Ace Wisdom

I know financial subjects can be boring but I am determined to keep hitting on things that will affect you in your everyday lives.
Annuities are products usually sold by “bottom dwelling, scum sucking” insurance piranha (just using Margaret’s words). The insurance companies make huge profits out of the “annuity game”.
The only way I can put annuities in laymans terms is to give two examples.
Lets say you have $100,000 laying around (I know that is a stretch for most of you) and you need $5,000 per year of income to live on. The solution is easy. Buy a guaranteed certificate of deposit insured by the FDIC. Today it is easy to get 5% as an effective interest rate without taking a any of risk. Problem solved. You got your $5,000 per year.
Now example number two. You again have $100,000 laying around but you need more than $5,000 per year to live on. Your friendly insurance agent says he will guarantee you $8,000 for the rest of your life if you turn the $100,000 over to him. Good deal, right? How can he do this? Well he calculates how long someone like you will live and he gambles that in addition to the $5,000 per year that he can earn also, he will pay you some of the $100,000 that you gave him. He will pay you $5,000 based on his earnings and $3,000 from principal. After one year, he has $97,000 left to invest. The insurance company gambles that you will die before it pays out all the money you gave them including interest. Here is the “kicker”. If you give the insurance company $100,000 in exchange for a monthly guarnteed income, it is gone. If you die one day after giving the $100,000 to the insurance company, they keep it. Your wife doesn’t get it nor do your KIDS.
Here my get rich tip (in this case, stay rich tip). Manage your own money just like an insurance company would when they present you with an annuity. Earn the best interest you can and use some of your principal when necessary.
Now to complicate the world you should know there are lifetime annuities, tax-deferred annuities, single premium annuities, and variable annuities just to name a few. They all have sophiscated financial calculations to do different things but in the end, the insurance company makes big dollars with your money.
My tip of the day, AVOID ANNUITIES. There is an occasional situation where annuities might make sense, but it is the exception to the rule.
Love,
Dad(Just Chas.)

When you wish upon a star, it makes no difference who you are, all your dreams will come true. Something like that.
Well Grasshoppers, your mom had a wish to see Celine Dion perform in person. You know, the voice behind the theme song to Titanic. When Leo Dicaprio on the ship bow is hanging onto Kate Windslett as she raises her hands in search of being set free, the background music is sung by an angel voice. Yep. That was Celine Dion. I believe the song won an Oscar.
They have built a special theater in Las Vegas at Ceasar’s Palace for Celine. All of Oprah Winfrey’s disciples journey to Las Vegas to hear Celine. Celine married her older agent Rene’, nursed him through cancer, had a miracle child and sings loves songs. Mercy. Mercy. How can you not like Celine?
Well we made the trip to see Celine. We did not leave until we were sure we had tickets. We could not get the tickets direct from the Ceasar Palace box office so we had to get them through a broker. We paid double the box office price. No price was to high to see Celine. Did I say that?
Well, we got to Las Vegas on Wednesday. Thursday night we were preparing to leave for the Celine performance. You guessed it. She cancelled. Something about allergies. TV interviewed an older lady at the airport who was leaving town to go home. She had planned to see Celine for 6 months and was leaving disappointed.
Well what about us? We paid extortion prices and traveled 1400 miles to see Celine. We were told by the concierge at our hotel, that Celine would probably be cancelled for the rest of the week. This can’t happen.
So I did what I always did in business, I didn’t take “no” for an answer. My bride and I wandered over to the Ceasar Palace box office to find out what the options were. Well, I learned I could not get refund directly for my cancelled tickets because my broker was the name on the tickets and he got the credit. I would have to wait until I got home until I could submit my claim to the broker. Then, good news. Celine was expected to be back the next night but there were no seats available. Of course! They were always sold out. While the attendant was looking at her screen, a block of seats became available. Apparently somebody had cancelled. Did we want the tickets? Are you kidding? Sign us up! These were better tickets, 5 rows back from the stage and a lot more expensive. We charged two tickets to Celine for Friday night. Whew! Think about this. I originally bought two tickets to Celine at double the retail price and I couldn’t get an immediate refund AND I had just charged two more expensive tickets to Celine for Friday night. Over $1,000 worth of tickets to see Celine and we hadn’t seen the performance.
