Friday, June 27, 2014

Tax evaders go to PR now

Your broker/advisor now evades taxes in Puerto Rico—Socialism for the rich
Puerto Rico signed a law that creates a tax haven for U.S. citizens. If they live on the island for at least 183 days a year, they pay minimal or no taxes, and unlike Singapore or Bermuda, Americans don’t have to turn in their passports. Stock traders, moguls and entrepreneurs have moved. Billionaire John Paulson is spearheading the tax evasion. So the government gives them all the privileges of citizenship and we pay for their FREE ride.

What do the working millionaires know that your kids don’t?
The Picture Book of Wealth: How to save and invest in pictures and stories

Harvard got taken by its advisors—how about you?
Harvard’s endowment posted annual average gains of just 1.7 percent vs 18.47% (market index fund) in the five years ended June 30, 2013. That compares with annual returns of 6.8 percent at Columbia University, 5.4 percent at University of Pennsylvania and 3.3 percent at Yale University. Advisors are paid even when they give bad advice. Harvard should follow Buffett’s advice—buy good value not advisors:

Will you have enough retirement income?
Use our calculator to illustrate if you will have enough retirement income by earning 8-10% on your contributions. How many years will it take to have enough to live on?
This calculator shows you how much retirement income your accumulation will provide after years of growth. It estimates your future buying power compared to your current one. It assumes you pay no taxes each year and your fees are low. It assumes your current income will rise with 3% inflation and then converts your nest egg into income stated in today's dollars. Your 30-year nest egg should last for 30 years or more:

Are Target-date funds for you?
For 5 years, target-date investors earned median annual returns of 15.3% vs. 14% for those managing on their own. The do-it-youselfers also had a wide range of outcomes, with the 25% earning median annual returns of less than 9%. These days more plans are providing guidance in the form of online tools and target date funds: 72% of 401(k) plans offer target-date funds, up from 57% in 2006, according to the Investment Company Institute. Unfortunately, nearly two-thirds of target-date fund users also had other funds and lowered their returns by 2.62%. Target date funds for 2035 and beyond have 90% stock now but reduce the ratio as you near retirement. Since Buffett advises compounding low-cost funds, this choice can be great:

Are alternative investments right for you?
Arguments over the importance of alternative investments in the average investor’s portfolio continue. Meanwhile, their results are not keeping up with more traditional portfolios, according to a new Morningstar study.  Emory University's professor Klaas Baks recently argued in favor of including alternatives in the Wall Street Journal. Advisor George Papadopoulos argued against alternatives. “Exotic assets may make a portfolio seem a lot sexier, but they may not get it to perform better over the long term. Factor in risks and expenses, and alternative investments just aren't worth the trouble,” Papadopoulos explained. The simple strategies work best:

GOP crazies
Nice guy Boehner says he is suing the President but not sure what for, exactly. I thought that was called “impeachment” in Washington. While we are at it, let’s add all of our so-called ‘representatives’ in the suit. They have done nothing while being paid. Isn’t that “breach of contract’ or something? Let’s ask Ms Palin and Mr Calvuto to be the prosecutors. It would be a new “Law and Order” series that would have better ratings than Survivors.  

GOP-led Supremes cut Obama recess appointments
Ronald Reagan made 232 recess appointments during his eight years in office. Bill Clinton and George W. Bush each made well more than 100. To date, Obama has made only 32 recess appointments. The recess appointments power was more pertinent when senators left town on "horseback," Justice Ruth Bader Ginsburg said, but the Supremes didn’t act in 1900 when Washington had cars.
Can we undue Reagan-Bush-Clinton appointments too? Only fair, right?

Supremes back Cheney’s Halliburton against shareholders—the corporate elites
Supreme Court limited shareholder class actions; stopping short of abolishing such cases altogether, in a case involving Halliburton which still pays Cheney. The Houston-based energy and engineering company, supported by business groups, asked the high court to overturn a 1988 precedent establishing “fraud on the market” that supported shareholder class actions. Cheney lied in 2003 about his  ties to his old company. Supreme’s Scalia is his hunting buddy and got him in with Bush in 2000. 

