| Table of Contents |
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Key Points
- is SWM ( AMSGPSL ) the best way to manage your money?
- After implementing a Savings plan ( S in AMSGPSL ), determine the right G - Growth investments to fit your financial needs short-term and long-term financial plans
References
Key Concepts for Financial Growth
Your Life Plan - AMSGPSL
7 Questions to Answer to Set Your Direction in Life
- Ask
- What do you want for your life?
- Make
- how can you make income going forward?
- Save
- how can you save to meet or exceed your goals?
- Grow
- how will you grow your savings and assets to meet your goals and manage risk?
- Protect
- how will you protect those important to you?
- Spend
- how will you spend smart and get more from life for less?
- Live
- how will you enjoy the journey not just the destination?
Grow
Understand income, taxes and wealth are important
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- In most cases, different types of wealth can generate funds or income or both
- asset investments can be bought and sold for net gains ( or losses ) - eg real estate, stocks, collectibles etc
- businesses can increase in value and be sold for funds
- businesses can generate income
- unless you want to work forever, creating wealth will give you future opportunities to raise funds and work less at some point
Understand Taxes and Investment Fees and how they impact your returns
US Federal Income Tax Rates
https://www.fidelity.com/learning-center/personal-finance/tax-brackets
Other taxes - Real Estate, Business Income
Investment Types that can Grow Your Capital
Real Estate - real estate can earn income, grow in value as an asset and reduce taxes with depreciation
ways to invest include
buying your own property
or buying into a real-estate pool using an ETF or shares in a REIT
Alternate Investments - Art, NFTs, movies, loans, other uniquely valued assets
Create your own Assets - Art, Writing, Screen plays, private loans
Capital Markets - Equities, Options, Futures, Funds, ETFs, REITs, Limited Partnerships, Whole Life, Annuities, Bonds etc
My focus here is Equities BUT you SHOULD understand ALL the investment types on long-term returns, risks, taxes, limitations, pros and cons
Dividends vs Return of Capital vs Interest Payments differences and tax impacts
Dividends
Different security types offer different options to pay investors
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preferred stock holders have higher priority on cash distributions of dividends then common stock holders if earnings don't cover dividends
DRIP - Dividend Reinvestment Programs - automatically grow your equity BUT you don't control timing of the purchases
Interest Payments
Debt instruments like bonds, loans will define fixed, variable or semi-variable interest rates
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AFTER that, you received your principal and need to reinvest in all likelihood
Return of Capital
a>> Making YOUR DECISIONS on how to invest to meet YOUR GOALS AND RISKS
gdoc > _fin-market-income-trends-ex1 gdoc link
...
pdf > _fin-market-income-trends-ex1.pdf. link
They key decisions you must make to invest
1> Decide When will you need your money? ( plan when you need to use it )
2> Decide what you do if your investment goes up or down
3> Decide how to invest your money
Then follow up on your decisions on your schedule ( ideally at least every 3 months )
My Decisions Drove My Portfolio Returns this past year
1> Decide When will you need your money? ( plan when you need to use it )
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- put the money ( 15% ) into SSO - a double leveraged fund on the S&P 500 index
- IF the market goes down 15%, my position will be down 30%
- if the market goes up 15%, my position goes up 30%
- I can afford to keep the 15% of my funds there for at least 5 years in case the market goes and wait for it to return to a profit
- I have ONLY tied up 15% of my money but using SSO, I have a 30% participation in the market in case it goes up
Returns Compared to Market Returns
Overall I implemented this portfolio in the past year
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Time-weighted rate of return (pre-tax) | 1-month | 3-month | YTD | 1-year | 3-year | 5-year | Notes | |
| small insurance | 0.0663 | 0.22 | 0.3823 | 0.2062 | 0.0635 | 0.1173 | not an investment account | |
| IRA | 0.034 | 0.0782 | 0.1344 | 0.0745 | 0.0011 | -1.24% | IRA kept cash for RMDs, company join hit too | |
| Managed Account | 0.023 | 0.0557 | 0.1304 | 0.0815 | 0.0824 | 0.0693 | Professionally managed account was consistent | |
| Brokerage | 0.0402 | 0.0818 | 0.1322 | 0.1014 | -2.13% | -8.49% | My stock account hit by joining a company | |
| ROTH IRA | 0.0401 | 0.1001 | 0.1807 | 0.0623 | 0.1399 | 0.0782 | ROTH IRA managed by me beat Pro account | |
| Total | 0.0354 | 0.0802 | 0.1407 | 0.0789 | 0.0267 | 0.0016 | ||
| Market Indexes‡ | 1-month | 3-month | YTD | 1-year | 3-year | 5-year | ||
| S&P 500® Index | 0.0321 | 0.1051 | 0.2065 | 0.1302 | 0.1372 | 0.122 | S&P 500 index beat me AND professional funds | |
Dow Jones U.S. Total Stock Market Index | 0.036 | 0.1118 | 0.2043 | 0.1262 | 0.13 | 0.1131 | ||
Bloomberg U.S. Aggregate Bond Index | -0.07% | -1.51% | 0.0202 | -3.37% | -4.46% | 0.0075 | My accounts beat bonds because of Biden inflation | |
| Bloomberg Municipal Bond Index | 0.004 | 0.0052 | 0.0308 | 0.0093 | -1.00% | 0.0187 | ||
The Power of Time and Yield to Grow Savings
Savings-Growth-Rates-for-1M-Didnt Max Out Your 401k This Year Why You Probably Shouldnt Worry.pdf
SWP Money Management- Grow Your Money - my course **
swp_build_your_road_to_financial_success_v3.pptx
...
