XVI was another GREAT
time to time in our Newsletter we like to call our readers attention
to exceptional service. The purpose of these articles is not
to endorse a product but definitely to endorse a service!
SPECIAL THANK You To OUR Skip-A-Day 2000 SPONSORS
- ValMark SECURITIES
FAMILY OF FUNDS
FAMILY OF FUNDS
ADVISOR FAMILY OF FUNDS
past March, right at about the time our last newsletter came
out, I met some clients and friends for a dinner/business meeting.
They suggested we meet at a new place in Plymouth called Howie
never been there but I had heard that this was one of those
places where you had to cook your own steak. I've never been
much on cooking, but since that's where my friends wanted to
go, I agreed.
experience started the minute I arrived. The host and hostess
had big smiles and friendly attitudes. I told them I was looking
for two friends, but as we surveyed the restaurant, I was the
first to arrive. They arranged for a booth with easy view of
the entrance so we could connect when they arrived. After being
seated the waitress, Lea, was my next good experience, a true
pro at making one feel warm and welcome. She even let me know
if I didn't want to cook, they did offer full chef services.
friends arrived. The top?notch service continued. Our orders
were placed and soon we were dining. When my steak arrived,
part of it was "well done" and part ?medium" [I ordered medium
rare]. In a few minutes Lea stopped by asking how the steaks
were? My friends pointed out that mine appeared a bit beyond
medium rare! Immediately Lea offered me a new steak ... let
me digress to say I was now in my 9th day of a 14 day diet and
that night was "steak night". No way did I want to wait for
a new steak! I said, the one I had would be fine.
minutes later, after I've devoured 65% of my 24?ounce porterhouse,
the owner shows up and tells me he has heard of my wrongly done
steak and will have a new one for me in a moment. He tells us
that Howie G was his dad and that naming their restaurant Howie
G's was a tribute to him.
from my perspective I would say that Howie G today, as he looks
down from heaven, must be very proud of his sons David and Mitchell.
To be able to observe sons who truly know how to provide customer
service has got to have something to do with upbringing!
G's has my vote...and they're not even running for political
has been said many times that 85% of customers say nothing,
12% say bad and 3% say good. That's five to one against you.
Let me strongly say that if you want a "3% experience" then
dine at "Howie G's"...I understand they have both Plymouth and
before I finish, I had one little complaint. Their menu offered
a free 44 ounce sirloin to anyone who could eat one in 30?minutes.
I asked if my two 24 ounce Porterhouses counted ... they said
no since I didn't get them both done in 30?minutes ... oh well
... It was worth the try. By the way Lea earned a 20% plus tip
By E. Dennis Zahrbock, CFP
As you can
see this is our first (and hopefully last) newsletter printed
on yellow paper! If you haven't heard, I took an antibiotic
called Augmentin last April and unlucky me came down with Toxic
Hepatitis on May 10h I turned the color of this newsletter.
Thanks to God, my wonderful wife Sue, my great staff associates
at B & E, my doctors and pharmacist, and my many friends that
called and wrote, I was able to return to work on July 10th.
And now I'm fully recovered.
8th Sue and I flew to Stavenger, Norway. I was the keynote speaker
at the 2000 Sons of Norway Convention. We then spent two weeks
in Norway visiting relatives and sites. We even went to an Island
in Bulandet, which has been owned by my mother's family for
over 300 years! Following Norway it was a week in Ireland to
celebrate General American's convention.
arrived with two trips to St. Louis to serve on General American
committees. Sue and I went to Denver for the third September
10th in a row...that was to celebrate birthday #2 of Granddaughter
#1 ? Addison. We also flew to Orlando, where I was honored to
speak to the members of the National Association of Insurance
and Financial Advisors.
sure to call Sarah and congratulate her for passing all five
parts of her CFP. She sits for the cumulative, final exam in
November and will be awarded her Certified Financial Planner
designation thereafter. Sarah has been with B & E nearly five
years and was elected a Vice President this past year. And,
more congratulations for Sarah, she has become the mother to
three new additions during her tenure with B & E. Her newest
arrival, Maxwell Darvin Kaelberer, born September 19th, 2000.
BULLETIN BOARD OF
will be spending three long weekends hunting at the Decoy
Inn on the Delta Marsh: once with his two favorite son?in?laws
and future potential possible maybe son?in?law to be, once
with a group of his cousins, and once with some great friends
and business associates.
to friend Richard Sullenger (2002 to?be President of the Million
Dollar Round Table), Dennis will be in Chicago the end of
October as a member of the MDRT Finance Committee.
takes her final CFP exam. Jules will be studying for the second
exam in the CFP series.
Sue and good friends Jim and Anne Eidsvold journey to Palm
Springs for a week to upgrade the new townhome they've acquired
at Rancho Mirage.
in the past, Business & Estate will be closed for business
from December 25th to January 2nd.
