Kim Butler

Co-founder at The SUMMIT for Advisors

| Best-Selling Financial Author | Founder of Partners for Prosperity, Inc.

Investing Outside of the Stock Market

May 26, 2015

“Some people don’t like change, but you need to embrace change if the alternative is disaster.”– Elon Musk

Investors have short -term memories, which is why so many are optimistic about the stock market right now. But if you think the stock market is headed for a correction or even a crash, you’re in good company. And if you aren’t sure WHERE to invest OUTSIDE of the stock market, you’re not alone by a long-shot.

Even nervous investors still cling to the stock market because:

1. They aren’t open-minded to try something new, even if they are unsatisfied with their current strategy.
2. People mistakenly believe that the risk and roller coaster ride is required if they want to earn a good rate of return in the long run.
3. Some investors just aren’t aware of other options. They lack the knowledge, confidence, and guidance to seek better alternatives.

Typical financial advice tends to give very limited options, fixating on “how much of your portfolio should be in stocks, and how much in bonds.”
We say, “Neither of the above!” Stocks and mutual funds are ultimately nothing more than speculation, and bonds (depending on if you’re talking high quality bonds or junk bonds) range from risky with fair returns to safe, but with weak returns.
Are you really stuck between high risk and low returns, as typical financial planning would have you believe? No, you’re not! In this article, we name our favorite investments notcorrelated to the stock market.

Life Settlements: Perhaps the Best Investment Outside the Stock Market

For those looking for excellent growth with minimal risk, life settlements are a very attractive option, offering investors a way to participate in the secondary market for life insurance policies.
Just as real estate deeds of trust can be bought and sold, so life insurance policies and the assets they represent are bought and sold on the secondary market. Life insurance has been considered an asset class since a Supreme Court ruling in 1911 judged that life insurance policies are private property that can be assigned or sold to others at the will of the policy owner.
Life settlements invest in life insurance by purchasing policies that have become unwanted, unneeded, or unaffordable to elderly policyholders. In this way, they represent a true “win-win” scenario.
Policyowners nearing life expectancy are able to turn a death benefit into a living benefit they can use now. At the same time, investors are able to purchase an asset with a sure future value, rather than grow an asset with an unknown, perhaps even lower future value.
Although most investors have never heard of life settlements, they have been used in institutional investing for decades. Some of the reasons life settlements have grown in popularity include:

• Returns are non-correlated. Life settlement investments are not correlated to interest rates, housing prices, stock prices, political events, or any outside influences.
• Almost no downside risk. Life settlements are based on actuarial math, not stock market speculation. As policies are purchased for a discount and costs such as future premiums are factored in, losses are unusual.
• Healthy returns. It is typical for investors to see annualized returns in the low double digits, though results vary.
• High Safety. Life insurance companies are among the strongest financial institutions in existence. Only seasoned policies are purchased for life settlements, and death benefits are always paid when the time comes.

Formerly for institutional investors only, there are now options for accredited  investors (with a net worth of 1 million and cash flow of $200k or $300k for couples) to purchase private equity funds that hold life settlements.
As with any investment, it is important to understand how it works and who it is best suited for. Life settlements are not liquid and the investment time frame and exact rate of return fluctuate. Required minimum investment with our life settlement partners currently begins at $100,000, and money is typically invested for 7-10 years.
For more information, listen to this introduction to life settlements in “An Introduction to Life Settlements” on The Prosperity Podcast. 

Commercial Bridge Loans: Our Top Investment for Cash Flow 

Bridge loans on commercial and investment property can be an excellent choice for investors looking for immediate, steady, substantial income. Bridge loans also allow investors to capitalize on real estate without the hassles of being a landlord.
Also known as “hard money loans,” sometimes they are “rehab loans” as well (though not always), bridge loans provide temporary financing, usually for periods of about one year, at higher-than-typical interest rates.
Real estate investors are eager to secure these higher-interest loans from private lenders because it has gotten more difficult to obtain financing for anyone with less than perfect credit. These are not predatory loans made to homeowners, they are short-term loans made to other investors and business owners who need temporary financing and can demonstrate an ability to pay.
Investing in carefully screened commercial mortgages and bridge loans can provide you with reliable monthly income with high single-digit and even low double-digit returns, with extremely low risk.
There are many benefits of bridge loan investing that make it worth serious consideration for anyone who needs income:

