Your Wealth Reserve: Financial independence on average wages

How to achieve financial independence on average wages

Financially independence: the ability to reach all your financial goals. To be free to pursue what is really important to you. Warren Buffett and his partner Charlie Munger have been operating independently for over 50 years. They recently explained: “We made a lot of money. But what we really wanted was independence. And we have had the ability since pretty much a little after we met financially we could associate with people who we wanted to associate with. We’ve had that luxury now for, you know, 60 years or close to it. And, and that beats 25-room houses and, you know, six cars or that stuff is, what really is great is if you can do what you want to do.” Buffett is reported to have driven his old Beatle everyday long after earning $millions. Money helps you live free.

True freedom is the ability to control how you spend your time.

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

What do you do when your advisor is fired?

Merrill Lynch Bank of America’s wealth management unit ‘lost’ 423 advisors. Despite fewer producers, BoA raked in record assets under management, asset management fees and new clients. Year over year, the firm cut 1,237 advisors. Client balances hit $3.1 trillion, up 25% year-over year. Revenue jumped without new staff due to market advances. The average client household increased to $1.4 million. If your advisor has dropped you, you need to reconsider the fact that you don’t need an advisor to increase your assets. You can buy advice from a planner for a one-time fee instead of paying 1-2% every year (even when your advisor is not needed). Merrill and the bank have enormous fixed expenses that you must pay for no matter what the market does. You pay even when your account falls in value. There are no refunds when the market tanks.

Consider a Robo before the lean years: https://www.amazon.com/Best-Robo-Advisor-Ultimate-Automatic-Management/dp/1537111957

What is the safest asset to hold in retirement?

Advisors have sold almost every asset class as the “safest” place to put our money. Some say bits of computer code, gold certificates, Treasury notes, banks, paintings, land, buildings, hotels, etc. The list is endless as long as they can make a commission. Two stubborn facts keep most of my readers in stocks. One, over almost any period of history, stocks and low-cost stock funds have provided the safest place to keep our money. Dalbar keeps track of how assets grow over time. https://www.dalbar.com/Portals/dalbar/cache/News/ PressReleases/DALBAR%20Pinpoints%20Investor%20Pain%202015.pdf. Using a low-cost stock index fund like Vanguard’s 500 Index, our money has gained 11.3% since 1976. We are talking long-term not every year. Two, wealthy people, who have no interest in selling us, have shown us that putting their money in businesses—their own or ones we can buy—have kept them rich. Warren Buffett provides his unbiased advice.

Two funds for retirement: https://www.amazon.com/Warren-Buffetts-Vanguard-Funds-Retirement/dp/1496148592/

Wealthy deduct their sports fun expenses: we pay more so they pay less

Wouldn’t you love to deduct from your wages all your expenses for your sports—equipment, tickets, ground fees, parking fees, beer, snacks, etc? While we pay 33% average income taxes, our millionaire Congress people give the wealthy tax benefits we don’t get. “Take Steve Ballmer, owner of the Los Angeles Clippers and former CEO of Microsoft. For 2018, Ballmer reported making $656 million to the IRS. His federal income tax rate was just 12%.” As one owner said: “Look, we play the Star Spangled Banner before every game. You want us to pay income taxes too?”

Start paying less: https://www.amazon.com/New-American-Retirement-System-ReserveTM/dp/1461030072/

Best deal for moving 401k, 403b employer pensions

When you change jobs or retire, you may have a choice of moving your nest egg. Instead of cashing it in and giving up 20% in tax withholding, have one of the low-cost mutual fund companies move it for you. By moving your money to a low-cost provider, you are assuring yourself of the maximum growth in the future accumulation: you keep more when you pay less. When you have you new firm move the money for you, you guarantee you will not give up tax withholding. Once your former employer sends the money to the IRS, you may have to wait a year to get it back. Plus you may miss out on a year of earnings. If you use a basic stock index like Vanguard’s 500 Index, you might miss market returns like the last few years:

2020 18.38

2019 31.74

2018 -4.41

2017 21.94

2016 11.93

2015 1.31

2014 13.81

2013 32.43

2012 15.88

Some of our readers have seen their nest eggs skyrocket from $600,000 to $1,215,000 in the last 9 years. That’s a 15% average annual return. Because they use a low-cost stock market fund and had their provider move the money directly (“trustee to trustee” transfer), they kept the 10% tax withholding fee working and making more money.

Check your best deal: https://www.amazon.com/New-American-Retirement-System-ReserveTM/dp/1461030072

Social Security offices still closed and behind in processing

You can check the status of your benefits, appeal, wage credits, estimated SS income at https://blog.ssa.gov/check-the-status-of-your-social-security-benefits-claim-online/. I recently applied for Medicare and Medicare Advantage by sending forms for Part B to my local SS office. They did not enroll me for over a month—paperwork was not complete. I found that their folks are not working in the office so they don’t always complete the process of enrollment in a timely manner. Thanks to an online account, I was able to alert them to the delay and I am now paying my $148.50 from my SS benefit. Hopefully SS COLA increases will keep up with Medicare increases so I won’t have to make more payments. Unfortunately, GOP does not seem to want to save our SS for the future since the trustees think our benefits will be cut 25% by 2035. GOP could have fixed SS trust when they gave the wealthy their 2017 tax cuts. I will have to go back to work to make up the shortfall: $7.25 x 40 hrs = $290-income, FICA, Medicare, state taxes = $197.20. Maybe Jeff can pay his fair share instead of deducting his quick ride.

Save smart: https://www.amazon.com/Maximize-Social-Security-Benefits-Retirement/dp/1495439224

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

Like 1776, this period is a test of democracy—We rejected an "American fascist" once

Our Jan 6 ‘Truth and Reconciliation Commission’

Trump: “I got impeached twice. I became worse” CPAC applause

What if Trump’s coup had succeeded?

Can we trust the military to stop a new ‘Leader’?

What if Trump’s fascist party wins in 2022?

How Govt wastes our money:

FREIGHTCAR AMERICA took our $10 million PPP: fired 500 workers: moved to Mexico

Southern states urging vaxx NOW after urging NO vaxx in Trump era.

Losing $ Billions revenue: audits on high-income taxpayers fell 37%: rich avoid taxes