Your Unbiased Advisor

Friday, February 7, 2020

What can your investments do for you?

Most retail investors have no idea what they should expect from their money over time. Sure, everyone says they want to be rich—tomorrow—like the lottery. Well, if you have played the lottery, you know it is just an additional tax. Odds of winning big prizes are greater than you becoming a star athlete. The most successful investors are those who follow the advice of legends like Warren Buffett and John Bogle. Buffett used Bogle’s low-cost 500 Index to beat the 5 hedge funds run by a Wall Street guru. Buffett used a low-cost 500 large company index because you are almost guaranteed the highest return over time that way. Buffett relied on the compounding of high earnings with low costs over more than 10 years to be assured his wager of $1 million won. Over time, your investment in a low-cost index fund of large companies will be more successful than the average brokerage account owner. Are there exceptions? Sure, but you won’t know until AFTER you lose money to the index. 11% over 30 years can compound your $250 a month 401k or IRA money into $1 million or more. Buffett picked Vanguard’s 500 Index because of the record: One year 31%; 3 year 15%; 5 year 11%; 10 year 13%; 11.15% since 1976. As Bogle said: "Don't look for the needle in the haystack. Just buy the haystack."

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

If you own a business, almost everything is deductible: pay $0 tax like Don

Our tax system has been set up to favor business. As you learned from our president, he has used the rules to pay ZERO or near zero taxes for years. He says that makes him smart. Looking at his most recent tax law changes, one thing is clear, the wealthy and most business don’t pay tax or pay very little compared to the average tax burden of 33.9% for the middle-class working stiffs. In

America

, we are better off running a business than working for one. The IRS even lets us reduce our income from business losses so we pay less. However, there are rules for a small business. Rules you need to know include the 50% limit on deduction for meals, no write-off for unpaid invoices, not all startup costs are deductible, not all fringe benefits are deductible, and you can’t deduct if you can’t prove you’re in it for the profits, like Trump. With the internet, it is relatively easy to learn what you need to know on the tax side of the business. You can’t assume anything. Be prepared to pay dearly for tax prep if you can’t do your own business taxes.

https://www.amazon.com/Your-Tax-Haven-Tax-FREE-Americans/dp/1482659441

Longevity risk: it’s all in the genes

Many folks are living longer. Family genes provide a general rule: if you parents lived past the average age of 79, you probably will too. Most are not prepared to finance 20-30 years of retirement income. About 1 in 3 65-year-olds today will live past age 90, and about 1 in 7 will live past age 95. The standard advisor answer is putting your money into an annuity since they promise to pay a monthly income for the rest of your life. Sounds good but did they explain that inflation will take half the buying power of your monthly income in about 20 years? Insurers price their products at the current low interest rate. Right now you can receive $524 a month with a payment of $100,000 if you are a male age 65. You can’t ‘outlive’ this $524 but by age 85 it will only buy $250 worth of goods. If that $100,000 represented the bulk of your assets, what do you do now? Instead you could take income and keep growing your assets for later. Annuities were fine in the last century when people died by age 68: Not fine now unless you are the seller!

Consider your alternatives: https://www.amazon.com/Best-Annuity-Strategy-Income-Growth/dp/1497532019

Your employer will now guess at your monthly retirement income

The SECURE Act requires retirement plan sponsors to tell workers how much their current savings will generate in monthly annuity income in retirement. The new law, sponsored by the insurance industry, aims to provide employees with a ‘clearer’ picture about whether or not they’re on track to retire. But your employer’s plan is making a lot of assumptions. First, when will you retire? Second, which investment option do you have and how long has your money been working. A 401k of $100,000 for a married couple could pay around $6,000 a year or $500 a month. The final monthly figure depends on a few annuity factors. Some plan sponsors already use their annuity table which assumes very low interest rates for accumulations and distributions. If you had plans for a higher amount per month from your nest egg, just don’t let your employer talk you into the annuity they now sell. Their ‘guaranteed’ annuity protects them, not you from inflation and insurer collapse. Using a simple low-cost balanced mutual fund, you could earn over 9% a year now and thus spend much more income later.

