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Business and Estate
A Publication of Business & Estate Advisers, Inc.


By E. Dennis Zahrbock, CFP

Products & Services Offered 

Business & Estate Advisers, Inc.
Individual and Group Life Insurance
Individual and Group Disability Insurance
Individual and Group Medical Insurance
Individual and Group Annuities
Long Term Care Insurance

B & E Investment Advisers, Inc.
Estate Planning
Retirement Planning
Financial Planning

B & E Pension Advisers, Inc.
Qualified Plan Design
Qualified Plan Administration
Qualified Plan Reporting

Valmark, Inc.
Variable Annuities and Life Insurance
Securities Investments (Stocks, Bonds, etc.)
Mutual Fund Investments
Tax Free Municipal Bonds
Individual Retirement Accounts (IRA)
Education IRA Accounts
Roth IRA Accounts
Qualified Plan Funding

Sarah and I were shocked on two separate occasions these past few months when long term clients stated "we didn't know you did that!" This article will try to let all our readers know what it is we do and how we do it. We also seek any words of wisdom from any readers on how to better communicate to all of our clients of what our true skills entail.

In one case, a twenty plus year client of mine in the Life Insurance side of our business inquired about finding a stock broker!  She didn't realize that Sarah, Steve and I are all Registered Representatives with Series 7 licenses (stock broker licenses) issued by the NASD (National Association of Securities Dealers).   Thus, point #1: We are licensed investment representatives and we currently help our many clients manage tens of millions of dollars.

In the second case, one of Sarah 's clients purchased a Life Insurance policy from another agent!   Thus, Point #2: Sarah, Steve and I are all legally licensed to sell Life, Disability, Long Term Care and Group Employee Benefits.

Our "unique business ability" is that we have professional competencies in three key financial areas.  We are one of the best 401(k) and related retirement plan providers in the upper Midwest , but we must admit, there are competitors that are good too.  We are one of the best Business and Personal Life Insurance providers in the upper Midwest , but we must admit, there are competitors that are good too.  And, we are one of the best Comprehensive Financial Planning firms in the upper Midwest, but again, we have good competitors.

What makes Business & Estate Advisers unique is that we are the only firm in the Upper Midwest and perhaps in all of the United States that offers all three levels of expertise under one roof.  Our clients can solve their issues in any of these three areas of specialty with only one number to call.  Our clients tell us what they like best is the coordinated expertise between the areas to maximize their benefits in each of the three areas.

E. Dennis Zahrbock, CFP


By E. Dennis Zahrbock, CFP

July 1st marked the first Anniversary of the opening our Rice Lake Office.  Last year we started with two part time associates, Sue and I.  We ended year #1 with two full time, Steve and Stefani and three part time, Sue, Lori Bowman and I.  Best of all we've gained many new relationships with the wonderful Rice Lake area people .

Congratulations to Steve Bowman, MBA on obtaining his CFP (Certified Financial Planner) designation.  He accomplished this task in less then three years in the business, something very few can match.  Just over 50% of those sitting for the final (2 day) exam passed.  Congratulations Steve on passing and receiving the CFP designation!

Third daughter Rachael married new son-in-law Todd Friesen on May 30th .  We all enjoyed a spectacular celebration at the Schwan Center in Northwest Wisconsin .

Sue was elected to the Barron County Board of Supervisors.  She has also become a Hospice volunteer.  She continues to sit on the board of the Rice Lake Hospital .  Bottom line, she's a busy person!

New Grandchild (#5), Kallahan Zahrbock Bowman arrived on August 27.   She weighed in a healthy 7 lbs 11 oz. and was 19 ½ inches long.

We are honored to have 3 new employees join the staff of B & E: Lori Kramer and Doug Wolgomot in the Wayzata office and Stefani Miller in the Rice Lake office.

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June 2004
Dennis, Steve and Sarah attended MDRT in June. Dennis and Sarah did a breakout session on Building a Top of the Table Staff. It was well received. Since then, two articles have been published featuring their presentation.

August 2004
Sue and E. Dennis attended the "Tholympics" near Omaha, NE in early August.  This is Dennis' mother's side of the family's four year reunion.  They are the Thompson side, hence the "THOLYMPICS" concept.

Ten days later Sue and E. Dennis took off for Athens, Greece where they attended the International Olympics opening event and several competitions.

E. Dennis was a featured speaker (for the 3 rd time) at the Sons of Norway annual convention in Washington, D.C.

September 2004
Opening of the Canadian Duck and Goose season takes place on September 27th with E. Dennis and Steve participating.

Sarah attended a 2-day Pension conference in Boston.

October 2004
Sarah , Steve, Doug and E. Dennis will attend the ValMark School of Life Conference in Orlando, Florida.

November 2004
Dennis and Rice Lake Friends will spend a weekend Pheasant Hunting nears Corsica, South Dakota.

Both Wayzata and Rice Lake office will be closed for Thanksgiving Day and the Friday following.

