Is your advisor’s “model” ETF option right for you?

 

Make the New Year better

 

Is owning a TIPS fund or ETF right for you?

A kind of bond issued by the US Treasury has complexities that baffle most investors who use them. They are not as simple as buying them to avoid losing purchase power to inflation. Many took the bait in 2020 with the promise of 5.5% vs -1.5% for the bond index. Semi-annual adjustments to the securities means TIPS are good at protection against unexpected inflation. So for most people, stocks will provide better long-term protection from inflation. For retirees, holding 10-20% of their bond allocation in TIPS may help settle out the stock market gyrations. Many retirees use high dividend payers to accomplish the same goal. The low-cost versions of all these options will do better than costly broker/advisor-managed ones simply because paying 2% to earn 5% provides you with only 3% net. The calculated yield is another big headache since not every fund is a pure TIPS play. Some add in derivatives to make their fund attractive. None of these offerings provides an inflation-busting guarantee. A better strategy is an over-weighted balanced fund plus diversified low-cost stock funds. Low-cost always beats high-cost.

https://www.amazon.com/Reset-Your-Retirement-Income-retirement/dp/1512304344

 

How can you deal with inflation?

Inflation of 7% is the running rate for the new year based on current price increases. Gas, food and rent-price jumps may have convinced you that something needs to be done. If you are an investor or retired person living on your investments, you may have heard the discussion of bond and stock prices changing drastically last month. Indeed, after the stock market index hit 28% last year, ’22 has taken some of your account balance away already. For those relying on their brokerage firm or advisor, the word from Goldman is: “Sticking with Stocks Is Best Bet to Beat Inflation.” Goldman favors equities in energy, financials, resources, real estate and infrastructure. Real estate has come off a year of over 40% but since the value of leases and contracts often rises when inflation increases, this will remain a good bet against inflation. Index funds usually cost much less than an advisor and so if most analysts think we will have single digit returns, Vanguard may be a better home to rest in 2022 than a full-service firm. Good health.

Use the low-cost leader: https://www.amazon.com/Vanguards-Top-Ten-mutual-funds/dp/150073909X

 

How to invest if you are NOT rich

There is a way to become rich even if you don’t have a lot of money and are not able to pick the next Amazon or Google stock. It requires you to wait for your money to grow by itself using the Miracle of Compounding. You know the principle of compound interest. If you lend a $1 to your bank, you will be paid interest each year. After 40 years, you will have $2.22 at 2%. Rates of interest are low right now, but in the 1980s, you could earn 8-12%. I saved for my first house down payment then. The stock market returns average over 11% over time, so you could have $80 from $1. If you could invest $100 per month in large company stocks, you could have $880,000 in 40 years. $100 a month is $3.34 a day. Almost everyone could do that if their mutual fund company could automatically deduct the $100 a month from their bank account. You would have to wait and never touch the money during those 40 years. Actually, fund firms have tested that plan: the highest accumulations were in accounts that the owner forgot they had. They left the account to compound by itself. Vanguard offers a low-cost large company stock fund that has returned 11.66% since 1976. Clients make money the ‘old-fashioned way;’ patience.

You should too: https://www.amazon.com/Just-Takes-Time-money-old-fashioned-ebook/dp/B07751F8N2

 

Can you trust online tax prep software?
If you use your prior year returns to guide you, you can easily navigate most online software tax services and save money. Most are free for Federal and some are free for some states. With direct deposit, you have the simplest and fastest way to do taxes. I have used a number of the services offered by the IRS-approved sites: https://www.irs.gov/ filing/free-file-do-your-federal-taxes-for-free. As an AARP tax preparer, I know some of these sites offer simple entry screens and good support. Even if you have a complicated return, these packages are manageable. As I tell AARP users, try to do your own taxes first then consider going to a costly preparer. The IRS has warned us that it is still doing last years returns so make sure you enter the correct amounts for the child tax credit and economic stimulus checks received last year. The IRS sent a letter to remind us. Beware of other tax preparers claiming FREE but add charges after you start. After 2-3 weeks, track your refund: https://www.irs.gov/refunds. If you need to know your previous year tax information, order a transcript from the IRS files: https://www.irs.gov/individuals/get-transcript. Your refund could pay for a secure retirement. $2,000 a year earns $500,000.

Let Uncle Sam help you: https://www.amazon.com/Tax-Refund-Millionaires-Let-Uncle-Help/dp/149595644X/

 

Is your advisor’s “model” ETF option right for you?

Model portfolio assets have more than doubled over the last five years. Many providers of models are asset managers, who stand to benefit from new cash flowing to their funds. Meanwhile, financial advisers have embraced them as a way to outsource allocation decisions so more time can be spent attracting and serving clients. “Investors who chase the recommendations also behave differently, as they pay less attention to both the price and the performance of the ETFs,” a new study found. Model providers recommend their affiliated ETFs more frequently, and these tend to have lower performance and higher fees than recommended unaffiliated ETFs. Over time, advisor and firm fees can take up to 63% of your potential earnings. Fees are guaranteed; earnings are never guaranteed.

Follow Buffett’s advice: https://www.amazon.com/Warren-Buffett-Your-Investment-Advisor/dp/1518690963

 

Is using an advisor right for you?

Many financial outlets claim that you can increase your returns by using a paid advisor. Consider the source: financial media depends on paid advisors and their firms for income so it makes sense to claim a paid advisor can help you. However, we all know that you can save big money by shopping direct—eliminate the “middle man markup.” Also, few advisors can beat a low-cost stock index simply because of the costs. The unbiased financial scorekeeper, Dalbar, has found that the average advisor-managed returns were 3.79% compared with the S&P 500 index of 11.06%. Warren Buffett put his money on the Vanguard’s 500 Index fund in a bet with a stock picking guru and 5 hedge funds. Buffett won the bet. He also designated the Vanguard low-cost index fund in his will for his heirs. Stock funds underperformed indexes nearly 93% of the time. Over time, advisor fees, charges, trading and bad decisions will lower your total accumulations by 63% or more. In every time period, low-cost funds beat high-cost funds, Morningstar showed.

Go with Buffett: https://www.amazon.com/Warren-Buffetts-Vanguard-Funds-Retirement/dp/1496148592

 

 

 

 

?**********ACCOUNTABILITY**************?

 

 

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

 

 

The Path to Dictatorship: 2010-2030

 

 

Terrorist attack fueled by propaganda

 

Congress fails to support democracy

 

Trump’s plan for coup

 

companies slam voter suppression laws, then donate to their sponsors

 

 

US civil war II

 

 

How Govt wastes our money:

TX already rejecting half of 700 mail-in applications for ballots: only GOP get ballot

Supremes decide Covid vaxx mandate cancelled: 865,000 dead: voted to continue deaths

Counties hide Covid death count: family/political reason fake causes: plague--1 million

 

SS benefit increase may raise tax bill: income threshold never adjusted: thanks Congress

10 wealthiest men doubled their fortunes: most pay lower tax rate than we do

Wealth group: “few if any of us can honestly say that we pay our fair share in taxes"

Wealthy tax-avoiders replacing residents of Puerto Rico: Beverly Hills in Caribbean

 

 

Manchin: parents waste monthly child tax payments on drugs instead of their children

Manchin coal company receives coal subsidies from our taxes: parties on houseboats

 

Biden spin to Putin: “any assembled units” NO; “Unassembled” guerillas across is OK?

Military bases near Ukraine: Black Sea region ground and air forces cost us $ millions.

 

 

SCAMS/SPINS:

OH Supremes cancel GOP election landslide gerrymandering: small step for OH humans

FL funds “brown shirt” type police use tips to arrest anyone allege violation of elections 

Don has to worry about kids spilling beans and FL mini-‘Reich’

Parallel: Al Capone, Don Trump: tax evasion case lies about assets and taxes

 

FedEx to use laser heat gun to deter should-fired missiles from packages

Tesla problems in heating/cooling of Model 3 and Model Y vehicles

Your 5G phone could crash airplanes: no one foresaw telecom conflict before today?

 

Martin Shkreli barred from industry fined $64.6 million Daraprim guage block generic

Metals.com, Chase Metals caught selling overpriced gold silver bullion $185 million

Scam: favorite digital and promissory notes easy to fake: large return for the risk.

 

Codie D. Malesker caught faking damage insurance reimbursement: jail 15 weekends

Perry Santillo caught stealing $100 million Ponzi scheme  prison17 years

Tesla on autopilot kills 2: driver not Elon indicted for manslaughter: No clapping in truck

 

Fake online offers: how to spot a fake website and goods

Fake QR codes to steal money: they direct people to malicious sites: just click delete

 

Millions of store & restaurant workers with Covid-19 are serving us: no sick days

 

Just dumb: GOP says life-saving Covid vaxx mandate is same as the Nazis killing Jews

TX GOP move to the right paid for by the wealthy: Porters, Wilks, Dunn

Mind control: powerful propaganda has convinced Trumpers that the dead don’t die

 

Jobs

Study shows college for some career degrees are not cost effective: nothing new

Hobbies That Help You Live Longer: Active outgoing social life

Home office deduction for your business: not for work from home

 

10 fastest growing 2022 jobs

Fastest job growth regions: hiring ID, WA, NC top list

 

Who owns your account now?

Even generic drugs have price increases as drug companies want higher profits

Auto insurance rates rise: time to shop for lower rates: bundling may not help

Avg monthly new car payment $636 a new high: same 70 month term

 

Activision Blizzard to Microsoft: Call to Duty for Mr Gates to play

Streaming costs more: look harder for free services

SEC makes it harder to find private co data: assures wealthy hide fortunes better

 

Miracles:

Cancer mortality rates continue to decline: lung cancer drop; no smokers

Free at-⁠home COVID-⁠19 tests: 4 while they last: check expiration date

Some states have lowered their taxes for 2022: Iowa phasing out inheritance tax

 

In our minds: Covid shot side effects (headache and fatigue) are from anxiety not vaxx.

Snow and hailstorms cover Saudi desert: Iceberg falls into ocean

IRS videos answer questions quicker than a phone call: IRS failed to answer 50%

 

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

Montclair, NJ   07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

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

 

Time can be your friend or your enemy

 

Is your emergency fund ready when the US stops payments in December?

GOP against raising taxes on the rich and insists on keeping its big tax breaks for the wealthy from 2017 so they are talking about America not paying what it owes. If gov lays off workers, delays SS payments, or stages other malfunctions in the American system of government, Congress people still get paid. We can’t use their salaries as leverage to make a deal. Some reps are not even at work to make a deal. They still get paid. We may not get our benefits so it is important to plan where your funding will come from. If you can borrow from your bank or credit card lender, be prepared to pay it back quickly since rates are still over 25%. You don’t have to settle for 0.005% earnings in a bank savings for your emergency fund. There are many options including a low-cost balanced fund like those at Vanguard. Wellesley Income, with 60% bonds, provides over 7% return and direct deposit withdrawal capability. 

https://www.amazon.com/dont-have-money-Financial-Emergencies/dp/1537636707

 

Time can be your friend or your enemy

Most of us are not going to marry rich, own a business, inherit wealth, get really lucky, or find talent. Time is available to all of us and we can become rich by using time to our advantage. Using just your average tax refund of $3,000 a year—$250 a month—you can become a millionaire over time. With time as your fiend, you don’t need to pick the right stocks, waste your money on advisors or trade ETF at the right time. Fidelity analyzed its accounts that produced the highest returns. They found that account holders that did NOT 'manage' their accounts were the most successful. Mutual fund analyst Morningstar found that in every period low-cost funds beat high-cost funds. Buy stocks like you buy groceries not perfume, Buffett’s teacher said. Recently, Warren Buffett has proved this strategy: buy and keep buying the Vanguard 500 index fund. Time is your enemy when you try to time the market: buy low and sell high. Inevitably money managers and TV gurus, who are paid well to time the market, either sell too early or buy too late. There are many get-rich stories but few are true.

Go with Buffett: https://www.amazon.com/Just-Takes-Time-money-fashioned/dp/1979380945

 

 

Beat Wall Street money managers

Another study shows how you can beat Wall Street money managers. So called ‘professionals’ make more mistakes in trading than you do. Even if they make wise decisions about which stocks to buy they must make wise decisions about when to sell. Usually they fail. They just don’t realize that the market is not driven by rationality. Professional investors demonstrate skill when buying stocks, but their selling decisions cause them to underperform benchmarks. That’s the conclusion of a recent working paper, “Selling Fast and Buying Slow,” by four researchers who examined the trading activity of more than 700 professionally managed portfolios. “They appear to focus primarily on finding the next great idea to add to their portfolio and view selling largely as a way to raise cash for purchases,” the study’s authors wrote. Keeping your money in an index fund gives you the advantage of NOT making bad trading decisions AND not overpaying for advice. Remember the Fidelity study results. Wall Street managers need to create great buying stories so they can attract more investors’ dollars. They are not concerned about providing you with better long-term returns that beat the market. They are paid to attract new dollars not provide you with the best returns over the long term. https://www.amazon.com/You-Beat-Wall-Street-professionals/dp/1986031373

 

Vanguard pushes industry to lower fee schedule

Vanguard leads the industry to lower fees for its Target Date funds again. With an anticipated expense ratio of 0.08%, investors will have access to a sophisticated, diversified asset allocation solution at just one-fifth of the average industry costs. These funds provide expert management at low cost. You don’t have to pick the asset allocation, adjusting as you age, or remember to buy/sell different ETFs every month, or enter limit orders, or rebalance on schedule, or decide when to invest. You just set up your automatic contribution amount and Vanguard does the rest. With the option to use the new Digital Advisor, you have the best of both worlds:

Low fees and advice when needed: https://www.amazon.com/Best-Robo-Advisor-Ultimate-Automatic-Management/dp/1537111957

 

New auto insurance discounts that may save you $500-800

Most folks are now driving less—fewer commute and fewer trips to the mall—so you can ask for your discount. Most insurers also offer discounts for safe drivers and driving review courses like AARP’s online course. Most folks can save by raising their deductible. Put the equivalent amount into your emergency fund as you save on premium each year. You may also save by dropping your collision on an older car. I have cancelled my roadside assistance since my credit card provides it free. Pay premiums annually or semi-annually instead of monthly. I always ask the phone rep if there are any other discounts I could qualify for. Most agents don’t tell explain them since they get paid by commission—a percentage of the premium.

Shop and save: https://www.amazon.com/Industry-Insiders-Guides-Buying-Insurance/dp/1466435712

 

Wealthy Pay a Lower Rate Than Everybody Else

New study confirms what everyone already knew: there are 2 tax systems in America. There is the one that Congress wrote for those who pay for their elections and one for the rest of us who do not pay for their elections. If you are taxing those who give you money so you can go to Washington, you give them every break possible—some really wealthy people pay nothing—as Trump said in 2016. Congress is serving those who feed them, as we would expect. How do they pay nothing? Congress only taxes some “income.” The wealthy can borrow against the value of their considerable holdings and live comfortably without selling stock or receiving any income from dividends, which new companies like Tesla and Amazon don’t pay. Congress does NOT tax wealth assets or the loan proceeds from it. Buffett’s company does not pay dividends so he pays nothing as his stock holdings increase in value. Buffett admitted that his staff pays over double what he pays in taxes: 17.7% vs 32.9%. He pays only the minimum into the SS and Medicare fund even though his net worth is $99 Billion. As one of the wealthy said: "We don't pay taxes. Only the little people pay taxes." This is Socialism for the Rich. https://www.amazon.com/Americas-Socialism-Rich-little-people/dp/1535218584

 

 

 

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

 

 

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

 

Our Jan 6 ‘Truth and Reconciliation Commission’

 

Terrorists knew exactly which windows were NOT reinforced

 

Domestic terrorists funded in crypto

 

Trump: “Nobody’s done more for Christianity than me” ?

 

 

How Govt wastes our money:

All these companies made $ billions but paid no Fed taxes: no wonder we owe high debt

World wealthy hide their corrupt proceeds: Pandora: how to avoid taxes: SD, NV

Our legal reps wrote the rules that let the rich hide their dough in some states: we pay bill

 

Congress on paid vacation again: can your biz operate if closed for 2 weeks?

Post office considers cashing checks for those without bank: payday lenders not happy

US fighter plane makers helped China copy F-22: US now complain J-20 fly over Taiwan

 

One guy, Mitch McConnell, decided America will not go bankrupt until December

 

SCAMS/SPINS:

Ban on ‘surprise’ medical bills due Jan: med providers will find another way to charge

Will  right-wing conspiracy theorist Jones ever have to make amends for family grief?

Trumpist confessed: Fox ‘News’ was propaganda agency of government: not journalism

ATT funds far-right fake news One America News: Trump conspiracy theories

 

Naseem Mohammed Salamah caught fraud $970,000: promised diversify accounts

Rich Already Have A Plan To Escape Biden's Tax Increase: we end up paying the rich

131 judges failed to recuse themselves from cases in which they had financial interest

 

Papal thieves complain Vatican justice not fair: lawyers never worry about abused kids

Pope ashamed of his guys but Church never called police about 200,000 abuse crimes

 

Fake misleading info is so easy to make: Facebook profits from hurting especially teens

Recall: 3.5 million Covid home test kits by Ellume: too many fake positives

Why didn’t auto-braking stop crashes involving Tesla vehicles? Computers get confused.

 

TCFG Investment CA caught overcharging 360% and kickbacks with no notice

Doctors/druggists are drug pushers: 400 opioids per resident of Trumbull County OH.

Simple Health caught selling worthless policy said complied with Affordable Care Act.

Home builders caught adding $30K to contract to finish house: suit means more delay

Car dealers caught adding $10K to sticker price bec they can even for good customers

 

Your emergency surgery delay may kill you: preventable Covid victims take ER spots

Covid vax: many would rather lose job and die than take gov cure: 712,000 dead so far

 

First ‘abortion vigilante’ to earn $10,000 by reporting abortion crime under new TX law

GOP Supremes set to repudiate abortion “settled law” despite former promises: liars!

19 states passed this year laws to restrict voting  Constitution says voting is a right!

 

Jobs

Hospital staff to replace those afraid of vax

NYS's largest healthcare provider, Northwell Health, has fired 1,400 employees  no shots

Vax mandate in many business creates openings for millions

 

Who owns your account now?

National Flood Insurance rates up for storms rise: $20 Billion in debt too

Condos you don’t want to buy/invest: 432 Park: need helicopter when elevator out

Make old-fashion toys for the kids this holiday: holiday goods sitting on Pacific & docks

 

Best Medicare Advantage plans: JD Power ratings of services, info, costs, etc

Average portfolio retirees near retirees: 35% stocks, 26% cash, 15% bonds, 9% real estate

 

Miracles:

woman-coma-covid-delivers-miracle-baby-after-postponing-vaccination-1634927

Climate change killed 14% of the world’s coral reefs in a decade: we are next?

Priceless friendship

 

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/

 

Wisdom comes only thru suffering Aeschylus

 

IAN

41 Watchung Plaza, B242

Montclair, NJ   07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

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