• Reliable: Monthly income payments often come directly from the company that sources the loans, not the borrower. In most cases, the company that sources and services the mortgages holds a secondary interest, which assures your best interests are represented.
• Secure: Assets are backed with real-world assets, often secured by first position deeds of trust. Loan-to-value never exceeds 65%, allowing for market fluctuations. Properties are valued and vetted by experienced professionals.
• Limited Risk: Although private investment mortgage funds can provide income for years, the underlying notes are held short-term (usually one year) to minimize risk in the event of a market downturn.
• Flexible: Bridge loan notes and funds can be held in a self-directed Roth IRA for tax-free income. Funds can usually be rolled over into new loans for continued cash flow.

The downsides to bridge loans are that there is quite a learning curve to finding and managing your own loans, and when working with other lenders, not all operate according to industry best practices that make protecting your principal a top priority. (We are choosy who we refer to!) 
Find out more about bridge loans 

Three More Ways to Invest Outside of the Stock Market 

1. Real Estate. Cash-flowing rental properties are a time-tested way to build wealth. Being a landlord can be time-intensive but rewarding. Some basics:

• Start small (perhaps renting out your old home when buying a new one);
• Crunch the numbers, always focusing on cash flow and not speculating on appreciation;
• Get good help and advice, from a real estate attorney to a great handyman; and
• Always have adequate cash for the unexpected. 

1. Peer Lending. Also called “peer to peer lending” or “P2P,” peer lending cuts out the middleman – the banks and credit card companies – and allows people to lend using online websites such as LendingClub.com  and Prosper.com 

For those who are just starting out, peer lending offers a way to start investing in a hands-on way, investing as little as $25 per loan. Returns are generally in the high single digits or low-double digits. See “Peer Lending: How Investors are Earning Double-Digit Returns… Helping Strangers!” for more information. 

1. High Cash Value Life Insurance. Life insurance is not an investment,” per say, but it is an excellent place to store cash while also providing more protection for a family. 

Whole life policies constructed for maximum cash value are particularly attractive when one or more of the following is true:

• You desire to build equity and liquidity in a long-term savings vehicle that can outpace inflation;
• You value the flexibility of being able to temporarily borrow against your savings for major expenses or investment opportunities;
• Increased life insurance protection is desired. Because death benefits are permanent and grow with time, families with term life insurance are wise to replace their term with permanent whole life policies as they are able.
• Multi-generational wealth is valued. (There are valuable benefits to insuring adult children and grandchildren as well as yourself.)

Kim Butler

Co-founder at The SUMMIT for Advisors

| Best-Selling Financial Author | Founder of Partners for Prosperity, Inc.

Worried about outliving your money? Consider this

Sharon Epperson | @sharon_epperson

Thursday, 21 May 2015 | 9:09 AM ET

CNBC.com

      

If you're worried about outliving your retirement savings, you're not alone. Research shows it's a top concern for many Americans.

In a recent survey, financial advisors noted that health-care costs, market fluctuations and potential lifestyle expenses caused clients the most stress about running out of money. To alleviate those fears, many financial advisors suggest annuities as a way to ensure that clients have a stable stream of income during retirement.


As fewer and fewer companies now offer pension plans, the federal government is making it easier for retirement plans to include annuities as an option within 401(k)s and IRAs. Last October, the Treasury Department and the IRS approved guidance making it clear that employers can offer deferred-income annuities in target-date funds that are used as default investments in the retirement plans they sponsor.


The target-date fund can include annuities that begin payments at retirement or at a later time, offering a way to generate guaranteed retirement income and protect your income stream later in life.
When considering an annuity, it's important to read the fine print as many carry high fees. There's also the risk of not living long enough to receive deferred payments if you select an annuity that pays out later in life, or seeing inflation erode their real value. 

Still, many experts argue that annuities at least provide some insurance against outliving your assets.

