Your Unbiased Advisor: Boeing kills

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Friday, September 23, 2022

new advisor/broker rules

Your RMD will tell you how much you need in retirement

When you save for retirement in a 401k, 403b, IRA, or other deferred taxation account, you will need to pay the tax when you retire using IRS rules. The required minimum distribution (RMD) will be about 4% of your total of all your deferred account balances every year beginning at age 72. The formula recalculates each year based on your previous year’s balances and your rising age. Your mutual fund company or broker will do the calculation so you don’t get a penalty for a mistake. However, to answer the question how much do you need to save, you can use this handy AARP calculator. https://www.aarp.org/work/retirement-planning/required-minimum-distribution-calculator.html. Here is an example: If you’re 72, for example, the distribution period is 25.6 years, based on the US life expectancy. Then divide your balance by the distribution period. Let’s say you have a combined $100,000 in your tax-deferred retirement accounts. $100,000 divided by 25.6 is $3,906.25, which is the amount you must withdraw annually. If you are in the 25 percent combined state and local tax bracket, you’ll owe $976.56 in taxes on your RMD. The tables change as well as the US life expectancy, so don’t use this calculator to determine your RMD for yourself. You can take your RMD out of one account, or take bits from each one, so long as you withdraw the required minimum. You can take more.

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

It can’t get much worse

The S&P 500 growth-leaning stocks are down 22% YTD. If you are concerned you should buy this index in a low-cost fund since over most history, this index has regained its strength within a year. The exception was 1973 when the whole banking system collapsed. We don’t have that imbalance this time. The stock market has fallen back to the level it was in March on 2021. More likely the high employment and thus consumer demand will help provide impressive future returns. The alternative is taking your losses and moving money to 3% CDs for 15 months. No one knows for sure so when your brilliant advisor suggests an alternative be sure to query their analysis. Keep in mind that low-cost index returns have been tested over time: “In every single time period and data point tested, low-cost funds beat high-cost funds.” That goes for every sector of the economy too.

It’s your money: https://www.amazon.com/Best-Predictor-Investment-Success-Cost/dp/1502524082

Ideas that wreck our investment success

“I hold on to losing stock because I must wait to recover my losses.” This means we are too emotionally attached to a fantasy. “My stock pick rose 10 days in a row. I’m a genius picker.” This means you had beginner’s luck and look out! “My pick’s success prove that my next one will also be a success.” This means your luck is derived from a growing market where all boats rise with the tide. “My picks were also chosen by the Journal. I must know something about picking winners.” This coincidence means another of the millions that follow stocks saw what you saw. “My last 3 picks have been losers so my next pick will win.” This means you are a gambler not an investor. “I got a bonus at work I did not expect so I am blowing it on this stock.” You are a gambler. Take Buffett’s advice and become an investor in great companies for the long haul.

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

Ideas that ensure investment success

Investment success is defined as reaching your goals long-term. Investing is not gambling where you are looking for a short-term windfall. Investing in the companies that make things or add value to the world require commitment to putting money into expansion with the hope of gains later on. US companies as measured by the stock market price and dividends have shown compounding wealth at about 11% per year on average over time. History of annual gains are recorded here. From 1871 to 2021 the growth rate is 11%. When you compare the stock market returns to other asset returns, you find the equity index holds at 11% while the gains for different assets are much less. Equity accounts managed by ‘professionals’ earn more for all time periods. Costs matter. Over 30 years the difference is stark: 11.06% vs 3.79%. Thus the ‘safest’ investment is a stock index fund that is continuously funded in order to maximize the “miracle of compounding.” Contribute $9 a day, $250 a month and own $2,000,000 in about 40 years. Use a tax-FREE account with a low-cost stock index and pay no taxes on your gains.

https://www.amazon.com/New-American-Retirement-System-Reserve/dp/1461030072

Cut taxes in retirement

If you feel you are paying more tax now than before you retired, consider these options. First, you must pay income taxes on the money you saved in a tax-deferred account at work. You may also have to pay tax on your Social Security benefits. So you may be able to convert a portion of your IRA to a tax-FREE future by staying in your current tax bracket. Your tax preparer can help with this calculation. Second, tax on capital gains is lower than on income so take some gains. Third, consider not selling assets this year. Fourth, plan charitable giving so you maximize your deductions. Fifth, delay taking or making taxable income. Rental real estate or other self-employment is a great way to defer taxation. Sixth, switch investments to non-dividend paying securities that diversify your portfolio. Buffett’s Berkshire Hathaway is one with many different subsidiaries. Market index funds are tax efficient.

https://www.amazon.com/Pay-No-Taxes-Retirement-legally/dp/1507527977/

Employees say they don’t want traditional “retirement”

