Is $1,000 advisor fee too much?

Is $1,000 advisor fee too much?

Many investors are happy to pay their advisors $1,000 a year in fees for the satisfaction of having a human to call when they panic. But everything is relative as they say. The average investor balance is about $96,000 but the median is only 27,000. Some wealthy people have $ millions in their 401k. An expense of 3.8% is just over the inflation rate so most of us are not making money. Our advisor is eating our lunch AND dinner. On the other hand, if you have $600,000 in your retirement accounts, $1000 sounds about right. That is 0.16% and assures you of a growing nest egg for almost any asset mix. Some Robos charge 0.25 and Vanguard’s human charges 0.30%. The larger your account, the smaller percentage you need. Since we are worried about OUR future not our advisor, total fees during our lifetimes should be less than 0.5%. If we pay 2% or more, we give up 63% of our total potential nest egg. It is our money. We take all the risk and we need every cent for the future escalating costs.

Avoid the high fees: https://www.amazon.com/Your-Plan-Live-Age-100/dp/1548180793

Is Fidelity’s ZERO fee mutual fund right for you?

Your advisor is probably squirming in their chair today. No fee is the final stage of the price war Vanguard set in motion years ago. Fidelity’s two new funds will have an expense ratio of zero and require no minimum investment. Compared to 0.14% and 0.09% (9 basis point) costs of the equivalent “Total Stock Market” index funds of Vanguard and Charles Schwab, that gets attention. The average cost of US bond and equity funds has slipped from 0.76 per cent and 0.99 per cent respectively in 2000 to 0.48 per cent and 0.59 per cent last year, according to the Investment Company Institute. Investment groups can still make some money from zero-cost funds thanks to the revenue they get from lending out the shares they own to short-sellers, a practice known as securities lending. However, they need huge deposits to make up for the lost fees. Since Fido is owned by the Johnson family they can probably use the loss leaders for a while. However, legal disclaimers say they could up the fees or other charges at any time. Your money is still being handled by a profit-seeking manager. Vanguard funds are owned by the investors themselves so investors lower costs by ending inefficiencies like small account paperwork. They pay only $200 a year on half a million dollars for support.

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

How is your spending plan? Meeting goals?

I know there is no ‘average family’ when it comes to spending. We are all different so it is instructive to look at what others spend for the same things. Averages from Labor Bureau are 2.5 people family; 1.3 were wage-earners earning $74,664 with 1.9 vehicles. 62% owned homes, going down. They spent $57,311: Food 12.6% with HALF spent on meals at home, but going down. Home 33% going down. Transport: 15.8--$755 a month—new vehicles? Apparel and services: 3% going down. Healthcare 8% going up; Entertainment 5% going up; Contributions 3.6%; Pension & SS 11.9% going up. Misc 4%. Taxes were not in the survey but gross-net=$17,353 or 23%.

Make saving/investing low-cost: https://www.amazon.com/One-Decision-Investing-Buffetts-strategy-ebook/dp/B07FRMRC7F

Are the new short-term health plans right for you?

Trump promised to replace Obamacare with “something terrific.” Trump’s mob has just completed rules that let insurers offer a new kind of health insurance. So-called short-term plans will be offered for relatively longer periods — just under a year at a time, with renewals for up to 36 months. They are cheap. Cheaper than the Obamacare plans—for good reason: They tend to cover fewer medical services than comprehensive insurance, and they will charge higher prices to people with pre-existing health problems, if they’ll cover them at all. In three months, who will buy these plans? Young healthy folks who are short on cash or those in between jobs are the users and they have always been the target. However, an accident or illness can strike anytime. Trump has made the plans renewable so he can claim we have it cheaper, better “terrific”. Sickness not covered.

Buy carefully or face bankruptcy: https://www.amazon.com/Health-Insurance-ONLY-right-policy/dp/1480125083

New ways the wealthy avoid their fair share of taxes

Though President Trump’s tax law increases the amount that can be passed to heirs, these thresholds expire in 2025—if a new federal administration doesn’t change them first. Wealthy people might look to longer-lasting vehicle to pass on wealth: dynasty trusts. With a dynasty trust a taxpayer transfers assets to the trust. The trust assets move from generation to generation with no corresponding payment of taxes. America ends up with a class society even though the upper class hates to admit it. Since the trusts can foot the bills of the next generation without taxes, we have to make up the loss of govt revenue since the rich use the courts, police, military, roads, airports, etc. As long as the estate tax and generation-skipping transfer tax GST lifetime exemptions of $22.36 million per couple are applied to the assets placed in the trust, the assets and their growth are out of the estate of the grantor and they can pass to multiple generations free of taxes. 

