Recognize Behavioral Signs before Your Emotions Take over in Making Strategic Financial Decisions

The Challenges of Choosing under Pressure

by Chia-Li Chien, CFP®, PMP® Oct 15, 2016

Recognize Behavioral Signs, Chia-Li Chien

 

 

A number of years ago, Betty (not her real name) went into cardiac arrest and John, her husband (not his real name) had the ambulances take her to the nearest hospital emergency room. While restlessly waiting for the emergency staff’s help, the surgeon on call asked John about what resources they should use to save Betty. John was given three options:

Option 1: The resources used will be covered 30% by medical insurance, but they are the best and most reliable ones.

Option 2, The resources used will be covered 50% by medical insurance.  In addition, the resources are better than the default option, but might lead to complications for Betty.

Option 3, The resources used will be covered 100% by medical insurance.  They are, however, the default option and historically lead to complications in the recovery process.
 

Coping with the Costs of College

Managing Money, Minding the Future

 

by Chia-Li Chien, CFP®, PMP® Oct 15, 2016

 

Coping with the Costs of College, Chia-Li Chien

 

 

According to the U.S. News 2016 Higher Education rankings, Ball State University (BSU) ranked 176th among national universities and top 93 public schools with a 41% four-year graduation rate. But that contrasts with Indiana University, which has a 60% four-year graduation rate. Recently the BSU student newspaper interviewed me regarding the biggest money mistakes students make. The biggest one is students taking too long to complete a bachelor’s degree.  This is unwise, except for students in double majors, or who are bridging courses to qualify for a professional certificate exam such as CPA, PE, etc.

Managing Major Business Change

Succession Planning To Protect Family Bonds As Well As Business Health.

 

by Chia-Li Chien, CFP®, PMP® Mar. 22, 2016

 

Managing Major Business Change by Chia-Li ChienJohn and Mary (not their real names) sold their successful sheet metal business and launched a new enterprise, a fabric business, about fifty years ago. At the time of the launch, they had no need for outside capital. Nevertheless, Mary’s family members insisted on being a part of John’s potentially successful venture. John made sure that he had control of the firm, with 57% ownership for him and Mary—leaving 43% to the rest of the family.

As predicted, John’s company performed really well. But each business, like every economy, goes through cycles. John’s company was no exception; it experienced growing pains. About ten years ago, the company expanded too quickly into China. John’s company proved unable to cash out the capital it had invested in China.  Moreover, John’s China division did not achieve a desirable profit margin. In fact, the division became a losing proposition. That struggle notwithstanding, John’s company limped along for a long time, using John’s own capital to keep the lights on in China.  Because of the capital shortfall, the company was also forced to stop issuing dividends to its family shareholders.

Changing Business Practices to Reflect New Market Realities

Bigger and better don’t always go together.

Chart-1 Source: Yahoo Finance WMT Key Statistics vs. S&P500 as of Feb 21, 2016

by Chia-Li Chien, CFP®, PMP® Feb. 23, 2016

Take a look at Wal-Mart’s 5-year stock price and compare Wal-Mart’s arc to that of the S&P 500 [1 and Chart-1]. You might say, “so, its not doing so hot, right …?” Well, you and I probably have Wal-Mart stocks in a retirement plan like a 401(k) or 403(b). The top three mutual fund holders of Wal-Mart stocks are 1) Vanguard Total Stock Market Index; 2) Dodge & Cox Stock; and 3) Vanguard 500 Index Investment. Because Wal-Mart might just impact your overall retirement dream, chances are you are not happy to learn that its stock price is sliding downward.

Utilizing key C2B trends to help your business evolve 

Creating value for all stakeholders in a digitally transformative economy.

by Chia-Li Chien, CFP®, PMP® Jan. 04, 2016

My mom is in her late 70s. I bought her an iPad in 2013. At first, we were concerned about the practical usage due to her lack of technology exposure during her career days. We were so wrong; she used YouTube daily to karaoke with her friends in her favorite Japanese songs. She connected with many families, friends, and past students on Facebook. She felt closer to her grandchildren as she commented on their postings often. She even housed one of my daughter’s friends from U. of Virginia in Taipei mid-2015. The fast pace and ever-changing nature of technology has made all of these adaptations possible for her.

Multi-Generational Financial Planning for Asian-American Families

Multi-Generational Financial Planning for Asian-American Families

by Chia-Li Chien, CFP®, PMP® Dec. 28, 2015

What does greater longevity mean for family financial planning?  Research has established that Asian Americans live longer than those in other ethnic groups.  In particular, Lauderdale & Kestenbaum (2002) found that Asian Americans live longer compared to Whites. The Master Beneficiary Record from the Social Security Administration and Medicare Part B enrollee data reveal telling data in this regard. Elderly Asian Americans in Lauderdale & Kestenbaum (2002) were divided into six subgroups: Chinese, Indians, Japanese, Koreans, Filipinos and Vietnamese. The largest subgroup in this study was Chinese.

The same study found that: 1) White males have on average a 1.36 times higher mortality rate compared to Chinese males; 2) White females on average have a 1.48 times higher morality rate than Chinese females. Lauderdale & Kestenbaum (2002) thus establish that Asian Americans live longer, healthier lives.

Why is this longevity a special concern for first-generation Asian Americans?  The implications are both cultural and financial.  According to Quadagno (2014), “adult children of immigrants had a greater sense of filial obligations to their parents and they saw their parents more frequently.” (p. 183) In addition, Quadagno (2014) found that “filial piety was a culture value” (p. 185) and has always been at the center of Asian culture and lifestyle.

Success with succession


A matter of good timing

by Chia-Li Chien | Oct. 20,  2015

Success with succession by Chia-Li ChienI absolutely enjoy travel, especially outside of the United States, because that’s when you know the least about your surroundings and you have to trust people you don’t know to lead you. In the Fall of 2015, I went to Japan for a business trip; the flight from Chicago to Tokyo was delayed 3 hours, and I missed my connecting flight to Okinawa. United Airlines took care of the overnight stay in Tokyo, but my client wanted me to take a 6 a.m., rather than a 10 a.m., flight out. That may not sound like much difference, but my body had not yet adjusted to the local time zone. I was physically exhausted.

That being said, the problem was the 6 a.m. flight--not my jet leg. The first flight out was at Haneda Airport, which is a 1.5-hour drive from Narita International Airport in Tokyo. I took a taxi at 3:20 in the morning to get to the airport. Well, I got there too early; the airport terminal was not open. This is a domestic-flight-only airport; most of the staff there speaks only Japanese. I could read most of the signs on the highway and in the airport, but could not speak the language.  And yet, those I encountered were very nice and helped me every step of the way. They were courteous, as you would expect anyone from Japan to be.