The Dolans' Financial Checkup

Don't Mess with My Money : The Dolans' No-Nonsense Lifetime Money Plan
by Ken Dolan, Daria Dolan

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We're mad as hell, and you will be, too, by the time you finish this chapter. It took foreign terrorists to shatter America's innocence, but the American dream was shattered from within at the start of the twenty-first century.

Greedy corporate leaders lied—yes, out and out LIED—about company earnings, and Wall Street analysts caused a stock market bubble that burst. That left millions of middle-class investors—even those who thought they were playing it safe with Fortune 500 stocks—stripped of the nest egg that was supposed to send their kids to college and provide a comfortable retirement. Research analysts have lied to brokers and brokers have lied to clients. Did you ever think you'd live to see the day when the chief executive officer of a major brokerage firm would publicly apologize for his firm's failing to live up to the standards clients, shareholders, and employees expected?* Or the day that BusinessWeek would run a cover story titled "How Corrupt Is Wall Street?" Perfectly competent people have lost jobs with little warning as companies cut back and restructured. Consumers have been told to spend money to boost the economy, as if buying a new computer or a stylish wardrobe were practically a patriotic duty, and credit card issuers have made spending so easy we've ended up a nation in debt past our eyeballs. We could be just one major massive corporate layoff away from an exploding consumer credit problem all over the country.

Through the years we have heard from listeners who made the mistake of trusting their employers and believing it was a good idea to keep most of their retirement bucks invested in the company's stock. It sounded good. Since they were on-scene every day, they could presumably keep an eye on the investment—except that only those who doctored the books knew when to pull out. For years, we warned against investing more than 5% or 10% of any retirement plan in the stock of the company for which you work. In recent years we've received many remorseful calls from people who wish they had listened to our advice.

An Enron employee named Diana, from Pennsylvania, called us in tears. Her 401(k), invested 100% in the company's stock, was at one point worth more than $300,000, and she was planning a comfortable retirement in six years. You don't need us to tell you what happened to the value of Enron stock because of its well-documented scandal. Diana said she would have to work full-time until at least the age of 70.

All you need to do is read the headlines to know that there are many more Enrons out there!

Well, the best revenge is still living well, and we will show you how to live well in spite of uncertain times, and sleep well, knowing that your finances aren't going to come crashing down like a house of Enron stock certificates.

A downturn is when your neighbor loses his job. A recession is when your wife loses her job. A depression is when you both lose your jobs.

Are You Financially Fit Enough to Weather a Downturn?

Be honest! If you are, you're the exception.

Would you run a marathon without being sure you are fit enough to withstand it? This is that kind of checkup. It's preventive care, so that you won't lose your shirt.

Now, you will have to start saving. It probably won't come naturally to you; Americans have earned the distinction of being the worst savers in the industrialized world. Many Americans have no savings at all, or have negative savings—that is, nothing in the bank and a pile of debts. As of late 2001, American consumers were in debt to the tune of $19.9 billion.

Money Doesn't Buy Happiness,
But It Can Buy You a Second Chance!

If you're going to live well you must consider, before you do anything else, where you are in relation to where you'd like to be. Forget about the economy at large. Are you happy with your job? Is your spouse or partner happy, career-wise? Can you afford to pursue your dreams? We believe in having dreams, and in realizing them.

We know plenty of people who have walked away from jobs in the middle of a recession because they've realized, with all our country has been through, that life is too short to be stuck in a job that is just a daily grind, and bravely gone forth to reinvent themselves. We have a close friend who was a big muckety-muck in the retail business, with a high six-figure income; she specialized in reviving faltering retail companies for resale. A tough job, a real pressure cooker. In return for her fat paycheck, she became accustomed to sleepless nights and no time for a personal life—all in the name of fixing someone else's mistakes, as she began to see it. So what did our friend do, just when she was at the top and companies were tripping over themselves clamoring for her services? She saved her money until she could comfortably say, "Sayonara, corporate America!" She is now starting a new career as a sculptor. She has enough savings to get her through about five years if she cuts back fairly drastically on her lifestyle. Who knows, had she stayed with the job, she might have eventually found herself out of work in spite of the demand, because corporate directors don't know the meaning of loyalty—and she might have been caught unawares without a financial cushion.

We have another story of a couple who walked away from financial security

together, a couple named Ken and Daria Dolan. The time was 1984. Ken was a managing director of an international brokerage firm, and Daria was happily raising their daughter, Meredith, and taking an occasional acting job. The whole country had become infatuated with Wall Street as people who'd never invested before caught their piece of the new bull market, and life was good for many Americans, including the Dolans.

But Ken had a dream....

He wanted to host a radio program using all he'd learned about personal finance to help people in a very public way, instead of just working with private clients. His dream came true in October of that year, when he was offered an on-air job at WOR Radio in New York City, beginning in early 1985. He accepted, though it meant taking a pay cut of 70%.

When Ken told Daria about the new job, she was in shock.

"I'll never to this day know what made me say it, but I said, 'Well, then, I guess I'll become a stockbroker,'" Daria recalls. A voice inside told her she was going to have to make some big changes to compensate. As a part-time actress, she could never hope

to make up the shortfall. So she announced that she was going to enter Ken's old business as a stockbroker—a pretty risky proposition, seeing that she had absolutely no experience.

Ken didn't think she would be able to pull it off, and Daria wasn't so sure herself. But whether through some latent innate ability or out-and-out terror of being in the poorhouse, Daria passed the New York Stock Exchange Series 7 test that is required of anyone who wishes to obtain a license to conduct securities business with the public—and she became a broker.

In fact, she enjoyed giving financial advice so much that in 1986 she teamed up with Ken to host a talk show on another New York City radio station, and The Dolans was born.

As 1987 began, they thought nothing could stop them. So they quit the smaller radio station to write their first book, thinking that being successful authors would bring them a fortune in radio and television opportunities. The timing couldn't have been worse. The stock market crashed in October of that year, ad sales were down, and not many programmers were willing to take a gamble on a couple of personalities without a long track record.

Copyright © 2002 by Ken and Daria Dolan. Excerpted by permission of Currency, a division of Random House, Inc. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.

About the Author

Ken Dolan is American business anchor, author, and radio host. Ken Dolan was an anchor, along with wife Daria Dolan, for Dolans Unscripted on CNN. Prior to his career in radio and television, Ken was co-founder and vice chairman of a merchant banking firm. He began his career as an account executive at a major New York Stock Exchange firm. He also served in the U.S. Navy in Vietnam from 1967 to 1968. Dolan holds a bachelor's degree in marketing from Boston College.

Daria and Ken Dolan are the hosts of the nation's #1 rated personal finance radio show, The Dolans, which reaches a weekly audience of more than two million listeners. For four years, they were money editors on CBS This Morning and CBS News Saturday Morning. They have hosted their own show on CNBC and have made frequent appearances on many other television shows, including The Today Show.