As a teenager in the 1960s, Lewis Bratcher would devour stories in Life magazine about Alaska and dream of visiting America’s last frontier.
By the time he graduated from the University of Tennessee in 1969, he was ready to do more than visit. So he bought a one-way plane ticket to Anchorage, hoping to land a job on the new 1,000-mile pipeline that would transport crude oil from northern Alaska to Valdez in the south.
He stepped off the plane in January 1970 wearing his father’s military coat against the cold, with his mother’s fruitcake tucked into his luggage. But the pipeline job didn’t materialize; legal disputes over land claims delayed the project for several years.
Still hoping to make it in Alaska, Bratcher worked odd jobs around Anchorage until he landed a position as a purchasing agent at a concrete supply company that fall. But a year later, the company filed for bankruptcy and Bratcher was once again out of a job.
Over the next 20 years, Bratcher would shift careers several more times. In the end, the struggles would lead him to found a traditional yet forward-thinking company — The Great Alaskan Bowl Co.
Chapter 1: Lumber Yard to Wooden Bowls
A year after moving north to Fairbanks for yet another job, Bratcher and a friend partnered to buy a small lumberyard there. Their company pulled in a decent profit over the next decade. Then, the economic recession that had gripped the lower 48 states following the 1970s global oil crisis eventually crept up to Alaska. By 1987, the lumberyard was struggling and Bratcher’s partner wanted out of the business.
Bratcher bought out his partner’s interest two days after the massive stock market crash on Monday, Oct. 19. Still hoping to keep the business going, he deposited all the company’s cash at 4:30 p.m. on Thursday to cover payroll the next day. Thirty minutes later, the FDIC seized the bank and its assets, including Bratcher’s money. “It had been a full week,” he wryly recalls.
Vendors started calling in their debts on Monday. Bratcher refused to declare bankruptcy and instead spent the next year selling his inventory to pay back unsecured creditors. He even convinced some vendors to take payment in lumber. He spent several more years trying to get his money back from the FDIC, and eventually received just cents on the dollar for the deposit he made on that fateful day.
Bratcher wasn’t beaten, however. He began to think about a new business, but one that was sustainable through good times and bad.
In passing, an acquaintance had mentioned he’d like to start a wooden bowl company, but Bratcher had dismissed it at the time as impractical. Now he began to reconsider. By the 1980s, wooden bowls were increasingly associated with quality craftsmanship. Alaska was a prime vacation spot, too, and bowls made of native trees could attract tourists as well as locals, Bratcher thought. The wholesale market also might prove lucrative.
In the end, he decided a bowl company would provide him with a niche market. “I wanted to make something the guy down the street couldn’t duplicate or buy overseas cheaper,” he says.
Wood had once been a common material for bowls; it was cheap, durable and relatively light once dried, a plus when following caribou across Alaska or traversing the Atlantic in search of the New World. As America grew, so did the demand for woodenware and bowl mills sprang up across the country.
Industrialization changed that. Once rare and expensive products like glass and glazed ceramic now became common and cheap due to mass production. Plastic’s invention and its use in kitchenware in the very early 20th century made it even harder for bowl companies to compete. By the time Bratcher was thinking about starting a bowl company, there were only a handful of wooden bowl mills still left in the United States.
Chapter 2: Building a Bowl Mill
Bratcher first needed machinery to both carve and sand his wooden bowls. He reached out to many former bowl mill owners, including John Coley in New York, who had sold his own company in the 1970s. Coley loved the idea of a new bowl company, but no longer had any machinery. He did, however, know a man who could make the machines.
Coley sent Bratcher to Ed McCormick in Vermont, an inventor who had built bowl-cutting machinery in the 1950s. McCormick unearthed a set of bowl machine blueprints from a filing cabinet and Bratcher paid him to build it.
In the past, wooden bowls had been milled on the shallow side, but Bratcher wanted his bowls deeper to set them apart. It would take McCormick a full year to finish the specialized cutting machine.
Then Bratcher had to find a way to dry the bowls to keep their shape. Bowl mills typically would lose a significant portion of their carved bowls while air drying them, since wood is notorious for cracking during the drying process. Bratcher thought a kiln might allow him to inexpensively control the drying process and retain most of his dried bowls for finishing.
While in Georgia for a woodworking conference, he watched a man in a video talk about drying lumber. He tracked the man down and unknowingly made contact with one of the world’s foremost experts on wood drying — Lee Fisk.
Fisk told him no one had ever built a kiln to dry bowls before. But over the next year, he helped Bratcher build a kiln to control air movement, humidity and temperature. They were elated when the carved bowls finally came out round and without cracks.
Now Bratcher could cut and dry the bowls, but he still needed a plentiful source of wood. He carved test bowls from several different trees before deciding on birch, a species native to Alaska that tends to spring up in fire-scorched areas. Dried birch produces a bowl with just the right heft, Bratcher says. And once oiled, it becomes more opalescent over time, unlike other hardwoods that lose their sheen.
