Friday, May 25, 2018

Are Target Date funds right for you?


Why are Target Date funds popular with young and mature investors?
For some investors using these funds takes the guesswork out of trying to find the next big thing, next star manager, next momentum sector, next favored country or next favored capitalization stocks. Since most people and computers cannot forecast the future growth areas in the world, it makes sense to NOT try to guess. There are many TV pitches and guru managers who have to prove their huge paychecks every quarter but realistically, most people just can’t follow along. Some folks are just tired of worrying about their portfolio but don’t trust their broker, advisor or brother in law. Many of these funds use index funds with a balance between stocks and bonds depending how far away you are from the retirement date you set. Thus a TDF 2025 might have 65% stocks and 35% bonds with 10% return for 1 year and 7% since 2003. Contrast that with TDF 2065 with 90% stocks with 12% return for 1 year and 8.7% since 7/2017. 
                                                

GOP cuts food stamps not corporate subsidies
Again GOP shows why it is not the conservative Grand Old Party. They are the rich helping the rich and their corporations. GOP cutting food stamps that feed people who can’t make it on $7.25 an hour—same as 2009. Could you? Instead of paying for the new tax breaks with cuts in corporate subsidies, they cut food stamps. Six parent companies have received $1 billion or more; 21 have received $500 million or more; and 98 have received $100 million or more. Spanish electric utility Iberdrola got $2.2 billion.
            Boeing, Ford Motor, General Electric, General Motors and JPMorgan Chase are the largest recipients of state subsidies; federal grants and tax credits; and federal loans, loan guarantees and bailout assistance. Boeing alone has received $13 billion in subsidies. Intel and Alcoa each received nearly $6 billion. General Motors scored $3.7 billion and Ford secured $2.5 billion. All told, 19 large corporations have received at least $1 billion. None of these 1,800 firms are needs corporate welfare but our so-called ‘representatives’ gave and have given them ‘food stamps’ since WWII. Some claim offshore residency to avoid any taxes. Some are owned by foreigners. Big subsidies go to corporate ‘farms’ some of which are paid to NOT grow anything. Remember, we are paying to subsidize milk and other foods. Agriculture is one of the most regulated industries, yet Trump has not bothered to de-regulate it. Farmers in New Zealand prosper without subsidies. Their lobbyists are not as powerful as ours.

Another way the new Trump GOP tax helps the wealthy
‘Living’ and working in income tax-free states offers an obvious tax edge since local taxes are no all deductible. Signing bonuses, royalty distributions and advances will be taxed at the domiciliary state tax rate of zero. One state domicile for taxes; one for working; one for vacations. Mitt Romney claimed Utah (no tax) as home. Set up a ‘loan-out’ corporation. A loan-out is a business entity separate tax-wise from the individual for whom it was created. A rich person establishes the loan-out and then becomes its ‘employee.’ Their corp deducts the employee expenses not the taxpayer since the new law outlaws the Form 2106. This also gives them asset protection and retirement benefit programs. Working for your own foundation offers other benefits.  


What to do with your RMD: How much will you spend?
Your RMD or required minimum distribution is the amount the IRS calculates for income tax purposes from your retirement accounts annually after your turn age 70½. You may want to invest part of it for the future or cut the amount in your IRA that you will pay tax on in coming years or contribute to legitimate charities. I help you answer these questions now: Will you have enough? How will you invest? How much will you spend? Explore 17 alternative uses of your RMD. Create tax-FREE income from your IRA while reducing future RMD. Take advantage of the miracle of compounding: $100,000 may become $500,000 in 15 years. Create an investment plan for 30+ retirement years. Self-insure and self-fund all your financial needs. Social Security to cut benefits in 2034 so you may need more income later. You have time to do something about the future.

Audits are down—IRS has no money
The number of IRS audits fell in recent years to the lowest levels in almost two decades. However, certain red flags such as excessive deductions (especially non-cash contributions to charities) can often trigger audits. Other triggers include large deductions in general, in comparison to income; large business expenses; an audit of a related return, such as of a business partner; certain kinds of activity in rental property; excessive losses on rentals; or, on a Schedule C for the self-employed, unusual expenses for depreciation, travel or offices.
            Also sales of non-public stock, rental expenses on a Schedule E and miscellaneous deductions related to the 2-percent limit on AGI. The IRS compares your return with statistical norms. Returns with anomalies can then be reviewed by up to three layers of IRS personnel before a decision is made to audit. They also use random audits to bolster validity to their computerized norms. They also use a computer automated process to kick out returns that appear abnormally out of range of a peer norm. More red flags or higher potential ‘adjustments’ trigger audits. IRS does NOT call—a letter starts the process. Most audits are completed by mail. Most ask for back up to your numbers.

