Friday, July 26, 2013

10 steps to success with money

Financial Literacy: 10 Steps to Success with Money 
Warren Buffett started with $6,000 saved from his paper routes and in 60 years, accumulated $60 billions—about the size of Bolivia's GDP.
What can we learn from Mr Buffett?
"My wealth has come from a combination of living in America, some lucky genes, and compound interest."
Invest your money in businesses sharing profits with you and over time you can reach $1,000,000. Use an IRS tax-FREE account and it’s like a $300,000 bonus.

People don’t reach goals because they don’t start saving early
Only one in four financial planning clients actually begin saving early enough in their career to achieve the recommended level of retirement savings. Overspending and living beyond one's means (61 percent) are the most common reasons clients veer from their financial plans, the study shows. You can make sure your grandchild starts early by opening a tax-FREE account for them with $100. Every year you delay costs your favorite kid $100,000 later

Study shows indexing is good even for high-cost managers
Fund managers have every incentive to mimic their benchmark when markets are down, according to researchers. During up years, a strong relationship exists between fund performance and net flows. However, during down years, outperforming or underperforming a benchmark does not have a significant impact on the subsequent year's flows. Earn 10-12% yourself without the high fees:

Drivers don’t use discounts—missing $500 savings
Almost two in five drivers are either not receiving any car insurance discounts (30%) or do not know if they are receiving any discounts (9%), according to

Health exchange drops price
Kaiser Permanente lowered the rates it is proposing to charge customers through the District's new DC Health Link insurance exchange by 4.4 percent for small-business employees and half a percent for individuals. Two other plans, United HealthCare, and Aetna dropped rates by more than 10 percent. CareFirst is the fourth company on the exchange. Buy only what you need:

Insurers named in “too big to fail” list
AIG and Allianz are among insurers deemed systemically important by global financial rule makers, meaning they may face tougher capital standards and tighter regulation.

Health care exchanges explained (sort of) in video
When you shop for health insurance, avoid these inadequate policies and gaps in coverage:
ObamaCare exchanges required states to work through many parts. Each state offers differing benefits and costs. NY says you can save 50%. Some states offer nothing. Having a lot of choices just makes it harder to decide and lets insurers cloud the price:
81% of Americans say they are aware of the 2010 Affordable Care Act's (ACA's) requirement that most Americans must carry health insurance or pay a fine. But many uninsured say they didn’t know they had to get coverage. Where have they been?

LA homeowners’ rate increases
State Farm in Louisiana is making changes to minimum homeowners’ deductibles and implementing an overall 8.8 percent homeowners’ rate increases. Check coverage for discounts and save:

FL wants the money from your benefits
The state of Florida has put the squeeze on some of the nation's biggest life insurance companies to hand over benefits from almost 96,000 unclaimed policies worth more than $75 million. You claim it:

Survey Finds Fear of the Markets Trumps Fear of Death
Americans are more afraid of investing in the stock market than they are of losing their jobs, public speaking and even dying. Many – especially younger investors – use a website for their financial planning needs. Investment ‘professionals’ are unclear about why this is. Low-cost index funds provide 10-12% a year over time.
83 percent of respondents are afraid of another financial crisis, while 72 percent are concerned their personal health care costs will become unmanageable and 71 percent worry they will not be able to pay for their children’s education. Rather than working with an investment professional, generation X and millennials are more likely to use websites as their primary financial planning resource. Some use Wealth Without Wall Street:

SCAMS           “Deficits don’t matter” Republican godfather, Dick Cheney, 2002

41 Watchung Plaza, B242
Montclair, NJ 07042

Friday, July 19, 2013

Are you ready for retirement?

