Mr. Smith & Mr. Hixon Go to Washington

As you probably know, Mary and I traveled to Washington, D.C. (technically National Harbor, MD) for the 2014 Raymond James Conference for Professional Development. I thought for this edition of The Short Squeeze I would focus on two different areas; first, why we believe it is important for us to attend these conferences, and second, share one of the main topics covered at the conference.

One of the main reasons we believe it is important to attend these conferences is to learn new techniques and technologies to better serve our existing clients. Many of you are familiar with our new financial planning software Goal Planning and Monitoring (GPM). GPM was launched at the 2012 National Conference with new features added in both 2013 and 2014. We feel this has been a valuable tool to help our clients visualize their financial plans in a more user-friendly format. Our attendance at these National Conferences has given us the ability receive advanced training on this software so that the resulting reports are more meaningful.  One exciting development on the horizon, set to launch by early 2015, is the ability for clients to digitally sign paperwork using an “eSignature” program on their computer or tablet.

Another topic covered at the conference was presented by the keynote speaker, Erskine Bowles, the businessman/politician who co-authored the Simpson-Bowles deficit reduction plan. For those unfamiliar with Bowles’s work, he believes there are five tough steps we need to take in order to get our deficit under control:

• Get healthcare costs under control. He noted that we spend twice as much on healthcare as other countries, which would be acceptable if our healthcare was twice as good. In 1980 we were spending 10% of the Federal Budget on healthcare, currently, that number is 25% and rising.

• Get defense spending under control. We spend more on national defense than the next 12 countries combined.

• Make the tax code efficient.

• Get Social Security Solvent. When Roosevelt implemented the program he was smart, life expectancy was 63 years, and you were not eligible for Social Security until you were 65. Now life expectancy is 79.

• Do something about our national debt and the impact of compounding interest on that debt. Currently, we are spending roughly $230 billion per year on interest to service our debt (at low rates); at normal interest rates that figure would be $650 billion and if we don’t do something it will be over $1 trillion per year.

He closed with a plea that we not only elect politicians who understand the issues we face, but who also are willing to address them. There are obviously some challenges for Americans to face in the future; but then again when in our history has this NOT been the case?

After listening to additional speakers at the conference, including Raymond James Chief Market Strategist Jeff Saut, we both began to realize what an important catalyst the energy reserves we have been discovering in the US will be to future growth.  Jeff Saut’s most recent Strategy piece can be found here and I HIGHLY recommend you take some time to read it.  It explains why many Americans are underestimating just how transformative our recent “Energy Renaissance” in the U.S. could be for the future.

Until next time. 

-Brett C. Hixon, CFP®