How did Buffett’s index beat Wall Street?
Buffett’s index pick returned more than the Wall Street geniuses. In 2007, Warren Buffett bet a million dollars that an index fund would outperform a collection of hedge funds over the course of 10 years. This week he won that bet and gave $2.2 million to his charity called Girls Inc. Over the course of the bet the S&P 500 index fund returned 7.1% compounded annually, significantly more than the average of 2.2% for the experts. Buffett has advocated putting the bulk of our investments in a low-cost index (he said Vanguard’s 500 index). For those who follow his advice, this bet confirmed his statement that “a very low-cost index is going to beat a majority of the amateur-managed money or professionally-managed money.” Why don’t more smart people follow this advice? He thinks it is because they think they are smarter than everyone else. Instead, low-cost beats high-cost every time studies show.

Can you really earn a second job income by trading?
You may have heard an advert that you can make another income from trading if you take a course at places like https://www.tradingacademy.com. They say they break down the concepts of trading into easily digestible pieces and provide an overabundance of online trading resources in addition to classroom training. You get a free class too. I am sure the OTA management does earn a second job income but you are not likely to learn anything more than ‘how to lose at day trading.’ For $60,000 tuition, they are laughing all the way to the bank. You know that if they really knew anything about investing, they would NOT be wasting time with this marketing firm. Read the reviews: https://daytradereview.com/online-trading-academy-review/. I made over 13% in my NON-trading account in one year. That’s $78,800 just from NOT trading.


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Make America, “The Don” Great Again







Trump thinks the govt is ‘conspiring against him.’

Trump gives Putin control of election: eliminates U.S. cyber advisor
Treason definition: ‘giving them aid and comfort within the United States

Fake ‘Witch Hunt’ produced 5 guilty; 17 indictments.

Putin controls US power utilities and 21 state voting files, Trump slush fund, etc

The election is going to be rigged—I’m going to be ‘honest’” 

Could Trump postpone Nov 2018 election using excuse of Putin meddling needs fixing?


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$178 BILLION tax cuts (lost revenue) goes to stockholders—our taxes paid them record!
Toxic water report blocked from release by EPA: Trump fears we might get mad.
GOP passes 142 of 172 legislation changing names of post offices. And big bonus check.
Russian bots changed election results in Trump favor and it costs $ millions to find out.


SCAMS/SPINS:
Harden schools w/bars/gates like prisons. Father gave killer his guns. Used vid games.
Trump blames Obama for surveillance AGAIN. Base believes FBI out to get him.
Trump cancels auto loan protections so dealers can charge non-whites more.
Trump trade war is over—‘Nobody knew trade could be so complicated.’
Trump’s Nobel bid is over—‘Nobody knew diplomacy could be so complicated.’
Trump’s lawyer says truth is relative.” So he really didn’t win election: Let’s vote again.
Clapper, former DNI says Russian attack actually threw the election to Trump.


William Gross, Highland Beach, caught selling unregistered securities $3 million.
IRS says some tax pros are being hacked by cyber thieves for client data.

Jobs:
Jobs from GOP tax cuts reduced – corporations paid themselves instead of new jobs
Supremes take away fundamental employee right: force arbitration so cannot sue

Who owns your account now?
Why we switched from a savings account to a serious wealth-building account.
Mortgage rates went higher and it pays $ thousands to join a credit union

Can we trust Ari Melber to explain the legal case against POTUS?

Miracle:

22 school shootings (dead or injured). 13 troops in other wars: humans kill their young.


IAN
41 Watchung Plaza, B242
MontclairNJ 07042
973.746.2014
Alerts 

Friday, May 18, 2018

What to do with your RMD: 17 alternatives


What to do with your RMD: How much will you spend?
Your RMD or required minimum distribution is the amount the IRS calculates for income tax purposes from your retirement accounts annually after your turn age 70½. You may want to invest part of it for the future or cut the amount in your IRA that you will pay tax on in coming years or contribute to legitimate charities. I help you answer these questions now: Will you have enough? How will you invest? How much will you spend? Explore 17 alternative uses of your RMD. Create tax-FREE income from your IRA while reducing future RMD. Take advantage of the miracle of compounding: $100,000 may become $500,000 in 15 years. Create an investment plan for 30+ retirement years. Self-insure and self-fund all your financial needs. Social Security to cut benefits in 2034 so you may need more income later. You have time to do something about the future.