Are you ready for retirement? Hope for the best; Plan for the worst
=The best guarantee for the future is having money
=Financial advisors can't predict the future
=Make a plan for the future or the government will
Pension funds like the one for California workers (CalPERS) have 63% equities, 23% fixed income and 14% other assets like real estate, forests, etc. Very little is in risky investments like hedge funds or gold.  By Ian Sender, former director, Wall Street firm

Annuity sales tactics you should avoid
When sales people hear that their products are expensive—3% a year or more, they claim that the benefits of death benefit and their sage advice are worth it. Most annuities never pay death benefits. Tax advantages are less than a regular investment account. Advice is not useful unless you are investing $100,000 or more.
Free email article available at
There are more sales tactics you should avoid:

How does your Medicare Advantage plan rate?
Out of five possible stars, 85 percent of AARP's plans fell into the 3.0-3.5 range, with 8.7 percent in the 4.0 range and no plans achieving an excellent 4.5 or 5.0 score. In comparison, 31 percent of non-AARP plans achieved a score of 4.0 or higher. The highest performing competitors across contracts were nonprofit health plans, including Kaiser; Gunderson Lutheran Health System; Baystate Health; and HealthPartners. Certain for-profit plans also had higher average contract scores than AARP, including Humana and Aetna. Compare plans at

Long-term care insurance usage study—Half used for home care
The majority of new long term care insurance claims in 2012 started after the policyholder was age 70. "Over two-thirds (68%) of new claims began after the policyholder turned 80," a study reports. "About one-in-four (23.5%) started their claim between ages 70 and 79. Roughly half of newly opened claimants received benefits for covered home care services with the rest paying for care in assisted living communities or skilled nursing homes. The most common reasons for a long term care insurance claim are Alzheimer’s disease, stroke, arthritis, circulatory issues or injury." Only 4% of men require institutional care. Consider alternatives:

Car dealers now offer insurance in SC
Love Chevrolet and the Allstate Insurance Company partnered to open a new agency inside the dealership in Irmo that will sell a full-range of insurance products, including automotive, home and life insurance. Called Love Insurance and Financial Services, the agency is the first of its kind in South Carolina and is designed to create a one-stop shop for customers to buy and insure a car. Allstate finished a pilot program that opened agencies in 11 dealerships across the country during the past two years. The pilot program was successful, and now Allstate is expanding the model to other dealerships like Love Chevrolet. Instead, buy with discounts, directly and save:

Wall Street gurus crash and burn—but still make $ millions by avoiding taxes
Hot hands attract hot money from wealthy, take 2% and 20% of gains, become rich and lazy, hot money leaves to find another hot hand. The pattern is typical “bubble” creation so real long-term investors have stayed away. Those who stay at the party too long, regret it. Our working person’s pension money is usually the last to leave. Thus one of the largest “bubbles” is down 8% in 2013 while their neighbor’s 500 index fund is up 20%. Meanwhile, Congress still gives the “bubble” people a tax break and we pay for it. Gurus can’t make you rich:

401k use is up—average savings rate is over 10%
A survey of American workers cite "saving enough for retirement" as their greatest financial concern – but men are paying more attention and taking more positive action, but women live longer. Participants in general are saving more, with the average retirement savings rate among those surveyed at 10.5%, up from 9% two years ago. Satisfaction with information from retirement plan sponsors is down sharply (10% in 2013 vs. 30% two years ago). Men are more likely to have a professional advisor and are more confident than women in virtually every aspect of retirement planning and defined contribution investment decisions. Ensure Your Financial Health with Wealth: A Woman's Guide to a $2,000,000 Tax-FREE Wealth Reserve

Is critical illness insurance right for you?
Prudential has just entered the employer market. These policies say they cover major illness like heart attack, cancer, organ transplant, renal failure, stroke and coronary artery bypass surgery. But employees are already covered for all of these causes in their comprehensive health care policy. Pru says health coverage does not pay for expenses like transportation and day care. These policies pay “a flat dollar amount, which can be used for anything and provides an “easy and convenient” way to keep extra protection in place,” Pru said.
These kinds of policies are just an expensive savings account that pays you less. You are better off using your own car and family for these expenses and using the money to buy a real health policy. Renal failure and cancer treatments cost much more than any “flat dollar amount” from these policies. Skip it:

Almost one-fourth of U.S. drivers feel they’ve come close to causing an accident while using their cell phone while driving, according to a new survey.