Use your tax credits to avoid paying their tax: https://www.amazon.com/Tax-Credit-Class-your-credits-ZERO/dp/1539462382

How is your Wall Street guru doing these days?

If you are looking for a STAR who will consistently beat the market—any market—you will need to keep looking. Popular myth says that consistent high performance over time indicates skilled active management. However, you probably are not with a fund that performed well across three- and five-year periods, according to “Does Past Performance Matter? The Persistence Scorecard,” a July 2018 report by S&P Dow Jones Indices. Famous investor Warren Buffett recently won a $1 million bet that proved it is almost impossible to find the 1 or 2 out of 557 funds that beats a low-cost index fund. Fixed income vehicles are little better. So is ‘skilled management’ just Wall Street hype to entice us to move our money around? More ordinary investors are coming to that conclusion. Many studies show that understanding all the variables of a company’s success is just not possible—even for expensive computer software. Plus, there is the unknown future. The one consistent factor: low-cost funds beat high cost funds.

Control costs first: https://www.amazon.com/Best-Predictor-Investment-Success-Cost/dp/1502524082

Do you take all the deductions for your small business?
Most small businesses are headquartered in the home. Yet fear of audit keeps many law-abiding taxpayers from taking home office deduction. Unless you measure every square inch of space used exclusively for it, your business is missing the $1,500 deduction. That is the recognized IRS amount for home businesses using the simplified method. Make sure you are taking your fair share of deductions. Don’t rely on your accountant to explain them all. There are just too many. Reading is fundamental.

https://www.amazon.com/J-K-Lassers-Small-Business-Taxes/dp/1119380413

New ways the wealthy avoid taxes that we have to pay for them

The Trump tax breaks did not reduce the amount the well off firms can deduct from their taxes. The rich get richer. We have to pay for the courts, police, military, roads, airports, etc. US firms use but don’t pay for. Trump sold the cuts as a way to dissuade companies from moving profits overseas. The cuts may make moving profits a lot more rewarding. For example, pharma firm AbbVie (Humira) told investors it expects its tax rate to fall to 9% from 22% because of the change. Many profitable firms have moved their patents and subsidiaries to low tax countries to accomplish similar tax avoidance schemes. Bermuda has a zero tax rate on corporate profits. Despite recording over half its $28.2 billion in 2017 sales in the US and basing most of its research facilities there, AbbVie has never ‘reported’ a profit in the US. They all do it: Pfizer Expedia Boston Scientific Microsoft.  

Stop paying AbbVie’s taxes: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

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Make America, “The Don”, Great Again

Two Americas: A Banana Republic? Do we really want an infant king? Daddy Putin!

Conspiracy against the United States, conspiracy to launder money, conspiracy to receive Emoluments from foreign states, false statements, subverting constitutional tax power, obstructing justice, failure to secure voting systems from attacks, and Foundation self-dealing.

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How Govt wastes our money: Congress spends $1.3 Trillion we don’t have!

FEMA staff hires for personal benefits.

Trump scraps $3 billion planned FBI center.

Last GOP govt shutdown cost us $24 billions.

All the other industries hurt by tariffs want their bailouts too.

Trump’s cut in capital gains means $100 billion less: King not Congress decides taxes.

Trump establishes anti-Christ group to legalize discrimination by label ‘religion liberty’

Our tax dollars go from Defense Dept to pro-Trump election fund: Taxes for Trump!

SCAMS/SPINS:

Trump’s Ed Sec pushing Private Schools Home Schooling but not better than Public

Trump snows farmers with fake news on EU soy deal Farmers upset about loss of market

‘Collusion’ is what mobsters and price-fixing companies do: Conspiracy what jailed for.

Scammers may have slowed your computer: fix it

Trump’s people watching you if you use toilet, cell, computer, sweat, passport, on plane

Red light cameras don’t reduce traffic accidents: causes more rear-enders to avoid ticket.

21% taxpayers will owe more in taxes in 2019 due to change in deduction cuts. Deficit up

Trump’s wealthy friends got a tax shield from the federal estate tax; did you?

Trump goes around Congress cut gains taxes. Constitution says Congress lays taxes.

NKorea "no longer a Nuclear Threat" –  ‘Putin not hacking’ -- Trump’s real ‘fake news’

Trump national socialism beliefs & theory to keep base occupied while democracy dies

When we all have guns for ‘protection,’ who will police shoot first? Safe in your home?

               police shoot owner who already shot intruder. All kids have plastic killer guns?

