profitable.

Don’t you just love a bargain? I was recently shopping at the Borders book store at Mansfield Crossing. Activity was brisk and I can’t begin to tell you how many customers were leaving the store with stacks and stacks of books, all purchased on sale. Often times when we read about the Dow Jones Industrial Average dropping, or watch the TV news anchors emotionally-charged segments about Wall Street, we worry and think that these market corrections are always a bad thing. If you’re young and have many years before retirement, however, market drops can be a very good thing indeed. When else can you purchase your mutual funds on sale?

Another consequence of the turmoil in the stock market is plunging interest rates. Last Tuesday, the US Federal Reserve pledged to keep interest rates at an “exceptionally low level” until the middle of 2013. This news could be a boon for families looking to buy or refinance their homes.

Borrow Low: "There’s a huge increase in mortgage applications," said Jerry Maguire, Senior Mortgage Advisor at Province Mortgage Associates, a local mortgage lender. With rates on conventional 30-year fixed-rate mortgages falling near, and in a few cases below, the 4 percent level, homeowners locally have been rushing to refinance in recent weeks. You’ve probably heard the old rule of thumb that says it only makes sense to refinance your mortgage if the new interest rate is at least two percentage points lower than your current one. “Not true” says Maguire. “Many people worry about their adjustable rate mortgages resetting at higher rates in the future. Even if you can’t lower your monthly payment by refinancing, many families can benefit by exchanging the uncertainty of a floating rate loan for the certainty of a fixed one.” Additionally, today’s low rates may allow some families to reduce the term of their mortgages from 30-years to just 15 or twenty years and potentially save thousands in interest costs.



Of course, everyone’s situation is different. As a financial advisor with more than twenty years experience, I’ve been down this road before. I understand that the number one question on the mind of most investors is, “What should I do now?” The answer to this question is the same for everyone: Talk with your advisor.

Oh, and if you’re worried that this is 2008 all over again? It’s not; there are major differences between then and now. Yes the equity markets have experienced recent losses, but today’s economic growth, while weak, is still positive. The banks in the United States are in much better shape than when the housing market collapsed. And corporations are producing solid earnings even in a weak economy. As an investor, I find that reassuring.


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This article was written by Steve Davis and appeared in the column "Talking with Davis about Money Matters" found at http://mansfield-ma.patch.com/articles/does-the-stock-market-have-you-worried





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

Financial Lessons from Driver's Ed

By Steve Davis, CERTIFIED FINANCIAL PLANNER ™ 

The Dow Jones industrial average dropped over 600 points Monday in the first day of trading after Standard & Poor's downgraded the United States' credit rating.  Skittish investors, already concerned about the economy, struggled to work out the implications of last week's downgrade.  With so much attention and angst focused on the debate in Washington over the US debt ceiling these past few weeks, it is no wonder the financial markets continue to bounce around. It seems that TV financial experts and entertainers (financial “expertainers”) often exaggerate events in the marketplace and thus excite the emotions of investors who are swayed by fear. This emotional ping-pong game results in illogical investment behavior, such as buying at market highs and selling at market lows. The wise investor learns to look past the colorful adjectives that describe daily market swings and instead keeps his or her eyes focused on long-term trends.


The Long View

My 16-year old son is currently taking his Driver’s Ed course at Driver’s Choice Driving School. Do you remember the first time you got behind the wheel of your mom’s station wagon? For me, I remember staring at the road immediately in front of the hood rather than looking 20 or so yards ahead. Quickly, it became apparent that it was next to impossible to drive safely with such a short-sighted approach to my surroundings. Even with a straight road, little traffic and perfect driving conditions, it was next to impossible to drive in a straight line when I only focused on the 3 feet of roadway immediately ahead of the front bumper. When I learned to look further down the road -- taking the long view – I discovered that maintaining a straight line of travel was not only easier, but much safer too.

It seems to me that the same logic applies to investing. Losing sight of the long term and thinking that you can time the market by selling at the peak and then re-entering the market once it hits bottom is a big mistake. Timing market shifts is nearly impossible and requires two correct decisions: when to sell and when to buy back in. While making modest adjustments can add value, investors who make wholesale market timing bets usually lose. The biggest potential pitfall in trying to time the market is missing the days it’s “up.” For example, during the 10-year period after the 1973-1974 stock market decline, an investor who missed just 10 of the market’s best days would have also missed out on more than 50% of the market’s price return.1 Imagine that! And trying to figure out when those 10 best days would occur would have been an impossible task when you consider that none of the days were consecutive, four of the days occurred in a single year, and six of the years didn’t have any of the best 10 days.2 Perhaps the folly of market timing can be illustrated with another lesson from Driver’s Ed.

Route 3 Traffic to the Cape
The left hand lane of the highway is referred to as the passing lane while the right hand lanes are called the travel lanes, right? In theory this seems correct, but on a Friday afternoon in the summer, all lanes heading to the Cape would probably be better referred to as “parking lot lanes”! How many times when sitting in traffic do you find yourself wanting to switch lanes? We’ve all done it; the lane next to ours starts to move so we put our blinker on, scan the rearview mirror and move into the line of cars that are making progress down the road. And as soon as we do it, our new lane stops and the one we were previously sitting in starts to move again. So, if you have a long-term investment horizon and are tempted to get out of the market and move entirely into cash because of short-term events, you may be wise to remember the story about Cape Cod traffic jams.

Financial Lessons
While the debt ceiling debate has grabbed the headlines and is currently the most significant risk to the market, the underlying strength of the global economy remains solid. Company earnings continue to be very strong as corporate America continues to benefit from a resurgent business reinvestment climate and a resilient consumer. On the other end of this self-imposed debt ceiling crisis stands an economic climate where businesses are earning near record profits, employment is improving, housing has stabilized, and consumers are once again revisiting the malls to spend.



Enjoy the Ride
As we enjoy the beautiful warm nights, think back to the summer shortly after you received your driver’s license. What joy and freedom we experienced when we used to cruise the streets with the windows open listening to our favorite songs play on the radio. One of my favorite songs from those days was by The Doors. Jim Morrison sang, “Keep your eyes on the road, your hands upon the wheel… We’re gonna have a real good time.”

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This article was written by Steve Davis and appeared in the column "Talking with Davis about Money Matters" found at http://mansfield-ma.patch.com/articles/financial-lessons-from-drivers-ed




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