Ace Wisdom

Grasshopper Number 3 has been inundating me with “boat” information. He thinks I am not listening. You know, a boat is this seasonal investment that gets used 3-4 months out of the year that you pay for 12 months out of the year.
Part of CCA’s passion for boats comes from the cottage experience. The first little red boat was a “trainer”. It was something that you can make mistakes with and it doesn’t cost a lot of money. The little red boat had a quality Mercury (65HP) engine.
Then by luck, we bought a glastron (I think it was a GT150?). I know it was 15 feet long. lt was built by people familiar building rugged boats. The gold fleck color was the best I’ve seen. We tried to make it go faster with an Evinrude 85 HP engine. I don’t think total speed changed much (55mph). It still was one of the faster boats on Crystal Lake. It seemed to go faster when no one was riding with CCA.
Paul and I conspired to purchase a classic CSS glastron 17 foot speedboat with a deeper “V” hull. We moved up to a 115 HP Mercury but alas, it performed at about the same speed as the first glastron. Even CCA riding alone and trimming it out at maximum angles couldn’t make the boat go faster. I think 60 mph was about the top.
Once the cottage life ended, so did the need for boats. So guess what! CCA buys his own. Did he buy a glastron? Nope he bought a Concord with a 240 Hp engine. A 17 footer that could go 75 mph with lots of gadgets. Gas Pedals. Jack plates. Modified Reeds. So look out Winnebago and Shawno Lake and the Wolf river. Finally the ultimate machine. Actually I think he “fryed” the engine by pushing it too hard.
Was he satisfied? Noooo! He moved up to a 21 foot Checkmate with a 270 HP Mercury engine. Bigger. Faster. Modified stainless steel props. Oooo, Oooo, Oooo. Tim the Toolman would love that. Somehow the bigger boat with the larger engine didn’t go much faster that previous combinations but the Checkmate handles better.
So where does this saga go? Well we keep the 21 foot Checkmate with sleeper accomodations but we hook up a 300 HP Mercury. Then we take the boat on Little Lake Butte De Morts on a quiet day (no waves). We get up to speed and then we move the jack plate into the perfect postion and trim out that throbbing 300 Hp engine and we check the speedometer. Whoa! Supersonic speed.
Then we start over. Different boat. Different engine. Different modifications and we spend 8 months getting ready for 3-4 months of enjoyment. Does it get any better.
It seems like an expensive passion even though it always used equipment. Do they have any openings at Calnin Goss? Hey, what is life without a passion.
Love,
Dad

Our country is obsessed with tapping into home equity for “stuff”. Stuff is vacations, cars, and paying off credit cards. What follows is a dis-jointed collection of thoughts regarding the tapping of home equity.
First, your home is usually a bad investment. Yes it appreciates in value but if you keep track of all the money you pour into it over the years with furnaces, carpets, furniture and remodeling, you probably would be lucky to get your money back. Yes, some people in hot markets like California, Arizonia, Florida and New Jersey have enjoyed rapid appreciation of property but that is the exception. Midwest values don’t move like that.
Second, the home is usually an emotional investment. It is where your family spends its time and everyone is looking for something. Recreation rooms, computer rooms, individual bedrooms for all the kids and other things. Yes you have money invested but it is necessary to create your lifestyle.
When interest rates go low like they have in the last few years, people are tempted to refinance home loans. This is good because you get to pay off your home loan with less dollars. Your cash flow improves month to month and if inflation sets in, you pay back your loan with “cheaper dollars”. On top of that you get to deduct you mortgage interest on your income tax. The genius of refinancing at the lower rate is to lock in the lower rate for the life of the loan. You don’t want to get caught with a loan that rises as interest rates rise. By the way, interest rates are rising.
If you extract money from the equity in your home, it is gone. I have found that it is very nice when it comes time to move to a different house, a build up in equity over years of mortgage payments makes it easy to move up to a better house because you have more equity to put into the new mortgage.
There is a diffference between assessed value, appraised value and market value.
The assessed value is what the city you live in uses to calculate your property tax bill. It is generally close to what houses in your area are selling for in your area.
The appraised value is what a professional (I use that term lightly) estimates your house is worth. Sometimes appraisals are slanted to the high side in an effort to create artificial value so that a “loan or mortgage company” can extend you a loan at high rates. Some people get appraisals to determine what their home might sell for. Real Estate companies have a tendancy to appraise your house high to encourage you to sell.
Then there is market value. That is the value your house will sell for. It is the real value. Once the deal is done, that is how much money you actually get for your house. It is the most important value. It is the only value!
The worst case scenerio is that your house is assessed to high so you have unrealistic property taxes, your house is appraised to high so that you take out loans using the additional equity, and the market value is really quite low so that if you sold, you might end up with “0” equity (or even negative equity).
Having said all of that, tapping home equity is a personal decision. It has to be factored into a family’s total financial situation. If someone is drowning in 23% credit card debt, tight monthly expenses and an unexpected medical costs, home equity is one of the potential sources of cash.
I guess Grasshoppers my final opinion would be to avoid “tapping home equity if you can”. It is not the best financial decision but most of us do not have the discipline to manage the “tapped equity” well. Only you can decide!
Love,
Dad

