Kimmunications

Lunch Bunch for Saturday, April 26

This week's "After-Show Lunch Bunch" will be at Paradise Bakery and Cafe in North Dallas after the radio show on Saturday. The address is 13710 Dallas Parkway, which is the northeast corner of the Tollway and Alpha (across from the Galleria). The phone number is 972-503-1800, and they're reserving several tables for us; just look for the signs. As always, anyone and everyone is welcome.

We started the Lunch Bunch a few weeks ago when, on a whim, I went on the show and invited our listeners to join me for lunch. More than a dozen showed up, so we tried it again the next week. About 25 came out!

It's nothing formal -- just a continuation of the conversation we start on the air. Anything you want to talk about is fair game.

We plan to do this every few weeks, and we'll move it around to make it convenient for as many people as possible. 

So please tune into the show tomorrow (Saturday) at noon on KRLD 1080 AM in Dallas-Fort Worth, then join us for lunch in Paradise... er, at Paradise Bakery around 1:30!

Lack of a financial education hurts the super-rich, too

Conventional wisdom holds that the ultra-wealthy have many more investment advantages than you or I. After all, they have access to highly selective hedge funds. It’s an exclusive club where the stakes are high and the rewards are out of this world.

Or that’s what they want us to believe.

The big hedge funds claim to offer much higher returns than what the normal investor can get through mutual funds. That’s why the buy-in is so high. But it turns out, hedge fund performance isn’t much better than that of run-of-the-mill mutual funds. What’s more, the incentive programs given to the managers leave hedge funds open to fraud and chicanery.

As with so many problems on Wall Street, this has to do with the compensation system. The manager of an ordinary actively managed mutual fund may take a fee of 1-2%. That’s bad enough, but it’s chump change compared to what the hedge fund manager gets. The typical fee arrangement for a hedge fund manager is usually 1 or 2% of the assets PLUS 20 percent of the returns that exceed some benchmark. So let’s say a fund has $200 million in assets and has a benchmark rate of return of 7%. After the first year, the fund was up 10%, or worth $220 million. The manager would earn $4.4 million for the management fee, plus $1.3 million for beating his benchmark (20% of the 3% extra gain).

You can imagine how this incentive arrangement just invites manipulation – and leaves hedge fund investors exposed to tremendous risk.

According to a study from the University of Pennsylvania's Wharton School:

…[I]t is very hard to set up an incentive structure that rewards skilled hedge fund managers without at the same time rewarding unskilled managers and outright con artists. Furthermore, any incentive scheme that does not directly penalize underperformance can be gamed by the manager so that his expected fees are at least as high, relative to expected gross returns, as for the most skilled managers.

The authors show how an enterprising hedge fund manager can use the derivatives market to generate what look like above-average returns. By placing highly leveraged bets on unlikely events, the manager can generate enormous amounts of cash. If his bets are right, the fund investors are very happy. If he's wrong, the fund collapses and the investors lose almost everything. Either way, the manager stands to make a fortune regardless of how the fund performs. This is a process the authors call “piggy-backing.”

In mutual funds and hedge funds, the term “alpha” is used to explain the part of a fund's performance that isn't explained by market forces. In other words, it's the result of the manager's supposed skill. By piggy-backing, an unskilled manager can fake alpha. By writing a number of covered calls using his investors' money as collateral, “it allows an unskilled manager to mimic a target series of excess returns without having the slightest idea about how a skilled manager would actually generate them.” [emphasis in original]

Dean P. Foster, one of the authors of the study, gives an example of this strategy at work:

An enterprising man named Oz sets up a new fund with the stated aim of earning 10 percent in excess of some benchmark rate of return, say 4 percent. The fund will run for five years, and investors can cash out at the end of each year if they wish. The fee is the standard '2 and 20': 2 percent annually for funds under management, and a 20 percent incentive fee for returns that exceed the benchmark.

Although he has no investment track record, Oz has a smooth manner, a doctorate in physics and many rich acquaintances. He raises 100 million and opens shop. He then studies the derivatives market and finds an event on which the market places fairly long odds, say 9:1. In other words, it costs .10 to buy an option that pays 1 if the event occurs and 0 otherwise. The nature of the event is unimportant: it might be a large fall in the stock market, Florida getting hit by a Category 5 hurricane or Russian President Vladimir Putin dying before the end of the year.