“When you pull a bowl out of the oil at the end of our process, that’s when you really see the character of the wood show up,” he says. The wood’s uniqueness is most pronounced in the company’s “family tree” bowls, when vibrant color patterns flow through a set of three to five nesting bowls.
Finding the best trees is always risky, says Randy Mickowski, the company’s production manager, who still traipses through the woods to find prize birch trees. Birch lives only for about 80 years before it begins to die from the inside out. So you can’t tell if a tree is healthy until it’s felled, Mickowski says. Sometimes decaying heartwood will clear up after a few feet; other times, it penetrates the whole log.
The company only uses trees from land that’s slated to be cleared anyway for roads or farmland. Once logs arrive at the Great Alaskan Bowl Co., they go through a 22-step process of carving, sanding and oiling to become wooden bowls, says cutter and sander Klaus Reeck. “The kind of bowl and how many we get really depends on the tree size and where the heartwood is,” he says. Birch’s heartwood, which is slightly darker than the surrounding wood, can be off-center, so a carver must work with the log to create the perfect bowl.
At 65, Reeck could retire, but says, “I like taking what nature started and finishing it too much to quit.”
Chapter 3: The Giving Tree
Whether a carver can get 100 bowls out of a birch or none, every bit of the log gets used, says Malen Bratcher, who is now the marketing and wholesale manager for his father’s company. Lower-quality wood not usable for bowls is instead sold as firewood to local Alaskans who use it to make it through the 40-below-zero winters. Shavings are used for packing material and sawdust is free for mulching and animal bedding. Bowls with minor imperfections become bird feeders.
People have a positive psychological connection to wood that they’ll tap into when they pick up a bowl.
“We’ve never had to ‘go green,’ because we’ve always had sustainable policies,” Malen says.
Customers like the company’s conservationist practices, but the real attraction remains the wood itself, says retail manager Elaine Williams. The best way to educate customers, she says, is to let them handle the bowls. “People have a positive psychological connection to wood that they’ll tap into when they pick up a bowl,” she says.
The company’s biggest solid bowl, aptly named “Mr. Perfect,” sits prominently on a top shelf at its retail store in Fairbanks. The bowl was carved from the only 24-inch, fully sound birch tree the Great Alaskan Bowl Co. has ever harvested. The beach ball sized bowl showcases nature’s artistry, as wide swaths of rich browns and reds flow across its vast interior, broken up by a single pale blonde streak.
Williams sees people go from “just looking” to spending hours picking through hundreds of bowls, laying them out in rows in their quest to find “the one” that speaks to them. In fact, physical contact with the wood is so important that the company will sometimes ship bowls to prospective wholesale clients in the lower 48 states to help them appreciate their quality.
In the past, the company produced mostly elegant and functional wooden bowls, but to grow the business, the Bratchers have added laser engraving and even painted scenes by Alaskan artists. In July, Bratcher signed an agreement with the U.S. Mint to reproduce the “America the Beautiful” series of coin artwork onto the company’s bowls. Vendors in Denali National Park sell the bowls, but Malen plans to offer wholesale agreements to other prominent sites in the lower 48 states, such as Mount Rushmore, the Grand Canyon and Yellowstone National Park.
“We hope to convince folks that we can take the coin images and capture America’s history in a new way — on a wooden canvas,” he says.
Marketing the company’s product comes naturally to Malen because he loves the bowls, so much that he once hid a set he was oiling from employees and his father. They were so striking he came in early the next day to buy the bowls for his personal use.
“These bowls put food on the table when we were kids,” he says, remembering his family’s personal set of wooden bowls they used for meals. “Dad fought hard for this company and I don’t take it for granted that I get to work here with him. Everything, from how he built the business to how we make the bowls … I feel like this is what is means to be ‘made in America.’ ”
This is the granddaddy of them all. Start to type “emergency” into Google (GOOG), and the first suggestion is “emergency fund.” The rule is to make sure you have six month’s of living expenses tucked away in cash in case you losefyour job or suffer a financial setback. Of course it’s important to have a financial safety net, but when you earn virtually nothing on your cash, this rule can cost you. For example, if six months of living expenses for you is $25,000, you’d be sacrificing close to $1,000 of income a year by keeping this money in a checking or money market account.
For years, I’ve broken the mold on this financial rule by telling clients they shouldn’t have their emergency fund in cash. Instead, choose a short-term bond fund that pays 3 percent or higher for your safety net. If you need the money quickly, you can easily sell the fund and get access to the cash. If you don’t need the cash –- and these emergency fund accounts are rarely used –- you can still make money on the assets.
Not so fast. There are many good reasons to contribute to a 401(k), such as tax savings, tax-deferred growth and a possible employer match, but there are also good reasons not to contribute as well. Don’t blindly dump money into your 401(k) if you don’t have an emergency reserve of some sort and there is a chance you will be laid off. It is taking longer for most to find a job, so if you think you may be out of work, make sure you have the resources to pay rent and buy food until you land a new job.
Also, if your employer doesn’t provide a match and you are in a low-income tax bracket, it may make more sense to pay the tax now (since you are in a low tax bracket) and invest in a Roth individual retirement account instead. Use this 401(k) vs. Roth IRA calculator to crunch the numbers.
You cannot cut your way to wealth. Too many people and financial advisers focus on trimming expenses when they should be focused on the other half of the equation — income. I’m a proponent for living within one’s means, but too often that creates an artificial barrier or ceiling. “This is what I make, so I have to cut back to save more,” is often the thought process. Rather than living within your mean, work on increasing your means.
There are many ways you can make more money, including asking for a raise, boosting your skills –- your human capital –- and getting a promotion, starting a side project in the after-hours or going back to school and starting a new career. What you make today is not necessarily what you can make tomorrow. Cut unnecessary expenses and then use your energy to increase your income.
You should only save for your children’s education if you can afford it. That means when you’re on track to having enough assets for your retirement. Assuming you have the retirement assets and now want to save for college, most advisers will recommend a 529 college savings account.
Not so fast. These 529 accounts have some real advantages, such as tax-free growth of contributions if they are used for approved higher education expenses. This tax-free growth is a big benefit. However, if you withdraw money from this account and do not use it for approved higher education expenses, the gains will be subject to ordinary income tax and a 10 percent penalty.
The big risk is if you fully fund your child’s college education but he or she decides to not go to college, drops out, finishes early or goes to a less expensive school. You have the ability change the beneficiary to another qualifying family member without penalty, but if you have just one child, there may not be anyone you can transfer the funds to. You would then have to liquidate the account and pay the tax and penalty. If you are undeterred and still want to pay for your child’s college education, start with a small contribution into the 529 and fund up to a maximum of 60 percent of the cost in case one of the above scenarios occur.
The certified financial planner designation is the gold standard when it comes to financial planning. I wouldn’t think of hiring a financial planner if they weren’t a CFP practitioner. However, just because you are working with a CFP doesn’t mean you shouldn’t research your adviser, his or her areas of expertise and how he or she charges. The CFP tells you he or she has advanced training in areas related to tax, investing and retirement planning; has passed a comprehensive and difficult exam; and has agreed to adhere to a high code of ethics.
The onus is on you to know what you need and to make sure your CFP financial planner can deliver. Don’t get lulled into thinking that just because he or she have three letters after his or her name that he or she has been screened. Ask tough questions before you trust your money to anyone -– even a CFP.
Most financial pundits will advise taxpayers to have just enough taken out of their paycheck so when April 15 comes around, they will neither owe money nor receive a refund. The rationale is if you get a refund from the Internal Revenue Service, it means you paid too much in over the year — and the government has had use of your money without paying you any interest. Keep the money and invest it yourself is the theory.
‘Again, that’s the theory, but reality is much different. It all comes down to psychology. I look at paying a bit more to the IRS as a forced and automatic savings account. Sure you won’t earn interest, but human nature tells us you probably won’t save the money anyway. There is a greater chance you will squander $100 a paycheck then if you receive a $2,400 check from the IRS. One approach takes a plan and discipline each month to save and invest while the other doesn’t. A check from the IRS isn’t an interest-free loan; it is an automatic savings plan.
Nobody wants to endure an IRS audit, but too often I see honest and ethical taxpayers avoid claiming certain deductions or taking certain positions that are completely legitimate because they fear it will increase their chances of an audit. First, your chances of being audited are small –- about 1 in 104 chance. If your return doesn’t include income from a business, rental real estate or farm, or employee business expense deductions, your chances are even smaller -– 1 in 250. Second, if you and your tax preparer are not crossing the line, you have little to worry about. In fact, thousands of taxpayers get a check from the IRS at the end of the audit. Don’t let a small chance of an audit keep you from taking advantage of every tax strategy for which you qualify.
Do what you love, and you’ll never have to work a day in your life, or so the saying goes. It sounds good and feels good, but it’s not necessarily true. Sometimes –- often, actually –- doing what you love can be a great hobby but not a good career. There are a lot of things I enjoy that I’ll never make a dime doing. A better approach is to find something you enjoy, are good at and that you can get paid to That is the financial trinity you should aspire to find because it ties your interests with your skills with the marketplace
Follow this rule, and I’ll send you straight to detention. We know college costs are soaring, and we don’t want to bury our kids in college debt, so most parents prioritize college saving over retirement saving. Big mistake. If worse comes to worst, Junior can get a loan, work while in school or go to a less expensive school. Basically, Junior has decent options, and you have tough choices.
If you haven’t saved enough for retirement, you are stuck. There’s very little you can do other than slash your expenses, work longer or both. Save for your own retirement first. That’s the financial rule you should follow. If you have amassed so much wealth when your children head off to college that you can afford to help them, go for it. If you haven’t, you’d be doing your kids a disservice by jeopardizing your own retirement by paying for their tuition.