Wednesday, April 25

Unconventional Retirement Planning

You won’t get rich with a 401K, says financial planner Sam Soprano. Yes, a 401K should play a part in every person’s financial planning, but it should not be the major portion, especially if you are still young.

“How Soon Do You Want to Retire?” is the topic of the presentation Soprano and fellow CPA Stephen Reed give to the Young Professionals on Wednesday, April 25, at 6 p.m. at Connelly Station in Belmar. Cost: $20. Call 201-421-9148.

Soprano, a certified financial planner and long-term care consultant, has been a managing director at CNA in Manasquan for 14 years, but his business roots are in Mercer County. He graduated from The College of New Jersey “when it was still Trenton State College,” with a degree in accounting.

“But in my senior year I discovered I really didn’t want to be an accountant,” he says. Since his childhood fantasy of becoming a major league ballplayer did not seem to be a viable career option, he turned to financial planning as an alternate, and found that helping people plan for their financial futures and increase their savings was something he could become passionate about. He worked for several years in the Princeton area and was active in the Princeton Chamber until moving to the Manasquan area and joining CNA.

Soprano calls himself “an anti-financial planner,” because much of the advice he gives is contrary to “traditional” financial planning advice.

Don’t tie up your money. 401 (k)s, he says, are not the place to tie up most of your savings, particularly if you are still in your 30s or early-40s. “Don’t you think that sometime in the next 30 years you are going to come across a great investment, real estate, a business investment, something where you can make more money than in that 401K?” he asks.

Unfortunately, if all of your savings are tied up in the 401 (k), you won’t be able to take advantage of that great investment.

“There’s a big misconception about how people get rich,” he says. “People don’t get rich from 401(k)s. They don’t get rich by investing in stocks.” While “a few” people made money during the dotcom boom of the 1990s, many more people lost money, says Soprano. “Unless you’re on the trading floor, you are behind the curve in the stock market,” he says. “Studies show that real wealth comes from owning a business or investing in real estate.”

In fact, if you are young and own a business, Soprano advises that the first place to put any savings is back into the business.

Don’t save to spend. “Most people save up for a vacation, or save to buy a car. In other words, they save up to spend money and it doesn’t work,” says Soprano. He suggests a different way to look at savings.

Don’t compartmentalize your savings — a portion in one area for college tuition, a chunk in another for retirement, and a third to save for a home. “Develop strategies, not products,” he says.

Soprano suggests that people “back into” the amount of savings they need by developing an overall plan for where they want to be and what they want to accomplish in the next 30 years.

“If you listen to the people on CNBC and the other TV talk shows they will talk about products,” he says. “It’s all propaganda. They are in the asset gathering business. They want to gather your assets. They don’t talk about how you will utilize those assets. They don’t want you to use your money. They want to use it.”

Don’t plan on a lower tax bracket. David Walker, the United States comptroller general, recently appeared on the TV show “60 Minutes” to discuss the problems he sees in the federal budget. His message impressed Soprano.

As the largest generation, the Baby Boomers, enter retirement, there are fewer people in the work force to support them through payroll deductions. Promised entitlement programs such as Social Security, Medicare, Medicaid and the new prescription drug plan, along with other government spending, have ensured that the government must continue to raise taxes.

How does that affect individual retirement income? Many of the current retirement savings plans envision retired people as being in lower tax brackets. Taxes in 401 (k)s and similar retirement saving vehicles, including IRA accounts, are deferred until the money is withdrawn. However, if taxes have to be raised on everyone, including retirees, a common retirement strategy won’t work.

Find other strategies. For most Americans, a home is the largest family financial asset, and there are ways to use this asset in retirement. Many people sell their homes when they retire, “not because they want to, but because they have to,” says Soprano. Reverse mortgages can make it possible to stay in the home. “A reverse mortgage isn’t something to consider when you are 65. It should be saved until you are 75 or 80, until you have spent your other money,” he advises.

“The biggest fear of retired people is that they will run out of money,” says Soprano. If the majority of money is in the stocks, a downturn in the market can be critical.

“If you are retired and living off the income from your stocks, you don’t have the luxury to wait for the market to change,” he point out. He suggests that people “develop different pockets of money that can be spent down at different times. The IRA and 401 (k) should be spent down over a period of time. You should have other investments, real estate, a reverse mortgage. There are a whole series of things that can be done.”

The investment opportunity Soprano likes least is the mutual fund. He is so down on the inflexibility of the stock funds that he says “you might as well bury your money in the backyard.”

Hang onto your real estate. “I had one client who was going to sell her house and buy a townhouse,” he says. “I suggested she keep her house and buy a townhouse.”

Soprano wants people to understand that retirement is only one part of an overall financial plan for life. “Don’t look at it piecemeal,” he says. “Look at the big picture.” Isolating retirement savings from the bigger financial planning picture, he says, “is like air conditioning the house with the windows open. You will lose money.”

— Karen Hodges Miller

Thursday, April 26

Laughter At Work

Humor is serious business and it definitely belongs in the workplace, says Doni Tamblyn, comedian, speaker, and corporate trainer. “Used appropriately, humor helps people work better, think better and get along better,” he says, “and it sure as heck makes life a lot more worth living.”

