Your Unbiased Advisor: Are ETFs right for you?

Are ETFs right for you?

Yes, you can trade exchange traded funds all day but at what cost? ETFs are index funds sold by brokers so you pay commissions/fees and you pay the 1.35% expense ratio of the fund itself. That makes some funds lose 16% for their 3 year return. The only reason to pay a broker and expenses for an index is to try to time the market. You have the chance to win big or lose big. I call this gambling and even the best gamblers in the market rarely do well. With millions of folks trying to find and use that special edge (your broker’s insight) it is just mathematically impossible. But as you have heard, gamblers have eternal hope that the strategy that doesn’t work for others will surely work for them. In study after study, cost was the best determinant of an investor’s success.

https://www.amazon.com/Best-Predictor-Investment-Success-Cost/dp/1502524082

How do you avoid taxes on your excess cash?

Buy tax-FREE municipal bonds if your tax bracket is high. This is the traditional solution for the wealthy. But if you are not wealthy and still want to reduce your tax bill, buy quality stocks that don’t produce dividends. Since you would prefer not to lose money, buy a firm that seems to have a diversified portfolio that ignores business cycles. One firm that stands out over time is Warren Buffett’s Berkshire Hathaway. It owns GEICO, Coke, Wells Fargo, American Express, Kraft, BNSF rail and others. It has symbol BRK.B. It has growth and profits. Over time the stock has gained about 20% a year for shareholders. You pay tax only when you sell. Buffett has called this method an ‘interest-FREE loan from the government.’ His tax rate is 17%--HALF that of his staff at 33%.

https://www.amazon.com/Warren-Buffett-Your-Investment-Advisor/dp/1518690963

New way the wealthy maintain their wealth: summer camp

Is your child at this kind of summer camp? Do they spend their summer camp learning how to grow their wealth? If this is something you might be interested in but just can’t afford it, there is hope. Your kids can learn the real secret to building wealth by using a little used tax shelter for those making under $120,000 or $189,000 for couples. They can put away $5,500 a year and end up with TAX-FREE $500,000. The teacher at this summer ‘camp’ is the most experienced investor of our lifetime: Warren Buffett. He recommends your child use a simple formula that anyone can learn. And because he is the ‘advisor’ not some Wall Street slick, there is no cost to invest. He will not be taking 1-2% of your kids money each year to assure that the firm knows best. He will help them learn how to control their fears about money and investing. And as proof that his strategy works, he explains how he recently beat the strategies of multiple Wall Street gurus. That kind of information is priceless but because Warren already has more money than almost anyone, so there is no charge.

This is your child’s chance to be wealth. https://www.amazon.com/Tax-Shelter-Young-Americans/dp/1500426520

Get best price for your home and skip gains tax

There are secrets to selling your home successfully. You have to prepare your home and find the right agent to help you in return for your 3%. You may also skip taxes on the gains in your home since you purchased it. And you can even skip the gains on your rental properties. IRS says take your gains FREE up to $500,000 for couples. If you spend 2 years in your rental, you get to save gains tax again. Rental properties can provide special tax benefits while you build equity. Like Trump you use other people’s money to add value to the property and deduct expenses from your income taxes. When you sell, you keep up to $500,000 in gains. Timing is important.

https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

Is Aflac insurance worth the money?

What does the lapsed-in force ratio tell us about this kind of insurance? Aflac customers quit at about the same rate as new ones begin. For 2017, annualized premiums in force was $5,896 billion, new sales, including conversions, of $1,552 billion, and Premiums lapsed was ($1,525) billion. So new replaced lapsed. The duck commercial gives the impression that we can receive money when we can’t work. Most states require that employers carry workmen’s compensation for just this need. Some even provide temporary disability insurance and sick/vacation time. Also, if you have a savings fund or other income, this policy may not be needed. Other buyers have had their problems with this coverage. Sales are necessary to maintain the cash flow so Aflac concentrates on that. When a firm must concentrate on sales, sales bonus and prize trips are the expense that you must pay. Expensive incentives are your costs. Consumer Reports has concerns too.

