Economic lessons from a young professional

As financial experts and political pundits sift through the wreckage of the credit crisis, a significant segment of the population has been ignored by the mainstream media: young people who have recently graduated or are newly employed.

As financial experts and political pundits sift through the wreckage of the credit crisis, a significant segment of the population has been ignored by the mainstream media: young people who have recently graduated or are newly employed.
For many, this is our first experience with the negative dynamics of the American economy, sans the protection of mom and dad.
Accordingly, I would like to share what I have learned while working for two dynamic-wealth-management firms since my graduation from college in 2006.
First, we need to keep in mind that a significant advantage of our youth is the time we have to let our money grow — at least for several years, before we buy a house or make any other major investment. We can be aggressive with our money without feeling compelled to bail out of the market at the first sign of trouble.
Second, it is important to diversify.
If diversified, we may not capture the highest returns during a boom, but we are also unlikely to suffer as much during a downturn — while reducing our portfolio’s risk.
Less than 50% of global investment opportunities are in the United States. Therefore, if your portfolio relies only on American investments, you are missing out on more than half the world’s economic growth.
Additionally, we need to think about diversifying our assets into commodities (oil, gold, timber, etc.) and alternative investments.
And third, plan for retirement.
It is never too early to start saving.
Contributing to your employer’s 401(k) plan where offered and maximizing your yearly contributions to either a traditional individual retirement account or a Roth IRA is an excellent way to begin.
Although the United States — as well as the rest of the globe — is suffering from an economic tsunami, a life raft exists for those of us getting our feet wet in the financial markets. By focusing on the long term, diversifying our investments and contributing whatever we can to the retirement vehicles available, we will be well-positioned to capture a good deal of the market upswing as the tsunami ebbs, better situating ourselves for a stable and rewarding financial future.

Benjamin Ratner
Sales/investment management associate
Wachovia Wealth Management
McLean, Va.

Banks should honor power of attorney

In the article “States mull power-of-attorney rule shift” that appeared in the Feb. 16 issue, you talk about banks not accepting a durable power of attorney if they think someone is up to no good.

My father was financially exploited by a woman who tried to take him for whatever she could. I went to the bank with him and told the people there what was going on and asked if they had ever seen this woman.

They thought she was a caregiver.

I asked the bank why they didn’t wonder what was going on when he began withdrawing large sums, and they said that they couldn’t do anything because it was his money.

I had the durable power of attorney, and I thought the documents were in order.

The bank refused to look at my durable power of attorney, and the manager called the legal department, which flat-out refused to even look at it and said I needed conservatorship.

This was all very expensive, stressful and time-consuming.

First, I had to get an attorney, at $225 an hour, and then be bonded for $1,500 so I didn’t steal from my dad’s annuities, of which I am the beneficiary. His houses are in a trust, so they weren’t an issue.

I was also on both his checking and savings accounts.

I finally got the woman arrested for fraud, but had to get guardianship just to get a warrant for her arrest, even though I had proof that she had gotten a lot of money from him.

I am so disgusted by the system and have contacted my state’s attorney general’s office.

These lawyers and fiduciary bonds people are stealing from my father.

Your article reported that banks — and financial advisers — may refuse to acknowledge the power of attorney as long as they report the suspicion of fraud to their state’s adult protective-services agency.

The act doesn’t force banks or brokerage houses to be good Samaritans, however, and report all suspicious activities. No one talks about the elderly being tricked by sweetheart scammers, and banks need to be more aware of these people.

My bank is awful. My father still does his banking and has his investments there, but that decision was made only to avoid confusion for him.

I don’t want anyone to go through what I had to, just to keep my father from losing everything. I believe the court or the attorney should have ordered the bank to honor my durable power of attorney.

Suzanne Smith
Columbus, Mich.
(Ms. Smith isn’t in the financial services business)

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