Next Oz writes some covered options on this event and sells 110 million of them in the derivatives market. This obligates him to pay the option holders 110 million if the event does occur and nothing if it does not. He collects 11 million on the options. To cover his obligations in case the 'bad' event occurs, he uses the investors' money plus the proceeds from the options to buy 110 million in one-year Treasury bills yielding 4 percent, which he deposits in escrow. This leaves 1 million in "pocket money," which he uses to lease some computer terminals and hire a few geeks to sit in front of them, just in case his investors drop by.

The probability is ninety percent that the bad event does not occur and Oz owes nothing to the option holders. With a gross return (before expenses) of 15,400,000, the investors are thrilled, and so is Oz. He collects 2 million in management fees (of which he has only spent 1 million), plus a performance bonus equal to 20 percent of the 'excess return', namely, 20 percent of 11,400,000. All in all, Oz nets over 3 million for doing absolutely nothing.

Foster says Oz can repeat this scheme next year. If his bets continue to pay off, he'll attract more investors and pocket more money. If the fund collapses, Oz can simply close the fund early and start a new one next year.

This scheme is not illegal, but it is risky – risky for his investors, but not for himself. In no scenario will Oz actually lose money. Actually, the more risk he takes with this investors' money, the more he stands to profit. That's the way his incentive structure works. You may get screwed if the fund collapses, but he walks away with millions.

This is yet another example of how Wall Street’s compensation system puts the interest of brokers and fund managers ahead of the investor. No matter how much money you’re working with, unless you know what’s really going on, you’re just asking to be taken advantage of.

That’s why it pays to learn as much as you can about how Wall Street really works, and why you ultimately should be in control of your own investments. Wall Street is set up to take advantage of the little guy, even if that little guy has millions and millions of dollars.

SOURCES:

1. Foster, Dean P. and H. Peyton Young, “The Hedge Fund Game: Incentives, Excess Returns, and Piggy-Backing.” March 2008. http://www.brookings.edu/~/media/Files/rc/papers/2007/1114_hedge_fund_young/1114_hedge_fund_young.pdf (Accessed April 23, 2008).

2. Foster, Dean P. and H. Peyton Young, “Hedge Fund Wizards,” Washingtonpost.com, December 19, 2007. http://www.brookings.edu/opinions/2007/1219_hedgefunds_young.aspx (Accessed April 23, 2008).

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Kim Snider is the President and Founder of Snider Advisors, an SEC Registered Investment Advisor, focused on teaching individual investors a sensible, long-term investment approach focused on maximizing cash flow. For more information on Snider Advisors or the Snider Investment Method and how to stop enriching your investment advisors at your expense, please visit snideradvisors.com. Her book, How to Be the Family CFO: Four Simple Steps To Put Your Financial House in Order, will be in bookstores October 1, 2008.

Snider Advisors makes no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method® Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments, including the Snider Investment Method™ are subject to risk, including possible loss of principal.

Can You Have Too Much Home Equity?

The conventional wisdom used to be: Pay off your mortgage as soon as you can. Retire with a paid for home. Some personal finance writers still believe that. I used to believe it too, but not any more.

 

No debt is as bad as too much debt. I used to be a zero-debt advocate, but now I think zero debt can create a diversification and liquidity problem. If I have too much of my net worth tied up in home equity, I am very sensitive to falling real estate prices, and I am going to find it very difficult to tap my equity if I need it.

 

The problem with home equity is that the more I need it, the harder it is to get to. What lender, for instance, is going to give me a home equity loan when I have just lost my job? What kind of bargaining power do I have in the sale of my home if a loved one is sick and needs hugely expensive out-of-pocket medical treatment?

 

In response to my previous posts on this topic, some have suggested that taking out a home equity line of credit (HELOC) and letting it sit there unused is the answer to freeing up the equity in your home in case you ever need it. Sunday's New York Times shows us why that is not necessarily the solution.

 

Apparently, lenders across the country are freezing HELOCs across the country, even if you have a perfect credit score. In the last month, lenders have sent hundreds of thousands of letters to consumers telling them those home equity lines of credit they paid money to secure, can no longer be tapped.

 

Most of us think of diversification in terms of asset classes. You also have to think in terms of diversifying liquidity. On the liquidity continuum, cash is obviously most liquid. Businesses and limited partnerships are probably least liquid. In between you have a broad range.