84% of employees say they want ‘financial independence’ not traditional concept of retirement. 55% say they would give their employer more personal data in return for personal financial strategies. However, employers don’t really want to provide strategies for their workers. They already have shifted the burden of ‘financial independence’ to workers by canceling paid pensions. Now some employers are not even meeting basic fiduciary requirements in their 401k plans. Workers must decide on the amount of contributions for a comfortable future income stream. They must also choose which investment options to use in their savings’ plans. However, because workers are not able or capable of making these complicated decisions, employers are essentially wiping their hands of this responsibility. Actually employers do not want ANY responsibility for their workers future financial success or failure. Workers have had to sue employers just to be fair with their savings plans. Employers sell workers the most expensive version of their company stock, the most expensive mutual funds, and the investment options most beneficial to the plan administrator or broker.

https://www.amazon.com/Robbing-You-Blind-401k-fees/dp/1493588966

Advisor/broker must follow the new communication rules

They can’t lie/misspeak to us anymore:

Includes untrue statements and omissions;
Includes unsubstantiated material statements of fact;
Includes untrue or misleading implications or inferences;
Fails to provide fair and balanced treatment of material risks or material limitations;
Fails to present specific investment advice in a fair and balanced manner;
Cherry-picks performance results or otherwise presents performance in a manner that is not fair and balanced; or
Is materially misleading.

They have to keep a record of what they communicate by any means. The modernization of archaic regulations has seen digital platforms enter the SEC’s jurisdiction, and compliance demands are about to increase drastically. They can still talk a great game so we may need to record a call.

?**********ACCOUNTABILITY**************?

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

The Path to Dictatorship: 2010-2030

Jan 21 2010 Corporations’ election-spending unlimited

Nov 2020 Wealthy discredit election process

Nov 21 2020 Trump’s Plans for a Coup: criminal

Nov 21 2020: Trump plan: US Marshals seize voting machines

Jan 6 2021 Direct assault failed: guns & bombs ready

Trump engaged in a "criminal conspiracy" to stop Biden

“I don’t f—ing care that they have weapons”

Trump was “detached from reality”

Trump used mafia-style intimidation on the defenseless

Parscale: “a sitting president asking for civil war.”

Trump: “Just say the election was corrupt and leave the rest to me”

GOP fascism: “RINO hunt armed; no bagging limit” J6 comm threat

Trump’s Supremes END personal rights & state laws except for weapons WMDs

Fascism: GOP to stop women leaving state for abortion

It’s not a court. It’s a junta: Two Americas

Trump: President Biden is 'enemy of the state'

Nov 8 2022 Trump’s “national revolution”

Jan 2025 Dictator pardons himself

How Govt wastes our money:

Migrants lured onto MA flights: false promises of housing and jobs: Nazi trick Jews too

Even TX GOP Cruz says kidnapping people is illegal: Hitler got popular by this trick

Northern states will send homeless population to deSantis’s warm climate for winter

Can a TX sheriff really indict FL gov DeSantis for migrant ‘relocation’ program?

Conspiracy Theorists Want to Run America’s Elections

NJ Court Strikes Down State Law That Gave Millions in Tax Breaks to Casinos

Fed: loss of jobs price we pay for higher inflation from huge corp profits

Can Congress actually reform the vote count process: Trump’s next ‘coup’

Trump will delay his legal jeopardies until GOP prez can shield him from prison

Aimee Bock MN caught theft $200 million for hungry kids’ food: fake docs

John Davis MS caught diverting federal funds for needy to own projects/friends

Are we really ready to soldier another foreign war? We declined fighters for Ukraine

SCAMS/SPINS:

GOP sex trafficker Gaetz sought pardon BEFORE arrest: only guilty need pardon

Trump OH rally of his Q “army”: uncanny resemblance to the infamous Nazi salute.

Trump warned last year about stealing US documents by his lawyer: dictator’s act

Trump’s immigration plan: bus murderers, rapists, criminals to Dem cities in 2019

GOP NM candidate offers chance for firearm for $100 donation: getting serious

GOP plans to reduce Social Security benefits: Congress can’t fix scheduled cuts 2034

Biden thinks ‘pandemic is over’: my town is giving Boosters for Covid weekly deaths

Biden calls the Queen “decent”: ‘people need decent homes’

Boeing caught misleading investors, public re: safety of 737 Max: kill 346, fine no jail

Shawn Everett Good NC caught Ponzi and laundering: promised low-risk

Morgan Stanley caught failing to secure personal data of millions of customers fine

Waddell & Reed caught for overcharging: keeping clients in wrap fee accounts fine

John Mendes, CA caught profit insider trading on friend’s info of acquisition fine

James Arthur McDonald Jr. CA caught risky trading lost $millions for clients

SCAM: 10 top scams on teens: media, shop, ID, contests, grants, debt, auction, ‘freebies’

SCAM: Geek Squad service renewal is fake ignore and call the Geeks on your contract

SCAM: 42% of people still pay for subscriptions they don't use.

