Make the New Year better
Is owning a TIPS fund or ETF right for you?
A kind of bond issued by the US Treasury has complexities that baffle most investors who use them. They are not as simple as buying them to avoid losing purchase power to inflation. Many took the bait in 2020 with the promise of 5.5% vs -1.5% for the bond index. Semi-annual adjustments to the securities means TIPS are good at protection against unexpected inflation. So for most people, stocks will provide better long-term protection from inflation. For retirees, holding 10-20% of their bond allocation in TIPS may help settle out the stock market gyrations. Many retirees use high dividend payers to accomplish the same goal. The low-cost versions of all these options will do better than costly broker/advisor-managed ones simply because paying 2% to earn 5% provides you with only 3% net. The calculated yield is another big headache since not every fund is a pure TIPS play. Some add in derivatives to make their fund attractive. None of these offerings provides an inflation-busting guarantee. A better strategy is an over-weighted balanced fund plus diversified low-cost stock funds. Low-cost always beats high-cost.
https://www.amazon.com/Reset-Your-Retirement-Income-retirement/dp/1512304344
How can you deal with inflation?
Inflation of 7%
is the running rate for the new year based on current price increases. Gas,
food and rent-price jumps may have convinced you that something needs to be
done. If you are an investor or retired person living on your investments, you
may have heard the discussion of bond and stock prices changing drastically
last month. Indeed, after the stock market index hit 28% last year, ’22 has
taken some of your account balance away already. For those relying on their
brokerage firm or advisor, the word from Goldman is: “Sticking with Stocks Is Best
Bet to Beat Inflation.” Goldman favors equities in energy, financials,
resources, real estate and infrastructure. Real estate has come off a year of
over 40% but since the value of leases and contracts often rises when inflation
increases, this will remain a good bet against inflation. Index funds usually
cost much less than an advisor and so if most analysts think we will have
single digit returns, Vanguard may be a better home to rest in 2022 than a
full-service firm. Good health.
Use the low-cost leader: https://www.amazon.com/Vanguards-Top-Ten-mutual-funds/dp/150073909X
How to invest if you are NOT rich
There is a way to become rich even if you don’t have a lot of money and are not able to pick the next Amazon or Google stock. It requires you to wait for your money to grow by itself using the Miracle of Compounding. You know the principle of compound interest. If you lend a $1 to your bank, you will be paid interest each year. After 40 years, you will have $2.22 at 2%. Rates of interest are low right now, but in the 1980s, you could earn 8-12%. I saved for my first house down payment then. The stock market returns average over 11% over time, so you could have $80 from $1. If you could invest $100 per month in large company stocks, you could have $880,000 in 40 years. $100 a month is $3.34 a day. Almost everyone could do that if their mutual fund company could automatically deduct the $100 a month from their bank account. You would have to wait and never touch the money during those 40 years. Actually, fund firms have tested that plan: the highest accumulations were in accounts that the owner forgot they had. They left the account to compound by itself. Vanguard offers a low-cost large company stock fund that has returned 11.66% since 1976. Clients make money the ‘old-fashioned way;’ patience.
You should too: https://www.amazon.com/Just-Takes-Time-money-old-fashioned-ebook/dp/B07751F8N2
Can you trust online tax prep software?
If you use your prior year returns to guide you, you can easily navigate most
online software tax services and save money. Most are free for Federal and some
are free for some states. With direct deposit, you have the simplest and
fastest way to do taxes. I have used a number of the services offered by the
IRS-approved sites: https://www.irs.gov/
filing/free-file-do-your-federal-taxes-for-free. As an AARP tax preparer, I
know some of these sites offer simple entry screens and good support. Even if
you have a complicated return, these packages are manageable. As I tell AARP
users, try to do your own taxes first then consider going to a costly preparer.
The IRS has warned us that it is still doing last years returns so make sure
you enter the correct amounts for the child
tax credit and economic
stimulus checks received last year. The IRS sent a letter to remind us.
Beware of other
tax preparers claiming FREE but add charges after you start. After 2-3
weeks, track your refund: https://www.irs.gov/refunds.
If you need to know your previous year tax information, order a transcript from
the IRS files: https://www.irs.gov/individuals/get-transcript.
Your refund could pay for a secure retirement. $2,000 a year earns $500,000.
Let Uncle Sam help you: https://www.amazon.com/Tax-Refund-Millionaires-Let-Uncle-Help/dp/149595644X/
Is your advisor’s “model” ETF option right for you?
Model portfolio assets have more than doubled over the last five years. Many providers of models are asset managers, who stand to benefit from new cash flowing to their funds. Meanwhile, financial advisers have embraced them as a way to outsource allocation decisions so more time can be spent attracting and serving clients. “Investors who chase the recommendations also behave differently, as they pay less attention to both the price and the performance of the ETFs,” a new study found. Model providers recommend their affiliated ETFs more frequently, and these tend to have lower performance and higher fees than recommended unaffiliated ETFs. Over time, advisor and firm fees can take up to 63% of your potential earnings. Fees are guaranteed; earnings are never guaranteed.