 

Having an emergency fund is key. I believe in at least a six month supply of cash on hand. Next comes cash flow. Interest, dividends, option premium, rent, and royalty payments are all forms of short term liquidity. After that are items that can be readily bought and sold in efficient markets. This would include stocks, bonds, options and futures. From there, liquidity becomes murkier.

 

Some investments have lock-up periods in which you cannot sell them or you will pay a big penalty to sell them. Others, like real estate, can be easy to sell at times, but almost impossible to sell at others. The more complex the asset, likely the less liquid it will be.

 

It is helpful to consider that most companies don't go bankrupt because they lose money, they go bankrupt because they don't have sufficient liquidity to meet their daily obligations. Think of Bear Sterns.

 

The same is true of individuals. Most individuals who file for bankruptcy have jobs and assets. It is just that their cash inflows don't properly match up to their cash outflows. When this happens, you have a liquidity problem.

 

Your job, as family CFO, is to structure your assets so that no matter what happens, your cash inflows match up to your cash outflows. In on other words, liquidity has to be a primary consideration.

 

As a general rule, I like to think of liquidity as being inverse to assets. The less resources you have, the more liquid you need to be. As your assets increase, you can afford to put more and more of them in less liquid assets.

 

If you haven't already, sit down and list out your assets. Stack rank them from most liquid to least liquid. Then ask my favorite question … "What if?" Ask yourself, what if I had no income coming in for two months? Where would the money come from? What about six months? A year? Two years? What if I was permanently disabled? What if I was sued or someone in my family became ill?

 

Asking these questions forces you to examine your resources in terms of liquidity. If you don't like the answers you come up with, it might be time to restructure your assets or get going on augmenting your savings.

 

SOURCES:

 

1. Morgenson, Gretchen, “You Thought You Had an Equity Line.” New York Times, April 13, 2008 http://www.nytimes.com/2008/04/13/business/13gret.html?_r=1&oref=slogin (accessed April 15, 2008,).

 

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Kim Snider is the President and Founder of Snider Advisors, a SEC Registered Investment Advisor, focused on teaching individual investors a sensible, long-term investment approach focused on maximizing cash flow. For more information on Snider Advisors or the Snider Investment Method and how to stop enriching your investment advisors at your expense, please visit snideradvisors.com. Her book, How to Be the Family CFO: Four Simple Steps To Put Your Financial House in Order, will be in bookstores October 1, 2008.

 

Snider Advisors makes no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments, including the Snider Investment Method™ are subject to risk, including possible loss of principal.

 

Problems with Viatical and Life Settlements

Warning: Long-Post

 

I have received several questions in recent weeks asking for my opinion on a life settlements. Rather than continuing to answer these questions piecemeal, it seems to make more sense to put the whole thing in writing so I can point people to a more thorough treatment of the subject than I can sometimes give on the radio or in a Q&A session.

 

The topic is a big one, so I will tackle it in several parts. To begin with, what exactly is a life settlement? What are the risks? - There must be some because we know there is no such thing as a risk free return in excess of what U.S. Treasuries will pay. They are not obvious but they are significant. Finally, do I like them as an investment?

 

What is a life settlement?

 

A life settlement is when the owner of a life insurance policy sells the policy for more than the surrender value but significantly less than the death benefit because they no longer need the policy, can't afford the premiums, or need the cash. The purchaser pays the premiums and becomes the beneficiary of the policy. When the insured dies, the new policy owner gets the proceeds rather then the insured's heirs.

 

Typically, the policy is bought by a viatical settlement provider. That company may hold the policies as an asset in their investment portfolio. More often, they securitize a group of policies and sell an interest in the pool of policies to investors - much like the mortgages that were pooled into collateralized mortgage obligations and all those other various acronyms you read about in the paper these days. In this case, they are a broker-dealer of life settlements.

 

Example

 

A policyholder sells a policy with a $100,000 death benefit for $50,000. The settlement provider or broker-dealer would take $50,000 of the money raised from investors and use it to pay the policyholder. When the policy holder dies, the settlement company receives the $100,000.

 

On the other side of the transaction, the company sells an interest in the policy to investors at some discount greater than the discount offered to the insured. For example, the broker-dealer offers the interest to investors at a 28% discount. The broker-dealer collects $72,000 from the investor and uses $50K to pay the seller of the policy, pocketing the difference. Some of that is paid as commission to the sales agent and the rest goes into company coffers.

