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Mastering Money

Mastering Money is hosted by Certified Income Specialist™ Steve Jurich. Steve's comments have been seen on MarketWatch, CNBC.com, Bloomberg, and TheStreet.com. Steve is joined on most days by Money Radio favorite Sinclair Noe as well as experts and authors from the world of Wall Street and real estate. New episodes published every weekday at 9am PST. Listen every weekday to get a handle on emerging market trends, asset allocation strategies, social security, medicare, RMD planning, tax strategies, estate planning, annuities, life insurance and more!
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Now displaying: October, 2015

Oct 30, 2015

According to Morningstar, ETFs are getting more costly to own. Average ETF fees once averaged 0.4 percent but have now jumped to over 0.6 percent. Some new exchange-traded products are charging over 1.0 percent in fees annually.

Increasingly, ETFs are seeing such volume that a new cost has crept into the math, known as “Tracking Errors”: ETF managers are supposed to keep their funds’ investment performance in line with the indexes they track. That mission is not as easy as it sounds, says Morningstar. Throughout the trading day, the spread between underlying securities and the ETF can be significant. For example, on August 24 when the market opened down 5.3%, the Vanguard Dividend Appreciation fund VIG, was down a whopping 38% for more than an hour. Steve and Sinclair breakdown some of the pros and cons of ETFs.

In a nutshell, the price you see for the ETF may not be equal to the sum of the shares inside the ETF and fees for ETFs are rising.

In the Q & A, Steve reviews a more effective approach to reducing risks on the bond side of the portfolio.

Oct 29, 2015

Hold onto your hat and your wallet if you are thinking about a file-and-suspend claiming strategy with your Social Security benefits. The new two-year budget agreement between Congress will close these loopholes—file and suspend in particular-- in the Social Security rules. While it remains to be seen whether the agreement will become law in its current form, the new rules mean that anyone receiving spousal benefits under file-and-suspend would have them terminated next spring, in 2016! Congress is set to negate the various “File and Suspend” strategies that permit spousal and dependent benefits to be paid while the primary earner still receives delayed retirement credits, with no "grandfathering" of benefits. Steve and Sinclair review the early details.

In the Q & A segment, professional actuary Brad Lankford joins the A Team to educate listeners on Defined Benefit and Cash Balance plans for business owners--which can result in contributions and tax deductions of $70,000 to $200,000 or more annually, and create a permanent lifetime retirement benefit.

Oct 28, 2015

The death of comedian Robin Williams provided interesting estate planning issues. Although he was hugely successful in movies and television, Williams spoke of financial problems in the years before his death. He had reached a net worth of over $100 million dollars in his prime, according to sources, but two divorces and fewer movie roles had reportedly depleted his assets to approximately $50 million, left completely to his kids in their teens and 20s, plus a home in Tiburon valued at $29 million, left to his wife.

Although he used a trust rather than a simple will, there still were many open ends and a lingering legal battle between his kids and his wife that he had not intended. What happened can be instructive for anyone arranging their affairs with any size estate. Steve and Sinclair review key elements and attorney opinions. In the Q & A segment, estate planning attorney Richard Dwornik and Certified Financial Planner® Murray Titterington with IQ Wealth join the A-Team to discuss special needs trusts and spendthrift trust provisions.

Oct 27, 2015

Global diamond production is expected to peak in 2017, when 164 million carats of diamonds are forecast to be produced. After that, production is expected to go into a long-term decline, unless major new discoveries are made. You would think prices of diamonds would be skyrocketing, however prices have fallen eight percent this year. De Beers, which mines rough diamonds and sells on to firms that ready them for the market, has slashed production this year as sales ebb. Thursday, De Beers said third-quarter diamond-sales volume fell 59% from the previous year and production slid 27% to six million carats. The diamond market isn’t rock solid. And it likely won’t harden up any time soon, according to the Wall Street Journal. Steve and Sinclair review the story. In the Q & A segment, Steve reviews how to add a long term care component to your retirement portfolio at very low cost, and without annual premiums.

Oct 26, 2015

Quarterly profits and revenue at big American companies are poised to decline for the first time since the recession, as some industrial firms warn of a pullback in spending, according to reports in the Wall Street Journal. From railroads to manufacturers to energy producers, businesses say they are facing a protracted slowdown in production, sales and employment that will spill into next year. Steve reviews some key points about allocating portfolios for retirement as we near the end of an up cycle in the economy. National gold expert Nick Grovich of American Federal Bullion and Coin joins the A Team to get into specifics on precious metals trends and insights.

Oct 23, 2015
Up until 2005, Morningstar reports that the expense ratio of ETFs averaged 0.4 percent, according to Morningstar. Since 2005, the average expense of new funds has now jumped to over 0.6 percent, and some new exchange-traded products are charging over 1.0 percent in fees annually. 
 
