Posted on August 31, 2010 @ 5:54 pm - Written by BawldGuy
Much is said about retirement plans at social and/or family gatherings. It’s sometimes an uncomfortable conversation considering the current context of the economy the last few years. Long time readers know what I think about 401Ks/IRAs — they don’t make sense no matter how ya look at ‘em. ‘Course, if you have one, or three, and can’t quite make yourself bail out, given the taxes and penalty you’d shoulder, I understand. It’s still the best thing for most folks to do — but I empathize with their thinking. Heck, I have clients with self-directed plans who I’ve helped invest in real estate. It’s my job to do the best I can with the cards my clients deal me.
I write on a couple other real estate related blogs, one of which I’m gonna link to tonight. There are a couple posts — one in which I directly address the issue of gutting your 401K/IRA. The other builds on that one, in the sense that I demonstrated that what I tell you and my clients to do, is the same thing I just told my own daughter and her new husband.
I encourage you to read those posts at your leisure — and in the order in which I linked them. Digest what was said, read any comments and replies, then come back here, if the spirit moves ya, and let me know your thoughts. After reading them you’ll know one thing for sure — I’m consistent. 
Meanwhile, back at BawldGuy Ranch — gimme a call, will ya? For Heaven’s sake, where ya been? Let’s see what’s possible in your specific situation. Besides, I need a fix. Go ahead — enable me. 619 -889-7100 will do the job. Have a good one.
Posted on August 26, 2010 @ 7:09 pm - Written by BawldGuy
So far this month there’s been a renewal of callers wishing to talk about locations offering appreciation in value. They couch it in amorphous language, but when the smoke clears, long term or not, they’re wanting to buy properties that’ll go up in value.
I wanna be a 23 years old major league pitcher with an indestructible right arm capable of throwing 140 pitches every fifth day at roughly 97 mph. Oh, and I wanna be able to have pinpoint control with not only my fastball, but my killer curve, and my virtually un-hitable sinking change-up.
I know, I’m bein’ a first degree smart-aleck. But you get the gist, right? Nobody — well, almost nobody, is sayin’ that appreciation can’t or won’t ever become reality again. But there are a couple lines here that’ll need to cross. The line that stretches down the road year after year ’till appreciation returns — and the line dictating when you shuffle off this mortal coil. Read the rest of this entry »
Posted on August 23, 2010 @ 6:00 am - Written by BawldGuy
Written By — John Park
I play recreational poker about once a year usually with the nephews for braggin’ rights. The game can be fun to play and, even playing with nephews, it can increase the heart rate a bit. Thank goodness they fall for my incredible theatrical talents at the table and I usually collect all their chips.
Well, while poker may be fun to play and tell stories about, it only serves in this article as an analogy with what may be happening with many individuals who are setting up self-directed IRAs and 401Ks. Many people are tired of the Wall Street yo-yo of up and down performance. And, it certainly can’t make one’s heart or stomach feel any better.
Consider some facts. Read the rest of this entry »
Posted on August 9, 2010 @ 7:56 pm - Written by BawldGuy
Last Tuesday I wrote a post on another blog about a strategy available and attractive to many. This is especially true for those in their 40’s who realize that though they may indeed have a boatload of money in their ‘qualified plan’ at work, they also realize it ain’t gonna be enough when it comes time to retire. This is especially true for those of you who have several hundred grand in your 401(k) — a figure that just a couple years ago was, um, larger by six figures. Ouch.
You realize it can happen again, probably will, and if you’re in your 40’s, the market has 15-20 years to make it happen. Not a happy thought.
Anywho, take a look at the above mentioned post, and don’t forget to read the comments while you’re there.
Tomorrow morning I’ll be publishing a follow-up post inspired by the comments you’ll be able to read in the first post. I’m showing what would happen if 20 years ago you employed the strategy I’m recommending. It’s eye opening, and I suspect many will be nudged to rethink what they’ve been doin’ all these years. Here’s the link to the site. I’m not sure what time it’ll be published.
Meanwhile, gimme a call, as I’m Jonesin’ for a fix. 619 889-7100 will find me. Have a good one.
