Jay Peroni, CFP, renowned financial advisor, public speaker, and author of The Faith-Based Millionaire, is an expert authority on the subject of FAITH-BASED INVESTING.
http://jayperoni.com/blog/ - Nov 24, 2013 5:39:48 AM - Dec 3, 2004 8:46:50 PM
Posted on November 21, 2013 in Income Generation
Ninety percent of Americans are counting on Social Security to fund their retirements. A recent study conducted by the National Institute on Retirement Security disclosed that only ten percent of Americans have saved enough money to allow them to retire to the life they want. Unfortunately, the average American family’s retirement asset is an unbelievably low $3,000.
There are many ways to attempt to catch up, one of which is to buy an annuity.
What Is an Annuity?
An annuity is a contract where you give a lump sum of money to a bank or investment house that manages the annuity. They promise you a fixed amount of income. Most annuities allow the buyer to select if they want annual, quarterly, or monthly payouts. Investors may also opt to take a single lump sum payment. Taking a lump sum payment terminates the investor’s relationship with the firm that issued the annuity.Posted on November 20, 2013 in Retirement
Why You Should Keep Contributing
To Your Retirement Plan
Save for retirement consistently, regardless of how the market behaves.
There is seldom a dull moment on Wall Street. Stocks may rise or fall dramatically over the course of a year or a decade. Sometimes, breaking news may tempt you to pull money out of a 401(a) plan or 457 plan, or greatly reduce your contributions to either. If you’re considering such moves, think twice.
Don’t stop saving for retirement. Even if you think you’re wealthy enough to forego contributing to a money purchase plan or deferred compensation plan for a while, you could end up seriously shortchanging your retirement savings potential by reducing your balance or elective salary deferrals.
These plans are terrific retirement savings vehicles – and the fact is that most Americans have not saved enough for their retirement years. Additionally, if you withdraw money from a 401(a) plan before age 59½, you’ll face a 10% tax penalty (with few exceptions) and you may end up spending money today that could have enjoyed tax-deferred compounding in the future. (Thankfully, your 457 plan contributions aren’t subject to early withdrawal penalties; only retirement savings funds that you roll over into a 457 get hit with the usual 10% penalty if withdrawn too soon.)
Don’t lose out on the power of tax deferral & compounding. Together, these factors have the potential to dramatically grow your retirement savings. As a hypothetical example, let’s say you have $30,000 in your 457 deferred comp plan at age 40, and you just contribute $50 a month to it for the next 20 years while your account yields 8% a year. Twenty years later, that $30,000 will grow into $177,255. In fact, it would grow to $147,804 in 20 years under those circumstances even if you never contributed a penny to it after age 40, all thanks to compounding and tax deferral.
Photo Credit: Professionals WA/NT
Many retirees find that their income streams are insufficient so they look for additional ways to earn more. With rock bottom interest rates, investors are seeking out high yielding investments. The federal funds rate is still next to nothing, and the classic conservative retirement investments like money market funds and CDs are failing to keep up with inflation.
So where do you turn for more yield, especially if you are close to or in retirement?
- Real estate investment trusts (REITs) allow you to enter the commercial real estate sector without the hassles of property management. They give you a fractional ownership share of a major-league real estate portfolio, with potential for dividend payments and excellent returns. Private REITs are not publicly traded.
- Dividend stocks stood out during the recession, as investors turned to them for cash flow. Commonly, they are issued by established corporations in essential industries.
- Utilities stocks often provide a hedge as they have the potential for nice dividends in good and bad market climates.
- Commodity futures: These include precious metals, oil and gas investments, green energy resources, crops and necessities such as timber and livestock.
- Currencies: When the dollar is weak, funds invested in foreign currencies get a boost as most funds out there are dollar-denominated.
You can invest in many of these asset classes not only via stocks and futures contracts, but via managed funds and exchange-traded funds (ETFs). ETFs are nice, as they don’t cost an arm and a leg to enter. They are tax-efficient, and as they trade on exchanges during the market day, they offer great liquidity and flexibility.