And annuities may provide benefits beyond just making sure you don't run out of money.
A "deferred income annuity," which is the type of annuity the Treasury Department touted last fall in its guidelines, provides an income stream that generally continues throughout your life. But it doesn't begin paying out until several months or years after it's purchased, allowing the money to grow. The Treasury Department says this type of annuity "can provide a cost-effective solution for retirees willing to use part of their savings to protect against outliving the rest of their assets, and can also help them avoid overcompensating by unnecessarily limiting their spending in retirement."


Mitigating risk isn't the only reason to buy an annuity, said Ross Goldstein, a managing director at New York Life. "In addition to helping you not outlive your money, an annuity can give you more income in retirement so that you potentially retire earlier." New York Life recently conducted a survey of retirees age 62 to 70 with at least $100,000 in investable assets and more than half of them said they would have rather have retired about four years earlier than they did.

"Rather than run out of money, retirees are more likely to dial down their spending and live more conservatively. This is not necessarily the retirement that they had been planning," said Goldstein. "But if you have a guaranteed income stream, you don't have to worry about being as conservative," he added, potentially giving retirees more time to afford to be retired.

Sharon Epperson

CNBC Senior Personal Finance Correspondent

Denver housing: Rocky Mountain high and HOT

Diana Olick | @DianaOlick

Thursday, 21 May 2015 | 11:23 AM ET

CNBC.com

When Christopher Simmons began shopping for a home in Denver six months ago, he had no idea the risk and the frustration it would take to get one. The 27-year-old had good credit and cash to put down, but that was not enough in this red-hot market.

"One of the hardest parts is that I travel for work often and am typically out of town on the weekends, and houses are being listed Thursday afternoon, offers due by Sunday afternoon and responses back on Monday," said Simmons.


He lost eight houses he liked, simply because he was out of town. He lost two others in bidding wars, one of which had 18 bidders. Finally, Simmons went under contract on a small home in a transitional neighborhood, but only after beating out five other bidders. He wrote a letter to the owners, describing how he had grown up in the neighborhood, and then he added a risky tactic.
"I waived the inspection and the appraisal contingencies on all of the offers I made and on this one as well," said Simmons.


The supply of homes for sale in Denver is down 15 percent from a year ago, the number of days on the market for homes has fallen 31 percent and the median home price is up 11 percent, according to the real estate company Live Urban Real Estate. Homes are flying off the shelves, and bidding wars are the new normal.

Getty Images

Skyline of Denver, Colorado

"Prices are going crazy. Multiple offers, love letters, videos, all kinds of things to appeal to a seller in order to make yours stand above all the others," said Denver real estate agent Jill Schafer.
Supply here is low for a number of reasons. Employment is growing at more than 4 percent versus a year ago, home builders really didn't ramp up production after the recession and land prices in the Denver area are at an all-time high, according to John Burns Real Estate Consulting. Most of the available land is out by the airport, where sales are not particularly strong.
Another issue plaguing the market is a lack of condominiums. Demand for condos was weak after the housing crash and foreclosure crisis, and then a Colorado law passed in 2010 making it easier for homeowners' associations (HOAs) to file class-action lawsuits against developers for even the smallest construction defects.


"If you can't put a project-specific insurance policy in place to protect yourself against inevitable lawsuits, you won't build condos," said Christopher Waggett, CEO of D4 Urban, a Denver real estate developer, who has been fighting to have the law changed.
Standing in front of a huge construction site of rental apartments, Waggett said there is a multifamily construction boom in Denver, but just 2 percent of it is condos, and those are only on the very high end. That's because in order to afford the insurance policies against litigation, developers would need to build million-dollar units.


"We've had a situation in Denver for the last five years, where vacancy rates on multifamily have stayed below 5 percent and rental growth has been above 7 percent. That is not a normal market," said Waggett.


Rent growth is great for apartment developers, not so great for Denver renters, many of whom are young millennials coming to town for new jobs with Google and Apple.
"I don't think incomes have been rising at that pace, and I think we all know what happened in 2008-09 where we got an imbalance between incomes and value of property, in this case rent. There is a serious issue," added Waggett.


Over in the tony Cherry Creek neighborhood of Denver, a condo building is going up, and it is more than 80 percent sold, even though it doesn't open until August.
"If we were 50 percent sold, we'd be just outrageously happy, but at 80-85 percent where we are right now, this market is so incredibly tight for all real estate including condos. It's just been amazing," said Roy Kline, managing director of Western Development Group.


