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jerryking : financial_planning   25

Stop Using Excel, Finance Chiefs Tell Staffs
Nov. 22, 2017 | WSJ | By Tatyana Shumsky.

“I don’t want financial planning people spending their time importing and exporting and manipulating data, I want them to focus on what is the data telling us (jk: i.e. "interpretation") ,” Mr. Garrett said. He is working on cutting Excel out of this process... for financial planning, analysis and reporting.

Finance chiefs say the ubiquitous spreadsheet software that revolutionized accounting in the 1980s hasn’t kept up with the demands of contemporary corporate finance units. Errors can bloom because data in Excel is separated from other systems and isn’t automatically updated. Older versions of Excel don’t allow multiple users to work together in one document, hampering collaboration. There is also a limit to how much data can be pulled into a single document, which can slow down analysis....Instead, companies are turning to new, cloud-based technologies from Anaplan Inc., Workiva Inc., Adaptive Insights and their competitors....The newer software connects with existing accounting and enterprise resource management systems, including those made by Oracle Corp. or SAP SE . This lets accountants aggregate, analyze and report data on one unified platform, often without additional training.
CFOs  errors  Excel  interpretation  financial_planning  spreadsheets 
november 2017 by jerryking
The Money Letter That Every Parent Should Write - The New York Times
By RON LIEBER JUNE 17, 2016

"....consider the old-fashioned letter. It’s long enough to tell some tales to bolster your advice, and if it’s written with enough soul, there’s a good chance the recipient will keep it for a long time. Plus, it’s a literal conversation piece, since the good letters will inspire more curiosity about how the writers oversee their own financial affairs....A good letter, according to Ms. Palmer, should include at least one story about a large financial challenge and another one about a big money triumph. Then, include a list of crucial habits and the tangible things they have helped the family achieve.

HEED YOUR IGNORANCE Quite often, the best stories and takeaways come from the biggest mistakes.
BEWARE OF GENIUS: Don’t trust the person who claims to be omniscient either.
STICK TO YOUR SELLING PLANS We can be blinded by flattery from the seats of power,” “Be aware of this in your business lives.” Selling something that is still valuable is the hardest part of any trade, he added. So if you can’t name three good reasons to continue owning something, then it’s time to sell.
BUDGETS ARE ABOUT VALUES. What you spend says a lot about what you stand for, and if you don’t like what your own notebook says about you, try to make it look different next month.
personal_finance  parenting  Communicating_&_Connecting  writing  investing  investors  mentoring  values  budgets  advice  self-discipline  lessons_learned  wisdom  habits  financial_planning  ownership  ignorance  origin_story  takeaways  family  storytelling  financial_challenges  family_office  generational_wealth  soul-enriching  coverletters  unsentimental 
june 2016 by jerryking
INVESTING TAX PLANNING Tax traps to avoid when you borrow for investments Pitfall could hurt interest deduction
October 25, 1997 | The Globe and Mail B.20. |Tim Cestnick.

In [STEVE]'s case, he had borrowed $50,000 to invest. The investment increased in value to $80,000 over time, and Steve sold $20,000 of t...
personal_finance  taxation  tax_planning  investing  financial_planning 
august 2013 by jerryking
10 Ways to Stumble in Commercial Real Estate -
November 12, 2006 | New York Times |By VIVIAN MARINO

(1) NO FINANCIAL PLAN
“The first step for investing in anything — whether it’s real estate or diamonds — is to have a plan, and your plan is based on your goals,”..... are you looking for a property that can be leased out, generating a monthly cash flow? Or, do you want to make a quick profit with a property that can appreciate in value after improvements?

You will also need to focus on a specific property type, based on personal interest and expertise. Mr. Cummings suggests taking on partners with “personal knowledge or specific talent dealing with this category of property.” He also recommends having an exit strategy,
(2) THINKING LOCATION ONLY
“It’s not location, location, location — it’s location, use and approval,” ......While finding a good location in a well-traveled corridor is important, he explained, you must also ensure that the proposed use for a property fits within zoning and deed restrictions as well as other local laws. That’s a crucial part of due diligence.

(3) NOT RESEARCHING A CITY
Even with zoning laws on your side, you may still be unable to move ahead with plans. “Some communities are getting impossible to develop,”.....Although a site may be properly zoned for such buildings, local planning boards might object that a design and scope of a project are incompatible with the area.