swp_build_your_road_to_financial_success_v3.pdf
Portfolio Design Concepts
https://drive.google.com/file/d/0BxqKQGV-b4WQTnVDZUlDdE5Bbkk/view?usp=sharing
Related investment tips
JEM portfolio 1 - high cash flow, moderate risk
Pros
total annual expected cash flow rate >= 8% from dividends, options with some adjustments up or down for risk design
...
need trade management plans for scenarios and automated alerts
KISS portfolio model
https://drive.google.com/file/d/0BxqKQGV-b4WQMGxNSzFNc0FNajQ/view?usp=sharing
Ideas on creating a tailored portfolio to match your needs
https://drive.google.com/file/d/1OoZUdpTZ49xrpMnildKwVOJWo9QrkO6W/view?usp=sharing
Choosing the Best Retirement Plan for You
https://www.fool.com/retirement/plans/
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- 401(k)
- 403(b)
- 457
- IRA
- Roth IRA
- Nondeductible IRA
- Solo 401(k)
- SEP IRA
- SIMPLE IRA
- Keogh plan
Brokerage account or IRA account for investments, trading - what are the differences on investments?
Under SEC rules, there are limits on the types of trades allowed in retirement accounts like IRAs. The SEC doesn't require the same limits on brokerage accounts. Firms like Fidelity will set their own "house" rules on how to implement those policies and restrictions.
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Like Brokerage accounts, retirement ( IRA ) accounts also need approvals for certain types of trades ( options, margin, index options etc )
For example - some option trade scenarios with net margin impacts for retirement accounts - what's allowed?
1>> buy an IBM Oct 155 call — that's a charge to your account and is allowed as a long position
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https://www.fidelity.com/learning-center/trading-investing/trading/limited-margin-trading-IRA
IRA or Roth IRA?
Know your long-term plan for income tax ( Federal and State )
https://www.irs.gov/filing/federal-income-tax-rates-and-brackets
What should be put in a Roth IRA?
https://www.fool.com/investing/2021/12/11/be-smart-about-what-you-hold-in-your-roth-ira/
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Current long-term capital gain rate is 20 or 23.8% today
Roth Contribution Limits for 2024
Roth IRA contributions are made on an after-tax basis or through a 529 rollover starting in 2024. However, keep in mind that your eligibility to contribute to a Roth IRA is based on your income level. If you file taxes as a single person, your Modified Adjusted Gross Income (MAGI) must be under $153,000 for tax year 2023 and $161,000 for tax year 2024 to contribute to a Roth IRA, and if you're married and file jointly, your MAGI must be under $228,000 for tax year 2023 and $240,000 for tax year 2024. The maximum total annual contribution for all your IRAs combined is:
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With the passage of SECURE 2.0 Act, effective 1/1/2024 you may also be eligible to contribute to your Roth IRA using 529 rollover assets
Roth IRA and Backdoor contributions - pros and cons. link
roth-ira-backdoor-2024-rebalance360.com-Backdoor Roth IRAs Are Promising and Perilous.pdf
Roth Backdoor IRA rollover from Traditional IRA
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Married filing separately and heads of household can use the limits for single people if they have not lived with their spouse in the past year.9
Maximize Growth with Roth IRA
Roth IRA conversions from Traditional IRA
2021 tax law still allows Roth conversions from Traditional IRA after the RMD is done.
Consider large conversion and paying taxes out of normal funds to maximize total moved to Roth IRA
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Tip>> pay the net taxes owed on the Roth conversion from other funds maximizing the Roth conversion amount
Consider 401K rollovers to Traditional IRA to setup a Roth conversion
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No tax impacts from the 401K rollover
Year end smart financial planning and tax moves
https://finance.yahoo.com/news/7-end-wealth-moves-094206315.html
tax-planning-finance.yahoo-7 Year-End Wealth Moves
1. Harvest Your Tax Losses
As of early November, the S&P 500 is up 24% and the Dow Jones is up 18% for the year. Unfortunately, some stocks and mutual funds are still posting a loss for the year. Therefore, it is likely that some items in your portfolio show up in red when you check the “unrealized gains and losses” column in your brokerage statement.
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Bear in mind that wealth strategy is not all about taxes. Tax loss harvesting could be a great opportunity to help you rebalance your portfolio with a reduced tax impact. Beware though of the wash sale rule: If you buy back your sold positions within 30 days, you will have negated the benefit.
2. Review Your Investment Planning
Tax-loss harvesting can be used effectively for short-term advantage. However, it also provides the opportunity to focus on more fundamental issues. In the first place, why did you buy these securities that you just sold? At one time, they probably played an important role in your investment strategy. And now with the cash from the sale, it’s important to be mindful when reinvesting.
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You will want to ensure that your portfolio risk is aligned with your goals, and that your asset allocation is aligned with your risk target. Reach out to your wealth strategist to review.
