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The Independent Investor: The Richest Man on Earth
By Bill Schmick On: 06:41PM / Friday March 15, 2013
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As the white smoke clears, the first Argentinean was appointed to the pinnacle of the Roman Catholic Church. Pope Francis I, formerly known as Cardinal Jorge Mario Bergoglio, assumed the reigns of what many believe is the wealthiest instituition on Earth and since he is the boss that makes him one wealthy individual.

At the helm of this financial behemoth representing 3,000 dioceses and 1.2 billion Catholics worldwide, is a 76-year-old man who likes to be called "Father Jorge," who takes the subway and prefers to dress in clerical black, rather than the rich red of his fellow cardinals. He is a man who rejected the palatial digs of his predecessors as Archbishop of Buenos Aires, opting instead to live in a small apartment where he cooked his own meals.

Francis I is responsible for untold billions in assets that range from priceless art works to real estate holdings that are so large they rival the size of many small countries. No one knows for sure how much the Catholic Church is worth although over the years various media organizations and research centers have made a stab at estimating portions of the net worth of this 2,000-year-old religious order.

For example, back in 2010, The Economist estimated that the church and organizations owned by them in just the United States was spending roughly $179 billion a year. They estimated that the 34 metropolitan provinces managed by 270 bishops spent 57 percent of that money in health-care networks, 28 percent went to colleges while parish and diocesan operations (of which there are 196) accounted for only 6 percent. It might surprise some to know that charitable donations only accounted for 2.7 percent.

The church employs 2,800 lay workers worldwide, which isn't much considering the number of Catholics out there. Pope Francis' new digs, Vatican City, alone accounts for 1,900 of these workers. Given that the Vatican is officially a city state, its employees are responsible for issuing its own passports, license plates, postal service as well as the administration of a host of offices and buildings, including its own hospital. Much of that infrastructure has outgrown the confines of the world's smallest country and has sprawled throughout Rome's urban landscape.

If we confine our discussion to just the assets the Vatican owns, we know that its portfolio includes billions in property across Europe. Included in the portfolio are buildings in London, Paris and Switzerland. Then there are the landmarks in Rome, which draw 5 million tourists a year such as the Apostolic Palace (the pope's official residence) the Sistine Chapel (with its murals by Botticelli and Michelangelo) and St. Peter's Basilica, the largest church in the world. You could combine Disneyland, Disney World and a couple more such attractions and you wouldn't come close to the worth of those historical spiritual shrines in the middle of some of the highest priced real estate in Europe.

There are estimates that worldwide, the Church owns roughly 716,000 square miles of real estate - about the size of Alberta, Canada - which includes churches, cathedrals, monasteries, schools and convents among other properties. Its bank, called the Institute for Works of Religion (IOR), is estimated to be worth $8 billion to $10 billion and has investments in multiple corporations ranging from finance, insurance, chemicals, steel, construction and real estate.

It is thought that the Vatican holds a mountain in gold worth several billion dollars. The real money, however, is tied up in artwork and other irreplaceable religious relics. They are both practically impossible to categorize and even more difficult to price, since the Church would never sell these objects.

Yet, despite its wealth, the Catholic Church has been cash-flow poor for several years. Scandal and mismanagement has cost this colossal non-profit an enormous sum. The abuse scandals have drained the church of well over $3.3 billion to date. That number is expected to grow as more cases are decided in favor of the plaintiffs. For an organization that receives $170 billion annually in revenues, a couple billion might seem like small change; but many of the settlements have been made by individual dioceses and religious orders, which are not nearly as wealthy as the Church overall. Eight U.S. dioceses have already declared bankruptcy as a result of these settlements and more of the country's 196 dioceses could wind up in similar straits.

The Vatican Bank, itself, has also been the subject to repeated multimillion dollar scandals ranging from money laundering, to mismanagement and the lack of financial controls. So don't envy the new pope too much. Francis I has his work cut out for him and I suspect he will have precious little time to enjoy his status as the wealthiest guy on Earth.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.



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The Independent Investor: Financial Planners: The Good, the Bad and the Ugly
By Bill Schmick On: 03:08PM / Friday March 08, 2013
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Recently a number of clients have expressed an interest in hiring a financial planner to provide a roadmap toward retiring or saving money toward a child's college education. They asked me what they should look for when hiring such an individual. Here is my advice.

