I am sharing a good article from Root Of God. I found it very logical and easy comprehension for any freshman college student. College is the time to start saving and investing. Happy Investing!

To Your Health… To Your Wealth… To Your Wisdom.

The Wall Street Copywriter

 

Saver Sam’s fraternal twin, Super Saver Samantha, is a slightly more frugal individual. She is a really good saver. Some say she’s a super saver. To appease the retirement gods, Super Saver Sam sacrifices 30% of her hard earned paycheck on the alter of savings, or $18,000 per year into her 401(k) and IRA.

After taking out investment contributions, Saver Sam is left with $54,000 per year which he spends diligently. Super Saver Samantha only has $42,000 left each year, which she gladly spends in a frugal manner.

Sam and Samantha both want to retire early, and both keep saving toward their goals. As Sam spends $54,000 per year, he must save around $1,543,000 in order to withdraw $54,000 per year to pay for his lifestyle (at a 3.5% withdrawal rate). Samantha, on the other hand, only needs $1,200,000 to fund her $42,000 per year spending habit.

So when can Sam and Samantha reach their retirement goals? Remember Samantha is saving more than Sam each year, so you expect her to save more money and reach her retirement goal sooner.

Sam does alright. He is on track to meet his savings goal at age 59 with $1,548,339 in his investment portfolio. Then, Sam can retire and live happily ever after to a ripe old age.

Samantha does even better! At the young age of 44, Super Saver Samantha passes the $1.2 million mark and grows her investment portfolio to almost $1.3 million! She will reach her retirement goal a full 15 years before Saver Sam will reach his goal.

Around age 46 or 47, Sam is cruising the internet, looking for his long lost twin sister. Eventually he finds her online profile and the travel blog she started when she retired at 44. Say what?! She spends a month or two each winter snorkeling and surfing in a low key Latin American beachfront community, and lives a generally awesome life. Without working ever again. But that’s impossible for someone her age, isn’t it?!

Slightly more attractive than a cubicle…

Sam gets a little jealous at this point, but figures Samantha might be able to give him a few tips on how to retire early. Sam and Samantha start comparing notes of their lifestyles over the last couple of decades. They found out they both lived comfortable middle class lifestyles in different parts of the U.S. Sam and Samantha both have decent houses and good cars, but Samantha is just a little more savvy and manages to spend a little less.

Her mortgage and housing costs were around $400 less per month because she bought a slightly smaller house in a slightly less swanky neighborhood. Compared to Saver Sam, Super Saver Samantha saves on average $300 per month by buying reasonably priced sedans instead of the latest luxury models. Samantha also keeps her cars for seven to ten years before replacing them with a new-to-her car. Sam lives it up and leases a beautiful new luxury car  every three years.

Samantha also managed to save an additional $300 per month in taxes by contributing $18,000 per year to her 401(k) and IRA. Go ahead and add up Samantha’s savings each month — $400 on housing, $300 on cars, and $300 on taxes. That’s $1,000 per month or $12,000 per year Samantha managed to save without making major sacrifices. The payoff was retiring 15 years earlier than Sam.

Here is Samantha’s tip to Sam — to be a Super Saver, all Samantha had to give up was a little bit of house, and drive a slightly less new, less flashy car. She didn’t have to reuse dryer sheets, rinse and re-use her plastic sandwich bags, or make her own laundry detergent to retire at 44. Super Saver Samantha simply selected a few areas to be a little more frugal and made some smart choices early on to set her on the path to a very early retirement.

I hope you all enjoyed Saver Sam and Super Saver Samantha’s journeys to retirement! Just remember, spending less not only means saving more, it also means needing a smaller investment portfolio to retire or be financially independent.

Today’s economy after the Mortgage Crisis in 2008 is what makes most Americans fear investing. Because of such fear, the everyday American is scared about another crisis happening any day now. This fear is what makes most people stay in debt. This debt is what takes our hope of the future away from us. Well, this is going to change after learning how to invest for the future.