One of my favorite types of income investments is Master Limited Partnerships (MLPs). They’ve outperformed stocks for over a decade. Investors are looking everywhere for better yields – but how many of them look into Master Limited Partnerships?
Many investors have never heard of MLPs. Others have, but assume they are complex and esoteric. That’s too bad, because these investments are capable of generating consistent, sizable dividends. In reality, investing in MLPs isn’t that mysterious. They trade on public exchangesand today there are even MLP mutual funds and ETFs.
MLPs have outperformed the S&P 500 in 12 of the past 13 years. In fact, they have left stocks in the dust in terms of annualized total returns. From 2002-2011, the average yearly total return for MLPs approached 16%, compared to less than 5% or less each for the S&P 500 and the DJIA. At the end of 2012, MLPs were yielding 6.7% compared to just 2.2% for the S&P 500.
Almost all MLPs are pipeline businesses making money from the processing or transport of oil, natural gas or coal. Thanks to strict environmental regulations, they don’t face much competition – and as they transport these commodities rather than explore for them, they are theoretically less affected by ongoing volatility in commodity prices.
An MLP weds the tax structure of a limited partnership to the liquidity of a publicly traded security. Like a REIT, an MLP pays out nearly all of its free cash flow to investors in the form of quarterly distributions. As MLPs have big depreciation shields resulting from capital expenditures, 80% of their distributions are characterized as tax-deferred return on capital.
There are demerits resulting from this hybrid construction. MLPs are exempt from corporate taxes, and the taxed part of an MLP distribution is taxed as regular income. The tax-deferred part of the payout reduces your cost basis in MLP shares (which are properly called units), and it is taxable when MLP shares are sold. Appreciation in MLP holdings is subject to corporate tax, and MLP investors get K-1 forms instead of annual 1099s.
Consequently, MLPs can be problematic for investors with tax-deferred accounts. Expect intensive paperwork at tax time if you own MLP units.
MLPs attract income-focused investors who want a hedge. Most people invest in MLPs through a holding company. Select ETFs or mutual funds provide alternate points of entry. If you are looking for greater yield and don’t want a lot of risk, you may want to look into this underpublicized investment class.
Want more income ideas? Check out our Global Income Portfolio Service. Finding high yield opportunities in a low interest environment is quite the challenge.
However, our low-risk investing approach focuses on safe, high dividend stocks that can weather any kind of storm that might come our way.
Posted on November 11, 2013 in Retirement Planning
Many times people leave a job and leave their old 401k behind. This could be a huge mistake! What happens to the money you have saved in your employee retirement plan?
With the volatile economy we have seen the past five years, many people have changed jobs. They often leave their job and don’t know what to do with their retirement plan at work. When you leave a job, you generally have four choices when it comes to your retirement plan money:
1. Cash it out (and lose part of it to taxes and possible tax penalties)
2. Leave the money in the plan (with only a handful of investment options)
3. Roll it into a new workplace retirement plan (with limited investment choices)
4. Roll it over into an IRA (with no taxable event occurring, and with the ability to direct the money into many different types of investments)
The smart move in most cases is to consider an IRA rollover. It often gives you more investment choices, better flexibility, and often-lower fees. An IRA rollover is a great choice, and I can help you accomplish it. Through a trustee-to-trustee transfer, you avoid the 20% withholding tax that would otherwise be incurred by simply taking a distribution from the old plan and depositing that money in an IRA.
Want more tax-deferred growth for your retirement savings?
An IRA rollover allows that to happen. You get continued tax deferral, you retain personal control over the money, and you can revise or change your investment mix as you wish.
Sound good? Call me at 866-594-9919. The more you study the options, the more you realize that the IRA rollover stands out as the smart choice. I can help you map out your investments and help you set up a plan to achieve your goals! Call me for a FREE 30 minute consultation or fill out this form and we will contact you to arrange a meeting.
Posted on November 7, 2013 in Faith-Based Investing
How should you look at finances?
