Friday, April 27, 2018

We have 15 years to make up for 25% cut in SS benefits


We have just 15 years to prepare for 25% cut in Social Security
The SS Trust Fund will be depleted in 2034 according to the 2017 Report: https://www.ssa.gov/OACT/TRSUM/tr17summary.pdf. “The Trustees recommend that lawmakers take action sooner rather than later to address these shortfalls, so that a broader range of solutions can be considered and more time will be available to phase in changes while giving the public adequate time to prepare.” We should not wait for our reps to do something since none of them need SS benefits. Most are millionaires. Our SS benefits are already taxed, depending on our incomes so the tax will be increased. The current FICA tax will likely be increased too so we will have less take-home pay. Our reps did not ‘reform’ the tax code that allows those earning above $127,200 to avoid FICA. So the Trust Fund deficit could be fixed by taxing everyone but this is not likely after they just cut taxes on their rich and donor class. We have 15 years to invest.


Low-cost meds under attack: we need single payer system
Generics cost little to make so profits are low. Good for us if we had a single payer system which bought huge quantities in bulk at cost. However, the current system works on high margins for a few drugs that are featured 24/7 on TV. Also large makers bribe doctors to push new drugs to patients. Largest generic drug maker has laid off 14,000 workers, closed 40 plants and others are folding. Four middlemen orgs buy as coop and jack up prices for additional profits. This is where a single payer would keep prices low by replacing the ‘middlemen’ to buy direct. EpiPen price increase to $300 gives the opposite impression to us. Single payer systems around the world buy direct and pay 40-50% less for same drugs. Medicare, the largest buyer of drugs, was outlawed by drug lobbyists in Washington from negotiating bulk rates. Contrary to drug maker propaganda, US patients DO NOT receive better care thus living longer than single payer countries.

Help your graduate get started on their Wealth Reserve
The number one regret that I hear from clients is “Why didn’t I start investing earlier.” Perhaps it was because no one learned about compounding in high school so they blew their first good paycheck on cars or wild parties. Why didn’t we learn this chart in school: http://www.saferchild.org/power/. By investing $2,000 a year for 8 years before age 26, we transform $16,000 into $1,000,000. And now a young person can have $1 million tax-FREE thanks to an IRS trust. How does it work? Each year you earn an average of 10% on all your contributions and earnings from previous years. So by age 30, you would have over $36,000; by age 40 $95,000; by age 50 $247,000; by age 60 $707,000; and by retirement $1,000,000. Actually if you kept it going by withdrawing $100,000 a year you would still have about $1 million. Of course, in 40 years, your $1,000,000 would have the purchasing power of about $250,000 due to inflation. However, you and your employer may be funding a 401k or IRA also.

Is ‘factor based investing’ right for you?
Our industry has come up with another way to excite the sales force to sell a new concept in order to move your money (more fees) to something new—almost anything new. This term has become popular with the advent of ETF or an index that can be traded daily to increase fees. Factors are the underlying exposures that explain and influence an investment’s risk. For example, the underlying factor affecting the risk of a broad market-cap-weighted stock portfolio is the market factor, also called equity risk. That is, we can consider market exposure as a factor. Instead of holding the largest company stocks in an index over time, the idea is to customize a portfolio so your advisor convinces you that they can control more or less risk of declines. A cool idea but no one has proved this can work over time. Advisors like to compare their new ‘power’ to control risk by claiming it is like your genetic predisposition to specific diseases. Factors that they think they can use to customize your investment outcome are “Market, Value, Size, Momentum, Low volatility, Term Credit.” I would call these items ‘influences’. Most of this is common sense but the identification allows advisors to sell you on the idea that they know which ETF is best for you. They don’t because no one knows the future; just the past.


“How much do I have to invest” is the most common question
Many people ask me this question. As you might imagine, “It depends” is the answer. It depends on your goal and your age. If you want to accumulate the most you can and you are in your 20s, 10% of your gross income will provide an adequate sum. Assuming average income of $30,000, $3000 a year for 40 years may provide $1.6 million or $400,000 in today’s purchasing power. If we start later, we need higher amounts to hit this goal because it takes time for compounding to work and create wealth. It takes $5,000 for 30 years to hit $1 million or $400,000 (inflation-adjusted). If we only have 20 years for compounding to work, we need $15,000 a year to hit $1 million inflation-adjusted $600,000. Assumes inflation 3%; stock market index 11%.

Has your advisor been preaching an “Advice-centric” experience?
Advice-centric experience is not what clients are looking for. Rather we want what might be called client-centric exploration. Advisors should take the time to find out what you are thinking and feeling before they start rolling advice at you. My industry is finally acknowledging that people don’t want just things: transactions—securities, insurance, annuities, package products, etc—thrown at them. Forget the lingo and the ‘sizzle’ wow talk. What people want are solutions that are “best for them” in their situations, now and later. Our industry has harmed a lot of people with its business model. It is a sales ‘killer’ culture. Most security sales people wouldn’t know what is “best for the customer” even if they were their own customer! Most don’t use direct-to-consumer manufacturers so they don’t know “the best” “low-cost” products. Financial firms are sales firms and the sale is what makes the “world go round” for them. This is why the “Fiduciary Rule” was killed at their request by Trump. The rule goes back to English Chancery law when a prominent person (trustee) had to act for another’s benefit with no conflict of interest. Most advisors can’t ‘put themselves in your shoes’ but at least they could explain their conflicts and all the costs of the product. But that would require a non-sales culture.


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Make America, “The Don” Great Again



‘I’m the only one that matters’ Mob Boss, Nov 3, 2017


(Dictators often have delusion they themselves ARE their country)

Treason is ‘giving them aid and comfort within the United States


Putin controls US power utilities and 21 state voting files, Trump slush fund, etc
Trump lied about time making ‘pee’ tape. “My head never hit a pillow” he admits.

The election is going to be rigged—I’m going to be ‘honest’” 
GOP voter suppression a success: Dems lost because poor don’t have new ID.


Could Trump postpone Nov 2018 election using excuse of Putin meddling needs fixing?


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Trump’s EPA told to ignore science for clean air and water

SCAMS:
Airline reg about full pricing to be cancelled so we won’t know full price till booked.

Jobs:
Online computer science degree GA Tech $7,000 gives you a chance at $70,000.
Ford exits car business: Crossover, Mustang only so needs only HALF US workforce.

Who owns your account now?
Amazon can deliver to your car with encrypted authentication process to open it? Steal?


Can we trust Ari Melber to explain the legal case against POTUS?

Miracle:
Afgan vet gets first ever operation restoring his privates

IAN
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