Celines’s status on Friday remained a concern. With allergies, who knows? We checked the box office at Ceasar’s late Friday afternoon and they said she was in the building. In the building! That was nothing but good news.
I know the love of my life talked to her special angels and her dreams really did come true. The Celine Dion performance came off without a hitch. An audience of 5,000 watched a superb performance. She really does have a fantastic voice and the supporting cast along with big screen visuals made it a spectacular performance. I’d recommend it. Even to the non-Oprah disciples.
All was right with the world. The primary reason to go to Vegas had been achieved. Mom was happy. Dad was happy.
Actually this blog is dripping with sarcasm to make it interesting. The whole Vegas trip was really a delight and a good time was had by all. I’ve been promised a full refund on my cancelled tickets.
To my bride of 45 years, Happy Anniversary.
If you wish upon a star your dreams really do come true.
Love,
Dad(Just Chas.)

Shelby and I spent the last full day of our Las Vegas trip with Aleene and Lowell Dyer. Lowell was a colleague of mine while at Ripon Foods. They had journeyed 8 hours from Sacramento, California to Vegas and it was nice to see them.
During our visit, I coaxed Lowell into describing his basketball exploits his senior year in high school and there was an eerie similarity to my senior experience (read Almost Perfet).
Lowell played basketball for Richmond High School in California. They were the “Oilers” because of the oil storage and refining operation in Richmond. Richmond, for those of you that don’t know, is located in the north San Franciso Bay area apparently near the Ocean. 20,000 population. The school year was 1952-53. The Richmond Oilers had a very good team. Several 6ft.4in. forwards and some guy name Mike Farmer at center measuring 6ft.7in. Lowell played guard and was 6ft. In 1953 that was a pretty tall team. Well, like my experience, the Richmond Oilers were undefeated going into the last 3 games of the year. Glory was in sight. They too could be perfect if they just “win out”.
Yep, you guessed it. Fate stepped in and Mike Farmer, the big center, came down with appendicitis. The prognosis was that he would not play the last 3 games.
I can’t take you through a step by step dramatization of the end of the season but playing the 3rd last game of the year without their big man, the Oilers lost by 1 point. Damn! One loss.
Then came the 2nd last game of the year, again without Farmer. The Richmond Oilers actually won. Still one loss. A terrific final game was now set up.
The last game of the year was a home. They were playing their fierce rival that also had only one loss. No Mike Farmer! I can only imagine but I bet the place was rocking. In their first meeting during the season, Lowell sunk a the last shot of the game to win by two points. Well the final game wasn’t as dramatic as my last game in high school, but the Oilers also lost. Lowell couldn’t tell me the final score but he said it “wasn’t very close”. Like my senior year, the season came down to the final game of the year. Close but no cigar.
Lowell ended the season as the Oilers leading scorer with 14 points per game. He got a basketball scholarhip to Stanford and played all four years for them. I think he varsity lettered his final 3 years.
Mike Farmer (having recovered from appendicitis) graduated from Richmond High School the next year in 1954. Richmond Oilers did win the league championship his final year. He got a full basketball scholarhip to San Francisco University. He was a team-mate of some guy named Bill Russell and helped USF win two NCAA Championships. Bill Russell went on to play in the NBA for the Boston Celtics and is considered to be one of the greatest players of all time.
Mike Farmer, I think went on to the NBA. I know he was one hell of a player.
I asked Lowell if he had seen Mike Farmer since high school and he said he hadn’t. You’d think the friendship and team-mate status would have entitled Lowell some free tickets to an NBA game but no such luck. I guess like all high school relationships, time creates distance.
So you see Grasshoppers, another person experienced “an almost perfect” season and I’m sure Lowell reflects on what could have been. He can take solace in the fact that he was part of something very special. In truth it shaped his life.