Trump tax plan has NOT brought outsourced cash back for jobs in US
GOP gave corporate America a great deal besides cutting rates so actual rates are less than 15%. Apple, Microsoft, Google, Oracle and Netflix have removed from reports any mention of their overseas cash totaling $ TRILLIONS. Most corps have given their senior staff and shareholders BIG raises but have hired few new taxpayers. GOP’s new 15.5% rate on repatriated cash seems to have few payers. But if the $ Trillions are not tracked, how will we know if the special tax deal we must pay for is effective? We taxpayers will still have to pick up the slack since most corps don’t need capital or jobs here in US. Most will find their next decade of profits overseas so they plan to use the money there. Why pay 15.5% when they can pay 0% in most tax shelters. Apple hides their cash in Jersey, an island off France. I would keep my money in 0% tax Jersey if I could too.

Do you need a gift for your grad?
Best gift for your graduate: The Gift of a Lifetime.
Your monthly gift could provide your grandchild with real ‘social security:’ their own tax-FREE money. You take advantage of the miracle of compounding. Your gift becomes a $2,000,000 tax-FREE Wealth Reserve. You could reduce your taxable estate by $500,000 for each grandchild. Your grandchild will NEVER have to pay taxes on the money either. Social Security will exhaust its funds in about 2034. Every year you delay costs your favorite kid $100,000 later. 


Are you eligible for Medicaid to pay your long-term care costs?
The way annuities can help with Medicaid eligibility is that they can transform otherwise countable assets, such as savings accounts, into a non-countable income stream, thus protecting assets for heirs while spending down what counts against you in Medicaid eligibility. You are essentially giving up your asset temporarily. So the annuity must be non-cancelable and non-assignable and name the state as beneficiary for at least the value of the Medicaid assistance received (exception for disabled child). Thus most annuities sold do not fit the requirement. You must obtain a confirming statement from the insurer to protect yourself. Typically it is a single premium immediate payout annuity. State law varies so use a qualified sales person. This strategy may not work for you since you won’t know for sure it works until you need it. Your spouse will not be made destitute in this process if you plan well.


How much are ‘reasonable’ advisor fees?
Again, it depends. How much is your advisor doing for you? Money management only costs 0.22% for a balanced (bond/stock) fund with a 40 year history of providing superior returns (9.4% a year). If your advisor is giving you financial planning services, including mortgage, college, tax and retirement funding, quality will cost you 0.30-0.50% of your <$1 million portfolio each year. If you just want periodic advice, pay $500-$2,000 an hour to a certified financial planner, depending on your needs. That way you pay as you go for professional services and leave the money management to institutions that know what they are doing. Investors not traders go for the long term rewards. If your advisor is asking you to move your money to another firm it is because they are getting a bonus up to $600,000 and you don’t want to be around as he has to make it to the firm next year.

Why do you need 12 Energy ETFs?
The fact that every brokerage firm seems to be pushing its own commissioned index with annual fees up to 1% should not surprise anyone. But I am. Some 3 year returns are negative (-16%). Some don’t even have them. All earn less than the proven market leader with over 10% returns since 1984 and no commission and lower annual cost of 0.41%. If you know when energy prices will spike, which one of the 12 should you buy? Can your broker tell you when to sell? If you have insider knowledge, why not just buy the company stock? What about the gains from oil and gas company earnings? China seems to own the solar panel market. Is that your short- or long-term bet?

Can you time the market declines/risings?
Many studies have been done on this strategy. When you listen to market commentators and they talk ‘over weight’, ‘sector rotation’ and ‘moving to cash during the cycle’, remember they are getting paid very well at sounding good trying to predict the future ($1 million is  better than fortune tellers). They are not actually doing what they talk about. Their wealth does NOT come from their ‘insight’ into market tea leaves but from entertainment TV sponsors. The reality is that timing and picking does not work. Look at one study ended 2015. How would you have done if you missed the market’s top-performing days, assuming you can’t predict the future? Your $100,000 investment would have reached $120,230 if you missed 25 days of the 7,300 days. However, if you were out for 20 days, then $148,698; 15 then $186,715; 10 then $238,637; only FIVE then $317,215. If you never left the market, then $478,171! Your money went up 378%! That’s about 8% a year nominal. $478,171 is more than $120,230. It’s time not timing!