Most of the condos at Kline's 250 Columbine list at more than a million dollars, with the penthouse going for $5 million. That, he said, is what it takes to insure his company against litigation, and to test the project vigilantly for any potential defects..

Stephanie Dhue | CNBC

Christopher Simmons has a home under contract in Denver after losing out on others in bidding wars.

"We have peer reviews, have people looking over each other's shoulder continuously to make sure everything gets done right," said Kline, who described going over the top by beefing up the building for sound attenuation and water resistance.


Kline, however, expects there still may be lawsuits, even though not one owner has moved in a suitcase. Lawyers, he says, target new condos, hoping to find anything wrong.
"The HOA will be approached by a litigation firm, and they'll ask them, maybe we can help you if you have some issues with your building, and they'll go in and literally end up taking a unit apart and looking for all the little defects in it," said Kline.


Some say the lack of condos is less about the law and more about lack of demand, but that argument is losing steam, as home prices soar amid stiff competition.
With rents continuing to rise, it is already cheaper to buy in this market than to rent, according to Schafer, and that will only put more pressure on single-family home builders and condo developers to ramp up production. Until then, buyers will continue to bid.

Mortgages

30 yr fixed 3.90% 3.98% 30 yr fixed jumbo 4.24% 4.34% 15 yr fixed 3.07% 3.23% 15 yr fixed jumbo 3.77% 3.98% 5/1 ARM 3.14% 5.43% 5/1 jumbo ARM 3.37% 5.92%

Find personalized rates: Bankrate.com

Diana OlickCNBC Real Estate Reporter

Tom Brady isn't the only one that should fear deflation—the economy should too

Alex Rosenberg | @CNBCAlex

CNBC.com

      

The specter of deflation is haunting more than New England Patriots quarterback Tom Brady. The whole U.S. economy is now grappling with its effects.


As growth splutters, the world's largest economy is facing the real possibility of a spiral in prices. On Thursday, the Producer Price Index for Final Demand showed that prices fell by 0.4 percent in April compared to March, and by 1.3 percent versus last April. The readings according to the previous-used PPI data series, known as PPI for finished goods, looked even worse, with a monster 4.4 percent year-over-year drop.




Steep price drops can be perilous for the growth of an economy that's comprised of nearly 2/3 consumer spending. While falling prices may sounds attractive from a consumer standpoint, they are bad for the overall economy since deflation encourages people to save, rather than spend, money. After all, why spend a dollar today when it will be worth the equivalent of $1.05 tomorrow?
However—and perhaps unlike the Patriots' embattled quarterback—the U.S. has a good excuse for the potential deflationary shock: Oil.

Crude's slide over the past year has reduced macro price metrics tremendously. And indeed, when energy and food prices are stripped out to produce what's known as the "core inflation" measure, PPI for Finished Goods actually rose by 2 percent over the course of the year. On the other hand, the core PPI for Final Demand number still fell 0.2 percent from March to April.
Simultaneously, some maintain that no matter how noisy the inflation reading may be, there are still bad signs embedded in it.


"The PPI came in well below expectations and trying to pin the drop in wholesale prices on any one component would be a mistake," wrote Steven Ricchiuto, Mizuho's unconventional chief economist. "The loss of upside momentum in prices is broad-based."

Headaches for the Fed?

Getty Images

For Ricchiuto, the number also points to a headache for the Federal Reserve in its quest to raise short-term rates. The central bank has set an inflation target of 2 percent, and no matter what the actual inflation number is, 2 percent does appear to be elusive at this point.
This despite years of ultra-loose monetary policy, which theoretically should spur inflation by making it more attractive to spend rather than save money. If inflation does not pick up, the Fed may not see fit to raise rates.


"The PPI fits with my later-rather-than-sooner Fed call, and further supports my call for a sustained trading range on 10-year notes," Ricchiuto wrote.
That is, a delay in the Fed's rate-hiking plans would mean that Treasury bonds can stay put, instead of trading much lower as yields rise.
The key event for inflation-watchers will come on Friday, when April Consumer Price Index data is released. Economists are looking for inflation of just 0.1 percent, and 0.2 percent ex- food and energy.


