What Important Fact Links Kobe Bryant, Pete Maravich, and Lyman Bostock?

by Michael Goodman

Kobe Bryant and daughter

This week brought the first anniversary of the helicopter crash that killed Kobe Bryant, his daughter, and others. The media was full of tributes to his spectacular career and the tragedy of lives lost too soon. Kobe had retired from the Lakers but his business career was blossoming, he seemed to love being an active Dad to his four daughters, and he was winning major awards for his work in other fields (including an Academy Award for a short film). He was only 41 when he died.

His sudden death stands as a reminder that no amount of fame or fortune can protect us when the Reaper comes to collect us. Unfortunately, the sudden death of Kobe was not the first involving a major American sports star. Quite a few come to mind, but I thought this was a good time to review two pro athletes that mostly seem to have been forgotten, Pete Maravich and Lyman Bostock.

Pete Maravich

Pete Maravich
“Pistol” Pete

Pete Maravich was raised to be a basketball star by his father, who coached him at LSU. He averaged more than 44 points per game over three seasons in the 1970s, before the 3-point shot, and when freshmen were not allowed to play varsity sports. Almost as remarkable were his dribbling and passing skills, which became the precursor to players like Magic Johnson.

Drafted by the Atlanta Hawks but without much of a team to support him, he still became a star before being traded to the New Orleans Jazz, an expansion team. In his best single game, he scored 68 points against the NY Knicks without the 3-point shot. In his final season in 1979, he played as a reserve with the Boston Celtics with rookie Larry Bird in the first season the NBA allowed the 3-pointer. He only attempted 15 3-point shots that season as a reserve, but he made 10 of them! Sadly, he died just a few years later of an undetected heart defect at age 40. He’d been out playing a pickup game in Pasadena when he collapsed.

Lyman Bostock

Lyman Bostock
Lyman Bostock

The death of Lyman Bostock was possibly even more shocking as he was in the prime of his career when he was suddenly killed. Bostock was a baseball player who became a star outfielder playing for the Minnesota Twins. In his third season (1977), he hit .336 for the Twins and finished second for the batting title. After that season, he signed with the California Angels as a free agent for one of the largest contracts in sports at that time.

Possibly feeling the pressure of his new contract, he started the season with a 2 for 39 slump. Feeling guilty, he offered to give back his first month’s salary to the owner, who refused it. He vowed that if he wasn’t hitting at least his weight by the end of the first month, he would donate his salary to charity! He finished that first month hitting just .150 and did later donate that salary to charity. But his hitting recovered and he was batting .296 when the Angels visited Chicago late in the season.

After a game at Comiskey Park, he went to visit his uncle in Gary, Indiana. He was driven to visit a couple of other old friends when he was shot while sitting in the backseat with a woman he’d just met. The woman’s crazy husband had seen her there and assumed she was having an affair with the guy next to her and tried to shoot her from another car with a shotgun! Bostock was hit in the right temple and died two hours after arriving at the hospital. How senselessly tragic!

Lyman Bostock hit .311 over his four seasons in the majors and seemed destined for the Hall of Fame. He was just 27 years old when he died! But, as I wrote above, his sudden death stands as a reminder that no amount of fame or fortune can protect us when the Reaper comes to collect us.

Cash to Cover the Expenses of a Lifetime Without Market Risk

by Michael Goodman

From birth to death, there are times for all of us when we can use some extra cash. It might be for college expenses, unexpected medical bills, a wedding, buying a home, a great vacation, the cost of raising a child (or children!), and having enough money for a great retirement.

This video discusses a place to save money for those expenses without market risks.

U.S. sets new standard for financial advisors and agents (like me!)

posted by Michael Goodman

(The article below discusses the new rule being set by the U.S. Labor Department that will require financial advisors to put the needs of the clients first. My first reaction is – why did it take so long to create such a rule? In my practice, I ALWAYS put the needs of clients first and never offer any products or services that are not just suitable for the client, but which satisfy a particular objective.)

Labor Department rule sets new standards for retirement advice

By Jonnelle Marte

(view the original article HERE)

The Labor Department announced sweeping rules Wednesday that could transform the financial advice given to people saving for retirement by requiring brokers and advisers to put their clients’ interests first.

The long-awaited “fiduciary rule” would create a new standard for brokers and advisers that is stricter than current regulations, which only require that brokers recommend products that are “suitable,” even if it may not be the investor’s best option.