Best Investments For the Future

So many get a phone call from their stockbroker to buy a “hot stock”. They spend $ 10,000 for the stock suggestion. A week later it drops 20 % because poor quarterly profits. You just lost $ 2,000 in one week. Now you grow bitter and negative on investing in the stock market. Maybe you will never invest in it again because of this loss. This is why investing in one particular stock is very risky for any individual investor. So, what are we supposed to do to build money for our retirement and college education costs in the next decade?

Exchange Traded Funds (ETFs) are mutual funds that invest in many corporations at once. For example, SPDR Financial ETF (XLF) invests in all banks from Wells Fargo to Goldman Sachs. Let us say that Goldman Sachs has a 10 % loss this quarter. You would lose a lot of your investment if invested all in Goldman Sachs. But, with an ETF you invest equally in all banks in the fund; not just one.
Hence, you still make a profit and get re-invested dividends from XLF fund.

How To Find The Best Long-Term Mutual and ETF Funds

First, get a financial advisor to help guide you through the purchasing of mutual funds. They show you 1 and 3 year returns on the mutual fund. You are interested in long term investing. hence, look at the past 5 years performance on the financial instrument. Let us say that you get 12 % from such an ETF. That is 12 % of you investment getting re-investing for next year.

The Cost For Such An Investment

You pay the financial advisor and his financial institution a management fee, usually 1-2 percent. Plus, we have to include inflation in the cost. Inflation is at most 2 % yearly. Thus, we have an expense of 4 percent of our returns. We get 8 % profit on our mutual fund with our advisor. Does that sound better than getting 0.05 % from your bank for leaving the cash in a savings account?

Gateway To Retiring Wealthy

Now we see how Wall Street can make up rich in the long-run. We have learned that there is no Get Rich Quick ways to wealth. Slow and steady with re-investing dividends is the key to wealth and prosperity. With your investments being watched by a financial professional and financial analysts control the mutual fund investments (since they need profits to exist) you will always make money in the long run. It is up to you to put your foot down and make your savings work for you. In the future, you will have a large amount of money for retirement and other future expenses.

I just had a flashback of my childhood living in Brooklyn during the 1980′s. People were more into socializing and talking to people as if they were human beings. Small business owners knew pretty much everyone in the neighborhood. One person I enjoyed was the landlord. He was more interested in how my grandmother’s surgery went then being one day late in the rent. Here in the 21st century, everything changed:

• No more mom and pop society
• We buy online instead of retail stores
• Oh yeh, our landlords today are giant investment banks

Blackstone Group has bought over 43,000 homes for over $ 8 billion after the mortgage crisis in 2008. The private equity behemoth rents out homes from its tenants from the Redwood Forest to Long Island. It is amazing to note that 40 % of home purchases came from investors. Instead of The American Dream, it now looks like “The Wall Street Dream”. The Mortgage Crisis of 2008 really has changed the way society functions on a small business/mom and pop personable way.

Blackstone is not the only one in the game of taking over The American Dream and turning it into a large rental market. Colony Capital and Silver Bay Realty Trust Corporation have spent near $ 20 billion for almost 200,000 homes on the rental market. The zero interest policy of the Federal Reserve Bank is the cause of investment banks taking over the real estate market. If only simpleton people like us can get a zero percent mortgage. The big behemoth banks and private equity can borrow unlimited amounts of money for basically free while the everyday Americans pay for it all with the high 40 % income tax.

Does this agitate you and annoy the thought that the American Dream is dead for us little people? Do you have almost no hope in the future of your wealth? Well, do not get mad when you can get even! How do we get even? Buy buying the private equity firms heavily invested in foreclosures and making a huge profit:

• Blackstone Group (BX)
• Oaktree Capital Group (OAK)
• Och-Ziff Capital Management Group (OZM)
• KKR (KKR)

These are four of the largest private equity firms traded on the stock exchange. Do your homework. Speak to your financial advisor. When people lose their homes and livelihoods, the money they lost goes somewhere. Why give the greedy Wall Street Fat Cats all the money to pocket when you can build a nest egg and retire early?