Banks have cut interest rates to historic lows and are purchasing assets by printing money. Inflation rates will skyrocket, and governments are borrowing at a global scale just to keep up their wartime rates of spending. Jubilee Centre further reports that the financial system is ignoring Biblical and Christian principles of finance. This includes ideas of lending freely, repayment of debt, and the abolishment of unjustified interest.
Do you see a man diligent and skillful in his business? He will stand before kings; he will not stand before obscure men (Proverbs 22:29)
The Christian perspective does not ignore financial prosperity, despite some common belief. Businesses have succeeded brilliantly on Christian morals, including Chick-Fil-A, Hobby Lobby, and teen fashion company Forever 21, notes CNN Religion.
Prosperity is significant, and companies employ wide-reaching brand techniques, such as logo design and social media, to reach an audience. Logo Garden is a resource that allows users to design a personalized company blog. Companies employ the core concept of branding to spread a Christian message while also providing a high quality service or product.Posted on November 4, 2013 in Faith-Based Investing
When it comes to investing, being too conservative can be just as dangerous as being too aggressive. Is your portfolio properly positioned to reach your goals?
At the end of October, the S&P 500 was up 24.39% in the past 12 months. What investor wouldn’t want gains like that? As uplifting as that market advance was for many, some baby boomers missed out on it. They were simply too afraid to get back into stocks – they couldn’t dispense with their memories of 2008.
Would most boomers take a 4% return instead? Earlier this year, the multinational investment firm Allianz surveyed Americans with more than $200,000 in investable assets. Allianz found that for most of these people, protecting retirement savings was financial priority number one. Aversion to risk ran high: 76% of the respondents said that they would prefer an investment vehicle that offered a 4% return with no chance of loss of principal over an investment that offered an 8% return without principal protection.
In the equity markets, risk and reward are not easily divorced. They come together in an imperfect marriage, a problematic one – but it is one you may need to put up with these days if you are seeking decent yields. With interest rates so minimal, fixed-rate, risk-averse investing can put you at a disadvantage even against mild inflation. If you turn your back on equity investing right now, you could find yourself thwarting your retirement savings potential.
Psychology froze some boomers out of the Wall Street rebound. The awful stock market slide of 2008-09 left many midlife investors skittish about stocks. As Wall Street history goes, that was an extraordinary, aberrational stretch of market behavior. These events, and the fears that followed, may have scared certain investors away from stocks for years to come.
What price risk aversion?
At the end of the third quarter, more than $8 trillion was sitting in U.S. money market accounts, doing basically nothing. It wasn’t being lost, but it sure wasn’t returning much. In the Allianz survey, 80% of baby boomers polled viewed the stock market as volatile; 38% said that volatility was prompting them to keep some or all of their cash on the sidelines.
While all that money isn’t being exposed to risk, it is also bringing investors meager rewards.
Consider the psychology of our society for a moment. Generation after generation is told to save and invest for future objectives, most prominently a comfortable retirement. That need, that purpose, is not going away. As long as that societal need is in place, people are likely predisposed to believe in the potential of equity investing. So there is a collective American psychology – as yet unshaken – that the stock market is a strong option for investing, making money, and building wealth. (The same unshaken assumption remains in the housing market, even after everything homeowners have been through.)
That powerful collective psychology has contributed to the longevity of bull markets – and it isn’t going away. We had the bulk of the federal government shutdown for 16 days last month, and yet the S&P 500 gained 4.46% in October. After 10 months of 2013, the index was up 23.16% YTD – and this is a year that has brought fears of a conflagration in the Middle East, the threat of a U.S. credit rating downgrade and a “fiscal cliff,” sequester cuts, a banking crisis in Cyprus that scared the international financial community, and continued high unemployment. Stocks have vaulted past all of it.
Consider the view from this wide historical window: in the last 10 years, the S&P 500 has averaged better than a 7% annual return, even with its appalling 47% drop from October 2007 to March 2009. Since 1926, the S&P has a) had 23 years where it returned 10% or better, b) never gone negative over a 20-year period, and c) advanced 8 to 10% a year on average.
If you bought and held, congratulations. If you opted for tactical asset allocation during the downturn, facing that risk paid off. The point is: you stayed in the market. You didn’t cash out in late 2008 or early 2009 and decide to buy back at the top (as some bearish investors have recently done).