December 2004
Sue and E. Dennis will travel to Jamaica once again, this time for a special Play Ground Equipment Build.  The event is sponsored jointly by Mission Jamaica, Kids Around the World, The MDRT Foundation and The ValMark Foundation.

Both Wayzata and Rice Lake office will be closed for the Christmas Holiday.

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Skip-A-Day XX Photos
Skip-A-Day XX Photos
Kallahan Zahrbock Bowman

Congratulations to Steve and Lori Bowman on the birth of their third child - a baby girl. Kallahan "Kallie" Zahrbock Bowman was born August 27, 2004 . she weighed 7 lbs. 11 oz. and was 19½ inches long. She is a precious addition to the Bowman Family.

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New Faces at Business & Estate ...

Lori KramerLori Kramer - Securities Specialist, Wayzata Office

I've worked in the Securities Industry since 1974 and became fully licensed in 1983.  My leisure time is pent in my flower beds, remodeling my 140 year old home, or attending games and functions that my 3 grandkids participate in.

Stefani MillerStefani Miller - Client & Community Relations, Rice Lake Office

I grew up in New Prague, MN and have spent the past 6 years in the Rice Lake area. I am currently living in Barron , WI where I just bought my own home. I graduated from Winona State University with a BA in Business Administration.  I spent just over 5 years working in the telephone industry and then came to B & E. I have two boys, Zachary - 5, and McCade - 2 ½.   I love to cook, read, and play with my kids.

Doug WolgamotDoug Wolgamot - Director of Business Development, Wayzata Office

I was married in August to Christy whom I met 5 years ago while attending St. Olaf College .  Prior to joining B & E, I worked with Thrivent. Outside of work, I enjoy spending my time on Minnesota Lakes .  I am an avid water-skier and wake boarder..  If I'm not on the water, you might find Christy and me enjoying a round of golf, cheering on the Gopher Football team or just spending time with our families.

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Business & Estate Adviser's
"Tips for Teens"

Volume 10 Issue 2

Edited and Revised by Business & Estate Advisers, Inc. as an insert to our newsletter
Stocks, Bonds, Mutual Funds & Annuities: What's the difference and what do I do with them?

By: E. Dennis Zahrbock , CFP

In the financial world terms like stocks, bonds, mutual funds, variable annuities, etc. are thrown around everyday as if everyone understood what was being talked about.  We felt this issue's Tips for Teens might be a time to try to give definition to some of these terms and provide some examples of what they mean.  So here goes:

Stock:  This is a term given to a portion of ownership of a company.  For example there are two people that form a company and each own half.  The company issues stock certificates indicating there is one share of stock for person A and one share of stock for person B.  When you own stock, you actually own the company.  This can be good or bad.  If the value of the company rises, the value of your stock also rises.  If the value of the company decreases, the value of your stock also decreases.  In public companies (those that are listed in the paper and available to the public) there is daily exchanging of stocks.  Some people want to sell and others want to buy.  This is simply daily changing of ownership of the company.  Most companies in America are not public, but rather they are what is called "closely held".  They also have stock but it does not change ownership daily.  It changes ownership when the current owners find a buyer.  Many times when you hear about the local business being sold, it is actually the stock that has been sold.  Somebody owned 100% of the stock before the sale and someone else owns 100% of the stock after the sale.  Bottom line is that stock is simply a form of paper that makes it convenient to determine the owners of a company.  Stock is ownership of companies.

Bond:  It has been said that "a man's word is his bond".  This simply means that a man's integrity is based on his keeping his word.  A bond in the financial world is a company's "word" that it will return money that is loaned to it by bond holders.  A bond from an investor's point of view is simply a loan to a company.  When you loan money to a company, your goal is to earn a higher interest rate than the bank. The reason you want to earn higher is that you do not have guarantees like a bank provides.  You must trust the company to pay you interest and to pay you back.  The larger the company, the higher the trust; thus, the lower interest they will pay you.  The smaller the company the lower the trust; thus, the higher interest they will pay you.  There are three main types of bonds in the United States .  The first is the Government bond which is issued by the U.S. Treasury (high level of trust) and it comes in three forms:  1) Treasury Bills (referred to as T-Bill) allow you to loan money to the Government for one year or less.  2)  Treasury Notes allow you to loan money to the Government for 1 year to 10 years.  3)  Treasury Bonds allow you to loan money to the Government for 10 years to 30 years.  The second type of bond, also issued by a level of the Government is a Municipal Bond.  These are issued by states and cities.  As incentive to bond buyers, these bonds are exempt from Federal Income Tax on the interest and usually exempt from State Income Tax if purchased from a state municipality.  The third form is a Corporate Bond, issued by the Corporation, which backs the promise to repay. The key to understanding bonds is that you loan not own.  Bonds are loans to companies.

The big questions are "What stock or what bond should I own?  When should I buy it and when should I sell it?"  For some people (a very small minority) they find that they have they have the skills to actually "buy low and sell high".  Unfortunately for most people they don't have sufficient discipline to make money buying and selling. These people generally employ Mutual Funds and/or Variable Annuities.  So what are these two items?

