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Wealth Odyssey is a proud participant in the Jump$tart Coalition. Many young people fail in the management of their first consumer credit experience, establish bad financial management habits, and stumble through their lives learning by trial and error. The Coalition's direct objective is to encourage curriculum enrichment to ensure that basic personal financial management skills are attained during the K-12 educational experience. The wheels of education do not need to be reinvented, they simply require balance. (from their website). I would be happy to speak with you about any of these below, or other topics. Interview Questions (with answers - key terms, phrases and links highlighted) 1. How is Wealth Odyssey different from all the other personal finance books out there? Ans: Wealth Odyssey does not rehash what has already been written about investing or retirement planning or any other topic. It takes a simplified approach to planning, rather than make it even more complex. Wealth Odyssey is written to be the first book that should be read in order to gain an overall philosophy upon which sub-philosophies such as investment strategies or topical planning such as retirement planning or college planning, etc., would be integrated. In other words, it is the book that should be read before you invest your next dollar. 2. What compelled you to write this book? Ans: As a wealth mentor who teaches a 12 hour public course, I would often get questions from students about the various topics, and if there was additional reading that simplified things. I could find no such book, so I decided to write it. There are many books on financial planning or investment strategies. There are none that develop how to put all the issues, topics, and strategies together simultaneously. Wealth Odyssey is meant to be the missing box top for the puzzle we call personal financial planning. I was compelled to write the book based on the persistent reports that Americans continually save very little - they spend a lot but save little. The condition is well described in "Affluenza. The All Consuming Epidemic." and "The Overspent American. Why We Want What We Don't Need. (info on both found in App. E of my book). People need to realize that what they spend makes everyone else wealthy! The key question people need to ask themselves is "Is my standard of individual living sustainable?" Not just now, but for the long run as well? (see Q#6) More on this based on personal observation of how people approach planning (also see a very good summary in the Sun Sentinal article by Humberto Cruz on this): This is not only my observation, but observations made by journalists who field questions from people - the observation is that people think in terms of "problem - solution." If the problem is retirement they are think of the products that solve their concern with retirement; in other words 401k, IRA, Roth, etc. If the problem is college, then they think in terms of Education Savings Account (ESA) or 529s. My point is this, no thought has been given to which one has the priority.... without knowing this how can you allocate resources effectively? And what is the priority of these two examples and the other financial concerns people have? So, what compelled me to write the book is to initiate the discussion about how to approach the larger scope of planning first, and then seek the solutions to the highest priority concerns and do the topical sub-planning after. People have their checklist of items they have in their finances as if this means they are accomplishing something ... 529, check; 401k, check; Roth, check; this that or the other product, check. However, in the grand scheme of everything, what are they actually accomplishing? Are they going to reach any of those destinations? Or are they just fooling themselves having checked off all the necessary products but not funding any of them adequately? 20th Century decisions were budget-centric. This results in inefficient resource decision making because that new car today competes equally for investing for tomorrow's retirement for example. 21st Century decisions need to be wealth-centric in order to realize what the impact will be when one makes their financial resources decisions. This is important because the rules today are more about wealth management. What is missing is the plan in financial planning. It is time people come to understand the larger issues and see the bigger picture first - to see the forest before they concentrate on the trees. (For those who seek a sensible approach to budgeting). 3. Can anybody use Wealth Odyssey? Ans: Yes. It makes things less, not more, complicated. Anybody of any age, modest income, high income or in between income, needs to understand how the financial topical areas that have been established by the Certified Financial Planner™ Board of Standards fit together and how a decision in one area has an effect on another. There are no "right answers." But, a person needs to understand the issues and how to prioritize them. My experience has been that people of high income have a harder time sustaining their living than those of modest income - it is relative how much you need to save; high incomes need to save more than modest income. However, I am more impressed with someone of modest income who is on track to sustaining their living into retirement. It is a matter of perspective. Some people see different things even though it is the same. Example, which do you see? An old woman? Or a young lady? They are both there for you to see ... it's your perspective that changes what you see and perceive.