(4) SEEING ALL AREAS AS SIMILAR
“Real estate is a local singular market,” ......“What goes on in San Francisco may appear to be the same as what is going on in Chicago or Miami, but in reality it is not.” You need to explore an area’s demographics — learning, for instance, the average age of the residents and potential customers, as well as household income. And while you’re at it, check on the prevailing rents, along with vacancy rates and property taxes. Some of this information can be found by contacting the local government or Chamber of Commerce, and by talking with neighboring business owners.

(5) NO THOUGHT TO TENANT MIX
you can’t expect to draw much business unless you have the right mix of tenants, both within your property and in the neighborhood. An “anchor,” or a business with a history of successful performance, can help.

(6) MISCALCULATING COSTS
uncover hidden problems in a building — structural, mechanical or environmental. The seller can then decide to fix the problems or renegotiate the sales price........set aside a cushion for future repairs or improvements. (Even tenants with so-called triple-net leases, in which they agree to pay all the continuing operating expenses like property taxes, may need to have a property reconfigured to meet their needs.)

“Many people do not take the time necessary to quantify deferred maintenance — from an antiquated heating system to a leaking roof to holes in the parking lot,”

(7) MISCALCULATING RETURNS
To get an idea of your initial rate of return, or capitalization rate, review expenses and income for the most recent year.

Some brokers and investors base their calculations on occupancy rates at or close to 100 percent. But take into account the likelihood of vacancies,

(8) TAKING ON ONEROUS DEBT
commercial-property land, can come with very onerous terms!!

(9) DOING IT ALL YOURSELF
experienced investors typically have a group of experts in place, including brokers, engineers, lawyers, accountants and property managers, to help with conducting due diligence.

(10) PROCRASTINATION
What good is doing the research if you never put it to use?
anchor_tenants  commercial_real_estate  debt  demographics  exits  financial_planning  hidden  investors  IRR  land_uses  miscalculations  missteps  pitfalls  procrastination  real_estate  rules_of_the_game  zoning 
september 2012 by jerryking
Investing Ideas That Stand Test of Time
April 25, 2000 | WSJ | Jonathan Clements

These days I find I am left with just three core investment ideas:
(1) Financial Success is a Sense of Control
If you ask folks about their financial goals, they will likely offer a laundry list of goods they want to buy or announce they want to accumulate as much money as possible. But in reality,
both goals are a prescription for unhappiness.
Sure it might be nice to purchase everything that catches your fancy. But nobody has unlimited wealth, so a focus on endless consumption inevitably results not in happiness, but in frustration and financial stress. Yeah, it would also be great to have heaps of money. But if all you want is an even bigger pile of cash, you will never be satisfied, because you will never reach your goal. So what should you
shoot for? A far more worthy goal, I believe, is eliminating the anxiety that comes with managing money. You want to reach that sweet spot where you feel your finances are under control, no matter what your standard of living and level of wealth.

(2)Investing is Simple
No doubts about it, there are lots of investments and investment strategies that are mighty complicated. But complexity usually means investors are running the risk of rotten results and Wall Street is getting the chance to charge fat fees. Investing is best when it is simple. In fact, if you want to accumulate a healthy nest egg, there
isn’t much to it. First, you have to save a goodly amount, preferably at least ten percent of your pre-tax annual income. Second, you should consider investing at least half of your portfolio in stocks, even if you are approaching retirement. Third, you should diversify broadly, owning a decent mix of large, small and foreign stocks. Fourth, you should hold down investment costs, including
brokerage commissions, annual fund expenses and taxes. Finally, you should give it time. A little humility also helps. Don’t waste effort — and risk havoc — by trying to pick the next hot stock, identify the next superstar fund manager or guess the market’s next move. Instead, your best bet is to buy and hold a few well-run mutual funds.

(3) We are the enemy
If successful investing is so simple, why do so many people mess up? It isn’t the markets that are the problem, it is the investors.
We make all sorts of mistakes. We fret about the performance of each investment that we own, so we don’t enjoy the benefits of diversification. We are often overly self-confident, which
prompts us to trade too much and bet too heavily on a single stock or market sector. We
extrapolate recent results, leading to excessive exuberance when stocks are rising and unjustified
pessimism when markets decline. We lack self-control, so we don’t save enough.

[All the points made immediately above are analogous to Jason Zweig's article on personal finance & investing. From Benjamin Graham --investing is often portrayed as a battle between you and the markets. Instead, “the investor’s chief problem — and even his worst enemy — is likely to be himself.”

