Is giving your 401k money to a hedge fund/private placement
right for you?
Trump has provided wealthy money managers a great new year
present. With access
to our $5.6 trillions in 401k money, the super rich will earn 2-4%
commission/fees. They also pay less tax since they invented the offshore tax
haven and contribute nothing to our way of life. They
take their money OUT of this country. For us, this ‘alternative’ wealth
option earns less for us. Over time their fees rob us of up to 63%
total accumulation due to the compounding effect. Some pension funds with
better fee deals than we can make have already dropped these investment
options after losing more than a simple index fund. The SEC
has already issued a warning about these investment managers. So why do
some wealthy people buy ‘alts’ as they are called. Some say they are great for
diversification and high returns. However, scientists who have studied their
history say they are a poor
investment choice even for the super wealthy. Warren Buffett beat the
returns of 6 of these funds with his recommendation for everyone.
Take Buffett’s advice: https://www.amazon.com/Warren-Buffett-Your-Investment-Advisor/dp/1518690963
How to deal with the bankruptcy stigma
With 50
million Americans out of work and the end
of unemployment help and eviction hiatus, many
working people will need to consider this strategy for a “fresh start.”
Most of us consider filing for bankruptcy an admission of failure. However, the
way some have gotten through it (Recession 2007-8) was to accept the reality
and move forward with the positive. One client I have was over 60 years of age
and had been laid off from 3 firms that closed. Even though he had much quality
experience and professional degrees, he could not find anything comparable to
his former management positions. He tried sales but found that that would take
years to build a customer base for a decent income.
He and his wife were forced to declare bankruptcy in 2010
after trying to live on credit cards and running up debts of $231,000. It cost
them a year of anxiety, near divorce and $3,000 in legal fees. Positives: No
more creditors calling at all hours, multiple letters, and fear of losing all
retirement account assets, cars, home, etc. They did not share the experience
with family or friends so that eliminated some feelings of shame and guilt.
They were able to keep all their retirement assets, home and cars. The husband
started his reduced Social Security benefits. They lived on the wife’s salary. They
lived with poor
credit scores for 10 years and then they had to work hard to remove it from
the records. I was able to help them with advice from my books, but they had to
make the tough choices. The husband tried making his own business but after
spending $3,000 from credit cards, he gave up. When debt is overwhelming, you
must choose the “fresh start” to be able to live your life again.
You can live again: https://www.amazon.com/Insiders-Guides-Discount-Financial-Services/dp/143480593X
Investing has been described in many ways it is not
For some folks, it is a game, a casino, a lottery, a gamble.
You hear some say they ‘play’ the market, ‘bet’ the ranch, raise their
‘stakes,’ ‘hit the big one,’ make "10-baggers,"
and all sorts of slang. Some dream of becoming wealthy by picking an unknown
stock that blossoms into a perpetual money tree. Most working people fear
losing all their money in the stock market so they don’t grow their long-term
savings. Others have steadily invested all their lives because their parents
were regular savers too. Some people are just lucky: consider those who
purchased just 10 shares in Warren Buffett’s company Berkshire Hathaway's stock in 1985. BRK is now the
costliest stock in the
world, with its current price at $286,899 a share.
This is primarily due to CEO Warren
Buffett's choice to NOT split the shares as they rise in value. He
once said that keeping the share price so high drives away traders looking to make
a quick buck. BRK owns many profitable companies like GEICO and stock in others
like Coke, American Express, Bank of America, and Apple. Buffett’s advice for
investors follows from his experience as owner NOT as a salesperson
advisor/broker.