My point - some people see and perceive the market as a place to make money. Others see and perceive the market as a source of wealth. They are different perspectives, with different outcomes, in the same market. See Q#5 for more on the concept of perspectives. See http://en.wikipedia.org/wiki/Wealth for a broad discussion of the concept of wealth. 4. Why is the message in Wealth Odyssey so critical for people today? Ans: Policy changes for Social Security and Pensions. People need a simple method, based on current research, where they can continually update their progress towards meeting their goals. In addition, to have the ability to immediately see the impact of policy changes on their goals, sooner rather than later, so they can make the necessary adjustments. People do not see the nuances when they work through worksheets. They do see nuances once they understand this model. Also, people just do not have anything upon which they can anchor their decisions. Anchoring their perspective on an income-centric point of view has many flaws; the primary one being, when is enough, enough? Sure, people want to make more money, but then they spend it all. How is that sustainable? A wealth-centric point of view anchors a person to a point of view that sustains today's living standards. This point of view also brings into focus all the personal finance topics - read Wealth Odyssey - this will bring into much clearer focus what it is you are trying to do with your money - "Where is it you are really trying to go with money?" See Story Ideas for more applications of ideas in Wealth Odyssey. 5. What are some of the issues and current events in the news that Wealth Odyssey addresses? Ans: Again, Social Security and Pension policy changes. There's nothing one can do when a policy is changed. There's plenty a person can do to evaluate the impact of a policy change on their plans as soon as possible, so they can make adjustments to maintain their quality of life in the future; in other words retire. (Information about policy can be obtained from the website National Center for Policy Analysis). More on Pensions. Many think that there is something magical or bullet proof about a pension (the kind where you get income from the pension for life). That thought is slowly changing as people realize that those assets to support retirement have much in common with the assets they invest themselves through employer provided plans (such as 401ks, 403b, 457s, etc). What is in common is that those assets are invested in the same markets everything else that people have are invested in. We live on a marble that is self contained. Everybody is investing in the same markets. What pensions have that are not in common with employer provided plans is that the individual is responsible for the investment selection, to the degree of what is offered through the plan, where pension assets are not managed by the individual. Again, these assets are in the same markets; how those assets are managed is what is different. And, pensions have the same issues related to managing the cash flow in and out to match forecast disbursement requirements for the retiree.
See Social Security's website (specifically to see past and current Trustee Reports on the status and solvency of the trust fund). Also see the Center for Retirement Research Boston College Social Security report link after their logo below.
or Pension Benefit Guaranty Corporation's website for more information about either of these programs. WARNING: Lack of Savings is hazardous to your Wealth ... recent studies finds most people lack a true understanding about retirement savings issues.
See the brief and report respectively REALLY? REAL ESTATE TRIVIA - The average price of a single family home in the United States has appreciated +5.4% annually over the last 25 years (1982-2006). The year-over-year growth rate was positive in each of the 25 calendar years (source: Office of Federal Housing Enterprise Oversight).
Measuring Retirement Income Adequacy: Calculating Realistic Income Replacement Rates http://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&content_id=3745 Will More of Us Work Forever? The 2006 Retirement Confidence Survey http://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&content_id=3630 Retirement Confidence Survey - 2006 Results http://www.ebri.org/surveys/rcs/2006/ (The Employee Benefit Research Institute is rich with other information as well).
National Retirement Risk Index The National Retirement Risk Index (NRRI) measures the percentage of working-age households who are at risk of being unable to maintain their pre-retirement standard of living in retirement. It addresses one of the most compelling challenges facing the nation today — ensuring retirement security for an aging population. Also - See their report: SOCIAL SECURITY’S FINANCIAL OUTLOOK: THE 2006 UPDATE IN PERSPECTIVE (pdf version).