Tamblyn, CEO of HumorRules, a Philadelphia-based corporate training and consulting firm, gives the keynote talk at the Administrative Professionals Day Conference sponsored by Mercer County Community on Thursday, April 26, beginning at 9 a.m. at the school’s Conference Center. Cost: $139. For more information and registration call 609-570-3311.

The day is designed for all levels of administrative staff, including secretaries, coordinators, customer service representatives, public relations representatives, and office managers. Other workshops presenters include Peter V. Plumb, an expert on stress reduction, ergonomics and wellness; Edward Wiegner and Eric Dyott, computer technology experts; and Sharon Vecchiarelli, a chef with a specialty in organic foods and healthy cooking.

Humor makes any situation better, says Tamblyn, from major natural disasters to the routine of the workplace. When situations are desperate, such as after Hurricane Katrina, humor often helps people to cope. “There were pictures of houses that were destroyed and people had written things on them,” he says. “A house without a roof said ‘House for sale. Skylight included.’ People use humor as a way of dealing with a bad situation.”

The workplace can often be filled with stress, and a manager who uses humor can reduce the stress and increase employee satisfaction and productivity, says Tamblyn. The trick is to use humor appropriately.

What is humor? “Humor is not stand-up comedy,” says Tamblyn. “It is not a rubber chicken.” How many of us are really comfortable standing up and telling a joke? Most aren’t. But how many of us like to laugh? All of us. A couple of laughs during the day can change our entire attitude.”

Humor is creativity. It is making playful, unexpected connections. “Curtains on a curtain rod are not funny because they are the obvious connection,” says Tamblyn. But curtains can be funny. When Scarlett O’Hara, in “Gone With the Wind,” uses curtains to make a dress, we are amused by the unexpected. When Carol Burnett, in her comedy routine, plays Scarlett with a curtain rod attached to her shoulders we laugh out loud.

“Give a child a curtain rod and he has a spear, a light saber, a flagpole, a horse, a limbo bar. Children make unexpected connections constantly until adults tell them to stop. Since we are all former children, we are all natural humorists. Humor is just a more playful approach to what is serious.”

What’s not appropriate? The trick in the workplace, says Tamblyn, is to use humor appropriately. “Anything that you would hear at a comedy club is probably not appropriate for the workplace,” he says. Controversial issues, sex, scatological references, religion, and partisan politics “everything mom told us to avoid at the dinner table,” should also be avoided at work.

Derogatory humor, put-downs, and sarcasm should also be avoided, she says. When a co-worker walks by and hears, “bad hair day, today?” the people around you might laugh, but the target of the joke feels hurt, creating tension in the workplace. When a worker brings in a report late, “thank God, you finally finished,” may sound like a light-hearted way to express disapproval, but actually just makes a difficult situation worse.

What is appropriate? There are many times when a little humor can lighten a stressful meeting or a difficult situation. Delivery has a lot to do with making a situation positive, rather than negative. When faced with an impossible deadline, Tamblyn suggests a manager might say, “Well this is going to be character building.”

If the statement is delivered in a negative, sarcastic way it will only increase the feelings of anxiety and defeat. If said in a positive manner, “it acknowledges the impossibility of the task, and allows people to laugh about it a little.”

Tests have shown that laughter actually affects the way our brains work, says Tamblyn, who is a member of the International Society for Humor Studies. The research from the institute is “invaluable” in her work, she says.

Tamblyn’s company, HumorRules, helps organizations to develop and retain top employees and managers. “Humor creates greater bonding among co-workers and decreases turnover rate,” she says. “We know that the number one reason employees leave their jobs is because they do not get along with their immediate supervisor,” she says. “Learn to be more positive, to approach situations with more humor, and it will help make your company the employer of choice.”

Tamblyn began her career in stand-up comedy in California. Like many performers, she needed a day job to help makes ends meet. She found a job where she could use her unique skills, as an instructor coordinator for a California traffic violators school. The school found that using humor increased the effectiveness of its training programs and Tamblyn was hired to recruit and train professional comedians to lead the sessions. “Only in California would someone hire you to do this,” she says.

A magna cum laude from San Francisco State University with a BA in communications, Tamblyn found that teaching others was the missing element in her career. In 1990 she became a corporate trainer, teaching managers to lead through humor at a variety of large and small corporations including Apple, Nestle, and Hewlett-Packard.

She has also written about humor in the workplace. “The Big Book of Humorous Training Games” was published by McGraw-Hill in 2000 and “Laugh and Learn: 95 Ways to Use Humor for More Effective Teaching and Training” was published by AMACOM Books in 2002.

“Managers will find they are more effective communicators if they use humor,” she says. “When people like the messenger, they believe the message. When the workplace is fun they will put in more discretionary effort on a project and go above and beyond the bare minimum.”

The trick, says Tamblyn, is in understanding that “you don’t have to be somber to serious.”

— Karen Hodges Miller

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