First off, one needs to understand what a financial planner actually does. A practicing financial planner looks at all aspects of your personal finance and that of your family. After understanding your goals and objectives, they create a plan that should include everything from how much money you make, spend and save, to your retirement objectives, education and insurance needs, estate and tax planning concerns and even business planning (for those who own a business).

Many older clients simply want to cut to the chase — how much will they need to retire and when. Creating a financial plan takes a lot of work and there are no short cuts. You have to put in the effort and it can end up costing you anywhere from $1,000 to $5,000, depending on what you want.

In addition, you need to spend time with the planner because they need to gather a lot of data about you and your household and it helps if you keep good records. Once the data is assembled, planners input that information into one of several financial planning software programs. The output should give you a fairly clear idea of where you are going financially.

Most of today's financial planning programs are interactive, which means that by changing assumptions (like retiring at 65, instead of 70 years of age, or saving $100 more a month rather than $50 over the next 15 years) you can generate different outcomes. Depending upon their experience and knowledge, a financial planner can come up with scenarios and solutions that best fit your circumstances. I strongly advise everyone to undergo this process and do so more than once. It could mean the difference between a happy retirement for you and your family or bagging groceries for a living to make ends meet when you are eighty.

Since there are literally hundreds of thousands of people who call themselves financial planners, how do you whittle it down to the one or two that are best for you?

One way would be to narrow your search is to select a Certified Financial Planner (CFP). CFPs must prove that they have completed a rigorous program of study on all aspects of the discipline and are then required to pass a two-day examination. It doesn’t guarantee that they are good at the job, but at least you know they have acquired the knowledge base.

My next suggestion would be to hire a "fee-only" planner as opposed to someone who is "fee-based." Fee-only planners charge you for the financial plan and that's all. Fee-based planners can and do sell a whole host of products and make commissions and fees on those products as well as charging a fee for the plan itself.

Clearly a potential conflict of interest arises when the same person who creates your plan "discovers" you need more insurance, or an annuity, or a new money manager and makes more money selling these services to you than the cost of the plan itself.

That doesn't mean that all fee-based planners are bad or all fee-only planners are good. I know, for example, excellent planners that are fee-based. I also know planners, who are not CFPs, but have vastly more experience than most CFPs. It simply means that you should be aware of these differences when shopping around and never, ever accept a planner that you have not checked out.

It is always smart to ask others for names of planners who have done a good job for them. That doesn't mean you are off the hook. You should still check references, vet the person (at least on the Internet) and find out what the charges will be before you agree to hire the planner.

If you follow this advice, you still may end up with a bad planner but chances are you will avoid a really ugly one and find someone who will provide real value for your money.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.



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@theMarket: The Blame Game
By Bill Schmick On: 03:28PM / Friday March 01, 2013
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Let's call out names, names, I hate you more

Let's call out names, names, for sure"

— 'Blame Game' by Kayne West



 

 

 

 

If it wasn't such a national embarrassment, the finger pointing going on among our so-called leaders would be comical. Nonetheless, it is March 1 and time is up. Bring on the Sequester.

Our congressional leaders made a big show today at the White House sequestration meeting. It was their first such meeting on the subject to date. I considered it a photo op at best. This week, rather than attempt a compromise, both Democrats and Republicans spent their time blaming each other for the Sequester.
 
From the GOP point of view, it is "the president's sequester" while the president is blaming the cuts on the Republican's failure to act responsibly. Since it was the Budget Control Act of 2011 that first authorized the Sequester, (if the bi-partisan "Super Committee" couldn't come up with a compromise solution to reducing the deficit), let's look at how the final vote panned out.

One hundred and seventy-four Republicans voted for the measure but only 95 Democrats. The final tally was 269-161 with just about all of today's GOP leadership voting yes. These are the same characters who now claim it was Obama's fault. All of this name calling is a smokescreen to hide an even more important deadline that occurs at the end of March.

On March 27, Congress will need to pass a "continuing resolution" (read short-term spending plan) or funding for the Federal government will expire. Yes, my long-suffering readers, without a deal between the two parties the government shuts down. Continuing resolutions are stop-gap measures that keep the lights on in Washington, absent a formal budget. We haven't had one of those in years because of political partisanship.