Clueless in Withdrawal… As readers of this journal are well aware, research in recent years (much of it making its debut in this publication) has suggested a 4 to 4.5 percent “safe” portfolio withdrawal rate for the average retiree. Some research has pushed that number a little higher, to over 5 percent, but the roughly 4 percent figure has become a sort of industry standard. Unfortunately, it’s taking a while for these numbers to seep down to the public. When people between the ages of 41 and 92 were asked in a New York Life poll what percentage of their retirement savings they thought they could safely withdraw every year without running out of money, • Only 10 percent picked less than 5 percent • 19 percent chose 5 to 9 percent • 29 percent chose 10 percent or more • 40 percent didn’t have a clue http://fpanet.org/journal/articles/2006_Issues/jfp0806-art10.cfm See the presentation for a visual discussion of withdrawals and how to apply it to your situation: A Practical Application of Withdrawal Rates. A low savings rate is another issue facing people today. There is much discussion about what this means and what it measures. However, there is no doubt that people are not saving enough towards their retirement. Just do a simple test, compare what you should be saving against what you are saving towards retirement through the methods discussed below (Q#7). Which camp are you in? Saving enough? Or, not saving enough? Feeling wealthy (from home and/or portfolio gains), and therefore spending more than you should is completely different from being wealthy (you are at or ahead of being wealthy compared to your "Progress Line" calculated below Q#8) and on track to your goals where you can maybe spend a little more because you can afford it and still retire as planned. It takes a lot more money later to make up for just a little you overspent today. Two very good studies into retirement wealth issues and the impact the Wealth Effect has on people illustrate the need to save and to resist the urge to spend prematurely. Retirement Wealth Accumulation and Decumulation: New Developments and OutstandingOpportunities by THE WHARTON FINANCIAL INSTITUTIONS CENTERSo how does one overcome a low savings rate personally? More easily said than done - but the answer is save more! Wealth Odyssey explains how to do this with a simple change in one's perspective - a change in how you measure success -
For example, Retirement issues are being shifted from the government and company to the individual. However, people have not made the necessary shift in thinking and perspective as a result of these pressures and trends. One measures their success under this new reality by benchmarking their progress against one's own SOIL and what they have saved towards achieving what they need to save to successfully retire. One would do the same towards any goal, comparing what they have against what they need. Money is for consumption. However, one needs to balance spending wants today with spending needs later. Achieving balance here results in sustainable living. The Wealth Odyssey Road Map (WORM) describes how to do this. Understanding what is a safe withdrawal rate is very important to understanding how to increase the likelihood your assets last at least as long as you do. Understanding SOIL (Q#6) and how it can be used helps one determine how to save ahead should your pension or Social Security change. 6. What do the acronyms WORM and SOIL stand for in the book? Ans: WORM stands for Wealth Odyssey Road Map; it relates all the financial topics to each other for ease of personal planning. The WORM serves as the missing box top for the financial puzzle everybody has. The WORM shows how the puzzle pieces relate to each other. WORM, the map, is what differentiates you wandering, or setting out on a journey that has purpose and destination. Wealth Odyssey helps you determine and prioritize what is important to you. There is no right or wrong answer; if there was, we would know what that answer is already because if it were right, everybody would know that. We are all different, therefore there are different answers. How you go about making your life sustainable is up to you. Wealth Odyssey shows you how to do this using the road map. SOIL stands for Standard Of Individual Living; a measure of your quality of life, both now with an income, and in the future without an income. Once you know this, you can evaluate how to make SOIL sustainable and what are the risks, what Wealth Odyssey calls "Potholes and Headwinds" to your plans. 7. What is the "Wealth Rule" in the book? Ans: The Wealth Rule is a simple formula that can be instantly calculated, once you know your SOIL, to determine the resources needed to maintain your SOIL in retirement. It comes from reverse engineering results of current, and ongoing, portfolio withdrawal research (research sources are listed in Appendix F of the book). (See also Story Ideas - A deeper Discussion). The significance of knowing SOIL and the "Wealth Rule:" "When can I retire?" or "How much do I need to retire?" are two of the most common questions. The real question being asked - "How do I make my current living sustainable?" Ongoing withdrawal research suggests there is a maximum withdrawal rate that should be used to help ensure that the portfolio is not exhausted too rapidly. The Wealth Rule is derived from here. The math simply is: SOIL = (X%) times (Retirement Resources) where X% is the wealth rule, and retirement resources are what is needed to support a given standard of living called SOIL. You already know your retirement SOIL - it is your standard of living today, less 1) what you are not spending (investing and saving), and less 2) other income sources such as Social Security and/or a Pension. Therefore, the significance is two-fold: 1) you can determine how much you need to save to retire, and 2) once you've saved it, you know when you can retire. These concepts simplify retirement planning because they can be used during the accumulation phase, transition phase and distribution phase - there is no need to switch your thinking as you go through each phase. How do you establish your "Wealth Rule?" Let's use simple logic that is supported