Allstate cutting benefits to employees to raise stock price
It named cost-cutting as one of its top priorities for 2013, and is reducing some retirement and life insurance benefits in a move that it says will boost its book value per share to $2. The changes include a new formula to calculate pensions, as well as ending retiree life insurance benefits for current employees.
America has more than 44 million workers (27,500 private-sector pension) that are now receiving reduced checks from the government because their employers cancelled their pensions. Make your own:

Employees pick less-expensive high-deductible health plans
Liazon survey says that when given the choice between a conventional employer-sponsored health plan and a less-expensive high-deductible or preferred network plan, 60% of employees chose the lower-priced plans. "HSA plans encourage individuals to take an active role in their health care decisions while stretching their health care dollars." Buy only what you need:

You don’t get what you pay for—even for the “professionals”
State pension plans that pay higher fees don't get better returns for their employee plans.  According to a BenefitsPro, "The 10 states paying the highest fees - a median rate of 0.61% - posted annualized five-year returns of 1.34%.  In comparison, the 10 lowest-paying states paid a median rate of only 0.22% and garnered 2.38% returns." If pension funds would just stick low-cost index funds, they would have returns of 7% for 5 years. Don’t pay for what “professionals” can’t deliver:

New York health exchanges offer 50% drop in premiums
Health insurance premiums will drop by about 50% on average for consumers in New York who buy new plans through a state-run marketplace created by the Affordable Care Act. The state approved plans to be sold by 17 insurers, including UnitedHealth Group and WellPoint, the industry’s two biggest carriers, according to a statement today by New York Governor Andrew Cuomo. The lowered rates mean that starting Oct. 1, a New York City resident who now pays at least $1,000 a month for insurance will be able to buy coverage for as little as $308, according to rates posted by governor’s office.

Why is your LPL Financial advisor raising your fees?
Your broker or advisor who uses LPL will be hit with new fees because of the way the firm is regulated. They can pass the costs on to you. You can leave and move your assets to a low-cost firm like Schwab, Fidelity or Vanguard. Try doing it yourself. All these firms have licensed advisors on salary who pass on economies of scale to you:

SCAMS           “Deficits don’t matter” Republican godfather, Dick Cheney, 2002

When hell freezes over?
4 senators want Wall Street banks to separate their 'high-stakes gambling' units from your savings and checking. Banks don’t want to give up your ‘cheap’ deposits. The bill sponsored by Senators Elizabeth Warren, John McCain, Maria Cantwell, and Angus King would separate traditional banks that offer checking and savings accounts insured by the Federal Deposit Insurance Corp. from “riskier financial institutions.” The latter category includes companies involved in investment banking, insurance, swaps dealing, hedge funds and private equity, according to the lawmakers' statement released yesterday. Some former bankers support the bill but previous attempts have failed. No current bank lobbyists are for it, so it has no chance to pass even the Senate.

Follow the Money host in jail
Patrick Kiley's radio voice was softened after being convicted of scamming hundreds of people who were victimized in the Ponzi scheme. He hosted "Follow the Money," broadcast on many Christian radio channels.

Senators pretend to be outraged by high gas prices
Lawmakers grilled representatives of oil producers and refiners seeking an explanation for a rise in gasoline prices at the pump amid a boom in U.S. oil production. Remember when we were told there was low supply so prices were high. Guess what, now the oil companies send the oil to places where the prices are higher so we all pay more anytime the oil companies want to raise profits. It is called monopoly capitalism and the Senators benefit in their dividend accounts. Laughs on us.

Credit bureau that has notorious errors in data, to verify income for ObamaCare
Equifax will be paid $ millions to verify incomes of people who apply for federal subsidies to buy health insurance. Regulators will never fix the way bureaus keep reselling their errors no matter what you do.  

Two Americas
Planned Parenthood informed staff at three of its facilities in Texas that they would be closing. Out of the three Planned Parenthood clinics that are closing, only the Bryan clinic performs abortions. “In recent years, Texas politicians have created an increasingly hostile environment for providers of reproductive health care in underserved communities. Texans with little or no access to health care services have been deeply affected by state budget cuts to programs provided by Planned Parenthood health centers and dozens of others that provided lifesaving cancer screenings, well-woman exams and birth control," said a spokeswoman.