January 14"' it's back to Palm Springs for Dennis and Sue.
This time for Sue to enjoy the new townhorne for a few days
and for Dennis to address the members of the International
Forum who are meeting at LaQuinta.
Lisa, and Dennis are scheduled to attend the GenAmerica Financial
Symposium in early February where Sarah and Dennis will be
involved in presenting a new National Marketing Program to
the top field associates of GenAmerica Financial.
and Dennis return to Mission Jamaica in late February for
"Mission #4" in this cause to help people. This year many
of their friends will be going with. We thank God for this
Advisory Board Members
Lindquist & Vennum,
How did you first become acquainted with Business & Estate
met Denny Zahrbock about a dozen years ago at the recommendation
of my partner, Dave Davenport, who knew Denny from Wayzata
activities. Denny held an informal get?together at his office
to meet members of my department and to learn about our practice.
At the conclusion of that meeting, Denny noted that these
sessions usually go nowhere unless the parties engage in some
business activity early on. With that in mind, Denny invited
me to visit a client of his in Mai?shall, MN to discuss ESOP's
and other fiduciary considerations. We made that long drive
together, had a successful session with his client, and got
to know one another quite well. Following that session, Denny
asked me to provide legal services to Business & Estate Advisers
with respect to their employee benefits matters, and we have
provided such legal services ever since. I have also maintained
a close personal relationship with Denny, and have enjoyed
our relationship during these past dozen years.
During your association, what has Business & Estate Advisers
done for you?
addition to being a wonderful client of Lindquist & Vennum,
Denny has provided helpful and constructive advice to me personally
with respect to my own estate plan. I have three wonderful
sons who have developed expensive educational tastes. Knowing
that I have protection at this time provides a great level
of comfort to me. With respect to my beautiful wife Nancy,
I believe that I have enough coverage to get her through the
six month mourning period, after which she will certainly
find a rich new husband.
What has your service on the Advisory Board meant to you?
am new to the Advisory Board and look forward to the experience.
I am well aware of the function of the Advisory Board in view
of my past dealings with Denny, and I know how much he appreciates
the efforts and input that the Board members provide to him
and his company. I am honored to be the first attorney appointed
to the Advisory Board.
What, in your opinion, what makes Business & Estate Advisers
different from other financial services firms?
am in a relationship business ? my clients must have a high
degree of confidence that I will provide them with practical
legal advice in areas affecting their personal and business
lives. My clients know that I have their best interests in
mind when I advise them. I expect the same level of service
and concern from those who provide important services to me.
I have that high level of confidence in Denny Zahrbock and
for that reason have remained a friend and customer of his
for these many years.
A New Service For Those That Desire
Prime Mortgage Corporation
long time friend, Ed Buntje, who has been one of Minnesota's
(and now Wisconsin too) Top Mortgage Bankers is now available
to our clients via our website. Just click on www.business-estate.com
and go to the icon "Mortgages."
have been referring business to Ed for over twenty?five years.
We've never had a client that wasn't happy with Ed's helping
them with their mortgage needs. We've never had a mortgage
deal that Ed couldn't do.
bottom line is we recommend Ed. Use him when you need his
and Revised by Business & Estate Advisers, Inc. as an
insert to our newsletter
Business & Estate Adviser's
E. Dennis Zahrbock, CFP
today's world many people have been convinced that debt
is good as it either allows us to have now or because the
interest may be tax deductible.
Let me point out as clearly as I can Debt Is Never
Good. No Debt Is Always Better! Let me now break
my argument into three categories:
Debt or credit card debt is always bad for two reasons:
1) You cannot tax deduct the interest expense and 2) You
need to earn $1.67 to pay off $1.00 of debt because debt
must be repaid with after tax income (assumes 40% tax bracket).
This is not to say that one should never use Consumer Debt.
I believe there are two times: 1) Paying your purchases
with a credit card but fully paying your credit card bill
each month certainly allows more convenience in our "plastic"
society, and 2) When the purchase "pays for itself'. For
example, if your weekly laundromat expense is $25.00 but
paying for a new washer and dryer is $15.00. However, if
you have money in a savings account, it would be even smarter
to use it to pay for the washer and dryer and then repay
your savings account the $25.00 per week you used to spend
at the laundry.
Debt on stock and bonds. Many will argue that this is good
debt since interest, in this case, is tax deductible. In
a stock market that always goes up I'd have to eat my words
"debt is never good" as stock increasing in value at 20%
while interest cost may be only 8% leaves a clear profit
of 12% The reality however, is that the stock market does
not always go up. Many an investor has been wiped out by
securities brokerage houses being forced to sell an individual
stock to pay off the debt. Worst case of all is that all
the stock proceeds are used to pay off the debt by sale
of the stock. In many cases this then causes a taxable gain
on some Is DEBT A GOOD IDEA? or all of the stock creating
taxes due with no money to pay them! Debt to the IRS is
Mortgage Debt is always good... at least that's what the
Banks and Lending Institutions would have us believe. I've
heard many say "We need to get a bigger mortgage so we can
get some tax deductions" ... what a fallacy! Let me explain.
