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Review Category : For The Pros

Why Asset Allocation May Be A Sinking Ship

When I started in the business in 1991, one of the biggest fundamental teachings was the concept of asset allocation.  Asset allocation is all about the notion that different assets classes offer returns that are not perfectly correlated, hence diversification reduces the overall risk in terms of the variability of returns for a given level of expected return. (www.wikipedia.com) Today’s world of asset allocation uses these fancy pie charts that show clients cash, corporate bonds, international bonds, government bonds, large cap stock, mid cap stock, small cap stock, international stock, emerging markets, commodities, real estate, and many more different types of asset classes.   The idea of all of these asset classes are supposed to act and look a lot like magnets.  By having a balance of these asset classes, while some areas have worse years other categories will have better years, minimizing the overall risk. The world’s global economy is so intertwined that many asset classes are more closely tied ...

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How To Lead By Learning From The Powerball

A few Wednesday’s ago, a magical thing happened at exactly 10:59 p.m.. Millions of Americans were glued to the TV as the Powerball Jackpot escalated to heights never seen before in the history of the Powerball. Billboards had to change the M to a B in order to even let people know where the jackpot stood leading up to Wednesday’s drawing. And then it happened. The winning numbers for the record-breaking jackpot were 4, 8, 19, 27, 34 and the Powerball 10. With three winners across the United States, each ticket was reported to be worth more than $528,000,000. Even with 11 other winners of $1,000,000 in the state of California, people swarmed outside of the Chino Hills 7-11 in hopes of catching a glimpse of the new celebrity Powerball winner(s) who will have more press coverage than when the Beatles did a worldwide tour. While many television stations, radio stations, and newspapers were covering all of the financial, tax, ...

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Should You Be Luke Skywalker or Yoda

Most people want to be the star of the show – the hero that saves the day.  Whether you are a business owner, have employees that you manage, or part of a team, it’s not hard to be the star of the show by crushing that work presentation or exceeding your sales goals.  In life you have these hero opportunities all the time, to be Luke Skywalker, the destroyer of the Death Star and the hero of the day. However, it is the heroes or those behind the heroes that are more influential? Maybe instead of being Luke, you are better off being Yoda.  You remember Yoda, right?  The small, green Jedi Master that mentored Luke.  Being a mentor to those around you can be far more rewarding than being the hero.  We all have a knowledge base that is beneficial to someone.   Spreading that knowledge will increase your sphere of influence and create greater life wealth. Take a moment ...

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It’s All About Two Words. SUPPORT and EXPECTATIONS.

As 2016 kicks off, both small business owners and corporate executives alike will be executing their business plans at the work place.   We know that leadership and culture are two big factors that can make a business or a division of a company become successful.   I thought I would start off 2016 with a simple exercise I have used over the years to help you avoid making the biggest leadership mistake you can ever make. “It’s all about two words.  SUPPORT and EXPECTATIONS.”—-Ted Jenkin If you put these two words together, I’m going to give you four different equations to consider.  If the math is done correctly, you can lead your business or company to a high level of success along with outstanding retention.  If the math is done incorrectly, you’ll be scratching your head as why the explosion went off in your business with a mess larger than Three Mile Island. Expectations With Support = TRUST Happiness ...

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When Is The Right Time To Sell Your Business?

There are different reasons why business owners decide to build a business.  Some do it for their family legacy.  Some do it for the potential of a big cash out down the road.   Some just build a business so they don’t have to work for the man, and get the business to generate enough income to support their lifestyle.   Whatever may be the reason you start a business, the question will come up at some point on when the right time (if at all) will come to eventually sell your business.  Here are some smart money moves thoughts on when may be a good time to sell your business. Historically low capital gain rates–  Currently, we have long term capital gain rate of 15% on most items, especially if you are considering doing an asset sale of your business.    It has been very uncertain where this rate will head in 2016 or 2017 with a new President,  but 20% is ...