Similarly, Nobel Laureate Daniel Kahneman wrote in his book Thinking, Fast and Slow. [that]evaluating yourself honestly is at least as important as evaluating your investments accurately. If you don’t force yourself to learn your limits as an investor, then it doesn’t matter how much you learn about the markets: Your emotions will be your undoing.... ]

If you are going to truly be a successful and happy investor, it isn’t enough simply to devise
strategies that allow you to meet your investment goals. Your strategies also must give you a
sense of financial control and fit with your risk tolerance, so that you stick with them through the
inevitable market turmoil.
That may mean keeping more of your money in bonds and money-market funds. It could mean
paying for an investment advisor. It might mean scaling back your financial goals and accepting
that the kids won’t be heading to Harvard and that you won’t be able to retire early.
These sorts of choices aren’t foolish. What’s foolish is settling on investment strategies without
considering whether you can see them through.
personal_finance  investing  howto  ideas  goal-setting  Nobel_Prizes  money_management  Jonathan_Clements  financial_literacy  biases  humility  mistakes  self-awareness  self-control  proclivities  overconfidence  financial_planning  delusions  self-delusions  emotions  human_frailties  Jason_Zweig  extrapolations  risk-tolerance  recency  unhappiness  human_errors  bear_markets  sense_of_control  superstars  Daniel_Kahneman 
may 2012 by jerryking
How to Plan for a Successful Retirement: Think Slow - WSJ.com
April 9, 2012 | WSJ | By DIANE COLE
So Much for Snap Decisions
A Nobel Prize winner explains why one secret to a successful retirement is to think 'slow'

the message that Daniel Kahneman, psychologist and Nobel Prize winner, delivers in his new book, "Thinking, Fast and Slow."

Typically, he says, people rely on blink-of-an-eye judgments, driven by emotion and impulse, in navigating life—even when we should be thinking "slow," using reason, deliberation and logic to weigh our options.

WSJ: In your book, you discuss overconfidence as a common pitfall. What impact does that have?

MR. KAHNEMAN: Overconfidence is everywhere. We all have clear and certain beliefs, and our certainty is not impaired by the fact that other people hold contradictory beliefs. We just think they are biased.

When optimism and overconfidence come together, you get many mistakes. Optimistic estimates can in retrospect seem almost delusional. One example is that people end up paying about twice as much as they originally expected to pay for kitchen renovations.

DANIEL KAHNEMAN: 'We all have clear and certain beliefs, and our certainty is not impaired by the fact that other people hold contradictory beliefs.'
DANIEL KAHNEMAN: 'We all have clear and certain beliefs, and our certainty is not impaired by the fact that other people hold contradictory beliefs.' JON ROEMER
WSJ: Is there a way to keep our self-certainty from blocking out other evidence?

MR. KAHNEMAN: You can imagine yourself trying to make the case for your belief before a skeptical judge.

It is even better to try to construct the best possible case against your own position, because searching for arguments that support your position is unlikely to lead you to correct your mistakes.
book_reviews  decision_making  retirement  howto  personal_finance  planning  financial_planning  Daniel_Kahneman  gut_feelings  optimism  overconfidence  thinking_deliberatively  Nobel_Prizes  self-certainty 
may 2012 by jerryking
The Recency Bias and How it Fools our Money Brains - NYTimes.com
February 13, 2012, 12:23 pm
Tomorrow’s Market Probably Won’t Look Anything Like Today
By CARL RICHARDS
cognitive_skills  biases  financial_planning  recency_bias 
february 2012 by jerryking
Forget Stocks—Chinese Turn Bullish On Booze and Caterpillar Fungus - WSJ.com
JANUARY 30, 2012 |WSJ | By DINNY MCMAHON.

Forget Stocks—Chinese Turn Bullish on Booze and Caterpillar Fungus
Investors Chase Returns in Strange Places; A Wild Ride in 'Roaring Yellow River'...With Chinese stocks falling, real-estate markets flat and bank deposits offering measly returns, Chinese investors have been looking for help in strange places. Besides traditional medicinal products, they are plowing money into art-based stock markets, homegrown liquors, mahogany furniture and jade, among other decidedly non-Western asset classes....The problem for Chinese investors is that returns have evaporated from more traditional markets. Real estate was once China's favorite investment, but government efforts to contain price increases and keep housing affordable have led to price stagnation and even declines in some cities. China's major stock exchange in Shanghai is down almost 20% since the beginning of 2011. Bank deposit rates are lower than the pace of inflation, meaning savers effectively pay banks for the privilege of handling their money.