See options: https://www.amazon.com/Not-Buy-That-Annuity-Guaranteed/dp/1466494573

File for the quickest refund FREE

If you meet certain criteria and have your documents already, federal and state can cost you nothing at https://apps.irs.gov/app/freeFile/. Another site has no income/forms restrictions: https://www.creditkarma.com/tax. The software helps you avoid common mistakes before you file. Even if you make a tiny mistake, the IRS usually catches it without penalty. I have used most of these programs for years even though my income is above the limits. Most charge nothing for the federal and state. Some charge only $12.95 for the state. For 2019, six states have kept the health mandate tax if you don’t have health care cover so that state return may get complicated. Once you file your first year, your previous years’ data is there and pre-fills your forms: Saves a lot of time and money. Try it before you spend $200-300 at a for-profit preparer. No refund due? File to keep your ID from scammers. Your W-2 should be sent to you by Jan 31 according to IRS. Your refund can be in your direct deposit account in 10 days. Check mobile: IRS2Go within 24 hours after IRS receives your e-filed return for status.

Plan now for a Tax FREE retirement: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

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

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

“Never in my life did I think I would like to see a dictator,

but if there's gonna be one I want it to be Trump

Top Mobster says HE is the COUNTRY: beating indictment gives absolute power: anything goes.

GOP agrees: president’s actions are OK because he is president—no crimes/misdemeanors possible!

Trump can now nullify 2020 election result since “his interests are US interests”

Will the DC mob ‘rub out’ Bolton, the squealer?

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

Tax cuts for the rich "trickle down" through economy, lifting growth, wages: not working

Deficit passed $1 Trillion: fewer paying taxes: Econ slows: Trump’s “greatest in history”

American farmers expect record-breaking 2020 bankruptcies: 2020 surpass 2019 record.

Long-term costs of maintaining hundreds of miles of Trump’s Wall: billions of dollars

SCAMS/SPINS:

Rush Limbaugh gets the award Mother Teresa got for her "bringing help to suffering humanity."

Racism celebrated by America’s highest award: ‘Freedom’ to profit from racist hate-mongering.

What a ‘kangaroo court’ looks like: GOP mob declare mobster boss ‘not guilty’ rubber stampin’

Trump judges rule lawmakers can’t sue Trump for using office to make money

Life of indicted insider trader: US visas for family to live in Manhattan hotel free, 4 hours to shop

Philip Riehl PA caught $60 million Ponzi schemes: preyed on Amish and Mennonite groups

Li Lin Hsu CA caught scamming $8.1 million with promise to Chinese of safe investment

Boeing found another 737 software problem to the Max

“house stealing” is the “latest scam: Fake sale from your stolen ID, docs, etc.

Identity theft, imposter scams, and telephone issues topped the FTC list of complaints.

Hackers control your car through your car computer: protection not yet perfect.

Fake electric utility robocalls daily: Congress allows this annoyance to get election money

Commercials bigger hit than football in SuperBowl: more movement on stripper pole than field

Trump thinks KC Chiefs are in Kansas: like Hurricane Doran to hit Alabama: his smarts gone

Dems Committee mess up IA count to assure no ‘socialist’ becomes party nominee: Hillary II?

Jobs

Macy’s shuts 125 stores, 2000 corp jobs: retail goes digital

Who owns your account now?

Does your mechanic love you? These owners hate paying for repairs

Re-gift or sell your gift cards: use safe sites to get best value

Miracle:

Scientists: warm ocean water flowing under the massive Greenland ice, melting faster.

No Pet Sounds: cofounder Mike Love at a trophy-hunting convention of Don Trump Jr.

Bumblebees are dying from the US, EU heat: tomatoes and cranberries at risk.

5,800 clergy on list of credible sexual assault: many have been left off by bishops

IAN

41 Watchung Plaza, B242

Montclair, NJ 07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

Alerts

Friday, January 31, 2020

Why we don’t lose money when the market crashes

We bought our stock or mutual fund shares at a certain price. When prices go down, the market is said to have fallen. BUT, and this is the point, we did not lose any of the shares we purchased (unless we sold in a panic). In most cases for our broad-market fund shares, the value of our account will go up when prices go up again. If we didn’t sell in 2007-8 when the market index fell from $150 to $69, our same shares are now worth $330. Our fund shares represent our part ownership in real producing companies. IT IS THE SHARES that have value and if we buy and hold as Buffett recommends, we won’t lose money when the market crashes. Unless we have insider information, we don’t know when an individual stock we bought for $20 will go to $1 or to $200. Speculating on a certain stock price has been shown to be a Loser’s Game. Remember when sellers give us an ‘inside tip’ they only make money when we trade: buying and selling. Even if your broker gives you bad advice, it takes years to recoup your loses (IF you can prove it). Make a killing when markets collapse: buy when share prices, NOT shares, fall—when they are ‘on sale’ as Buffett advises. Just keep buying shares in proven winners.