The threat of a shutdown actually will force Congress to act since, unlike the more subtle and slower-paced sequester cuts, a total shutdown of the government would be highly visible and extremely disruptive. It would not be pretty. Either congress will agree to keep the sequester cuts as is or it will have to come up with an alternative set of revenue increases and spending cuts.

In the meantime, both parties will have had almost a month of dealing with irate airline passengers, defense contractors, various agency heads, parents of Head Start children and the like. So this week's failure to compromise is simply setting the stage for a bigger cliffhanger, much more drama and, I suspect, heightened volatility in the stock market.

Readers may have noticed that over the last two weeks volatility has escalated among the averages. We will most likely see more one percent up and down days as March unfolds. Washington seems to be providing the justification for the pullback I have been expecting. So with headwinds strengthening, one wonders just how long the markets will be able to shrug them off. But let me be clear: I don't expect a market route, simply a nice pullback that stocks sorely need in order to advance further this year.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.
- See more at: http://www.iberkshires.com/blogs/Bill_Schmick#sthash.JrIiQUKK.dpuf
Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.
- See more at: http://www.iberkshires.com/blogs/Bill_Schmick#sthash.JrIiQUKK.dpuf

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.



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The Independent Investor: Snap, Crackle and Pop
By Bill Schmick On: 02:44PM / Thursday February 28, 2013
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Chiropractors are seeing more patients than ever and that trend is expected to continue as Baby Boomers grow older. The popularity of alternative medicines and Americans newly-found caution towards pain killers only increase the demand. But the real question is can the industry get paid for it?

By 2016, the chiropractic industry is forecast to reach $14.8 billion in revenues. Those sales are divided among 142,000 to 143,000 chiropractors practicing in America today. That number is growing slowly even though the healthcare industry overall continues to grow far faster. The slower growth can be explained by a number of trends that have turned out to be a two-edged sword for the industry.

As I mentioned, the graying of America has been one trend that has filled the offices of many chiropractors around the nation. To be fair, my headline is misleading since the days of forcing someone's body into contorted positions and inducing a snap, crackle or pop are long gone. I, for one, have been going to chiropractors for years ever since injuring my back during a rocket attack in Vietnam. Sharing the waiting rooms with me and my disc issues, have been an increasing array of patients suffering a diverse list of common ailments. Neck pain from whiplash injuries, scoliosis, hip and knee problems and carpal tunnel syndrome are only some of the aches and pains that afflicts all of us oldsters (and many youngsters as well).

Unfortunately, most of these conditions cannot be resolved by surgery nor will they disappear forever once treated. I have herniated discs and for me this is a chronic condition. Although that's bad for me, it's good for the chiropractic business, or could be if it weren’t for the limitations placed on chiropractic visits by most medical insurance companies.

Most plans limit chiropractic visits to 12 sessions a year. I can go through that many visits in one month if I throw out my back severely, which can happen once or twice a year. After that, I pay out of pocket. Most people can't afford that.

Although chiropractic care is gaining acceptance among more and more health-care providers, it wasn't always that way. There was a time in the not too recent past when most medical professionals wrote chiropractors off as quacks or charlatans. The insurance companies, following that lead, made it extremely difficult for chiropractors to be reimbursed for their services.

The passage of the Patient Protection and Affordability Act in 2010 (Obamacare) is expected to improve the position of chiropractors among health insurance providers. The act makes it illegal for insurance companies to discriminate against chiropractors and other providers, relative to their participation and coverage in health plans.

That may be good news, but like other medical practitioners, chiropractors are faced with shrinking reimbursements, while at the same time their regulation and insurance costs are skyrocketing. Another hindrance to the growth of the profession is its position as an alternative medicine and not a primary form of healthcare.

Yet the well-documented shrinking in the numbers of general practitioners in America has also bolstered the demand for chiropractors as an alternative primary care physician.

"People often say they would rather come to us first before going to their doctor," says Ron Piazza, owner of Berkshire Family Chiropractor in Pittsfield and a practicing chiropractor since 1985.

He has a point. In my experience, it usually requires one to two months before I can get a visit with my GP. If there is an emergency, my alternative is the hospital emergency room. But I can get in to see my chiropractor on the day I call, if it is an emergency or a day or two if it is not. I know that whatever ails me, he will have a lot more expertise in guiding me in the right direction.

"More and more, we are being considered the first line of defense by our patients," Piazza explains. "Simply because there is nowhere else to go except the emergency room."