3. Review your Retirement Planning
There is still time to top out your retirement account! In 2021, you can contribute up to $19,500 from your salary, including employer match, to a standard defined contribution plan such as 401(k), TSP, 403(b) or 457, subject to the terms and conditions of your plan. And if you happen to be 50 years old or older, you can contribute an additional $6,500 for this year.
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Many people think of the Roth account as tax-free. However, you should bear in mind that although Roth accounts are popularly designated as "tax-free" they are merely taxed differently, since you would be contributing after-tax funds. Double check with a Certified Financial Planner professional to determine whether choosing to defer some of your salary on a pretax basis or post-tax to a Roth account better fits your situation.
4. Roth Conversions
The current tax environment is especially favorable to Roth conversions. With the Tax Cuts and Jobs Act set to sunset, income tax rates will be going back up in 2026. Therefore, Roth conversions could cost less in current taxes until then. Of course, Congress could vote for tax rates to go up before the end of the year. There is even the possibility that Congress will remove the ability to do a Roth a conversion after 2021.
To do a Roth conversion, you withdraw money from a traditional tax-deferred retirement account, pay income taxes on the distribution, and move the assets into a Roth account. Then the assets can grow and be distributed tax-free, provided certain other requirements are met. If you think that your tax bracket will be higher in the future than it is now, you could benefit from a Roth conversion.
5. Choose Your Health Plan
With health insurance re-enrollment season, the annual ritual of choosing a health insurance plan is with us. With health insurance getting ever more expensive, this could be one of your more important short-term financial decisions.
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If you choose a high-deductible plan, you should plan to fund your HSA to the maximum. Many employers will contribute as well to encourage their employees to pick that option. If you choose a low-deductible plan instead, make sure to fund your flexible spending account. FSAs are used to pay for medical expenses on a pretax basis. The unspent amount cannot be rolled over to future years, unlike HSAs.
6. Plan Your RMDs
Don't forget to take your required minimum distributions (RMDs) if you are 72 or older. At 50%, the penalty for not taking your RMD is steep. You must withdraw your first minimum distribution by April 1 of the year following the year in which you turn 72, and then by Dec. 31 for each year after.
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You could also plan for a qualified charitable distribution from the IRA. That distribution must go directly from the IRA to a charity. Unlike a normal RMD, it is excluded from taxable income and may count toward your RMD under certain conditions.
7. Plan Your Charitable Donations
Charitable donations can also help reduce taxable income and provide financial planning benefits. However, the Tax Cut and Jobs Act of 2017 (TCJA) has made it more complicated. A significant result of the TCJA is that standard deductions for 2021 are $12,550 for individuals and $25,100 for joint filers. In practice, it means that the first $12,550 or $25,100 of deductible items have no tax benefits.
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If your thinking wheels are turning after reading this article, check in with your wealth strategist or financial planner: There may be other techniques that you could or should do before the end of the year!
Benefit from company 401K retirement plans
https://www.investopedia.com/articles/retirement/05/introroth401k.asp
The Roth 401(k) account made its debut in the retirement investment community in 2006. Created by a provision of the Economic Growth and Tax Relief Reconciliation Act of 2001 and modeled after the Roth IRA, the Roth 401(k) is an employer-sponsored investment savings account that allows employees to save for retirement with after-tax money.
- A Roth 401(k) is an employer-sponsored savings plan that gives employees the option of investing after-tax dollars for retirement.
- Contribution limits for 2021 are $19,500 ($20,500 for 2022) for people under age 50, with an allowed $6,500 additional catch-up contribution per year allowed each for those age 50 and above.
- Although you pay taxes on your contributions, withdrawals that you take after age 59½ will be tax-free if the account has been funded for at least five years.
the Roth 401(k) generates current revenue in the form of tax dollars
The money you earn today is taxed today. When you put this after-tax money into your Roth 401(k), withdrawals that you take after you reach age 59½ will be tax-free if the account has been funded for at least five years
2022 401K limit = 19600 — over 50 limit = 27000
example deduction amount for a deduction rate for given a salary
var salary = 160000;
var rate = .12;
...
rate = .03;
0.03
console.log(` 401k total contribution based on rate ${rate} = ${ salary * ( rate ) }`);
VM20631:1 401k total contribution based on rate 0.03 = 4800
Impact of higher future tax rates on Roth decisions
While it may seem intuitive that most investors will experience a decrease in their tax rate upon retirement, retirees often have fewer tax deductions, and there's also the potential impact of future legislation, which could result in higher tax rates. Considering the uncertainty of tax rates in the future, young workers who currently have lower income tax rates may want to consider investing in after-tax programs like the Roth 401(k), essentially locking in the lower tax rate
Roth 401K rules
- Unlike Roth IRAs, Roth 401(k) participants are subject to required minimum distributions at age 72, which forces investors to take distributions even if they don't need or want them.3
- The distribution requirement can be avoided by rolling over to a Roth IRA, but doing so is an administrative hassle, and legislators may change the rules at any time to forbid such transfers
- Any matching contributions your employer makes to your Roth 401(k) must be deposited into a traditional 401(k) account
Roth 401K rollover rules on leaving a job
https://www.investopedia.com/articles/retirement/09/roth-401k-rollover.asp
- A Roth 401(k) can be rolled over to a new or existing Roth IRA or Roth 401(k).
