Your Wealth Reserve: Need a graduation gift?

Need a graduation gift?

The greatest gift you can give is financial knowledge. No matter how much your young graduate makes, it is up to YOU to show them the Buffett investment strategy. Make sure they can make and manage money. At my first job, I had no clue which investment to use for my 401k contributions and company match. The HR person told me to put it into the 'safe' stable value fund. That was the worst choice at my age I learned later when I got my securities’ licenses. If I had followed their advice I would have ended up with about $150,000 instead of a Wealth Reserve of $877,233 about 33 years later.

YOUR choice: https://www.amazon.com/Give-child-leg-up/dp/1096505355

Stock-picking hedge funds are throwing in the towel

With Warren Buffett’s win of a simple strategy over 5 hedge funds, some high-cost managers are giving up. Buffett put a $1 million in the simple Vanguard 500 index in 2008. The five funds of hedge funds Protege picked were up roughly 19.6% compared with the 63.5% for the top 500 index. Lackluster returns and lofty fees charged by hedge funds have prompted investors to head for the exits, and they withdrew $15 billion in the first quarter, according to eVestment data, in a fourth straight quarter of redemptions. Most Wall Street firms are dropping fees in an attempt to maintain their failed business model. John Bogle made it clear: costs matter. Over a 50-year investing lifetime, that little 2% fee will erode 63% of what you would have had. Do the math: if your money earns 10% and you pay 2%, your $3,000 a year retirement contribution will be worth only $2 million; NOT $4.3 million.

https://www.amazon.com/Warren-Buffetts-Investment-Secret-Steeple/dp/1484189809

Do we have too many options?

Amazon carries an almost infinite variety of stuff. Big box stores are forced to carry more choices and most of us can’t cope. Contemporary internet shopping conjures a perfect storm of choice anxiety. Research has consistently held that people who are presented with a few options make better, easier decisions than those presented with many. This is why we see DISRUPTORS in the consumer commodity space: Casper (mattresses), Glossier (makeup), Away (suitcases), and many others have sprouted up to offer consumers freedom from choice: These firms are selling a confidence in those things, and an ability to opt out of the stuff rat race. This is especially true for financial products. If there are only 10,000 stocks, how come there are 9,356 mutual funds, and 5,024 ETFs. (Less than 1% get HALF of all the money) But which of the 25,000 options should you put your money into? Investors are flocking to Vanguard to pay less; earn more.

Follow the money: https://www.amazon.com/Disruptors-Three-Innovators-increase-WEALTH/dp/1720857563

Trump’s Socialism: like Putin he picks the firms he likes

Nike, Adidas and 173 shoe firms claim Trump tariffs are killing their business. Tariffs are a tax paid by the importer: ultimately, the consumer, Trump’s economist confessed. Shoes already pay duty so tariffs are double tax industry. Apple watches, flat screen TVs and high chairs all got waivers during the last round of tariffs. 47,000 requests have been submitted on steel and aluminum tariffs. American steelmakers have successfully blocked thousands of waiver applications, with more than half the objections coming from just a handful of big steel producers. So U.S. Steel, Nucor and AK Steel have effectively become an oligopoly. They can control prices since everyone, but them, must pay the tariff tax. The farm welfare goes mainly to the large agribusinesses so they become larger and buy up small family farms. We pay for the Export-They can’t compete on price. Using the 2017 Opportunity Zones tax break, the wealthy can reduce their gains’ taxes to 0%. We can’t do that. We pay for their tax breaks as group, ‘socially.’

Trump’s Socialism: https://www.amazon.com/Americas-Socialism-for-Rich-little-people-pay/dp/1535218584

Despite DEM talk, wealth gap will become larger

The rich benefit from a rising stock market. They have doubled their wealth since 2012 just by letting their money alone. The richest people have increased their share of stock ownership over the last 30 years. 1% of households now own 50% of all household equities, up from 39% in the late 1980s. Just over half of Americans own stocks. Two-thirds of Americans do not even participate in or have access to a 401(k) plan, according to the U.S. Census Bureau. Working people, whose income has remained the same since the 1970s (inflation-adjusted), can’t afford to save and invest. Trump promised his tax cut was for workers, but corporations are giving it to stockholders. Even with everyone in the household working when they can, the cost of living does not allow for a savings/ investing plan. Most do not know about the Miracle of Compounding and a tax-free account. These strategies could help most people have enough in retirement.

Use these tools to assure your retirement: https://www.amazon.com/Your-Wealth-Reserve-Save-year/dp/107028288X

Why your broker/advisor called the market move wrong

When the markets took a break from historic long bull at the end of 2018, many so called ‘professionals’ sent their money to fixed vehicles. Of course, then the bulls continued to run despite the various ‘signals’ sent from Washington. We don’t ever learn: none of these people can predict the future—they’re salespeople. That was my first lesson at my brokerage firm in 1987. So you missed another 12% gain. So what if the market swings wildly from day to day. If you can’t stand it then don’t—spread your money around—don’t follow their advice. You know down deep that they are not going to be right most of the time. Accept the returns of a diversified portfolio knowing that every sector has its day in the sun. Pick a balanced fund like Wellesley Income and just hold it for 9.69% since 1970 or buy BRK for 20%. Boring, yes; but profitably steady.

Find another hobby: https://www.amazon.com/Vanguards-Top-Ten-mutual-funds/dp/150073909X

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Make

~~America~~

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