ETFs suddenly cost more than people think. Increasingly, ETFs are seeing such volume that a new cost has crept into the math, known as “Tracking Errors”:  ETF managers are supposed to keep their funds’ investment performance in line with the indexes they track. That mission is not as easy as it sounds, says Morningstar. 
 
Throughout the trading day, the spread between underlying securities and the ETF can be significant. For example, on August 24 when the market opened down 5.3%, the Vanguard Dividend Appreciation fund VIG, was down a whopping 38% for more than an hour. Steve and Sinclair breakdown some of the pros and cons of ETFs. In the Q & A, Steve reviews a more effective approach to reducing risks on the bond side of the portfolio.
 
In a nutshell, the price you see for the ETF may not be equal to the sum of the shares inside the ETF.
 
In the Q & A, Steve answers questions on alternatives to bonds and bond funds in a well managed portfolio.
Oct 22, 2015

Wondering why interest rates on treasury bills and notes are staying so close to zero? It's all about the insatiable demand for U.S. demoninated debt from the nations of the world whose own currency is so unreliable, they need more of ours. For those borrowing money, low rates are a blessing. For savers, it is pure punishment. Worse yet, there's even a chance that interest rates on safe, liquid, short term money could go negative soon, like in Switzerland and Germany.

Demand is also coming from major brokerages. Behind the sudden epic hunger for government debt is a rule change that has Fidelity Investments and other money-fund managers hustling to snap up short-term Treasurys. Listen in as Steve and Sinclair review an article in the Wall Street Journal, with facts and figures. In segment 3, Steve does an analysis of the new Nationwide Index Annuity, which he finds most people misunderstand. It is a 3 year index not a one year index, and is based on managed futures inde--not a simple annual reset of the S & P. The income rider comes without a competitive guaranteed increase. Steve brings up five points you should understand before signing on the dotted line.

 

Oct 21, 2015

The biggest landlords in the U.S. are being crushed under a mountain of packages, leading one large apartment operator to stop accepting deliveries and others to experiment with ways to minimize the clutter, according to the Wall Street Journal.

The moves are at the center of two colliding trends: an increase in apartment living and a surge in online shopping (can you spell Amazon Prime?). The result is a rising tide of packages with no good place to go. The onslaught has turned management offices of apartment buildings into de facto receiving centers as landlords grapple with recording packages, tracking tenants down to pick them up and finding places to store the parcels.Some have stopped receiving packages. Many tenants are saying they won't renew leases. Where's it going. Steve and Sinclair review.

The Journals says that managers can afford to enforce a few rules now while occupancy rates are high, but with more apartment construction adding to supply soon, they may not have the leeway. In the Q & A segment, Certified Financial Planner® Murray Titterington with IQ Wealth joins the A-Team to discuss the rise in Part B medicare premiums and how it may affect social security claiming.

Oct 20, 2015

Is the cost of rising health insurance benefits hitting the big delivery companies? According to the Wall Street Journal, FedEx Corp. is raising its fuel surcharge for the second time this year, jolting e-commerce companies, retailers and other shippers with price increases just as they gear up for the make-or-break holiday sales season.The Wall Street Journal says the increase, which takes effect Nov. 2, would add about $170 to the bill for shipping 100 shoeboxes. UPS’s surcharge would add about $200 to the cost of shipping the same 100 shoeboxes, the analysis found.

The increases are coming just in time for the holiday season. With fuel prices lowering, one would think delivery costs would be falling. But both Fed Ex and UPS are seeing their overnight delivery businesses sink like a rock because of email and instant messaging. And, with more home deliveries, more gas is burned. Could it be the cost of providing health insurance under Obama Care? Steve and Sinclair review. In the Q & A, Sinclair and Steve review several key points from the Mastering Money Retirement Workshop at the Museum of the West.

Oct 19, 2015

Today, Tesla is a brand name for cars but over a hundred years ago the prolific inventor Nikola Tesla predicted “an inexpensive instrument, not bigger than a watch, [which] will enable its bearer to hear anywhere, on sea or land, music or song however distant.” They're available at the Apple Store and Bestbuy.

The Yugoslavian born Mr. Tesla foresaw the transmission of electricity directly through thin air, particularly radio waves. Steve and Sinclair review an article by Christopher Mims in the Wall Street Journal on this technology's rapid progress using chips that re the size of a peel and stick price tag and will eventually charge your phone when you simply walk into the room. In the Q & A segment, real estate Attorney Christopher McNichol joins the A Team to discuss risks and opportunities in the purchase of tax liens as an investment.

In segment 4, Steve and Sinclair review the Mastering Money workshop held over the weekend with Steve and Gary Kaltbaum in Scottsdale.

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