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Dangerous times in the market! May 26, 2017

Posted by shaferfinancial in Finance, mutual funds, Retirement Income.
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Just wanted to put out my thoughts here. We are in a serious transition period that adds tremendous risk to all markets. We seeing more and more irrational market movements. Interest rates are being pushed up gradually, companies are reporting mixed results. Oil markets are running off of only emotions, forgetting fundamentals. Real estate and the the equity markets have both had fairly long run-ups by historical standards. And politically, there is huge risk with a new untested leader.

Now is the time to be very careful if you have market driven financial products. If you are planning to retire anytime soon, protect yourself. If you can’t emotionally deal with huge losses in the equity market, move to products that protect principal.

Frankly, I am not good at “timing” market issues and usually keep my money at work. But I have plenty of time to recover if the market goes south and have a good amount in my EIUL which won’t go south. Additionally, since half my stock portfolio is in Berkshire, which performs best in down markets, I feel safe. My oil stocks have already done poorly for the last couple years, so no more damage can be done to them.

Protect yourselves going into the summer.

There is more than 1 right answer! May 2, 2017

Posted by shaferfinancial in Finance, mutual funds, paradigm shift, Retirement Income.
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I recently pulled out and wore an old t-shirt. It was a t-shirt from an old friend who is now deceased. He was a jeweler who made fine items for folks. The ultra-wealthy from all over the east would come to buy his wares. He was a mountain of a man with huge hands. I was always amazed that those club hands could make such fine jewelry. When he walked the beach he lived on, most people thought he was some biker and stayed away from him. He like it that way.

On the back of the t-shirt is his saying: It’s better to be a well known drunk than an anonymous alcoholic.

You can imagine the looks I got when I took my son to the playground wearing this t-shirt. 🙂
Anyway it has spent way to much time tucked into my closet and now I just don’t care what looks I get.

But the saying on the t-shirt it speaks to perspective. He lived the life of a rich and somewhat famous person and pretty much did what he wanted to do. While 12 step programs are all about conforming to society’s norms around substance abuse.

Where is this all going? Well most of us conform to the norms of society in our everyday life. We go about our business never really questioning the reality taught to us by those in power. Now I am not saying that we should all go around drinking excessively and doing what we want without regards to others. But I am saying that there are always alternative ways of thinking that are just as valuable as what we have been taught.

I dedicate my life to helping people understand that in the financial world. I am grateful that so many people come to understand what I am teaching them and have found financial success as a result.

As my son is now a freshman in HS, we often have discussions about the world. I find myself having to play “devil’s advocate” with some of his now strongly held beliefs. I hope he will learn from our discussions and not be so quick to buy into what is being told to him whether it is political, financial or the propaganda from the medical system about what is good for him and what is not. I hope he learns to be a critical thinker. He will need to be.

Wall Street invents another way to beat you with “Robo-Advisors” April 6, 2017

Posted by shaferfinancial in Finance, mutual funds, Mutual Funds for Retirement, Retirement Income.
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Wall Street has always put their profits ahead of the people they advise on stock buying.
This, of course, should not be shocking. But, even I am amazed at how inventive they have become. So called “Robo-Advisors,” or using computers instead of human advisors to help folks make decisions on their market securities are being introduced. These “Robo-Advisors” are just computer programs that attempt to pick up sensitive/hidden market movements and place trades for folks. Now, most people know that Wall Street already employs computers on their own accounts [so called high-frequency trading] and these have allowed Wall Street firms to make huge profits at all of our expense. Now, they are saying that they will employ computers on your behalf. Does anyone really think that they will organize these computers to beat the ones they already have working for their own accounts?

Or is this just another marketing strategy? Retail accounts for most of these Wall Street firms are huge money makers and these Wall Street firms have generally moved to prioritizing getting company 401ks under their direction away from trying to talk to individuals. Of course once they control your companies retirement accounts they put a “representative” in charge of talking to you with cookie cutter advice. These representative job is really to just get people happy with what the marketing is, at least enough to not complain.

Ever ask yourself why it is you have so little control over “your” 401K? Ever ask yourself why you can’t access your accounts, move them, take money out when you want and need to? Ever ask yourself why the investment choices are so minimal? Wouldn’t it be great if you could control $Billions of dollars of other peoples money with those people having so little ability to wrest control of their money away from you, pretty much having to leave their job to do it? And if you were in this position of controlling all this money, why you would suddenly stop putting your own trading accounts ahead of this other money? You earn fees on “managing” this money no matter how it does in the market. In fact, you advise people to just buy index funds and ride the out any market, which if they listen to you only stabilizes these earned fees.

Let me add all this up for you:
1. Wall Street has always put its account ahead of yours when it comes to making profitable trades and stock owning strategies; and
2. Their main concern has always been how best to market to you; and
3. They, along with the US Government, have designed a system that steals control of your “retirement accounts” from you to them. Really the only way most people can get control of their 401Ks is to leave the company they are working for;
4. Their best advice is to not do anything, just leave the thinking to them; and
5. They never are honest about the final results of this system.

