Can I retire early?

(Money Magazine) -- Kevin Ford has worked as an engineer in the Detroit auto industry for more than three decades - currently for the car company that best suits his name. His wife, Janice, is also a veteran of the field, a fellow engineer who even ran her own dealership for a few years before leaving the industry in 2005 to do part-time business development consulting.

Kevin hoped to follow her into retirement at age 55, and two years ago that seemed doable. The family had nearly $1 million saved, plus a hefty pension; they had no debt besides a $300,000 mortgage; their son, Darrell, was out of college and daughter, Kimberly, would be done in 2011.

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Income:
$170,000
Assets:
$710,000 in retirement funds
$172,000 in other investment accounts
Goals:
Kevin's retirement at age 55
Renovate their summer home
Build a new primary home for retirement CDs & Money Market
MMA 0.95%
$10K MMA 1.04%
6 month CD 0.99%
1 yr CD 1.45%
5 yr CD 2.66%
Find personalized rates:


Rates provided by Bankrate.com. Then came the great crash of '08. "With the losses in the market, I was certain my retirement was pushed back 10 years," says Kevin. But last year's rebound has revived his portfolio and his dream: Is it once again realistic?

What the planner says
It'll be difficult for Kevin to realize his dream of retiring in four years, especially given the family's future plans to build a custom home in Virginia and renovate their lake-front summer cottage in Michigan, says financial planner Sam Fawaz of Canton, Mich. Figuring in those goals, Fawaz estimates that the Fords will need $1.2 million, alongside pension and Social Security, to sustain 40 years of retirement. They currently have $882,000 with other investment accounts, and are saving $21,000 a year for retirement, including catch-up contributions allowed for people age 50 and older.

While they could hit their target by socking away another $30,000 a year until Kevin retires, that would be a stretch since they're still paying college bills for Kimberly. And while Kevin's pension - $65,000 a year at 55 - allows him to invest more aggressively than most people his age, he shouldn't go above his current 65% stock allocation, given the short time horizon and the uncertainty of his industry. All that said, some smart portfolio moves could give the Fords a shot - albeit slim - of getting to $1.2 million by the time Kevin is 55, says Fawaz.

What they should do
GO ABROAD. The Fords' portfolio is heavily weighted toward U.S. large-cap stocks. But foreign stocks are expected to grow faster in coming years than their domestic counterparts, says Fawaz. Kevin and Janice should take advantage by putting 13% in small- and midcap international funds, like T. Rowe Price International Discovery (PRIDX).

DUMP COMPANY STOCK. About 8% of Kevin's 401(k) is in Ford Motor Co. (F, Fortune 500) stock. Investing in any single stock is risky, but this one's a doozy. The company is his employer; it's his pension provider, and it's in an industry that's in ill health. Kevin should scale back to less than 5%, says Fawaz.

PUT CASH TO WORK. The Fords have 35% of their portfolio in cash. Fawaz recommends moving two-thirds of it to a high-quality short-term bond fund, as such funds typically have better returns without a lot more risk for long-term investors. One good, low-cost option: Vanguard's Short-Term Federal (VSGBX) fund.

BE FLEXIBLE. If the portfolio doesn't reach $1.2 million by 2013, Kevin could delay retirement or work part-time (he'd be interested in teaching at a community college).

Duit duit

Polygamy club draws criticism

KUALA LUMPUR, Jan 6 — Rohaya Mohamad, 44, is an articulate, bespectacled medical doctor who studied at a university in Wales. Juhaidah Yusof, 41, is a shy Islamic studies teacher and mother of eight. Kartini Maarof, 41, is a divorce lawyer and Rubaizah Rejab, a youthful-looking 30-year-old woman, teaches Arabic at a private college.

The lives of these four women are closely entwined — they take care of each others’ children, cook for each other and share a home on weekends.

They also share a husband.

The man at the centre of this matrimonial arrangement is Mohamad Ikram Ashaari, the 43-year-old stepson of Hatijah Aam, 54, a woman who in August established a club to promote polygamy.

“Men are by nature polygamous,” said Rohaya, Ikram’s third wife, flanked by the other three women and Ikram for an interview on a recent morning. The women were dressed in ankle-length skirts, their hair covered by tudungs. “We hear of many men having the ‘other woman,’ affairs and prostitution because for men, one woman is not enough. Polygamy is a way to overcome social ills such as this.”

The Ikhwan Polygamy Club is managed by Global Ikhwan, a company whose businesses include bread and noodle factories, a chicken-processing plant, pharmacies, cafes and supermarkets. Ikram is a director of the company.

While polygamy is legal here, the club has come under fire from the government and religious leaders, who suspect it may be an attempt to revive Al-Arqam, a defunct Islamic movement headed by Hatijah’s husband, Ashaari Mohamad, who is the founder and owner of Global Ikhwan. Al-Arqam was banned in 1994 for “deviant” religious teachings.

The club denies allegations that it is trying to revive Al-Arqam, and says that the aim of the club is to help single mothers and women past “marrying age” find husbands.