That makes a lot more sense when one realizes that the education required to become a chiropractor is not that much different than that required of a medical doctor. It is a four-year curriculum after college including residency whereas, in general, an MD requires six years, although two of those years are in residency.

From a personal point of view, I can expect to hurt myself at the gym or snow shoeing or cross country skiing or something else at least once or twice a year. The older I get, the less likely that my body can rebound on its own. I have a strong aversion to taking drugs and have found that a chiropractor performs for me the same function an auto mechanic provides for my car. In fact, I'm going for a tune-up tonight.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

 



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The Independent Investor: Vocational Schools — A Youthful Answer to Unemployment
By Bill Schmick On: 04:24PM / Thursday February 21, 2013
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If you think a 7.8 percent unemployment rate in this country is terrible, ask an unemployed 18-year-old how their job search is going.

I'll tell you, not well. Today, unemployed workers between the ages of 16 and 19 years old have an unemployment rate of more than 23 percent, according to the Bureau of Labor Statistics. That number falls to 20.9 percent among white kids and explodes to 39.3 percent for African-American youths. The dismal fact is that for America's young adults unemployment is 30 percent higher than the national average.

Youth unemployment is worse than at any time since the Great Depression and will remain stubbornly high largely because the young lack the experience and skills of older workers. So if you believe, like I do, that young people represent the future of this country, something better be done to turn these numbers around and pronto.

In my last column, I wrote that trade/vocational schools were making a comeback. And as this century picks up speed the demand for skilled workers in a variety of high-paying, blue-collar areas is going to accelerate. For many of today's unemployed youth, vocational training should be a no-brainer. Here's why.

Vocational training requires less time to complete than a college degree since most postsecondary vocational degrees can be had in two years. Unlike your college-educated brethren, you will have readily employable skills, therefore you can be working and earning money in as little as 24 months while many college grads will still be searching for a job. And you will do so without an enormous educational debt burden that most college grads will be required to pay down over the next 15-20 years.

But the future of vocational training, in my opinion, must do more. It must reach backward into our high school system. That's where the student's technical training should start. Let's face it, not everyone should go to college, nor do they want to. Yet, for the most part, our educational system is geared for that single objective. That is a big mistake.

Some students, maybe a lot of students, won't be attending college. What about them? Given the high cost of a college education today, many lower and middle income students already know they can't afford college. So why, they ask, should they even remain in a high school dedicated to preparing them for a college they will never attend?

I say bring back shop classes. Why not allow those students to spend at least half their time in a trade area, alternating a full week of career education and a week of academics?

What about trying a Swiss or Netherlands-style vocational education approach? In their systems, students in their last two-years of high school have the option of participating in a structured workplace apprenticeship, making money some of the week while spending the rest of the time in the classroom. That might explain why the Swiss unemployment rate among youths is only 5 percent.

Consider that in the Massachusetts' vocational technical high schools the dropout rate is half the rate of those at comprehensive high schools, according to a recent study by Pioneer Institute, a Boston-based research firm.

Why? Students, who are given a choice between preparing for college (the comprehensive approach) or preparing to learn a skill or trade, feel they have more control of the future. In addition, the academic and applied learning environment in mastering a vocation of their choice tends to keep the student's attention and reinforce their commitment.

Finally, the more a student can apprentice while in the classroom the better. Apprenticeships, in combination with academic education, will improve the transition from schools to careers and higher paying jobs. It can upgrade skills and fine tune them to the needs of our nation's companies. I say urge our nation's businesses to return to the apprenticeship and training model. It worked well in this country for decades and works splendidly today in Germany, Austria and other European countries.

President Obama, in his State of the Union address, appears to recognize the need for a change of direction in how we are educating and training our youth for the challenges ahead. I say he is on the right track. What do you say?

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


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News Headlines
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Adams-Cheshire First-Graders Find Success In New Reading Initiative
Mass MoCA's Festival Field Getting New Features
Guest Column: Keeping Your Pet Safe This Holiday
Thanksgiving Greetings
North Adams Church Welcomes New Pastor & Music Director
Lanesborough Outlines 250th Celebration Calendar
'Dumb and Dumber To': It Sure Is
Williamstown Chamber Executive Director Departing
Selectmen May Seek Peer Review of Dollar General Traffic Study

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



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