Your Unbiased Advisor: We are paying more taxes than US corporations

Why do actual investors earn less than their benchmarks?

A recent study found that, while certain mutual funds and ETFs delivered a 9.4% average annual total return for the past decade, the average investor in these funds got only 7.7% due to poorly timed trading activity. This really hurts those who are investing for a big goal like house down payment or retirement or business start up. Over time, a $250 a month investment would reach $1.3 million WITHOUT the trading activity. Timing the markets would result in total accumulation of only $805,605—a loss of $494,395. In another study, Fidelity found that its accounts that did the best were those for which the owners forgot about them. Investing is simple to be successful but not easy. Gambling is hard to be successful but easy to do. Successful investors have 3 ‘pots’ of money: Patience for the long-term goals and impatience for the short-term get-rich-quick schemes. The third pot pays for living expenses.

Go simple: https://www.amazon.com/Keep-Simple-Essential-Financial-Life/dp/1492258849

What is the single most important reason for financial failure?

You are right; it is debt. If we had no debt, especially interest debt that can NOT be deducted, we could easily reach our long-term goals. We have credit card debt, mortgage debt and car debt. We borrow an average $34,635 for new vehicles and $21,438 for used vehicles. The average loan term is 70 months for new cars, 65 months for used cars and 37 months for leased vehicles. The average monthly payments for new, used and leased vehicles is $563, $397, $450. And this is an era of low interest rates. Interest is NOT deductible unless your company leases your car. So how is financial failure defined? How much do we lose with our vehicle loans? Investing $563 for 70 months could yield $59,541. Investing instead of buying on time provides enough money to buy a vehicle outright. This is why the wealthy pay cash for their rides. Their cash is special: their cash is compounded cash. They earn the money we pay on debt. We pay 9.46% they earn 9%.

Earn interest; don’t pay interest: https://www.amazon.com/Compounded-Cash-Save-your-Self-Funded/dp/1515066096

Most Americans are paying more taxes than US corporations pay

In fact many large profitable companies have Negative tax rates—taking our money as a refund. Most tech companies, including Oracle, Adobe and Microsoft are still paying much less by using an accounting trick to report profits outside the US. Many large profitable firms like Wells Fargo, Salesforce, AbbVie, Duke Energy, Adobe, Broadcom, IBM, Medtronic, and GE have a negative rate—We actually give them our tax payments. The rest pay lower rates than we do: NVIDIA, NextEra Energy, Bank of America, Pfizer, and Texas Instruments pay the lowest rates. The average overall company tax rate is only 19.7%. Our average is 32.9% including Fed, state, SS, Medicare, sales and gas taxes. This does not include property tax which some of us pay. We don’t receive a state subsidy like the $3 billion state subsidy that Foxconn got in 2018. Some call government-supported corporate tax refunds and grants US socialism.

Avoid paying their taxes: https://www.amazon.com/New-American-Retirement-System-ReserveTaxFree/dp/1461030072

Insurers may be overcharging you for coverage

Insurers use our credit scores and history to set premiums for car, home and rent insurance. Other service providers (rental agent, mortgage and auto loan) may use credit scores to set their charges. The CARES Act placed a temporary hold on reporting negative credit information to bureaus that collect credit history. When the hold is lifted, you may get whacked with increases in everything if the pandemic has disrupted your life. Some insurers recognize that the pandemic has had a disproportionate impact on the credit scores of some racial and income groups. Some are making it their business model to switch to a usage-based approach. Insurer Root’s usage-based approach can define a new industry approach that ties driving risk directly to driving habits rather than proxies. Thus drivers who speed, text and cause accidents may have a lower premium than safe drivers who have filed bankruptcy due to a medical catastrophe. Thus some insurers may offer you a better deal but unless you shop every 2 years you won’t know. And don’t forget to check for excessive car repair problems before you buy again.

Shop and save: https://www.amazon.com/Vehicle-Insurance-Beware-Double-Coverage/dp/1480027634

What is your plan for your next financial stress?

Most of us have no plan to deal with a financial emergency. A plan BEFORE a crisis while in retirement would provide us with peace of mind—one of the most important goals we have. I hear about folks that are overwhelmed by a medical expense event, a family member money request, and a huge loss in retirement savings. In a recent survey, the most common answers given by folks age 40-73 were ask family and friends, children, church/state agencies, work and downsize to live on SS benefits. These are desperation measures, not a plan. My experience with folks who made a plan shows that building an emergency fund of HALF a year’s expenses works best. These folks kept that emergency money in a balanced fund like Vanguard’s Wellesley Income not a bank: they earn 7% not 1%. First, you feel better. Second, the money gives you time to figure out what to do. Third, the crisis may be over in a year. Make a plan using the tools that are available online for FREE.

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

How to protect your retirement funds and keep them growing

The best protection is not putting your money in bank products, money market funds, an annuity, or bonds. These are the vehicles I see folks using because their advisors told them to “protect” savings in “safe” accounts. However, as inflation rises, they will lose buying power—probably for a long time to come. Unless you know you will die in a couple of years, fixed return investments will starve you to death. All of the traditional “safe” places are providing Wall Street with great revenue. However, these places don’t help you. Over the next 30 years, you could be giving away HALF your potential nest egg. The best way to protect your funds is to grow them—the best defense is a great offense. Growth and security come from a combination of stocks, bonds and real estate holdings. Over time, your nest egg will continue to grow with stocks while bonds and real estate provide stability. A low cost balanced fund provides steady total returns of over 7%. For instance, Vanguard’s Wellesley Income Fund has provided 40 years of solid returns over 7% on average. Retirement income is thus a combination of interest and dividends. As part of the Vanguard Top Ten funds, investors shift more of their assets to this fund as they progress in retirement.

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

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Like 1776, this period is a test of democracy—We rejected an "American fascist" once

Our Jan 6 ‘Truth and Reconciliation Commission’

9/11 Bush warns of “domestic terrorism”

Will “domestic terrorists” install Trump Sat?

Generals planned to stop Trump from starting WWIII

How Govt wastes our money:

GOP requires gov ID to vote and drive but requires no Covid vax card to touch kids

Your freedom; their deaths: Anti-vax anti-mask Christians killing babies with Covid plague

Saudis caught helping terrorists kill us: why we still giving them weapons/intelligence?

Lindsey wants to re-invade Afghanistan but he won’t be leading the charge: sending kids