At a time when mom-and-pop savers are increasingly being put in charge of their own retirement security, the rule is meant to add a new layer of protection to guard workers from poor or conflicted investment advice. The rule is supposed to improve disclosures and to reduce conflicts of interest, such as cases when a firm is paid by a mutual fund company or other third party for recommending a particular investment.

“This is a huge win for the middle class,” said Thomas Perez, secretary of the Labor Department. “In far too many places and on far too many issues, the rules no longer work for working people.”

Proponents of the rule say it should cut back on cases of retirement savers being steered into complicated and pricey investments, leaving them with more savings in their pockets. While the new rule won’t ban commissions, brokers may have to explain why they are recommending a particular product when a less expensive option is available, and they could face scrutiny if they recommend complicated products. Conflicted investment advice costs savers $17 billion a year, according to an estimate from the White House Council of Economic Advisers.

“Hard workers need every dollar to work for them,” said Sen. Elizabeth Warren during a press event Wednesday announcing the rule.

It’s too soon to know exactly how the rule will play out, but the change could lead savers to invest more of their money in low-cost index-based funds, analysts say. Some investment firms could also lower their fees. For instance, LPL Financial said last month that it would allow savers to hold accounts with smaller balances and that it would cut the fees for some funds by up to 30 percent.

Another potential impact of the new rules, which affect people saving in individual retirement accounts or rolling money over from a 401(k) plan to an IRA, is that retirement savers might end up switching accounts or investment firms. Some investors may have conversations with their brokers and advisers over the next several months about whether they should be moved into a different kind of account or work with a different firm altogether.

“We’re definitely going to see investors that are forced to change how they interact with the investment services industry,” says Michael Wong, an analyst focusing on brokerages and exchanges for the fund research firm Morningstar.

Some firms may decide to move investors from commission-based accounts to fee-based accounts, where an investor’s costs may be structured as a percentage of assets invested, Wong said. The move would put savers into accounts where what brokers and advisers are paid would not depend on the type of investment product they sell, he added.

Those fee-based accounts are already subject to fiduciary standards but some financial professionals have said it may raise costs for investors who rarely make trades and are more likely to hold on to investments for the long term.

For some savers, particularly those with small account balances, the new regulations could require them to take on a bigger role in how their money is managed – particularly if they lose the advisers they’re working with now. Some companies facing higher administrative costs may feel pressure to drop clients with low account balances, say below $50,000, which may no longer be as profitable with fewer commissions. Some firms may try to transfer savers into stripped-down, online-based accounts, where they may pay lower fees but also receive less personalized advice.

Members of the financial industry said Wednesday that they were still reviewing the details of the rule but expressed initial worries about how the regulations would affect their relationships with customers.

“We remain concerned that the [Department of Labor’s] rule could force significant changes to current relationships, which may leave clients without the help they need to prepare for retirement,” said Kenneth Bentsen, president and chief executive of the Securities Industry and Financial Markets Association, a trade group for broker dealers and other financial professionals.

The shift could also encourage more people to use discount brokerages or online investment accounts dubbed “robo-advisers,” which typically use algorithms to help people create portfolios, according to a Morningstar report. The online options can often be more affordable than working with a financial adviser, in part because they often using index-based investment options.

Judy Barfell, a 67-year-old retiree near Daytona Beach, Fla., was surprised to learn a few years ago that her IRA savings were invested partially in emerging market funds, high yield bonds and other risky investments. After talking to her adviser about the portfolio and doing some other research, she also realized she was paying roughly twice as much in investment fees each year as she thought she was.

“You trust the people that you put your money with and then this happens,” she said.

Last year, Barfell moved her savings into an account with Rebalance IRA, an online based account where her advisory and investment fees add up to about 0.7 percent of her savings, down from the close to 2 percent in fees she was paying before. She said she is glad the rule will require advisers to put investors’ interest first, something she had previously assumed was required.

“You spend a lot of time in your career cutting out the money to save,” Barfell said. “It’s hard when you have your life … to put all that money aside. And then you save it and to have someone take advantage of you is really disheartening.”

The Labor Department also says educational information offered to retirement savers about types of investments would still be allowed under the new rules. But investment firms consulting savers on whether they should keep their money in a 401(k) or roll them over into an IRA would be required to meet the new standard on any advice they offer. Financial firms would have until January 2018 to get into compliance.