So with this entry, a sincere thank you to Lowell for sharing his experience and to both Lowell and Aleene for joining us in Vegas. It was very, very special.
Love,
Dad(Just Chas.)

I was reminded of a childhood project when I saw two yuppies out riding their bicyle built for two. Spring has sprung.
John Zelm and I were downtown neighbors in Plymouth. I lived above the City Club and he was next door above May Kaestner’s clothing store. He was two years older than me. I must have been around 12 years old when we dreamed up this bicycle project.
Like all kids with “nothing to do mom, I’m bored”, John and I decided to build a “bike for two”. We did it from old bicycle parts we could find (no Christopher, you do not have a corner on old parts). We cut the back wheel off one old bike and then chopped off the front steering assembly from a second bike. The Implement Company located right behind the City Club agreed to weld the frames together. Our biggest problem was getting the sprockets between the front person and back person lined up so that the common chain drive would stay on. It turned out pretty good except that the chain to the back of the bike kept coming off when we tried to go fast (put too much pressure on it). With parts, donated labor of the Implement Company employees and our own sweat, we probably spent $15-$20. Not bad. We probably had the only bicycle built for two in Plymouth.
When the common chain came off the rear person would come crashing down on the bars and you would walk funny for a while.
Well older John Zelm never liked sharing the bike with me. Remember I was two years younger and that was “yuk”. He also felt I didn’t peddle as hard. That part was probably true. The City had repaved the main street in town (actually the total length of Mill Street) and widened it out. There had been no traffic allowed for 6 months. To celebrate the reopening of the street, they had a bicycle race from one end of the street to the other. I don’t remember what the prize was.
John Zelm thought he could smoke everybody with the “bike for two” because it was two people on a common frame. He had entered the bike and decided that Jim Barnes, a friend in his class would ride with him, not me. Asshole!
Well being the sport that I am, I went to the starting line to watch my creation run the race with John/Jim at the controls. The flag came down, there was a frenzy of bikes taking off and there sat the bike for two. With all the pressure put on the chain drive to the back of the bike it had come off. It was going nowhere. And, John Zelm was writhing around in pain because he had come down hard on the bar. Oh, poor John. It served the son of a gun right for not including me. Then I smiled because that could have been me limping around.
The bike eventually ended up being sold for $10 but it always warms me to think about the two bastards that tried to steal my thunder.
My opinion is that a “bicycle built for two” is meant to be shared by two young lovers where the woman can carry the whole load by doing more of the peddling. Just like she does in life! Did I get it right?
Enjoy the warmer weather.
Love,
Dad(Just Chas.)

The choice this morning was to talk about annuities or “what I believe in”. I know your minds can only absorb so much financial philosophy so “what I believe in” wins out.
In the movie Bull Durham, Susan Surandon asks Kevin Kostner what he really believes in. His response is “soul, dawn, an evening susnset, the small of a womans back, a hanging curve ball, slow wet sloppy kisses, Lee Harvey Oswald acted alone, soft-core pornography and opening presents on Christmas morning”. I was moved. Here was a man who wasn’t a mindless jock.
I pondered what my answer would be. The person closest to me wrote down on a piece of paper what my answer to Susan would be.
I believe in …….
Soul
The power of intuition
Reincarnation
The Golden Rule
Crisp, white, tailored open neck blouses
Banana popsicles
The swish of a pure jump shot
The ritual of baseball
Pagentry of Badger Football
The power of money
The existence of evil
Magic of Christmas
Persistence prevails
Johnsonville Brats
Johnsonville brats? Actually over the years I’ve never found brats that tasted as good and occasionally I get a craving. Yep, it stays on the list.
Nobody has ever asked me for my list before. I can only dream that they would.
What is your list? Quick! Off the top of your head. Don’t spend weeks reflecting on it. Share it with me.
Love,
Dad(Just Chas.)

I watched the NCAA Basketball Tournament over the last few weeks. It is fun if you know just a little about the different teams. “Upsets” make it interesting.
