One of the downsides of widespread ownership of shares of common stock is that individual owners have a reduced say in how a company is run. This situation effectively allows corporate officers like CEOs and CFOs defacto control of companies. If you’re not sure about this argument check out John Bogle’s book, The Battle for the Soul of Capitalism.

One of the unfortunate results of this state of affairs is that company CEOs often fail to act to safeguard the long term future of their companies.

A great example of this is the recent actions of former Lehman Brothers CEO Richard Fuld. Fuld took $22 million in compensation in 2007 and let his company go bankrupt. Now he is transferring his assets out of his name to avoid payback from the shareholders he stiffed. How unfortunate.

Best,

James

MANAGE YOUR MONEY TOGETHER

Here are some simple guidelines for DINKS to build wealth:

1) Collaborate: Meet regularly to talk about money, set goals together, track and monitor them.

2) Understand and respect your partner. Take time to understand your partners values about money.

3) Watch the numbers. Get a budget, monitor your spending and track your net worth.

4) Max your retirement. Maximize contributions to your tax deferred retirement accounts.

5) Invest in stock. Stocks perform better than bonds or cash.

6) Avoid high interest debt. Credit cards and title loans are financial cancer.

7) Diversify. Don't put all your eggs in one basket.

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