by the research. The sooner you retire, the more years you have in retirement. This means that you need to put less stress on the portfolio so that it can support the withdrawals and the increase in your living costs later over this much longer potential lifespan. The suggestions here simplify the "wealth rule" taking all these factors into account and is formatted as follows: Your retirement age / Suggested maximum withdrawal rate (wealth rule) / potential years portfolio might last (100 divided by wealth rule - no gains or losses) In your 50's/3%/33 In your 60's/4%/25 In your 70's/5%/20 In your 80's/6%/16 Let's ask a slightly different question: How many more years of working before I can retire? First, you need to use the "wealth rule" as discussed above to determine the resources required to sustain your current Standard of Individual Living (SOIL). Make the adjustments to current SOIL by subtracting out income from Pensions (if any) and Social Security. This gives you the "net unfunded retirement" SOIL amount. Then, subtract the resources you currently have saved from the "net unfunded retirement" you need ... this tells you how much more you need to save. Next, ask yourself "How much can I save for retirement each year?" Divide the amount of assets you still need to save by the amount you can save each year ... this tells you how many more years of work you need to plan on so you can save up so as not to have to work. The more you can save each year, the less the amount of time you have to work to sustain your current SOIL. Example: Current SOIL: $70,000/ year (they are currently saving $20,000 - gross would be $90,000 if they did not save anything for retirement); no pension; Social Security projected by annual statement from SSA: $12,000; current age 55; target retirement mid 60's (so you'd use 4% wealth rule from above); currently saved in all accounts earmarked for retirement: $450,000. Can save ..... Ok here it goes: $70,000 minus $12,000 = $58,000 net unfunded retirement SOIL. $58,000 divided by 4% (.04) = $1,450,000 total needed to save. $1,450,000 minus $450,000 currently saved = $1,000,000 amount still needed to save. $1 million divided by $20,000 = 50 more years of working. Here's a case where they need to evaluate their standard of living to determine how they can save more. At first it seems hopeless. Let's look closer. They determine they can save an additional $10,000 ($30,000 per year). Now their current SOIL is $60,000! KEY POINT - this is dynamic! $60K - 12K = $48,000 net unfunded retirement; divided by .04 = 1,200,000; minus $450,000 currently saved = $750,000 divided by $30,000 = 25 years of work. Saving just a bit more cut their working years in half! Now, they know they can't save anymore so it looks like they should plan on retirement in their early 70's. The wealth rule is 5% for that age. Therefore $48,000 divided by .05 = $960,000 minus $450,000 = $510,000 divided by $30,000 = 17 years. Current age 55 + 17 = 72 projected retirement age. What about investment returns? Note none were projected. Why? Because it is likely that inflation will continue to move the $60,000 SOIL upward. Investment returns will grow the assets so that they can support a higher SOIL later; otherwise it will require saving even more later because SOIL has grown (See Q#9). Note that this is not simply an income point-of-view, but rather a Total Return point of view - you can harvest the spending dollars to support your SOIL from both growth in value and dividends/interest. Where the dollars come from within the portfolio will actually depend on the economic and market dynamics at the time - you can not predict these years ahead of time - before, or even while in, retirement. (see A deeper discussion). Read Wealth Odyssey for an in-depth discussion of Standard of Individual Living (SOIL) and how to determine it. Another website that discusses Safe Withdrawal Rates (SWR) can be found through a link on this website's review page where a letter to editor and book review are also posted. NOTE: Once these concepts are understood, you can extend your level of understand through two more stages: 1) applying a conservative rate of return, and 2) understanding deterministic calculations/modeling versus stochastic modeling. Why conservative rate of return? Because the rate of return is less within your control than the amount you save and the length of time you save it for. Modeling differences become apparent through the link below.
Additional Note: A visual description/example of the above is located at the In Search of the Numbers presentation on the Changing Retirement Planning page. 8. Wealth Odyssey uses the term "Progress Line." What is that and how is it used? Ans: The Progress Line is simply net worth - the resources you have available today. You compare today's sum total of assets to the future total assets you require in order to visualize your progress. It is how you track your progress once you understand questions 6 and 7 above. You fill your "Asset Reservoir" through growing your net worth - reduce debt & built assets - and the Progress Line shows the relative level of accomplishment in your reservoir - your Benchmark that is specific to measure how you are doing relative to your specific goal. Net worth is how you measure results, not your level of income. Even modest incomes can accumulate net worth which will eventually free someone from having to work all their lives or accomplish other goals and aspirations important to them. Chris, a writer with Columbus Alive, expressed a common response about young people or those with modest incomes. This has been expressed so often in interviews that I'd like to post a response about that here in order to address this perception or concern many have. Here's my edited response to Chris - and other's may think about this as well: As I ponder our discussion you raised one question or common "observation" that many others have expressed: The sense of hopelessness that those with modest incomes seem to have. I explained to you that my experience was that the more affluent were
actually more hopeless because they were unwilling to give up
what was required in order to sustain their living standards.