The Ikhwan Polygamy Club says it has 1,000 members across Malaysia, Indonesia, Australia, Singapore, Thailand, the Middle East and Europe. It recently started a branch in Bandung, Indonesia, and plans to open another one in Jakarta. Most of the members are employees of Global Ikwan or former members of Al-Arqam.

Members get together regularly for meetings and relationship counselling, which is given by senior members of the group.

Under Malaysian law, it is legal for Muslim men to marry as many as four wives, although they must obtain permission from an Islamic, or syariah, court to marry more than one. Women’s groups say it has become easier for men to obtain permission to take multiple wives in recent years, a development they say coincides with a rise in Islamic conservatism in Malaysia.

While some states require men to obtain the consent of their existing wives before seeking court permission to marry another wife, Sa’adiah Din, a family lawyer who practises in the syariah courts, said other states no longer required the wives’ consent.

In 2008, 1,791 men applied to the syariah courts, which apply only to the country’s Muslim population, for permission to take another wife, up from 1,694 in 2007. The government could not provide figures on the total number of polygamous marriages, but researchers including Norani Othman, a sociologist at Universiti Kebangsaan Malaysia, said the number could be as high as five per cent of all marriages.

Despite the growing number of polygamous marriages, the club’s effort to promote the practice has put it in the sights of the authorities.

The Department of Islamic Development Malaysia, a government department that is responsible for the promotion and administration of Islam, is investigating the activities of the Ikhwan Polygamy Club and says it believes Ashaari and his family may be promoting teachings contrary to Islam. A spokeswoman would not provide further details, saying the investigation was continuing.

Al-Arqam had asserted that Ashaari had the power to forgive the sins of Muslims, an act Muslims believe can be done only by God. Some reports have suggested that the movement had as many as 10,000 members when it was banned.

A leading religious official, Harussani Zakaria, the mufti of Perak, said followers of Al-Arqam had claimed that Ashaari had the power to send people to heaven or hell.

Harussani said he believed the polygamy club could be a front to resurrect Al-Arqam. “I think because they have been banned they want to attract people to come to him again,” he said, referring to Ashaari.

The club has also been criticised by women’s groups like Sisters in Islam, a non-governmental organisation.

Norani, the sociologist, who is the lead researcher in a Sisters in Islam project investigating polygamy, said the practice could be harmful to women and children, particularly those born to first wives.

She and her fellow researchers have interviewed 2,000 men, women and adult children who have experienced polygamous marriage.

Although she stressed that her comments were based on preliminary observations, Norani said many of the first wives interviewed reported feelings of resentment and depression after their husbands took a second wife, and “a significant number” had considered divorce.

She said she knew some well-educated, financially independent women in Kuala Lumpur, including business executives and lawyers, who had chosen to become second or third wives.

“Usually they marry late, they do a second or third degree, they put off marriage until later and they find it difficult to find an unmarried man,” she said. “One of them said ‘all the good men are either married or gay’.’

With 17 children among them, ages 6 to 21, Ikram’s four wives all have their own homes near their workplaces, but on weekends they gather at the family’s five-bedroom house on the outskirts of Kuala Lumpur.

Most of the older children are at boarding school or university, but the children of primary-school age stay at the family house, where they are usually cared for by the first wife, Juhaidah, during the week.

Ikram takes turns spending nights with each of his four wives. “It’s like one, two, three, four,” said Rohaya, pointing to each of the wives.

The wives usually meet Ikram at the family house but they say there is no strict arrangement, and Ikram sometimes comes to their individual homes during the week.

On weekends, at the family house, the women take turns doing the cooking.

“We share clothes,” Rohaya said. “We’re like sisters, really.”

None of the women grew up in polygamous families, and although they admit to having had some initial reservations, they all said they were happy and would recommend polygamous marriage to their daughters.

Ikram rejected suggestions from the women’s groups that polygamous marriages may benefit men while causing hardship for women.

“Actually, in a polygamous marriage it’s more of a burden to a man than to a woman because the husband has to face four different women, and that’s not easy,” he said, prompting laughter from his wives. — NYT

Video Klips - Cari Jodoh

Life after Madoff

SAN FRANCISCO (MarketWatch) -- Jeannene Langford is ready to move on, eager to mark the end of a year of misery that Bernard Madoff brought her.

That's one reason why the 55-year-old product-design specialist traveled to Washington earlier this month from her home in San Rafael, Calif., carrying a blunt message for Congress about the handling of Madoff victims' claims.

"The money I had invested with Madoff represented my life savings," Langford told House Financial Services subcommittee members. "This was my retirement, a down payment for a house, investment for the business I was starting, and it was money for my daughter's education. In short, it was the foundation for my future."

Langford is one of some 11,000 investors who became mired in the Madoff mess through investment pools known as "feeder" funds. These family-run funds, hedge funds and other entities were conduits to Madoff, funneling billions of dollars into his brokerage firm. The feeder funds are distinct from the 4,600 or so people who invested directly with Madoff. Account holders like Langford had no idea that Madoff, the perpetrator of the most staggering financial scam ever, controlled their money.

