Guidant Financial Group Blog

Wasn’t it in the movie The Matrix where they explored the idea that humans would eventually invent something that would end up being their demise?

A little bleak, we know, but there’s a tie-in here, we promise!

It would seem that the American entrepreneur is the first segment of the human population to fulfill this idea of man’s own advancement cannibalizing itself.

A new bill before the House, which proposes numerous changes to the existing U.S. patent law, threatens to negatively impact new and smaller inventors to the benefit of large, already established corporations.

The proposed changes, as outlined by Entrepreneur.com (see How Patent Law Changes Could Hurt Small Inventors), include a “first-to-file” system. This system favors large corporations with the resources to file for patents regularly. Also included are changes to the infringement damages law, which puts the burden on the inventor to prove any infringement was intentional (difficult for a small inventor working on a shoestring budget); and changes to the appeals system that allows appeals to be filed before a final judgment has been made, thus drawing out the process – and legal expenses – of the inventor.

Just like in Citizen Kane, big corporations may come to realize that what they had in the beginning – small inventors who could freely create a better mousetrap (or a sled named Rosebud) – is what they really need to be happy and successful.

Where would they or America be without small inventors? Great ideas certainly don’t all come from large corporations!

Without a patent system that protects small inventors as much as the big ones, American capitalism -- and the small businesses that drive it -- could take a blow with long-term consequences. At the very least, it could stunt the ability for many creative entrepreneurs to follow through on their dreams.

Isn’t it ironic that the latest bank to be razed by the winds of financial ruin is the Columbian Bank and Trust Company of Kansas? (See US Regulators Shut Down Columbian Bank in Kansas) Ever since Dorothy uttered those famous words from the Wizard of Oz, “Kansas” has become synonymous with familiarity and normalcy.

We don’t want to believe that this failure – the ninth FDIC-insured bank to go under in 2008 – is anything like “normal.” And, even though we concede (as we did in our 07.28.08 Blog) that cyclical ups and downs are to be expected, we should never allow ourselves to become so complacent about today’s sorry state of affairs that we accept it as routine.

There is danger that, as these closures become more commonplace, we develop a sort of blasé “it-is-what-it-is” attitude. Maybe it’s like kids who become desensitized to violence by playing gory videogames. Or perhaps it’s simply human nature to deal with the shock of these various fiscal disasters by falling into a type of survival denial: if we haven’t been directly touched by it, if our own bank hasn’t gone under and taken our life savings with it, then maybe it’s not so bad.

But it IS bad. And even though we can see some silver linings amidst the storm clouds and we know that rainbows often follow showers, we can’t (and we shouldn’t) ignore the fact that the sky is nevertheless pretty dark and ominous. Our job as educators here at Guidant is to help you see the potential sunshine through the gloom and to help you make the most informed decisions within this economic climate.

This does not mean, however, that we aren’t seriously concerned about our battered economy. We must all face the fact that it’s in trouble and do our part to help diminish the damage. This includes adjusting our attitudes towards credit and spending, learning all we can about monetary matters, more carefully considering our financial options, and demanding of our leaders that America’s economic infrastructure be closely examined and repaired. If we don’t take seriously the carelessness, blind naiveté and reckless behaviors (by banks, the government and citizens alike) that created this mess, then we’re bound to repeat this disaster until the lessons of fiscal responsibility are learned.

Now that said. . . . Even though the FDIC is anticipating more bank closures this year, we nevertheless believe that the vast majority of financial institutions will survive and will be the stronger for it. We further believe that, through some careful and mature handling of our personal finances, most of us, like Dorothy and Toto, will also weather this storm.

We are sooooo excited to announce that Guidant has made the Inc. 500 list!

For those of you who are unfamiliar with the Inc. 500/5000, this list is a compilation of the fastest growing private companies in America. To even be named to the Inc. 5000 list is an honor, but to be named number 384 is phenomenal!

