Your Unbiased Advisor: Save $3,000 a year; more later

Have fun living frugally so you have enough for more!

Every retiree says they wish they had learned to enjoy saving money. They don’t want to be misers but they remember wasting money on stuff they really could have done without or a substitute less cost. In financial services, I have learned from those who live the frugal life that they actually have fun while saving at least $3,000 a year for later. The greatest savings they experienced was finding out from their own experience that they don’t need a high-cost financial person. They don’t trade to beat the market since all the research says that they can do better with buy and hold using low-cost mutual funds—both stock and bond. The study that impressed me the most was the reason John Bogle founded Vanguard: that little 2 percent fee will erode 63 percent of what you would have had. Also when analysts look at returns actual clients earn over time, the index earns 11% compared to 3.79% for managed equity funds. When they need specific advice, these happy folks buy it from an unbiased licensed planner—one fee not annual fees for years.

https://www.amazon.com/Best-Robo-Advisor-Ultimate-Automatic-Management/dp/1537111957

Why are real-estate trusts doing well when rental property rents are frozen?

If you are invested in rental real estate, you may have lost money in the last year. So why are REIT mutual funds doing so well? Vanguard’s low-cost fund is up 34% for 1 year and up over 10% a year since 2001. The fund owns malls, industrial and residential REITs but 38% of the fund is in “specialized REITs.” This category also includes companies that do not generate a majority of their income from real estate rental or leasing operations. They dabble in just about everything, including student housing, casinos, prisons, senior housing, cannabis facility. The major benefit of specialized REITs is the ability to diversify one’s exposure to various aspects of the real estate market. So, this category requires considerably more research. Asset selection in specialized REITs is also more limited when compared with other categories. Companies or trusts engaged in the acquisition, development, ownership, leasing, management and operation of properties that don’t fit the traditional types. With low interest rates, specialty REITs have expanded choice and thus diversification.

Lower costs; keep more: https://www.amazon.com/Wall-Streets-Secret-Sauce-S-h/dp/1536845248

Save on highly depreciated used cars

Used vehicles prices have increased as new car/truck chips have not been made since 2020. Covid stopped car buying and chip making. Apparently it takes time to work up a silicone chip into a mini computer to run our vehicles. What can we do if we need new transport? These 3 year old models may fit your needs. Most are the expensive luxury models that lose value very quickly (over 50%). They may have experienced mechanical troubles according to JD Power survey of owners. If they are fixed or you are willing to take the risk of huge repair bills, these Audi, Benz, BMWs may suit you. Don’t forget to ask for your insurance discounts: save up for the high cost of luxury model repairs.

Save: https://www.amazon.com/Vehicle-Insurance-Beware-Double-Coverage/dp/1480027634

Are you ready for retirement?

Most retirees have no idea what it’s like to be living without a regular paycheck. If you are used to using credit cards for unusual expenses because you knew you could pay off the balance with your next check or two, consider how to handle that expense now. Successful retirees make a written spending plan so they avoid running up debt for an emergency. They have totaled their expected incomes and expenses so they know where to go for the unexpected expense. Some have a line of credit backed by their home or other asset. Some have a designated asset to draw on. I call this a Wealth Reserve. It is assets that can continue to grow if not needed. Some are building this Reserve with savings from cutting expenses they don’t have anymore. They raise the deductible on their insurance policies. They move their brokerage and mutual funds to a low-cost provider. They stop trading and move their money into a balanced fund. They have transferred their company 401k or pension to the same mutual fund rollover-IRA provider. They are taking their retirement income according to the IRS schedule (RMD) as calculated by their fund provider. They know what they can spend and where their monthly income/expenses come and go.

Retirement security: https://www.amazon.com/What-your-RMD-much-spend/dp/1718946716

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