If you have $100,000 mortgage at 8% interest you pay $8,000
(8% of $100,000) to a lending institution each year. You
then deduct $8,000 from your adjusted gross income on your
tax return. This saves you $3,200 (if you're in the 40%
bracket, 40% of $8,000 = $3,200) in income taxes. Most people
are not in the 40% bracket, so they would save even less!
A very simple question illustrates my point: If you could
pay $8,000 in interest to a lending institution, leaving
you with nothing left, or $3,200 to the government, leaving
you with $4,800 left, which would you prefer? Home mortgage
debt is not always good!
does all of this mean? What is the bottom line? Debt is always
bad but may be necessary at various points in life. Most people
cannot pay cash for their home so a mortgage is necessary.
It's the same logic as consumer debt for a washer and dryer
... you'd pay rent if you didn't pay a mortgage payment so
you are, in effect, using rent payment to pay of your mortgage.
eliminates an expense is sometimes necessary but even this
debt should be repaid as fast as one's budget allows. Remember
if you have an 8% mortgage and pay more than your minimum
payment you are earning (saving) a guaranteed 8% You cannot
make more than 5.6% today without some risk ... a guaranteed
8% return is a super one!
should never be used and will only cause financial problems
is debt for purchases that do not save you money (i.e. laundry
expense, rent expense). Debt for vacations, debt for toys,
debt for clothes, debt for dinner out is never good as you
must pay tomorrow for something you enjoyed today. Again,
all of these debts are ok if you fully pay your charge cards
each month. Financial Independence and Security may be delayed
for many years by misusing debt!
YOU MUST USE DEBT, WHICH FORMS ARE BEST?
Investment Debt is best as there is normally no closing cost
to get it. You simply pledge your Investment Account to your
Brokerage Firm and they send you the cash. Interest is tax
deductible and you can pay back at your convenience.
Best: Home Mortgages are great because you can obtain
long term fixed interest rates and the interest is tax deductible.
The problem is that closing costs are expenses that are gone
forever. Home mortgages are not a good idea for less than
5?year debt needs.
Best: Home Equity Loans are great as interest is deductible
and closing costs are normally negotiable to only an appraisal
cost. If your property tax statement would allow you adequate
debt, you may even be able to eliminate this cost entirely.
Also, always work on negotiating your interest rate. If you
have a good credit rating you should be able to receive a
floating rate equal to "prime", "prime plus 1%" or "prime
plus 2%". If your lending institution wants more than "prime
plus 2%" .... do some shopping!
Good: Bank or Financial Institution Debt is usually not
good. You'll pay over prime and will not get a tax deduction
for the interest you pay. Also be aware that car loans offered
at below?market rates really cost you more! Somewhere in the
price of the car you are paying regular market rates. For
example, you buy a car for $20,000 and pay market rates of
8% or $1,600. The dealer advertises 3% interest rate but now
you find your "best deal" is $21,000. You now spend 3% of
$21,000 or $630 plus an extra $1,000 in price for a total
Worst: Credit Card Debt and Finance Company Debt is by
far the worst! You now pay in many cases at least double the
market (16% vs. 8%) and still don't get a tax deduction. Don't
be lured into small monthly payments that last forever!
do you do for "necessary debt"? Buy a home and make mortgage
payments instead of rent. When you have extra, pay your mortgage
off early! When you need a car or washer and dryer, call your
broker for Investment Debt or use a Home Equity Loan. Both
have good rates and both are tax deductible.
Free is best of all. Money you used to spend on debt
can now be saved. The psychological benefit of owing nothing
will make you feel better every day! You'll even be happy
paying an extra $3,200 in taxes because you know you'll be
saving $8,000 in interest.... you might be able to buy whatever
you always wanted to buy with the left over $4,800!
best form of debt is mortgage debt. T F
debt is always good because it saves taxes. T F
to acquire a new television is an example of necessary
debt. T F
debt" is the exception to the rule that debt is never
good. T F
you are in the 40% tax bracket and use Investment Debt
at 8% for $10,000 to acquire stock which you sell in 364
days for $12,000 what is your net after tax gain or loss?
CORRECT ANSWERS WILL RECEIVE A PRIZE! PLEASE MAIL OR FAX
RESPONSES TO P.0. Box 679, WAYZATA, MN 55391 OR FAX (952)
the oddballs we are, Business & Estate Advisers sponsored
their first softball team, The Oddballs. Associates, Jules
Kingren and Lisa Margalli (in front row center), were
part of the Championship Team that took Second Place in