- As a rule, a transfer to a Roth IRA is most desirable, since it facilitates a wider range of investment options.
- It is best to move the money to an existing Roth IRA account, if you have one, because of the five-year rule governing qualified distributions.2
- If you plan to withdraw the transferred funds soon, moving them to another Roth 401(k) may provide favorable tax treatment.
- Roth 401K investment options more limited than Roth IRA
Article - Buy, Borrow, Die to grow Wealth long term
https://finance.yahoo.com/news/buy-borrow-die-rich-avoid-140004536.html
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getting started is not easy ( building your first million in net worth is always hard )
tax-free-income-strategies-- Proven Methods.pdf link
- a health savings account
- check the limitations on both contributions and valid expenses as they change
- Contribute to a Roth IRA or Roth 401K
- depending on your income tax level Roth accounts MAY be better long-term for higher returns
- Roth accounts do not have RMDs
- If you can't directly contribute to a Roth because of income level, Look at back-door Roth conversions from an IRA
- Municipal bonds and funds
- Is the rate high enough compared to other investments?
- how long is the duration of the bonds now?
- are the bonds callable if rates drop?
- Social Security payments
- based on your income level up to 85% of Social Security Income may be taxable as regular income
- Cash value life insurance
- If you are married, have children, have maxed out your contributions to your existing retirement account, or
are in an upper tax bracket, cash-value life insurance might be a great way to achieve the financial freedom
we all want.
- If you are married, have children, have maxed out your contributions to your existing retirement account, or
- Inheritances - where and how much tax do you pay?
- States with inheritance or estate taxes /state-estate-tax-inheritance-tax-2023/
- The federal estate tax generally applies to assets over $13.61 million in 2024, and the estate tax rate ranges from 18% to 40%. Some states also have estate taxes, and they might have much lower exemption thresholds than the IRS. Assets that spouses inherit generally aren't subject to estate tax.
Equality or Equity - Which is Fair?
Equality - We both have relatively equal opportunity under the law and in the markeplace to be successful based on our decisions, our skills and our effort
Equity - You work twice as much as me, produce twice the value I did and took twice the risk I did but we are paid the same
The government is no different than ordinary family. I gave my brother a car and he didn't even say thank you because it was my old car. He figures that since I make more than him I'm rich and should have given him a new car. This plays out the same with all my family. I tell them I work for a living and have bills, but it falls on deaf ears because my earnings are $150K per year and the make less than $50K. Since they pay no income tax they figure I don't either etc.... You know the rest. I should be paying my fair share of my saved assets to them so they can live like me. For some reason we should be equals even though I worked my tail off all my life and face 10x the pressure they do. None of that matters. I have saved more and make more and the deserve some of it. Equality will get more and more play going forward and some kind of communistic revolution is coming in the next 30 yrs. Just wait until these youngster control government. Taxes will be 90% and everyone will be equals.
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Yep. No matter how much they pay, it is never enough. Especially in the minds of people who've been brainwashed into believing that the "rich" are bad people that made their money at the expense of the poor and then avoided paying taxes.
>> asset value risk
This strategy worked well from 1980 to 2021, when declining interest rates virtually assured increased asset prices. Maybe not so today.
I think the idea of not selling appreciated liquid assets, solely to avoid taxes, is silly. I sell when I think appropriate, and invest elsewhere. Anyone who held Meta the last 24 months can attest to the risk
How to get started on building wealth for the average person - it's a choice
I've got over a million dollars in real estate debt on which I'm paying about 3% interest, I have tenants paying my mortgages with a profit left over for me. I have a bunch of dividend paying stocks which earn nearly 10% paid monthly. When I die my heirs get all the real estate growth (hundreds of thousands) with a step-up. I'm a high school drop out. I used to live on rice and beans when I started. It's called get an education, live below your means, start small and keep building.
<< worked hard, saved hard, manages his good investments actively,
States with inheritance and estate taxes
Good set of investment critieria for Equities
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Generational Wealth > Create Your Strategy to Build It
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6 Key Signs Your Investments Will Build Generational Wealth.pdf link
Key Wealth Management Tips
- Reinvest your dividends automatically
- Own an SP500 Index Fund
- Specify Your Heirs in a Will and Educate them on Wealth Management
- Own Income Generating Assets ( Stocks, Real Estate, more )
- Protect Assets for Heirs in Trusts that manage Tax Burdens
- Avoid Investment Fads ( limiting risks )
Market Value Risks of Investments Example for different investment types
Compare the 5 year total return for the 3 options shown:
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IF the job hire had not happened, the investment rules loss would be eliminated, net loss would have been only -1%
The S&P 500 Index for the last 5 years
https://www.financecharts.com/etfs/SPY/performance/total-return
The total return for SPDR S&P 500 ETF Trust (SPY) stock is 7.62% over the past 12 months. So far it's up 15.32% this year. The 5-year total return is 66.34%, meaning $100 invested in SPY stock 5 years ago would be worth $166.34 today. Total return includes price appreciation plus reinvesting any dividends paid out.
