The Economics of Ice and Fire

Any CPAs out there who are also fans of the HBO series "Game of Thrones" will want to read a recent series from Slate financial reporter Matt Yglesias. In a pair of blog posts, he posits that due to its natural resources, House Tyrell is, in fact, richer than House Lannister, the generally accepted richest house in Westeros.

* Now that I've started the name-dropping, I'll go ahead and get this out of the way to encapsulate what a lot of our readers must be thinking:



Yglesias also makes the point that much of a good bit of House Lannister's wealth comes in the form of debts incurred by the Iron Throne. The point is that House Tyrell is much more liquid than House Lannister, although the Joffrey-Margaery wedding may render that point moot.

What do you think? Should Tyrion, the master of coin in King's Landing, be worried about his family's financial stability? Let's keep things spoiler-free, people.

Financial Fitness for the Very Rich: ‘Broke’

Forgive this blogger for the lateness of this review, but CPAs with an interest in financial literacy, financial planning and/or sports should set their DVRs for a rerun of the second-season premiere of the “30 for 30” film series, “Broke.” Directed by Billy Corben (who also directed the University of Miami football documentary “The U” in the first season of “30 for 30”), the film focuses on the alarming numbers of professional athletes who go broke after their playing careers are done.

A 2009 Sports Illustrated article, “How (and Why) Athletes Go Broke,” goes into detail on, well, how and why athletes go broke. One of the athlete workshops mentioned in that article is shown in the movie, and workshop leader Ed Butowsky plays a prominent role.

For those sports fans out there looking for some nostalgia, among the players interviewed are:

• Former NFL players Andre Rison, Bernie Kosar, Dante Wesley, Keith McCants and Leon Searcy
• Former NBA players Jamal Mashburn (who, it should be noted, has been remarkably successful as an entrepreneur post-retirement) and Antoine Walker
• Former MLB players Curt Schilling (whose video-game company, 38 Studios, recently filed for bankruptcy), Cliff Floyd and Homer Bush (another post-retirement success story)

Another strong presence is former NFL player and coach Herm Edwards, who runs league workshops on financial literacy. The criticisms presented in the AV Club review of the movie are valid — Corben might have done better to narrow his focus onto fewer subjects — but overall, it’s a fascinating look at how even multimillionaires can lose it all.

"Broke" next airs on Saturday, Oct. 13, at 6:30 p.m. on ESPN Classic.

Investment Adviser Oversight: What's Your Preference?

A recent InvestmentNews survey found that a majority of investment advisers would prefer to pay a user fee to help fund adviser examinations by the U.S. Securities and Exchange Commission (SEC) over other options.

Nearly 60 percent of respondents to the survey support the user fees, while the other options — a self-regulatory organization (SRO) or a more expansive Financial Industry Regulatory Authority (FINRA) — failed to reach the 50 percent mark. The SRO and the FINRA expansion both drew more than 50 percent favorable responses in a 201 poll, while the user fees were favored by just 27.8 percent of respondents that year.

The SEC has said that it has the resources to examine about 8 percent of registered advisers each year.
What do you think, investment advisers? Which option would you prefer? Why is the user-fee option gaining steam? Sound off in the comments.

From Accountant to NFL Tight End?

From CPA to NFL? Not exactly. But what Les Brown is trying to pull off is pretty close.

Ben Maller of Yahoo! Sports blog ThePostGame wrote a story last week on Brown, a former accountant at a private equity firm in West Palm Beach, Fla. Brown played basketball at Westminster College in Utah before dropping out to take a full-time job offer at Huntsman Gay Global Capital. (Incidentally, that firm’s co-founder is Jon Huntsman, Sr., father of the former Republican presidential hopeful of the same name.)

Brown left that job and returned to Utah to finish his degree. While helping his brother, an offensive lineman at Brigham Young University (BYU), prepare for the NFL draft, he met a trainer who offered to help him pursue his own NFL dreams.
Brown, who played football in high school but concentrated on hoops in college, worked out at BYU’s pro day and impressed enough to earn a contract offer with the Miami Dolphins.
Even if it took a potential accountant out of the ranks in Utah and Florida, Les Brown looks like a guy worth rooting for. If Brown makes the Dolphins, the team might pick up some accounting-minded fans.

Read more about Brown in the Salt Lake Tribune.

Changes to Virginia Retirement System: On the Right Track?

Virginia Gov. Bob McDonnell recently approved sweeping changes to the Virginia Retirement System (VRS) while proposing several technical amendments to related bills. Changes include reduced pension benefits for employees with less than five years of service and an entirely new type of retirement plan for state and local employees hired after Jan. 1, 2014.

The changes, included in HB 1130, consist of three components:

• Changes in benefits effective Jan. 1, 2013 — including changes to requirements for years of service before retirement, the average final compensation and multiplier used to calculate benefits and a 3 percent per year cap on cost-of-living adjustments — for state and local employees hired since July 1, 2010, and current employees with less than five years of service
• Creation of a mandatory hybrid plan for all state and local employees hired on or after Jan. 1, 2014, except for hazardous-duty employees such as police and firefighters, that will combine reduced pension benefits and a 401(k)-style contribution plan
• A statutory commitment for the General Assembly and Governor to gradually adopt the same method of calculating retirement rates for teachers and state employees as the VRS Board of Trustees, with a requirement that the state must fully fund the VRS rates by 2018–2020

Click here to read more details on the changes at VSCPA.com. For more information, read an opinion article in Virginia Business magazine from VSCPA member Jim Shepherd, CPA. Bond-rating agency Moody's Investor Services said the reforms were "credit positive" (PDF).

What are your thoughts on the changes? Is Virginia on the right track to maintain control of its finances?

U.S. Retirement Confidence Hits Record Low

Only half of Americans believe they will have enough money to enjoy a comfortable retirement, according to Country Financial’s Security Index.

The index dropped one point to 63.7 in June, partly because confidence in retirement reached an all-time low at 51 percent.

Just 45 percent of Americans were able to set aside money for savings and investment, a three-point drop from April. Only 37 percent rated their overall level of financial security positively, a one-point increase, and there was a two-point decrease in respondents who say their families would live comfortably if they died or became disabled.

For the first time in the four years of the index, women are more confident than men in most aspects of their financial security, with 53 percent of women indicating they are confident they will be able to enjoy a comfortable retirement, compared to 49 percent of men.