Top Line

ON THE RECORD
A Thank-You to the Profession

Treasury Secretary John W. Snow, speaking on May 23 to the AICPA Council in Washington, D.C.:

I want to commend this group for your 360 Degrees of Financial Literacy effort. Treasurys Office of Financial Education is delighted to be working with you on national financial education efforts; our partnership is awfully important to the young people who will benefit from these efforts.

It has been said that, regardless of how much money you have, wisdom has to be acquired on the installment plan. Similarly, it is true that regardless of an individuals income, saving must be done steadily, deliberately over a lifetime. Learning about how to become, and stay, financially healthy is a lifelong pursuit as well. So I want to thank you for giving back on this issue. Its a great gift to generations of Americans.

AND ALSO
Carl R. George, CPA, CEO of Clifton Gunderson LLP, speaking at the AICPA Retirement Planning Conference in Las Vegas on June 6:

With the 360 Degrees of Financial Literacy program, CPAs have an opportunity to help Americans understand the need to take responsibility for their retirement planning. According to the Roper Poll the AICPA performed in April 2004, 49% of respondents had never heard of a 401(k) planand this is the primary savings vehicle for most Americans. CPAs can use the resources of the Financial Literacy Resource Center, www.aicpa.org/financialliteracy, to get out into their communities to teach people about retirement savings vehicles and planning. We can help Americans change their financial futures.

I.Q. TEST
(Innocuous Question)

Whats My Line?
How many of your colleagues can identify these extinct jobs?

1. Whitesmith
2. Cotter
3. Limner
4. Ostler
5. Cordwainer

Robert Lester Porter, CPA

NUMEROLOGY
Five Common Investor Errors
Chasing returns on exotic foreign investments while ignoring growth opportunities in U.S. markets. Many portfolios today are dangerously overloaded with international investments.

Rushing to invest in real estate. If there is a real estate bubble, investors who are over-concentrated and poorly diversified will suffer the most.

Treating hot investment alternatives such as hedge funds or private equity accounts as though they were legitimate asset classes. They arent.

Taking a short-term view of tax avoidance by buying products that ultimately dont end up reducing their tax bill.

Ignoring the true costs of owning an investment. In a flat market investors will have a hard time recouping fees and expenses to make a profit.

Source: Zero Alpha Group, www.zeroalphagroup.com, 2005.

SIGNS OF THE TIMES
Fear Factor

Those of us who perform litigation services for a living have a high anxiety level during a deposition: The fear of the unknown questionand hoping well be able to answer itkeeps us sharp.

I knew going in that one deposition was going to be tedious. We were in a bet-the-company patent infringement suit with significant dollars at risk, and I was ready for anythingor so I thought. Right after I was sworn in, the opposing counsel pitched it. Would you please state for the record your Social Security number, Mr. Newman. Questions spun through my mind. How was that relevant? Would it go to my credibility? Affect my analysis? And given the proliferation of identity theft, the last thing I wanted was my Social Security number on a court record.

The question came again. I said I wasnt comfortable putting that information on the record, but the attorney again directed me to answer the question.

Finally, I was told that if I didnt answer the question, someone would call the judge. I caved, but asked that the deposition be marked confidential. Only counsel could request such a thing, they said. OK, its 204-xx-yyyy. I felt horribledefeatedand couldnt wait to finish the depo.

When we took our first break about an hour into the proceeding, my inquisitor cut right to the chase. You were uncomfortable, werent you? I admitted Id never been asked that question before. My curiosity got the best of me. I asked him why such a question. His response was simple: I asked only because your attorney asked my expert for his Social Security number yesterday.

That explained it!

Glenn Newman, CPA
Principal in Charge
Parente Randolph LLC
Philadelphia

GOLDEN BUSINESS IDEAS
Put a Lid On It

The expression, When youve got it, flaunt it, is a surefire career killer.

Just because you know something doesnt mean you have to insist on telling everyone. Nothing pushes peoplesespecially bosseshot buttons more than someone who repeatedly pontificates. Thats not to say you shouldnt present well-supported and deeply felt opinions. Just not all the time.

Stanley Zarowin

HOME FRONT
Retire to Shangri-La

Theres more to retirement planning than simply saving enough money. Deciding where to live is important, too. In addition to popular destinations such as Florida or Arizona, retirees are heading to Las Vegas, North Carolina and even Mexico and the Caribbean. Here are some factors to consider in picking the perfect retirement spot:

Cost of living. Its more expensive to retire to New York City than to Texas. Make sure your retirement income will stretch far enough.

Availability of adequate health care. Make certain hospitals and other medical facilities are nearbyespecially if you have an existing condition that requires special care.

What its like to live there. Consider renting for three to six months before buying a home to make sure its where you really want to live.

Climate. Phoenix can be plenty hot in July; make sure you can handle it.

Income, estate and sales tax rates. Some states, including Florida, Texas and Washington, have no income tax, making them potentially attractive retirement destinations.

Diversity of housing stock. The day may come when you have to move to a retirement community, perhaps one with nursing or intermediate care facilities.

Availability of part-time employment. Many retirees need to work part-time to make ends meet.

Proximity to major airport. If you want to see them frequently, make it easy for children and grandchildren to visit.

Access to cultural and arts facilities. Cabo San Lucas is a beautiful place but its a long drive to attend the symphony.

Foreign language and visa requirements. If you plan to live abroad, study the language and the legal requirements.

NEWS WIRE
A Million Thanks

Its not every day that a CPA donates $1 million to his alma materespecially when thats Cal State Northridge. But its precisely the schools less-than-Ivy-League cachet that made Harvey Bookstein feel his gift would be truly appreciated. The cofounder of Los Angeles accounting firm RBZ LLP says the money will help pay for top-quality professors and fund scholarships for accounting students.

The only child of two tax preparers who arrived in California with $100 and an old car, Bookstein began helping out in the family firm at the age of seven. I was the class nerd and hated high school, he says, but my parents insisted I get the college degree and CPA certification they always regretted not having. Im very grateful to Northridge for my opportunity and my career.

Today Bookstein is a therapeutic accountant who specializes in financial issues involving children, divorce and passing down family businesses from one generation to the next. I try to get sons to respect their fathers years of knowledge and fathers to respect sons technology know-how, he says. Together theyre much more successful than they would be apart.

About his seven-figure giftthe largest in Northridge historyBookstein says, Im not wealthy, but Ive certainly made more money than I ever thought I would and I want to enjoy the fruits of my efforts while Im still alive.

Cheryl Rosen

SURVEY SAVVY

Source: "Age Discrimination in the Job Market," a survey of 2,928 executives
earning $100,00 a year or more, TheLadders.com, 2005.

GOLDEN BUSINESS IDEAS
Contract Musts

When negotiating a contract ask for every free or inexpensive option you can get. The other party usually is willing to give them away because they appear to be irrelevant to the dealbut sometimes they become very valuable later on.

When leasing a property, ask for an option to sublease even if you have no plans to do that. When committing to a long-term purchase contract, get an option to resell the goods you buy even if you intend to use them yourself. If circumstances unexpectedly change, you may need to sublease or sell the goods.

Stanley Zarowin