Follow Buffett’s advice: https://www.amazon.com/Warren-Buffett-Your-Investment-Advisor/dp/1518690963
Is using an advisor right for you?
Many financial outlets claim that you can increase your returns by using a paid advisor. Consider the source: financial media depends on paid advisors and their firms for income so it makes sense to claim a paid advisor can help you. However, we all know that you can save big money by shopping direct—eliminate the “middle man markup.” Also, few advisors can beat a low-cost stock index simply because of the costs. The unbiased financial scorekeeper, Dalbar, has found that the average advisor-managed returns were 3.79% compared with the S&P 500 index of 11.06%. Warren Buffett put his money on the Vanguard’s 500 Index fund in a bet with a stock picking guru and 5 hedge funds. Buffett won the bet. He also designated the Vanguard low-cost index fund in his will for his heirs. Stock funds underperformed indexes nearly 93% of the time. Over time, advisor fees, charges, trading and bad decisions will lower your total accumulations by 63% or more. In every time period, low-cost funds beat high-cost funds, Morningstar showed.
Go with Buffett: https://www.amazon.com/Warren-Buffetts-Vanguard-Funds-Retirement/dp/1496148592
?**********ACCOUNTABILITY**************?
Like 1776, this
period is a test
of democracy—We
rejected an "American
fascist" once
The
Path to Dictatorship: 2010-2030
Terrorist
attack fueled by propaganda
Congress
fails to support democracy
companies
slam voter suppression laws, then donate to their sponsors
How Govt wastes our money:
TX already rejecting
half of 700 mail-in applications for ballots: only
GOP get ballot
Supremes decide
Covid vaxx mandate cancelled: 865,000
dead: voted to continue deaths
Counties
hide Covid death count: family/political reason fake causes: plague--1
million
SS
benefit increase may raise tax bill: income threshold never adjusted:
thanks Congress
10 wealthiest men doubled
their fortunes: most pay lower tax rate than we do
Wealth group: “few
if any of us can honestly say that we pay our fair share in taxes"
Wealthy tax-avoiders
replacing residents of Puerto Rico:
Manchin: parents
waste monthly child tax payments on drugs instead of their children
Manchin
coal company receives coal subsidies from our taxes: parties on houseboats
Biden spin to Putin: “any assembled
units” NO; “Unassembled” guerillas across is OK?
Military
bases near Ukraine:
SCAMS/SPINS:
OH Supremes cancel GOP election landslide gerrymandering: small
step for OH humans
FL funds “brown
shirt” type police use tips to arrest anyone allege violation of elections
Don has to worry about kids
spilling beans and FL mini-‘Reich’
Parallel: Al Capone, Don Trump: tax
evasion case lies about assets and taxes
FedEx to use laser heat gun to deter
should-fired missiles from packages
Tesla problems in heating/cooling
of Model 3 and Model Y vehicles
Your 5G phone could crash airplanes: no
one foresaw telecom conflict before today?
Martin Shkreli barred
from industry fined $64.6 million Daraprim guage block generic
Metals.com, Chase Metals caught
selling overpriced gold silver bullion $185 million
Scam: favorite digital
and promissory notes easy to fake: large return for the risk.
Codie D. Malesker caught faking
damage insurance reimbursement: jail 15 weekends
Perry Santillo caught
stealing $100 million Ponzi scheme
prison17 years
Tesla
on autopilot kills 2: driver not Elon indicted for manslaughter: No clapping in truck
Fake online offers: how to
spot a fake website and goods
Fake
QR codes to steal money: they direct people to malicious sites: just click
delete
Millions of store & restaurant workers
with Covid-19 are serving us: no sick days
Just dumb: GOP says life-saving Covid vaxx
mandate is same as the Nazis killing Jews
TX
GOP move to the right paid for by the wealthy: Porters, Wilks, Dunn
Mind control: powerful
propaganda has convinced Trumpers that the dead don’t
die
Jobs
Study shows college for
some career degrees are not cost effective: nothing new
Hobbies
That Help You Live Longer: Active outgoing social life
Home office deduction for your business: not
for work from home
Fastest
job growth regions: hiring ID, WA, NC top list
Who owns your account now?
Even generic
drugs have price increases as drug companies want higher profits
Auto insurance rates rise: time to shop for lower rates: bundling may not help
Avg monthly new car payment $636 a new high: same 70 month term
Activision Blizzard to Microsoft: Call to Duty for Mr Gates to play
Streaming costs more: look harder for free services
SEC makes it harder to find private co data: assures wealthy hide fortunes better
Miracles:
Cancer
mortality rates continue to decline: lung cancer drop; no smokers
Free at-home COVID-19 tests: 4 while
they last: check expiration date
Some states have lowered their taxes for
2022:
In our minds: Covid shot side
effects (headache and fatigue) are from anxiety not vaxx.
Snow and
hailstorms cover Saudi desert: Iceberg
falls into ocean
IRS videos answer questions
quicker than a phone call: IRS failed to answer 50%
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
41 Watchung Plaza, B242
973.746.2014
www.InsuranceAdvisorsNetwork.com
Alerts available
at http://dankeppel.blogspot.com/