It isn’t time to throw caution to the wind. The Federal Reserve is not going to keep easing forever; QE3 will eventually end, perhaps early in 2014. When it does, Wall Street will react. The market may price it in, or we may see something worse happen. When you look at all the hurdles this bull market has overcome in the past few years, however, you have to think there is at least a bit more upside to come. Wall Street is optimistic and the performance of stocks certainly demonstrates that optimism, even as bearish thoughts persist.
Need help with your investments?
Jay can help you map out your retirement and help you set up a plan to achieve your goals! Give Jay Peroni, CFP® a call today at 866-594-9919 for a FREE 30 minute consultation orfill out this form and Jay will contact you to arrange a meeting.Posted on October 31, 2013 in
A Great Opportunity Ahead?
Chinese stocks have been stuck in neutral the past few years. Now is the perfect time for a break out. Here is a stock that could lead the charge!
China is still not fully understood by most investors. Many believe China will have a hard landing, as they believe its days of high-flying growth are numbered. Others simply don’t trust the government. Some shy away from foreign risk. Whatever the reason, China presents a great opportunity for investors who are willing to take on some risk and I believe the reward will be quite exciting.
When I look at China, I see attractive valuations. In fact, while I was scouring the Financial Times recently, I noticed that China has one of the cheapest stock markets in the entire world. Mainland China was trading at just 7.1 times earnings compared to 18.6 times here in the U.S. Even Hong Kong stocks trading at 11.7 times earnings are a better value play than the U.S. Chinese stocks are dirt-cheap and they have been trading sideways for years.
I also see growth. The forecasted economic growth rate of China should be among the global leaders for at least the next decade. It has already averaged a 9% annual growth rate for past two decades. This is nearly 3 times the growth rate of developed countries and I expect this trend to continue.Posted on October 29, 2013 in Retirement Planning
Where are all your important documents?Now is the time to organize and centralize your documents, and make sure your plans are in order!
Before retirement begins, gather what you need. Put as much documentation as you can in one place, for you and those you love. It could be a password-protected online vault; it could be a file cabinet; it could be a file folder. Regardless of what it is, by centralizing the location of important papers, you are saving yourself from disorganization and headaches in the future.
What should go in the vault, cabinet or folder(s)? Crucial financial information and more. You will want to include…
Those quarterly/annual statements. Recentperformance paperwork forIRAs, 401(k)s, funds, brokerage accounts and so forth. Include the statements from the latest quarter and the statements from the end of the previous calendar year (that is, the last Q4 statement you received). You don’t get paper statements anymore? Print out the equivalent, or if you really want to minimize clutter, just print out the links to the online statements. (Someone is going to need your passwords, of course.) These documents can also become handy in figuring out a retirement income distribution strategy.
Healthcare benefit info. Are you enrolled in Medicare or a Medicare Advantage plan? Are you in a group health plan? Do you pay for your own health coverage? Own a long term care policy? Gather the policies together in your new retirement command center and include related literature so you can study their benefit summaries, coverage options, and rules and regulations. Contact information for insurers, HMOs, your doctor(s) and the insurance agent who sold you a particular policy should also go in here.
Life insurance info. Do you have a straight term insurance policy, no potential for cash value whatsoever? Keep a record of when the level premiums end. If you have a whole life policy, you want to keep paperwork communicating the death benefit, the present cash value in the policy and the required monthly premiums in your file.
Beneficiary designation forms. Few pre-retirees realize that beneficiary designations often take priority over requests made in a will when it comes to 401(k)s, 403(b)s and IRAs. Hopefully, you have retained copies of these forms. If not, you can request them from the account custodians and review the choices you have made. Are they choices you would still make today? By reviewing them in the company of a retirement planner or an attorney, you can gauge the tax efficiency of the eventual transfer of assets.1
Social Security basics. If you haven’t claimed benefits yet, put your Social Security card, last year’s W-2 form, certified copies of your birth certificate, marriage license or divorce papers in one place, and military discharge paperwork or and a copy of your W-2 form for last year (or Schedule SE and Schedule C plus 1040 form, if you work for yourself), and military discharge papers or proof of citizenship if applicable. Social Security no longer mails people paper statements tracking their accrued benefits, but e-statements are available via its website. Take a look at yours and print it out.2
Pension matters. Will you receive a bona fide pension in retirement? If so, you want to collect any special letters or bulletins from your employer. You want your Individual Benefit Statement telling you about the benefits you have earned and for which you may become eligible; you also want the Summary Plan Description and contact info for someone at the employee benefits department where you worked.
