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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: 2015

Dec 16, 2015

…Call it “the year of mimicking dangerously.”, says Jason Zweig, Wall Street Journal columnist and author of the Intelligent investor.

A handful of mutual funds and exchange-traded funds seek to emulate such leading investors as hedge-fund manager William Ackman of Pershing Square Capital Management. Zweig points out that most of these funds are down 5% or more for 2015, and some have lost at least 10% over the past three months as the embattled drug company Valeant Pharmaceuticals International, and other holdings of top investors have tumbled.

AlphaClone Alternative Alpha, for example, is a $143 million ETF that selects at least 20 hedge funds it believes to be especially skillful and builds a portfolio of about 75 stocks from among their top holdings.

Unfortunately, Valeant had grown to be the fund’s largest holding, at 7% of assets. At the end of September the fund’s hedging formula kicked in — right before the S&P 500 shot straight up the following month. October was the worst of both worlds for the fund as it captured Valeant’s 47.4% decline but missed out on the stock market’s 8.4% gain.

Steve and Sinclair review "clone" hedge funds in Segment 2. In the Q & A Segment, CFP Murray Titterington with IQ Wealth shares views on income planning from well known financial writer and professor, Michael Finke.

Dec 15, 2015

It's tax time if you are looking for year-end tax planning ideas and strategies. Since 1969, many, many families have used charitable remainder trusts (CRTs) to increase their incomes, save taxes and benefit charities.

What does a CRT do?
A CRT lets you convert a highly appreciated asset like stock or real estate into lifetime income. It reduces your income taxes now and estate taxes, if any when you die. You pay no capital gains tax when the asset is sold to your trust. And it lets you help one or more charities that have special meaning to you, besides paying you and your family what can be a lifetime income of at least five percent annually for life. You also can receive the right to take a substantial tax deduction on your tax return. There are two types of CRTs--the Unitrust and the Annuity Trust. Steve and Sinclair break it down and explore.

In the Q & A Segment, Enrolled Agent and Master Instructor with H & R Block, Doris Milton answers key tax questions to make 2015 a little less painful.

Dec 14, 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. In a nutshell, the price you see for the ETF may not be equal to the sum of the shares inside the ETF.

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 now affecting many ETFs. Those are the extremes, but on an increasing basis, "tracking error" is getting to be a bigger factor.

In the Q & A, Steve reviews a more effective approach to reducing risks on the bond side of the portfolio and putting lazy money to work. The purpose of your money should dictate where you place it. But never forget your risk tolerance and time horizon. Here's how to help simplify your investment choices.

Dec 11, 2015

You think you have it bad with 1% CDs and 0.025% money markets? If you lived in Europe, you'd be thrilled.

In the topsy-turvy world of negative interest rates, the ECB’s deposit rate is minus 0.2%. Two-year German bonds are now yielding minus 0.4%.

Bond yields across the eurozone have tumbled, meaning investors are effectively paying a fee to have their money stored. Now, in a very literal sense, they’d be making more in the mattress. Steve and Sinclair review a Wall Street Journal report on the state of interest rates going into 2016. How will it affect you and your investments?

In the Q & A, CPA Nick Stefaniak joins the A-Team to answer questions on "what happens if your parents or an ex-spouse dies owing a bunch of back taxes?" Are you liable? Always? Sometimes? Join us--Nick has the answers.

Dec 10, 2015

For married couples seeking tax savings and lifetime access to cash, a spousal lifetime access trust (SLAT) has become increasingly popular in estate planning in recent years.

The SLAT—the spousal lifetime access trust-- is creating positive buzz because it combines the estate tax savings of an ILIT used for life insurance, but with lifetime access to tax-advantaged cash value inside a quality life insurance policy.

Rather than tying up money irrevocably, the SLAT offers the spouse lifetime income on a tax free basis, while providing exceptional estate planning and asset protection benefits.

Steve and Doc break it down in Segment 2. In the Q & A segment, estate planning attorney Richard Dwornik joins the A-Team to continue the analysis of the SLAT.

Dec 9, 2015

Once, it was a good thing to have money in the bank.

Now, Danish companies pay taxes early to rid themselves of cash. At one small Swiss bank, customer deposits will SHRINK by an eighth of a percent a year—not after inflation. Before inflation. It actually is more profitable to keep money in the mattress than the bank.

But it isn’t all bad. Some Danes with floating-rate mortgages are discovering that their banks are paying THEM every month to borrow, instead of charging interest on their home loans.

Such is life in the upside-down world of negative interest rates, in which banks impose a LEVY on customers to hold their money, instead of paying interest on deposits. And its not in a Grimm Fairy tale. Its happening about thirteen hours away in Europe.