Who owns your account now?
Lincoln Benefit Life to Resolution Life (GB)
Allstate will discontinue issuing fixed annuities and its agents will sell other products.

41 Watchung Plaza, B242
Montclair, NJ 07042

Friday, July 12, 2013

Is your variable annuity broken?

Is your variable annuity broken?
Insurers have been cutting future benefits or raising the price of these expensive products. The popular minimum withdrawal benefit now costs an average 1.25%, up from under 1%. That lifts the average base price to 3.7% you are charged EVERY year, no matter how well your investments do. And you may be restricted in how much your account can earn. Some insurers are now limiting stock exposure to 60% of your account. Thus “peace of mind” may cost more than you paid. Your alternatives are not good: transfer to another insurer or pay surrender charges. Better: annuitize now—putting the payments into a tax-advantaged account. Alternatives:

Customize Your Insurance  -Save $3,000 every year

  • Buy only what you need and save $3,000 every year.
  • Accumulate $1,000,000 free of fees and taxes.
  • Avoid the Wealth Killers.

The best guarantee of lifelong security is having money. Accumulating $1 million requires that we avoid high product and advisor fees, commissions, loads and … taxes—the Wealth Killers.
Since we need to buy protection—auto, home, health, life insurance—why not skip the “bells and whistles” and save $3,000 every year? We avoid fees by buying ONLY the financial services we need at a discount. We avoid taxes by using an IRS-approved tax-FREE account. We invest ALL our savings. We accumulate $1 million by leveraging the Miracle of Compounding over time.

Insurers against gun-toting teachers
As more states enact laws allowing teachers or administrators to carry guns in schools, insurance carriers are threatening to raise their premiums or revoke coverage entirely. Guns in schools made no sense in the Wild West either. Remember, Dodge City banned gun-carrying within town limits (and schools). People kill with whatever is at hand. While the United States has overall rates of violent crime in line with rates in other developed nations; our homicide rate is, relatively speaking, off the charts. Data:
Who really benefits from all these gun sales?

The top 1 percent of households took 23.5% of all U.S income.
Q: Why do the rich get richer? A: Compounding of high investment earnings. Income includes dividends from shares of stock, rent, and profits from selling something for more than you paid for it. Once you have $1 million, you can let it compound in stocks etc at 10-12% and have $2 million in about 10 years, $4 in 20 and $8 in 30. You don’t even have to use a broker to make money. In fact, Wall Street usually takes more than it gives.

Big brother Data saves life (sentence)
An insurance company monitoring device that records when a car is started and stopped has helped clear a northeastern Ohio man in the suffocation death of his 7-month-old daughter. Twenty-eight-year-old Michael Beard was acquitted by a jury in Cleveland of murder and other charges. He was facing life in prison in the May 2011 death of Lynniah Beard. The prosecutors contended Beard suffocated the baby at 4:45 a.m.
But his attorney noted that the Progressive Snapshot device in his car showed he arrived and turned off the car at 4:44 a.m., and turned it back on three minutes later.
His attorney said that in those three minutes, Beard discovered the baby wasn't breathing and returned to the car to rush her to the hospital.

Brokers are against “best advice” rule for customers
A leading Wall Street trade organization told the Securities and Exchange Commission last week thatraising investment advice standards for brokers would force individual firms to spend millions of dollars to upgrade their compliance systems. You don’t want to wait for the government to force brokers to do the right thing. Use unbiased advisors at the major mutual fund firms for free and earn more.

America becoming a “banana” republic?
Hiring is exploding in the one corner of the U.S. economy where few want to be hired: Temporary work. From Wal-Mart to General Motors to PepsiCo, companies are increasingly turning to temps and to a much larger universe of freelancers, contract workers and consultants. Combined, these workers number nearly 17 million people who have only tenuous ties to the companies that pay them — about 12 percent of everyone with a job. The rise in temp and contract work shows that many employers aren't willing to hire for the long run. The number of temps has jumped more than 50 percent since the recession ended four years ago to nearly 2.7 million — the most on government records dating to 1990. In no other sector has hiring come close. 
The top 1 percent's share of national income is over 23 percent. The average inflation-adjusted hourly wage declined by more than 7 percent from 1976 to 2007.
A “banana” republic has 1% elites and 99% in near poverty conditions, like Honduras was.