FL insurers raise rates for all to cover Wild West shootings
Florida Gov. Rick Scott signed a bill saying insurers cannot deny coverage or charge more because of gun or ammunition ownership in Florida. GOP bill interferes with the free market—force insurers to charge all for gun-related risks. Bill biased against women and minorities. The Florida Insurance Council, warned as the bill was being debated it could have unintended consequences. Ask for the no-guns, dogs, art, jewels, pool-discounts:

Supremes split on gun-buying deceit—Lying is OK according to 4 of 9.
Justice Scalia noted that it is permissible to buy guns as gifts, for later resale or as raffle prizes. The majority erred, he said, in interpreting the law to make it “a federal crime for one lawful gun owner to buy a gun for another lawful gun owner.” Roberts, Thomas and Alito joined Scalia in allowing buyers to lie on application about ownership and let them sell or give to others. Let buyers decide who is “lawful” owner—Really?

NJ business insurers lower rates
Horizon BCBS NJ new small employer plans slash premiums 15 percent and waive deductibles for network doctors. Horizon faces strong competition in the under-50 group market. Buy only what you need:

Two Americas--end of middle-income
Since 2000, jobs traditionally done by teenagers, such as retail and food service, are increasingly shifting to older workers. The number of people aged 20-24 working in retail has risen 24%, while the number of those in food service has shot up 57% during that time. Meanwhile, the number of teens working retail jobs has plunged 47%. And the shares of people 65 and over working in retail and food service are up 52% and 55%, respectively, over that period. Because jobs in areas like restaurants and retail are lower-paying, those who start their adult careers in such industries may be doomed to a lifetime of lower wages. And closing off opportunities to younger people while leaving older ones stuck in place stifles economic mobility. The promise of college has always constituted what Shierholz calls "an implicit contract." If job gains continue to be concentrated in low-paying, low-skilled areas, that contract may have to be rethought.

Your advisor doesn’t even know how much they charge you?
Nearly 63 percent of advisors surveyed underestimated their fees. The advisors believed their fees were below 1.5 percent of assets, while the actual average was about 1.83 percent. In addition, Cerulli says that 60 percent of clients do not understand how their financial advisor is charging them.
Your advisor can take up to 63% of your nest egg over time. Use Warren Buffett’s secret:

Did you already suspect?
Watching television isn't just slowly killing your brain cells, it may be slowly killing you. Researchers found that people who watched three or more hours of television a day were at twice the risk of an early death than those who watched less. The study found a correlation to television watching time but found no significant association with computer or driving time. "If you're driving or using a computer for working, you are stressed." The study took 8 years so it was too late to warn those who died from TV.

SCAMS           Why are we still paying $700 Billion a year for WWII deployments?
We are paying for 164,253 of our active-duty armed personnel to be in 150 countries around the world. We have about 50,000 in Japan and 50,000 in Germany.
Are we preparing for WWII again? There are 1,208,083[1] armed personnel in the United States. Our taxes pay for about HALF of the WORLD’s military expenditures every year.
We just can’t afford to pay for everyone else’s defenses anymore.
Japan, Germany and S. Korea can pay for their own defense.

Your IRA money may now go to creditors—not beneficiary
Thanks to a recent decision by the U.S. Supreme Court, IRAs no longer have the same level of bankruptcy protection as some other retirement assets. In the case of Clark v. Rameker, the land's highest court said that “the term ‘retirement account’ is narrowly-defined,” explains attorney Edwin Morrow, wealth specialist with Key Private Bank. Translation: “retirement account” does not apply to assets you receive from someone else.

Obama set to allow crude exports—higher gas prices likely—switch to electric?
1975 law banning exports may be relaxed so big oil can sell at higher prices and refiners of gasoline will need to pay more on world oil markets.

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