So how does your advisor broker survive on $0 commissions?

Happy Holiday

So how does your advisor broker survive on $0 commissions?

There is no FREE lunch especially in financial services. Schwab paid its chief executive, Walt Bettinger, an 8.9% compensation hike in 2018 to $15.6 million (down from 2016 of  $19.54 million), about 150 times the firm’s median employee pay of $104,281. Charles gave himself $6.05 million, up 9.6% from 2017. Like others, Schwab had a profit margin of 45%. So how do we give them so much money if not in commissions? Firms execute others’ trades: Selling order flow. Firms earn interest on your cash. Earn from loans: margin trading and options trading. Earn from money management accounts: quarterly fee for ‘holding’ your money. Securities lending: covers shorts. Remember, most firms have such huge economies of scale that trading millions of shares a day at only 10 cents each is worth $ millions for senior management. Some firms are market makers and so have a virtual monopoly on certain markets. For instance, two former Deutsche Bank traders were found guilty of trying to rig a key lending benchmark (LIBOR) that was considered one of the most important barometers of the world’s financial health. Some brokerage firms are also capital creators selling IPOs: the stocks of new companies for big fees. There is no need to pay for advisors. Amateur traders usually lose money. Most smaller active stock managers may become history since beating an index is too hard.

Avoid making Wall Street richer: https://www.amazon.com/Pimps-Wall-Street-money-middlemen/dp/151525254X

Congress just gave insurers and salespeople a big bonus

They passed the SECURE Act, "The SECURE Act will make it easier for employers to offer as part of their retirement plans annuities that provide a guaranteed stream of lifetime income," says an insurance lobbyist. Employers and their retirement plan person can entice us into high-cost plans that lock up our retirement dollars into an insurer’s vaults. Using industry trick-phrases like “guaranteed income you can’t outlive” and misleading charts with best possible outcomes, employers can wash their hands of any future responsibility for the inevitable low payouts down the line. For instance, when we chose an annuity of $1000 a month in 2020, we will have no recourse when it buys only $500 a month benefits later on. Currently, a retiree can shop and buy the best annuity deal out there with their money. Under SECURE, employers will be able to escape any future lawsuit when an annuity ‘guarantee’ goes wrong. We are NOT secure with SECURE.

Learn the annuity facts: https://www.amazon.com/Annuity-Decision-Tree-questions-answers/dp/1546454497

How much IRA money should you convert to Roth IRA?

If you have a good idea how much income and thus tax you will pay for 2019, you can calculate how much IRA money to convert. If you file jointly, your $100,000 earned income puts you in the 22% bracket. With the standard deduction of $24,400, you can estimate the amount of IRA income to be taxed on for the year. You can convert to a Roth IRA as much as you can afford since the $7,000 limit on contributions does not apply. Example: $100,000 - $24,400 = $75,600. With $5,000 added income (SS, pension, interest, dividends, gains, etc) you can convert up to $88,000 without hitting the 24% bracket. Of course you will owe an extra $19,360 tax on top of the $17,600 AGI income tax. Pace it out over time. Use the FREE efile software to calculate: https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free: now open: https://www.freetaxusa.com/ .

Pay no tax in retirement: https://www.amazon.com/Pay-No-Taxes-Retirement-legally/dp/1507527977

How much will you be required to withdrawal from your IRA 2020?

IRS expects those over 70 ½ years old with a traditional IRA to take a certain amount out and pay tax on the taxable amount. Your IRA trustee or custodian reports your year end IRA account balances to the IRS and if you allow, calculates your RMD for the year. IRS tables tell us the divisor based on your assumed longevity. RMD is the ‘minimum’ you need to acknowledge and pay tax on. You can take more and pay more tax now. The IRS leaves it up to you to report how much of the RMD is taxable each year. Some people added already taxed money to their IRA (before the Roth IRA) so no need to be taxed again. You can adjust that RMD by removing money from your IRA and paying more tax before year-end. You might do that if you have no income other than SS benefits or you had to meet an emergency. Reducing the IRA balance by year-end will lower the RMD for the rest of your life. Thus if you have a $100,000 in your IRA your RMD is $3,773.58 because you are expected to live 26.5 years more when you are 71. If you took out $20,000 the year before the calculation, your RMD would be $3,018.87 the following year.

