Your Unbiased Advisor: Financial revolution offers more for less

Financial revolution offers more for less

Low-cost index investing. Single fund investing. Advisor-free management. Realistic income projections. Automatic 401k enrollment. Robo-advisor. Tax-free account.

The financial revolution is the work of John Bogle, Warren Buffett, and William Roth. Bogle gave us low-cost index investing, greatest accumulations and robo-advisor. Buffett gave us advisor-free management, single fund investing and realistic income projections. Roth gave us tax-free accounts. We can now avoid being ripped off by the industry. We can earn more by paying less, with greater diversification, less volatility and more predictable earnings over time. We don’t need to worry about picking the right stocks or time to buy them. Most working people can accumulate $1 million for retirement with just one fund automatically from their paycheck. It is so simple: it’s like brushing your teeth—once you start it becomes a habit you do ‘automatically.’

https://www.amazon.com/Millionaire-Mutual-Funds-Save-taxes/dp/1534939490

Financial industry pushing annuities on women/younger caretakers

Women and younger parental caregivers are being targeted for annuity purchase because they have less income and live longer. The National Institute on Retirement Security found that the average income of women 65 and older was 25% lower than that of men. In addition, women live longer, so their savings have to last longer. And fewer employers today offer traditional lifetime pensions. Annuity sellers are appealing to women by highlighting the need for more income from fixed annuities compared with low-interest CDs. Sellers say economists recommend putting up to 80% of assets into annuities. That’s B.S. Great for insurers but women then carry all the risk of reduced purchasing power over time. This is not ‘worry-free’ retirement because 1. how much annuity to buy, 2. when to buy, 3. what about inflation: it reduces by HALF the buying power of the benefit in 20 years, 4. not much for a legacy, 5. there is no upside potential and no large asset in case of emergency needs, 6. annuities are non-refundable, 7. you forgo the total return of a stock portfolio—no dividends and no capital appreciation. Yes, annuities last for your lifetime but spending power and assets decline over time.

https://www.amazon.com/Not-Buy-That-Annuity-Guaranteed/dp/1466494573

Can you afford an adult child moving back?

More families are becoming depression-era extended families. The question you need to discuss is ‘how this changes your plan for retirement’? If your child cannot afford to pay for some of their costs, are you willing to cut your retirement expenses short? More than 15% of 25-to-35-year-olds lived at home in 2016, according to The Pew Research Center, 5 percentage points higher than the previous generation. Sure, you can plan to work longer but not everyone has that opportunity. Ask for rent so they know you have limits. Let them know all their regular expenses like cell phone are theirs alone. Make the rules BEFORE they move back so there are no misunderstandings. For instance, they can do their own laundry—you’re lending them your machine and water. Remind them that you paid for their college education—running over $10,000 a year. The purpose of moving back is to give them money to finance their own independence eventually. Set a time limit so they don’t take over your home. It’s too easy to become dependent.

They need independence: https://www.amazon.com/DIY-Financial-Independence-Freedom-Workbook/dp/1088908500

New tax rates are issued but what about the $31 million watch?

This is a perfect example of what is wrong with our tax rates. How many dams could we repair with $31 million? Instead, someone spends $31 million for a watch? Something is wrong with our tax system. How can our society afford to buy a watch for $31 million but can’t fix the places where we spend most of our lives? Are the tax rates and code created for the rich so they keep more money for themselves? The rich get richer and the poor get poor—pretty soon there won’t be anyone left to pay the taxes. Example: Warren Buffett pays only 17.7% total taxes; all his employees pay 32.9%: HALF. Expert tax avoiders like President Trump, Mitt Romney and John Kerry pay less than 15%. Most corporations like GM Apple and Google hide income in corporate shells and pay 10% or less. Taxes fall much more heavily on labor income than on capital income. $31 million watch! How fair is a system designed to tax us DOUBLE what the rich pay.

Average people pay 33% in taxes: https://www.amazon.com/Americas-Socialism-Rich-little-people/dp/1535218584

Another way the wealthy avoid their fair share of taxes

IRS says they are going to crack down on conservation easement transactions. Basically you get to deduct the reduction in the value of your property if you donate property for the public good. The reason the IRS is cracking down is because wealthy people overstate the amount of the reduction in value. IRS says there are billions of dollars of potentially inflated deductions as well as hundreds of partnerships and thousands of investors. Apparently there are people who promote this activity for profit. We are talking lawyers, appraisers, tax return preparers and others. President Trump used this trick to ‘donate’ unusable land (now an unused state park) and claim a huge income tax deduction. He said the land was worth $26.1 million: he paid $2.75 million. Syndicated conservation easements are included on the IRS's 2019 "Dirty Dozen" list of tax scams to avoid. There are easier ways to avoid income taxes.

Use your own legal tax shelter: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300/

Do you really need life insurance?

Are you single? Are you getting life insurance as an employment benefit? Does your spouse have a job? Do you have over $50,000 in all your savings/investment accounts? Do you have a HELOC or over 50% equity in your home? Do you own a business? Are you in the armed services? Do you have medical or student loan debt?

Consider the alternatives: https://www.amazon.com/Drop-Your-Insurance-Only-What-Need/dp/1448623391

Don’t forget to take your RMD by Dec 31

Every 401k, IRA and pension must be distributed annually after you reach age 70.5 otherwise you get fined by the IRS. The scheduled annual distribution amount is calculated on your balance of ALL tax-deferred funds the year before. You can rely on your fund company if ALL your accounts are held by them. The rates are determined by your age and life expectancy. Since we are all living longer, IRS will adjust the RMD rates next year. Since they will be spread out over more years, we will have to take LESS income each year. Taking less means adjusting our income requirements next year. RMD works just like an annuity—guaranteed income for life based on your assets each year. Unlike annuity, you don’t give up control and your purchase power may go up. You may leave a legacy too.

Plan ahead: https://www.amazon.com/What-your-RMD-much-spend/dp/1718946716

Why 25% of wealthy don’t use a financial advisor

Wealthy folks want an advisor with experience, with fiduciary pledge and holistic perspective. Apparently, 25% of them can’t find this advisor or they don’t need one. Those who do have a strategy rely on diversification to manage market risk. Some folks see diversification as the answer to the advisor question. They don’t need an advisor if they know they can’t beat the market with quick trading, market timing, sector rotation and other crystal ball strategies. Besides, paying advisor fees, charges, and retainers can cut their potential accumulation in half. Some might even be taking Warren Buffett’s advice. You may be better off with Warren Buffett as your advisor.

https://www.amazon.com/Warren-Buffetts-Investment-Strategy-Forget/dp/1484822900

**********ACCOUNTABILITY**************

Like 1776, this period is a test of democracy—do we really want ‘low-IQ’ as prez?

He "stumbles, slurs, gets confused, is easily irritated, and has trouble synthesizing information."

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Trump owes Scotland $290,000 in lawsuit over wind farm: long hate for wind power

Trump to just take land for WALL in TX: Family-owned land for generations not selling

Trump pays $ millions to keep taxes hidden from US: legion of lawyers at 5 courts

SCAMS/SPINS:

Morgan Stanley caught misrepresented its share-class: overcharged customers $1.5 mil