Mike Kulper: Spending, Planning, Serving for Financial Health

Investing 101: Wednesday, April 22 from 5:30 to 7 p.m. at the Orcas Public Library

— by Margie Doyle —

Mike Kulper is a retired college professor, but he still works, spreading his passion for teaching and planning and helping many in the community to better their lives.

Kulper offers Financial Literacy classes at the Orcas Island Public Library on the first and fourth Mondays of each month from 6-7:30 p.m. His “students” range from high-school age to octogenarians. This Wednesday Kulper will teach a special class in the basics of investing, as part of the Orcas Island Public Library’s “Money Smart Week.”

His teaching, planning and investing philosophy can be summed up in one catchphrase: Cutting through the complexity. Simple, but not easy. He’s troubled by the numbers of people who fail to budget, or save, or invest for their financial livelihood, but he starts with something the best — and worst — planners all do — spending.

As he lists the steps to financial literacy, he describes the initial process of budgeting as having a spending plan. “Until you budget, you can’t see where you’re spending,” he says. Tracking income and expenses through your spending plan leads you to see where you can generate more income or cut your expenses so that you can move to the second basic step: a savings plan.

Before moving on to the third step, investing, Kulper says, “You need to set aside emergency cash reserves for unexpected expenditures such as a trip to the hospital or a major car repair.” That amount should be enough to cover your living expenses for at least three to six months, “so you aren’t pressured to use a credit card or borrow.”

He advises making the savings as automatic and “invisible” as possible; to keep the savings in a separate account, and take advantage of some programs that allow direct payments into a savings or retirement account.

“It’s important to keep your savings separate,” Kulper says.

Then, with those emergency contingencies provided for, you get to the investing phase. Kulper will cover this information and guide you to the next steps in planning at the Wednesday evening class, Investing 101: Do you understand the basics of budgeting, saving, and investing? Unfortunately, surveys have shown that most people do not, so you’re not alone! Learn the basics of how to start your retirement planning.” The class will be from 5:30 to 7 p.m. in the Library conference room.

His advice on planning for lifelong financial health is all basic, and his passion for teaching makes it understandable and doable. He is the first to say he’s made mistakes; “I’m trying to help people avoid some of the mistakes I made along the way.” The biggest mistake, that many make, is being impatient. “When I started investing I didn’t have the patience to hold onto my investments for the long-run. At the time I wish I had someone come alongside me and encourage me to be patient.”

“Patience is a big issue for many people,” he says.

Other keys to successful financial planning depend on your personal situation:

1) time horizon — how long a time period do you have to invest?

2) objective — will you need your investment resources for retirement? for education?

3) risk tolerance — if your investments are in the stock market, can you sleep at night with market fluctuations?

“It doesn’t matter what age you are, you should still get started as soon as you can,” says Kulper. He’s also seen people recover from financial disaster — emergencies, bad credit, huge debt. “I’ve heard stories of amazing comebacks, even average people can do it when they set their mind to it. It involves reducing expenses, generating income and saving.”

For young adults with college education loans to repay, he says, “You have time on your side. If the loans are at a high interest rate, pay them off as quickly as possible.”

For those approaching retirement, he says it’s smart to move to a more conservative mix of investments.

With credit card debt, he advises paying the balance due every month to avoid finance charges.

His own story is one of following the advice he gives to others. As a college graduate he knew he had a gift and a passion for teaching. He was “drawn to accounting because it would give me a variety of options.” He earned his MBA (Masters in Business Administration) and went on to work for KPMG, one of the largest U.S. audit, tax and advisory services firms.

He then moved on to teaching at Santa Barbara City College where, among other courses, he taught financial accounting and managerial accounting, which were required courses for undergraduate business students.

He and his wife vacationed on Orcas Island since 2005, and, with their two young sons, moved to Orcas in 2012, “as soon as I could,” he says. “I wanted to spend more time with my family before the boys grew up.”

However, knowing how good he was at talking about investing and his passion for teaching, his wife suggested he offer the financial literacy courses at the library to help people. He has a regular group that comes, among them a 16-year old high school sophomore, and newcomers are always welcome. He’s created a website to help pass on information generated by the class (www.orcasfinancialliteracy.webs.com).

He says, “I don’t know where it will all lead, I’m just trying to help others. I have no money motive, just passing along important information — and maybe a sense of urgency.”

“My personal take is keep it simple. As Tony Robbins says, ‘Complexity is the enemy of execution.'”