Before I give you a better example, as a reminder, the amount of
dollars required in order to maintain a balance between spending
today and being able to support spending tomorrow is relative.
In other words, the higher a person's standard of individual
living (SOIL), the more resources it will require to sustain it. 9. How are inflation and rates of return considered? Ans: Accumulation Years: You would recalculate your SOIL with each pay raise and promotion. Pay raises are typically used to compensate for inflation's effects. Promotions need to be considered as well. The real question is, "How do you maintain your current quality of life (once income stops)?" This is managed through prudent use of the "Wealth Rule." You account for inflation's effects through actual realized returns on your overall portfolio that exceed inflation. During your plan reviews, you compare your portfolio value to your required "progress line" based on today's SOIL. This is how you compare where you should be to where you are. If your actual value is less than your required value at this point in time, divide the total shortfall by the number of years you have remaining until retirement. This tells you how much you need to save each year (See Q#7). Accumulation and Distribution Years: Notice a rate of return is not used in this calculation. You account for the actual return (or loss) during each annual review and redo this comparison each year. This method uses actual returns instead of basing your plans on any return you could speculate on - it's best to use what you know rather than try to guess what might be. Distribution Years: Most plan projections assume a fixed annual adjustment for inflation. Prudence would dictate that during the annual review, based on actual market and portfolio results, one determines whether an inflation adjustment to distributions would be supportable or not. It may be that expenses need to be cut if portfolio results can't even support current distributions. In other words, trying to program in regular cost of living increases is not required ahead of time. Those are supported by portfolio results which exceed your withdrawal rate. Therefore, it is more prudent to develop and focus on a sustainable withdrawal today. There are many efforts to model, through software, how various economic and market changes would effect your retirement. An effort that may provide some valuable insight. However, why is there no modeling software that looks at the savings issues during the accumulation and working years? Those years also have uncertainty - how do people deal with job loss, wage and salary reductions, etc as well? Or, when costs keep going up but their pay check doesn't get a pay raise to help them keep up? ... all those things also go "bad" for people while working as are the result of a poor economy and markets. ... Answer: They make adjustments. It stands to reason, adjustments need to be made during the retirement years as well when "things don't go as well as planned" - just like during those working year setbacks ... This being said, it is obviously prudent to have reserves (in this case a portion of the portfolio set aside to whether storms) established to whether the bad years - just as it is important and prudent to have reserves during the accumulation years. In other words, during accumulation years when things aren't going as well, people save less or even cut expenses. When things are going well, they save more and even spend more. Why should it be any different in retirement? You can't model the uncertainty during the working years to predict how much you would actually have saved for retirement ... just as it is difficult to model the uncertainty during the retirement years to predict how much you would have actually spent. What is in common between the two phases in life? Answer: Prudent adjustments as time goes by. 10. What is the difference between a pension and today's retirement plans? Ans: A pension generally refers to a fixed income a retiree receives as long as they live. Many are finding out these are not as guaranteed as they thought. Retirement plans refers to the employee having made contributions towards funding their retirement through accounts set up at their place of employment. Participating in a retirement plan is not the same as having a plan to retire. 11. How can the concepts in Wealth Odyssey be useful for people when one considers all the changing policies for Social Security and Pensions? Ans: Having an overall wealth philosophy and seeing how all things are related goes a long ways toward being able to evaluate your situation when things change; and they always do. 12. How does Wealth Odyssey help a person evaluate the ongoing and coming changes in either Social Security or Pensions? Ans: When a person knows their SOIL, they can use the wealth rule to determine the resources needed to support that SOIL. Resource sources include Social Security, Pensions, retirement plans and other assets. Any change in one area, means another area needs to make up for that change. The sooner you make adjustments for a change, either real or potential, the better. This is because it takes fewer dollars now to make up any differences. This is for two reasons: 1) Given a shortage of needed dollars, example: $40,000, if you give yourself 16 years to make up the difference that's $2,500 a year; if you procrastinate until 8 years left, then you need to invest $5,000 a year. 2) Any return you get will help accumulate needed dollars as well. However, people often forget that returns are not constant, nor are they always positive. Therefore, for PLANNING