Mutual Funds:  Quite simply mutual funds are groups of either stocks or bonds that a professional manager purchases and sells on the investor's behalf.  For example you want to buy some stocks but have no idea of what to buy. Even if you did, you may not know when to sell!  A professional manager has a full-time focus on buying and selling stocks.  He may even employ a research staff which spends their entire work life checking out companies and advising the manager of what the stocks might be worth today and tomorrow.  Mutual funds are usually companies themselves.  You've maybe heard of many of them:  Fidelity, American Funds, Franklin , T. Rowe Price, Janus, Putnam, and Strong, just to name a few. These, like most mutual fund companies, provide professional management of stocks and bonds and offer various investment styles.  Some invest in big companies only.  Others invest in small companies only. There are a variety of choices among the over 10,000 mutual funds currently available.

Variable Annuities:  Just like mutual funds variable annuities invest in groups of stocks and bonds.  They are different in two areas: 1) Whatever they earn is "tax deferred".  It is very important that you understand that taxes are deferred not eliminated.  They are not like municipal bonds where taxes are eliminated!  2) They may offer guarantees, generally at an additional cost.  Currently many variable annuities have two very attractive guarantees.  First, they may have a provision that guarantees your account value (remember you are buying stocks that can go down!) even if the stocks that they purchase go down.  This guarantee generally requires that the buyer keep his or her money invested for a minimum number of years, usually between five and ten years.  The guarantee is usually only available to compute a monthly income but some variable annuities will provide lump sum payments of the guarantees.  The second guarantee may be available in case the buyer dies.  If the buyer dies most variable annuities guarantee that they will give the original investment back even if it has gone down.  In today's market, many also guarantee that the original investment will compound at some pre-set interest rate from date of purchase to date of death.  It is even common these days to find contracts that guarantee they will pay the highest anniversary value of the contract.  This means that if someone invested $100,000 and in some number of years it reached $400,000 (on contract anniversary) and then it again reduced to only $100,000, that the Variable Annuity with this feature would pay $400,000 to the beneficiary.  It simply says that the beneficiary will get the highest of 1) actual account value, 2) original investment compounded at some pre-determined interest rate, or 3) the highest anniversary value.  It is for these benefits of variable annuities that many people want to own them.

So now that you have some definitions of stocks, bonds, mutual funds and variable annuities, how do you really understand what to do?  We've come up with a simple analogy. If you buy a stock or a bond it is like having a garden in your backyard and deciding to plant carrots, peas and turnips.  If it's a great year for carrots, a bad year for peas and a so-so year for turnips, you may just break even.  If it's a great year for all three you get rich!  If it's a bad year for all three you go broke!  No matter what, you have yourself to congratulate or blame as you planted your own garden.  If, on the other hand, you don't know what to plant in your garden, you can hire a professional gardener to come into your backyard and plant your garden with what he or she thinks is best for your climate and growing conditions.  The garden is still your garden , but you have someone else take care of it.  At the end of the year when the crops are harvested, the gardener gets about 1% of the crop and you get to keep 99%.  That's pretty much how a Mutual Fund works.  A Variable Annuity is just like a Mutual Fund except your gardener purchased crop insurance (or as we commonly say in the Midwest , "hail insurance").  In the Variable Annuity the gardener plants the same crops but he insures their safety.  At the end of the year you get to keep 97%, the gardener gets 1% and the crop insurance company gets 2%. 

So what do you do when you have money to invest?  You look at the three options and decide:  Do you want to plant your own garden?  If so you buy and sell your own stocks and/or bonds.  Do you want to employ a gardener?  If so you hire a Mutual Fund manager.  Or, do you want a gardener that acquires crop insurance?  If so you acquire a Variable Annuity.

Today's Quiz:

  1. Stocks are easy to buy low and sell high? T F
  2. Stocks are loans to companies and bonds are owning companies. T F
  3. Mutual funds provide guarantees.  T F
  4. Variable Annuities provide tax-free benefits. T F
  5. Variable Annuities guarantee you always get your money back. T F


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Business and Estate
Business & Estate Adviser, published periodically, is composed on a personal computer utilizing Microsoft Word 2000 and Times New Roman typeface. Camera-ready copy is generated on a Hewlett-Packard LaserJet 4050 printer. Gray-shades and printing by Wallace Carlson Company, Minnetonka, Minnesota. For additional copies or information, please contact Jule Kingren at (952) 475-0440. Copyright © 1990-2004 Business & Estate Advisers, Inc. All rights reserved.


282 East Wayzata Boulevard
Wayzata, MN 55391
(952) 475-0440

738 Wilson Avenue
Rice Lake, WI 54868
(715) 434-0440

Fee Based planning offered through B&E Investment Advisers, Inc.
Securities offered through ValMark Securities, Inc., Member FINRA/SIPC
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Business & Estate Advisers, Inc and B&E Investment Advisers, Inc. are separate entities from ValMark Securities, Inc.

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