In addition to being ranked number 384 overall, Guidant was ranked number 23 in the Top 100 Financial Services Companies category, and number 11 in the Top 50 Businesses in the Seattle-Tacoma-Bellevue area category.

Wow.

We hope you can tell how excited we are about making this prestigious list. Being recognized as one of the country’s top entrepreneurial companies means there are only bigger and better things to come for Guidant. Could this mean that the world is now ready for a new way of thinking about investments and financing?

Read the full release here. Or, for complete information on this year's Inc. 500, including company profiles and a list of the fastest-growing companies that can be sorted by industry and region, visit http://www.inc5000.com/.

Although the SBA reports that 75 percent of small businesses survive at least two years, and about 44 percent survive at least four years, Guidant clients are experiencing a 95 percent survival rate!

A recent Guidant survey indicated that 95 percent of clients who purchased their business using Guidant’s 401(k) small business financing solution are still in business. Although this is an average of all Guidant clients who have been in business anywhere from a few months to five years, the success rate is nevertheless significant when compared against national averages.

The financial advantages of using one’s own retirement funds rather than debt to launch a business are pretty obvious. But what continues to impress us are the numbers of clients who say that investing their retirement funds into an asset they can personally control is one of the factors that keeps them motivated during the early – and often leaner – years.

That old adage, “Necessity is the mother of invention,” certainly rings true when it comes to the financial industry. Because lenders are making it harder than ever to secure credit the “old-fashioned” way, some progressive financial experts are putting their energies into discovering or creating new ways for Americans to access needed capital.

Here at Guidant, we’re especially excited about one new and revolutionary vehicle that lets homeowners turn their home’s equity into cash without debt, interest or monthly payments. In fact, we are so impressed with this strategy that, through a strategic company affiliation, we are now able to help you obtain this Debt-Free Home EquityTM. (See Guidant’s Press Release.)

This isn’t a reverse mortgage, second mortgage or loan of any sort. If you qualify, this program enables you to receive as much as $300,000 in an upfront cash payment based on the value of your home. In exchange, you agree to share with the program sponsors an agreed-upon percentage of the home’s increase (or decrease) in value at the time of sale or end of the agreement. This strategy is best for those who intend to remain in their home for at least five years.

We’ve found Debt-Free Home Equity to be a great way to liquidate some of the value you’ve built up in your home without paying extra to do so. Use the upfront cash payment to buy a business (even combine with your 401(k) funds), invest in real estate, pay off debts . . . or buy a yacht and sail around the world! There are no prohibited transactions with this plan, so use your money however you like.

You can read more about it at our special Debt-Free Home Equity product page. Our financial experts will be happy to answer your questions about this program and to pre-qualify you for it.

Here at Guidant, we’re always looking for good, innovative ways for you to access capital with little or no debt. We’re eager to hear what you think about this newest debt-free offering!

Because of the services Guidant offers, we often focus on ways to grow your retirement accounts. But what about ways to prepare for the actual act of retiring – which is, after all, the whole point of growing your account?

Guidant’s self-directed IRA and 401(k) small business financing solutions are designed to help you grow your retirement dollars in ways that you feel are more lucrative and more secure than the options offered by the securities market. (Don’t worry – with our services, you can still invest in securities too!)

But what should you do when you’re ready to stop saving and start spending?

Wallet Pop has an interactive slide show that provides five tips for preparing for the day your actually retire (see Last Minute Retirement Tips). While it can be as simple as drawing out your mandatory distributions each year, the smart way to spend those retirement dollars is a little more complex.

The number-one tip is balancing your asset allocation as you near retirement age. Because you have less time to recoup losses, many financial experts recommend that you get progressively more conservative with, and hold more cash in, your retirement accounts.

For self-directed IRA holders, this could mean several things, such as switching to rental properties instead of rehab flips, or maybe moving out of the real estate market altogether and focusing on secured notes and loans.

Whatever your investment interest may be, you and your financial advisor can find ways to incorporate more conservative investments in your self-directed portfolio as you near retirement.