Look at all alternatives: https://www.amazon.com/Disability-Insurance-Cash-better-Self-insure/dp/1481843893

New ways the wealthy avoid taxes that we have to pay for them

The Trump tax breaks allow the newly wealthy to avoid paying capital gains taxes on their $ millions worth of stock. They can also claim a charitable deduction that most likely saves millions of dollars more, and probably reduced their personal tax bill for years to come. How? Donor-advised funds, allow wealthy individuals like Mr. Woodman founder of GoPro to give assets — usually cash and stock, but also real estate, art and cryptocurrencies — to a sponsoring organization like the Silicon Valley Community Foundation, Fidelity Charitable or Vanguard Charitable. They get the benefits—tax cuts of 50%--and then get to grant it to their favorite organization. This gives them influence without negative press or taxes. The Trump administration said it would stop requiring these nonprofit organizations to disclose the names of large donors, a change that will make it easier for some political groups to hide their funders. Now they can make policy without any accountability. Since they don’t pay taxes, we have to pay for the courts, police, military, roads, airports, etc. The rich use all the services but don’t pay for them.

You can have a Trump tax shelter too: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

Are Dividend Reinvestment Plans right for you?

These plans automatically buy more stock with your dividends from the stock. Typically you are putting all your eggs in one basket and for someone in a low tax bracket like a child, this is great. A $2,000 investment in Pepsi in 1980 would be worth more than $150,000 by the end of 2004. You would have started with 80 shares, but by reinvesting dividends, you’d now have 2,800 shares. If you have a favorite firm you may be able to buy direct from it but watch the brokerage fees and DRIP charges—nothing is FREE even for young investors without money. It would be good to research the lowest fee highest yield stock so you earn over time. However, there is no guarantee that your pick will keep raising dividends. Of course, most mutual funds offer FREE dividend reinvestment as part of their share ownership. Buy broad markets earning 11% over time.

https://www.amazon.com/Vanguards-Top-Ten-mutual-funds/dp/150073909X

Our broker/advisors will now have a background check

BrokerCheck information about our representative is accurate, complete and up to date as possible claims FINRA, the brokerage trade representative. Our advisors are monitored by the securities regulator using form ADV. https://www.sec.gov/fast-answers/answersformadvhtm.html. If you feel there is something wrong in your account or their behavior, report it immediately to these regulators. Brokers with questionable records tend to move to new firms so it is best to track their missteps going back as far as you can. And don’t let the publicity of a big firm cloud your research. EG: Morgan Stanley needs the fees as much as a small firm. Presumably FINRA checked on this broker before she moved to a new firm. Now that the Fiduciary Rule has been eliminated by Trump, we have little protection except by our own due diligence.

https://www.amazon.com/Fiduciary-Rule-BEST-dont-anymore/dp/1530980275

Is your broker/advisor’s Financial Plan right for you?

They will be paid more if you buy their Financial Plan. And don’t be surprised if the Plan calls for more products. Morgan Stanley has released their comp grid (pay scale) for next year. The most radical aspect of Morgan Stanley’s plan is tying pay changes and bonuses to individual customer accounts rather than to overall production that can be generated from a small percentage of a broker’s book (your account), said insiders and consultants. It’s also the riskiest in terms of winning broker acceptance, because he or she needs widespread adoption across clients to make a meaningful difference to compensation.

“You’re going to need to fundamentally shift your business approach for this to add up,” said Andy Tasnady a comp consultant. “In the past, it hasn’t been designed at a micro level for just a household.” They will earn more by moving your mortgage and bank accounts to their bank. Most firms strive for the “whole client wallet” meaning they control all your money. Just remember that you will need help taking all your accounts back. Merrill Lynch is actually lowering payouts if you don’t buy their plans.

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Make

America

, “The Don”, Great Again

Two

Americas

: A Banana Republic? Do we really want an infant king? Daddy Putin!

Conspiracy against the United States, conspiracy to launder money, conspiracy to receive Emoluments from foreign states, false statements, subverting constitutional tax power, obstructing justice, failure to secure voting systems from attacks, and Foundation self-dealing.

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