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

How to fight health care overcharges by your providers

Recently I got a bill from my colonoscopy provider. I thought all screening procedures are FREE since my expensive health care plan is usually excellent. My employer told me on my W-2 box 12a that my shared cost was $26,920.68. I did some research and printed out the FREE screening protocols for ACA ObamaCare compliant health plans. The ACA Preventive health initiative by Obama is meant to reduce long-term costs by catching problems early. I assumed my provider knew this when I confirmed that all the costs of my procedure would be covered. So I sent a copy of the ACA regs to the provider’s billing address with a note that I was covered. They just sent more bills and emails for months. The doctor’s office ignored me. Like in the movie Rainmaker, we pay premiums and the insurer-doctor complex assumes we will give up fighting. Since I knew they were wrong, I wrote a letter to the CEO of my insurance company asking him to pay the bill and set the provider’s billing clerk straight. They called the provider group HD and told me I would not get another bill. Most people would just give up and be sued and perhaps be thrown into bankruptcy. It happens a lot since we have no power against the insurer-doctor complex.

Know what you are buying: https://www.amazon.com/Health-Insurance-ONLY-right-policy/dp/1480125083

Vanguard cut fees AGAIN

Vanguard has cut some fees 20% for funds and ETFs. Why is that important? Over time you will earn and KEEP substantially more of your hard-earned money. If you are investing for the long term, you could give up $143,000 on $10,000 deposit with that 20% extra fee. Compounding the extra fees works for your advisor just as well as it can work for you. This fact never comes to mind for most of us because our employer’s HR person never tells us exactly and completely what our 401k or 403b investments cost. Some of them don’t know. Most of us have no idea which options are best for us when we start our plan. Some employers don’t even look at fees when giving the plan advisor the annual check up. Even if they know what the fees are, they don’t care because WE are ones paying them. It comes out of our earnings even before our earnings are credited to our accounts. We don’t see them. Our employer has the fiduciary responsibility for choosing the best options for US not the advisor. However, most employers don’t take their duty seriously and this has led to many lawsuits. Over time, this can cost you over $100,00 in lost earnings on your invested money.

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

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

Like 1776, this period is a test of democracy—do we really want ‘low-IQ’ Mobster?

GOP losing members and identity

GOP already drank the Kool-aid: no evidence necessary:

Mob boss never has live witnesses!

Letter by 700 impeachment experts

Trump’s desperate ‘jailhouse’ letter

Trump personal attacks on dead Congress member’s family: “look up” from hell

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

35% charter schools funded by federal Charter School Program never opened or shut.

$ Trillions: Afghan army incompetent, poorly trained, corrupt, riddled with infiltrators.

Trump fights for his useless WALL instead of lower drug prices from drug companies

Can Congress do something worthwhile? 54.6 billion spam phone calls placed.

Why can’t Trump negotiate lower drug prices or buy from foreign countries?

Trump will reduce SS benefits for the disabled: cuts to pay for tax break for wealthy

Medical fraud is easy: scammers have taken gov (us) for $ millions.

SCAMS/SPINS:

McConnell GOP bending down to Giuliani’s ass for impeachment: Judge Roy Bean

Supremes help Trump hide his Russia money-laundering till 2020 and beyond.

Truth is the greatest victim of this fight to the death for GOP view of ‘democracy’

Putin has Trump’s back: Russian dictator echoes GOP “made up reasons” Ukraine did it

GOP compares Trump to Jesus: Trump treated worse, GA rep says. Lincoln shot.

Voting machine makers can’t account for security of our voting tabulations

WI removes 234,000 DEM voters from rolls to assure WI goes to Trump again.

GA takes aim at eliminating 309,000 DEM voters: voter suppression for 2020

KY went Dem and removed Medicaid work restrictions placed by GOP recently

Jeffrey Friedland promoted weed investment w/o disclosing he got paid fined $4.2million

Windhaven Insurance FL insolvent taken over by the state for lack of surplus funds

Mormon Church caught using the tax-exempt donations to prop up a pair of businesses.

MetLife caught cheating annuity beneficiaries out of $ millions: Fine, no jail time.

Robinhood broker order flow failed to guarantee receive best prices: cheap but not best

Samuel Lek caught manipulative trading for foreign traders using master-sub account

Ryan Skinner caught using scheme to have seniors liquidate securities to buy annuities

BEWARE: Advisor sells annuity promising LTC benefits: pay extra 1% for no coverage.

QBI ends in 2025: Roth may be better tax-advantage later than 20% cut now

Harvey Weinstein accused sex criminal has his insurance pay 30 victims $47 million 

Hype of 5G: different types may not match your phone, coverage areas, speeds-too early.

Antidepressant use by children jumps more than 20 percent after a school shooting

Who owns your account?

