On weekends, a number of the Dallas radio stations broadcast infomercials for various people who earn their livings as financial advisors, stock brokers, real estate investment "mentors," and those who want to tell "already old people" how to tweak their remaining assets so that they will not outlive them.

I assume you can hear similar programs where you live.

Often times I find myself screaming at the radio as if the guy on the other end could hear me saying, "That's not right," "You're nothing but a crook," "Why does the radio station allow your to make such claims?"

Most certainly all of them do not fall into the questionable information-advice category, but a serious portion of them in the Dallas area, at least, do.

People are not corporations or perpetual trusts.  They do not have the option of perpetual life nor level mind, tools or physical being to have continuous earnings.  People have to earn it, live on it, and save it while they can because at some point the only financial friends they will have left are their saved assets, their pensions, Social Security, and the ability to tap welfare if and when all of those fail.

It is improper to advise people to invest and operate their personal finances as if they were a corporation or a perpetual trust; yet, in reality that's what many of these investment hucksters promote.

In the days before pensions, Social Security, and substantive health care insurance, most young families spent a part of their lives and their income taking care of at least one parent who could no longer sustain his own financial needs. 

Preservation of human dignity was important. 

In my own case, while it was never mentioned, I now realize that my daddy and mom financed the well-being of their mothers and my mother's aunt.

My daddy told me any number of times that the one thing he could guarantee me was that he and my mother would be able to comfortably live for the remainder of their lives without ever having to depend on their children for help...and he was telling me that when he was no more than 40-years old.  And it turned out as he promised.

So what is a good approach?  Here are some empirical rules, no matter your wealth, current income or what you perceive as your personal financial well-being.  Live by them, and you'll do fine.  (Yes, my daddy and mom did live by them.)

• Home ownership is not a proper investment tool to fund future retirement.
• All anticipated future needs should be guaranteed with the appropriate amount of permanent life insurance.  Term insurance, while it has a very valid purpose in most financial portfolios, does not replace the reason for permanent insurance
• Far more important than picking the "perfect" investment vehicle you will use to accumulate wealth, is picking one and then using the principal of Dollar Cost Averaging* for the remainder of your employment years
• Real estate is an improper investment when its rehabilitation and unexpected losses will be funded by anything other than the discretionary income of the investor or the conservative estimate of the net income the property can be expected to generate
• There are a number of sound-based insurance products that allow the policy owner to invest cash and at a reasonable return without exposure to current taxes and without exposure to loss as a result of bankruptcy or court ordered judgment. This is where windfalls belong...the Christmas bonus, an inheritance, etc.
• The commonly stated axiom, "buy term life insurance and invest the difference in equities" is a direct contradiction to the purpose of insurance and equity investments
• Most investment plans fail for one of three reasons:  1) the plan was never initiated 2) the plan was not religiously followed to completion, 3) the investment was tapped for cash to buy, say, a car.  It is rarely because the chosen investment vehicles were totally inappropriate, i.e., the mutual fund did not perform well, CD interest rates/bond rates went down
• During your lifetime, donations to charities, hospitals, libraries, and on and on should only be made from discretionary income, not in lump-sum gifts.  Large gifts should be made as bequeaths in your will or trust, or through a beneficial interest in a life insurance policy 
• Do not loan money to your children, relatives or friends after you have retired
• Do not give money to children, relatives or friends after you have retired
• Do not co-sign bank notes for anyone, including your children, relatives and friends, at anytime.  Period.  You are not a bank.  If they are unable to borrow from a bank, it's because they are judged a poor risk
• Under no circumstances should anyone other than your spouse be listed as a co-owner of your home, bank accounts, investment accounts, etc.  If you've done this, take them off today!  This is very important.  If you want them to have access to your accounts, you can do this by giving them specific powers of attorney
• Reverse mortgages are rarely a good thing
• Refinancing and home equity loans are a poor solution to bailing out your unsecured credit card debts and/or paying off cars and other bank loans, and,
• Keep the beneficiary designations current on your life insurance, pension and retirement trust accounts.  Those designations are NOT over-ridden by anything stated to the contrary in your will.

* Dollar Cost Averaging is an investment principal whereby the investor makes the same dollar amount investment regularly, say on the first day of every month he purchases $100 of ABC Mutual Fund shares, regardless of the price per share.

So back to the radio commentators whose thirty minutes of investment advice is preceded and followed by an all-encompassing disclaimer by them and the radio station.  To claim that they can show their clients how to safely (guaranteed) invest their money in vehicles whereby there is no chance of loss, yet the return will approach, say, Harvard University Charitable Trust (14% return over 20-year period) is ridiculous.

In yesterday's blog, I wrote about Paxton Kelso.  He considers these principals as he reviews your investment needs with you.  Patxon primarily services people in the early years of their business life.  My friend, W. Neil Gallagher, Ph.D., is known in Dallas as the Money Doctor.  He considers these principals when he is advising those who are nearing retirement age or who are already there. 

While I know that both of these men are properly educated and ethical, nevertheless, no investment plan should be initiated or maintained without the inclusion of your own good judgment, and none should be initiated on the spur of the moment, irrespective of what their value may be to your future.

Bill Cherry on the Web