Follow the unbiased master: https://www.amazon.com/MasterClass-Buffetts-SIMPLE-Strategy/dp/1983485268
Why the Roth IRA may be the best investment option
Other than a legal offshore tax haven, the Roth IRA/Roth
401k are the best investment account for most people. All your earnings in the
account can be spent with no income tax due. Unlike a regular IRA or 401k, you
pay tax on just the contributions NOT the earnings. Assuming you are saving for
your later spending years, this may provide an extra 25% spending power when
you most need it. Later when you can’t work or can’t work harder, this tax-FREE
income will lower your tax on Social Security benefits too. The Roth IRA and
Roth 401k are relatively new so in my AARP tax volunteer time, I don’t see them
very often. When I do, I congratulate that client for thinking ahead. Another
fact: Income tax rates are lower now so paying tax on your contributions now can save you a bundle later. For instance, let’s
say you invest $250 a month, $3,000 a year in a stock index
fund inside a Roth IRA for 33 years ($99,000). Your
nest will be worth about $980,000. You can spend every cent of $4,683 a month tax-FREE. Plus your SS
benefits are probably not taxed. With a regular IRA or 401k, you pay 22-25% in
tax on this income (including 60% of SS
benefits). $4,683 minus tax is $3,512 a month or $1,171 a month less. Over
the average retirement life, that is $351,000 less in spending.
The stock market recovery reflects the inequality of Two
Americas
With 50
million on unemployment and without jobs, how can wealthy Americans
continue to support the same 2019
market level? Why
are investors so confident? Where did positive
2nd quarter company earnings come from? Wealth inequality. 10%
of the richest folks own 70% of all assets. The middle class is shrinking so
the top
20% own more assets than the other 80%. Since most of the market assets are
owned and traded by the top
20%, it can keep
going forever as long as there is confidence
that their assets will grow in value. That confidence seems to come from
the feeling that the US
Our national bank, the Federal Reserve has been buying the
stocks and bonds of struggling
companies in this crisis. This means we, the taxpayers of a ‘capitalist’
country, are now the owners
of these businesses (socialism) without any say in how
poorly they are run. Investors have confidence because large companies are too
big to fail. In the past if almost every retail
firm was closed or severely limited in sales revenue, with millions
of workers not working, the economy would be in recession or depression. Almost
every store in my neighborhood has been closed or limited in traffic.
Almost every family with kids has been home or working from home so we only go
out for food. Yet Wall
Street booms on concentrated wealth and more national borrowings. How much
of American
business can we afford to buy? Who
will pay off our debts?
Avoid paying for the wealthy Socialism: https://www.amazon.com/Americas-Socialism-for-Rich-little-people-pay/dp/1535218584
Your 401k balance is what?
Where
are you compared to others by age, income, gender, industry? Don’t look at
the average since one wealthy person with $ millions can demoralize all the
rest. That person probably owned a company and added their lifetime profits to
their 401k rollover. Not a fair comparison. For instance, the median 401(k) balance is $22,217. But a better
indicator of what the majority of Americans have saved for retirement is by
age.
Age Average 401(k) balance Median
401(k) balance
Under 25 $4,236 $1,427
25 to 34 $21,970 $8,126
35 to 44 $61,238 $22,123
45 to 54 $115,497 $40,243
55 to 64 $171,623 $61,738
65 and up $192,887 $58,035
However, a
44 year old earning minimum age is probably not going to have $22,123 in their
account. You must compare income and gender to take a more realistic measure of
your progress. In most cases, adding an additional 2-3% of salary a year will
help because of compounding.
That is the factor that helps you end up with more money without more
contributions. In a stock fund, that can add another 50% to your total. Another
50% can be added by choosing a low-cost stock index fund. Check your fund
costs: https://www.finra.org/investors/tools-and-calculators/using-finra-fund-analyzer.
Your advisor can’t control the markets. Cost is the only factor you can control
after the amount of our contribution. Over time a lower annual cost can add 50%
or more.
Tune up your 401k: https://www.amazon.com/Tune-your-401k-EARN-Tax-FREE/dp/1490591028
**********ACCOUNTABILITY**************
Like 1776, this period
is a test
of democracy—do we really want ‘low-IQ’
Mobster?
PA DA: we have an “authoritarian
dictator."
