The Less You Give, The More You Receive

On July 1, 2012, group retirement plan service providers are required by law to more fully disclose their fees.  These long-awaited federal regulations are primarily focused on 401(k) plans, to give both participants and sponsoring employers a more transparent view of the fees they are paying.

Why is this important?  Because whether you’re a 401(k) plan participant or not, low fees are at the heart of a good investment outcome for any portfolio.

According to a 2010 Morningstar study ¹ that encompassed a 5-year look-back period, low-cost funds categorically outperformed high-cost funds.  In fact, in every asset class over every time period, the least costly quintile of mutual funds produced higher total returns than the most expensive quintile.

Morningstar went so far as to say that expense ratios were the most dependable predictor of performance.  “Investors should make expense ratios a primary test in fund selection,” the study concluded.  “If there’s anything in the whole world of mutual funds that you can take to the bank, it’s that expense ratios help you make a better decision.”

As with 401(k) plans, the only way you can know whether your investment fees are low is to determine what those fees are, and how they compare with others.  If you have any doubt, contact someone who can help.

The Taxpayer Warrior Strikes Again

On July 2nd, The Des Moines Register smartly published another letter to the editor I sent them.  It went like this:

So Polk County supervisors are going to start paying part of their health insurance for the first time ever, effective July 1? It sounds like a great victory for taxpayers – until you consider it’s expected to save less than $3,000 annually.

In fact, those affected will only being paying between $15 and $25 per month for insurance premiums. While that’s more than zero, it’s hundreds of dollars less per month than most private sector employees pay.

Regardless, Supervisors Chairwoman Angela Connolly crowed, “We all have to pay our fair share in terms of insurance costs.” This is just another example of how far out of touch elected officials are with their constituents, and with the economy.

This took me all of 15 minutes to write and email to them, but I can confirm that I got a lot more than 15 minutes of enjoyment out of embarrassing a bunch of wasteful politicians!

These People Are Not Well

It's past time to add a few new members to my list of people who are Whacked Out In The Head (WOITH).

I haven't even mentioned this acronym for over six months, the last time when I was handicapping the field of Republican presidential nominees.

Based on her campaign after I wrote that, I'm elevating Michele Bachmann to full WOITH status.  Just like WOITH members Steve King and Bob Vander Plaats, if you pulled back her skin I'm pretty certain there's an alien creature underneath.

I'm at least going to add a politician to the WOITH list while I'm on the topic. Hmmm, so many to choose from...Kentucky Senator Mitch McConnell is certainly deserving, but it has to be...my own State Senator, Brad Zaun.  Not only has he never met a social conservative issue he didn't like, but he also took on the duty of campaign manager for Bachmann when fellow WOITH member Kent Sorenson quit.  It couldn't be more perfectly symmetrical than that.

To save time, I'm just going to list my new WOITH members with no explanation.  If you don't know why they belong, I suggest you Google them:

Charlie Sheen (obvious and belated omission until now)

Jerry Sandusky

Anyone with a reality show on MTV

The entire Kardashian family

And as an honorary member, I also want to include the guy down my street who put a $60,000 house on a $30,000 lot.

Citizens Un-united

A few months ago, many beef-industry-reliant states got into a tizzy over media reports about 'pink slime.' This is in fact a derogatory name for a beef filler / by-product that's found in practically every package of ground beef.  (The beef industry prefers the name "lean finely textured beef.")

Anyway, the governors of these states held a press conference at a processing plant to complain about the way this filler was being characterized.  At this made-for-TV event, the mainstream media reporter who gave the 'pink slime' a national spotlight asked Iowa's governor a question - did his interest in this issue also stem from the fact the beef processor was one of his biggest political donors?

Of course, the governor responded with righteous indignation that someone would even think there was a connection.  Many others, including my own friends and acquaintances, agreed it was a cheap shot question from a self-aggrandizing reporter.