SP500 compared to growth stocks and ET over 5 years
Hi Dividend Stocks Report - 2024
JDN - Jim Dividend Nbr. = the dividend rate + 1/3 time the dividend growth rate for 5 years
| Google drive sheets | ||||||||
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Market Economic Factors - Corporate EPS, Rates, Money Supply, Trade Balances, Credit Risks
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Long leading indicators, recently “less negative,” have a major reversal with corporate profits (actual + estimated) for Q4 making a 3-year low.
Short leading indicators are mixed, with positive trends in stock prices and gas prices, but negative trends in commodity prices.
Coincident indicators remain slightly positive, with real consumer spending and low layoffs, but corporate profits are declining.
Either corporate profits or stock prices are giving a false sign. Tracking other short leading indicators should give us the answer.
Summary & conclusion
Below are this week's spreadsheets of the long leading, short leading, and coincident readings. Check marks indicate the present reading. If there has been a change this week, the prior reading is marked with an X:
| Long Leading Indicators | Positive | Neutral | Negative | |
|---|---|---|---|---|
| Corporate bonds | ✓ | |||
| 10 year Treasury | ✓ | |||
| 10 yr-2 yr Treasury | X | ✓ | ||
| 10 ry. - 3 mo. Treasury | ✓ | |||
| 2 yr - Fed funds | ✓ | |||
| Mortgage rates | ✓ | |||
| Purchase Mtg. Apps. | ✓ | |||
| Refi Mtg Apps. | ✓ | |||
| Real Estate Loans | ✓ | |||
| Real M1 | ✓ | |||
| Real M2 | ✓ | |||
| Corporate Profits | X | ✓ | ||
| Adj. Fin. Conditions Index | ✓ | |||
| Leverage Index | ✓ | |||
| Totals: | 3 | 2 | 9 | |
| Short Leading Indicators | Positive | Neutral | Negative | |
|---|---|---|---|---|
| Credit Spread | ✓ | |||
| Miller Score | ✓ | |||
| St. L. Fin. Stress Index | ✓ | |||
| US$ Broad | ✓ | |||
| US$ Major currencies | ✓ | |||
| Total commodities | ✓ | |||
| Industrial commodities | ✓ | |||
| Stock prices | ✓ | |||
| Regional Fed New Orders | ✓ | |||
| Initial jobless claims | ✓ | |||
| Temporary staffing | ✓ | |||
| Gas prices | ✓ | |||
| Oil prices | ✓ | |||
| Gas Usage | ✓ | |||
| Totals: | 6 | 3 | 5 | |
| Coincident Indicators | Positive | Neutral | Negative | |
|---|---|---|---|---|
| Weekly Econ. Index | ✓ | |||
| Open Table | ✓ | |||
| Redbook | ✓ | |||
| Rail | x | ✓ | ||
| Harpex | ✓ | |||
| BDI | ✓ | |||
| Steel | x | ✓ | ||
| Tax Withholding | ✓ | X | ||
| TED (deleted) | ||||
| LIBOR (deleted) | ||||
| Financial Cond. Index | ✓ | |||
| Totals: | 4 | 3 | 2 | |
The long leading indicators recently began to improve. But corporate profits as estimated and reported for the 4th quarter of 2023 are just above their low of 3 years ago in Q1 2021. The long-term historical record says that corporate profits typically lead stock prices, averaged quarterly, which brings us to …
Among short leading measures, stock prices made an all-time high this week. One of the two - estimated + reported corporate profits, or stock prices - is giving a seriously false signal. Gas and oil prices continue to be important positives. If the supply chain has been fully un-kinked, then the continuing decline in commodity prices also signals significant weakness. Contrarily, real consumer spending continued very positive, and layoffs are close to 50+ year lows.
Coincident indicators continue slightly positive. Significantly, the sharp YoY decline in tax withholding has ended.
My suspicion is that corporate profits are giving a true signal, and stocks have gotten ahead of themselves, anticipating Fed rate cuts and a "soft landing." The other short leading indicators assume added importance in this scenario.
Energy Transfer ( ET )
Hi Dividend Common Stock with limited payout risks and small growth potential from 2024 onward
Energy Transfer: Top 5 Big-Yield MLPs. 240115
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The bottom line here is that there are important nuances to holding MLPs in a retirement account, and depending on your own personal situation, it may or may not make sense to do so. Also worth mentioning, some brokerages won't even allow you to own an MLP in a tax-advantaged retirement account (e.g. IRA, 401K).
Tax risks of C-corp conversion where company is sold and gain taxed
And according to a November 2023 note from Morningstar Strategist, Stephen Ellis:
“Energy Transfer seems to be considering a C-Corporation conversion, or C-Corp, alternative more seriously than it has in the past as an alternative to buybacks. Co-CEO Thomas Long said he thinks the C-Corp currency makes a lot of sense, and the company is spending considerable time evaluating it. This shift seems to suggest that Energy Transfer management may have thought the stock would rerate higher with the increased yield (currently 9%), but in the absence of that, it may consider a C-Corp conversion to address the long-standing EBITDA multiple discount versus peers.”