But those more bullish than Ricchiuto, such as RBC senior economic Jacob Oubina, say that the April inflation reading should mark the "bottom" for inflation, with core inflation "grinding up" to 2 percent by year-end.


Oubina says that shelter makes up 42 percent of CPI, and since rental real estate "will continue to be in high demand, that alone will support the inflation backdrop as we make our way through the balance of 2015."


PPI is often used to forecast CPI, given that those produced goods will, in theory, be sold to consumers in the future. Yet the weak April reading doesn't spook the RBC economist, largely because it is such a "frustratingly volatile" economic reading.
"Energy and trade services alone pulled this index down. So the pass-through argument just doesn't pass the smell test," he said.

—By CNBC's Alex Rosenberg.

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4 ways to outlive your retirement savings

Anna Robaton

Friday, 1 May 2015 | 10:00 AM ET

CNBC.com

Ever wake up in cold sweat at night wondering whether you'll outlive your retirement savings? You're not alone.

Many Americans have spent too much and saved too little, and traditional defined-benefit pensions have gone the way of the fax machine, displaced by 401(k) plans with modest balances.
The median 401(k) plan balance for two-person households nearing retirement (age 55 to 64) is about $111,000, according to the Center for Retirement Research at Boston College. To some, that may seem like a big nest egg, but it equates to less than $400 per month during retirement, assuming a yearly withdrawal rate of 4 percent, adjusted for inflation.

Don Klumpp | Photographer's Choice | Getty Images

To make matters worse, half of today's private-sector workers don't have any employer-sponsored retirement plan at their current jobs, according to the book "Falling Short: The Coming Retirement Crisis and What to Do About It," by Charles D. Ellis, Alicia H. Munnell and Andrew D. Eschtruth. Many of us will need more income during retirement than did previous generations, due to longer life expectancies and rising health-care costs.

"The fundamental problem," when it comes to retirement, "is that most people don't have much in the way of savings," said Anthony Webb, a senior research economist at the Center for Retirement Research at Boston College. "The solution to not having enough is to have a boatload of money. The question is: How do you acquire a boatload of money?"

If you are off-track when it comes to retirement savings, the obvious solution is to begin stashing away a huge percentage of your income, Webb said. But many people in their 40s and 50s are unwilling or unable to make that kind of sacrifice, he added. So then what?
Here are some ideas to consider:

1. Delay retirement. Retirement-planning experts say it behooves us to resist the temptation to call it quits in our early 60s, provided we don't have very physically taxing jobs. Putting off retirement has several potential benefits. It means more time to save and invest and, for better or worse, a shorter life expectancy during retirement.

"If you can work longer, for many people that will be a more palatable solution than saving a crazy percentage of your salary," Webb said.
Working longer also allows you to wait to claim Social Security retirement benefits.
Typically, the longer you wait to claim benefits, the bigger your monthly payments will be, up until age 70. Those who claim benefits at age 70 get a whopping 76 percent more per month than they would if they began drawing benefits at age 62, according to the book "Falling Short: The Coming Retirement Crisis and What to Do About It."

Many people draw Social Security benefits early, figuring they might not live long enough to make a higher monthly payout worth the wait. But that calculus can be problematic, because nobody knows exactly when they'll die, said David Mendels, a certified financial planner and director of planning at Creative Financial Concepts.
"You might die before your life expectancy, and if you do and you claimed early, you made the right call—and congratulations," he quipped. "But if you live longer than your life expectancy, you might end up eating cat food in your old age."

2. Redefine retirement. "Retirement used to be a reward for 40 years of drudgery," said Frank Boucher, a CFP and owner of Boucher Financial Planning Services. "Folks would die shortly after they retired, but that's usually not the case anymore."
Many of us will spend a couple decades in retirement, which gives us ample opportunity to engage in interesting and/or rewarding activities. For many people, that might entail some sort of post-retirement work, Boucher said. Part-time work allows retirees to put off tapping their nest eggs or draw down savings more slowly. Those who are self-employed are also eligible for related tax deductions.
Boucher is living by his own advice. Tired of traveling for work and wanting a change, he retired in 2006 from a national association providing financial education and planning services and started his own practice.
"You can really enhance your retirement finances by focusing on the things you are passionate about and getting paid to do them," he said. "A lot of people actually enjoy the work they do, but not the environment they do it in."

