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Let’s look at the results! September 19, 2008

Posted by shaferfinancial in Uncategorized.
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I regularly talk about evidence based financial planning.  I also am very public with my choices, having posted them on this blog.  Unlike the talking heads on TV, and most financial planners, I admit to my miscalculations.  Over the last year I have told readers that I moved almost all the money I had in mutual funds into other financial products over the last 5 years.  I have done this slowly over time and now have moved 90% of my money out of mutual funds.  Soon, I will have all of it out of mutual funds.  Let’s look at the results of what I have done.  I have put my money mainly into three places.  75% into Berkshire Hathaway, 20% into HCN, a health care REIT, and the remaining into an EIUL for tax protection.  Only HCN costs me anything in current taxation as it pays dividends in the 6% range. The following chart gives the reader a startling look at the results for the last year.

 

 

 

HCN up 25% (remember it also pays a dividend of 6%), Berkshire up 10%, and the S& P Index down 18% (remember that is the index; all mutual funds have expenses that dampen returns and the funds inside 401K’s have fees that average over 2%).  My EIUL return is tied to the S & P 500, doesn’t go negative and has a guarantee of 2%, so it has remained stable.  The real estate I own (outside of the REIT) with the exception of my Florida home has remained stable.  My Florida home dropped 20%, but I am still up 120% since I bought it in 2000.  I have a large investment with a real estate developer in the Boston area, that can pay off at any moment in the neighborhood of 40-50% return on capital (It also can fail to get any return of capital).

Now, these returns are wonderful.  Not all my years have had similar returns.  But since I started moving out of mutual funds into more concentrated positions I have beaten the S & P 500 return every year.  Now here is the main point.  I am no stock picking genius.  I am not even lucky.  I simply have made a bet on riding Buffett’s ability and looked at obvious demographic changes.  Anyone, with a little nudge in the right direction can do what I do.

Isn’t it time you joined the Shafer Wealth Academy?  You know that $1950 tuition is gotta be looking real cheap compared to your mutual fund losses.  Time to learn to take control of your finances from those “geniuses” that brought you into this situation?

www.shaferwealthacademy.com  and fill out the contact form!

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