Drive

Okay, I'm hooked on FUEL TV. I don't know if you've seen this channel, but its programming is devoted to surfing, skateboarding, motocross, and BMX. I especially like the BMX/Freestyle stuff, where the athletes do amazing things on BMX bikes - jumps, trackstands, ramp tricks - that blow my mind.

Anyhow, there is a show on FUEL TV called Drive. I recommend watching this show at least once, because the show's concept as it relates to business is genius. Based on the award-winning documentary film, DRIVE: Notes From the Wilderness, the Drive series goes on the road with professional skateboarder Mike Vallely as he travels across the U.S. and around the world exploring the people, places, and issues defining skateboarding and youth culture today. More than just a skate trip, Drive is the world through Vallely’s eyes.

Mike Vallely goes to places where kids have built homemade skate ramps. He goes to places like Africa where kids want to skate but poverty makes it difficult. He goes to urban areas where adults have started skate parks to give at risk youth something to do besides get involved in crime. And Mike skates with them. And talks with them. And motivates them. And gives them free stuff - stuff they would probably never be able to afford.

Mike gets these kids fired up about skateboarding and shows them what it is like to be a professional skateboarder. He gets them involved and excited, which leads to a long term love of the sport. Sales trainers call this "transfer of enthusiasm".

At the end of the show, Mike gives the kids free hats, t-shirts, boards, and promotional items provided by his sponsors. You can only imagine how special these items are to these kids - they were given to them by a pro skateboarder on the TV show that they appeared on! What memories. The sponsors get huge bang for their buck.

Think a moment about your business - are you passionate about what you do? Mike Vallely loves skateboarding and passes that enthusiasm on to others. Do you get others excited about what you do? Do you transfer enthusiasm?

Think also about giving back to your industry. Mike Vallely passes his knowledge on to others. He shows them how to do tricks, build ramps, and try new things. He gives back. Do you give your knowledge to others - not only to clients, but what about young people who might want to do what you do?

Sometimes we get messages from unusual places, and I sure got some great ideas from Drive. But don't worry - I won't be attempting a 50-50 Grind any time soon.

The Value Investor

This past Saturday I attended a client review meeting with a money manager we work with. This half day session was an extremely interesting view into the minds of the managers. These managers embrace the theory of value investing - a focus on purchasing stocks of a company when the stock is at a "discount" and selling at a pre-determined point. The stock is a value at the purchase price - like buying something on sale and then selling it again for its normal price. Now, the explanation I just gave is very basic and value investing is more complex than that. Value investing takes patience and discipline.

The founder of this management firm is a dynamic individual and during his portion of the presentation he spoke of a man named Benjamin Graham. Benjamin Graham was an economist and professional investor who is often called the "Dean of Wall Street". He is considered the founder of the value investing theory. Warren Buffett, the mega-billionaire investor, was a student of Benjamin Graham and was so endeared with his teachings that he named one of his children after him. Buffett, who credits Graham as grounding him with a sound intellectual investment framework, described him as the second most influential person in his life after his own father.

Value investing takes emotion out of the process and focuses on business review and sound principles. Graham writes: "An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative."

I have decided to learn more about Mr. Graham so that I can understand his practice of value investing. After all, if it has worked for the extremely successful management firm I heard from on Saturday, and has worked for Warren Buffett, why not? Graham has written several books on the subject, two of which are "The Intelligent Investor" and "Security Analysis".

The USS Kidd DDG100 Tour!

Last Sunday my daughter and I had a probably once in a lifetime experience - we got to tour one of the Navy's newest members of its fleet. Usually when you get to tour a fighting ship, it is one that is no longer in service and is stripped of its gear. Not so with this ship - it was loaded to the gills and ready to go off to war.

Our Galveston getaway weekend just happened to coincide with the USS Kidd's commissioning ceremony.

On Sunday we had our usual lunch at Willie G's on Galveston's Pier 21, and the USS Kidd was docked about 200 yards away. We overheard another table talking about a tour of the ship they had just finished, so I asked them if the tours were still going on. Sure enough, as soon as we had finished lunch my daughter and I walked over to the USS Kid's security checkpoint and ten minutes later we joined a group of about ten people on a tour of the ship led by one of the crew.

We were led onto the stern (brow?) of the ship and entered through one of the helicopter bays. Man, this ship is impressive and I would not want to be on the receiving end of its fury. We walked past one of the fire suppression units as our guide explained how they could battle various kinds of attacks, including nuclear and biological weapon hits. We saw the mess hall where the sailors ate, and walked through the cramped hallways that they work in. I was amazed at how much equipment was crammed in every nook and cranny, all clearly labelled and in its place. The coolest part of the trip for my daughter and I was seeing the "battle room" - a darkend room full of computers, giant screens, communication equipment, and battle stations that the Commanding Officer and crew use to fight their battles. We then walked out on the bow of the ship where we stood next to the main gun and the forward missile tubes. I didn't bring a camera since I didn't expect to be allowed to photograph anything, but we did miss an opportunity to get a photo on deck.

All in all, it was a great tour of a very impressive ship. The crew was extremely professional and obviously had great rapport with, and respect for, each other. Seeing this symbol of our mighty nation and the men and women who crew her made me proud to be an American. May God bless the USS Kidd DDG100 and her crew as they fight to defend our Nation.

The Ultimate Driving Experience!

Last Sunday I got a chance to go drive BMW X5s. Not just drive BMWs, but push them to their limits. BMW invited me to a half-day event at Houston's Reliant Park called "The Ultimate Driving Experience". This event put me in a car with a professional BMW driver on a closed autocross course to see just what these cars could do.