Don’t take your phone to do your crime: Govt will find you using Google data.

Govt will take your legacy if your heirs don’t withdraw and pay taxes in 10 years.

Fiat Chrysler and Peugeot merge: Fiat family run with French twist

Jobs

Retirement isn’t for everyone: some people just have to work—it’s their joy.

Employers tricked by health insurance brokers so we pay more

Miracle:

Oceans getting more acidic: CA waters double the global rate. Australia hits 105.6.

Impeachment rallies: #NotAboveTheLaw rallies

Pope finally turning over criminal child abuser files to the police only IF requested.

IAN

41 Watchung Plaza, B242

Montclair, NJ   07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

Alerts 

Compound interest provides $1 million

Can compound interest provide a $1 million retirement?

Are you saving and investing at least $250 a month in your retirement at work (401k, 403b) or IRA on your own? Are you putting most of the money in low-cost stock mutual funds? The other variable is time. Compound interest works when you have time on your side. It takes about 33 years ($250 a month, $3,000 a year) with total contributions of only $99,000 to reach $1,000,000. Even if you begin after age 30, you can still have much more than almost all your neighbors. According to Warren Buffett, “My wealth has come from a combination of living in America, some lucky genes, and compound interest.” Mr Buffett recommends we use low-cost funds like those at Vanguard. He confirms that compounding works over time if we do not try to time the market or trade the ‘hot’ securities. Look at any 33 year period of stock earnings. You earn 10-12%: http://www.moneychimp.com/features/market_cagr.htm. Go with Buffett’s ‘Secret’.

Forget brokers/advisors: https://www.amazon.com/Warren-Buffetts-Investment-Secret-Steeple/dp/148418980

What about ETF up 35% this year?

What are the gurus and TV marketing people so happy about? Your plain low-cost broad market index that Buffett recommends is flat for 2018. So what can financial people talk about? How about gold (JDST): Return year-to-date: 48.79%; One-month return: 28.66%. But after you look further, the three-year return is -77.62%. Natural gas? (UGAZ): Return year-to-date: 51.62%; One-month return: 22.37%. But three-year return: -51.43%. How about muni bonds (EVLMC)?: Return year-to-date: 100.76%; One-month return: 0.11%. No track record for a three-year return: N/A. So what about Treasuries (DLBS)?: Return year-to-date: 37.96%; One-month return: -0.74%. Not much better than your bank savings account in three-year return: 0.24%. 500 Index (VFIAX)?: Return YTD: 3.83%; 5 year: 11.3%; 10 year: 13.22%. Salespeople always have ‘shiny objects’.

Buffett still has the edge: https://www.amazon.com/Warren-Buffetts-Vanguard-Funds-Retirement/dp/1496148592

Do you need a REAL middle-income tax break?

The REAL tax break from the GOP and Trump is the removal of the income cap on conversions from traditional IRAs to Roth IRAs. The 1.6% income increase for the average household earning $50,000 to $75,000 has been eaten up by tariffs and health care costs. Compare the $thousands you save in taxes during retirement when most of your income is tax-FREE and you no longer have to take taxable RMDs from your IRAs. For many, the elimination of tax on IRA distributions means their income can continue to grow after 70 ½ AND they will pay less tax or nothing on their SS benefits.

Keep your taxes low for life: https://www.amazon.com/Tax-FREE-Retirement-code-lifetime-income/dp/1475206976

Health ins plan scams prey on the most vulnerable

“You can now get a great insurance plan at the price you can afford. We make it hassle free to sign up with the policies from Signa Blue Cross Etna United and many more. Press one now to get a hassle free assessment or press two to be placed on our do not call list. Thank you and it’s always be happy blessed.” Criminals promise inexpensive health care plans and take personal information that’s used to commit identity theft. In another version, victims are sold useless healthcare discount plans that scammers frame as cheaper than the consumers’ current health insurance. A Florida-based company named Simple Health Plans allegedly collected $100 million from tens of thousands of victims, Federal Trade Commission lawsuit.  Consumers paid up to $500 a month for a relatively worthless product, the agency said.

It is easy to be fooled: https://www.amazon.com/Health-Insurance-ONLY-right-policy/dp/1480125083

Do you own the absolute WORST funds?