Jobs:

Small business owners’ profits and savings up; wage earners take the hit from stagnation

Trump gives civil service jobs to his supporters/donors.

Your earnings and jobs affect your SS benefits later in life.

Jobs abound but where are the raises: time to find a better deal

Who owns your account now?

Travel sites are all owned by two firms: oligopoly; not competition

Last time GOP shut down govt; Social Security still paid on time.

Cure for SS benefit shortfall in 2034—More immigrants who work

RobustWealth to Principal Financial  

Best Brokerage Bonus for the Brokers/Advisors: Where are the clients’ yachts

Best Bonus Miles Card: Use anywhere but watch the fees

Best Bank Bonus: $300 for new checking but watch the fees

Buying a house tips: https://www.bankrate.com/mortgages/best-monthly-mortgage-tips

                                                  

Miracle:

What miracle can restore sanity, morality, humility in an insane world?

Pope says killing is wrong even by the state; priests kill innocent children’s virtue.

IAN

41 Watchung Plaza, B242

Montclair ,  NJ   07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

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Add $1,000 to your refund before April 17

Up your refund by $1,000 before April 17

3 weeks to tax due. If you find you owe tax instead of hitting the refund button this year, you may still be able to claim your refund. You can reduce your 2017 income and receive a tax credit. Credits reduce your taxes dollar for dollar. In effect, IRS code can help you reduce taxes like The Don AND save for retirement at the same time. On line 32, Form 1040 or line 17, Form 1040a, you can enter up to $5,500 ($6,500 over age 50) as IRA contribution to reduce your income. If you meet the qualification, a credit will show up on Line 51, Form 1040 or Line 34, 1040a. You subtract this credit from your tax. EG: Income $66,000: tax refund is $3,335, without IRA contribution. With the contribution, the refund is $4,392 or $5,553 if you both make the contribution. Credit against tax is $400. IRS checks your IRA. Use: irs.gov/app/freeFile/jsp/index.jsp

For help with complicated returns: https://irs.treasury.gov/rpo/rpo.jsf

Take the deal: https://www.amazon.com/Tax-Refund-Millionaires-Let-Uncle-Help/dp/149595644X

Transfer other people's investment values to you

            “The stock market is a device for transferring money from the impatient to the patient.”     Warren Buffett

Your choice: You and your advisor can try to outsmart the market with millions of traders and likely earn 3.79% a year or let their money flow to you over time and earn 11%. The analysis of real investors showed that the average advisor- investor earned just 3.79% a year while the stock market earned 11.06% over the last 30 years. DALBAR’s

You can earn 11% by NOT letting advisors touch your money. 95% of active traders do NOT beat the market over time. The leading cause of bad returns is costs. Morningstar the rating firm found: “In every single time period and data point tested, low-cost funds beat high-cost funds.” Warren Buffett, one of the greatest investors of all time, has given us his formula. We must leave our assets alone. Riches come to those who do nothing but wait. All the things that our Wall Street advisor tells us to do are wrong. Buffett says growth comes from compound interest not trading, timing, or hedging.

Patience is profitable: https://www.amazon.com/Patience-profitable-passive-investments-beat-Street/dp/1986843777

The Trump Tax Shelter

Clearly the Trump tax plan helps businesses and the wealthy. Trump even cut the Pease limits. The Pease limitation capped the value of itemized deductions for wealthy taxpayers. There is no reason why you cannot benefit from the tax code too. Using § 408 of the IRS code, you can create an unlimited account and never pay taxes on earnings. It eliminates taxes when taken out for your needs and can pass to your heirs tax FREE. No matter what your income this helps you avoid future taxes to pay off the national debt. All of the 2018 individual tax breaks are repealed in 2026 to pay for the permanent business tax cuts. Avoid paying for their windfall—35-21% tax rate. Corporations provide only 1% of our revenue now. 20 TRILLION dollar deficits mean each taxpayer owes over $160,000. Avoid getting stuck making up their share. 

Use Trump’s Tax Shelter: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

Wall Street is taking $500 BILLION+ from our accounts

All the things that our Wall Street advisor tells us to do is wrong

Set up your asset account and let it grow by itself. Don’t trade, time, hedge, etc.

Fidelity analyzed its most successful accounts. Results:

Either the client was dead or forgot about their account.

Warren Buffett has confirmed the same success factor. He says:

“The stock market is a device for transferring money from the                            impatient to the patient.”

“We continue to make more money when snoring than when active.”

The DALBAR study:

The average advisor investor earned just 3.79% a year while the stock market earned 11.06% over the last 30 years.     DALBAR’s QAIB

Morningstar the rating firm found:

“In every single time period and data point tested,

low-cost funds beat high-cost funds.”