Real estate documents. Gather up your deed, mortgage docs, property tax statements and homeowner insurance policy. Also, make a list of the contents of your home and their estimated value – you may be away from your home more in retirement, so those items may be more vulnerable as a consequence.
Estate planning paperwork. Put copies of your estate plan and any trust paperwork within the collection, and of course a will. In case of a crisis of mind or body, your loved ones may need to find a durable power of attorney or health care directive, so include those documents if you have them and let them know where to find them.
Tax returns. Should you only keep last year’s 1040 and state return? How about those for the past 7 years? At the very least, you should have a copy of last year’s returns in this collection.
A list of your digital assets. We all have them now, and they are far from trivial – the contents of a cloud, a photo library, or a Facebook page may be vital to your image or your business. Passwords must be compiled too, of course.
This will take a little work, but you will be glad you did it someday. Consider this a Saturday morning or weekend project. It may lead to some discoveries and possibly prompt some alterations to your financial picture as you prepare for retirement.
Need help with your retirement?
Jay can help you map out your retirement and help you set up a plan to achieve your goals! Give Jay Peroni, CFP® a call today at 866-594-9919 for a FREE 30 minute consultation orfill out this form and Jay will contact you to arrange a meeting.
Posted on October 21, 2013 in Faith-Based Investing
Often I get questions from prospects, clients at Faith-Based Investor, or from subscribers at Wall St. Renegade, and sometimes they are such important questions that I think my whole audience can benefit from such a response.
This past week, Brandy had a question about investing. She wants to know:
“Jay, what factors do you consider when investing, and how do you balance out all of the short-term and long-term information coming out about the markets and individual stocks?”
Whenever I consider investing, I view my investments as companies rather than just stocks. I look to “invest” in great businesses rather than just put together winning trades. Don’t get me wrong, for a portion of my investments, I do trade. I find lots of short-term windows of opportunity and buy and sell based on those opportunities; but for the bulk of my serious money I look for great companies that I can hold for a long time!
My “proud to own” process involves three areas of focus:
- I look to avoid companies that violate my faith and values. Some of the types of companies I avoid include those involved in the abortion industry, those producing explicit entertainment and pornography, those conducting embryonic stem cell and fetal tissue research, companies funding and lobbying for homosexuality, those involved in vices like alcohol, tobacco, and gambling, and companies that are abusing the environment.
- I seek out companies that complement my faith and values. This involves finding companies: helping the poor and defenseless; protecting the sanctity of human life; producing morally sound entertainment; finding cures for life threatening diseases; and improving the society in which we live.
- I seek companies with strong profit potential. This involves finding companies in solid financial condition that have strong profit potential and/or provide strong cash flows via dividends. My goal is to find quality companies that stay true to my values AND are profitable! This is not an either /or scenario but rather a winning combination.
Now, once I make a list of potential companies I am considering for my portfolio, I specifically look for “great companies”. Not companies that are just the “stock du jour”, I want companies that have lasting power! Just like Jim Collins spends his time looking for companies that have gone from “Good to Great”, I specifically target companies that are making a difference in our world and growing by leaps and bounds.
Here is how I find great growth companies:
Growth investors are concerned with a company’s future growth potential, and there are many formulas and methods to find such companies. Let’s look at five of the things I look at when searching for growth opportunities.
