NEVER PAY RETAIL FOR A COLLEGE EDUCATION!

Sooner or later, the folks who run universities must come to grips that there is an alternative to turning out students with large education debts. Recent announcements of increases in tuition costs at most major universities have met with some adverse commentary, particularly for those who must pay to play the game.

When the price of a college diploma is escalating at such a rapid pace, the alternatives available in a competitive marketplace must be worth investigating. One such place is a manual put together by Gary North entitled College for $15,000 (Or Less)) and it involves an investment of less than $100.  Unlike the job opportunities dangled in front of students, this investment comes with a 2 year money-back guarantee.

Not having read the manual, our referral is based on the guarantee, and it certainly seems like a minor step to the ultimate goal of achieving a college degree.

Another choice is to simply recognize that a college degree is not essential to getting a worthwhile job. Many trades are in dire need of competently trained individuals, and are willing to pay good wages for those with needed skills. Such skills can be readily acquired in valid trade schools.

When laying out financial plans for your life as a young person, the high costs of college now are a wonderful incentive for you to examine all your choices. Oh, to be young again!

Is this man stupid?

There are many who would advise that the most significant financial plan for the average person would be to get the mortgage paid off as quickly as possible. The same type of adviser would also likely suggest that you avoid the use of annuities at all cost.

Thus, it is most interesting to note the actual planning that has been done by one of the most financially astute individuals in the country, a former Princeton professor by the name of Ben Bernanke.

According to a report from Associated Press, the holdings of Mr. Bernanke include two annuities with a value of over $500,000, constituting a major portion of his overall financial net worth. So much for the ‘idiocy’ of anyone who is dumb enough to hold annuities.

The other item of interest is Mr. Bernanke’s mortgage refinancing. He is obviously capable of paying off the mortgage and living free of monthly payments. Why would he elect to have a mortgage in excess of $500,000?

If you do not know the answer to this question, perhaps it is time for you to have a frank discussion with a financial adviser. First, though, you might ask how the adviser feels about the use of annuities.

If he is negative about them, or even lukewarm, you might suspect that the advice you receive will conflict with that utilized by Mr. Bernanke.

Are we there yet?

I believe that the community is already in process of dissolution where each man begins to eye his neighbor as a possible enemy, where non-conformity with the accepted creed, political as well as religious, is a mark of disaffection; where denunciation, without specification or backing, takes the place of evidence, where orthodoxy chokes freedom of dissent; where faith in the eventual supremacy of reason has become so timid that we dare not enter our convictions in the open lists, to win or lose.

 

The above words are a direct quote from the renowned federal judge Leaned Hand.    It is evidence that the same forces that prevailed in this country a long time ago are still at work today.

The divisiveness merchants are at work in this country, starting at the top. Wake up, folks!

Do they really think we are so stupid?

Are we to the point that we are wiling to accept that the folks running the country these days really know what is best for us poor folks? Are we so helpless, that we cannot manage our own affairs? Must we believe that every little emergency requires more federal law making?

 Case in point: We are asked to believe that we must have a takeover of the medical industry so that everybody can have contraceptives at no cost, and juveniles must be covered under the parents medical insurance until they turn 26. Why not 35, or 40?

 Come on, America! Will you wake up when you find out that the so called’ Affordable Care Act makes medical care less affordable, or even available? Will the effort to reduce the population of so-called uninsured persons actually INCREASE the number of people without insurance?

 If the president’s wife decrees that we must all eat broccoli, will that now become the law of the land? If so, then even the uninformed will wake up to the fact that we now live in a totalitarian state, and are subject to the whims and desires of a monarch, just as those who revolted against the English king a long time ago.

 Now that it appears that Obamacare is a ‘trainwreck’ as admitted by one of its sponsors, there is an opportunity to actually accomplish a positive end result. This will happen only if we start over and all cooperate, and put aside the goal of ‘controlling the people’ as inadvertently admitted by a long entrenched federal legislator.

 Here is a suggestion: All of congress should be forced to read the chapter on health care in Ben Carson’s book AMERICA THE BEAUTIFUL. What a wonderful starting point on the road to making this country what the last line of the national anthem proclaims it to be.

 

 

 

 

Good advice online

We thought the following advice  recently received was worth sharing:

A recent report by Vanguard, called Advisor’s Alpha, had some interesting things to say about the benefits of using financial advisors and how retired folks can benefit from them.