Advisors are now allowed to sell you the worst products (best for them)
A court struck down Labor’s fiduciary rule so the DOL said it won’t enforce ‘prohibited transactions’. Sellers will go back to selling annuities to 90 year old widows as they did before. Lawsuits have been brought that allege that certain insurance companies and banks target elders and use scare tactics to pressure seniors into investing their life savings in deferred annuities, which can make the seniors’ savings inaccessible for 10-20 years, can carry exorbitant surrender charges and severe tax penalties, and can create complicated estate problems after death. Appealing, yet misleading, sales pitches to seniors often describe annuities as “guaranteed” and compare them to having money in the bank that is “safe” but pays a better return. Confusing language in the annuity contract often obscures the devastating fees involved if money needs to be withdrawn as the senior citizen ages. Additionally, many of these annuity products are sold by agents being paid significant commissions for such sales, creating a potential conflict of interest. Don’t settle for poor products. Use firms that put your best interests first.

Is it worth making a financial plan?
People who make a financial plan are more likely to be ready for whatever our economy throws at them. Companies and their jobs can come and go in a very short time. Even though it seems that people who want to work can find a job in today’s market, our situation can change quickly. If there are tons of jobs in another region, can we just pick up and leave? Most people need time to adjust—move or find another job. This takes an emergency fund. According to a Schwab study, 65% of people who plan have one; 24% of non-planners do not have one. People who plan are less likely to live paycheck to paycheck. They feel financially stable. Making a plan does not require you to hire a financial planner or open a brokerage account. It takes just 2 weekends.

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Make America, “The Don” Great Again







Trump thinks the govt is ‘conspiring against him.’
(Dictators often have delusion they are being attacked by insiders)

Trump gives Putin control of election: eliminates U.S. cyber advisor
Treason definition: ‘giving them aid and comfort within the United States’

Fake ‘Witch Hunt’ produced 5 guilty; 17 indictments.

Putin controls US power utilities and 21 state voting files, Trump slush fund, etc

The election is going to be rigged—I’m going to be ‘honest’” 

Could Trump postpone Nov 2018 election using excuse of Putin meddling needs fixing?


************************

            Is The Don still getting tax breaks from taxpayers? Fills DC hotel and winter WH.
            Trump lifts sanctions on Russian aluminum billionaire but not everyone else.


SCAMS:
Jared’s ‘peace within reach’ solution—Israel snipers kill 60 after rocks thrown. Qatar?
What is this ‘deep state’? Fed govt that groups don’t like who control no accountability.
GOP hits zenith: states can now take money from every gambler instead of the mafia.

Trump’s greatest con continues as victims believe he protests against being disrespected
Hannity becomes Trump’s last ‘advisor’—con men share jokes/domestic policy/hate.




Fake memory enhancement Prevagen sued for false claims but still makes $ millions.

Jobs:
GM to stop making cars; joins Ford and Fiat keep trucks and electrics
Truck drivers to $150,000 in TX; nurses signing bonus $25,000
Trump working hard to restore jobs in China China caught helping Iran N.Korea.

Get your degree online from best universities: https://www.coursera.org/degrees

Who owns your account now?

What if your home/car can be hacked like your vote, credit, friends’ data?
All personal phones (except 1) are taken from WH staff but didn’t prevent leaks so far.

Can we trust Ari Melber to explain the legal case against POTUS?

Miracle:

            Former Trumper warns Americans are losing their democracy with alt. facts.

“A ticking time bomb,” the Vatican calls financial derivatives. They take vital life-lines.

IAN
41 Watchung Plaza, B242
MontclairNJ 07042
973.746.2014
Alerts

Friday, May 11, 2018

Which is better for you--ETF or mutual fund?


Which is better for you—ETF or mutual fund?
As usual it depends. It depends on what you are trying to do with your money. ETFs are index funds that can be traded daily for a price. You have to have a brokerage account. You should know why you are buying this particular one—not just because your broker is selling it. The industry created these securities because investors were moving money to index funds because they beat stock pickers over time. They created ETFs so they could get investors to trade again. Now, the pitch is this ‘slice of the market will beat your cheap index fund.’ They have not. Studies show In every single time period and data point tested, low-cost funds beat high-cost funds” and cost is the most accurate predictor of success. Over time, paying 2% of your money may seem trivial but can take 63% of your potential accumulation.

