Today’s Cheat Sheet Q & A:

Question:  Preserving savings in uncertain times

The question: 

I have built up (savings) in my 401K.  (Aggressive investing 15% - co match is 2%)

I am SOOOO afraid of loosing what I have saved by the declining value of the dollar that is being talked about all over the internet, "buy gold, buy silver" "new ways to invest to save your earnings", etc. "The dollar is going to be worthless - save yourself now".

Please help me - it is very confusing out there AND who do I trust so as not to loose my hard earned money and what I have accumulated if there is a major financial shift with the dollar? Do I buy gold, silver, invest in universal insurance????

If I should do any of these things, who do I go to and how do I do it???

Bottom Line:  My bottom line advice is to have a personal consultation with an investment advisor.  With your savings occurring in a 401k plan – you should have access to advisors through the administrator of the plan.  In virtually all 401k plans you’ll have at least three different types of options for your investment money.  They are:

  • Blended stock funds
  • Mixed bond funds
  • Money Market fund

(Some companies may offer company stock if they are publically traded) 

  • Stock funds historically carry the most risk but also the highest average rate of return at about 8.4% per year
  • Bonds funds typically carry less risk but a lower rate of return of 3-3.5%
  • Money Market funds carry virtually no risk and provide a historic rate of return of about 2-2.5%. 

I have many rules of the road I live by when investing and planning for the future – including retirement…  But there is one that’s unwritten and important.  You need to be able to sleep.  Your investments shouldn’t keep you awake at night.  While I can’t offer specific advice to you with regard to your investments I’ll break down a few of the items you outlined:

  • Saving 15% with a 2% match – Congrats!  That’s terrific commitment that should reward you well with sound investment decisions over the long run


  • Fear of the US dollar collapsing…  I’ll elaborate on the one.

The US dollar has been watered down, so to speak, by Quantitative Easing by the Federal Reserve (aka money printing).  By my estimation we have 21% more US currency in circulation than before the Great Recession.  That practice has led to a slightly weaker dollar against other world currencies but the recent trend has turned around significantly. 

The recent expectation that the Federal Reserve will begin to scale back, or taper, QE later this year has led to a stronger dollar of the past two months.   The dollar is back to being worth more than the Canadian and Australian dollar and has generally gained ground against other important world currencies.  Additionally S&P and Moody’s recently announced a stable outlook for the US credit rating as our deficit rate is decreasing as a result of the Sequester and improved revenue through capital gains (as the stock market has been a strong performer over the past three years).  The result is that the trend is a stronger dollar and certainly not a US dollar that is in current danger of collapsing.  If that time comes I’ll do what I can to keep all of us ahead of the curve to be able to prepare (a la investments prior to the fall of 08’). 

  • Buying gold, silver or universal insurance on the expectation of collapse

Candidly I didn’t even know that universal insurance was being pitched to investors fearing collapse but it certainly wouldn’t be something I’d want to cash out of my 401k plan to invest in.  I’ll move along to gold and silver. 

Recently when gold and silver experienced severe declines I wrote a series of entries to address many listeners who were confused and/or upset that gold and silver were causing them to lose a great deal of investment money despite the huge debt the US has and continues to accumulate.  Here are a couple of key considerations with gold and silver as an investment.

  • Gold hasn’t been pegged to the US dollar since the 1970’s (when the US dropped the Gold Standard)
  • Silver has never been pegged to the US dollar (allow once upon a time some “Silver Notes” could be redeemed for silver upon request)

In other words it’s perception that if the US dollar declines gold and silver will rise.  To be clear – that’s a possibility but there is no certainty and no direct connection between the dollar and precious metals (other than using dollars to purchase them).

For my purposes, I believe in investing in “producing investments”.  Gold and silver require you to be a trader to reap a profit.  In other words, the price of the metal must appreciate and you must sell at the right time to derive benefit.  That’s difficult for many professional commodity traders to do let alone most individual investors.  Investing in companies, most commonly through stock investment, is an example of a producing asset.  If you invest in profitable companies, especially those that pay a dividend, you own your share of the profits and dividends produced.  Those have inherent value regardless of the share price that a company trades at from day to day.  Just a little food for thought... 

