Friday, August 13, 2021

Your advisor's costs can hurt you

 

How does the cost of financial services cut our nest egg in HALF?

You may have read that brokerage costs can cut your eventual retirement fund by 63%. One of the reasons John Bogle founded low-cost Vanguard Group was his insight that cost is an important factor in our long-term financial benefits. Compare your ultimate retirement income when using high cost investing. Vanguard’s 500 Index tracks the top 500 stocks at $4 per $10,000. Over time you earn the market rate of 11% not 3.79% for a managed equity account. Fidelity did a study of its accounts and found that the ones that did best were those NOT managed by Fidelity. The clients had either forgotten their money or died. Many studies have shown that low-cost beats high-cost in every period and every asset class. An index fund of a broad spectrum of stocks provides our best chance of adequate retirement needs. A typical investor funds their IRA or other tax-deferred or tax-FREE plan with $250 a month for 40 years. The 0.04% index produces $2.1 million; the 0.20% index produces $1.1 million. The average advisor-managed fund produces about $281,342. Clearly, paying less for the long-term stock market return of 11% is better than using an advisor. And no advisor has been able to beat the market over any 40 years of investing. You keep more of your money: advisors don’t need any more!

Pay less; get more: https://www.amazon.com/Pay-less-Get-more-investment/dp/1500598321

 

We don’t have to pay income taxes on SS benefits any more

Most people have built their retirement plan at work with a 401k or 403b or IRA account. These accounts help us by delaying taxes on the money we contribute. They assume that we will pay fewer income taxes when we retire without other taxable income. Many people have this kind of situation. Most working people receive Social Security benefits without paying income tax since their pension money supplements their benefits. However, SS benefits are taxable if we work in retirement or have funded our pension plan consistently well. Thus any couple with total income above $44,000 will pay taxes on some of the SS benefits: Up to 85% of your benefits may be taxable. Since 1997, we have been able to fund our retirement income without any taxes. It’s totally tax-FREE—no tax on retirement income; no tax on SS benefits. We avoid taxes like the rich.

Spend all your money: https://www.amazon.com/Millionaire-Mutual-Funds-Save-taxes/dp/1534939490

 

How can we avoid paying the taxes that the rich don’t pay?

Most wealthy people pay a lower rate of tax than we do. Warren Buffett admitted he pays only 17.7% compared with his secretary and staff who pay an average of 32.9%. We pay almost DOUBLE what the wealthy pay, if they pay at all. As the GOP candidate boasted in 2016, Trump pays NOTHING—zero income taxes. Most corporations don’t pay taxes either—many corporations get us to pay them a tax refund due to their bad management. Because the wealthy pay a lower income tax rate or disguise income as corporate non-income, they have taken more of the country’s wealth than ever before. Compared to 1983, we have lost almost 8% of the total US wealth. Thus 80% of us own only 11% of assets—usually our homes; while the 1%, about 3 million upper class, own almost 40% of everything. This happened over time—since the 1970s when wages after inflation have been frozen. How much did the wealthy pay recently? Jeff Bezos paid 0.98% tax rate; Elon Musk paid a true tax rate of 3.27%; Warren Buffett paid only 0.10%. Instead of paying their taxes, the wealthy buy our future elected officials. Time to stop!

Avoid paying their taxes: https://www.amazon.com/New-American-Retirement-System-ReserveTM/dp/1461030072

 

Why You Still Can’t Trust Your Financial Adviser

Unfortunately, Biden has not re-authorized the Fiduciary Rule finalized under Obama and originally set to take effect in 2017. The Fiduciary Rule means that product sellers must provide the best choice for our interests not theirs. This rule is followed by a few financial sellers called Registered Investment Advisors and some fee-only certified financial planners (CFP). Why is this rule necessary? Researchers conducting a study sent “mystery shoppers” into 284 Boston-area financial advisers. When clients walked in with the kind of low-cost, diversified portfolio unbiased independent experts recommend, only 2.4 percent of advisers approved of it and some 85 percent recommended making a change. Financial advisers were eight times more supportive if clients had a less-than-ideal strategy of chasing returns—one that was more likely to generate commissions. Your broker/advisor and their firm rely on commissions and fees to make selling profitable. Most do not operate like a lawyer in charging a set fee for an agreed upon service. Most sellers rely on us paying an ongoing fee of 1-2% per year no matter what the outcome of their advice. It’s the perfect business—for them; not us.

https://www.amazon.com/Wall-Street-Cleans-Up-Advisors/dp/1517043255

 

 

Where to invest if you can’t contribute to an IRA?

For retirees who no longer have “earned” income, there is no way to add savings to tax-deferred or tax-FREE accounts. However, your profit from a small business qualifies for many plans including a tax-FREE Roth IRA. There may be other ways to qualify. For some of us who have extra funds to invest, there are several attractive options. We can buy individual stocks that do not increase our taxes. Stocks without dividends means there are no taxes on income or gains until we sell. Of course, we need to have a low-cost brokerage account and have some idea of the value of the company we are buying. I use my Vanguard brokerage account to buy Warren Buffett’s well-diversified company Berkshire Hathaway. I am buying a stock that owns a railroad, insurers, candy, cement, airline, credit cards, etc etc. I don’t pay income taxes when I sell. I usually pay nothing on capital gains but some may pay 15%. There are many stocks that do not pay a dividend—usually using profits to grow the business. Amazon is a good example.