I finished my “retirement planning course”. It was administered by financial sharks. The course was a good refresher.
Because I am a suspicious soul, I was determined to find out more about the financial services of the company doing the presenting. They were obviously looking for “leads” to make money. So here is my take!
A company named Morgan Stanley which provides broker/dealer services headquartered in New York is always looking for clients to buy financial services, trade stocks and bonds and conclude sale of mutual funds. I don’t know what their total fees amount to but last year their top officials received bonuses of over $10 million. So they are making a buck.
In an effort to reach the “little guy” like me, other mom and pops, and grandma and grandpa’s, Morgan Stanley franchised a branch office (broker and dealer) in Green Bay named Batus. They pay Morgan Stanley some fees and channel financial transactions through “big daddy”. This branch dealership was the group doing the presentation of the course materials. Their goal was to find new clients and provide financial services. They make money offering advice to clients and handling their transactions.
Batus major selling point was that they could find 3rd party unbiased financial groups to watch your investments and move them quickly if negative things were happening in the market. The third party made about 2% of the value of your investments. By the way, you had to give power of attorney to the 3rd party to buy and sell mutual funds for you. Yeah, right!
Most of the investments that the 3rd party watched were stock mutual funds. Stock mutual funds normally have fees in the 1% range but if you buy certain mutual funds, 5% charges can be incurred. So the mutual fund companies are making big bucks.
So if you were following carefully, Morgan Stanley (a big shark) created a branch office called Batus (a smaller shark) to help widows and orphans manage their money. Batus hired a 3rd party financial group (a rogue shark) to watch your investments and move them around if necessary. The unbiased 3rd party worked with mutual funds groups (parasites to sharks) to suck transaction fees out of you. By my count you have a chain of 4 groups, each sucking off 1%-3% for a total of 8%-10% in fees. They get their 10% in fees before you make a dime. Just a note. The stock market was up 2% last year. That is not a good situation.
My guess is that there were some pretty smart people in the finance class. I think a lot of small business families attended. They didn’t accumulate money by being stupid. They recognized a shark for what it is. If it looks like a shark, swims like a shark and feeds like a shark, it is a shark.
You work too hard to earn your money. Don’t swim with the sharks.
Love,
Dad