 

To Your Health…

To Your Wealth…

To Your Wisdom…

Usually something that is named the debt ceiling limit should be limiting the debt, correct? Well, common sense does not seem to work in the 21st Century in America. This reminds me of my days before being a teenager and celebrating Halloween. I walk with my mother and younger sister around the neighbor collecting candy bars. It was fun getting free candy to send me off to the dentist next week. But, my mother was quite mean for not spoiling her kids. She gave me a limit on how much junk food I can collect from the neighbors. What a tough life!

Just like my childhood, the Congress needs some serious parenting on how to limit their consumption of your hard earned dollars. In 1917, Congress created a debt ceiling to issue new bonds for our expenditures, such at causing every war since the Holocaust. Before 1917, congress had to vote for each new bond issuance. That was the days of actually balancing the budget.

Going back to the pre-1917 practice (When the Fed was only 3 years old) would limit both taxes and spending. But, there was no FDR “DEAL” or LBJ War On poverty then. Plus, no social security or medicare expenses for elderly and disability. So, can we actually go back to pre-1917 ways with such socialist and Marxist policies today?  This is a unanswered question because of all the ifs involved.

Peterson Institute For International Economics stated the following:

“The bad behavior of Congress in repeatedly failing to pass budget legislation, or to bring the debt ceiling into line with spending, and ultimately explicitly threatening default on U.S. government debt, makes our fiscal politics no better than anyone else’s — and in some ways a lot worse,” he writes in the introduction. “There is no other known example of a solvent democracy flirting with default through sheer political stubbornness.”

There are a few ways to prepare for a debt ceiling crisis:

1. Do absolutely nothing and hope for cooling down (Like Gambling In Atlantic City)
2. Sell, Sell, Sell (Panic Mania)
3. Do not sell, but do hedge your bets (Prepare For The Worst, Hope For The Best)

The one investment people tend to forget about is:

Treasury Bond?  NOPE!

Equity Stocks? NOPE!

CASH!

Having cash on hold is a great asset to have. When the Dow drops 2 %, you have money to buy stocks at a bargain price. The next couple of days they bounce right back up like a trampoline. The only stocks that can override these political stunts and Federal Reserve actions is high yield paying dividend stocks.

Big blue chips can override all these mini catastrophes in the long run. By from Google to Cocoa Cola to Xerox and leave the money there for 10+ years. Collect the dividends and re-invest the dividends. BINGO! This is how Warren Buffett and Bill gates became billionaires 20 years later from creating corporate empires. you can do the same.

Your money is now working for YOU!

 

To Your Health…

To Your Wealth…

To Your Wisdom…

The Wall Street Copywriter

 

This week a a big breakthrough in United States history. Fed Chairman Ben Bernanke stepped down and we now have our first female Federal Reserve Chairwoman, Janet Yellen. There was a unanimous vote from all 10 Fed Presidents to cut Quantitative Easing by another $ 10 billion to $ 65 billion. This was a great surprise. Why? It was the first unanimous vote from Fed Presidents since June 2011.

Just consider that Dallas Fed President Richard Fisher said::  “Were a stock market correction to ensue while I have the vote, I would not flinch from supporting continued reductions in the size of our asset purchases as long as the real economy is growing, cyclical unemployment is declining and demand-driven deflation remains a small tail risk; I would vote for continued reductions in our asset purchases, with an eye toward eliminating them entirely at the earliest practicable date.”

Many Fed Presidents claim that we should not see a huge decline in the stock market. This is because everyone was expecting that sometime they would have to pull back on their tapering. Furthermore, Atlanta’s Fed President Dennis Lockhart calls tapering the “default mode” for policy. He stated: “Absent a marked adverse change in the outlook for the economy, I think it is reasonable to expect a progression of similar moves, with the asset purchase program completely wound down by the fourth quarter of the year.”