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

What can we do now that Trump says he will cut Medicare and Social Security?

Recently, Trump told the world he will cut Medicare & Social Security by “end of the year.” The GOP may actually do it since they passed his big 2017 tax cut for the rich. His tax cut for his tax-credit class only increased the deficit to $1Trillion. Now he needs to cut our benefits to pay for making the rich richer. What can we do now to supplement the cuts in our benefits in the future? Some have already started a tax-FREE account that they can use in retirement. Others have been converting some of their IRA money to this tax-FREE account. Future accumulations will not be taxed so these folks can make up for the cuts in benefits using the growth with no taxes due. They recognized early that the GOP would take our earned Social Security and Medicare benefits to pay off the deficit. The GOP is certainly NOT going to raise taxes on those who pay for their elections.

Build your own benefits fund: https://www.amazon.com/Forget-Social-Security-Medicare-Lifestyle/dp/1466394285

Lower your tax: We can continue to contribute to deductible IRAs

Previously, we were not allowed to continue making contributions to Traditional IRAs once we reached age 70½. But the SECURE Act removes this age limit, effective this year. This could be beneficial for the growing number of people who are working past age 70 since they can now continue making IRA contributions indefinitely, thus enhancing their long-term retirement financial security. They can also make non-deductible contributions to their Roth IRA which is never taxes later. On the other hand, distributions from traditional IRAs must begin when we reach 72 up from age 70 1/2. However, the new rule does not apply to those already older than 70 ½ or turned 70 ½ in 2019 (born on or before June 30, 1949). Those individuals must continue or begin taking RMDs under the old rule. The SECURE Act effectively eliminated stretch IRAs as an estate planning tool. Effective for deaths occurring after December 31, 2019, funds from inherited IRAs must now be fully withdrawn by beneficiaries within 10 years of the account owner’s death. Exceptions for spouse and disabled. See a professional.

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

Why are annuities popular despite falling interest rates?

Sales of all types of annuities rose nearly 15% in 2018 over 2017, according to the Insurance Information Institute, with fixed-annuity sales far surpassing variable annuities. It is claimed that annuities protect us against longevity risk by promising a stream of income we can’t outlive. Now more retirees will be enticed by the annuity offer because the new SECURE Act frees employers from the liability of annuity failure. Unfortunately, many retirees will be convinced that their employer’s annuity choice for their pension income is the best way to provide it. The employer is protected from liability when the annuity-income buying-power is cut in half later in life: $500 a month now will be worth $250 in 20 years. The employer will not have to worry about the possible failure of its insurance company. The employer will not be concerned about an escalating inflation rate and rising living costs. Yes, retirees will have a guaranteed income but as it’s value decreases, retirees will have no alternatives to maintain their buying power. Retirees will be stuck with today’s low interest-rate income payouts.

Consider options: https://www.amazon.com/Not-Buy-That-Annuity-Guaranteed-Low/dp/1466494573

How to negotiate when you have a dispute

Famous FBI hostage negotiator Chris Voss says don’t compromise: there isn’t a real big difference between compromising and caving. Let opponent think your solution is their own so they own it. Accommodator’s demeanor is your competitive edge. You are listening to and getting along with everyone. Listen first: opponent will share things you would never know. Commiserate with their real fears: “sounds like you have been burned in the past.” Instead of getting to ‘yes’ getting to ‘that’s right’ creates agreement. Rapport allows opponent to feel comfortable sharing. Sharing frees them from feeling judged and attacked. Say: “It seems like I haven’t earned your trust yet.” Speak quietly. Empathize. Paraphrase what they just blamed you for. Instead of ‘no’, “How can I do that.”

Negotiate with liars: https://www.amazon.com/Confess-Things-Your-Advisors-Will/dp/1463712154

Complete your tax filing for FREE

If you meet certain criteria and have your documents already, federal and state can cost you nothing at https://apps.irs.gov/app/freeFile/. Another site has no income/forms restrictions: https://www.creditkarma.com/tax. The software helps you avoid common mistakes before you file. Even if you make a tiny mistake, the IRS usually catches it without penalty. I have used most of these programs for years even though my income is above the limits. Most charge nothing for the federal and state. Some charge only $12.95 for the state. In 2019, NJ has kept the ObamaCare mandate tax if you don’t have health care cover so that state return may get complicated. Once you file your first year, your previous years’ data is there and pre-fills your forms: Saves a lot of time and money. Try it before you spend $200-300 at a for-profit preparer. No refund due? File to keep your ID from scammers. Your W-2 should be sent to you by Jan 31 according to IRS.

