You can’t take it with you, but it’s getting easier to leave it to your heirs. So says Laura Saunders, writing for the Wall Street Journal. The Journal reports that the Internal Revenue Service recently released final rules detailing a generous estate- and gift-tax break for married couples.
The break, known as “portability,” allows spouses to pass nearly $11 million of assets to heirs free of estate tax. Without it, many couples would qualify only for one estate-tax exemption instead of two. Steve and Sinclair review. In the Q & A segment, The A Team welcomes Christopher McNichol of Gust Rosenfeld, a prominent Phoenix area law firm. Chris is one of the Southwest Super Lawyers® for Real Estate Law. He is AV® Preeminent™ rated by Martindale-Hubbell®, representing the highest rating in legal ability and ethical standards, and was named by Arizona Business Magazine in Ranking Arizona Best of the Best Award Winner. Today, we quiz Chris on mechanics liens and how they could affect your real property.
When it comes to asset allocation, where does gold fit in? Is it an investment? Is it a speculation? Is it insurance? Or is it simply a back up currency? On Mondays this summer, Steve has invited Nick Grovich of American Federated Coin and Bullion to share his views on gold, coins, and metals. Listen in to "inside baseball" on the gold markets. Steve comments on a recent article in Barrons': "Bye-Bye Bond Funds" which focuses on the multiple risks that bond mutual fund and ETF owners are faced with now.
Many investors use dividends to create wealth over the long run. As a wealth accumulation tool, the reinvesting of dividends ranks near the top. In fact, when investors hear that "stocks average 8% to 11% over the long run", it is only true if dividends are reinvested. Without dividends reinvested, the S & P would not average much more than 6% according to Morningstar, Dalbar Inc, and simple calcutlons you can do at home. The mistake that retired investors make is that they start trying to live off dividends. When you spend your dividends, you will stop building wealth in the same way and are subjecting your portfolio to sequence of returns risk. Steve and Sinclair break down and analyze the outcomes of two investors who bought Coca Cola in 1962 to 1965 when Coke was trading at $80 a share with $10,000. One of the investors spent all dividends. The other reinvested dividends. Find out why it is so important to separate your income capital from your wealth creating (growth) capital.
Ironically, Twitter may become a victim of the times it helped invent. So says Steven Sears, writing in Barrons. Steve and Sinclair review the stats on Twitter whose IPO has not worked out well. In the real world, Institutional money managers are using social media for financial intelligence more and more, but Twitter ranks last, after LinkedIn and Facebook for financial intel. According to the study, 20% of analysts first use LinkedIn to research industries, followed by 13% for Facebook, and 9% for Twitter. For market and event commentary, 18% turned to LinkedIn, 13% to Facebook, and 12% to Twitter. For investment products and services, it’s 13% for LinkedIn, 9% for Facebook, and 5% for Twitter. Sears reviews put, call, and collar strategies. In the Q & A, Pension and Qualified plan specialist Mary Read joins the A Team to discuss defined benefit plans, cash balance plans, and 401ks for small business owners. Mary has been instrumental in over 10,000 qualified plans in her career.
Get the breakdown on Greece that appeared in Barrons. Dr. Carl B. Weinberg is the founder and Chief Economist of High Frequency Economicsin New York. From 1978 to 1981, Dr. Weinberg co-authored the Wharton World Economic Model while serving as Director of Wharton Econometric Forecasting Associates. As an IBM Fellow in the mid-1970s, Dr. Weinberg established a European Research and Simulation Center at the IBM Scientific Center in Pisa, Italy. In a featured Barron’s article over the weekend, Dr. Weinburg laid out the reasons why a Greek default could hammer bonds in the Eurozone and globally. Steve and Sinclair review. In the Q & A Section, CFP® Murray Titterington with IQ Wealth, formerly of Morgan Stanley, joins the A Team to review Social Security strategies.
Have you noticed the lack of leg room on more and more flights? The big 4 airlines (American, United, Southwest, and Delta) have been putting the pedal to the metal on a technique known as “upgauging,” in which airlines increase capacity by adding seats on existing jets and replacing smaller planes with larger ones. They are cramming in more seats, and cutting flights. The Department of Justice is investigating collusion among the Big 4. Steve and Sinclair review what's happening per the Wall Street Journal. In the Q & A segment, Steve provides the A's and outlines a logical process for choosing the right annuity. With bonds paying next to nothing and banks even worse, many investors who would never have considered an annuity, are suddenly saying no to bond funds and yes to annuities, especially this very unique type of annuity.
Alzheimers research is moving at a fast pace. The first company with a cure or effective treatment would be a trillion dollar operation virtually overnight. In the meantime, researchers have discovered a testing procedure which could tell you --and the insurance company--if you are pre-disposed to cognitive issues and early long term care claims. Net result? It could spell doom for the long term care insurance industry. Who would buy the insurance if told there was no problem. If the insurance company knows you are on the road to Alzheimers, why would they give you a policy? What would they charge. Steve and Sinclair review a Forbes report. In the Q & A, Steve reviews methods of paying for long term care without the expensive premiums.
When you or a loved one on Medicare spends the night in the hospital, beware--your status matters. Are you considered an "outpatient under observation?" , or officially admitted as an inpatient. Medicare requires hospitals to decide within 24 to 48 hours whether to admit or discharge a patient under observation. But several studies have shown that hospitals often flout this rule.
"Hospitals would rather take lower Part B reimbursements by keeping a person as an outpatient" than take the chance of having to pay back the Part A money later, Edelman says. Find out how this costed a patient over $5,000 out of pocket, even though he had become paralyzed while under "outpatient" status. Steve and Sinclair review a Kiplingers report. In the Q & A, CPA® Murray Titterington with IQ Wealth discusses the key flaws in with many of the top financial planning software platforms.
We’ve become accustomed to the idea that many imported cars are now made in Kentucky, South Carolina, and Alabama. But what about that imported beer you take a fancy to every now and then? Well according to the Wall Street Journal, If you thought your favorite beer was an import, think again. It may have been brewed in St. Louis…or Latrobe, Pa., or Fort Worth, Texas. A recent class action suit could put money in your pocket. Steve and Sinclair review a Wall Street journal report on the lawsuit. In the Q & A, Sinclair and Steve review some key differences in annuities and how some annuities actually benefit from rising rates. Find out what rising rates can mean for an immediate, variable, fixed, or fixed index annuity.
Gold expert Nick Grovich of American Federated Coin and Bullion joins the A-Team for the Q & A. Nick will soon be a regular guest on Mastering Money. In the Getting Smart segment, Steve reviews the "770 Account" and "Bank on Yourself". They are heavily marketed on the internet, yet are simply marketing nicknames for what is known as "Overfunded" or "Max Funded" cash value life insurance. IQ Wealth is an authority and primary resource for these types of policies. A surprise to most people-- U.S. banks utilize max funded life policies for a part of their cash reserves. American banks like B of A, Wells Fargo, Chase, and Citi owned a combined $130 billion in this asset. If you're looking for tax preferred status on a portion of your capital while shoring up your estate and long term care plan in one brush stroke, listen in.