ObamaCare health insurance exchange
First state to go live is Oregon. Looks like they are ready to cover uninsured. Many GOP states have said they won’t cover uninsured. Will everyone move to Oregon?

SCAMS           “Deficits don’t matter” Republican godfather, Dick Cheney, 2002

Buckets of Money advisor has his buckets revoked
Ray Lucia, host of a nationally syndicated daily radio program and famed for his Buckets of Money investment strategy, was fined $50,000 and had his adviser registration revoked by an administrative-law judge yesterday. Mr. Lucia's firm was fined $250,000 and its registration was revoked, the Securities and Exchange Commission said.

AIG, GE, Prudential leveraging again a threat to us
U.S. regulators have labeled American International Group and General Electric's finance arm as potentialthreats to the financial system, designations that bring stricter government oversight.

Regulators allow disaster to strike small investors
Hedge funds and other firms that seek private investments will be allowed to advertise publicly for the first time. SEC killed an 80-year old ban on advertising intended to safeguard small investors from taking on potentially dangerous risk. The “snake oil” salesmen are exempt from requirements to report public financial statements. Hedge fund owners, with bank loans, are exempt from paying income tax on their gains already. WOW! Wild Wild West again.

What is wrong with American military-industrial complex?
It was commissioned by the Army in February 2010 to be the Command and Control Facility for Regional Command Southwest during the surge. How could the U.S. military spend $34 million constructing a building in Afghanistan that has never been used - and may now be demolished? In May 2010, even before construction began, the Marine commander cancelled the project. Despite that request, the Air Force told British-based AMEC to construct the facility and, in November 2012, the U.S. government took over the facility. Afgans don’t want it. Private equity firms own British AMEC and got the $34 million. We got the bill.
Is anyone at the Pentagon in charge? Can the Taliban buy it? They are funded by donations from Britain and the Persian Gulf.

Farm bill pays corporations extra money for poor results but $0 for poor
Even conservatives voted against it since it was still "loaded down with market-distorting giveaways to special interests with no path established to remove the government's involvement in the agriculture industry." GOP cut all food stamps and nutrition for the poor: Let them starve, is the message.

41 Watchung Plaza, B242
MontclairNJ 07042

Friday, July 5, 2013

How did your Wall Street guru do?

How did your Wall Street guru do?  Stock traders can't make you rich
*Few stock-picking gurus do well for long
*Last year's genius is this year's loser
*Gurus' forecasts are correct less than 50% of the time
*Gurus attract money which then dilutes high returns
*Computer trading beats the best gurus consistently
Warren Buffett used compound interest to become wealthy.
“My wealth has come from a combination of living in America, some lucky genes, and
compound interest.” Warren Buffett
You need just $250 a month (and compounding) to reach your lifetime money goals.

Is your mutual fund still around?
Only one mutual fund company has increased its presence in the top 10 funds since 1998.
Putnam, American Century and Fidelity Advisor have dropped off the list by 2013.
You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time. Abraham Lincoln 
Wall Street gurus don’t last but your retirement does.

Idaho ObamaCare policy $240/mo. average
Health insurance policies sold via Idaho's insurance exchange starting Jan. 1 will cost around $240 monthly, a figure based on packages submitted so far to the state Department of Insurance by insurers aiming to participate. For instance, a family of four making $60,000 headed by a 40-year-old would likely be eligible for a government tax credit of $7,193 toward their annual premium of $12,130. That means they'd pay $4,937, about 8 percent of their income, or $410 monthly. Meanwhile, lower-income families would make lower payments, with help from the government's sliding-scale subsidies provided for those who earn less than 400 percent of the poverty line.