1. Strong historical earnings growth
I start by looking at a company’s past. Though past results are no guarantee of future results, it is still a great place to start. As a growth investor, I start by looking to see if the company’s annual revenues have been growing in the past. I specifically look for companies with strong Earnings Per Share (EPS) growth over the last five years. Ideally, I like to see strong 10-year EPS growth as well. If a company has displayed good growth over the last five- or 10-year period, there is a strong possibility that this trend is likely to continue.
2. Strong forward earnings growth
My minimum projected five-year growth rate is at least 10-12%, but I prefer companies that show a growth rate in excess of 15%. Though forward estimates are only expectations, it still helps to see how analysts view the company’s future prospects.
3. Strong management team that is controlling costs and growing revenues
I tend to look very closely at profit margins. This is an assessment of a firm’s income as a percentage of its revenue. If a company has margins at 25% that means it is earning 25 cents for every dollar’s worth of products or services it sells.
Margins will vary by industry with retailers often having thin margins due to tight competition. Technology and health-related companies tend to have wider margins with more price flexibility. I look for firms with the best profit-to-sales ratios in its industry with expanding margins quarter-by-quarter and year-by-year.
I find that those with the highest margins tend to have stronger pricing power for their products or better control inputs to produce their products at a lower cost than the competition.
By comparing a company’s present profit margins to its past margins and its competition’s profit margins, it helps gauge whether or not management is controlling costs and revenues and improving or lowering margins. To make things easier, I look to pretax margins (simply divide the firm’s income from operations before taxes by its net sales). If a company exceeds its previous five-year average of pre-tax profit margins and also is above the industry average, it certainly makes a good growth stock candidate.
4. Strong, efficient business operations
Here I look at return on equity (ROE). If a company is efficiently using its assets, you will see stable or rising ROE. To get a good pulse on a company, I compare a company’s present ROE with its five-year average ROE and with that of the industry. If it beats both criteria, again it’s a good growth stock candidate.
5. Stocks with a strong chance of doubling in price over the next five years
If a stock cannot realistically double within the next five years, it’s not really a growth stock. So that is why I focus so heavily on a 15% annual growth rate, which would enable the stock to double within the next five years.
Need help with your investment portfolio? Not getting the returns you desire? Give Jay Peroni, CFP® a call today at 866-594-9919 for a FREE 30 minute consultation or fill out this form and Jay will contact you to arrange a meeting.
Posted on October 15, 2013 in Faith-Based Investing, Recommended Resource, Retirement Planning, Wise Spending
Each decade of our lives is a milestone; and each milestone brings new perspective, a different focus, and varying needs. We trade our tricycles for bicycles; our bicycles for sports cars; our sports cars for minivans; our minivans for SUVs; and our SUVs for sensible four-door full-size sedans.
Just as our modes of transportation change through the years, so do our financial needs and focus.
This week’s blog post is hosted in connection with Festival of Frugality. We are featuring a collection of articles from blogs around the world dealing with these various stages of life. I trust you will find the articles both informative and interesting and that you will share this post with those you know who would find it of interest.
A good faith-based financial life plan is one based on using your God-given gifts to do purposeful and honorable work; then saving, giving, and investing according to your values – in companies you can be proud to own. Applying Biblical principles to each stage of life is the best way to create a faith-based financial life plan.
Youth – The Formative Years
Parents, you are your children’s primary teachers. Train them on solid financial principles. Teach them to work and earn money – and then guide them into being responsible with what they earn. Teaching them these three simple principles will serve them well throughout their lives: work – give – save.
John S presents How Much Things Cost According to a 6 Year Old posted at Frugal RulesWouldn’t it be the life if we could all buy houses that cost only $155 and had a car by age 12? Humor aside, children have little grasp of what things cost and how to save money which is further reason why we should be burdened to teach them so they can be financially literate as they get older.
Debt Guru presents Tips on Tuition Troubles – A Parent’s Guide posted at Debt Free BlogThese days, parents are bracing for their children’s college debt. Tuition troubles are tricky, but not impossible. Here are tips on how to solve them!
20’s and 30’s – The Foundational Years
Posted on January 6, 2013 in
You may be amused by the efforts of some of your friends and neighbors as they try to “chase the return” in the stock market. We all seem to know a day trader or two: someone constantly hunting for the next hot stock, endlessly refreshing browser windows for breaking news and tips from assorted gurus.
