Is your estate plan in order? Do you need a review or update of your living trust, power of attorney, or health care directives? Are your beneficiaries in order and would you like to better understand how a spendthrift provision in your trust could be a benefit? An AB Living Trust is a good start, but an up to date complete package is needed.
The death of comedian Robin Williams provided interesting estate planning issues that address these 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. PS: see if you can spot the flaw in segment 2 and email us!! Steve@IQWealth.com
Some economists are starting to whisper the "R" word--recession. While it doesn't appear to be on the immediate horizon, its important to remember that the last recession began in December of 2007, but economists only knew that by looking back, after the fact. They officially called the recession of 2008 a full year after it startted. Since World War II, recessions have occurred an average of every five years. The current expansion is more than six years old, beginning in July 2009.
Meanwhile, globally, copper prices keep falling, hitting a new six-year low on fresh signs of a slowdown in China. Economic weakness in the world’s biggest copper consumer has led to reduced demand for the metal, which is used in everything from iPhones to refrigerators and pipes. Shares of mining companies have also suffered. It has directly hit economies like Australia and others. Steve and Sinclair explore multiple reports in the Wall Street Journal regarding the historic deflationary trend worldwide, keeping interest rates very low.
In the Q & A segment CPA Nick Stefaniak joins the A-Team for a lively quiz on tax planning. Fun and informative!
Just over five years after it began offering rides in San Francisco, Uber now operates in 342 cities spread across more than 60 countries. It’s the poster child for the so-called sharing economy, employing some 327,000 freelance drivers in the U.S. and hundreds of thousands more around the world. Almost overnight, it is a $51 billion global company. But it's tax scheme allows it to pay virtually no taxes, since it operates on royalties out of the Netherlands, where royalties are not taxed. Steve and Sinclair review an exploration of Uber's controversial business model reported by Fortune Magazine.
In the Q & A segment, test your knowledge with a financial quiz from the Wall Street Journal.
Cars bursting into flames are never a good thing. So when a Tesla Model S ran over a metal object in Kent, Wash., in October of 2013 and burst into flames, owners, potential customers, investors, and company executives got worried. But rather than a massive recall, costly repairs, and a big financial hit to the car maker, Tesla was able to correct the problem with a software command to all of its cars on the road. A federal investigation into safety was closed four months later, with no recurrences. Tesla is one of many companies finding 21st century solutions to 20th Century problems. The goal: "friction-free" capital--money, labor, and information flowing quick and smooth at less cost.
Geoff Colvin, editor and writer for Fortune Magazine delves into other companies doing the same. Sinclair and Steve review key revelations. In the Q & A, Steve explains how reliance on bonds paying 5% to 8%--as they did in the 20th Century--is a losing proposition in the 21st Century. Interest rates have been cut in half and retirements have doubled in length. Here's what to do about it and some important points to consider about your current portfolio.
In segment 4, The A-Team honors the 240th birthday of the U.S. Marine Corps. We listen to Johnny Cash doing "This Old Tattered Flag". We think you'll like it.
On a Manic Monday when stocks opened down and the Fed is talking about raising rates, what are the smartest moves you can make with your money right now? Eliminating mistakes is job number one. Finding value is job number two. Markets are already near all time highs and interest rates near all time lows. Its an important time to take inventory in your own portfolio.Not everyone wants to own precious metals, but if you do, this may be an opportune time. For example, gold is back at a price point investors could only have dreamed about five years ago. Gold expert Nick Grovich reveals key opportunities in gold, platinum and silver in segments 2 and 3.
In segment 4, Steve reviews the research reported in the Wall Street Journal about why your smart phone could be making you a dumber investor. According to research by Dr. Shlomo Benartzi, a professor and co-chair at the Anderson School of Management at UCLA, paying too much attention minute to minute or day to day means you are going to see the market being down 47% of the time. If you automatically sell when the market is down, you are doomed to failure. It leads to a trader's mentality rather than an investing mentality. Steve reviews a smart way to avoid reacting to TMDTQ (too much data too quick), and getting your retirement plan on strong footing.
According to a study of 4,500 Dutch consumers in the Journal of Economic Psychology, unhappy people save less, spend more and have a higher propensity to consume. It's not just overseas--Americans are spending at a pretty fast clip says the University of Utah. Researchers are finding that we are all spending money--often more than what's coming in--for a new set of reasons.
What drives us—the majority of people in fact-- to spend too much even when we seem to make all the right moves? Steve and Sinclair review an intriguing report from the Wall Street Journal. Then, in the Q & A segment, Steve reviews his method for addressing all of a client's liabilities, and the step by step process involved in building a durable retirement income plan, while also growing capital.
Pensions are going the way of the Dodo bird. The dodo is an extinct flightless bird that was endemic to the island of Mauritius in the Indian Ocean. Pensions as a reward for decades of service, are heading that way. A survey released earlier this year by benefits consultant Aon Hewitt of nearly 250 employers representing 6 million employees found that, of the roughly three-quarters who still offer a defined benefit pension plan, a third were closing them and another third had frozen them.
Of the companies with plans that remained open, 14 percent of companies said they were "very likely" to close them this year, 9 percent said they were "very likely" to freeze them and 5 percent said there were very likely to terminate them. Companies terminating plans typically offer participant a lump sum payout to replace the monthly defined benefit income. Steve and Sinclair review a CNBC report. In the Q & A segment, CPA Nick Stefaniak joins the A Team to discuss year end tax planning and a special offer for Mastering Money listeners.
The most broad and sweeping change to Social Security in years was included in the new $80 billion Budget Bill. Married couples both over 66 years of age are not affected whatsoever IF they are using a restricted strategy now or by the deadline. But as of May 2, 2016 many of the advanced claiming strategies get axed for those not already using them. Find out the winners and losers and why you're not grandfathered on key strategies if you are 62 to 65. See what survived and what did not. Steve and Sinclair review national experts' insights in segment 2, CFP® Murray Titterington joins the A Team in the Q & A session to discuss further. Get smart on Social Security and get organized for 2016!
Wondering why interest rates on treasury bills and notes are staying so close to zero? For those borrowing money, low rates are a blessing. For savers, it is pure punishment. It's all about the insatiable demand for dollar denominated debt from the nations of the world whose own currency is so unstable , they need more of ours. 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. Steve and Sinclair review important keys you need to know. 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 more than 30 managed futures indexes--not a simple annual reset of the S & P. While the company is strong, the income rider comes without a competitive guaranteed increase, nor does it have a long term care benefit. Steve brings up five points you should understand before signing on the dotted line with this or any annuity.
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.