The day started with my getting into a Z4 Roadster convertible and driving a course around Houston to raise funds for the Susan G. Komen Cancer Foundation. For every mile I drove, BMW made a contribution to the cause.

After the Z4 drive, the real fun began. I went into the classroom for a 20 minute presentation on BMW X5 suspension, engine systems, stability control programs, and car set up. The instructor talked about three other cars - a Lexus GX470, a Mercedes ML500, and the Volvo XC90. He discussed the differences in all these cars, so we would have a background for evaluation. After the talk, we met up with our drivers and headed out to the autocross course. My instructor's name was Dave and since retiring from racing he has made his living in California as a test driver for various car companies, and has driven cars in many commercials - he's the guy they refer to in the small print "professional driver, closed course" on commercials.


We were three to a car on the autocross course - pro driver and 2 passengers. The goal for the afternoon was to learn some driving techniques - cornering, quick stops, accident avoidance, and theory. We got 2 laps each in a Lexus GX470 & Mercedes ML500, and 6 laps in the BMW X5. The course had all kinds of turns - switchbacks, slaloms, and sweeping lefts and rights. We took the course fast, with tires squealing and ABS going haywire. During the laps, the pro driver in the passenger seat would tell us when to brake, steer, and accelerate. The mantra for cornering in a car is "slow in, fast out" - way different from my bicycle racing days where we just flowed through turns. The amazing thing was that for all of the hard braking and poor entry/exit points, neither one of us spun the X5. That car was amazing and we could really push it. I was taking corners that would normally be 20 MPH turns, at about 45 MPH. The cars were pushed so hard that new tires had to be put on every 1-2 days. The Lexus got a new front driver's side tire every day.

The real fun was at the very end - the pro driver got behind the wheel and took us on "hot laps" in the BMW X5. We got in the car, and our driver disabled the stability control, traction control, and put the car in manual shift mode. We then proceeded to haul some serious butt around the course. We took most corners at 60 MPH, triple what I was able to do. I wish I had taken photos - all three BMWs were on the course at once and we were inches from the car ahead of us. On one of the sweeping right hand turns, I looked at the cars ahead and the inside front tires on the X5s were about 2 inches in the air! Very fast, very cool, and very fun. All in all a great afternoon and thank you to BMW for a great time.

Health Savings Accounts are not just for Health Insurance

I recently made a presentation to a group of business owners about Health Savings account plans. I really enjoy these presentations because at the end I usually get great questions. There were a couple of financial planners in the audience, and we started linking some of the ideas that I mentioned with HSA’s to their clients’ goals. I have always held the belief that a benefit plan’s components all work together – disability and medical, life and 401k, etc. The question I received from this financial planner caused a joint “A-ha!” moment. “You mean to tell me”, the financial planner asked, “that if my client joins an HSA qualified plan that he can put aside over five thousand dollars pre-tax?” The answer was yes and we were off on a brain storming session.

Think of Health Savings account plans as two different pieces – a Qualified High Deductible Health Plan (QHDHP) and the Savings Account (HSA).

The Health Plan
The QHDHP is just that – health insurance. You go to the doctor and pay negotiated rates, if something major happens; your financial exposure is limited to an out-of-pocket dollar amount. The QHDHP plan just does not have bells and whistles such as prescription drug and office visit co-pays. Think of the QHDHP as an “old school” plan that pays a percentage after the deductible is met. No frills, just financial protection.

The Savings Account
Enough about the health plan; let’s talk about fun stuff – saving money for the future. If you are enrolled in a qualifying high deductible health plan, you can now open up a Health Savings Account. Through payroll deduction, you can put pre-tax money from your paycheck into this account. If you are enrolled in single coverage, you can set aside $2,850 (2007 limits); if you cover your family you can set aside $5,650 pre-tax. Remember, you must be enrolled in the QHDHP to do this. The actual account is very similar to a checking account, except you get reports at the end of the year on money that you used out of it.

Okay, here is where is starts getting interesting. The money you put into the health savings account can be used for any unreimbursed medical expense, such as deductibles, prescription drugs, over the counter medication, and other items on a very long list. (If you already take advantage of a Flexible Spending Account, the same items qualify under a HSA account). So you go to the doctor and the bill is $75 dollars – write them a check out of your health savings account. OR DON’T and let me tell you why:

If you do not use the money in your health savings account each year, it continues to accrue and grow tax deferred in the account. When you turn 65, unused money can be withdrawn without penalties. Think about it – in addition to your 401k plan, the HSA can be another retirement account. So if you have that occasional doctor visit or prescription, just pay for it with regular after tax money and let the HSA grow. Most HSA vendors either pay an interest rate on the funds or give you a limited list of mutual funds to invest in.

In conclusion, always think creatively about your benefit plan. A good benefit advisor should see the “big picture” and show you tools that fit your organization and perform multiple duties. Adding a Health Savings Account option gives the protection of a medical plan combined with tax advantaged dollars. Remember that there are many ways to design your benefits plan and it pays to think outside of the box!

Welcome to my blog!

Hello and welcome to the brand new SB&K Benefits, LLC blog! My name is Todd and I am a buyer's consultant for employee benefits.

But this spot will not just be dedicated to employee benefits - I will talk about all kinds of things, as work does not fill up all my life. Cycling, kids, car racing, self-improvement, and running a business will all be fodder for my postings.

So I hope you enjoy this blog!