Lockhart’s comment can not be any clearer of why policymakers have been waiting to hear. Interest rates would go sky high even when one whispers cutting the tapering. Eliminating the tapering would have interest rates rise to what the market says is the right rates, not Keynesian governments. All of this makes new strategies for you to invest your money safely and wisely:

• Avoid long-term Treasury bonds
• Avoid all long-term municipal bonds
• Avoid all long-term corporate bonds
• Avoid emerging markets debt instruments, especially in highly volatile BRICS
• Keep all fixed income in short-maturity (e.x. 18 months)
• Avoid REIT’s because of strong volatility to interest rates

To be a head of the game, one has to keep watching watch Federal Reserve Chairwoman Janet Yellen keeps saying to the press. Great place to learn more is Bloomberg and Fox Business News.

 

To Your Health…

To Your Wealth…

To Your Wisdom…

 

Retreat and Sharing are always welcome.

Jim Morrison of The Doors is one of the greatest singers since the Hippie Days some 50 years ago. Who ever knew that his lyrics made on an acid trip would be so true for America one of these days. Which lyric? “This is the end. My only friend, the end.” Well, Washington’s political leaders have just made us one step closer to the end.

The House had absolutely no confrontations this time around on raising the United States debt limit. There were no reductions this time around by House Speaker Boehner. The Republican Party had failed proposals of tying Keystone pipeline or military reduction pensions into the compromise game. I guess Republicans have stabbed a stiletto into the backs of veterans and job creation.

One of the reasons for playing chicken and coward is because of the republicans getting the bad reputation for closing down Washington, DC last year. To keep their image and their jobs, they decided to give the economy another stab in the stomach. When will they just use the knife and cut America’s throat and just end it all for the world’s reserve currency? Why do they play such games in DC?

This clean debt ceiling resolution due in March 2014 gives President Obama just what he wants: TO SPEND YOUR HARD EARNED MONEY! This no confrontation means that there is no stopping the fast growing government spending. It is a sour note to have House Speaker Boehner give no confrontation to the higher taxes and more bond issuing. The GOP has invited the Democrat Senate to keep control and take The House next election.

How does this effect you, The Everyday Hard Working American? It basically means more money out of your pocket. Less money to pay employees and their benefits. Thus, higher unemployment. It means keep that printing press rolling to print more dollars (decrease value of the dollar). What really hurt me personally was the failure to restore military pensions cut in 2013 budget.

In my viewpoint, this is a big breakthrough in politics. How so? It proves that Republicans and Democrats are the same political party. There is no difference between one and the other. We, The United States, is actually a one party system and almost no one recognizes it. What does a one party government turn into?

We have to go back in history and see what happens:

• Nazi Party in Germany
• Communist Party of China
• Communist Party of Cuba
• Lao People’s Revolutionary Party
• Worker’s Party of Korea
• Communist Party of Vietnam

Where is America headed? I want you to not believe anything I say. I might be lying. I would like you to always do a Google search and research for yourself. The United States is getting closer and closer to the end. We already live in a Stasi Government Style (government of East Germany during Cold War).

IT IS UP TO YOU TO DECIDE ON WHAT THE FUTURE LOOKS LIKE FOR YOURSELF AND YOUR LOVED ONES!

To Your Health…

To Your Wealth…

To Your Wisdom…

Source: Conde Nast

 

We just had the Superbowl two days ago. Now, Valentine’s Day is creeping up on us when we pay double the regular price for dinner. Pretty soon April 15th will be coming fast around the corner. Speaking about Tax Day, Germany’s Bundesbank mentioned last week that countries close to going bankrupt should tax their wealthy citizens. This is fine and dandy in the eyes of middle and working class. Yet, their paychecks come from the filthy rich. If there is less money because of taxes, then the middle and working classes get affected with lower wages.