"There really are very few investment channels," says Ren Jun, a 30-year-old media entrepreneur with investments in contemporary art, antiques, gold and silver. "That's why I'm kind of forcing myself to be brave in trying new options."
China  investing  investors  personal_finance  financial_planning  asset_classes  diversification  art  collectibles  commodities  alternative_investments  antiques  furniture  collectors 
january 2012 by jerryking
How to Build Your Financial Dream Team - WSJ.com
DECEMBER 31, 2011

How to Build Your Financial Dream Team

By KAREN BLUMENTHAL
financial_advisors  howto  teams  financial_planning 
january 2012 by jerryking
Wealth Matters - The Rules That Madoff’s Investors Ignored - NYTimes.com
January 6, 2009 | | By PAUL SULLIVAN.

THE 10 PERCENT RULE The saddest Madoff stories are the ones about life savings lost. These were people who had, say, $5 million in one of his funds and now have nothing. Honestly, the people themselves need to bear some responsibility for this. The most basic book on investing will tell you never to put more than 5 or 10 percent into any one investment, particularly one meant to preserve wealth…Having a concentrated stock position when you’re working for a company is sometimes unavoidable. If you were a senior executive at Lehman or Bear Stearns, a part of your bonus was paid in shares, and such restricted stock needs to be held for a period of time, generally two to seven years. Having a concentrated position in other circumstances, however, is foolish. Any responsible wealth manager works to reduce or hedge a person’s concentrated stock position. With Mr. Madoff, investors went the other way and added money year after year. Discipline is key: stick to 10 percent or less and remember that any investment can go bust.
CONSISTENCY IS BAD - Consistency at the highest level isn’t bad; it’s impossible. There are too many variables that inhibit being great on a regular basis.
THE GRAND FALLOON Kurt Vonnegut coined this phrase in “Cat’s Cradle,” and never did it have a more devastating application than in the Madoff scheme. In Vonnegut’s world, a grand falloon was a false association mistaken for friendship — two people from the same town, same university, same company meet somewhere and believe that coincidental connection has significant meaning. It doesn’t, no more so than belonging to the Palm Beach Country Club or the Fifth Avenue Synagogue did for those who used their proximity to Mr. Madoff to coax him into taking their money.
This is a crucial point particularly in opaque investments, from hedge funds to private equity partnerships: just because someone is a good golfer does not mean he should be trusted to invest your money. Private bankers are forever telling their clients not to try to get into someone’s hedge fund just because you enjoyed their conversation on the course — or, worse, want to play with them again. Like taking care of your health, picking an investment adviser should be done with the utmost rigor.
‘DON’T ASK, DON’T TELL’ - Ask questions and don’t assume the person who brings an investment to you has vetted it. Nothing in which you are putting millions of dollars is so wonderful that it cannot withstand scrutiny.
PUT MONEY IN BUCKETS - follow the popular wisdom of private bank investment strategists: divide your money into buckets to insure the money you need to live on will always be safe. Most strategists advise putting your riskiest assets into your philanthropy bucket.
Bernard_Madoff  high_net_worth  fraud  mistakes  opacity  friendships  trustworthiness  diversification  biases  personal_finance  financial_planning  grand_falloon  wealth_management  concentrated_stock_positions  high-risk  philanthropy  due_diligence  passions  passion_investing  impact_investing 
october 2011 by jerryking
Ten financial steps to take before you die - The Globe and Mail
TIM CESTNICK | Columnist profile | E-mail
From Thursday's Globe and Mail
Published Wednesday, Nov. 24, 2010
financial_planning  estate_planning  Tim_Cestnick 
april 2011 by jerryking
The Urge To React
Richards, Carl
The New York Times
03-19-2011

It's hard to stick to a plan when everything is screaming at you to
abandon ship. I'm also not saying that the market will stop going down.
But if you have carefully considered your investment decisions in the
context of your life and goals, with a clear understanding of the risks
you take when you invest in the stock market (no excuses here since we
just lived through the best example of risk in decades), then now is the
time to stick to the plan.
financial_planning  crisis_management  reflections  personal_finance  goals  values  crisis  self-discipline 
march 2011 by jerryking
globeandmail.com - This won't be your regular job loss
January 31, 2009 G&M column by AVNER MANDELMAN arguing that
the unemployment picture is grim, rising eventually to 13 per cent and
staying high for a year or two – which means that bonds could trump
stocks, and folks should keep more cash than usual, for emergencies such
as layoffs.
Avner_Mandelman  layoffs  crisis  financial_planning  personal_finance 
february 2009 by jerryking

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