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Six Important Lessons For Every Entrepreneur

Most people daydream about the idea of running their own business.  The freedom to have no boss, set your work hours, and control your own financial destiny.  However, running your own business doesn’t come without taking on some bumps and bruises.   Here are ten important lessons that every entrepreneur should keep in the back pocket. Entrepreneurs Are Always Overly Optimistic-  I often use this phrase with the works; irrational exuberance.  Be very careful of letting your own rose colored lenses cloud the quality decision making your company needs based upon the facts. Measure Twice And Then Measure Again- No matter how many pro forma sheets you run and how many classes you sit through, nothing can prepare you for the certainty of uncertainty.  Make sure to margin for error in the beginning. If It Doesn’t Smell Right, Don’t Do It- You’ll have lots of salespeople wanting to sell you different solutions or products for your business.  If they don’t pass ...

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How Much Money Did My S Corporation Make

When business owners set up an S Corporation and creates a business entity, it is usually an accountant or bookkeeper (or both) that crank out the profit and loss statements for an S Corporation owner.   What can be confusing at the end of the year, because an S Corporation owner has multiple methods to receive cash through the business, is to actually figure out what you made in the business.   Taxes in many cases can be even more confusing to the S Corporation business owner.   Here’s a ‘your smart money moves’ breakdown to figure out just how much you made in your business. Salary- When you own an S Corporation, the IRS has salary guidelines on how much you should be paying yourself.  The IRS has created an outline of what’s called “reasonable compensation” that should be paid to the owner.    There are a myriad number of factors including industry averages, number of hours worked, and what is being paid ...

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Five Business Lessons From Donald Trump

Which person in the White House will Donald Trump fire first if he is elected President of The United States?    A few weeks ago, I was able to watch a piece of Donald Trump’s coming out party announcing his candidacy for President.  Whether you like Donald Trump or you don’t like Donald Trump, you have to admire his uncanny ability to be savvy about using all outlets possible to build the riches of his empire.  Trump golf course.  Trump hotels. Trump water.   It never ends.   Here are five business lessons that all business owners can learn from Donald Trump. Use The Media To Expand Your Reach I read this excerpt from www.commondreams.org about Trump’s initial speech. Already the commentators have derided his massive egotitis – he said “I” 195 times in his announcement speech, not counting the 28 times he said “my” or “mine” or the 22 mentions of “me.” But Trump revels in self-promotion and, as one commentator wrote, ...

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The Three P’s To Picking A Fund Manager

For those that have sat in a conference room building out a new strategy for your company, you know that often the team leader will discuss the three P’s: Purpose, Process, and Payoff. With well over 10,000 mutual funds in the marketplace and now a slew of actively managed exchange traded funds, picking a mutual fund manager may end up being one of the more challenging tasks for an investor in their 401(k) plan or those with a large portfolio. Is it best to pick a fund manager that is a lone ranger? Is it best to pick a fund manager that selects funds through a team approach? I have often asked investors, which is most important to win the horse race? The horse or the jockey? To be successful as an investor, I would suggest you filter them out by using the purpose, process, and payoff system. Purpose: Do you know exactly what outcome you are looking for with ...

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47% Of Americans Pay No Income Taxes

It’s pretty interesting to look at who pays income tax in America and who does not.  That is until you realize you might just be in the top 1% of all wage earners in America and the differential in the percentage of taxes you pay relative to overall adjusted gross income does not match at all when you add up the numbers.  What’s truly amazing about the data below is that the top 1% of wage earners is about $380,354 and the top 5% of wage earners is about $159,619, but the top 5% account for 58.72% of the taxes. When compared to their share of adjusted gross income, the top 1% are almost double the income taxes against their actual AGI contributed into the mix. WHO ARE THE 47% WHO PAY NO FEDERAL INCOME TAXES? (this excerpt was taking from www.financialsamurai.com) The Tax Policy Center’s Donald Marron said they fall into three main groups: The working poor. The earned income ...

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