Media encouraged people to cook chicken in NyQuil teens end up in emergency or die

Credit check: AnnualCreditReport.com is free: credit score from most cc providers.

Recall: Nissan pickup trucks: they move automatically (no driver) in park

Tesla recall 1.1 million vehicles windows don’t close in crash

Putin orders up 300,000 more reserves plus prisoners recruited to die like heros

Putin's Top Priest Tells Russians Not to Fear Death Amid Mobilization: just leave Putin

Jobs

Rich people got PPP bonus for not keeping workers employed

Scam jobs: pay fee, shopper, entry, envelopes, med billing

Jobs no current citizens want to hold: immigration is vital to future US survival

Ask for raise: Office work costs twice as much as home working

Who owns your account now?

3% interest for 15 mo CD: no minimum: emergency fund idea

10 Places to Get Free Online File Storage

National Parks entry is free on Sept 24 and Nov 11: https://www.nps.gov/findapark/index.htm

Best Free Antivirus Software for 2022: you have no excuse not to protect your data

Are the iPhone 14’s big changes worth another $800 + tax? Shakes, cut/paste, black out

Miracles:

Poverty in richest nation overcome by special programs for deadly sickness: wealthy too

photovoltaic glass: convert almost any glass sheet or window into a PV cell.

Cooling without electricity: future without warming outside?

Queen’s last trip in photos in case you couldn’t make it to London:

Gaza farmer unearths Byzantine-era mosaic

Above law: Trump could declassify with Executive Order: none for nuclear code/docs

Cancer death rates fall steadily in the US, with more survivors than ever

Light is both a particle and a wave depending on how we look at the light.

I don’t think that there is any such thing as a position or a velocity of a particle.

Everything (galaxies to stones) in universe made of subatomic energy ‘vibrations’

A subatomic ‘particle’ is the smallest possible vibration (quantum) of a quantum field.

Mass–energy equivalence: E=mc^2. At the smallest level; Everything is moving!

There is no TIME at this level because of force fields come and go in all directions.

Inside protons, neutrons, it is the fields of the virtual particles that creates its mass.

“Empty space is a boiling, bubbling brew of virtual particles that pop in and out of existence in a time scale so short that you can’t even measure them.” Space expanding.

The electricity we use comes from the field around the wire not from election itself.

We can apply for Medicare online: https://blog.ssa.gov/apply-for-medicare-online

We can apply for Social Security online: https://www.ssa.gov/benefits/retirement/

We can apply for health care online: https://www.healthcare.gov/

IAN

973.746.2014

www.InsuranceAdvisorsNetwork.com

Alerts available at http://dankeppel.blogspot.com/

Friday, October 25, 2019

Are Warren Buffett’s Vanguard funds right for you?

Warren Buffett, one of the greatest investors, recommends we invest in only 2 funds: Vanguard funds. There are over 9,000 mutual funds and over 5,000 ETFs (index funds) to buy. Why did he pick just 2? He beat 5 Wall Street guru strategies with Vanguard’s 500 Index. It is low cost and diversified across many industries. The Vanguard 500 Index has returned about 11% per year since 1976. Buffett notes that compounding has made him wealthy. He recommends Vanguard because it provides high returns at low cost. His holding period is “forever.” His mantra is “we make more money when snoring than when active.” Why don’t all investors follow his advice: hubris and greed! People think they or their advisor can beat the market even though they can’t year after year. The average investor’s managed account earns just 3.79%. Trading reduces the benefits of compounding. Market timing is never perfect. Buffett says just ignore market gyrations.

https://www.amazon.com/Warren-Buffetts-Vanguard-Funds-Retirement/dp/1496148592

Social Security benefits rise in 2020

Wealthy people receive even higher benefits in 2020: $3,011 per month. That extra $1,800 a year comes from higher pay but a cap on their tax: incomes over $137,700 are not taxed at all! Those who need SS benefits the least don’t have to pay 6.2% of their income like we do. This is ‘Socialism for the Rich’: From the poor by law to the very rich by design. The wealthy folks’ benefits rise but they stop paying the 6.2% tax when their income rises above $137,700. We always pay 6.2%--they stop at the cap. The average benefit is $1,485: an increase of $24. Most of us fear GOP will reduce benefits to pay for their tax breaks. SS trustees estimate a benefit CUT in 2034. GOP has called SS benefits “socialism;” yes, Socialism for the Rich. Plan for the cuts now!