What if you did NOT file a tax return on time?
Anyone who didn’t file and owes tax should file a return as soon as possible and pay as much as possible to reduce penalties and interest. There’s no penalty for filing a late return if a refund is duePenalties and interest only accrue on unfiled returns of taxpayers who don’t pay by the deadline. IRS Free File is still available on IRS.gov through October 15 to prepare and file returns electronically if you qualify. If you usually pay on time you may qualify for penalty relief. Otherwise, apply online for a payment plan—an installment agreement. IRS fixes your math errors and notifies you by mailcalls from IRS are scammers. Letters may also request missing forms or schedules.


You can earn HIGHER returns than the Harvard Endowment
A small college in WI uses a former businessman as advisor. Working from his home, his picks surpassed the dozens of advisor portfolio managers at Harvard and many other Ivy schools. The winning advisor’s approach is more pedestrian: mostly low-cost, market-tracking index funds from Vanguard, the same funds used by legions of do-it-yourself individual investors. Why isn’t reliance on indexing more common among those who oversee the nation’s half a trillion dollars in college endowments? “Maybe it’s too simple,” advisor Abt says. That is also what Warren Buffett says. How could Ivy school advisors justify $175 millions in salary and bonus if they used low-cost index funds?

Do you know all the lingo and fees when you shop for a car/vehicle?
Time to review what the sales person means and charges are BEFORE you hit the internet to search for your best deal. This glossary helps you learn what fees you can negotiate and which your state requires. Do you pay the average price for your model and mileage (used) and dealer or private owner? Obtain your own financing if you can since dealers make more on the financing (for those with poor credit) than on the car. Just don’t tell the seller until you agree on the price. Remember, you are going through all this because a car/vehicle can cost as much as your house down payment. Over 6-8 years of the loan you may be overpaying by $9,600 or more. Same with insurance. Cutting out the add-ons and using a high deductible will save you $500 to $1000 per year.

Why is a Target Retirement fund perfect for your graduate?
Easy to start and add money every year. There is no fear of buying the wrong securities. You can make contributions automatically. Over time this fund will earn more because the cost is very low—0.15%. If your grad earns money, even part-time, you can match it in an account that creates a nest egg that is completely tax-FREE. Even if they have to use some of it along the way, they won’t pay tax on the contributions. Even if the market does not grow every year, they have a good chance of amassing $500,000 over 30 years. Your money earns the stock market average of 10-12%. This account avoids all the contingencies of an employer’s 401k like high fees, poor performance, bankruptcy, or tracking abandoned plans--and solves the annual ‘pick a present’ problem.

Is your advisor raising your fees and costs?
A growing number of investment advisors are successfully increasing client fees from 10 to 25 basis points, industry insiders say. “We have seen many clients increase their fees, in contrast to racing to be the lowest-cost wealth manager,” said Carolyn Armitage. “When you lower your prices, it can imply that you’re really not providing all the services you promised or that you’re not that good.” Charging us another 0.025% on our account may not seem like much but it can add anger to poor performance and over time can rob your nest egg of up to 25% of possible totals.


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Make America, “The Don” Great Again





(Dictators often have delusion they themselves ARE their country)

Treason definition: ‘giving them aid and comfort within the United States


Putin controls US power utilities and 21 state voting files, Trump slush fund, etc

The election is going to be rigged—I’m going to be ‘honest’” 
GOP voter suppression a success: Dems lost because poor don’t have new ID.


Could Trump postpone Nov 2018 election using excuse of Putin meddling needs fixing?


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All our votes are at risk of manipulation and Washington says “not my job” Paper ballot?

Crime pays: IRS gives the rich a break for breaking the law—we lose house; go to jail.
2nd Fleet activated to “operate more powerfully in the Atlantic.” But they have missiles.

SCAMS:
Schools ditch analog clocks for digital since students never learn analog: Big Ben digital?
Trump limits consumer protection law to favor business uses of our credit; we can’t sue.

Fake currency is "probably rat poison squared" says Buffett. Worthless gambling chips.

GOP ends auto loan protections so more minorities can be charged more interest.

Jobs:
Trump’s anti-Obama move costs Boeing jobs for 80 plane deal—part maker jobs too.

Who owns your account now?

Hackers use Alexa, Siri to empty your bank and unlock your digital front door


Can we trust Ari Melber to explain the legal case against POTUS?

Miracle:
N. Korea releases 3 Americans held as prisoners as ‘proof that his diplomacy’ skills work

N. Korea all of sudden will give up its ‘big equalizer’ and open to inspections!

Grow a new ear on her arm for Army Pvt. Shamika Burrage

IAN
41 Watchung Plaza, B242
MontclairNJ 07042
973.746.2014
Alerts