If you read this report, keep in mind this advice about the benefit of using advisors is coming from the company that made online trading and not using advisers possible.

Vanguard was quite clear that long-term numbers indicate an advisor will not necessarily generate higher returns than what you might be able to do with something as simple as an index fund or ETF, but there are three areas where they can be a big help…

1. Behavioral Coaching

The first is behavioral coaching: avoiding bad decision making.

The report said the same thing I have been saying for the past 20 years: the small investor’s biggest enemy is himself. As recently as 2009 the returns from self-managed money wasn’t even beating inflation.

Investment returns for self-managed money is far below that for the pros, not because of the investments they chose, but because of the little guy’s habit of buying when things look rosy and selling at the first sign of a rough spot in the market.

This is one area where Vanguard thinks an advisor can help level the playing field.

For retired folks the two biggest benefits an advisor can offer are an asset-allocation strategy, which Alexander Green has been providing to Oxford Club members for over a decade, and an efficient tax strategy.

2. Asset Allocation

Asset allocation is a critical element of investing success and according to the Vanguard report is responsible for 90% of investment returns. Most investors ignore it completely in favor of the “stock of the month” club. Another behavioral issue!

3. Tax Strategy

On the tax side, an efficient distribution strategy can make all the difference for a retired person.

Vanguard says most retired persons withdraw money from tax-deferred accounts first, which is the least efficient way to do it. A well-thought-out withdrawal plan that takes into consideration all the possible tax implications can significantly increase financial security in retirement.

Saving a few bucks by managing your finances is not the same thing as saving a few cents by pumping your own gas or bagging your own groceries. Investing is a whole world unto itself says Vanguard, and most of us need outside expertise to help make it come together. And that is coming from Vanguard – the online brokerage.

Consider the help a financial advisor can provide in the tax, asset allocation and behavior areas.

An alternative to Obamacare!

Here is an outline of what I would like to see:

1. Have the insurance industry establish a pooling arrangement to re-insure all companies against catastrophic losses above $250,000. In order to do business as a health insurer, require the companies to accept all applicants with no pre-existing exclusions, and require them to allow employees to continue coverage at regular rates if changing jobs.

2. Allow the companies to set rates on actuarially sound base, and continue to use existing regulatory authorities to monitor them. Require a waiting period of 90 days for coverage to take effect to eliminate those who want to take advantage of ‘guaranteed insurability’ in order to game the system.

3. Rates for coverage would be based on actual claims experience and would be the same for all, even those who are in poor health. Those in good health that could qualify for credits, and could achieve lowered costs. Standards for ‘preferred’ rates would be known in advance by all.

4. Promote the concept of Health Savings Accounts which allow those with good health to manage their own risk, and would give them a reward for staying healthy without adding to their financial risk.

5. Companies would be allowed to re-insure  risks with the common insurance pool, and would be allowed to offer varying plans to compete for business. They would continue to process claims as at present, but would be protected from catastrophic claims by the use of the re-insurance pool.

 Instead of penalizing 250 million people for the 50 million who do not enjoy insurance protection, devise a program to motivate those who elect not to buy insurance, and subsidize those who cannot afford to buy.

Certainly, it must be possible to cost this out, and probably you would find that the costs will be much lower than the massive costs involved with the ‘reform’ program the administration wants, with all the new bureaucrats mandating their rules under the auspices of federal law. That does not take in the massive loss of freedom, which adds to the total cost in a non-measurable way.

 6. Finally, do something to reduce the legal costs of the present tort system. It is not necessary to do away with the tort system – merely to rein in the abuses currently rampant that make the medical profession more concerned about lawsuits than about care of the client.

 What with all the information available in these times, it should be possible to financially evaluate the options suggested here without delay. The alternative is to witness the so called savings arising from the government being the sole payer of your medical expenses disappear along with all the other promises that were made to get the program into law.

 

 

 

 

 

 

LATTER DAY ‘BLEATING’

In his classic work, The Animal Farm, George Orwell describes the constant bleating of the sheep – ‘Four legs good, Two legs bad’. (These days, there is a different flock of sheep bleating the party line. We know them as the ‘main stream media’)

On this site, we aim to establish a different bleat. It will go like this:

TAX DEFERRED GOOD, TAX-FREE BETTER!