Invest in 'Assets that grow by themselves'? : https://www.amazon.com/Assets-that-grow-themselves-snoring/dp/1986381226

GOP defied The Don last month and gave more money to SS for backlog

Congress made a downpayment on a badly needed fix for the customer-service crisis plaguing Social Security. Lawmakers ignored the Trump administration’s request to hold the SSA budget flat, instead boosting the agency’s administrative budget by $480 million. Demand for SSA services is rising as the nation ages, with about 1 million new claimants coming on board each year. But budget cuts have forced sharp reductions in staffing and other resources that have damaged the agency’s ability to provide effective, timely public service. Long lines form daily outside many local field offices. Our local office was closed 5 years ago. And the backlog of people waiting for a hearing on claims is more than 600 days. Apply online: https://secure.ssa.gov/iClaim/rib

Avoid SS benefit cuts: https://www.amazon.com/Forget-Social-Security-Medicare-Lifestyle/dp/1466394285

IRS free filing sites avoid $300+ cost of filing taxes

Commercial tax prep sites offer expensive loans as advances on your refund but you can keep your whole refund using the IRS free filing partners. Refunds can be in your account within 2-3 weeks. Remember: IRS does NOT call you. The average refund is over $3,000. Check if you have a refund for a previous year—there is over $1 billion from 2014 alone. https://www.efile.com/unclaimed-irs-tax-refund-checks-and-bank-deposits/. Need previous year return (transcript): https://www.irs.gov/individuals/get-transcript. Check your refund: https://sa.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp.

You can create a tax-free retirement fund of $500,000 with that amount each year. If you need free tax preparer service for your 1040, use AARP Tax Aides near you. Bring last year’s return and ID: https://www.aarp.org/money/taxes/aarp_taxaide/. If you have a simple return: FreeTaxUSA or FreeFile: https://apps.irs.gov/app/freeFile/jsp/index.jsp.

Use your refund to fund your tax-FREE IRS approved account: https://www.amazon.com/Tax-FREE-Retirement-code-lifetime-income/dp/1475206976

Is holding life insurance for estate tax right for you?
Each family needs to consider whether their specific circumstances warrant holding this asset to pay for estate taxes? Will there be an estate tax in the future? The federal tax exemption was doubled to $11.2 million (double if couples plan) but only through 2025. If you will not be liable, the reason to pay for this asset is gone. Life insurance is usually a bad investment. So if you don’t need a contract to pay the federal or state estate tax, there are better investments. Your policy will show the guaranteed cash value (and additions) at age 85 and 90, so compare these values to a balanced fund accumulation for the same period at the same premium/contribution level. Try 6%, 7% and 8% rate in this:  http://www.moneychimp.com/calculator/compound_interest_calculator.htm. If you pay $3,000 a year, enter that. If you are age 70, enter 20 years. Compare $132,000 to age 90 values in the contract. If you have held the contract for a long time, cashing it in will cost income taxes on the gains like any asset. You should contact the carrier or agent for options like loans, paid-up coverage or conversion to an annuity. Finally, you may want to obtain ‘life settlement’ quotes. Investors will pay you cash in order to collect on your death. Beware: that creates a tax bill too. Ask Hunt: http://www.evaluatelifeinsurance.org/.

Do what is best for your retirement: https://www.amazon.com/Your-Retirement-Spending-Plan-enough/dp/1461084016

Health insurance premiums to rise—existing conditions to cost more each year

The new U.S. Department of Labor proposal would allow the “short-term” health insurance market to go from offering 90-day “skinny” policies to 364-day policies, while being able to increase premium prices based on age and even deny coverage to those with pre-existing conditions like cancer, diabetes and asthma. “We could see premiums for 50-64 year olds cost five- or even 10 times what younger people pay.” AARP contends premium increases could hit the $4,000 mark or higher annually for 60-year-olds who buy a silver plan in the Affordable Care Act marketplace if the short-term marketplace is allowed to expand. Trump has pushed for these age/illness rated policies after cutting the subsidy that allowed millions more to be covered. He has encouraged the young healthy group to cut their coverage. Buy affordable catastrophic coverage or remain in your employer plan: https://www.amazon.com/Health-Insurance-ONLY-right-policy/dp/1480125083

Is a laddered CD plan right for you?

