Retirement Planner: Banks banking on us to make money

To review the basics, banks borrow money from depositors -- those of us with savings accounts, CDs, the float from our checking accounts, etc., and they make loans with that money. Currently, 95 percent of what banks loan comes from what people like us have loaned them.  
Federal Reserve chief Janet Yellen, according to a recent report, is inclined to favor Main Street over Wall Street, which means that she is inclined to do what is necessary to keep the economy growing.  
 
LTC policyholders should take the time to write to Dave Jones, the California insurance commissioner, and suggest that he require insurance companies to honor the marketing materials they used to sell policies years ago that clearly implied that "buying policies at a young age LOCKED IN low premiums."  
 
A 50/50 mix of stocks and bonds or heavily weighted (perhaps 90 percent) stocks buttressed by a cash side fund to weather periodic crashes. Either approach offers a vast improvement over the mindless annuities and target date retirement funds routinely foisted on retirees by the financial services industry.  
 
I love what I hear about the new commissioner of the Internal Revenue Service. He sounds like the kind of person that will go after what a New York Times editorial cited as the $385 billion annual shortfall between what taxpayers owe and what they pay.  
 
John Bogle of the Vanguard Group points out something that had escaped me. He says that while 30 percent of the entire stock market is owned by people who invest directly in index funds, the remaining 70 percent, in the aggregate, are indexing as well, even though this group is actually made up of millions of investors who are trying to beat the indexes. Bogle would argue that the 70 percent is playing a zero-sum game (for every winner, there's a loser).  
 
Just when we might be thinking that really wealthy people have great investment opportunities not available to the rest of us, the facts suggest otherwise.  
 
The so-called Prudent Man Rule defines how someone is supposed to invest when they are charged with managing other people's money. This rule applies to what's known as a "fiduciary," someone who presides over a managed pool of money and who is legally obligated to act in the sole interest of the beneficiaries of that money.  
 
Looking at history for a moment, the Dow Jones average reached a low of 41 in 1933 and that's the point at which dividends amounted to a 7 percent to 10 percent return. Those dividends, if reinvested, were buying new shares at rock-bottom prices. By 1937, the Dow average reached 194, so not only had the original shares quintupled in value, but a lot more shares had been added to the portfolio by reinvested dividends.  
 
A two-pronged approach to facing a productive retirement starts with painting a picture of what a stimulating retirement life will entail.  
 
 
 
 
 
 
(LINDA DUVAL/Colorado Springs Gazette)
SF movie tours and Buffalo Bill lore

Play local tourist with a new interactive map app that takes you to San Francisco movie filming locations, from 'Godzilla' to 'Vertigo.'  
(Photo by Kevin Winter/Getty Images)
Taylor Swift 'Shake it Off' director rebuts racism charges

Mark Romanek responds to rapper Earl Sweatshirt who -- without seeing the video -- blasted its twerking scene as “inherently offesnive.”