I couldn’t help thinking about the “zone”. This a place where people go when things always go right. It is a place where amazing things happen. If you get in this zone, personal confidence is sky high. You don’t want it to end.
Michael Jordon was playing in an NBA Championship game in the 90’s and he was in a zone. He made an impossible twisting basket and on his way up the court to play defense, he shrugged his shoulders and had a whimsical grin as if to say “when you are hot, you’re hot”. He had found the zone. He had an amazing game.
I remember a practice basketball game when I was a senior in high school. The seniors were playing all the other aspiring undergraduate students. I made my first basket by pulling it out of my left ear (or some other difficult place) and I can still see the shot ripping the net. And that was the way it went. Shot after shot after shot. Give me the ball. It was going down baby. I was in the zone. I could do no wrong. And then? And then the game was over. The spell disappeared and I was back to normal. But it was magical.
I’ve been in the zone on the golf course where it just feels like every shot is going where you want. Putts go in. Chips are amazing. And then it ends.
I’m sure everybody reading this can think of situations where things were going so well, you didn’t want it to end. Music. Sports. Dance. Romance. Oops, I’m not sure romance applies. For romance, stupor might be more appropriate. You get the idea.
In the basketball game last night, North Carolina beat Illinois. The big man, Sean May for North Carolina made 10 out of 11 basket attempts. He rebounded. He blocked shots. He was in the zone. It was also his birthday. Imagine being in a zone on your birthday.
My sincere wish is that you all experience the “zone”. I hope it happens for long periods of time and often. You can not plan it. You can only recognize it when it occurs. You can keep putting yourself in situations where the zone might occur.
The zone be with you!
Love,
Dad

On the eve of our 45th wedding anniversay I’d like to reflect on the moments in life where a significant change takes place. These events mark a point in time where your life changes forever. You don’t know it at the time, but hindsight is revealing.
Yes, April 2, 1960 defines our wedding. For me, I remember meeting Shelby in September, 1954. We were members of a “float committee” designing a decorated wagon for the Homecoming parade. Shelby volunteered her home as a place to plan our entry. We were freshmen in high school, tremendously insecure and impressionable. For some reason I remember the girl in a sparkling white blouse with a flashy smile. As Oprah would say, “it was a magic moment”. I was smitten.
What followed was high school romance. Chuckie from downtown Plymouth living above the City Club Rooms. Shelby, a good catholic girl living in the ideal family house up on the hill. Rich people lived up there. I made many trips up that hill. Going together during high school reduces many anxieties. Homecoming and Prom are givens. Throw in the oldsmobile convertible and you have very special times.
Commiting to college was important for me, but not a magic moment. The eminent arrival of Deborah Kay was! Life took on a needed direction. My studying to be a high school math teacher turned to pursing an engneering degree at Marquette. That was significant because it served as the basis for my life career. Shelby’s folks made the schooling possible. And then there was Debbie. She changed the life certainly of Shelby and Chuck, but also the whole Steger clan. She represented the energy of life. She got lots of special attention. All first borns do.
The coming of Kelly and Chris over the next few years were no less joyous. They made life very busy and meaningful. The next magic moment that changed my life, however, was starting at Vollrath Company becaue it was a journey that would let me gain confidence and grow personally. The money wasn’t bad either. It was a special 17 years.
During the Vollrath years, Paul and Margaret appeared on the scene. They were kind of like a second family becaue they were distant from the “early three kids”. If you don’t do it right the first time, you get a second chance.
I would say that buying our first cottage was a magic moment. It served as the basis for more than 25 years of family entertainment. The boats, the rafts, the family “get togethers”. It was a catalyst for our lives. I think that every child has his/her memories of the cottages.
I’m not sure moving to Appleton and starting employment at Ripon Foods is a magic moment. It did signify the bridge that got us from Vollrath/Sheboygan to retirement/Appleton.
It has been a journey. It all began with Shelby. Life is meant to be shared and I can’t think of a better life partner. We had tremendous early years filled with infatuation, then years of building a family and the joy in watching the growth of each child.