Sometimes I let you Grasshoppers into my head to watch the gerbil running on the wheel. Some subjects are not worth contemplating but I can’t help myself.
Well lately I’ve contemplated the people in my life that I’ve known that have had the name Rex. It is not a long list because “Rex” has not been all that popular over the years.
My first encounter with Rex was in my childhood. During the early 1950’s, cowboy flicks on Friday night were the rage at the local theater. You know! Gene Autry, Roy Rogers (the King of the Cowboys) and Hopalong Cassidy. During this orgy of westerns, Rex Allen appeared on the scene. He was a singing cowboy. He was macho. He had a great horse (I don’t remember the name) and a fantastic voice. I liked Rex Allen but like all the cowboy movie heros, Rex “faded to black”.
The next Rex that I remember was when I started school at UW-Oshkosh. We had six guys in our rooming house on Elmwood Avenue. One guy named Rex Joslyn was two years ahead of me in school and was majoring in psychology. He was muscular (today women would say he was chiseled) and was on the diving team. He had a annoying habit of shouting “diggy diggy dig” when he was exuberant. It was stupid. A real man would should yell “yo” or “hot damn”. But no, Rex had to say that femmy “diggy diggy dig”. I can still hear him leaving the house on a hot date and yelling his “cry” as he went down the steps. All in all, Rex was a good guy. That was 45 years ago.
Then in the late 1970’s I met another Rex. Rex Coryell. He was the coordinator for our group of business executives (TEC). He was a good listener. He was a really classy person. His job did not pay a hugh salary. It turns out he was a Harvard graduate with a Master degree from also from Harvard. He was also a retired Naval officer and had a life pension. He was doing what he wanted to do. He was working with top people in business and he was having fun. Yeah! My kind of guy. I haven’t seen Rex in 15 years.
So you see my composite of “Rex” is a cowboy with a Harvard degree riding off into the sunset screaming “diggy diggy dig”.
I can’t help but wonder what the next person named Rex will be like as he enters my life. If history is an predictor, he will be accomplished and he will make a lasting positive impression. Rex? Are you out there?
Love,
Dad

As mentioned, I am taking a night course at Fox Valley Technical College called “Retirement Planning Today”. It is advertised as appropriate for people ages 50-70. The first session was several days ago.
I have an adversion for what Margaret calls bottom dwelling, skum suckers. The list is usually credit card companies, insurance sales people and real estate agents. When you deal with those types, put you hand on your wallet and squeeze tightly. Add financial companies offering seminars. They promise is to present unbiased retirement planning information. No sales pressure! Yeah, rigtht.
Well my financial planning course is offered by Company out of Green Bay that helps you with your financial affairs and just happens to sell annuities, mutual funds and insurance. It is owned by Mr. Nero who just bought the company. His motivation is pay off his new company. Helping him is a man who spent 29 years in the State Prison system. I assume he was a guard (at least I hope so). I think he is Nero’s body guard. The third member of the teaching team spent many years in the commodity markets which is very speculative in nature. So we have a “strapped” business owner, a body guard and a gambler teaching retirement principles. Nothing to fear!
They promise at the outset to present information in a professional manner and that this would not be a sales seminar. They would however be available at the breaks and after the evening presentation. They would also be pleased to set up a one hour “one on one” session to help you review you personal retirement situation at a later date. Isn’t that generous! The slick part of the “hustle” is that during the seminar, they gloss over important financial facts and spend lots of time on annuities and insurance products. I think they make most of their money on annuities.
The truth is that the 45 people attending the seminar are moms and dads, grandmas and grandpas that have spent years saving up for retirement (notice I didn’t mention widows and orphans). The teaching team, namely the boss, the body guard and the gambler are there to help. It is definitely a “shark alert”. It like swimming in a tank full of sharks. The predators are circling.
So as I am leaving the seminar after the first night, I make sure that other people get “button-holed” at the door and I avoid any eye contant with the sharks. Never make eye contact with a shark. I escape uscathed.
Maybe I’m paranoid. Mom says I am a suspicious soul. Maybe, but I still have my wallet.
I go back in the shark tank one more time. Since this will be their last chance to entice me into their confidence, I’ll need to take along my shark repellant and a stun gun. Fear not, I shall survive.
Beware of shark attacks.
Love,
Dad