Is that the path to making money in stocks? Some people have made money that way, but others do not. Many people eventually tire of the stress involved, and come to regret the emotional decisions that a) invite financial losses, b) stifle the potential for long-term gains.
We all want a terrific return on investment (ROI), but risk management matters just as much in investing, perhaps more. That is why diversification is so important. There are two great reasons to invest across a range of asset classes, even when some are clearly outperforming others.
#1: You have the potential to capture gains in different market climates. If you allocate your invested assets across the breadth of asset classes, you will at least have some percentage of your portfolio assigned to the market’s best-performing sectors on any given trading day. If your portfolio is too heavily weighted in one asset class, or in one stock, its return is riding too heavily on its performance.
So is diversification just a synonym for playing not to lose? No. It isn’t about timidity, but wisdom. While thoughtful diversification doesn’t let you “put it all on black” when shares in a particular sector or asset class soar, it guards against the associated risk of doing so. This leads directly to reason number two…Posted on January 4, 2013 in Reducing Taxes
Giving to charity doesn’t make you a good person, but it sure helps. Charity should be the luxury of the blessed, and without the generosity of these big-hearted citizens, the world would be a wretched place.
According to TurboTax data, people with an average gross income (AGI) between $30,000 and $50,000 gave around $2,000 to charity last year. Those with an AGI between $50,000 and $100,000 gave a bit more than $2,600 on average, and those making $250,000 or more gave a whopping $28,110 on average. Where do you fall on this spectrum?
Choosing the Right Charity
Selecting the right charity for you should come from your heart first and foremost, but that doesn’t mean you should pull out your checkbook the second a commercial about tortured animals grabs your attention. If you have a soft spot for animals, children, the environment, teaching urban youth to read instead of just throwing a fistful of your income at them, do the research and make sure the non-profit you choose qualifies for tax deductions and is, in fact, what they say they are.
There are plenty of charities that are fake, which makes protecting your charitable finances essential. Sites like Lifelock.com on Crunchbase.com can help you navigate potentially murky waters of the faux non-profit world.Posted on December 16, 2012 in
10 Behaviors worth changing in 2013
Do bad money habits constrain your financial progress? Many people fall into the same financial behavior patterns year after year. If you sometimes succumb to these financial tendencies, the New Year is as good an occasion as any to alter your behavior.
#1: Lending money to family & friends. You may know someone who has lent a few thousand to a sister or brother, a few hundred to an old buddy, and so on. Generosity is a virtue, but personal loans can easily transform into personal financial losses for the lender. If you must loan money to a friend or family member, mention that you will charge interest and set a repayment plan with deadlines. Better yet, don’t do it at all. If your friends or relatives can’t learn to budget, why should you bail them out?
#2: Spending more than you make. Living beyond your means, living on margin, whatever you wish to call it, it is a path toward significant debt. Wealth is seldom made by buying possessions. Today’s flashy material items may become the garage sale junk of 2025. Yet, the trend continues: a 2012 Federal Reserve Survey of Consumer Finances calculated that just 52% of American households earn more money than they spend.
#3: Saving little or nothing. Good savers build emergency funds, have money to invest and compound, and leave the stress of living paycheck-to-paycheck behind. If you can’t put extra money away, there is another way to get some: a second job. Even working 15-20 hours more per week could make a big difference. The problem is far too common: a CreditDonkey.com survey of 1,105 households last fall found that 41% of respondents had less than $500 in savings. In another disturbing detail, 54% of the respondents had no savings strategy.
#4: Living without a budget. You may make enough money that you don’t feel you need to budget. In truth, few of us are really that wealthy. In calculating a budget, you may find opportunities for savings and detect wasteful spending.
#5: Frivolous spending. Advertisers can make us feel as if we have sudden needs; needs we must respond to, needs that can only be met via the purchase of a product. See their ploys for what they are. Think twice before spending impulsively.
#6: Not using cash often enough. No one can deny that the world runs on credit, but that doesn’t mean your household should. Pay with cash as often as your budget allows.