purposes, use simple division as in the example above. Invest prudently in a diversified portfolio. Compare the investment RESULTS each year (current value compared to required value), to the planned benchmark (Q#8 - Progress Line). This comparison will tell you a lot more about how you are progressing towards retirement than trying to compare your results to a generic market benchmark. You'll notice that this is the OPPOSITE of how people are taught to retirement plan today. They are taught to invest and compare those results to a benchmark. This is really hoping that investing will bail a person out for the lack of having a plan. It is much better to plan it first, THEN invest. Should results be favorable (or unfavorable), adjust the plan accordingly with each review. This method also tends to keep people more diversified than simply following the money at it runs like a school of fish from one asset to another (see Wealth Odyssey, page 82 for this metaphor 's explanation) since people stay better focused on their benchmark than any market segment or asset classification. Reasons for planning in this manner? Who knows what will happen in the future? What expenses will go up faster than normal (than the historical inflation rate)? Will one have the health (injury or illness derails being able to save when it also derails being able to earn an income) or avoid job loss in order to complete the accumulation phase? Will there be a string of poor market returns? This methodology is a conservative approach that builds up from what is known today and adjusts for tomorrow's unknowns, during future reviews, once they become known. This methodology reverses the steps, plan first, then invest to meet or exceed the plan's specifications. Investment planning becomes designing the portfolio through diversification in such a manner as to increase the likelihood of success. 13. How does Wealth Odyssey put together all the competing financial issues people face? Issues like retirement planning, college planning, care for aging parents (or your own long term health care concerns), new home, vacation, insurances, investment planning, etc. Ans: Through working with each component of the WORM for each issue you face. Then comparing available resources to requirements and prioritizing them. People need to understand the difference between rich, wealth, and income. With this understanding, they can better allocate their resources to meet their unique individual goals and aspirations. Financial planning is determining the overall structure of what you are trying to do - where you are trying to go with money. It is the architectural blueprint (switching the metaphor from the book to illustrate this point). Retirement, college, long term care, budgeting, insurances, investments, etc., are all components of the overall plan. These are like the rooms of the blueprint. Most people try to build their financial plan with no idea how the rooms are related. They get a mess. Financial planning is the blueprint for how the other planning components fit together. In Wealth Odyssey, this metaphor is the Wealth Odyssey Road Map (WORM), discussed in the next question. (See BUDGETING) 14. How does Wealth Odyssey help a person with personal financial planning? Ans: Wealth Odyssey shows how the topics, or financial components, fit together in primary and supporting roles through the Wealth Odyssey Road Map (WORM). This is important to see so that a person understands the implications of their decisions and can prioritize their often limited resources more effectively. More on questions 13 and 14: The problem people have is they do not have a point of view that is conducive to accomplishing the future while living in-the-today. An income-centric point of view takes care of today and gives less priority on tomorrow. Both should be given the same priority in order to compete on an even basis for the limited resources of income. Income is the source of everything. However, spending it all makes everyone else wealthy. Moreover, you are forced to have to continue to seek income (work or social security) in order to support your SOIL. Only the small part you keep represents your wealth. A wealth-centric point of view shifts some priority to net worth as well so that assets are accumulated to take you off the "have to keep working" treadmill* of supporting your SOIL. Income is not wealth; it is only the source of wealth. You have to build and fill your "asset reservoir" (Q#8) to grow your wealth. *People often think that more money will buy them more happiness. People need to stop and think about what it is that will really make them happy - and allocate the resources and income that they already have towards accomplishing that. Studies have shown that, yes there is an initial increase in your happiness when people purchase say, that new bigger car. However, over time they grow accustomed to it and to experience happiness again, they need to buy an even bigger car. In order to maintain the same level of happiness through consumption, people must continually buy new things - the concept of "retail therapy." Psychologists have developed a term "hedonic treadmill" to describe human adaptation to more wealth and material goods. In order to moderate our natural tendencies psychologically, we need to establish what is important to us and establish the plan to allocate our resources in order to sustain our consumption now, up to and through retirement... I repeat it again ... sustainable living. Wealth Odyssey helps you to do this. 15. Why are specific investments not discussed? Ans: Those books are already written. What's missing in them is how to apply it in real life while also considering competing issues and limited resources. Wealth Odyssey doesn't replace investment books; they are still needed, but they are easier to use once you have an overall map and concepts that simplify your puzzle about what you are trying to do and where you are trying to go. Investing is discussed in Wealth Odyssey on the macro scale. Asset allocation and diversification are important concepts; this is how you handle all the things you can not control. See page 82 in Wealth Odyssey for the "school of fish" metaphor of money, and how this relates to investing. 