This site may be a ‘voice in the wilderness’, but with the assistance of the United States government offering tax motivation, there still possibly be some who can hear. After all, who is there who believes that taxes are likely to be lower in the future?

If taxes are going up, what reason would you have to avoid planning? Would you still choose to leave a major portion of your life savings to the tax man? Are you so in awe of the way the government doles out money that you want to continue supplying it?

If you are inclined to look at ‘tax free’ alternatives, you should find ways to inform yourself. One way to do this is to visIt our blog – safemoneyplus.com

Doing so will not only stimulate thought, it will also give you an opportunity to ask questions.

Financial planning in reverse!

It makes me crazy to listen to to the commercials on television touting the benefits of ‘reverse’ mortgages.  It is a reminder of the fact that there must be substantial fees to the lender of these programs in order to sustain that barrage of advertising.

As a financial planner, it reinforces the contention that factual planning is put aside when it comes to mortgages.  Emotions rule instead.

It is common for advisers to tell that you should plan to pay off your mortgage as quickly as possible to avoid paying ‘all that interest’.  They would have you forget that the interest comes in handy at tax time, and by getting rid of a mortgage eliminates one of the great tax shelters left to the ordinary taxpayer.

They would also have you believe the myth that having no mortgage means you are living in your home for free.   Consider this – if you live in a $200,000 house with a big fat mortgage – say $180,000.  You you do have mortgage payments every month, but with the $180,000 set aside in an interest earning account, the payments can be made from that account.

Properly managed, that interest bearing account can grow even if the value of your home goes down.

So, what is going on here?  It seems as if you use every device to hasten the day when you ‘burn the mortgage’,  only to find that you now need money to live on even with a free and clear home.   Now you can go out and pay some big fees to have that home equity available to you by means of a monthly check for as long as you live in the home.

Whoever is influencing you to adopt that strategy is costing you a good bit of change.

I WONDER!!

 

The popular documentary Searching for Sugarman has brought long deserved attention to Sixto Rodriquez and we have been treated to a refreshing view of the world from a talented musician.

 

One of the popular songs that he sings is called ‘I wonder‘ and it contains a line that is appropriate to anyone seeking ways to invest their nest egg nowadays.

 

I wonder and worry my friend
I wonder – I wonder, – wonder don’t you?

These days, with the stock market soaring to record levels, there are many who still sit out the action on the sidelines. And those who are ‘in the game’, are confronted with a decision – whether to cash in or wait for further increases.

Here is a recommendation for those who are wondering what to do about investing their hard earned nest egg in a way to eliminate decision making – check in regularly with our website – www.safemoneyplus.com

None of the information you will see at our site will expose your principal to stock market loss at any point in the future. AND, you will still be able to participate in the stock market increases as they occur in the future.

A recent glance at the chart for the stock market over the last seven years indicated that there was an overall increase of just over 20%. T there. To obtain this return, you would have been obliged to endure a 40% drop in the market on TWO occasions. The end result was less than you would have experienced if the funds had been deposited in all most any annuity contract out there.

For those planning on using the money for a future income, the results with insurance contracts are even more impressive. We know of at least one company who will guarantee a 198% increase in the ‘income base’ over a 7 year period. (The income base is used to determine the size of your contractual income.)

Since it is totally possible to plan your finances without stock market risk –

WHY WONDER????

A note to those born after 1980

Let’s  say that the stock market is bad, and government bureaucracy is stupid and investment people are greedy.    And – “private”  accounts are bad, too.

To support the system, we agree that we will rely on the younger people to keep paying taxes to allow the older ones to receive benefits as promised.  What can we do to motivate the younger generation to keep on paying into the system?

Why not simply tell them that a portion of what they pay will be allocated to an account which they own?  One that will be theirs to use at retirement age, or to pass on to their heirs.  One that will be available to their own beneficiary with no strings if they do not make it to retirement age.  Said account would only be invested in government bonds.  No stock market investment allowed because that is  “too risky”.

Here is a sample:  If we allocated just $2500 annually to that account, with a 4% return on the bonds over 40 years, the amount available would be $247,000.  The benefit of income from that account would be available in addition to what ever was available from the other portion of the account which was controlled by the present system.

If we could only revise the present system to that extent, would anyone object?   How many of the younger generation would not support such a move?  How many of the older generation?

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