3. Look into buying an immediate annuity to hedge the risk you'll outlive your assets. Immediate annuities, sometimes called income or payout annuities, are pretty straightforward. Basically, you hand over a lump sum to an insurer in return for guaranteed regular payments for a period of time, say 10 or 20 years, or until you die. The payments may be fixed or increase with the cost of living, which helps counter inflation risk.

"Remember that you aren't investing for just the next five years. You are also investing for 20 years from now." -David Mendels, director of planning at Creative Financial Concepts

Sellers of these annuities are essentially redistributing income from contract owners that die relatively young to those who live a long life, said Webb at the Center for Retirement Research. So why part with a chunk of money when you run the risk of falling into the first camp? The rationale, Webb said, is similar to the reason people buy homeowner's insurance: Your house may not burn down, but if it does, you'll be glad you had insurance.

4. Don't ignore inflation and interest-rate risks. One of the biggest dilemmas many older Americans face is how to invest their savings. Mendels at Creative Financial Concepts says it's important to keep in mind that all investments carry risk and that it's okay to take some stock-market risk to help counter the real possibility that inflation will erode your spending power during retirement. Many retirees, he said, wrongly focus exclusively on income-generating investments, which can be volatile, too.
"Retirees jump through these hoops in an effort to generate more income and get into riskier and narrower stuff when they should be focused on total return as opposed to yield," Mendels said.
It is important, he added, to have a long-term perspective and "remember that you aren't investing for just the next five years. You are also investing for 20 years from now."

—By Anna Robaton, special to CNBC.com

 

Anna RobatonSpecial to CNBC.com

Doctor shortages: Here's the real culprit

Jake Novak | @jakejakeny

CNBC.com

Ever wonder why it's often so hard to find a doctor, especially if you don't live in a big city?
Ever wonder why the government has such a hard time understanding or following the law of supply and demand?

These two questions go together because it's the government that's created and continued a harrowing chokehold on the supply of doctors in America. And if it doesn't ease the grip soon, not even those of us who live in large urban areas are going to escape the consequences. A study conducted this year for the Association of American Medical colleges predicts that by the year 2025, the United States will face a shortage of between 46,000 and 90,000 physicians.

Yuri Arcurs | Getty Images

 

Medical-school applicants basically need to have near-perfect GPA's and very high MCAT scores to get accepted to an accredited U.S. institution. Even among that much better qualified pool of applicants, only about 50 percent get accepted. Imagine if only half of our high-school grads who applied for college got in to any college — there would be riots at admissions offices every spring.


If you're among the lucky ones to get accepted, there's an ever-expanding amount of requirements, including coursework and hands-on training. The average time a medical student spends in school is now a whopping 14 years. Sure, extra training is usually a good thing, but that's a looong time to ask a smart, young person to take him or herself out of the good salary-earning pool for science-skilled workers. A med-school student is likely to see his or her college classmates who majored in the hard sciences making big money elsewhere before they even get to dissect their first cadaver.

All that extra time in school brings up another little problem called "tuition," which serves as an additional barrier to entry to those students still willing to blow a decade and a half in school. That tuition problem translates to a median $170,000 debt for graduating med students. Again that's median, so half of all medical-school grads actually have debt more than that. Many of them are in the neighborhood of more like $500,000 in the hole.

At this stage, the government again plays a big role in the supply-chain jam. One of the key problems is that the number of residencies hospitals establish for new med-school grads is almost entirely dependent on Medicare funding. The baseline for that funding hasn't changed enough since 1997 to meet demand. Teaching hospitals have been complaining about this for at least five years. But by getting into bed with the government decades ago and allowing Medicare to dictate residency spots, this was a predictable Faustian bargain.

So, you survive all of that and — yay! — you become a doctor. Think it ends there? Nope! The government keeps throwing up hurdles.