Energy Transfer Total Return for the Last 5 years
https://www.financecharts.com/stocks/ET/performance/total-return
The total return for Energy Transfer LP (ET) stock is 20.78% over the past 12 months. So far it's up 17.69% this year. The 5-year total return is 13.65%, meaning $100 invested in ET stock 5 years ago would be worth $113.65 today. Total return includes price appreciation plus reinvesting any dividends paid out.
see more on Energy Transfer analysis here:
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et-230918-seekingalpha.com-Energy Transfer An Old Adversary Threatens A Material Future Change.pdf
ET management presentation - 2024 - see strategic goals
ET compared to Top Tech Stocks - 2 year view
ET compared to Top Tech Stocks - 5 year view
ARCC ( a BDC ) Total Return for the Last 5 years
https://www.financecharts.com/stocks/ARCC/performance/total-return
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Jim100-ModerateRiskReturn1Portfolio
Total Return Calculator
https://www.financecharts.com/stocks/ET/performance/total-return
SmithDiv-A 9%-YieldingPortfolioWithLow-RiskDividendsForSustainablePassiveIncome
Value insurance companies using the combined ratio
The company has an excellent risk management history, which you can observe by its combined ratio. This essential insurance metric is the sum of claims costs (how much an insurance company pays out on a policy) and expenses (like employee compensation or fixed overhead) divided by the premiums the company collects.
Over the past two decades, Chubb's average combined ratio was 90.8%, well below the industry average of 100%. This matters because it translates into free cash flow, which the company uses to pay dividends, buy back shares, or invest in things like bonds and stocks. Chubb's solid growth is why it has raised its dividend payout for 31 consecutive years.
Protect
Who do you help?
Who do you need to protect? when? for how long?
Your Health Insurance Options
Medicare - Medigap or Advantage Programs
Medicare cheat sheet - read at age 64
...
_investopedia.com-Medicare Advantage vs Medigap.pdf
Disenroll at Social Security from Medicare Part B once you have private insurance, re-enroll later
...
https://www.aarp.org/health/medicare-insurance/info-05-2008/ask_ms__medicare_5.html
Your Social Security Plans
2022 Social Security Changes
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- Social Security recipients will get a 5.9% raise for 2022, compared with the 1.3% hike that beneficiaries received in 2021.1
- Maximum earnings subject to the Social Security tax also increased—from $142,800 a year to $147,000.
- Other changes for 2022 include an increase in how much money working Social Security recipients can earn before their benefits are reduced and a slight rise in disability benefits.
- Social Security tax rates remain the same for 2022: 6.2% on employees and 12.4% on the self-employed.
- It now takes $1,510 to earn a single Social Security credit, up just $40 from 2021.2
Maximize Social Security for your Spouse
Option for Widowed Spouse to elect spousal benefits
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Widow can elect to replace their benefits with deceased spouse benefits
Options for Spousal benefits
You can still claim Social Security spousal benefits even if your spouse is gone
Spend
Manage your credit score
Most of us need to borrow money for short-term credit, long-term mortgages or car loans etc.
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If you don't manage your credit history well, borrowing money will be difficult.
Info from Experian on how your credit score is determined and tips to manage
Mortgage Types and Factors to consider
https://fhmtg.com/2019/08/23/what-is-a-non-qualified-mortgage/
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These guidelines were adopted by the Consumer Financial Protection Bureau (CFPB) to help prevent poor lending practices that sparked the previous financial crisis.
A Non-Qualified Mortgage (Non-QM) is a loan that doesn’t meet the standards of a qualified mortgage and uses non-traditional methods of income verification to help a borrower get approved for a home loan.
Manage automatic credit payments better
With credit cards and online payment services, many subscription programs will automatically bill you on a periodic basis.
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The credit services all have ways you can manage cancelling the automatic payments on their end if the vendor side doesn't work
For Paypal - log in to your PayPal account, go to Profile, and click My money. Update your agreement in the "My pre-approved payments" section.
Live - What's important today for you? tomorrow for all ?
Focus on Health, Diet, Nutrition, Exercise
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In terms of the time you're taking to work out, HIIT has a clear advantage, as you'll be burning a higher number of calories in a shorter window than you would be during a lower-intensity session. However, this also requires a higher skill level, explains Beaugrand. "If you're doing sprints, you need to be at least good enough to be able to do that in all-out intensity," he says, "whereas in lower or moderate intensity, we don't need a lot of skill for that, we can do something like walking, riding our bike, going out for a hike."
"If we're doing a significant amount of steady-state cardio, we're creating this adaptation response where our body wants to be good at cardio," says Beaugrand. "Being good at cardio and being a good bodybuilder don't necessarily go hand in hand."
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Make a routine that you can stick to, and know what you’re going to be doing before you do it.
Where to Live ? US
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https://moneywise.com/retirement/affordable-beach-towns
Where to Live ? Overseas
https://www.yahoo.com/lifestyle/considering-move-abroad-2024-best-100025391.html
SWP Common Sense Financial Planning
1> the basic investment course for those who don't have time or interest
2> the "JimK" program for your kids investment future
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3> Build Your Life Plan
4> Life Tracker Keeps Your Life Plan Working
Finance Life Tracker Process
Initial Consultation
is this right for you?
free assessment
Build your plan
fee based based on plan scope
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adjustments
plan implementation
Periodic Plan Checkins
no charge
based on kpis at standard times
family bonus plan - semi-annual plan update reviews
Plan Review & Updates
fee based based on plan scope
as needed
CFP 2019 Approved Financial Planning Process
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One of the most significant changes in the CFP Board’s financial planning process outlines the way in which advisors must take a holistic approach to advice. There are changes to all steps in the new standards to incorporate consideration of all of a client’s financial goals, even if an advisor doesn’t handle every aspect of their financial lives.
