May 18


Are You Keeping Secrets From Your Spouse?

A Modern Day Fable:

Frank, a retired police officer, met with his financial advisor several times right before he retired in order to ensure that all the pieces of his financial puzzle were put together in a smart and cohesive manner.  But there was a BIG problem: his wife, Barbara, never attended the meetings.  At age 65 Frank finally hung up his badge and settled into retirement.

Frank thoroughly understood that a diversified portfolio of stocks and bonds was a powerful and consistent way for his money to make money.  Frank also understood that it was OK to start spending his hard-earned savings now that he was retired.  He had big plans.  He would buy an old boat and fix it up.  Next, it was time to take his wife to the Caribbean for a few weeks each year.  And maybe join the local country club where all of his golf buddies hang out.

“Barb,” Frank said, one day as they were drinking their morning coffee together, “I’m thinking about checking out a nice bass boat I saw online.”

Barb’s eyes widened and stared at her husband incredulously.  “What do you mean!?  We can’t afford that!”

Frank responded quickly, “Don’t worry about it.  We are fine.  My advisor says that we can spend nearly $3000 a month from our savings above and beyond our budget.  They are only asking about $10,000 for the boat.  I have it all figured out.  We’ll be fine.”

Barb shot back,  “Are you out of your mind, Frank?  It said last night on the news that the Dow Jones just went way down.  And you know what?   Nancy next door keeps talking about this scary stuff she’s reading online.   Frank, there is no way we can be spending money on stuff like this.”

Frank saw the look in his wife’s eye and knew she meant business.  His dreams of trolling the Gulf began to fade away…..

Moral of the Story:  If you are married, be sure to include your spouse in any financial planning discussions.  I don’t care if you usually handle “this kind of stuff.”   If you aren’t on the same page as your spouse, you may end up like Frank, sitting on the sofa, watching a show about fishing, dreaming of what could have been….

Here’s a question I get from time to time:

What happens if I have my mutual funds and investments with a bank and the bank goes bankrupt?  (JP Morgan Chase, BofA, Merrill Lynch, etc.)

Whenever you buy a stock or bond or mutual fund, that investment has to be “held” somewhere.  Back in the good old days, many people would actually hold stock certificates inside a safe in their house.

Nowadays, with modern technology, stocks and bonds are held electronically at a “custodian.”  A custodian is simply a financial institution that holds your investments.

So what happens if the custodian goes bankrupt?  First of all, this is an extremely rare occurrence.  In 2008, when Lehman Brothers went bankrupt, JP Morgan Chase purchased them and took over the custodial responsibilities.  Not a single account holder lost a penny due to the bankruptcy of the custodian.  It simply meant was that JP Morgan Chase started to hold the stocks and bonds instead of Lehman Brothers.

But what you really need to know is the following:  whoever is holding your investments has no financial claim to your money.  Your assets are held separately from the bank’s assets.

For most of you who work with me, you know that we employ TD Ameritrade.  This particular bank holds 540 billion dollars in client assets.

So if TD Ameritrade comes out tomorrow and says they are going bankrupt (which they won’t), what happens to your money?!

Let me answer that question, by asking another question.  Let’s say you purchase 100 shares of Disney stock, and you request the actual paper stock certificates.  You then place those certificates in a safety deposit box at a local bank.   If that bank went bankrupt, would you lose your stock certificates?

Absolutely not.  You would go to the now-bankrupt bank, open up your safety deposit box, and take your stock certificates.

The same thing applies to you and your investments now.

There are actually several additional layers of safeguards for consumers, including SIPC insurance, but at the end of the day, you really have nothing to worry about.

So if you are concerned about the bank holding your investments.  Please stop.  There is nothing to worry about.

Be Blessed,


P.S.-  I am now doing my social security classes  online.  You and your friends can sign up at

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