Plan now for a Tax FREE retirement: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

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

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

Claim: Impeachment not possible because anything Trump does is in the national interest

Trump tells the world he will cut Medicare & Social Security by “end of the year.”

Trump promises another tax cut before the election despite rising deficits.

Trump to suppress book proving his extortion ‘high crimes’

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

Trump wants to have us taxpayers pay for religious education of some kids: Constitution?

Trump allows states to undermine health coverage for poor with caps/block grants.

On this 75^th anniversary, would our soldiers defy the commander in chief if he gave an order to arrest without warrants all the people from ‘shithole’ countries?

Former Treasury Sec Summers plans to close rich loopholes/bump IRS not ‘wealth tax’.

SCAMS/SPINS:

Treasury admits reasons for tariffs were ‘trumped’ up for propaganda purposes

Jeff Carpoff CA caught wire fraud, money laundering $1 billion mobile solar generator

Alex Gierbolini caught making $2 million unsuitable sales over time to a wealthy client

Brian Simms IN caught making $1 million unsuitable sales

Edward Matthes WI caught stealing $2.4 million promised guaranteed 4% return

Jerry Szilagyi Catalyst Capital mislead investors lost $ 100 million risky deals

Kerry Wills caught ‘borrowing’ from client and taking $19,500 gift.

Citizens Bank RI caught failing to properly manage\respond to credit card disputes.

Some Americans have already voted for prez: our long process from 1800s out of date?

IPhone of Amazon CEO hacked by Saudis: Nothing safe from hackers: DO NOT OPEN

Ring and other apps sell your info to others: you gave app OK to collect info. Not sell it.

TrumpCare puts onus on you if your employer uses ICHRAs: you alone pick/pay for plan

Blue Cross to fund generic drug price cuts

Practice Fusion caught taking drug maker kickbacks to push opioids to docs

Jobs

Nurses, electricians, artists, mechanics, researchers for CA labor unions hiring

Bed Bath Beyond closing 40 stores: Macy’s closing 30 stores

Who owns your account now?

Lockheed Martin secures $1.9 billion pension plan buyout: pension now at insurance co.

IRS claims you have rights when you have to deal with them: no calls just letters

Miracle:

People die here: America’s concentration camps

NFL owner Benson pays lawyers to help hide child abuse by priests/bishop LIST

How did Billie Eilish win 4 Grammys: ‘song and record of the year’?

IAN

41 Watchung Plaza, B242

Montclair, NJ 07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

Alerts

Friday, January 24, 2020

How much income in retirement?

How much income can we expect in retirement?

The older folks I talk to have been saving all their lives. Their parents learned from practical experience (during hard times and before Social Security benefits started flowing) that if they didn’t save themselves or work at a place that gave pensions, they would have a hard time later. They learned to make sure part of their incomes was saved for later. Today, many have all types of income including SS benefits which they earned. Some men in Congress think our SS benefits are ‘entitlements’ that can be cut to pay the rich. They encourage the free subsidies some of their constituents receive for NOT growing crops or NOT finding oil or NOT having a bank reserve. Of course for some folks, it has always been hard to save for later—they never had a high paying job or their wages have stayed the same since the 1960s. So 40% of us over age 60 live on (try to live on) SS benefits alone. I don’t think all those folks threw their wages away and deliberately did not save. Their wages just did not reflect their increased productivity. Their share went to senior management. Their job didn’t offer matching 401k contributions. Their savings went to an emergency. Most of the folks I now help as an AARP Tax-Aide have a pension and SS benefits only. One in 10 has personal investments they cash in periodically. Most average less than $40,000 total income—a combination from both spouses. Most learn to cope with less. Trump now says Medicare and SS benefits may be cut since his tax cuts have NOT reduced the deficit as promised.