 

When the insured dies, the insurance company pays money to the settlement provider, who then distributes the $100,000 proceeds to the investors. If the insured had a two year life expectancy and died on schedule, the investor would receive the full 28% return indicated by the discount. If the insured lives beyond the two year life expectancy, for six years say, the investor still receives the 28% holding period return, but because of the increased number of years to earn the return, the annualized return is reduced to 3.5%.

 

Brief History

 

Life settlements sprang up in the 1980s in the form of viatical settlements - the sale of a life insurance policy by a terminally ill policy holder. The price paid for the policy was/is discounted from face value based on the anticipated life expectancy of the person selling the policy - the longer the life expectancy, the steeper the discount.

 

Viaticals became big business - and big news - in the 1990s because of the AIDS epidemic. The industry was largely unregulated and rife with fraud.

 

Advances in AIDS treatments eventually undermined the viatical industry, which was based on the certain and imminent death of the insured. Advances in medical technology soon had AIDS victims living longer and some went into remission altogether. The same thing started happening with cancer patients. Seeking greener pastures, the industry moved on to life settlements, also sometimes known as senior settlements.

 

The difference between viaticals and life settlements

 

A search of the web finds the term viatical settlement is defined, in conventional usage, as the sale of a policy where the insured is terminally ill and anticipates death within 24 to 36 months. A life settlement is the sale of a policy on an insured who is generally over the age of 65, not terminally ill, but whose mortality is predictable based on standard actuarial methods.

 

What returns can an investor expect?

 

It is hard to find any marketer of life settlements promising less than double digit returns. In a report by the Conference for Advanced Life Underwriting, the author notes, "Presumably, high current returns reflect an immature market, where uncertain regulation, doubtful liquidity and high risk of deception or outright fraud require a premium on the investment yield, and will revert to more conservative norms as the market matures."

 

Risks of investing in viaticals or life settlements

 

Federal and state regulators consider life settlements to be securities. That means the person selling them must be licensed to sell securities. It also means they must provide you with a full and fair disclosure of all material facts, including a discussion of the risks, in the form of a prospectus or other similar document.

 

Liquidity risk - unlike stocks, bonds or other highly liquid securities, you probably cannot readily convert a life settlement into cash if you need it. This means you may not get any money from the investment until the insured dies and the claim is paid. It is possible the insured could live much longer than expected, or even outlive you. There are plenty of cases where that has happened. Can you afford to lock your money up until the insured dies?

 

Longevity risk - "There's an old saying, `The only sure things in life are death and taxes' and viatical salesmen play on that," said Denise Voigt Crawford, Texas securities commissioner. "They tell investors that because death is a sure thing, viaticals are too. But the only sure thing with viaticals are the large commissions some brokers get, making it even tougher for investors to get the returns they're promised."

 

The Florida Department of Financial Services, which regulates securities in the state of Florida, says in their pamphlet on life settlements, "Be cautious of any person that represents these investments as guaranteed or low risk." The life expectancy of the insured is just a guess. Those stubborn insureds and their doctors aren't in any hurry to make your investment pay off. They can and do live longer than the life expectancy estimate.

 

Longevity risk is particularly relevant in IRAs and other retirement savings vehicles because they produce no income and are not liquid. This is a serious problem if the insured outlives the life expectancy estimate and you need retirement income. It is exacerbated if you reach the age of required minimum distributions and can't make them.

 

Variability of return - If the insured dies within the estimated timeframe, your return will be high. If they don't, your return will be low. Beyond the ghoulishness of waiting around for some poor soul to die so you can profit from their demise, the variability of returns is a risk. It isn't the slam dunk the salesperson often portrays.

 

Quality of life expectancy estimate - The life expectancy estimate is the key to return. If the company or its consultants improperly evaluate life expectancy, or worse, misrepresent the life expectancy, promised returns go out the window. Like all pooled investments, there is no transparency. It is difficult for the investor to really know what they own and the reputation of the parties involved. Considering the dodgy history of the industry, this lack of transparency is particularly troubling.