Create your own SS supplement: https://www.amazon.com/Pay-No-Taxes-Retirement-legally/dp/1507527977

Is equity rebalancing right for you?

Rebalancing means buying and selling securities to maintain the proportion you feel comfortable with. Example: you want to keep 60% of your money in equities for the foreseeable future. Equities grow to 70% of your total portfolio in a year so you sell 10% and buy the other securities to maintain the ‘balance’ overall. But if you do this, you may have higher taxes and a lower return over time. The tradeoff is you can sleep at night despite the market volatility. However, it you don’t look at your account, you can ignore the market gyrations and earn a higher return. Vanguard has provided an analysis of different rebalancing strategies (timing and portfolios) to illustrate the relationships. However, John Bogle, the founder of Vanguard, advises: “I don't think you need to do it. And sometimes rebalancing improves your returns. Sometimes it makes them worse.” “There is a comfort level …. So it's a behavioral problem.” If it makes you feel better, rebalance. However, don’t expect the market returns of 11% over time: $250 a month compounded at 11% provides about $1 million in 34 years vs $500,000 at 8%. Big deal!

Take Bogle’s advice: https://www.amazon.com/Dont-Re-balance-Your-Portfolio-Research/dp/1508802386

Is a balanced fund right for you?

Instead of rebalancing (selling and buying for fees) on your advisor’s orders, maybe a better plan is keeping a balanced fund fully funded. Take the Wellesley Income Fund. This 40 year-old, income-oriented balanced fund offers exposure to stocks and investment-grade bonds. This fund is unique in allocating about one-third to stocks and two-thirds to bonds. The fund’s stock holdings are focused on companies that have historically paid a larger-than-average dividend or that have expectations of increasing dividends. This focus may provide a higher quarterly income distribution. As a result, you earn a consistent 8-10% return over time without wild market swings.

One of Vanguard’s Top Ten: https://www.amazon.com/Vanguards-Top-Ten-mutual-funds/dp/150073909X

Why compounding your earnings is considered a ‘miracle’

Compounding is a miracle because you can accumulate over $1 million by investing just $3,000 during your working years. You can expect to earn the market returns of 11% over time: $250 a month compounded at 11% provides about $1 million in 34 years vs $500,000 at 8%. That is a quite a difference! Of course you must invest in a low-cost stock market index fund and avoid trading and advisor fees. Actually, this is exactly what Warren Buffett, a successful investor, recommends: "A very low-cost index is going to beat a majority of the amateur-managed money or professionally-managed money." He says: "My wealth has come from a combination of living in America, some lucky genes, and compound interest." Every $20 invested in stocks is worth $770 in 35 years.

Use compound interest: https://www.amazon.com/Miracle-Compounding-Turn-day-into/dp/1470176513

Why do more investors go it alone?

You might have noticed the trend to investors going the Do It Yourself right-of-way. First, everyone thinks they are above average investors. Actually, the average investor earns only 3.79% over time while a simple market index earns 11%. Second, dealing with an advisor/broker can hurt you financially. Even top firms don’t control their Reps well: JP Morgan was caught not disclosing advisor fraud, stealing, lying, forging, etc etc. Reps are not reported quickly if at all and no one at the firm goes to jail. The industry considers bad behavior just the cost of doing business. Morgan employs 26,000 Reps. They “prevented or delayed regulators, other member firms, and the public from learning about those events and, in certain instances, prevented the regulator FINRA from pursuing potential disciplinary action.” Example: 12b-1 fees and revenue-sharing from mutual funds to advisors are often not disclosed. SEC says “investment advisers have not appropriately addressed these conflicts of interest." When I worked for a Wall Street firm and my advisor screwed up, my own compliance department dismissed my complaint. Third, industry lobbyists got Trump to cancel the Obama’s Fiduciary Rule that held Reps to a higher standard of ‘give the client the best’. Avoid industry Tricks of the Trade.

Earn more on your own: https://www.amazon.com/Tricks-Trade-Mutual-Insurance-Annuities/dp/1535497289/

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

Like 1776, this period is a test of democracy—do we really want a mafia boss prez?

Trump’s lawyer says he can shoot a person and not be prosecuted; above law?

“I am building the border wall in Colorado”: 25^th Amendment time

How Govt wastes our money: Congress spends another 1.7 Trillion we don’t have!

million military in 151 countries: After 60 years 55,000 are ‘defending’ Japan; 43K in HI

SCAMS/SPINS:

Boeing pilots knew "egregious" problems with 737 Max airplane 3 years ago: 346 dead!

20-day supply addictive painkillers shipped for every man, woman and child in 2012-5

DNA test: where some people in world share your DNA: Not necessarily your homeland

TurboTax lobby tells our reps to keep it complicated and tax prep costs high: Reps agree