Posted on August 2, 2010 @ 6:06 pm - Written by BawldGuy
Most aren’t aware of the new rule allowing conversion to a Roth IRA from a traditional IRA. — regardless of either your income tax filing status or your income. Income? Yeah, those makin’ over $100,000 annually used to be restricted from creating Roths. That rule has now been eliminated for good. It became effective the first of the year. You’ll be happy to learn it also allows you to spread the conversion’s tax hit over three years — AND — you’ll be able to skip 2010 totally. This makes it possible to split the tax between 2011 and 2012. This tax split is only available this year. As you might imagine, this bundle of carrots offered to taxpayers has motivated a buncha IRA owners to dive into the conversion pool.
Here’re a few other facts you should know about converting to a Roth IRA Read the rest of this entry »
Posted on July 29, 2010 @ 6:46 pm - Written by BawldGuy
“The definition of insanity is doing the same thing over and over again and expecting different results” Albert Einstein
Gonna throw some reality, some empirical truth, and some food for thought about your retirement. This goes for all ages.
By the time the average American celebrates their 58th birthday, their retirement plan, in whatever form it resides, is worth less than $70,000. As thoughts go, that ain’t sobering, it’s downright frightening.
The average annual return enjoyed(?) by those with company sponsored 401Ks, the overwhelming majority of which are invested in mutual funds, in Wall Street’s own 20 year study, was less than 4%. In other words, they performed less than twice as well as the government has with our Social Security payments, which, according to the gummit folks themselves, has averaged an impressive 2%. Read the rest of this entry »
Posted on July 26, 2010 @ 10:03 am - Written by BawldGuy
Written By — David Shafer
History has pointed out that those who sell mutual funds [and stocks in general] tend toward an idealized view of the future that can be rightly called Pollyannaism [having an overly positive view]. While those selling Life Insurance tend to be exactly the opposite, perhaps alarmist in viewpoint. I try to stay in the middle of those two extremes by cementing my strategy into real life experience and data. This “middle-way” will provide the basis for this post.
When comparing two different retirement strategies it is best that we strip away as much of the hyperbole as possible, so I will not demonize those that push either side. 401Ks were originally designed as an avenue to get additional compensation to corporate upper level management. As such it was thought as simply one of many points of compensation, but one that took special consideration about immediate taxation. Long-term tax issues were best dealt with by strategies designed by tax accountants and attorneys. Since those meager beginnings, 401Ks have become the only retirement plans for the majority of workers. Note, that they were not designed to be the majority retirement plans that they have become. So as a retirement tool, they will always be a little off. Most people fund their 401Ks with mutual funds. The mutual funds offered within corporate plans are both limited and have high expenses. In fact, among corporate offered mutual funds the expenses are extremely high, 3% on average. Read the rest of this entry »
Posted on July 21, 2010 @ 5:57 pm - Written by BawldGuy
Written By — David Shafer
I always find it amusing when folks forget about the important things and instead concentrate on the minutiae. Not that the details aren’t important [they are], it’s just easy to go off the reservation getting into the small details. Whenever I talk to people about EIULs we start by talking about overall strategy. Once we have an understanding of overall strategy we can then talk about how an EIUL might fit into the big picture. But inevitably, clients want to delve down into the details of EIULs, and sometimes we get lost in those details. Because its my business to totally understand EIULs and to communicate that to clients, I often have to draw it back to the big picture. Sometimes I fail at that. Like recently when a potential client wrote me that he and his wife had decided to fund her 401K instead of fund an EIUL. We had gotten so wrapped up in the numbers inside the EIUL that we forgot the real reasons for choosing an EIUL [taxes, doesn’t drop below zero, etc.].
If you think that EIULs might fit into your overall strategy, let’s talk. But let’s remember why we like EIULs so much!
BawldGuy Here: Dave underlines a great point, which I try to make here as often as possible. Much of what keepin’ your eye on the ball, is simply keepin’ the big picture sharply focused. The idea in your overall Purposeful Plan is to retire sooner rather than later — with more rather than less — and with as much of your income as possible either tax sheltered or tax free.
The rest? Mostly happy talk.