Planning Ideas, Articles
What retired people wish they had done earlier
https://www.yahoo.com/news/5-retirees-reveal-wish-d-100700165.html
retirement-plan-regrets-yahoo.com-Retirees Confess What They Wish Theyd Done With Their Money.pdf
10 Steps to Financial Security Before Age 30
10 Steps to Financial Security Before Age 30 pdf
1. Track Your Spending
A free budgeting app like Mint can help you do this.
2. Live Within Your Means
Keep your standard of living below what your earnings can accommodate
3. Don't Borrow to Finance a Lifestyle
Borrowed money should be used when your gain will outrun your borrowing costs. This might mean investing in yourself—for your education, to start a business, or to buy a house.
4. Set Short-Term Goals
set a series of small short-term goals that are both measurable and precise—for example, paying off credit card debt within a year or contributing to a retirement plan with a set contribution each month
5. Become Financially Literate
Taking the time and effort to become knowledgeable in the areas of personal finance and investing will pay off throughout your life. Making sound financial and investment decisions is important for achieving your financial goals.
6. Save What You Can for Retirement
Try setting up automatic monthly contributions to a retirement plan, such as an employer-sponsored 401(k) if you have access to one, or an IRA if you don't. You can increase your contributions when your income rises or when you've achieved more of your short-term goals.
7. Don't Leave Money on the Table
If you work for a company that offers a 401(k), make sure to contribute at least up to the maximum of what your employer will match, otherwise you are leaving money on the table. In addition, you can deduct your contributions in the year you make them, which lowers your taxable income for the year.1
8. Take Calculated Risks
Examples of calculated risks include:
- Moving to a new city with more job opportunities
- Going back to school for additional training
- Taking a new job at a different company for less pay but more upside potential
- Investing in high risk/high return stocks
9. Invest in Yourself
Look at yourself as a financial asset. Investing in yourself will pay off in the future. Your skills, knowledge, and experience are the biggest assets you have. Increase your value by continually upgrading your skills and knowledge and by making smart career choices.
10. Find the Right Balance
Striking a proper balance between your life today and the future is also important. Financially, we can't live as if today is our last day. We have to decide between what we spend today versus what we spend in the future. For example, set a short-term goal to save for a trip to a destination you've always wanted to see instead of using a credit card to finance it. Finding the correct balance is an important step toward achieving financial security.
11. Generally avoid credit card loans
You should ALWAYS pay off credit card debt monthly to avoid the finance charges that can legally run up to 30%
KEY TAKEAWAYS
- Knowing how much you spend can keep spending in check.
- Live within your means, don’t use credit to fund a lifestyle, and set short-term achievable financial goals.
- Become financially literate and save what you can for retirement.
- Take calculated risks, such as moving to a city with more job opportunities or taking on a new job that pays less but has more upside potential.
- Invest in yourself by continually upgrading your skills and knowledge.
- Strike a balance—working toward financial security doesn’t mean you need to deprive yourself.
Potential Value Opportunities
Building Better People
Tips on managing life ****
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7 Key Attitudes for Successful People
1. Self-confidence
2. Empathy
3. Self-control
4. Integrity
5. Curiosity
6. Perseverance
7. Optimism
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boys2-men-medium.com-10 Habits That Change Boys Into Men.pdf
Better Communications Comes from Better Communications Skills
- Focus as a group
- Bring the right attitude to the conversation
- Understand the audience roles, motivations, credibility (and gaps) and temperature they bring to the meeting
- Be prepared (not rehearsed) >> find your voice, passion on: the roles, issues, impacts, solutions, progress, gaps and challenges, opportunities, success keys
- Follow the IBM LSP model to id problems, impact, solutions and agree on a plan
- introduction and rapport
- IBS - initial benefit statement - why are we here now?
- Qualifications - get agreement on >> what are your challenges now? solutions? results and history? road forward?
- FBR - get agreement on >> Feature, Benefit, Responses on a solution strategy
- Trial close to qualify the close process and find objections and decision authority
- Clarify and Manage Objections >> validate agreements
- Agree on the Action Plan
- Follow up on any prior outstanding items and actions
- Survey the audience for better understanding
- Listen to understand, not respond
- Ask for clarity and concrete examples when needed
- Get agreement on the problem, impacts and value before the solution
- Ask where are we now? then understand then respond
- Don't give the answers
- Let the audience find the right answers by asking the right questions
- Pause for impact and understanding
- Have everyone answer what the solution looks like? Why?