There will be a massive migration one day of European millionaires. When taking their money, they will also be taking their companies and jobs out of Europe. More than a thousand Chinese flocked to US on the “investor’s visa”. Interestingly, people seem to not be flocking to Cayman Islands or any other small islands anymore. Now, they are flocking to productive countries to settle their money and make it work for them. Millionaires are actually creating new job by outsourcing the jobs from their tax greedy home countries.

What can governments in Europe do? Well, they can lower their taxes for one. Many countries charge income tax up to half your income when you make over 100,000 euros. So why would I go to law school for three years when a garbage man makes the same amounts of money I do after taxes? So, people do move away from steep taxes to other countries.

This is not the only cause of the worldwide financial crisis. Yet, it does help in making the situation a lot worse. At the rate of people leaving their homeland, they take their money and productive jobs with them. High taxes is what broke Israel 3,000 years ago into two kingdoms. From the wisdom of King Solomon, “there is nothing new under the sun.” It seems that there is nothing new about taxation reform in Euro Zone and United Kingdom on keeping their millionaire job creators.

What do you think US, Canada, and Europe can do about the millionaire migration happening? Comments are always welcome.

To Your Health… To Your Wealth… To Your Wisdom

Source: Conde Nast

Terrance is going to purchase a new beach summer home in Isle of Wight in England. He needs to get 25,000 British pounds as a down payment on his dream beach home for the summer. So, he goes over to HSBC to take the money out of his trust account. The teller tells him, “I am sorry to inform you that we are not allowed to give you more than 10,000 pounds at a time.” Terence is shocked and amazed that there are capital controls on his British trust account. He gets out 10,000 pounds and makes an appointment with his HSBC financial adviser for Monday morning to discuss the rest of the money needed. The next week, he decided to take the train down to Andorra to open a new trust account outside of British jurisdiction. Instead of buying his dream beach house in Isle of Wight, he purchase a log cabin in the mountains.

UK Government is pushing for Cyprus-style deposit confiscation. Americans keep on telling me the old adage: “It Can NEVER Happen here.” Well, it has already happened and barely made it into the media. For ones who have observed JP Morgan Chase Restricting business account to maximum of $ 50,000. Today it is $ 50,000. Next month it could very easily be $ 1,000… and it could be done overnight without any notice.

Terrance was very wise on his financial transaction. He got his money out of a country that has capital controls on how much a depositor is allowed to use him own money for his own desires and needs. HSBC has such a capital control today. I personally would not advise anyone to open a trust account in any jurisdiction that has capital controls on its customers. In the European Union, there exist very few jurisdiction to have your money, gold, and real estate in safe keeping.

While you can still open offshore accounts like all the Mitt Romneys today, it is best to sit down with a lawyer and discuss your options before HSBC “LEGALIZED ACTIONS” come across the Atlantic to Canada and America. There is only one person looking out for you and your family. It is up to you to make sure you have savings and precious metal coins in offshore accounts and safe deposit boxes for your ‘insurance’ of what the future may hold. You have insurance for when you pass away; why not have insurance for when you are alive also?

 

To Your Health… To Your Wealth… To Your Wisdom

Source: MSNBC

After a long day seeing his patients, Jason came home and turned on the six o’clock news. He sees the scares in Russia for the Olympics, the violence in Ukraine, and the 14 % Argentina peso crash. Jason can not fathom what is happening to all the world currencies from Japanese yen to the Israeli shekel. Jason knows that the Fed and ECB are playing a huge roll in this worldwide crisis.

Fter seeing all this news, Jason is wondering where is there a safe place today to put his extra money He is filled with fear and worry because of what he sees on the national news channel. Just like what we saw in Spain and Italy defaulting in 2013. Almost a year later, Jason drives the same traffic every morning, drinks the same Folgers coffee, and comes home to the same house. Nothing has changed and life seems to keep on going.

While everyone is running wild and emotionally selling their stakes in emerging markets, Jason can foresee 7 reasons on why he should buy emerging markets today.