Our Child Abuse: children as young as
1 held in hotels for weeks
How Govt wastes our money: Congress
gives 3.7 Trillion to the wealthy!
Arete
Financial, Ponzi scheme in fake student loan biz gets $1 million virus
money
IRS
delays paper return refunds: staff cuts delay enforcement too
IRS
Limits Taxation of Foreign Income: wealthy entirely defer liability on GILTI
income
Now that the wealthy
have virus money & huge
tax breaks the GOP
wants to cut relief $s
Payroll
tax cut only helps employed: 50
million unemployed: Did
Trump pass cognitive test?
New
ways wealthy avoid taxes before taxes go up: combine investments and gifts
FL
teachers sue gov to stop mandated in-school return: violates safe ed.
constitution
SCAMS/SPINS:
Some
states see rising
infection rates due to reopening euphoria and outdoor activity spike
Eviction
spike in 2 weeks feared by HALF of unemployed as support ends: Congress on
vacation
Ivanka
and Don don’t actually eat Goya beans but need the voters who do: crude
propaganda
Trump
‘comfortable’ send son/grandchildren to school but they don’t go to DC
public schools
Trump’s
mob does follow science out of TV view: masks, tracing, tests: just not for
Americans.
Trump cancels GOP convention:
reality of death gets closer to GOP: stupid but not fools
Trump
happy talk not cut it: GOP finds virus, no jobs, no healthcare, no
hope—reality at home
TX
allows new virus spikes in religious schools: they can ignore
virus containment strategy
52%
of cases to date in LA County have been people under 41. Young avoid warnings.
We
pay $20 for vaccine but most of us won’t receive it: wealthy and pols first
Crazy
GOP blames Dems for 1965 attack on John Lewis: Dems ruled South then so
elect Trump?
Trump
cuts anti-segregation housing rules: towns left to segregate; Make
America White Again
No
medical prices to negotiate: we
can’t bargain lower hospital prices if prices are hidden
Luke
John Flint KY caught
pre-registering for a non-existent COVID-19 vaccine $100 Bitcoin
Neiman
Marcus executives seek $10 million in bonuses
for bankrupting: stockholders outraged
UBS
diverts best muni bonds from customers to wholesalers for profit
Michael
Barry Carter stole
$6 million from Morgan Stanley clients: 12 years of fake statements.
Certified
Forensic Loan Auditor, Lehman caught
advance fees, abuse mortgage relief services
Charles
Kulch MA caught
unsuitable illiquid high-risk, high-commission REIT investments.
No
hassle home buyout: scammers offer immediate cash for your home: legal but
big loss
NRA
Must Face ‘Murder Insurance’ Regulatory Hearing: coverage if NRA member
kills
Is it a scam? Check AARP scamline 877.908.3360.
Jobs
Why not fix bridges,
roads, schools, etc for
50 million need paychecks?
Lobbyists
tell Congress to exempt biz from virus lawsuits: workers/customers be d****d.
Ann
Taylor, Lane Bryant, Catherine, Justice, LouGrey close
some stores: execs get $5.5 millions
After
Great Depression, unemployment remained
above 14% to 1940. It took New Deal &
WWII
Who owns your account now?
Buying
a home: research the whole deal before making the deal: virus
strategy
Owe IRS but can’t
pay? Ask for a plan before legal action: https://www.irs.gov/payments
Free money: your
PPP loan can be forgiven—easy https://www.pppforgivenesstool.com/
Miracle:
TX schools go online
only: virus pandemic serious; GA gov fights to
keep masks OFF
Retail stores lead
fight with mask requirement: can GA shut stores that require masks?
US broke single-day
record new
cases at least NINE 9 times in a month: getting worse!
New treatment for Fragile
X syndrome a marker for autism: reduces hyperactivity
Heparin
may decoy coronavirus and can keep it from making you sick
Trump:
$20 million ready for court fight over election results: already got
Supremes set
IAN
41 Watchung Plaza,
B242
973.746.2014
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