About a decade ago there was a movie about a robot that began to take on human like qualities. For the life of me I can’t remember the movie title. It starred Ally Sheady. The robot named “No. 5” had an insatiable appetite for knowledge so his cry was “more input, more input”. He could read a book in 10 seconds. He could digest a dictionary in less than a minute. The more he read, the more he needed “more input”.
So in my quest for more input, I signed up for a night course at Fox Valley Technical College. It is titled “Retirement Planning Today”. It meets over several weeks, 3 hours at a time.
The first subject matter is “determine the amount of money you need to retire”. Come to think of it, for me it is a little late to broach that subject. So why am I going?
The second issue discussed is “create your own goals for a successful retirement”. I guess it is never too late to set goals even though I am in the 7th year of retirement.
Then they hit “eliminate debt and improve cash flow”. How does a person like myself on a limited income (actually decreasing income) find enough money to reduce debt and improve cash flow?
You get the idea. Lots of financial advice but I’m not sure how applicable it is to your mother and I.
So why am I doing this? I need more input. I know a little about planning for retirement but the tax laws keep changing, health insurance rules are in constant flux and social security has it’s little quirks. So what I receive is updated information on all of those subjects to put in my personal memory bank.
Usually I have some primary objective and this is no exeption. I want to find out details about “long term care” insurance. People are living longer because they can put together medicine cocktails that keep you breathing until you are 80, 90, or 100. You can buy long term care insurance that covers the cost of nursing homes in later life. I don’t have that type of insurance. I’m not sure I can afford it! I’m not sure I want it? The cost of the course may be worth the information I get.
I contemplate what my life would be like if my kids would “take me in” when I get totally senile. I’m sure that Debs would modify her life to take care of me (yeah, right). Kelly would probably move to Peru to avoid taking me in. Chris would make “his old man” cut the lawn to pay his way. Paul would prop me in a corner and propose a toast. And Margaret would take a picture of a senile old man, post it on the internet and let the world see how pathetic I was! No sir, I want to control my own journey into senility. Stay tuned! I’ll keep you posted.
So here I go. My personal growth continues.
Love,
Dad

This is not what you think. It is not about your big salaries (i.e. big bucks) nor is it about winning the lottery and falling into “big bucks”.
It was 1995. I belonged to TEC which was a group of business executives that met on a regular basis. Jack Sturm, who was President of Sturm Industries, had season tickets for the Milwaukee Bucks. He offered to take Gordy Minch from Ripon, the President of Ripon College, and myself to a night game at the Bradley Center. Two tickets were in the lower grandstand but two tickets were on the basketball court under the basket. That is right, two of us got to sit right under the Milwaukee Bucks basket as they warmed up. We were in the first row of courtside chairs and we got first hand knowledge of what “big Bucks” really were. I don’t think anyone was under 6 foot 4 inches tall and there were a couple 7 footers. One I remember was big Paul Mokosky (Big Mo). He wasn’t real good but he was 7 feet tall, he tried hard and he was a crowd favorite.
So as I was sitting there courtside thinking about what the rest of the world was doing that evening, I decided that I would try to get the tickets for another game and take family member.
About a month later, I got a couple of complimentary tickets and Paul and I went to a game. The game looks different from courtside at the end of the court. Play is right in front of you and you are awed by the close, fast action. Part of the play is at the other end of the court and you are viewing it unobstructed from a distance. Does it get any better?
But here is the “clinker”. In the NBA, there is a lot of fast action and sometimes as the teams race down the court they shoot and then run under the basket and sometimes into the crowd. That is right! We were sitting in the place where you see players charge into fans and chairs and photographers go sprawling. We were in mortal danger. We could have got run over by a 7 footer. What had I done? Paul and I could get hurt. But you know what, we didn’t care. If we were going to die, how great would it be to “expire” under the basket at a Milwaukee Bucks game.
We obviously survived and are here to tell our story.
I don’t remember if the Bucks won or not. I don’t care! I don’t remember the names of any of the other players at the time and I don’t care. The team sucked and I didn’t care. I do remember that it was a special moment.
Now I know what you are all thinking! Why Paul and not me? Well Deb had to work that night. Kelly was busy over in Madison. Shelby Jr. wouldn’t let Chris go. Margaret was at dance recital. So it was just Paul and me. It would have been a shame to waste the tickets.
Wouldn’t you know it was the last Bucks game I ever attended.
Love,
Dad