Your Wealth Reserve: Did automation and simple options save your retirement fund?

Having a hard time sticking with your allocations?

Market ups and downs can lead you to destroy your wealth. Actually market volatility is normal—it’s our reactions that destroy our long-term accumulations, not the allocations. How we react to news can hurt us. Usually, TV gurus and fund managers are trying to collect more assets, not manage your money for your maximum dollars. What we hear has nothing to do with our strategy. Managers get paid on how MUCH money they manage not on how WELL they manage it. These are two different but related goals. Managers get paid every quarter—we only have to worry about the final outcome. Research has shown that that small annual fee managers take from us can cost us up to 63% of our total potential accumulation. It’s the “the tyranny of compounding costs” that we don’t see until the end. Managers take our money every quarter but it adds up. Managers think they can time the market and we are happy for them to succeed. But over time, no manager can be successful all the time. They are in it for this quarter. We are in it for the long term. Warren Buffett: "The stock market is a device for transferring money from the IMPATIENT to the PATIENT."

Go with the Best: https://www.amazon.com/Vanguards-Top-Ten-mutual-funds/dp/150073909X

Is a private equity 401k account right for you?

In a huge win for the asset class, your 401k money is now a target for professional con men and women. Trump’s Labor department, charged with protecting your retirement investments, has changed sides. Now, if private equity is embraced, 401k costs will skyrocket, risk will dramatically increase and transparency will plummet. The private equity industry — a massive campaign donor, by the way— wants your money. The typical private equity manager charges 2% of the fund’s assets as an annual fee, just for showing up, and takes 20% of any profits. 2% of the 401k pool is $180 billion in profits a year. Private equity managers typically borrow huge amounts of money to buy a poorly run company so they can flip it for a quick sale. The managers collect huge fees and stock segments while investors are silent partners with little control. Like hedge funds, investors can lose everything with no recourse. Private equity fund investment is for investors who can afford to have capital locked up for long periods and who can risk losing significant amounts of money. This is gambling at its extreme. As one advisor said, “You don’t really know what you’re investing in.” It is ‘private’ for a reason. And they don’t even beat the simple index fund. The final test: Warren Buffett’s investment strategy beat private funds because of high fees.

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

Is this summer the time for a new vehicle?

As dealers try to catch up on sales for 2020, watch for more discounts. Keep in mind that an unreliable vehicle is NOT a great deal no matter what the price. Most notable, CR ranks Mazda and Dodge above Honda and Audi. Buick has fallen to #18 on the list. Acura and Cadillac are now at the bottom of the list with Alfa Romeo.

Avoid the 10 LEAST reliable models of 2020, according to Consumer Reports:

Chevrolet Colorado/GMC Canyon (same body style, different badging)

Chevrolet Camaro

Jeep Wrangler

Alfa Romeo Giulia

Volkswagen Atlas

Volkswagen Tiguan

Acura MDX

Tesla Model X

Chrysler Pacifica

Chevrolet Traverse

Save with your insurance discounts: https://www.amazon.com/Vehicle-Insurance-Beware-Double-Coverage/dp/1480027634

Did automation and simple options save your retirement fund?

In a period where many investors lost money, two-thirds of Vanguard’s retirement plan participants saw their account balances rise on a year-over-year basis for the 12 months ending on April 30. Vanguard found that automation and simplified investment options have led to superior investment outcomes for plan participants. The median account balance among its 401(k) participants increased 71% between April 2015 and April 2020. As founder, John Bogle said, “stay the course.” https://www.amazon.com/Best-Robo-Advisor-Ultimate-Automatic-Management/dp/1537111957

Do you really need a will?

My house is owned jointly. It becomes my wife’s automatically at my death. Some of my financial accounts are held jointly. Most of my assets are in IRA accounts with beneficiaries already chosen. My business is a partnership with the partners already in control. There are very few assets that need a will to designate their new owner. If I died today, my wife gets my car and my life’s ‘junk.’ I made a will for $100 that was witnessed by a local notary for $20. My wife will consult with a lawyer to execute my will. She will pay a one-time fee to have a CFP check her financial assets once a year. My stock holdings are my ‘life insurance’: no taxes on the stepped-up basis. I have made arrangements for my cremation so no funeral/plot expenses. I don’t have ugly heirs that would contest my will and gifts. Yes, a $100 will is a necessary convenience for us.

Do you need one? https://www.amazon.com/Your-Plan-Live-Age-100/dp/1548180793

Should you work one more year?

We are facing another year of this question. Given the discussion of another home remodeling project and another possible collapse of the stock market, this year turns out like the last one: we don’t have a clear answer. We have a CFP plan that assures us of money for the rest of our lives so no matter what, we will live comfortably. But that does not change the question—work or not work. It is just NOT about money. It is hard to say goodbye to our everyday routines. We don’t have a compelling goal of travel or other must-do ‘bucket list.’ We love what we do so it is hard to give it up. And with the market and economic upheavals, we don’t feel confident that this is the time to make a change.

Fix your mistakes: https://www.amazon.com/What-did-wrong-financial-mistakes/dp/1491095946

Wealthy get another bailout from US taxpayers

The US gov announced it will reimburse the wealthy for their losses on companies they own if they were run poorly and lost money. The Federal Reserve (us) will buy individual company bonds. If you ran a company that borrowed more money than your revenue so that you could reward your stockholders, you would be rewarded with a big bonus. However, when you have to pay back the money, you should be bankrupt if revenue falls. These “zombie” firms would be dead if it were not for us taxpayers giving them money in the form of future tax dollars for their almost worthless bonds. If they could not run the business before, are they likely to fulfill ‘promises to pay’ later. Since the Fed can create money to buy bonds, it just adds to the national debt and makes the rich richer. We will have to pay interest later. Actually our kids will be paying long after our Social Security benefits are cut to help finance this bailout.

Avoid paying for this bailout: https://www.amazon.com/Tax-FREE-Retirement-code-lifetime-income/dp/1475206976

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

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