Jason recalls seeing Lloyd Blankfein (CEO of Goldman Sachs) on live TV in Davos, Switzerland telling viewers that he is long on emerging markets. Thinking to himself, Jason would rather listen to a big shot CEO at one of the largest investment banks than watch the insanity of everyone on TV.  Jason keeps looking into why he should sell out now and not invest more. Amazingly, he discovers interesting facts on the emerging market:

1) It is HATED by all investors now.

2) They are extremely cheap with price to earning below 10.

3) The value spread is extremely wide in developed markets

Is this definitely all true? The answer would be a big yes. But, there is always possibility of downtrend to continue. I can not say this enough: ALWAYS USE TRAILING STOPS! This is the reason why most people lose their money on Wall Street. They treat it more as a trip to Atlantic City then a strategic plan for both success and failure.

Instead of buying individual stocks, there are many ETFs to purchase to ride the long term success in future emerging markets. The following is from www.TheStreet.com.

To Good Health… To Good Wealth… To Good Wisdom

Top Emerging Market ETFs as of 12/31/13

 

Fund Name	Get Info	Overall Rating	Risk Grade
iShares MSCI Frontier 100 ETF	FM	A+	B
WisdomTree Middle East Dividend Fd	GULF	B+	B
Market Vectors Gulf States Idx ETF	MES	B	B
PowerShares Chinese YDS Bd	DSUM	B	B+
Global X NASDAQ China Tech ETF	QQQC	B-	C+
Guggenheim China Technology ETF	CQQQ	C+	C+
PowerShares Golden Dragon China	PGJ	C+	C+
Market Vectors Renminbi Bond ETF	CHLC	C+	B+
First Trust South Korea AlphaDEX	FKO	C+	B-
First Trust EM Small Cap AlphaDEX	FEMS	C	B-

Source: LA Times

Rain, rain go away; come again another day. Fond memories of childhood that brings back. I always wanted the rain to go away somewhere else so I can play kickball or softball. Well, today in California, I think many people have chanted that song a little too much for the New Year of 2014. While New York and Chicago are getting record number snow storms and single digit temperatures, California is is dying of thirst.

Most people escape the freezing cold winter and stay in warmer climates for winter in Southern California and The Sun Belt. Would you believe that 2013-14 is California’s worst drought in history. Almost three quarters of the state is in severe water shortage. This has minimally made it into the national news in America. Here in New York area, we all think that everyone is in blizzard conditions from the snow we got this year. California’s Governor Brown finally declared national emergency for the severe drought.

So, how does any of this affect us in the Northeast or Chicago area? Researchers claim the there is only enough water for a 20 year supply. California has one of the largest agricultural markets in America, according to California’s Department of Agriculture. Go any supermarket or fruit stand in your community. You will be amazed that California has a huge chunk of the market in carrots, cattle, strawberries, grapes, wine, almonds, milk, and cheese. With a life expectancy of another 20 years feeding your family, food prices only go in one direction: Up and up MORE.

The population of California is roughly 40 million people. There surely will not be enough water for everyone in the next 20 years. The Pin Flat Reservoir turns Fresno Reservoir into a puddle.  The following on California’s farming market is from City-Data.com:

The state produces 99 percent of the artichokes grown in the US, 44 percent of asparagus, a fifth of cabbage, two-thirds of carrots, half of bell peppers, 89 percent of cauliflower, 94 percent of broccoli, and 95 percent of celery. Leafy greens? California’s got the market cornered: 90 percent of the leaf lettuce we consume, along with and 83 percent of Romaine lettuce and 83 percent of fresh spinach, come from the big state on the left side of the map. Cali also cranks a third of total fresh tomatoes consumed in the U.S.—and 95 percent of ones destined for cans and other processing purposes.

How will your life change from this natural disaster?

What do you see as a solution?

Where are we headed for the future?

 

 To Health… To Wealth… To Prosperity

 

As always, please tell us what you think in the comments below…