- Have each party provide the VCRS - Value, Cost, Risks ( What's it take to do it right? ) and Support ( What's needed from each of us when ? )
- Work through the VCRS as a team
- Set the next action plan, responsibilities and commitments and then follow up
- 3 outcomes from meeting:
- 1> committed action plan
- 2> more research on the solution, problems, impacts, responsibilities, roles, resources
- 3> end the effort because the VCRS doesn't it make it worth the effort
Potential Challenges
Maxing ROTH contributions annually
Banks randomly cancelling customer accounts - AI algorithms will make this worse
https://www.yahoo.com/news/why-banks-suddenly-closing-down-155511987.html
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But there are almost always red flags — transactions that appear out of character, for example — that lead to the eviction. The algorithmically generated alerts are reviewed every day by human employees
Candidate Solutions
Annuity vs Traditional Investment Accounts
Annuity ? High commissions, stable returns
Investment Account ? Higher returns and losses, lower commissions
JimK plan
IRA, 401K Accounts
Roth IRA, 401K Accounts
Annual contributions limited by MAGI
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JEM Hedge Fund
Tailored portfolios to meet different goals
Low growth, high income, moderate risk
All have dividend yields > 4%
- ATT
- high yield and high long-term risk on stock price - dropped to #3 in wireless, HBO MAX may be an also ran in streaming wars
- no dividend risk based on short-term cash flow
- yield almost 7%
- Verizon
- good dividend with no risks now
- number 1 in wireless but may drop with price wars from T-Mobile, ATT
- yield > 4%
- IBM
- declining revenue company with good cash flow but high debt service levels
- dividend safe now
- yield > 5%
- Citizens Bank
- strong regional bank ( number 10 US ? ) with some growth
- high yield because of COVID economy and failure on a stress test
- analyst recommended
- yield > 6%
Strong growth, moderate income, moderate risk
FAANG + Microsoft + Salesforce + Johnson & Johnson + Walmart + ???
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most are segment leaders so they have a wider moat
High growth, high risk
Small tech companies
what are the odds it's the next Amazon or Microsoft? Low
Stable income, low risk
ETFs like PGX that tie to bond market more than stock market
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- return averages > 5%
- pays monthly
- invests 90% in US financial institutions preferred stock so in bad times not likely to get cut like common dividends
Trusts for Wealth Transfer
Revocable vs Irrevocable Trusts
Medicare Trusts
A Smart Option for Transferring Wealth Through Generations: The Dynasty Trust
https://finance.yahoo.com/news/smart-option-transferring-wealth-generations-083007593.html
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The problem is if you transfer assets outright, you are exposing those same assets to a second generation of estate taxes. And if you try to transfer assets directly to your grandchildren, you could be exposing those assets to a third set of taxes called generation-skipping transfer tax (GSTT). That is the dilemma. Most people I deal with who want to include their grandchildren in their planning just do not realize those assets could be subject to another tax due.
Trust options
if you own a Family Limited Partnership (FLP) or Limited Liability Company (LLC), possibly owning real estate or having a large equity portfolio, these assets offer tremendous gifting and wealth transfer opportunities. You do not even have to give up control of these assets, you just must want to provide for your family one day in the future and protect them for always.
Dynasty Trust
A dynasty trust is created to transfer wealth from generation to generation without being subject to the various gift, estate and/or GSTT taxes for as long as the assets remain in the trust, based on applicable state laws. In addition, a dynasty trust can protect those assets from creditors, divorcing spouses and other issues.
A lot of people use an irrevocable life insurance trust (ILIT), and they transfer the assets free of trust upon death. And most living trusts are transferred the same way, without the benefit of being held within trusts.
Why not transfer assets in trust and protect those assets? You are not taking anything away from your children, and all you are doing is adding a layer of asset protection and protecting them for generations to come.
How Dynasty Trust works
A dynasty trust is created in most cases by Mom and Dad. It can include almost any type of asset — life insurance, any type of securities you want to gift, limited partnership interests, etc. — other than qualified retirement plans. The assets are held within the trust, and when the grantor passes away, the trust can automatically subdivide into as many new trusts as you have named beneficiaries in the trust. This is a bloodline trust.
So, if you have three children, it divides into three new trusts, dividing the assets equally among the three. When each child passes away, the trust subdivides again for their children (your grandchildren) in their respective trusts, and again the assets are divided into equal shares.
The trust offers broad powers for health, welfare, maintenance and support. So, the children can use the money as they deem appropriate, investing it or taking income out, etc. The trust is protected, and all assets and the growth thereof held in that trust avoid estate taxes when structured correctly. You must have a trustee or co-trustee, and a qualified estate planning attorney drafting and executing the documents.
Including life insurance in your trust compounds the future liquidity of the policy, and there are different ways to pay for the life insurance in this trust through the various gifting options available.
Let us assume you have a limited liability company that owns real estate, and you want to transfer that real estate to the children one day in the future. Why not gift non-managing member shares of that same LLC to the trust, and allow those shares to generate enough income to buy life insurance within the trust? Think about this: You are taking a tax-favored and leveraged asset — life insurance — and now making it tax-free for generations to come. Life insurance is a very effective vehicle for wealth transfer planning. Additional advantages of this planning: no annual gift tax returns and no Crummey letters required. When you gift assets for life insurance or various outright gifts you use a vehicle called Crummey gifts (named after the subject of a landmark tax case in 1968), otherwise you could be subject to taxation on the gift.
If you want to protect your children, their children, and your great-grandchildren, and provide for them, put a dynasty trust together, buy life insurance, and you are on your way.
Step-by-step guide for Example
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