First, there's the malpractice insurance that boasts premiums of about $250,000 per year for many surgeons and specialists. And then you'll find you're never quite out of school as certifying bodies like the American Board of Physical Medicine and Rehabilitation, (ABPMR), impose a rigorous and all-too-frequent testing process that costs doctors massive amounts of time and money just about every other year. Oh, and do I need to mention the ABPMR is a government-blessed for-profit enterprise that filed tax returns last year showing $8 million in profits? And that's just one group overseeing one specialty. A physician told me earlier this year that he's thinking of hanging a sign up outside his office that says: "The doctor can't see you now, he's studying for another useless test."
All of this takes place before you can bill your first patient, or more likely, fill out your first reimbursement paperwork for an insurance company or Medicare. It's one thing to discourage unqualified people from providing life-saving care and fly-by-night schools from training them, but our current system of educating, insuring, and re-certifying doctors has gone too far for way too long. Remember, the best future doctors will be the same people with the same skills the tech sector is gobbling up for far more money and with far less formal training.

What we're left with is a system that not only leaves us short of the needed number of doctors, but also discourages those who do finish their training from going into any kind of private practice. Punching a clock at an expanded hospital facility may seem attractive to medical-school grads who have already assumed enough financial risk, but will the best innovations in patient service and care come out of that cookie-cutter atmosphere? And as acquisitive and aggressive as many major hospitals are about setting up off-site clinics, will they really reach as many people as the traditional neighborhood doctors setting up offices in their residential neighborhoods?


And, while I'm never short of criticism of Obamacare, the Affordable Care Act isn't responsible for creating this problem. Though, it hasn't done anything to fix it either — and that's a big problem.
Of course, no one wants a bunch of quacks out there pretending to know how to treat sick people. But breaking down some of these barriers won't lead to that kind of scenario by a long shot. Capping insurance liabilities, reducing the frequency of re-certification tests, opening up opportunities for more private-sector investment in residency programs, etc., are all things the government can do to get out of the darn way of potentially thousands of future doctors.
It's time to get America out of the waiting room.

Commentary by Jake Novak, supervising producer of "Power Lunch." Follow him on Twitter @jakejakeny.
 

Jake NovakSupervising Producer for “Power Lunch”

Even the rich are worried about their retirement savings

Tom Anderson | @bytomanderson

CNBC.com

Having a big nest egg doesn't guarantee retirement worries won't keep you up at night.
Households with at least $250,000 in investable assets are more concerned with saving and investing enough for retirement than with creating a legacy for their heirs, according to the new TIAA-CREF Affluent Investor Barometer survey, which sampled 1,242 investors in March. Even among the millionaires surveyed, only 10 percent said leaving a legacy was their top priority.


"It's not surprising that the primary concern for investors is how to generate retirement income for 30 years or more," said Sean Wilson, a wealth advisor at TIAA-CREF in New York City. "People are living longer. We tell many of our clients that they can expect to live until 95 and they need a portfolio that will last."

The TIAA-CREF report echoes the anxieties revealed by other surveys of wealthy investors.
A recent Legg Mason survey found people with $200,000 in investable assets spent 475 hours a year worrying about money and said they would need $2.5 million in retirement savings to enjoy the lifestyle they have today.




"Saving for retirement is the No. 1 priority for all my affluent clients," said Michael Chadwick, a certified financial planner at Chadwick Financial Advisors in Unionville, Connecticut, who works with many small-business owners and physicians. "My wealthiest clients are concerned with estate planning, but retirement is still the focus for most of our conversations."

Better retirement planning can alleviate many of the financial worries for the affluent and ordinary investors alike. "Clients need to figure out how much they will need in retirement, all the sources of income they will have, what they should save and the income they will need to generate to reach their goals," Wilson said.

The pitfalls that diminish a nest egg are also similar across income groups. "The three biggest mistakes affluent investors make, or any investor makes, are not saving enough for retirement, starting savings too late in life and being too conservative with their investments," Chadwick said.

Tom Anderson 

Personal Finance Writer

Beware Hidden College Costs: Here's What Financial Aid Doesn't Cover

Elizabeth Chuck

NBC News

The acceptance letters are in, and so are the all-important financial aid offers. But for college-bound students, most of whom must choose a school by this week, the next four years can be full of hidden costs.