16. Why are there not a lot of calculations in Wealth Odyssey; isn't that what financial planning is? Ans: No, financial planning is, first and foremost, about determining how to best do what you want to do with the resources you have. Calculations come second to this important first step. Wealth Odyssey is about an easy to use approach to illustrate what financial planning is. Financial planning is not about product or calculations; those are the solutions to what you are trying to do in the first place. 17. Why the title Wealth Odyssey? Ans: Wealth relates to the concept of changing your perspective from income-centric to net worth- or asset-centric. Odyssey is the journey metaphor used to illustrate where you are and where you are trying to go in the journey we call life. See more of the answer in question 14 above. 18. Why does all this still seem confusing? Ans: Most likely because one is not seeing the complete Road Map and its' uses yet. A complete reading of the book will go a long way to help erase confusion. I also mention in Wealth Odyssey that it probably will take more than one reading to begin to put it all together ... in order to pick up what is missed the first time and the second time in order to put together just those elements discussed that you want to apply specifically to your situation. Keep it handy, your situation will change over time and you can use it to readjust what you are doing in light of newer priorities and concerns. 19. Where is Wealth Odyssey available? Ans:
Online through
Barnes
and Noble
,
Amazon or
Borders
websites or through www.iUniverse.com
, the publisher's website,
http://www.iuniverse.com/bookstore/book_detail.asp?&isbn=0-595-33720-1
20. Are you available to the general public? Ans: Generally, no. Because, an advisor needs to have a complete conversation to get a good understanding of what the person is trying to do and where they are trying to go with their money and life. This can not be done effectively long distance. This is why I suggest in Wealth Odyssey that the person seek out a credentialed advisor. That would suggest someone local. They need to meet face to face to be sure there's complete understanding of what the person is trying to do with their resources. However, the person needs to have done their homework first and that is to understand what their priorities are and where they are trying to go with their money. The book will go a long way to help people understand. If they read Wealth Odyssey, this will help them take charge and do this important thinking process before seeking help. I do have featured links to educational websites, calculators, and other educational material available to the public on my website at www.BetterFinancialEducation.com. If they need additional guidance after reading the book, they can check out the additional guidance link highlighted in this sentence for more assistance. If they are still stuck, then they can contact me via this email link (contact author) . However, they need to be able to convince me that long distance is going to work. (See also "What is Financial Planning," and to find a planner.) 21. What do you see as the role of an advisor being? Ans: If someone seeks out a credentialed advisor, which means the advisor tends to have education and training beyond basic licensing, they should look for an advisor who understands their role in the relationship in helping people accomplish their unique priorities. An advisor's role is to help in those areas where you are having problems, confusion, issues, or don't understand clearly. If you don't have any of these, you don't need an advisor; you can get product anywhere; and calculations are all over the web. 22. What should the general public avoid doing with an advisor? Ans: They should avoid seeking advice when they have not yet determined themselves what they are trying to do. How can an advisor help when a person doesn't know what they want to do? You might answer that's the job of the advisor to help them determine what they are trying to do. That leads more often to pushing an agenda not in the best interests of the person, only because the person hasn't determined yet what their interests are. A person who doesn't have a clear picture of what their decisions mean often finds it is not what they expect later. That is the purpose of the Wealth Odyssey Road Map (WORM), to help them better see pros and cons of decisions and priorities and how all the twists and turns relate to each other in personal financial planning. 23. Are you available to the media to expand upon and clarify the above questions and answers, or to answer other questions? Ans: Yes, I am available to the media. Easiest initial contact is through email to (contact author) with subject line "Wealth Odyssey Media Questions." You could try to catch me available in the office at (916) 773-3509 as well. PS. Please also see Additions since publication. Page updated 7 Jun 07 Site Designed By:
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