The Securities Investor Protection Corp. provides up to $500,000 per investor in cases where brokerages fail. But in the long line of almost 16,000 claimants hoping to recover at least something from Madoff's elaborate Ponzi scheme, Langford can't even take a number. Unlike individuals with accounts at Madoff's firm, Langford and others whose money came to Madoff indirectly are not entitled to SIPC compensation for their loss.

"This financially devastating scandal destroyed my life," Langford testified. "It has shattered my trust in my government's ability to serve and protect us. My hope is that Congress will choose to recognize and protect all indirect investors such as myself who were victimized by this scandal. We need your help now." See related story on how regulators missed Madoff's con.

Fateful phone call

Going public with her financial situation and pleading with politicians isn't in Langford's nature. But little in her life has been natural since that day in December 2008 when the telephone rang at the small one-bedroom apartment she rents in San Rafael.

Jeannene Langford lost most of her savings in Bernard Madoff's Ponzi scheme.

It was her money manager. Two years before, Langford was looking for a place to park the several hundred thousand dollars she'd made from selling a house in nearby Sebastopol. A friend recommended a local investor who was doing well for himself and his family and friends. Langford spoke with him and came away convinced that his strategy was stable and suitable.

"I had just sold my house at the top of the market," Langford said in a recent interview with MarketWatch. "It was not a great time to buy so I wanted to invest the money and had three sets of criteria: Safe, liquid, and diversified. My friend said hands down this was the safest place I could put my money."

Now the manager was calling with news about Langford's account, and it wasn't good.

"Our money was with Madoff," he told her. "It's all gone."

"I pretty much fell apart," Langford said. "I remember sitting down and crying on the phone to him. But there was not much to say, other than to explain that it was all a fraud."

Many people believe that Madoff's victims got what they deserved. They say Madoff's investors were rich and greedy and should have known better -- should have known that pocketing positive returns month after month is simply too good to be true.

Countless times over the past 12 months, Langford has asked herself whether she could have seen through the façade. Her portfolio delivered about 7% a year over the two years she was invested, she said; by comparison U.S. government bonds averaged 3% in the same period, while the Standard & Poor's 500-stock index /quotes/comstock/21z!i1:in\x (SPX 1,115, -11.32, -1.00%) registered an 18% annualized loss.

Happy New Year 2010

Woods scandal cost shareholders up to RM41b

MIAMI, Dec 30 — The sex scandal that engulfed Tiger Woods may have cost shareholders of companies endorsed by the world's No. 1 golfer up to US$12 billion (RM41 billion) in losses, according to a study by two economics professors from the University of California, Davis.

The study, released on Monday by researchers Victor Stango and Christopher Knittel, gave an estimate for damage to the market value of Woods' main sponsors caused by revelations of alleged extramarital affairs that surfaced after he was involved in a minor car accident outside his Florida home on Nov 27.

"We estimate that shareholders of Tiger Woods' sponsors lost US$5-12 billion after his car accident, relative to shareholders of firms that Woods does not endorse," the researchers wrote, adding that millions of shareholders were affected.

"Our analysis makes clear that while having a celebrity of Tiger Woods' stature as an endorser has undeniable upside, the downside risk is substantial, too," Stango, a professor at the UC Davis Graduate School of Management, said in a statement released along with the study.

Woods, believed to be the world's wealthiest athlete who was estimated to earn about US$100 million a year in endorsement deals before his troubles, confessed on Dec 11 to "infidelity" to his Swedish wife Elin Nordegren. He announced he would take an indefinite break from golf to save his marriage.

Some of the star golfer's main commercial sponsors have backed away from him as a result of the scandal. Others, while standing by him, have said they are evaluating their future relationship.

In their study, the two professors said they looked at stock market returns for the 13 trading days after Nov 27, the date of the car incident that ignited the Woods scandal.

They compared returns for Woods' sponsors during this period to those of both the total stock market and of each sponsor's closest competitor. They also reviewed returns for four years before the car accident to build up a comparative picture of the sponsors' market performance.

The study looked at sponsors of Tiger Woods for which stock prices were available, in several cases through quoted prices for the parent companies. Sponsors included: Accenture; AT&T; Tiger Woods PGA Tour Golf (Electronic Arts); Gillette (Proctor and Gamble); Nike; Gatorade (PepsiCo); TLC Laser Eye Centres.

The report carried a caution that this kind of statistical study might have a "particularly large" margin of error because many sponsors were subsidiaries of larger quoted companies.

Overall, Knittel and Stango concluded that the scandal reduced shareholder value in the sponsor companies by 2.3 per cent, or about US$12 billion.

They called the results statistically significant and said the overall pattern of losses at the parent companies was unlikely to stem from ordinary day-to-day variation in their stock prices."

"Our findings speak to a larger question of general interest in the business and academic communities: Does celebrity sponsorship have any impact on a firm's bottom line?" Stango and Knittel said in presenting the report.

The scandal saw a parade of more than a dozen women — from cocktail waitresses to porn stars — come forward to say they had affairs with the married father of two. Since the start of the scandal, Woods has kept out of sight of the media. — Reuters