Everyone’s retirement plans are different, and everyone’s investment interests are different; but, by learning early on what you can do to ensure a healthy retirement, you can work out a plan well in advance that will work for you and your goals.

The newest survey by the National Federation of Independent Business shows that Small Business Owners are “not very optimistic” about the future (see Small-Business Mood Fades).

Doesn’t “not very optimistic” simply mean they’re pessimistic? Oh well, glass half-full, right?

Even though business owners are slashing their prices and inventories are being kept at bare minimums, the cost of doing business keeps climbing.

For those of you new to the game, this is a recipe for trouble (alt. sp. I-N-F-L-A-T-I-O-N).

As a provider of small business financing solutions, we obviously want to find the silver lining in this nimbus cloud – and there are, indeed, a few glimmers here and there if you squint really hard. After all, we’re not hearing a lot of complaints from our self-directed IRA investors who are buying up real estate at rock-bottom prices, or new business owners who are using retirement funds to secure bargain priced businesses from over-extended would-be moguls.

The reality, however, is (as many economics professors keep reminding us): the U.S. economy is cyclical. Like sales cycles, bowling scores and the weather, it’s really a byproduct of nature. And when it comes to business, human nature especially. We experience success, so we may get overzealous, over-confident or expectant, which can lead to failure. Or we’ve done nothing wrong, but the people we’re doing business with have become overzealous, overconfident or expectant and they let us down. Either way, we get hurt and our hearts are broken. (Yes, we’re still talking about business relationships here!)

Eventually, the pendulum will swing back and the day will come when we rejoice that the first decade of 2000 is behind us. But in the meantime … What does a good business owner do? They learn from their mistakes and the mistakes of others, and they move on – probably smarter and stronger than before.

Most direct-to-consumer retail businesses are seeing a decline in revenue due to the unstable economy. Apparently, in a tight economy, consumers can live without just about everything.

It appears, however, that there’s one thing humans can’t live without.

Chocolate.

Maybe it’s because Americans are sitting on their couches, wallowing in their misery and stuffing their faces with bon bons and chocolate bars . . .

Or, maybe it’s because Europeans are alternating between biting their nails and biting off sweet pieces of a chocolate éclair while they wait to see if America’s mess will cross the Atlantic . . .

But, whatever the cause, Nestle (that trusted purveyor of chocolaty goodness) beat analyst’s expectations and posted a 6.1 % growth in first-half net profit (see Nestle's 1H Profits up 6.1 Percent).

Okay, okay. So Nestle doesn’t just sell chocolate. In fact, Nestle is the world’s largest food and drink company, owning such major brands as Nescafe, Perrier and (we’re not kidding) Jenny Craig.

A chocolate company owns Jenny Craig? Hmmm. How does that work?

Sorry, we digress.

The amazing thing about this story is that, despite rising fuel and raw material costs, the glutton-appeasing giant has continued to perform well. Since Nestle breaks down profits by the half, not by the quarter as most companies do, perhaps this means that the economic downturn isn’t so much a paradigm shift as it is momentary (albeit deep) pothole on the road of life.
One can hope. But if we really are in this down economy for the long haul, at least we can retreat into a chocolate haze to make our troubles go away . . . and Nestle’s investors fat and happy.

June pending home sales are up 5.3% over May, says the National Association of Realtors (see June Pending Home Sales Tick Up 5.3%).

Yay!

Not much more to say here, but it appears that the housing market might be on the mend. Of course, the June numbers are well below what they were exactly a year ago, but Realtors and industry analysts alike are thinking positively.

We have found that a number of the people who come to Guidant’s blog do so through a Google search for the terms “Guidant Financial Group Scam.” (Sneaky little thing, that Google analytics!)

If you’re among The Truth Is Out There scam-detectives, then we applaud you! We fully expect, and encourage, our clients to do their due diligence in anything they do, and this does not exclude their due diligence on Guidant.