Almost 70% of Millennials Have No Retirement Plan—NOW only $9 a day
Millennials, young people 30 and under, are coming of age in a world vastly different from that of their parents and grandparents. 54 percent have had some college education, compared to only 36 percent of "baby boomers" (those ages 50-64) at their age.  39 percent are nonwhite. 90 percent use the Internet at least occasionally, compared to 79 percent of boomers, and 75 percent use social networking sites, compared to only 30 percent of boomers. And, due to a flagging economy, they are less likely to be employed than previous generations were at their age. The unemployment rate for those ages 18-24 is nearly double the overall rate (16.3 percent compared to 8.8 percent).

HSBC bank put its advisors on salary
HSBC has taken a move that many in the industry have long considered unthinkable: it has put all of its advisors on salary. Under a new compensation structure, advisors are paid a salary plus a quarterly discretionary bonus, marking a huge shift from being paid solely on commission. All non-US advisors are salaried. But observers suspect that there are other reasons for the shift. Some say the desire to more closely align client and advisor interests may have prompted the change. Without commissions, the fear or perception that advisors are “churning/spinning accounts” or suggesting products and services merely to increase their production is removed. Some investors are getting the advice and then doing it themselves:

ER—the new health care system?
Record numbers of Americans are going to emergency rooms for dental treatment, which is straining the nation's health care system and increasing health care costs. Half the states have declined to expand Medicaid to the uninsured with federal dollars. Uninsured in these states will expand their use of the ER as their health care system. GOP lawmakers have provided no other option for the poor.

ObamaCare mandate delayed 1 year
The mandate would require most businesses with 50 or more full-time employees to provide health insurance meeting certain minimum criteria — or pay a penalty of $2,000 per worker. The purpose of the employer mandate is to discourage employers from dropping coverage and leaving employees to buy subsidized insurance in the Obamacare exchanges at greater taxpayer expense. The delay does not affect the individual mandate, the requirement that most Americans purchase insurance, nor does it halt the implementation of marketplaces where individuals and businesses can sign up for insurance coverage. 

GAO reports corporations enjoyed a 12.6% tax rate
This is far below the 35% tax that is the statutory rate imposed by the federal government on corporate profits. The report found that even when foreign, state, and local taxes were included, the tax rate of large companies rose only to 16.9 percent of total income, still well below the official 35 percent. Big companies are shouldering a smaller part of the overall tax burden than in the past. As a percentage of federal tax revenue, corporate taxes have fallen to 9 percent from more than 30 percent in the 1950s.
66% of US corporations pay NO tax. Working Americans are forced to close the gap as their average inflation-adjusted wages have fallen. Pay only your fair share:

SCAMS           “Deficits don’t matter” Republican godfather, Dick Cheney, 2002

Bankers gouge our soldiers for $6.5 millions
Obama’s new regulator, Consumer Financial Protection Bureau said it has ordered U.S. Bank and another company, Dealers' Financial Services, to refund a combined $6.5 million to more than 50,000 active duty service members to make up for failing to disclose fees and other costs on auto loans. Borrowers who were "often young and new to the car buying process."
Shame! Boycott U.S. Bank!

Obama’s new regulator OK with derivatives that could cost us taxpayers again!
Securities and Exchange Commission head, in her first commission vote, Ms. White led the commissioners in approving a proposal that, if finalized, could leave investors and taxpayers exposed to the ravages of reckless bank trading. Congress has a bill that would ask Obama to list the banks, foreign and domestic that could cause a system failure.

Obama haters tell NFL not to help uninsured—and they comply
The league’s response came following receipt of a letter sent last week by two Republican Senators warning that the NFL could undermine its nonpartisan reputation by getting involved in an issue marked by “divisiveness and persistent unpopularity.”
“It is difficult to understand why an organization like yours would risk damaging its inclusive and apolitical brand by lending its name to (the ACA’s) promotion,” Sens. Mitch McConnell (R-Ky.) and John Cornyn (R-Texas) wrote in a letter to six major sports organizations, including the NFL and Major League Baseball.
Where are the pro-citizen Senators?

41 Watchung Plaza, B242
MontclairNJ 07042