Prepare for your later income NOW: https://www.amazon.com/Your-Retirement-Income-Checklist-TrumpWorld/dp/1544703260

Complete your tax filing for FREE

If you meet certain criteria and have your documents already, federal and state can cost you nothing at https://apps.irs.gov/app/freeFile/. The software helps you avoid common mistakes before you file. Even if you make a tiny mistake, the IRS usually catches it without penalty. I have used most of these programs for years even though my income is above the limits. Most charge nothing for the federal and state. Some charge only $12.95 for the state. In 2019, NJ has kept the ObamaCare mandate tax if you don’t have health care cover so that state return may get complicated. Once you file your first year, your previous years’ data is there and pre-fills your forms: Saves a lot of time and money. Try it before you spend $200-300 at a for-profit preparer. No refund? File to keep your ID from scammers.

Plan now for a Tax FREE retirement: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

Which is better: ETF or Mutual Fund?

ETFs are index funds you can buy and sell every minute. Some brokers charge commissions. Are you surprised to learn the largest ETFs are offered by Vanguard? Since most ETFs and Funds charge almost nothing and use the same index of stocks/bonds, why invest in one or the other. First you don’t need a brokerage account to own a Fund. Second, you may be able to reduce your taxable income with one over the other. Third, it is much easier to buy and sell an ETF than a Fund. Fourth, one or the other may provide an index of securities you favor. There are now at least 5,000 ETFs trading globally, with more than 1,750 based in the U.S. There were 9,599 mutual funds in 2018. However, here are only 3,671 domestic stocks today, down from 7,322 in 1996. There are 108,790 listed companies around the world. Remember, Warren Buffett won his bet with hedge fund options by holding just one low-cost Fund for 10 years.

Pick one and hold it: https://www.amazon.com/Assets-that-grow-themselves-snoring/dp/1986381226

Why does Warren Buffett credit COMPOUNDING for his wealth?

Compound interest: making money on your previous earnings. Warren Buffett wrote:

"My wealth has come from a combination of living in

America

, some lucky genes, and compound interest." Compounding is the Miracle of Finance. Unfortunately, the financial services industry does not allow schools to teach compounding of high earnings from index funds as Buffett advises. He proved Bogle’s idea: costs matter and are the most important factor in investing success. He bet the Vanguard 500 Index would beat the 5 hedge funds run by a Wall Street ‘professional.’ Indeed if you look at the past, most equity investors earn much less than a low-cost index fund: 3.79% vs 11.06%. The only requirement is that you must give up the vain search for the top stock or fund and just wait. We all want to be rich quickly so we don’t know how to wait. Fast trading is the myth of Wall Street since trading is the only way they make money. Make money the old fashioned way—Wait—and let the Miracle of Compounding work for you.

Take 11% a year: https://www.amazon.com/You-Beat-Wall-Street-professionals/dp/1986031373

Are ‘thematic’ funds right for you?

These mutual funds “hunt for tomorrow’s winners based on today’s emerging trends.” Using tea leaves and propaganda from the companies they buy, these well-paid gurus of Wall Street buy into stocks with 1000 to 1 chance of being the next Amazon, Apple or Facebook. Assets under management doubled in three years to reach $175.2 billion at the end of December. When interest rates are declining, investors tend to make more dangerous bets. Often you lose with larger wagers. People who have made this bet usually forget that the huge winners like Amazon have taken years to win support: 1997 price $1.73; 2020 price $1,884. Few gave Jeff $1.73 for his bookstore stock. 11% a year is easier money.

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

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

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

Trump admits there is “a growing totalitarian impulse …”

Trump kills foreign leader because he was “saying bad things”

His power comes from fear that they may be next

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

Trump cancels Obama’s vegetables and fruits in public school lunches: Perdue’s menu

Social Security benefits will be saved or lost in the next election: 2100 Act v TRUST Act

Washington is ignoring tax avoidance by the rich: you are more likely to be audited

Trump kills Obama water rules: dump whatever you like into rivers and streams.

Trump to cut California health funding: Going for the Evangelical vote

SCAMS/SPINS:

MO parents can have librarian jailed allowing certain books in ‘public’ library: Rev lawmaker.

How to beat the high cost of textbooks: 3 firms make 80% so monopoly pricing capitalism.

John Stumpf WellsFargo caught pumping sale bogus accounts for profit: first Fed charge banker

John Kapoor Insys Therapeutics caught drug dealer gets 5 years jail—first corp dealer in jail!

One pill replaces workout benefits: Sestrin appears to mimic the effects of exercise … on mice!

Telephone replaces human communication: loneliness from screen time; few make real contact.

