Posted on October 20, 2008 @ 9:57 pm - Written by BawldGuy
For nearly two years now, I’ve been doin’ my best to convince folks to take a step back when it comes to job related retirement plans, mostly 401k’s. Not content with criticizing them generally, then with specificity, I also offered what I believe to be an incredibly superior alternative — the EIUL. (Equity Indexed Universal Life — it’s an investment grade insurance policy.)
For the record, the photos in this post have as much to do with its substance as most dollars invested in 401k’s above the employer’s match do with a happy retirement. (Dude, that was harsh.)
The primary exception to my advice to abandon 401k’s, is employer matching. To the extent your company is puttin’ in a buck for every buck you are, keep doin’ it. Duh. ‘Course even then yer gonna face some daunting crappola (technical investment term), when you enter the pre-retirement and retirement phases of your life. 100% of that crappola will be income tax related — and no, it won’t be taxpayer friendly. Still, having your savings doubled before you even get started lookin’ for return ain’t bad.
Before continuing, be clear on something near and dear to my heart. We make nothin’, zero, nada, zilch when our clients redirect some of their dollars from 401k’s to EIUL’s. Not even a courtesy referral fee of any kind. We don’t want it. Then why do we do it, when we could just as easily advise folks to invest that redirected capital into real estate?
That one’s easy — ‘cuz it’s the right thing to do. Duh. Read the rest of this entry »
Posted on October 17, 2008 @ 11:22 pm - Written by BawldGuy
If you’re unsure about what we’re referring to here, just scroll down to the post immediately below. It’s pretty straightforward.
Let’s skip to the chase here, ‘cuz it’s Friday night, and I’ve got some studyin’ to do. Takin’ care of my periodic requirement for continuing education. It’s an entirely worthless endeavor, but the state has made it abundantly clear they disagree with my assessment. 
To that end, I’m playin’ their game like a good licensee, pretending their silly ‘education’ is worth more than a used Snickers Bar. Boy, did I wander off the reservation with that crud, or what?
Anywho, what loan did you choose? Here’s the bottom line for all three of ‘em. All figures are the for 5 year holding period. And yeah, I don’t make mention of the $2,000 difference in points between #1 and the other two loans. It’s not a factor in this analysis, as loans 2 & 3 both require 2 points. Much of the time points do factor in when deciding upon different loans — just not this time.
Here’s a snapshot of the pertinent info. Read the rest of this entry »
Posted on October 9, 2008 @ 11:05 pm - Written by BawldGuy
As I write this it’s still Thursday, which means Josh and I had lunch at Mom’s, or Grandma’s, depending upon who’s doin’ the talkin’. Though retirement didn’t come up in conversation, something she said reminded me of data I ran across about a year ago. It was both surprising and an impending nightmare for a large and ever growing segment of the country.
The average Joe/Jane arrives at their 58th birthday with a 401(k) valued at less than $60,000 give or take.
Read that sentence again, and let it sink in.
58 today? Have $1,000 for every year you’ve been breathin’ on the planet, saved up for your glorious retirement?
Ever heard of the colloquialism ‘up the creek without a paddle’? Happy Birthday!
There are millions of ‘Boomers in their 40’s and 50’s. There are thousands and thousands who’ve recently realized they own a water born vessel, but without any visible means of locomotion. Read the rest of this entry »
Posted on October 6, 2008 @ 10:19 pm - Written by BawldGuy
I feel so much for those who’ve been watchin’ the retirement plans they have at work slide downward as if they’re on Teflon. Millions of Americans have worked honestly and hard building up their 401(k)/IRA’s. Seeing years, often many years of disciplined effort, shrink significantly in real time is a body blow to the spirit. I know, I’ve been there. I empathize with you.
So many of us, usually when we’ve been kicked in the groin financially, have vowed passionately if not also with righteous indignation, to take control of our own futures. By future, we meant our retirement. That word means so many different things to us, but one factor is shared by us all — the older we get the more valuable the stability and reliability of our retirement becomes.
BawldGuy Axiom: Words mean things. For example: The physics of economics will not be mocked.
What do the words ‘Take control of my retirement’ mean to you? Think about it honestly. Read the rest of this entry »
Posted on October 3, 2008 @ 9:23 pm - Written by BawldGuy
When last we left our local couple, they’d been told to, surprise surprise, Get Outa Dodge! We outlined what they’d been advised to do, and gave a snapshot of what might happen over a five year period. Though Jon and Jill get far more detail, with all the analysis you’d expect, plus their own personal Purposeful Plan, you got an idea of why they should be putting San Diego in their rear view mirror as it relates to real estate investing.
As you may have noticed, I eschew photos matching the day’s topic from time to time. Tonight’s one of those times. Also, I wanted to grab the opportunity to use the word ‘eschew’ in the post.
Today we’ll take a snapshot of what might happen if they’d decided to remain in San Diego, hoping for a better future. Let’s first review where they are today.
They own both their primary residence and a local rental house free and clear. The sale of the rental will generate $200,000 give or take. The family’s income is around $127,000 yearly. They live frugally. Their credit is excellent, and they have $50,000 cash savings, which will act as their Sominex Account (cash reserves). You can read what I advised them to do by reading Wednesday’s post.
We’ll make some assumptions first. Read the rest of this entry »