It sounds like you’re on the right path and a good advisor from your plan might be just the added direction you need to make you feel more confident in your investment. 

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


Potential for good news for investors but not for job seekers:

Bottom Line:  If you’ve grown frustrated by the divergence between the stock market performance and the little job growth occurring with larger companies – there is a reason why it’s occurring.  We’re about a quarter of the way through the earnings season for corporate America and there are some key take-aways I have for you.  Good and bad. 

The Good:

  • Earnings are up about 4% so far over last year

The not so good:

  • Revenue is actually down about 1%

So…  Companies are doing a bit more with enhancing the bottom line in the face of the top line actually declining.  If revenue is declining it certainly doesn’t signal a need for more people to be added.  If this trend is consistent through earnings season, the enhanced earnings could help support the stock prices but won’t lead to job growth with larger companies and would be likely to lead to more of the same tepid job growth in the second half of the year.


Which of the new mobile plans is the best deal?:

Bottom Line:  About mid-week last week I mentioned that anytime you’re up for renewal or evaluating service plans for mobile devices, you need to take a look at all of the options available because there have been so many changes.  That’s still the case but with all of the major carriers now having announced new plans what’s the best deal?  My initial analysis about the plans appears to be correct with T-Mobile being the best overall value and AT&T’s Next not being a good deal.

Here’s my overall take:

Best value:  TMobile’s Jump

Best of the big two providers:  Verizon’s Edge

Poor value:  AT&T’s Next

To see a two year breakout of the cost of these plans for the average customer click the link to the info from The Verge:


Next gen hybrids are set to bring spectacular gains in MPG:

Bottom Line:  Ready for a staggering increase in MPG?  This is the all electric attempt to convert to MPG.  While electric is part of the equation the prototype that just shattered all MPG records uses diesel with plug-in capability.  So how many MPG?  100?  150? How about 200?  Try 261 MPG!

Volkswagen has produced an XL 1 car that was road tested to an average of 261 MPG with its diesel / electric fueling system.  Like most technology…  If you wait until the second generation of tech prices tend to improve and the technology generally stakes a big step forward.  Such is the case with this part electric / part fuel hybrid.  It’s not close to production in the US but within the next couple of years we’ll likely to a huge advance in fuel efficiency with vehicles like this one.  One more reason I’d be inclined to wait if possible.


Top 10 hospitals for great service and value for major operations:

Bottom Line:  I’ve long been an advocate of becoming a better consumer of healthcare.  The healthcare crisis is with regard to cost – not access or insurance.  In fact insurance is the biggest problem and obstacle to fixing the real problem.  Why? Because it takes us out of the equation.  We just go to a medical facility, provide insurance info and have no idea what anything costs until you start getting a series of statements that generally don’t make sense.  That’s being a poor consumer of a service and yet it’s the most common.  So just how much of a difference can there be in some procedures? 

The folks at illustrated the difference by choosing knee and hip replacements.  They surveyed hospitals around the country and found the following:

  • The lowest cost for one of those procedures was about $15,500
  • The highest cost was $223,400!  

Same procedure, more than 200k difference!  Hopefully this points out the need across the board to inform ourselves.  Btw, the average in South Florida was $77,000 – so maybe it’d even make sense to travel. 

NerdWallet has a tool to compare many difference medial produces and costs around the country and by hospital here:


Apple map app could go from a weakness to strength (best in breed) by next iPhone:

Bottom Line:  Many have panned the Apple Map app since they broke from Google as the source powering the app.  After a move on Friday, Apple could go from the perception of an inferior map app to the best available. 

On Friday, Apple purchases a technology company called Locationary.  Locationary provides:

  • Great mapping
  • Constantly updated in real time
  • Alerts you to a location that’s no longer in operation or that it’s closed if that info is available.  

If Apple puts this tech altogether with their existing platform it would be a huge leap forward.