Go Tax-FREE: https://www.amazon.com/Tax-FREE-Retirement-code-lifetime-income/dp/1475206976

 

Is your advisor’s advice costing you $ thousands?

Schwab reports its robo portfolio of 10% cash has costs you $1.13 billion in total earnings. Plus the management fee (.30%) would have resulted in $531 million in lost earning to you. Advisors get paid for losing you money: a great deal for advisors but not for you. Schwab has been cutting staff to gain revenue during this time of transition to absorb TD Ameritrade. Perhaps it is time to evaluate your portfolio advisor billed as a robo. There are better alternatives. You can pay less; earn more for later.

Better Robos: https://www.amazon.com/Best-Robo-Advisor-Ultimate-Automatic-Management/dp/1537111957

 

 

 

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

 

 

Like 1776, this period is a test of democracyWe rejected an "American fascist" once

 

 

Our Jan 6 ‘Truth and Reconciliation Commission

 

Judge: you “can’t replace [democracy] with the will of the mob."

 

Trump coup failed: we pay his $500 million repair bill?

 

How Govt wastes our money:

Biden reverses promise to cut subsidy to coal: gives subsidy to profit Arch Resources 

Biden approving hundreds of requests to drill on federal land: not what he promised

Biden extending the pause on federal student loan payments  Sept thru Jan

 

GOP insider steals password to CO voting machines: Trump win at any cost

 

Only 2 Senators to repeal tax break carried interest: fund managers pay lower tax rates

2 Dems ask Gov how rich “legal tax loopholes avoid paying their fair share of taxes.”

 

Wealthy who don’t pay their fair share of taxes  are against helping us thrive

46 GOP senators warn that they will not lift debt ceiling: America won’t pay its bills

Millionaire Congress voted for all the Trump tax cuts and loopholes in 2017

 

SCAMS/SPINS:

Some states hide Covid infection rates: misinformation kills 620,000: more than wars

Biden blamed for Covid ‘explosion’ in FL: immigrants have lower rates than TX folk

LA state officials conflicting advice on masks: Louisiana dangerous surge of COVID

 

Vaccine for pregnant women: CDC makes it official

TX covid patents admitted to ‘tents’ near hospitals: buy oxygen now before Gov bans!

80 kids exposed first day school: parent child tested positive Covid test: Freedom to kill?

 

Taliban is committed to their ideology like anti-vaxxers committed to theirs? Not give up

 

FL hospitals do NOT require staff to get vax so get your vax BEFORE you go to surgery

Tucker tells employees to sue employer is vax mandate but Tucker got his vax last year.

Alabama lowest vax rate in US: destroys 65,000 vax not used: GOP ideology kills

 

Pentagon orders all military personnel to get the COVID-19 vaccine: bold step for safety

TX bans masks to fight Covid but recruiting more health care workers worldwide

FL bans masks to fight Covid and will cut pay if school staff allows masks

 

FL requests hundreds of ventilators from feds: no mask-school kids fills hospitals

NY AG: Cuomo hid Covid deaths to make himself look hero: ignored deaths in hospital

 

TX GOP will arrest Dem representatives to suppress voters: Fascism Texas style

Recall 2 million dehumidifiers, many brands, overheat and start fires

14 Most Deadly Car Models: Subcompact cars and sports cars

 

Miami tells hundreds to evacuate 8-story condo building deemed unsafe: failed inspect

Used car prices have risen 45% over 12 months: new $42,000

 

Evarist Amah misled clients about how their $700,000 in Grail investments fared.

Regulators get tough with brokerage re: funds for client treated badly by brokers

Trump’s post office head giving own biz $120 million leg up: USPS service decline

 

Zuck employs religious practices to cement Facebook interactions and profits

What is shooting yourselves in the feet? Jeopardy execs not naming LaVar host

 

QAnon ideolog kills his 2 kids bec/ they will be monsters who will destroy world

 

Jobs

High pay jobs with 2 year certificate: medical specialist high pay

Target will pay for college at certain schools: work and study to go forward

Export drugs to Mexico: we are now selling weed not smuggling across border

 

This is a first: The US has 10 million job openings

 

Who owns your account now?

JD Power rates Rocket Mortgage top dog again: great personal experience

JD Power rates Vehicle Insurance top dogs by regions

JD Power rates Pharmacy Study top is not chain but local Good Neighbor 

JD Power rates major appliances: Samsung and LG top lists

Repair or not repair; that is the question: prisoners to “authorized” monopoly repairs

 

Miracles:

Warming changes Gulf Stream ocean circulation: weather changes for EU 119.8*

Drought makes new natural wonders in Powell: like Petra Indiana Jones

Facebook spawns folks who reject science of disease by germs: ultimate ‘freedom’

 

Siberian fires larger than all world’s fires combined: can fear motivate change or kill us?

Senator Paul does not report how he made a fortune on his job’s insider information

 

We can apply for Medicare online: https://blog.ssa.gov/apply-for-medicare-online

We can apply for Social Security online: https://www.ssa.gov/benefits/retirement/

We can apply for health care online: https://www.healthcare.gov/

 

IAN

41 Watchung Plaza, B242

MontclairNJ   07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

Alerts available at http://dankeppel.blogspot.com/

 

No comments: