Social Security Dropping
Recent studies show that for the last 10 years while the market was going up, up, up with no end in sight, and the boomers were not right on the door step of age 61 to be retired. They were in the 50s. They didn't feel any anxiousness in any way, shape or form. Recently, the very first boomer filed for Social Security a week ago. Now, they are all starting to show some anxiety about their retirement. Will they be able to have the same kind of income and etc.?
Statistics by Boston's College Center of Retirement research shows that 43% of all households are at risk of being unable to maintain a current standard of living at retirement. So given that, this study shows that while today it is 43%, soon within the next 10 years that will grow to be much higher. In fact, it will be almost as high as 60% when it comes down to generation X, those who were born in the 60s. This shows a dramatic problem will begin because of Social Security perhaps not being there, and people not having near enough money in terms of retirement.
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Teachers Sue Nationwide Insurance Company for Overcharging.
Just recently, in the National Underwriter, there was an article in
July of this year that shows that Nationwide and their selected
associates actually based their decisions to invest in certain mutual
funds on how much they were going to get paid for their services,
rather than on what was objective and prudent through their evaluation
as they looked at the merits of various funds and did not keep in front
of their view the best interest of the plan participants.
The
conclusion is that when the wolf is tending the sheep, the wolf is
going to have a lot of fun. Whenever you have your money in with
somebody else, it's so important for you to watch over them and make
sure that they have your best interest. If not, then take you money
away from them.
The school teachers signed a master contract
that everything had to be through Nationwide and, as a result, they
couldn't make that change. Nationwide knew they had a captive audience
and so they could make the changes they wanted.
This was my
interpretation as I read the article, but it just shows it is so
important for us to know the rules and to always look at the big
picture.
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Liquidity
When a person has cash reserves they can take advantage of
opportunities that come along. Suppose someone has to sell their car in
a hurry and are willing to take $3,000 less that book? With cash, snap
it up and resell for a profit. Many times in a persons life they will
have opportunities to take advantage if they have cash reserves. Cash
is like King Kong!
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Saver vs Investor
This has to do with the definition of a saver versus an investor. Recently I was reading a book called "Prophecy" by Robert Kiyosaki, an observation that there are many people who have put money into the Stock Market or mutual funds through their 401K. So often that is referred to as they are an investor, or they have invested money in the Stock Market when, in fact, the observation is made that all they have done is save money. So there is a need to define what a saver is versus an investor.
A saver saves their money, gives up their money to someone else to investor in some way put that money in motion. But the saver, by definition, doesn't understand where the money went and is not in control at all. So many people who have saved money in a 401K to put into the market are not investors. They don't know what is going on, and they don't know how to find out how those managing the funds can make any changes to improve their situation.
An investor, however, is a person who keeps their money and puts it in motion and always knows where it is and what it is doing. My suggestion is there are so many people that are savers and not investors who will then follow each other into a bad time. As the market is going down, they will jump out as it is going down and cause an even further reduction in the market, or vice versa, when the market is going up, they will climb on, and they will just keep putting more money in and follow the masses.
In the future, it is going to become obvious that when a ton of savers, at least 80% to 90% it is estimated, are savers in the market will just follow each other, and they will have another huge Stock Market crash. You can tell when there is so much uneasiness because there will be new highs and new lows. So March 14, 2007 was one of the largest drop-offs in value in the Stock Market, in the Dow Jones Stock prices. Since March 2007 until right now, approaching March 2008, it has now three more times hit an all time low and slowly comes back. The largest drop in value in one day has been posted three times since last March, showing such unsteadiness in the market. So savers beware. You have no control, and you don't know what is going on. It is better that you go on the sideline. Just put your money in Money Markets and leave them there and not be subject to market risk.
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Tax Information
An individual taxpayer can deduct un-recovered amounts from personal
loans that have become totally worthless. Reminder: Claim the write-off
as a short-term loss on Schedule D. This information is taken from the
Small Business Tax Strategies newsletter, Vol. 2, No. 4 April 2007.
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Exit strategy for small business owner
Many small business owners feel it is best if they put all their money
back into the business. Over the years, I see that the best decision is
to diversify into others things rather than just in one place. While a
small business may not have a lot of extra money, take a modest salary
and have a surplus to establish a SEP or and IRA. After all, if your
business can not through off at least this much money, you are not in
aa position to be a successful leader in you business, and your are not
going to set a good example for your employees.
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Adjustable Rate Mortgage Time-bomb
We are told 25% of all loans last year were sub-prime. With ARMS coming
due at an increasing rate, I am asked often what to do? If you don't
have your loan docs handy, get them. Read them. Make a summary list of
all the information, for example: rate changes when, how much and what
will be the new payment? Is there a PPP? PPP is a pre-payment penalty.
When a person can't pay the increase mortgage payment, the best option
I know is to "sell-short". Find someone who has cash and is willing to
pay something and sell it to them contingent upon the lenders approval.
Then bottle all this up and approach your lender. Cash in the bank is
better than them carrying the paper upon foreclosure. So, often times
the lender will agree and you are off the hook. Learn what selling
short is and how to do it, much better than a BK or waking away and
completely trashing your credit.
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Why Few People Should Be Allowed to Have Anything to Do With Managing Their Own Money Until They’ve Received Financial Coaching…
Only Three in 100 Americans is Ready For Retirement. A Financial
Coach Will Keep You from Being One of the 97 Other People Who Just
Doesn’t Get It.
Have you ever wondered why you can’t get
your debt completely under control? Or why you can’t manage to save
anything for retirement? Or why you feel confused and frustrated about
how to invest in the stock market? Do you ever find yourself thinking
that you’re missing important information that would make your finances
come together and finally make sense but don’t know where to find it?
You’re
not alone. Millions of people feel hopelessly confused about how to
manage their money. That’s because they have never been taught the way
to truly master their finances. It isn’t taught in schools or at home,
and it certainly isn’t shared by the gurus on Wall Street. Most of the
financial world preys upon your ignorance and frustration, taking
advantage of it by selling you investment, insurance, or debt reduction
products that sometimes alleviate some symptoms, but don’t address the
real underlying problems.
To get to the heart of those
problems, you need a coach. Athletes, top executives, and Hollywood
stars all use coaches to help them perform at their absolute best. A
personal financial coach can help you discover what your strengths and
weaknesses are and give you the perspective you personally need to put
all the pieces of your financial puzzle together so it makes sense to
you.
A Money Mastery Coach is the Secret to Piecing the Puzzle Together
There
are many financial advisors, gurus, and experts out there who are
willing to share pieces of that puzzle. But unfortunately, many of them
do not understand how to put all the pieces together so it makes sense,
or to use another analogy, they do not know the proper “recipe” for
true financial mastery. Some advisors provide all the ingredients for
this recipe but don’t tell you in which order to “bake” them. Others
know the order, but don’t know how much of one particular ingredient to
include. In addition to those who don’t know the recipe for success,
there are those who know it but are unwilling to share it because they
are intent on making you dependent on their advice and in selling you
expensive financial products rather than giving you the principle
ingredients that will allow you to manage your own money. While these
products will often earn the sellers of them a hefty commission and
seem to help create a perfect outcome, they rarely solve the overall
problem and can sometimes make finances worse.
Money Mastery
coaching is different. Our financial experts know ALL the ingredients
required to get in complete control, increase cash flow, and begin
building real wealth and prosperity. They are willing to teach you
about each of those ingredients, what order they will need to be added
to your financial life, and how much of each ingredient you will
personally require to eliminate your debt, control your spending,
maximize your savings for retirement and protect your wealth from over
taxation and market downturns. Our coaches are committed to educating
and training you so YOU can take charge of your own money.
Personal
coaching with a Money Mastery mentor is a powerful alliance. Our
coaches aren’t biased by commissions or dollars earned from selling
products or investment advice. They are motivated by a desire to teach
you correct principles that will allow you to govern yourself, play
complex financial games on an even playing field with others, take the
emotional confusion and frustration out of your financial decisions,
empower you to make lasting and significant changes, and help you make
your money work for you so it can generate much, much more.
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Tax Refund Spells
Just out today the IRS says the refunds are mostly being spent a little to catch up on credit card debts and then to fund a much needed vacation. Especially among those making less than $45,000 a year, they spend it all. Just a thought.
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Credit Card Rates
Credit card companies are always changing the rules. They constantly
make changes in terms of interest rate on any particular credit card
just because they can. They give someone an introductory rate of say
3.9% and then just arbitrarily raise that to 10%, 18%, 24%, 28%. I
think it is horrible. Their argument is that there have been changes in
the card holder's credit rating. Many times that is true, but actually
so many people have done very well, and they keep paying on time.
Still, they get the increases. The total debt that the Americans have
right now is $9 billion in credit card debt. That is an average of
$2,200/household. When you look at the impact this has on every
household in this nation, there needs to be some way to constrain the
credit card companies from just raising fees, hiding penalties, raising
interest, and internally just making these cards so expensive that it
dooms the card holder.
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