Hold on, now.  While this 'pink slime' deal was very overblown and a bit offensive, that question was not.  If politicians are going to accept political donations, they are fair game to be criticized when they appear to do favors for those donors, rightly or wrongly.  It doesn't matter if they actually happen to believe what they're saying, the appearance of impropriety is there.

Of course, this is just a microcosm of the current state of affairs in this country when it comes to money and politics.  Thanks to the Citizens United decision, money has never had a bigger influence in who gets what in the USA, and politicians have never been more brazen about doing favors for those who provide them with financial backing.

Senator John McCain, one of the few people who still can pass as a moderate Republican and a long-time voice for campaign finance reform, recently said about Citizens United, "There will be scandals associated with the worst decision of the United States Supreme Court in the 21st century.”  Will be?  It's been happening since the day the decision was made.

Even before that decision, that system was still broken.  PACs/SuperPACs and lobbyists have always had too much influence, mostly due to the access their money buys them.  I used to work for a large trade association, and it was no secret how this worked.  When raising money for the PAC, they openly stated  that money was how the game was played, and they needed to be a player.

Oh, but they didn't say that publicly.  Instead they had the gall to quote Thomas Jefferson, who once said, "We in America do not have government by the majority. We have government by the majority who participate.”  As if that meant Jefferson would support a PAC!  (Note - Thomas Jefferson also said, "The end of democracy will occur when government falls into the hands of lending institutions and moneyed incorporations."  Why didn't that trade association use that quote?  D-bags.)

What planet are elected officials on when they allow themselves to accept money from people and especially from corporations, yet don't think constituents or the media should question them about the consequences of that relationship?  It's legal bribery, with politicians who don't want to change it and an electorate that feels powerless to change it.

Golf Is Good

The U.S. Open Golf Championship is this weekend.  As a golfer, this is pretty much a must-see-TV event me, as is The Masters and the other so-called 'major' tournaments.

That surely sounds incredibly boring to those who don't care about golf.  Too bad for them.  The fact is, people of all ages who don't care about it are missing out, big time.

Let's just summarize a few of the reasons that golf is the greatest sport ever invented:

• It's a life-long sport.  It can be played at any age, and you don't need to be in peak physical condition to enjoy playing it.  Even older and disabled people can play it, because it doesn't require absolute physical strength and agility (although that helps).

• It's never the same.  Unlike the uniform conditions for indoor sports, in golf every hole on every course is different, and the weather elements are always a factor.

• It's got competitive equilibrium.  With its handicap, slope, and course rating systems, any two people can play on any given course in an even game.  No other sport can consistently and accurately do this, which is totally awesome!

• It's incredibly challenging, requiring as much mental as physical skill.  But still so damn much fun.

And lastly.....Caddyshack!

Taxpayer Funded iPads For Everyone - Update

The good news is, my Des Moines Register letter to the editor on this topic was published today.  The bad news is, they published it in the local 'Community' section of the paper rather than the statewide edition.  So instead of thousands reading it, only hundreds will.

Oh well, as long as it exposes the Johnston Community School District as out of touch with the taxpayer, like most governmental / nonprofit entities, it isn't all bad.

Profiting In The Nonprofit World

I've blogged before about the scandals in the nonprofit world, especially when it comes to wasting taxpayer money.  (In comparison, nonprofits like charities or membership organizations focus more narrowly on only fleecing those who contribute to them.)

But when is comes to school districts, this is getting ridiculous.

In this week's Des Moines Register, you would have counted no less than four different stories of scandals, waste, nepotism, and/or outright embezzlement at four different school districts.  From superintendents to clerks, everybody seems to be working it.

The "it" is the simple knowledge that there is very little accountability or oversight in the nonprofit organizational model.  The "it" is the lack of competition and incentive that would make employees and boards pay more attention to detail.  The "it" is understanding that no matter how bad its behavior, a nearly unlimited funding stream from taxpayers will keep the entity operating.

Let's turn public schooling over to the for-profit world.  It's a bad idea who's time has come.