For all the times that Shelby felt she was raising the kids alone, for the times that she needed a much need “break” and I wasn’t listening and for never being the dance partner she yearned for, I hope she forgives me. I have never stopped loving her and she has made my life complete.
So you see, anniversary dates mark time but it is “magic moments” and special people that define life. Shelby has been the one constant in my life and I have never doubted her support and trust. She has given her life to me. What else is there?
Love,
Dad(Just Chas.)

The title is not what you think. I keep trying to pick practical subjects that you can use to get rich. Life choices refers to insurance. Life Insurance!
Life insurance is always interesting. I joke about “why do I need insurance, when I die I don’t get to see any of it”. Actually that is true! Life insurance becomes practical when you think about the loved ones you leave behind that have been dependent on your income. So if you have a wife/husband and kiddies, life insurance makes sense.
The first thing you need to do is differentiate between insurance and investments. My advice is when you buy insurance on your life, buy just that. Term Insurance. If you want investments, set up different programs on your own and don’t use the “insurance vehicle”. Examples of the life insurance muddled together with investments are “whole life” and “universal life” programs.
To insure your loved ones, you want “rot gut” plain term insurance with the lowest annual premium that you can find provided it is with a A+ rated insurance company. You will get the coverage for the family in case of untimely death at a very low cost. Mission achieved!
How much term insurance? Lets work it backwards. If your work brings home $50,000 per year, you might want to continue that same amount for your family after you die. If you make the assumption the family would be paid a lump sum and they would invest it in bonds for 5% interest, you would need $1 million of term insurance. If you use a proper mix of stocks and bonds, 10% return is probably realistic and you would need $500,000 of term insurance. If your family is close to being grown, then you may figure that everyone can fend for themselves and you could rationalize lessor insurance. If you figure that your spouse would marry some asshole and use the life insurance in some extravagant way, then maybe you shouldn’t consider insurance. As you can see, there probably isn’t any right amount. If you have a two income family, losing one income isn’t as big a deal and lessor insurance could be selected.
I don’t put life insurance salespeople in the bottom dwelling, scum sucking category. They get paid on commission. The more products they can sell you, the more commission they make, They don’t like plain term insurance because they make almost nothing. Dah! They play on your emotions. All the things that could happen if you die. Insist on term insurance.
At age 40, you should pay about $1.00 per year for $1,000 worth of term life insurance. So if you want $300,000 worth of insurance, it would cost about $300 per year. Pretty reasonable.
Don’t even use an insurance agent. Call Selectquote or similar phone/computer agent that will compare companies for you and recommend the best deal. You never need face to face contact with an insurance agent.
You want a policy that is annually renewable and guaranteed premium for as long as possible. You don’t want them raising your premium every year. Lock in the premium. Plan on needing the insurance to 65.
Make the term insurance convertible to cash value policy should you choose. You probably would not do this, but you want the right. Insist on not having to take a medical exam.
Insurance agents want to sell you “whole life” policies. To get the $300,000 “life” coverage you would probably pay $2,000 to $3,000 per year. You are buying the life insurance of a term policy and the rest of the payments you make are to pay his commissions and are to be invested to give you a 3-4% return. Really lousy investment returns. They also like to sell “universal life” which is mix and match of life insurance and different investment vehicles. Again, if you want to invest, do it some other way. Don’t use insurance.
There are so many variations of insurance including health insurance, disability insurance, mortgage insurance, auto insurance, and liability insurance. They need to be considered when deciding on the right amount of life insurance to chose. For example, if you die and your $100,000 mortgage is paid off, maybe you can select a lessor amount of life insurance. All subjects for a future writing. For pure life insurance coverage, think TERM.
Love,
Dad(Just Chas.)

This blog entry is intended to be glorius and light. As Easter approaches, we can each count our many blessings. He has risen. He gives hope to the whole Christian world.
Grasshopper No. 1 is doing her own form of extreme makeover. Facial surgery. Dental work. What pray tell is going on? Seems like a rebirth here too.