Steve and Sinclair review an intriguing Wall Street Journal report on why rates are falling below zero in Europe and how it could happen here.

In the Q & A segment, CFP and Certified Investment Management Analyst Murray Titterington with IQ Wealth joins the A-Team to analyze portfolio strategy life expectancies.

Dec 8, 2015

Kinder Morgan is under siege. Shares of the energy pipeline giant, whose shares show up in many portfolios seeking dividends, were slammed in heavy trading last week, falling $7, or 29%, to $16.82 and fell another 2% on Monday, amid growing concerns that the Houston-based company may have to cut its quarterly dividend, now 51 cents, to shore up its leveraged balance sheet. Kinder Morgan stock (symbol KMI) is down 60% this year while the Alerian MLP index is off a painful 42%.


Citigroup analyst Faisel Khan put out a note this week titled “Debt Rating at Risk, Dividend Cut Possible Amid Limited Options.” He wrote that the company needs to cut debt to maintain its investment-grade debt rating: “The most expeditious way of achieving this would be to reduce the dividend by around 40%, allowing the firm to retain about $1.9 billion per year, rather than paying out so much revenue in dividends. Steve and Sinclair review a Barrons report.

In the Q & A segment, real estate attorney Stephanie Wilson, partner in the law firm Stoops, Denious, Wilson, and Murray joins the A-Team to review what can go wrong when buying or selling investment properties run by Home Owners Associations with too many investors rather than residents.

Dec 7, 2015

Steve and Sinclair update trends and markets, followed by a visit from gold expert Nick Grovich, who gives factual insight on the metals markets.

Steve then reviews a key element of today's investment environment: Americans are feeling poorer and it follows that their ability to keep buying stocks at the same pace may decline long term. Currently, 51% of Americans say they are middle class or upper-middle class, while 48% say they are lower class or working class. In multiple surveys conducted from 2000 through 2008, an average of more than 60% of Americans identified as middle or upper-middle class.

Using the same cross section rules in 2015, the change is remarkable. Only 1% say they are Upper class—that’s a 66% decline in what is described as a strong feeling of affluence. But inflation has stepped in: You need $2.4 million to be a "1980 millionaire" and $5.1 million to be a "1960 millionaire. A million no longer buys what it once did. What will it buy in 20 years?

As an investor, no matter what YOUR net worth is, even if you are in the top five to ten percent in net worth, you must pay attention to the rest of Americans. Today, 70% of Americans make less than $50,000 a year, with less than $50,000 in savings. Although the reported unemployment rate is "low", low paying service jobs dominate, and the idea that young Americans can expect 30 years of high paying work, a big 401k and a pension, is out the window. Steve points out that this is an excellent time, while the market is near all time high's, to determine how you want to manage your money going forward. How much of it do you want protected from market declines at all times? Some of it? None of it? Most of it? Or, all of it?

Dec 4, 2015

More and more people would like to own a pension when they retire, but fewer and fewer companies are offering them. Business owners can create their own defined benefit plans that can be turned into a high paying pension after five, seven, or ten years.

One type of defined-benefit plan is growing fast. Cash Balance Plans are gaining popularity among business owners and medical practitioners who are behind on retirement savings.

Kiplingers reports that many business owners are turning to these plans to turbocharge their retirement savings. Cash-balance plans have generous contribution limits that increase with age. People 60 and older can sock away well over $200,000 TO $300,000 annually in pretax contributions. In 401(k)s, total employer and employee contributions for those 50 and older are limited to only $57,500. Steve and Sinclair review the fundamentals.


In the Q & A Session, professional actuary and plan administrator Brad Lankford joins the A-Team to dig into Cash Balance, 401k, and Defined Benefit Plans.

Dec 3, 2015

You think you have it bad with 1% CDs? If you lived in Europe, you'd be thrilled.

In the topsy-turvy world of negative interest rates, the ECB’s deposit rate is minus 0.2%. But yields on the safest government bonds have fallen so far that a substantial slice of the securities the ECB will be looking to buy in their $63 billion dollar a month "stimulus" program, now falls below zero. Two-year German bonds, for instance, yield minus 0.4%.

Bond yields across the eurozone have tumbled, meaning investors are effectively paying a fee to have their money stored. They’d be making more in the mattress. Steve and Sinclair review a Wall Street Journal report on the state of interest rates going into 2016. How will it affect you and your investments?

In the Q & A, CPA Nick Stefaniak joins the A-Team to answer questions on "what happens if your parents or an ex-spouse dies owing a bunch of back taxes?" Are you liable? Always? Sometimes? Join us--Nick has the answers.

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