#7: Gambling. Remember when people had to go to Atlantic City or Nevada to play blackjack or slots? Today, behemoth casinos are as common as major airports; most metro areas seem to have one or be within an hour’s drive of one. If you don’t like smoke and crowds, you can always play the lottery. There are many glamorous ways to lose money while having “fun”. The bottom line: losing money is not fun. All it takes is willpower to stop gambling. If an addiction has overruled your willpower, seek help.
#8: Inadequate financial literacy. Is the financial world boring? To many people, it is. TheWall Street Journal is not exactly Rolling Stone, The Economist is hardly light reading. You don’t have to start there, however: great, readable and even entertaining websites filled with useful financial information abound. Reading an article per day on these websites could help you greatly increase your financial understanding if you feel it is lacking.
#9: Not contributing to IRAs or workplace retirement plans. Even with all the complaints about 401(k)s and the low annual limits on traditional and Roth IRA contributions, these retirement savings vehicles offer you remarkable wealth-building opportunities. The earlier you contribute to them, the better; the more you contribute to them, the more compounding of those invested assets you may potentially realize.
#10: DIY retirement planning. Those who plan for retirement without the help of professionals leave themselves open to abrupt, emotional investing mistakes and tax and estate planning oversights. Another common tendency is to vastly underestimate the amount of money needed for the future. Few people have the time to amass the knowledge and skill set possessed by a financial services professional with years of experience. Instead of flirting with trial and error, see a professional for insight.
This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or a recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.Posted on November 7, 2012 in
Bad Markets, Good Returns?
The markets are down over 2%. Between the results of the U.S. elections, focus on the Fiscal Cliff of 2013,and MORE trouble brewing in Europe, investors aren’t exactly in a buying mood.
As of 11:00am EST:
- The Dow is off 288 points
- NASDAQ is down 67 points
- The S&P 500 just broke below 1400 (down 30 points)
Things look bad for stock investors. Here we are on a day when the markets are crashing and we have 80% in cash along with two current stock holdings that are UP while the markets are down! Our system knew danger was ahead and thus we had a very high cash position.Posted on October 18, 2012 in
The power of the Wall St. Renegade System has been nothing short of amazing. Many happy subscribers who bought Aegerion Pharmaceuticals (AEGR), a latest stock that CRUSHED the market. The stock increased by over 50% in less than 2 weeks.
Posted on October 5, 2012 in
That said, stock market historians have repeatedly analyzed market behavior in presidential election years, and what stocks do when different parties hold the reins of power in Washington. They have noticed some interesting patterns through the years which may or may not prove true for 2012.
The Dow hasn’t done that well when the presidency has changed hands. A new research report from MFS Investment Management details the history of the blue chips in presidential election years from 1900-2008. It notes that the DJIA has on average lost 4.4% in election years in which the incumbent party in the White House loses. On the other hand, in years when the status quo was maintained, the Dow gained an average of 15.1%. Of course, much of these yearly gains and losses could also be chalked up to macroeconomic factors having nothing to do with a presidential race.
Too often, employees think of Health Savings Accounts (HSAs) as if they were simply deposit accounts. In reality, HSAs have much greater financial potential – and it shouldn’t be ignored.
With an HSA, you don’t have to “use it or lose it”. An HSA lets you set aside money each year for qualified medical expenses. Any money you don’t withdraw from your HSA annually is allowed to accumulate.
HSA funds can also be invested. So given investment gains, ongoing contributions to your account and tax-advantaged compounding, your savings for future health care expenses have the potential to grow impressively.
An HSA gives you a versatile automatic savings plan with striking tax breaks. The contributions to an HSA aren’t taxed by the IRS, since they are made with pre-tax dollars (as with a Roth IRA). Distributions usually aren’t taxed either, as long as they are used to pay for deductibles, co-payments and other qualified medical expenses. The IRS also refrains from taxing HSA earnings. This makes the HSA unique among retirement savings accounts.No public Twitter messages.
Copyright © 2013 Jay Peroni – Faith Based Investing
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