Articles Collected for Groups Jim Hinners is Addressing


The Profitable Dentist: Dentists and Bank on Yourself, Pt. 1

The Profitable Dentist: Dentists and Bank on Yourself, Pt. 2

Father of the 401(k) Disowns It

Veterans’ Aid and Attendance Pension

10 Stock Market Myths That Just Won’t Die

Putnam’s Harlow Surprised By 10% Optimal Retirement Equity Allocation

Speed Traders Changing Wall Street

2011 Social Security Rules Regarding Earned Income

Bloomberg: Not since 1861 have bonds beaten stocks for an entire 30 year period… until now

Fed: Boomers Likely to Kill Stock Returns for Decades

Five Reasons I Hate Target Date Funds


The Magic Wand: A Durable Power of Attorney – Revised 2/15/12

(IMPORTANT: Effective October 1, 2011, Florida law changed some of the rules about Durable Powers of Attorney used in the State of Florida, and as of 2/15/12, this article has been revised accordingly. The article below is NOT legal advice, but is written for public interest only. See a competent Florida estate planning attorney for a complete details regarding the new rules changes).

Jim Hinners, Bank On Yourself® Authorized Advisor (not a legal advisor)

Doctor: “Yes, Mrs. Gomez, your mother has had a terrible stroke and is unable to communicate her wishes to me about her medical treatment. Unfortunately, even though you may be her only child, and even though you have been here with her on all of her past appointments, I cannot accept your directions for her care from this point on. Please step around to the desk over there. They will give you the name of the court-appointed guardian who will now be making those decisions for your mother.”

Is this the Twilight Zone for Mrs. Gomez? She probably thinks so, but it is only reality.  And her day gets worse:

Local banker: “Yes, Mrs. Gomez, its true that your joint account with your mother has plenty of cash. It is also true that each of you have been able to write checks on it independently these past four years. But now that she is no longer able to speak for herself, we can’t authorize EITHER of you to have access to those funds… You do have funds of your own to pay for all these hospital bills, don’t you?”

And what if Mrs. Gomez’ mother’s incapacitation turns into a long-term condition? In effect, she has just permanently lost control of her mother’s health care and all of her mom’s assets that were supposed to be used for this purpose. As long as her mother lives, she will be paying for all the uninsured health care costs herself.

And here’s the kicker: this entire nightmare could have been avoided so easily! How? By putting into place one of the most valuable documents available: the Durable Power of Attorney (“DPA”).

A Power of Attorney is a legal document, which allows you to appoint another person to handle your affairs as your agent. For example, while our daughter studied overseas, she used a Power of Attorney to appoint us, her parents, to handle all her affairs here while she was away. It was very helpful, for example, with banking matters.

A DURABLE power of attorney differs from a Power of Attorney in a key way: it allows the person to continue to act as your agent even after you have been incapacitated. Even after you are determined by professionals to be incapacitated and cannot speak or act on your own, the DPA remains active, giving the agent you have appointed in the DPA all the authority outlined in it to act in your behalf in the areas that you stipulate in the document.

So for banking and finances, you have a Durable Power of Attorney for Finances; for health care – a Durable Power of Attorney for Health Care.  Each of these documents can be as broad or as narrow in scope as you desire.

But a DPA is expensive, right? You might think that documents having such an important role must be costly and require an attorney’s special attention and costs. But I recently discovered this is not the case. I called on a client who had a mother that was beginning to slip into the early stages of dementia. They had no DPA’s in place.

On my next call a month later, and despite my insistence that they put DPA’s in place for her, nothing had changed. Because we had seen the power of the DPA work so well in my own family, I immediately left the client’s offices on a mission. 20 minutes later, after a quick trip to a local big box office supply store plus an expenditure of about the amount of a MacDonald’s Happy Meal®, the documents were in their hands. Since that day my client’s mother has slipped into full dementia. But thanks to these newly-signed and executed DPA’s, the daughter has full power to deal with doctors, hospitals and banks on her mother’s behalf – unlike poor Mrs. Gomez! *

So how do you put a DPA in place? The DPA must be signed by the person (“Principal”) granting the authority to the Agent. At the time of the signing, the Principal must be mentally competent in order for the DPA to be legally binding (if there is a question about mental competence, a doctor can be asked to certify that the Principal understands the document and the consequences of turning their authority over to the Agent).

