Cheat Sheet Q & A: 


Today’s question:  (Recently)  you have stated that "bit coin" has nothing backing a fiat currency ‎thus very much like our federal reserve note NOTHING BACKING IT....


Bottom Line:  I feel the frustration.  And I understand it as well.  The very premise of bitcoin is born of this very feeling.  Central banks around the world are manipulating currencies (often devaluing them), so let’s break away from that system.  That’s why so many were drawn to gold and silver before bitcoin.  You likely may not know it but more than 30 quasi crypto currencies are being attempted right now.  Bitcoin just happens to be the one that has captured the imagination of the most people.  Let’s compare bitcoin to the US dollar.


  • It is true that the US Dollar isn’t backed by anything physical as it left the gold standard in the 1970’s
  • The US Dollar is backed by the “full faith and credit of the United States of America
  • The US Dollar is the recognized reserve currency of the world


I know it’s easy to be cynical on the full faith stuff these days.  We do have way too much debt.  We do have poor leadership in Washington.  The Federal Reserve has watered down our money supply by 23% since they began QE in December of 2008.  But we are still the #1 economy in the world and we have significant credibility as a result. 


Bitcoin has a very good chance of becoming the cyrpto currency of choice.  Aside from having captured the imagination of many people around the world, it is being capped at just 21 million bitcoin being allowed into existence.  That does take the Federal Reserve QE element out of bitcoin.  But keep in mind that bitcoin is literally an invented idea.  It does have and will have value as long as someone is willing to pay X for the bitcoin.  It’s literally an invented idea being assigned value.  That’s one of the biggest risks associated with it.  What’s to keep any one, any company or any country from creating their own version of bitcoin?  What happens if it’s outlawed (as is the case in Russia and India already)? 


If you have a topic or question you’d like me to address email me:


Audio Report:



Would a Comcast - Time Warner merger be a good or bad thing?


Bottom Line:  The new this week of a possible Comcast / Time Warner merger has brought up a great deal of conversation, emotion and often negativity.  Let’s cut through the noise and see what the impact on you would actually be.  By the numbers:


  • With customer satisfaction ratings in the low 70’s both of these companies are among the least liked national companies in the US (this is historically true in the cable industry)
  • If the merger were allowed to go through the new entity would control 38% of the cable market nationwide
  • There is no over lap anywhere in the country (literally not one home)


Now the deal itself from a shareholder point of view is poor in my view.  I don’t like all stock deals which is what this one is being offered as but otherwise…  If anything it could be a positive.  How? 


  • Cable is already a declining business.  Both Time Warner Cable and Comcast have been experiencing a decline in users since 2010 (so the impact of the merger would likely become less significant with time)
  • They are both the cable monopolies in the areas they serve so there isn’t any competitive change for you regardless of if it’s Comcast or Time Warner that’s your only option


Now for the potential benefit… 


  • Cable and satellite companies have increasingly been held hostage by the most in demand networks – most notably ESPN which is the most expensive network by a margin.  At issue is that the cable or satellite operator will often cave (the only example in which that hasn’t occurred is the current Direct TV / Weather Channel standoff).  With nearly 40% of the cable market, the premium content providers would need to do business with the new combined company.  They literally couldn’t afford to lost the distribution of so many households from an advertising standpoint.  Not even short term.  That could mean better bargaining power by the combined company and in term potentially lower price increases for you in the future


So in summation…  As a customer of either of these companies, a merger would either have no impact or if anything a slight positive benefit. 


Audio Report:



Still cheaper data coming from Verizon:


Bottom Line:  Good news Verizon data customers!  Do nothing and get a discount on your bill every month.  You can handle that right?  Evidently the recent price competition has been so intense that its driving Verizon to try to do a better job retaining its existing customers. 


Verizon will soon announce the “More Everything” plan.  Here are the details:


  • Existing Verizon data customers who pay for 8GB or less per month will get $10 per month taken off of their bill
  • Existing Verizon data customers who pay for 10GB or more of data per month with get $20 per month taken off of their bill


We’re now seeing in mobile competition what we saw with traditional home service in the 90’s.  That’s great news for our wallets. 


Audio Report:


Stop cashing out of your 401k plan!: 


Bottom Line:  We received what at first glance appeared to be good news regarding our 401k balances yesterday.   By the numbers Fidelity reported that…:


  • The average 401k balance reached a record $89,300 by the end of 2013
  • That’s up 15.5% from 2012


Sounds good right?  Well here’s what I see immediately…  We are really mismanaging our 401k’s.  How?  Why?


  • That 15.5% increase includes our contributions and those of our employer
  • The average stock appreciate by 30% last year


That’s terrible!  In other words the average person should have doubled their investment returns without any new contributions last year!  That means that many 401k plans aren’t being effectively managed.  If this is you…  Take advantage of the investment professionals that are available to you through you plan. 


Next up…  What’s happening when you leave your company…


  • 35% of people who left their company in 2013 cashed out their 401k!


That’s the single worst thing you can do for your future. Even if you’re in financial distress you shouldn’t touch your 401k.  It’s protected even in bankruptcy from creditors.  So in other words, we need to do a much better job of managing our most valuable retirement resource.



Government is managed better than a family owned & operated business!:


Bottom Line:  Here is a study from the National Bureau of Economic Research that has significant findings about the best and worst run organizations.  They studied 10,000 organizations of every type that require a management structure.  Here are the findings:




So… Government isn’t run well but family founded and run businesses are actually run more poorly!  So perhaps your company would benefit from having an outsider run the day to day while you focus on the products and services. 

Audio Report: