Money Magazine released the results of the publication’s survey of the towns with the highest median household income. New Canaan, Connecticut tops the list with a median income of $231,138.

Considering a move to help your income go farther? Don’t choose one of these locales. Considering a move to be closer to culture, leisure, and advanced education without living in a city? These towns might be for you. Here are the top ten.

1. New Canaan, CT, $231,138. “New York City’s elite once chose New Canaan as a vacation town, but they liked it so much, they decided to stay there year-round and turn it into one of the nation’s wealthiest residential communities.”

2. Darien, CT, $218,130. “Darien was once a vacation community for New York City’s upper crust who decided to lay down year-round roots.”

3. Lake Forest, IL, $212,122. “With a town plan heavily influenced by English gardens, Lake Forest is home to mansions and vast estates seated on the bluffs overlooking Lake Michigan.”

4. Saratoga, CA, $196,420. “The [Paul Masson] Winery is still there, but so are the best and brightest of Silicon Valley, whose fortunes have spilled over into this upscale bedroom community.”

5. Westport, CT, $193,540. “Once an artist’s colony, Westport is now better known as an affluent bedroom community on Long Island Sound that’s held on to its cultural roots.”

6. Los Altos, CA, $189,839. “The village, in San Francisco’s Bay Area, has become a haven for techland’s top earners. Still, the birthplace of Hewlett-Packard prides itself on maintaining a semi-rural feel.”

7. Potomac, MD, $183,258. ”[M]uch of Potomac has been turned over to the Washington, D.C., area’s wealthiest residents… If you are of an equestrian bent, the area still offers a number of riding schools, breeders and stables.”

8. McLean, VA, $180,103. “If you want your neighbors to be rich AND powerful, move to McLean. Vice President Dick Cheney is said to be building a home there for when he leaves the West Wing… [B]e careful who’s listening: The CIA is headquartered in the town’s Langley area.”

9. Wellesley, MA, $172,900. “The Boston suburb is home to the school of the same name, which is consistently rated as one of the nation’s top liberal arts colleges. Notable alumni include Senator Hillary Clinton…”

10. University Park, TX, $170,150. “University Park started as a group of houses surrounding Southern Methodist University almost 100 years ago. Since then it’s been swallowed up by Dallas’ urban sprawl, but the area still likes to maintain its identity.”

Other towns in the top 25 include Bethesda, MD, Greenwich, CT, Ridgewood, NJ, Los Gatos, CA, Deerfield, IL, and Garden City, NY.

25 top-earning towns, Money Magazine, June 14, 2008

I like the new columns from Money Magazine featuring “The Mole,” an undercover financial planner. Like me, The Mole prefers to write anonymously to protect his or her identity. While my reasons for doing so pertain more with my desire to post sensitive personal information, The Mole maintains incognito status because he tends to speak out against the practices of his contemporaries and associates.

Some time ago, I considered publicly becoming a financial adviser or planner. Eventually, I decided it wasn’t the path I wanted to take, but the resulting discussion was interesting. So what does a would-be financial planner need in order to be hired and trusted by customers?

Perhaps a certification. The Mole says “maybe.” He has good things to say about Certified Financial Planners (CFPs), as he is one. This is a quality certification program with stringent requirements. Unfortunately, not all certifications require rigorous education and some have a loose grasp on ethics and fiduciary responsibility.

Now by my last count, there were more than 100 financial designations. Many, like the CFP, take a significant amount of time and expertise to master before the designation is awarded… Unfortunately, many of the others require nothing more than brief courses geared toward sales techniques; how to use emotions to sell annuities to seniors is a popular one.

A strong designation would reduce the chances your financial planner turns out to be sleazy like these annuities salesmen profiled by Dateline NBC.

However, even a designation like CFP does not guarantee the quality of the planner. Regardless of the designation, it’s best to get referrals from satisfied customers before selecting your financial planner. Don’t know anyone who is retaining financial advisory services? You can get referrals from the Financial Planning Association or the National Association of Personal Financial Advisors.

With referrals in hand, research your potential advisers with the North American Securities Administrators Association.

Walter Updegrave, another columnist for Money Magazine, submits the following:

I’d be wary of any advisers who contact me unsolicited, and doubly wary of ones who run free retirement-planning lunches or seminars. Many times such sessions are just a come-on to sell high-priced investments.

The lesson is to remain skeptical. If your adviser isn’t listening to your goals, suggesting products that are right for you, or trading frequently, it may be time to fire him or her, regardless of the adviser’s certification.

Do I Really Need a CFP? [Money Magazine]
Cracking the mysterious code of financial advisers [Money Magazine]

I own shares in one exchange-traded fund, iShares Dow Jones U.S. Telecommunications Sector Index Fund (IYZ). I picked up the shares with free money from a Sharebuilder bonus, and since it was free money, I decided to attempt to choose an investment narrower than my typical investing philosophy would normally allow. Rather than a broad stock market index fund, I selected an industry that I thought would have great prospects for the 21st century.

For a while, ETFs became a favorite investment vehicle in the financial media. In the most basic form, ETFs are like index mutual funds. They benefit from low turnover, little tax liability, and low management fees. You can trade ETFs like stocks with a similar transaction fee. If you have a lump sum to invest for the long-term, the larger the lump sum investment, the smaller the fee is as a percentage of the assets.

According to Money Magazine, Wall Street is taking advantage of the popularity and frugal reputation of ETFs by creating an increasing number of these investments with higher turnover and fees.

Like index mutual funds, ETFs were designed to track traditional market benchmarks with long track records, like the Dow and the S&P 500. But to stand out from their rivals, lately providers have been cobbling together portfolios based on custom-designed indexes they hope will beat the market’s performance…

No question, traditional index ETFs are still dirt cheap, typically charging 0.20% or less. Yet the average expense ratio for ETFs overall is much higher—0.53% of assets vs. 0.35% in 2002. What’s the deal? Newer ETFs with complex strategies tend to incur higher management and transaction fees.

IYZ falls right below the industry average with a total expense ratio of 0.48%. What have I received for this fee so far? I funded the account on August 9, 2005 with $50. As of today, after reinvesting dividends, my account is valued at $46.99.

Would I have been better off with VOX, Vanguard’s equivalent ETF? It appears that the two funds follow each other closely, but Vanguard carries a slight advantage. The lower expense ratio (0.23%) seems to account for Vanguard’s better performance. That slight advantage could account for a significant difference between the two funds’ performance if I hold onto the account for decades.

Despite recent poor performance, I believe the telecommunications industry is a great choice for the next century or so. I don’t mind “timing” the market with a free $50.

The best investment in 10 years: Get in while you can [Money Magazine]

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