When CD rates are rising as they are expected to do in the coming year, what do you do with your accounts coming up for renewal? If you renew for another 5 years to catch a higher rate, you might miss the extra 1% which may come in a year. Today, a 5 year pays 2.75% at an internet bank run by Goldman Sachs. You lose interest if the rate climbs 3% in 5 years. Under normal circumstances, you may earn more interest by dividing your balance into 5 equal amounts and buying a 1, 2, 3, 4, and 5 year paper. Then when each matures, you buy the current 5 year if you don’t need the money. Each year, you are going long to take advantage of the higher returns and you have cash if you need it.

An alternative is to rely on a Tax-Managed Balanced Fund. With over half of its assets invested in federally tax-exempt municipal bonds and half in non-dividend stocks, this fund has maintained steady returns of 7% while creating little taxable interest. This combination of securities will reflect new interest rates and avoid loses. Cost: 0.09%.

Go long—build your future: https://www.amazon.com/Go-Long-Reach-Wealth-Starting/dp/1519376189

Is an advisor using the fiduciary rule right for you?

Despite the fact that Trump has nullified this requirement for financial sales people, you can still hire professionals who live by the rule. If you are looking for an advisor, ask for those who follow it. There are advisors with the degree CFP who “must act in the best interests of the client.” These pros place the interests of the client above the interests of the CFP professional and the CFP professional’s firm. They lose their license if they fail.

Use fiduciary protection: https://www.amazon.com/Fiduciary-Rule-BEST-dont-lose-anymore/dp/1530980275

Best gift for your graduate this year

Money to start their long-term investment account. There is one important fact about investing that we usually learn too late to help: Time value of money. What’s that mean? Your graduate can practically guarantee themselves a great nest egg in the future if they use TIME to grow their investments 10 times. They can spend $30,000 for every $3,000 they invest early. With 30 plus years to compound, $250 a month, $3,000 a year can grow to $1,000,000 in 33 years. INVEST EARLY: people aged 35 have to set aside 11.69% of their pay to keep up with those in their 20s socking away only 6% of their salary, based on calculations by Financial Engines. Index funds are a good investment, as they are less expensive than other options. Pay less and earn more. Set up a Roth IRA if you have no access to an employer-sponsored retirement plan.

Create a Roth in 1 hour: https://www.amazon.com/401k-IRA-Tax-FREE-Tax-Deferred-retirement/dp/1475057938

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Make America, “The Don” Great Again

‘I’m the only one that matters’ Mob Boss, Nov 3, 2017

Trump to refuse to answer special prosecutor’s questions: Above the law?

The Path to Dictatorship

“I have absolute right to do what I want with the Justice Department”

China has ‘leader for life’: “maybe we’ll have to give that a shot someday.”

Putin’s influence: Manafort, Flynn, Gates, Page, Stone, Papadopoulos, Sater, Zwaan, Prince, Jr, Jared, Sessions, etc 

Putin controls US power utilities and 21 state voting files, etc

“The election is going to be rigged—I’m going to be honest” 

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How Govt wastes our money: Congress spends $1.3 Trillion we don’t have! The kids will pay.

Congress voted 2,300 pages of spending no one read. Trump TV condemned his signing.

Schools buying rocks for students to throw at AK 15 intruders—30 rounds/min vs rock.

‘First strike’ Bolton can cost us $2 Trillion war in Iran, Korea: 1 million lives?

Trump’s ‘doc’ to failing agency: 400,000 employees : Nice guys can’t fix VA problems.

SCAMS:

Smart owner-only guns can be effective; like cars we can make guns safer.

Beware: Diesel VWs failed emissions parked in desert tweeked for resale.

Trump does not need lawyers—he knows more than anyone about the system.

GOP Congressman links Parkland survivor Emma to communist Cuba – Sick Alt Right

Trump lawyer talks pardons with indicted witness Manafort to keep him quiet

TX woman gets 5 years in prison for voting while on work release –she is black.

EPA workers/scientist told to lie about global warning while Easter Is is washed away

Parkland killer of 17 getting love letters, money – what is wrong with people?

TX pastor to GW Bush caught selling worthless Chinese bonds to congregation

Jobs:

Despite bad treatment, FBI exec asks young people to work as civil servant in FBI.

Shell oil plans to manage climate change to Paris accord despite Trump

SS got extra $480 million to deal with poor service and hiring more CSR.

http://www.wealthmanagement.com/industry/merrill-edge-hire-300-advisors-2018

Who owns your account now?

New Medicare card in April with separate number so thieves can’t have your SS# etc.

Miracle:

Can Mattis, Defence keep Bolton & Trump from sending us to war--Iran, Korea, etc?

Chicago White Sox gives exonerated killer his old job back after 24 years.

IAN

41 Watchung Plaza, B242

Montclair, NJ 07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

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