Through surveys that we have sent out to past clients, we have found that Guidant customers are a very savvy group. In fact, almost 80% of Guidant clients have completed college, and more than 25% have an MBA or doctorate. Furthermore - and this is the kicker - 85% of Guidant clients have a credit score above 700.

Wow!

Any company with a client demographic this sophisticated has to expect that their potential clients will be doing their homework.

So, we thought we’d help you a little. We do a lot of our business via email, phone and the Internet, and because our main office is in Seattle, many of our clients never get a chance to come into our offices – which we wish wasn’t the case. But because of this, we have decided to bring the office to you! (And you are ALWAYS welcome to visit!)

The photos in this blog posting are of our headquarters in Bellevue, Washington (just across Lake Washington, east of Seattle by a 15-minute freeway drive). As you can see, we have a fairly large facility (and some pretty spiffy conference rooms, if we say so ourselves). But, believe it or not, we are running out of space! Guidant has more than 100 employees, more than 80 of whom work in our Bellevue office. We are, in fact, the largest-staffed provider in this financial services niche.

But we know that photos alone won’t be enough to satisfy you. So, don’t take our word for it. Guidant has been recognized by top national organizations and institutions for its leadership and innovative products. Below are just a few of the awards Guidant has won:

• U.S. Chamber of Commerce Blue Ribbon Small Business
• Small Business Administration (SBA) National Young Entrepreneurs of the Year Award (to Guidant’s Co-Founders)
• Ernst and Young Entrepreneur of the Year Finalist (CEO David Nilssen)
• 6th Fastest-Growing Company (Private Small Business) in Washington State

Furthermore, Guidant is a member in good standing of several nationally recognized organizations. The links below are to some sites where you can view the status of Guidant’s membership:

• Better Business Bureau (BBB)
• International Franchising Association (IFA)
• International Business Brokers Association (IBBA)

And last, but not least, Guidant has been highlighted in major publications across the country for both its self-directed IRA and 401(K) small business financing solutions. Below are links to just a sampling of the articles Guidant has been mentioned in:

• TheStreet.com
• The Wall Street Journal
• Chicago Tribune

The Labor Department reported today that unemployment has reached a 4-year high and that the average hourly work week has dropped 0.1 hour to 33.6 hours (see Unemployment at 4-year High).

A large number of Guidant’s 401(k) small business financing clients came to us after being laid off. Because many laid-off workers are experienced employees, they tend to have a large amount of funds put away in their 401(k)s.

For those of you who are facing a layoff and pondering the idea of starting your own business should the unfortunate take place, here is an important tip for you:

If you have a company 401(k), you can use the money in that account to help start your business – without taking a distribution! BUT, in order to take advantage of 401(k) small business financing, your funds will need to be rollable (meaning, they can be transferred out of your 401(k) into another tax-deferred account).

Although laid-off, you may still be considered an employee of the company for some time. If your employer considers your layoff as potentially temporary, or if you choose a severance package that keeps you on the payroll for a period of time, they will most likely continue to hold the assets of your 401(k) in their account.

One problem: almost all 401(k) plans do not allow for the rollover of funds if an account holder is still employed with the plan sponsor. Bottom line? You cannot use Guidant’s 401(k) small business financing solution if you are continuing a payroll relationship with your employer.

So what should you do?

When you have that disappointing meeting with your HR rep or your boss, be sure to ask what the status of your 401(k) plan will be once the layoff takes effect. If it appears that your 401(k) will stay on the company books, find out if, by taking any severance as a lump-sum in lieu of continuing a payroll relationship, you will be able to transfer your 401(k) balance out of the company plan.

Although rare, there are some companies that allow the rollover of 401(k) funds before termination of employment, so it is important to ask what options you have with your 401(k) plan as soon as you are faced with a layoff.

Starting your own business can be a great way to escape the cycle of layoffs that tend to face many Americans. 401(k) small business financing can help to give you a significant head start – if the money is rollable.