Treasury Sec Mnuchin goes after 17-year old for her remarks

Nathan Duane Oeming Commonwealth Financial caught soliciting a minor

Honda recalls 2.7 million 1996 through 2003 for airbag inflator

Gray hair: we use up the limited supply of hair dye in our cellular make-up if we get too scared.

Jobs

Biden thinks his son Beau should be running for prez not him

Who owns your account now?

Trump promised to cut our Medicare and SS benefit accounts to pay for his deficits.

Miracle:

Causes of early deaths are preventable but not with drugs with pro-human decisions

America’s doctors now advocate universal health care so everyone is helped

56% of over 65 say Trump should stay; 63% of under 30 say trial for Trump’s removal.

IAN

41 Watchung Plaza, B242

Montclair, NJ 07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

Alerts

Friday, January 17, 2020

File taxes FREE

Complete your tax filing for FREE

If you meet certain criteria and have your documents already, federal and state can cost you nothing at https://apps.irs.gov/app/freeFile/. The software helps you avoid common mistakes before you file. Even if you make a tiny mistake, the IRS usually catches it without penalty. I have used most of these programs for years even though my income is above the limits. Most charge nothing for the federal and state. Some charge only $12.95 for the state. Since its 2003 debut, Free File has served nearly 57 million taxpayers, saving an estimated $1.7 billion calculated using a conservative $30 tax preparation fee. In 2019, NJ has kept the ObamaCare mandate tax if you don’t have health care cover so that state return may get complicated. Once you file your first year, your previous data is there and pre-fills your forms: Saves a lot of time and money. Try it before you spend $2-300 at a for-profit preparer. No refund? File to keep your ID from scammers.

Plan now for a Tax FREE retirement: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

Who knows what markets will do in 2020?

Despite what commentators and investment gurus say, no one knows. Given that employment remains strong, it is likely that your retirement account is safe for now. However, because we are all human and sometimes sell at the wrong time, it may be prudent to check how diversified your assets are. Since no person made perfect predictions in the past, don’t listen to the paid fortunetellers now. Look at the long-term statistics for guidance: 11% from a low-cost index: https://investor.vanguard.com/mutual-funds/profile/VFINX since 1976 and over 30 years: https://www.dalbar.com/Portals/dalbar/cache/News/PressReleases/DALBAR%20Pinpoints%20Investor%20Pain%202015.pdf The one fact we have to keep in view: the more you pay the less you earn. If we give up 2% of our account value each year, compounding will make sure we will accumulate less over time. Here is my favorite example: Let’s say you add $250 a month to your retirement fund. If your firm or advisor offered a low-cost stock index fund at 11% average for 40 years, you would retire with $2,169,740. If trading and fees take 2% a year over time, you would retire with only $1,179,107. You gave about HALF to your employer or advisor just because they did not offer the best options for you. They chose the best options for themselves. No one advisor has ever beaten the market over time except Warren Buffett’s 20.5% and he doesn’t charge.

Cost determines success: https://www.amazon.com/Best-Predictor-Investment-Success-Cost/dp/1502524082

Use Warren Buffett as your advisor

Since he has been successful over time and you are investing for the long-haul, you should make Buffett your advisor. His advice is free so you keep everything your money earns. Depending on your goals and timeline, Buffett could make you wealthy. How wealthy? Well, take the example above. Buffett tells everyone who listens to him to use a low-cost 500 index fund as their primary strategy. He used the Vanguard 500 Index Fund in his win over a hedge fund manager. You notice that over time you earn over 11%. Using a compounding calculator like this one you can see how much you can accumulate. http://www.moneychimp.com/calculator/compound_interest_calculator.htm Most of us would rather know how much we can spend in retirement with that total accumulation. Use the ‘Monte Carlo’ calculation that most advisors use to do the calculation 100,000 times depending on many market historical outcomes. This provides you with a probability of success depending on how much you spend each year for a certain number of years. In the example of $1 million fund over 30 years in retirement, you will have on average $45,000 a year to live on. This is an average so some years you will have less and some more—you must keep some excess in your Wealth Reserve. https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf

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

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

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

Trump kills Iran leader because “horrible past”

“I saved a couple of big wars; I deserve the Nobel”

GOP to just dismiss impeachment: change Senate rules

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

US violates Iraq sovereignty: we will keep 5,200 US troops in your country uninvited

Trump goes after disabled to pay for wealthy tax cuts: $783/mo poor have little to take

Trump hides US casualties from Iran missile attack on 2 bases: He claims no injuries

SCAMS/SPINS:

Trump kills Iran leader because “horrible past” NOT “imminent threat” to US: Mob kills anyone!