The new Florida law adds some important witness and notarization requirements which, if not followed, may render it invalid, so be sure to check with competent legal counsel on these rules.

When my mother-in-law was ill with cancer in 2009, the DPA’s we had in place for her health care and finances were like magic wands. All the critical doors immediately opened to us. Health providers and banks saw we had her authority to speak with them for her, to give them direction and to use money from her account.*

Caring for loved ones who are undergoing a health crisis can become a crisis of your own as their child, spouse or friend. What you don’t need at that time is the added trauma of discovering there are legal obstacles stopping you from you dealing directly with their health care providers, or hospice, or from having access to the finances they had set aside for this very purpose. It doesn’t have to be that way for you. Use the magic wand of the Durable Powers of Attorney for Health Care and for Finances. Getting them in place before the crisis happens is the best thing you can do for them – and yourself!

* (IMPORTANT: Both the accounts mentioned above occurred prior to the 10/1/11 effective date of Florida’s new durable power of attorney law. Such off-the-shelf documents in local office supply stores may or may not now comport with some of the new law’s requirements. Don’t take chances: Consult with competent legal counsel to be sure).

Knowledge is Power, but Also Dangerous?

By Jim Hinners, Bank On Yourself® Authorized Advisor

“Honey, where the heck are my glasses?” You already know the answer don’t you, “Right there in front of you!”

Remember this very discussion about your car keys recently? What it describes is something that is so common it has now been given a name: The Curse of Knowledge*. The Curse of Knowledge works like this: The more you think you know about something, the blinder you become. Why is that?

The Curse of the Familiar. As in the eyeglasses case, familiarity deadens our sensitivities to objects we look for, things we try to hear, even people we want to know better. Its why we can walk right by our reading glasses in the kitchen as we look for them, not even notice some valuable aspect about a co-worker, or even cut off a friend in conversation when we think we know its direction because we’ve “heard it all before.”

The Curse of Limited Perspective. You can only see so much by yourself. Its why “two minds are better than one” is really true. Another person’s perspective on a situation you are facing – especially one you have been wrestling over and over – brings insight, fresh thinking and new ideas. It is also why top pro coaches from football to basketball post a “spotter” high up in the stands during game time. They know a perspective from high up is different and helpful to a coach down on the field who is trying to direct the team.

The Curse of Focus. What? Yes! You actually get good at your job, role or task, is because you build focus. Focus is crucial to getting laser sharp in business, sports and other achievement-oriented fields. Focus eliminates distractions and rejects less profitable ideas and proposals. But when you think about it, focus is, by definition,  exclusive. It works because it shuts out all other noise, putting blinders on our minds and eyes. This is exactly why the world’s top athletes – some of the most focused people on the planet – actually hire third parties to critique everything about how they swing clubs, tennis rackets and baseball bats, to how they think. They know they need someone to regularly violate the very focus they have masterfully honed and developed in order to improve.

The Big One: the Curse of Hubris. Hubris is arrogant over-confidence. Hubris is believing you know all there is to know about something. Its been called, “the pride that blinds.” It can also be called the pride that kills. Remember the Titanic? They were so sure it was unsinkable that they saw no need to even carry enough lifeboats.

What are cures for the Curse of Knowledge? The best cures are an open mind, the counsel of others outside your normal group of sources and, most of all, humility. One of my most helpful cures for the Curse is running my ideas by my wife. Who knows my weaknesses, blind spots and vulnerabilities better than your best friend? Whoever you have in your life who knows you well is a great “spotter” for where the Curse can be hurting you.

Do you think you know how your employees feel about working with you or about how you are as a boss? Get a third party to survey them!

Have you asked your customers within the last 6 months how they feel about your service/products? Maybe its time to get a third party to get honest answers them.

Customers and valuable employees can vote with their feet. Get a clearer picture of how they really are doing before that happens and head the Curse off at the pass!

*The Curse of Knowledge is a term created by Chip and Dan Heath, authors of “Made to Stick – Why Some Ideas Survive and Others Die”