Welcome to our Beyond Riches Blog. You'll hear from several of us as we think about what really constitutes wealth and how we can continue to find happiness by readjusting how we think about money. As we read relevant industry research or hear new thoughts on subjects that are important to all of us, we'll pass along our comments and reactions. If you want to send us your comments, click here.

Teachers in Trouble

I come from a family of teachers. My mom was a teacher. My grandparents were teachers. My sister-in-law is a teacher. Several of my aunts were teachers. Many of my clients are teachers. So as I watch economic developments that affect teachers, I can't help but be concerned.

We've known for some time that teachers' pensions were potentially at risk because states are having serious problems financially. For the most part, we've seen primarily new teachers affected by stretching out the ages they qualified for retirement benefits.

But lately, I've been seeing more issues that concern even retired teachers or teachers who may want to retire shortly.

Often, teachers aren't eligible for Social Security (unless they worked two jobs for enough years to qualify). So their pensions are critical for their retirement security. Recently ten states have voted to require government employees (including teachers) to work longer before receiving full pension benefits. Arizona, Colorado, Illinois, Michigan, Minnesota, Missouri and Utah are some of the states revising their criteria for full retirement benefits. These changes include increasing the age or years of service required before receiving pensions.

In Colorado and Minnesota, more serious cuts are being considered. Cost-of-living increases have been reduced. Retirees are suing. The Colorado Public Employees' Retirement Association says it will run out of money in 30 years even if investments return 7% a year.

Illinois is one of the states in deepest trouble. One Northwestern University associate professor predicts the state may run out of pension funds by 2018. That's only eight years away. He also says New Jersey, Indiana and Connecticut are on a collision course.

What happens if a state pension fund runs out of money? The state is on the hook to make good on retiree claims. But in the case of Illinois, paying those claims would take half of the state's general revenue--derailing other important state services.

Federal bailout? This can't be the answer for every problem. Tax rates are already predicted to increase substantially.

Look to the corporate world for what's most likely. Pension plans do change over time. Most pension plans now don't have cost of living increases. Retiree medical has been drastically cut in the corporate world.

Increased savings as a back-up plan are probably what I would recommend. But if you've already retired or plan to shortly, that's too little notice, too late.

As an advisor, I like to do detailed planning for retirement for all types of professions. I find it especially hard for teachers who have an expectation that their pensions will provide a significant portion of their retirement income. If that's not going to be the case, then we need to let them know as early as possible so they have as many years as possible to save for the balance of what they'll need.

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Just Say No to Oil

Demand for alternative sources of energy fluctuates constantly. Part of the reason people haven't insisted on cleaner energy alternatives is that investing in oil stocks is safe and comfortable.  But there are mutual funds and exchange-traded funds out there investing in companies that are making strides in the alternative energy and green solutions arenas. This is not what I'd call a "safe" investment, but there is opportunity for growth and profit by becoming a more socially responsible investor.

Wind

Wind power, created in various ways, is emerging as a very viable source of energy. Wind power creates no greenhouse gas emissions and incurs extremely low variable costs after plant construction. Increased government funding and support should lead to innovations to decrease initial fixed  costs, and in turn lead to profits for companies pursuing energy alternatives in the form of wind power.

Electricity

Whether it be based on outrage from the recent crisis in the Gulf or fear of rising gas prices, decisions by consumers to invest in electric transportation would directly decrease dependence on oil. Through the implementation of tax credits and funding, the government has greatly increased incentives for buyers and producers of electric automobiles. Electric cars have long been thought of as the future of the automobile industry, but direct exposure to the market has been difficult for investors. This is beginning to change, however, as private companies like Tesla Motors enter the public space. Existing car manufacturers such as Chevrolet and Nissan have also already announced the production of electric automobiles and have lofty expectations for the future of the industry. Competition in electric transportation is increasing rapidly. Advancements in efficiency, such as longer battery life, could be the determining factor in who captures a majority of this growing market.

Water

Water is necessary for sustained life. As the population continues to grow rapidly, and the number of developing countries increases, solutions to a diminishing water supply should be on your mind. We often fail to recognize this need, as most of us are fortunate enough to have clean water readily available. However, even developed countries like China are searching for solutions as the rapidly growing population will make it harder for demand to be met.

Solar

Solar power gets a lot of attention as a source of energy, and perhaps rightfully so. Although a large area and high fixed costs are necessary for the generation of electricity through solar power, variable costs are low. Assuming tax credits remain in effect and funding is provided, these costs could be further decreased, making solar power an even more intriguing option. Given the notoriety the solar power industry receives, there are a number of funds with direct exposure to this sector.

Nuclear

Most people cringe just hearing the word nuclear. However, nuclear power already accounts for a sizable portion of the world's electricity, and further advancements could make it a very viable option for the future. Nuclear power plant construction has dramatically increased globally, but has been stagnant in the U.S. Although this may begin to change as the Obama administration offers loan guarantees to facilitate the production of new plants, investors may find opportunities Europe and Asia. If improvements can be made in nuclear waste disposal and/or storage, perhaps we will see greater inroads in this area.

Mixed alternative energy funds

Demand is high for solutions in alternative energy, and opportunities are abundant. The opportunities, however, are surrounded by uncertainty regarding the practicality of the options being explored and what will emerge as the energy source of the future.  A number of funds exist ranging from sector specific to broader alternative energy funds. The latest issue of Radiant Wealth takes an in-depth look at what is available in the alternative energy arena. To subscribe or learn more about Radiant Wealth, click here.

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What's Happening in Greece Affects Us All

We've all watched the news as violence erupted in Greece and the stock market careened as the EU debated what to do. It's not hard to see parallels to our own country's mounting issues with debt.

I was recently in Greece and talked with local residents about their own experiences. There is a deep sense of sadness and betrayal by the people. They feel their government got them into this mess and essentially stole their public funds. The government officials in these positions have not yet been held accountable. The Greek people are watching their retirement accounts, which were low to begin with, get slashed. Perhaps there is no other way to solve the problem, but people are feeling desperate and angry.

I saw firsthand the broken windows, the graffiti in downtown Athens, even the makeshift memorial to the three people killed in a bank fire started in a riot. Conspiracy theories abound. At least in part, everyone is to blame and no one is to blame.

At the crux of the matter is a nation that is bankrupt. It may be the first, but it won't be the last. The problem is wide and spreading. The limits of bailouts are stretched as other countries try to protect their own populations. 

Greece is a country rich in history and natural beauty. There are no easy answers to resolve this current national crisis. Each person I spoke to was directly affected by what is happening and this has brought them to inner spiritual reflection as they seek answers.

How does this affect us in the U.S.? We need to take a sober look at our own savings--personally and as a nation. We need to take responsibility for our debts before it is out of our control. We need balance in our lives and our portfolios. We also need to find the right mix of compassion and wisdom as we recognize we are all part of a greater whole. 

Dramatic world events also dictate that we take a closer look at the international composition of our portfolios. Read more about this in the next issue of Radiant Wealth. 

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