 

Credit risk - There are significant activities and associated costs incurred while the policy is outstanding. These include paying the premiums, tracking the insured, monitoring the health of the insured, filing a claim when the insured dies, and distributing the proceeds to investors. The credit worthiness of the life settlement issuer is a major issue. Who will pay these costs if the broker-dealer goes out of business of is otherwise unable to pay these costs?

 

There is also credit risk in the insurer as well. Viatical investment promoters commonly assure investors that issuing life companies have a high credit rating and are unlikely to fail. That is not necessarily true. Regulators seized Confederation Life in 1994, when it was rated B++ and had been rated A+ (superior) only the year before. For those unfamiliar with the company, it was the single largest life insurance company to fail in North America, with total losses in the billions.

 

Legal risk - Because the heirs lost out on whatever return the investors and issuer made, they can and often do challenge the change of ownership in the policy, tying up the proceeds in legal proceedings and incurring additional legal fees.

 

Again, transparency is an issue insofar as you could lose the entire investment if the settlement provider, issuer, broker-dealer, agent or others involved encounter financial trouble or are involved in fraud. Life insurance companies have two years to investigate and rescind policies obtained using fraudulent information. They may also sue for damages.

 

Many applications, for example, ask the applicant whether they intend to sell the policy. If the insured says no, at the time, and then later sells the policy, there is potential grounds for rescission. Other potential pitfalls involve policies that contain intentionally misleading information from the insured, known as "cleansheeting." This is when an insured or agent deliberately leaves relevant information off the application. If you think this doesn't happen, think of all the fraudulent mortgage applications that were filed in the last few years.

 

Another scheme that could cause you to lose money is known as "wet ink." This is where the policyholder obtains a life insurance policy for the specific purpose of immediately reselling it. Some are even encouraged by unscrupulous life settlement providers to repeat the practice over and over again.

 

Regulatory risk - Given that the SEC, FINRA and state regulators have deemed life settlements to be securities, the question of suitability comes into play. In the case of a life settlement, it is not just suitability of the investment for the buyer, but in this case, also for the seller. If the seller was allowed to sell a policy when it was not in his or her best interest, or the best interest of the heirs, as is often the case, regulators could take action.

 

The SEC recently filed their first case involving life settlements, going after a hedge fund for improper disclosure. This firmly establishes the SEC's intent to claim regulatory jurisdiction over life settlements, something they had not done until now.

 

Legislative risk - Life insurance is tax advantaged in that the value is allowed to build up tax deferred and no income or capital gains is due on the death benefit. This special treatment was due to the role life insurance is supposed to play in caring for a family after the death of the breadwinner.

 

Congress, which is faced with large budget deficits, has been licking their chops over the cash buildup in life insurance policies for quite awhile now. Life settlements, which threaten to turn life insurance policies into nothing more than an investment, may be the excuse Congress has been looking for to tax life insurance policies.

 

What is my opinion on life settlements?

 

I have covered the risks at length. Personally, I am much more comfortable with market risk. There is also just the general idea, which I find repugnant. I don't care how much they pay.

 

"The psychology of investing in viaticals is different than investing in other types of instruments, and people need to consider that going in," said Bradley Skolnik, Indiana securities commissioner and chair of NASAA's enforcement section. "The risk is high with viaticals, and investors need to ask themselves if the potential reward is worth the burden of hoping someone will die quickly so they can maximize their return."

 

Beyond those two things, I am a cash flow investor. I believe that today's investor has to be most concerned with matching up cash outflows to cash inflows. Life settlements offer no cash flow and no liquidity. Combining them with a traditional cash flow investment, like bonds or an immediate annuity, drops the return to an unacceptable level for the person who has to make a bare minimum of 10% a year (.04 + .04)/(1-.25) to cover a 4% withdrawal rate, minimum of 4% inflation and an assumed 25% marginal tax rate.

 

My take is life settlements are another great product for the commissioned salesman selling them but a bad idea for you. You can do better.

 

SOURCES:

 

1. Rothberg, Ed, Viatical and Life Settlements: Investing Without a Safety Net. CALU Report (Conference for Advanced Life Underwriting, 2005) http://www.calu.ca/publicationDetails.asp?x=&y=EHQ-7142005-3382&i=308&d=1&z= (accessed April 9, 2008,).

 

2. “NASD Warns on Viaticals,” Financial & Tax Fraud Associates, Inc. http://www.quatloos.com/viaticals.htm (accessed April 9, 2008,).