While schools map out basic expenses, there are "a variety of fees that aren't necessarily going to be in that cost of attendance figure," said Mark Kantrowitz, senior vice president and publisher at Edvisors.com, a website about planning and paying for college.
Darian Stevenson, a high school senior in Alton, Illinois, had hoped to go away to college. But the price of room and board discouraged the 18-year-old from leaving home: Despite having her heart set on going to Illinois State University for its journalism program, she'll be commuting to Southern Illinois University at Edwardsville, a 25-minute drive from her house.

Bebeto Matthew | AP

 

Student textbooks for rent sit on the shelves at the City College Bookstore in New York.

But even that has come along with unexpected strains on her bank account.
"I actually just got a second job because I know I'm going to have to pay for gas and other things just to get to and from school," said Stevenson, the first in her family to go to college. She works at a supermarket and is now waitressing, too. "I'm trying to save money, rather than spend it."
Stevenson is one of 10 high school seniors from across the country that NBC News is following for the next seven months, as they navigate their first semester of college. Like millions of other students, finances weighed heavily when it came to choosing a school.

It's little wonder: The average annual cost for tuition, room and board at a private four-year institution runs students a hefty $42,419, and the class of 2014 inherited the most debt of any graduating class.
To make matters worse, "almost all colleges are increasing their tuitions a little bit each year, and that creeps up over time. A lot of families don't take that into account" when they see the first-year tuition cost, said Deborah Fox, CEO and founder of Fox College Funding, a San Diego-based company that helps students maximize their financial aid.

Those sobering statistics make any extra charges even more painful on cash-strapped students' wallets. But even this late in the game — most colleges and universities require students to claim their spots by May 1 — there are ways to maximize the amount of financial aid you have (or have not) received.

"I would recommend that the student put together a budget so that they know to spread out their spending over time," Kantrowitz said, adding that between course, activity, and transportation fees, there can be up to three or four hundred dollars per month in unanticipated charges.

While the financial aid offers have been set in stone, there are still scholarships whose deadlines haven't passed to which students can apply. Not all are conventional, such as the contest for the best prom outfit made of duct tape, which awards a $10,000 grand prize.
"But you need to know how your college will displace their own financial aid when you win a private scholarship," for example, by potentially reducing your grants, Kantrowitz said.
Students can also work during the summer and rack up savings, earning a little more than $6,000 a year before it affects their financial aid.

Among the most common hidden college costs to be aware of:

• Transportation: Travel fees for a student traveling 3,000 miles for college will vary from a student who's going to school close to home. And once you get to campus, there may be parking fees if you have a car, or public transportation and campus shuttle fees. Gas prices are low — for now — but as with tuition, these costs can increase over time.
• School supplies: Depending on what you study, there may be various add-ons: lab fees for science courses, equipment charges for technology classes, art supply fees for art classes, higher costs for thicker textbooks. Schools may make you pay to use their printers. If you need a new computer for college, Kantrowitz advises holding out until you arrive on campus before you purchase it. "Often times there are special discounts for college students where you can get it through the school's computer store," he said. Then there's dorm decorations and necessities, such as a mini-fridge and perhaps an air conditioner and TV.
• Activity fees: There are charges for participating in athletics and on-campus activities, such as clubs, sororities and fraternities. Plus, "part of the college experience isn't just sitting in classrooms 24/7, but hanging out with friends, eating out, going to movies or other entertainment," Kantrowitz said.

The best way to keep the savings account from getting drained? Students — and their families — should review their finances each of the four years, advised Fox.
"The student can apply for private scholarship funds. Those are available not only for incoming freshmen, but all throughout the four years. Many families don't realize that scholarships are not just for high school seniors," she said. "It will be important for students to build relationships with their department head, the career services office, the financial aid office at the campus they'll be attending to find out about those opportunities."

Financial aid is need-based or merit-based. If families qualify for need-based aid, they need to re-file for it each year.

"They need to be very diligent in making sure that they're refiling the FAFSA [Free Application for Federal Student Aid] and any additional forms that need to be filed each year," Fox said, and to budget for any potential increases.

The summer is a perfect time to teach students how to manage a budget, she said.
"They will be making decisions about whether or not they go out, eating off-campus, or maybe going to concerts, or sporting events. All of these things really add up, and it's not that a student shouldn't be able to do them. It's just they need to plan everything out and have a monthly budget that keeps them on track."