Trump cites ‘deep state’ intelligence for killing: same ‘intelligence’ he dismissed Jan 2019

Trump gets applause from his fans for killing

Iran

’s favorite son: embassies don’t feel threat

Trump advisor Flynn says he is not guilty now: sentencing delayed.

American intelligence staff fear reporting on threats: Trump blasts analysts if disagree with him.

Putin is fast-tracking work on constitutional changes that could keep him in power: Shows Trump

WI GOP to cancel 209,000 Dem votes before cast: Trump won by 23,000 in 2016.

Scammers for hire: “end-to-end online manipulation system” to get you elected anywhere

‘Choices’ in policy are just marketing gimmick to keep profits high and options low. 1 size for all

PointState Capital hedge fund: traders decline to give investors money back now their fees spent

US Bank pension plan caught overcharging and self-dealing retirement options: $750 million lost

Northrop Grumman caught overcharging employees, taking kickbacks, fine, deny liability

Tax preparer registered to do your taxes? https://irs.treasury.gov/rpo/rpo.jsf

Refund Advance to $3,500 filing today: HR Block misleads cost of loan from your tax refund!

Co-pay higher than buying direct: $35 out of pocket instead of $120 using insurance Drug tricks!

Fix errors in your credit reports FREE: https://www.annualcreditreport.com/index.action

WINDOWS 7 support ends: Free WIN 10 update?

Pay taxes on SS benefits: For income in excess of $44,000 up to 85% of benefits may be taxable.

Jobs

New law protects employer if worker picks annuity & payouts less than full amount later.

Half employers feel workers not taking full advantage of pension plans: no money?

CVS to expand health services at low cost covering up to 80% of what PCP offers

Who owns your account now?

Voya Financial (ING) selling rest of biz: already sold annuity and life

NJ another state to run its own health insurance exchange: $40 million for GetInsured

Miracle:

Prince Harry gives up ‘public funds:’ escape bullying with Meghan: Who’s next to work?

Seattle restricts foreign-influenced companies’ (Amazon) spending on local elections: Trend?

New Alzheimer strategies may help future victims: One cure is unlikely

IAN

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Montclair, NJ 07042

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www.InsuranceAdvisorsNetwork.com

Alert

Friday, January 10, 2020

We pay $3,000 to subsidize taxpayers who avoid paying what they owe

The Treasury Inspector General for Tax Administration and outside groups claim that the IRS isn’t effectively auditing corporations and high-income individuals with complicated returns. Even with Trump’s generous tax cuts to the rich, some are not satisfied and avoid paying since there is little downside. With fewer audits/staff, 14.2% of the taxes owed are never paid. On top of that, most corporations pay nothing. Actually, we give them our money in the form of subsidies, grants, deferrals and credits. Congress and its lobbyists are the beneficiaries and are unlikely to give it more money to do the tough audits. Actually, a poor parent with EIC is more likely to be audited. It is easier to garnish the wages of someone making $30,000 than sue GE, Boeing, or Apple. Two thirds of corporations pay NO tax. They use shells, non-US headquarters and asset manipulation to avoid taxes on income earned in the

. Even the president uses tricks to pay nothing.

https://www.amazon.com/Most-U-S-Corporations-Pay-Zero-Taxes/dp/1514274116

Does it really make a difference to cut advisor commissions/fees?

Is it really important to move your investments to the lower priced generic? For instance, Trader Joe employees are suing because they are paying more for their 401k retirement than needed. It may not seem that the 2% you pay for managing your money and keeping a record of your shares and earnings is a problem. If you earned 25% every year like you did in 2019, then of course it isn’t worth suing your employer. However, they don’t earn 25% every year for you. The 2% of your balance EVERY YEAR is a big deal when you earn only 4% average over time. Let’s say you add $250 a month to your retirement fund. If your firm or advisor offered a low-cost stock index fund at 11% average for 40 years, you would retire with $2,169,740. If they charged 2% a year over time, you would retire with only $1,179,107. You gave about HALF to your employer or advisor just because they did not offer the best options for you. They chose the best options for themselves.