 

3. Viaticals and Life Settlements, (Florida Department of Financial Services: Office of Financial Regulation) http://www.fldfs.com/Consumers/literature/Viaticals2.pdf (accessed April 10, 2008,).

 

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Kim Snider is the President and Founder of Snider Advisors, a SEC Registered Investment Advisor, focused on teaching individual investors a sensible, long-term investment approach focused on maximizing cash flow. For more information on Snider Advisors or the Snider Investment Method and how to stop enriching your investment advisors at your expense, please visit snideradvisors.com. Her book, How to Be the Family CFO: Four Simple Steps To Put Your Financial House in Order, will be in bookstores October 1, 2008.

 

Snider Advisors makes no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments, including the Snider Investment Method™ are subject to risk, including possible loss of principal.

 

Lunch Bunch Meeting Place

This week's "After-Show Lunch Bunch" will be at Shady Oaks BBQ in Plano after the radio show on Saturday. The address is 3408 N Central Expressway (just north of Parker Road on the east side of the Hwy 75).  Their phone number is 972-509-1551. The back room will be reserved for our group. Anyone and everyone is welcome.

If you don't know about the Lunch Bunch, don't feel left out. It is fairly new. During last week's radio show, on a whim, I invited anyone who wanted to join me for something to eat after the show to meet me at Spring Creek Barbeque in Addison. To my surprise, people showed up. It was great!

Never one to forgo the opportunity to talk about taking control of your financial future, as long as people keep showing up, I'll keep inviting them. It's nothing formal - just a continuation of the conversation we start on the air. Anything you want to talk about is fair game.

I will do my best to move the meeting place around each week to make it convenient for as many people as possible.

Be sure to tune into the show tomorrow at noon on KRLD 1080 AM in Dallas-Fort Worth. Then I hope to see you at Shady Oaks BBQ around 1:30 for the After-Show Lunch Bunch.

The Darned Book - Finally!

Some of you know, the bane of my existence over the last few years  has been getting my book written. It is, in fact, finally done. Hooray! It is being published by Greenleaf Books and will be in bookstores this October.

After much gnashing of teeth, we have finally settled on the title:

How to Be the Family CFO - Four Simple Steps to Putting Your Financial House in Order.

Now we need to decide on a book cover. I was wondering if you would be willing to help? We have three ideas. Each of them is below. Your feedback would be invaluable.

First, I need to set the stage though. There is a placeholder quote at the top of each cover. Some people have assumed (reasonably I might add), from the fake blurb, that the book is specifically targeted at women. It isn't. The book is gender neutral. Please don't let the placeholder text affect your view of the cover. Also, the gray copyright information at the bottom won't be on the book either.

That being said, here is what I would like to know. Without taking a lot of time to think about it, which cover would you be most likely to pick up in a bookstore? For identification purposes, we'll call them the nest egg, the pig and the quarter. With regard to the cover you picked, what do you think appealed to you? What feelings or emotions did it evoke? Is there anything you would change about it?

If you would like to help, please take a moment to give me your ideas in this quick survey:
Click Here to put in your two cents

 

 

 

If you would like to help, please take a moment to give me your ideas in this quick survey:
Click Here to put in your two cents

Thanks, as always for your help. Without you as inspiration, this book would have never been written!

UPDATE (4/9/2008): A couple of people have asked what the results were. The nest egg won hands down. Approximately 55% of you preferred the nest egg. 27% liked the pig and 15% liked the quarter. A lot of you participated in the survey, for which I am really grateful. Whenever I ask for your help, you never fail to come out in force. Thank you!

The book will be in bookstores October 1st. Our friends will definitely be given the opportunity to pre-order autographed copies at a discount. I hope you will give twenty copies each to all your friends and family!  ;-)  No, seriously!  -KIM-

P.S. I closed the survey. The cover, with a few minor tweaks, is a done deal at this point.

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Kim Snider is the President and Founder of Snider Advisors, a SEC Registered Investment Advisor, focused on teaching individual investors a sensible, long-term investment approach focuseed on maximizing cash flow. For more information on Snider Advisors or the Snider Investment Method and how to stop enriching your investment advisors at your expense, please visit snideradvisors.com.

Snider Advisors makes no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 888-SNIDER7 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments, including the Snider Investment Method™ are subject to risk, including possible loss of principal.