Grasshopper No. 2 saw Carlos off to Peru for 7-8 days. I know he was really excited to be going “home” finally after 6 years. Grasshopper No. 2 is negotiating on a horse she can call her own. Something about teaching it not to trot. What is it with girls and horses?
Grasshopper No. 3 celebrates Easter on the eve that his wife, last born, and mother-in-law depart for Ireland for 9 days. I guess the rest of the family will just have to stay home and look for better ski boats.
Grasshopper No. 4 is celebrating the improvement of cash flow. He has a job! Only 30 more years of this and he’ll be rich. If he thinks about it, maybe he is already rich. He wrote a very nice tribute to his mom on his blog. Oooooohhhh!
Grasshopper No. 5 is preparing to go to England for 11 days. She is going alone. Yeah, right! Nobody told her there are lots of places to visit right her in the U.S.
I guess as I close, my thoughts are “what the hell ever happened to the discipline of saving”? Ireland, England, Peru, elective surgery, boats, and horses. Is there something I don’t understand? I guess rich means different things to different people. You are all rich.
Have a VERY HAPPY EASTER!
Love,
Dad(Just Chas.)

I’ve had a number of questions about investing in Mutual Funds. It is the “vehicle” that most companies offer you as you set money aside in your 401(k). The concept of Mutual Fund is not hard but selecting the mutual fund that suits you is a little more difficult.
The most fun is selecting one stock, watching it grow, collecting your profit and dancing into the sunset. Unfortunately not all stock goes up and sometimes one announcement can cause a major change in stock value. Merck voluntarily withdrew it’s blockbuster drug Vioxx from the market because of alleged heart problems. When it made the announcement everyone was concerned about lawsuits and the stock fell 25% within 8 hours. Bummer. Most people don’t want to take that kind of a hit, especially in their retirement account.
So some financial genius decided to select a “breadbasket” of various stock, put them together in a single Mutual Fund and then make them available to you. When you buy a mutual fund you are buying various stock under one umbrella. At the end of the day, the mutual fund adds up the results of how all it’s stock selections did and publishes in the paper, a NAV (net asset value). You can look in the paper everyday and read how your particular fund did. I think there are now more mutual funds available than the number of individual stocks in the New York Stock Exchange and NASDAQ combined.
In most cases, mutual fund are good things. They diversify risk by buying many different shares of stock so if one goes down, the rest buoy it up and you don’t take a big loss. You get full time professional management of the fund including research. You can invest through automatic payroll deduction and all your dividends in the fund along with gains and losses in sale of stock within the mutual fund get reinvested by the manager.
Now the sleezy side of mutual funds. Some funds charge as much as an 8% fee for you to get into. So if you invest $1,000, the management gets $80 just for taking the money into their fund. Now you have $920 to invested. You need to gain 8.7% just to get back to $1,000. That is baloney because you can find excellent funds that do not charge any commission. Usually life insurance salespeople offer mutual funds as the investment vehicle within a “whole life policy”. You are getting screwed royally. Mutual funds can charge you getting in, charge you with reinvestment fees while you are in the fund and charge you to get out. They can charge redemption fees, exchange fees, and management fees. A key to getting rich. Avoid all the un-cessary fees.
Now the good news. There are fund families out there that charge nothing to get in, nothing to get out and a annual management fee (which is fair to watch your money) of less than 0.5% (one half of one percent). Vanguard and Fidelity are excellent mutual fund groups.
Your employer usually offers a menu of mutual funds typically selecting a Vanguard or Fidelity family of funds for you to chose from. The Employer should have your best interest at heart and paying big mutual fund management fees is not in your best interest.
I do not have enough space in this blog to begin to talk about the techniques you should use in choosing a particular fund. I’ll attempt that another time.
If you remember nothing else: Mutual Funds diversify your risk in investing in stocks making them a good thing AND mutual funds that charge all kinds of fees other than an annual management fee are bad.
Some mutual funds will say that they are so astute at picking stock that they are worth additional management fees. There are very, very, very few that can back up that claim over the long term. Don’t participate in that kind of fund.
If you have questions, let me know.
Love,
Dad (Just Chas.)