Why do people pay much more for exactly the same commodities as others? Convenience? Inertia? B.S.? Misleading benefits? Some advisors are charging 2.33% for the same product as others charge 0.00%. Is that a ‘loss leader’? Sellers need to make something in order to compensate for time spent on other services they say. State Farm charges 1.34% for their plain 500 index fund. Do their customers believe they are buying an insurance product? Many insurers seem to be enjoying this extra profit. Perhaps customers are finally getting the message—net flows are negative for 3 and 5 years. Customers who feel more informed have chosen to separate financial providers/vendors. Vanguard, not brokers, offered the index in 1976 for less. It is now the largest mutual fund firm for a reason—costs matter. 11% vs 3.79% return on your money is huge.  

Go with the pro: https://www.amazon.com/Vanguards-Top-Ten-mutual-funds/dp/150073909X

Another way the ‘Tax Credit’ class avoids paying their fair share

The IRS just issued proposed regulations stating that there will be no clawback of the use of any unified credit (gift tax exemption) before 2026 when the lifetime exemption will revert from $10 million to $5 million. Wealthy taxpayers may safely use the current $5+ million excess and, if death occurs after 2025, still have $5 million for estate tax purposes, thanks to the millionaire Congress. Similarly, a taxpayer could make a taxable gift now of $11.18 million without concern that there would be a phantom estate tax on their death after 2025. Passing on $11.18 million tax-free allows the kids to get the ‘head start they really need’? to create their own tax-advantaged business.

Use your tax credits too: https://www.amazon.com/Tax-Credit-Class-your-credits-ZERO/dp/1539462382

****************

Make America, “The Don”, Great Again

Senile Psychosis

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

McGahn is ‘lodestar’: Told Trump ‘NO’ - saved Mueller!

***********************

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

Trump’s stunt over: 5,800 troops not home for Thanksgiving. Cost us $220 million.

SCAMS/SPINS:

RoboCallers index: Top 100 callers by volume https://robocallindex.com/top-robocallers

Health ins plan scam: Simple Health Plans FL promised one of Trump’s ‘great’ plans.

Hackers control your pacemaker? Any electronic implant can be controlled by others.

First Choice Healthcare Solutions caught ‘pump and dump’ stock scam: $12.5 mil lost.

Elite Stock Research caught ‘pump and dump’ stock scam: $10. mil lost.

Giga Entertainment caught paying others to pump up sales software on Apple Store.

Check food: banned flavors--methyl eugenol, benzophenone, ethyl acrylate and pyridine.

Ford’s robot cars: “When we take the road, we know what doing and where the profit is.”

Trump attacks another distinguished patriot: draft dodger says he could have done better.

Cheryl Ann Stallings caught controlling client bank accounts for profit

Kimberly Pine Kitts, MA caught stealing $3 million by forging signatures etc.

Scott Newsholme, FL caught stealing $3.1 million by various fraud: jail 8.5 years

Waddell Reed caught loading its 401(k) plan with costly in-house investments. Fine only

H. Beck MD caught allowing sale of unsuitable L-share variable annuities/riders. No jail.

Trump’s mob using private email accounts too—lock them up too? “ijkfamily.com” 

Trump ordered Justice to prosecute 2 rivals just like tin dictator—McGahn said “no”

The Don SAYS HE'S MOST THANKFUL FOR HIMSELF ON THANKSGIVING

Is there really a ‘master race’ in Kansas? Dorothy found out our Wizards are frauds!

IRS audit? agents for criminal investigations dropped below 2,100—Lowest since ‘60s.

When everyone has a gun, how do police know who to shoot?

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The Mob Boss can never go to jail: Trump has Kava as Supreme so no indictment.

‘No man is above the law’ … well up till now. Dictators nullify courts first, then votes.

Supremes protect Don’s ‘Orders’? – GOP: Sure, pres can change Constitution anytime.

----------------------------------

Jobs:

Give Trump a rake and help CA firefighters. Like his ‘health care is easy’ solution.

Who owns your account now?

Avoid mistakes like these in passing on your accounts and assets.

Need your IRS tax file? https://www.irs.gov/individuals/get-transcript and help to file.

Major airlines may owe you money from overcharging conspiracy.

Foxconn coned WI into $4.1 BILLION subsidy: now orders down but taxpayers billed.

Miracle:

Where is the miracle that stops mass killings? More crazy people or mass destruction weapons?

20 million more of us have health insurance than in 2010! 28.5 million still not covered. We can do better: All the children in New England are insured. 

We fell 84 floors in broken elevator -- lived to tell the tale: Grace of God? 1 good cable?

“Mick and I live off of this fire between us” New rule: work past age 75 for a grand life.

IAN

41 Watchung Plaza, B242

Montclair, NJ   07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

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