Earn 11% over time: https://www.amazon.com/You-Can-Beat-SoCalled-Wall-Street-professionals/dp/1986031373

Reducing income tax by contributing to traditional IRA

Congress passed laws changing the IRA rules: you can contribute $6,000 ($7,000 over 50) to your traditional IRA and take a deduction from income. The law ends the prohibition on contributing to an individual retirement account (IRA) after 70½. Individuals may continue contributing to an IRA at any age, as long as they have ‘earned’ income. BEWARE NEW LAW: If you were pumping up your Roth IRA so your heirs could have tax-FREE income for life you may have to change your estate: NO stretch ROTH. All IRAs must be exhausted in 10 years unless disabled/illness. Even though you have paid tax on this money if you converted your IRA, you may have to use a trust to create legacy income for them. You may also want to use your lower income years to convert your IRA to a Roth since your rates may be lower now with a deductible IRA. Also new: Part-timers can make pre-tax contributions to a 401k and an IRA.

Which is best for you? https://www.amazon.com/401k-IRA-Tax-FREE-Tax-Deferred-retirement/dp/1475057938/

MA fighting lobbyists to re-install fiduciary standard

The broker-dealer and insurance industries agree: They don't like the broad-based Massachusetts fiduciary proposal, which would blanket their respective industries with a fiduciary standard they’ve been successful in avoiding up until now. Trump responded to the industry lobbyists immediately after election to kill the Obama version of the duty that sellers must give us the best deal regardless of size of commissions. Now MA Galvin wants bad products to be off limits: MA would “deem it an unethical or dishonest conduct or practice for a broker-dealer, agent, investment adviser, or investment adviser representative registered required to be registered in Massachusetts to fail to act in accordance with a fiduciary duty to any customer or client.” Lobbyists claim small investors would be hurt by this rule because industry would avoid helping those with limited funds—folks who need help the most. MA GOP Gov caves to lobbyists.

We need sellers to follow fiduciary duty: https://www.amazon.com/Fiduciary-Rule-BEST-dont-anymore/dp/1530980275

Is your ex still the beneficiary of your pension, insurance, etc?

This is important. When you forget to change your beneficiaries on your pension, brokerage or life insurance, you may have a long legal fight to fix it. And your current spouse and children may hate you. Choices made in your former life may come back to bite you. Most people are not always completely thorough during their separations/re-marriage/divorce. They miss changing beneficiaries they named 20 or even 10 years ago. It could be a pension account at a former employer that is due to go to your ex at age 65 or a forgotten paid up policy with last marriage kids as beneficiaries. Sure, with a legal fight you may get it changed but who needs the fight. This new tax season is the perfect time to look at your overhanging past life choices. Safe than sorry.

Check your benes: https://www.amazon.com/Personal-Finance-Smarties-Not-Dummies/dp/1469973030

Advisor trend: retainer fees to avoid ‘hawking proprietary products’

Is your advisor acting as a fiduciary? Are they recommending what’s best for YOU or maximizing the leverage they have over you? How do you know the difference? As your portfolio grows, does your advisor reduce the standard AUM fee? 1% of $1 mil is better for you than 1% of $1.5 mil this year: the market went up 30%; not their IQ. Advisors use much more automation and model portfolios now. Subscription-based services are becoming common for clients with large non-tradable or business assets or the need to offset market volatility. Time to ask for a better price for ‘advice.’

Shop Advisor costs: https://www.amazon.com/DIY-Financial-Independence-Freedom-Workbook/dp/1088908500

Why most investors don’t need an annuity

Many are DIY investors—they have jettisoned their advisors since learning the John Bogle and Warren Buffett investment lessons: advisor costs detract from your earnings. Advisors and annuities can take up to HALF your earnings in fees and trading costs. Here are DIY's results for 2019. They are total return investors—selling shares equally across all 10 funds for their monthly RMD income in retirement. Some want protection from a down market and so they overweight Wellesley Income instead of buying an annuity: Wellesley’s 9.7% a year is not too bad to live on.

2019 Total Return Fund Long-term Return Longevity

31.5% 500 Index 11.2% since 1976

13.2% Energy 9.9% since 1984

28.0% Extended Market 10.7% since 1987

22.9% Health 16.2% since 1984

31.4% International Growth 10.6% since 1981

27.9% PRIMECAP 13.4% since 1984

27.4% Small Cap Index 10.6% since 1960

16.4% Wellesley Income 9.7% since 1970

30.4% Windsor 11.3% since 1958

29.0% Windsor II 10.7% since 1985

25.8% Average 11.4% *