So this is the system you want to be involved in? Is that match really worth it?

Now they are telling you that they will employ computer programs that will increase your returns and make you a successful investor. And these computers will in direct competition with the ones already employed on their behalf.  But, don’t worry.

Really???????

Designer of the 401K now regrets it!!! January 5, 2017

Posted by shaferfinancial in Finance, Mutual Funds for Retirement, Retirement Income.
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Folks who read my blog know how much I dislike the 401K as a retirement vehicle. I have often pointed out that the original design of the 401K assumed it was a supplemental strategy to go along with pensions and other investing for top level corporate executives. It was never intended for use as a single retirement vehicle for average salaried workers.

Now in an article in the Wall Street Journal written by Timothy Martin, one of the original designers basically comes out and says what I have been saying all along.

From the Wall Street Journal Piece:

“His hope in 1981 was that the retirement-savings plan would supplement a company pension that guaranteed payouts for life. Thirty-five years later, the former Johnson & Johnson human-resources executive has misgivings about what he helped start. What Mr. Whitehouse and other proponents didn’t anticipate was that the tax-deferred savings tool would largely replace pensions as big employers looked for ways to cut expenses. Just 13% of all private-sector workers have a traditional pension, compared with 38% in 1979. “We weren’t social visionaries,” Mr. Whitehouse says. Many early backers of the 401(k) now say they have regrets about how their creation turned out….

“The great lie is that the 401(k) was capable of replacing the old system of pensions,” says former American Society of Pension Actuaries head Gerald Facciani, who helped turn back a 1986 Reagan administration push to kill the 401(k). “It was oversold.” ”

So in short, corporations took advantage of the 401K to reduce pension obligations and the need to put aside $$$ to cover those obligations in both good and bad markets. They found this pension cash flow need hard to manage in varying markets. But, individuals are expected to be able to handle this cash flow issue?

I have said it before many times, but sequence of return risk is the greatest challenge to individual retirement savers. And the vast majority of workers have no idea what sequence of return risk is, let alone how it can devastate their retirement savings.

Now that the Wall Street Journal is even on board, isn’t it time you gave me a call?

Are people waking up to the issues of mutual funds as retirement vehicles? October 17, 2016

Posted by shaferfinancial in Finance, mutual funds, Retirement Income, Uncategorized.
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An interesting trend is occurring with the people who are contacting me about EIULs. I am getting a lot of calls from folks in their early to mid thirties who start the conversation off with something like this: My 401K is going nowhere, I know there must be a better way to save for retirement. Now I find this very interesting because most of these folks weren’t in the market in 2008, the last time we saw a significant negative year.

I had this conversation recently with a 35 year old.

DS: What are you trying to accomplish?
Client: Well, my 401K is going nowhere, so I am looking for something that will do better and work for me.
DS: When did you start your 401K?
Client: Well, I don’t really remember, but it was somewhere around 2008 or 2009. Before that, I really didn’t have a great job and I wasn’t married so I was spending everything I made.
DS: Do you own a home?
Client: Yes, after getting married, my wife and I were able to buy a home with assistance from our families.
DS: How much are you able to save now?
Client: Well, between my wife and myself we are saving around $1200 month including what we put into our 401Ks. Before our 1st child was born, it was a little more.
DS: Do you remember the stock market dropping significantly?
Client: Well, I do remember it, but it did’t really affect me, so my memory of it is vague. Around 2007 or so right? But we do remember the housing prices dropping, because we were able to pick up a nice house for a decent price in 2010.
DS: Yes, 2008 was the last time we saw a big drop in the stock market.

What is surprising to me, is that this 35 year old recognizes the issues with mutual funds even though he hasn’t had a truly big negative year. People tend to forget the fear of big drops in ones finances, but the scars remain long after the memory fades. But, this person was able to recognize the issue without the scars or the memory. And he isn’t alone. I have been getting increasing amounts of calls from folks in this same situation and similar age group.

That is progress.

Bawld Guy Retirement Income Seminars July 3, 2015

Posted by shaferfinancial in Mutual Funds for Retirement, Retirement Income.
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Retirement Income Seminars. Jeff Brown has organized monthly seminars around the country that are focused on strategies for maximizing retirement income. As you know I have for a long time used real data to develop efficient retirement income strategies that work. For years Jeff and I have put together purposeful financial planning based on a multiple prong strategy of real estate investing and EIULs. The data on successful retirement strategies is succinct in documenting what works and what doesn’t work. The seminars present experts on all aspects of successful retirement income strategies including myself. Please look over the list below and visit the link the month of the seminar you can make. The small cost of attending could be the most important decision you make in creating a fruitful financial future.

Bawld Guy Live

2015

Detroit, MI July 10-12
Dallas, TX August 7-9
Las Vegas, NV September 25-27
Newport Beach, CA October 23-25