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Should You Invest In That Collectible Car?

Recently, the Wall Street Journal ran a tremendously powerful article http://snip.ly/hm9s0 about how bonds have outperformed stocks since 12/31/1999.   Over long periods of time, historically stocks are more volatile than bonds but also outperform bonds over the long term.  The question is will this trend continue this century?  Since 2000, investors have turned to adding an additional asset class to the cash, stock, and bond mix by putting more money into ‘alternative investments’.  These include investments such as REIT’s, commodities, and precious metals. Increasingly I am getting asked questions about other types of investments.  One couple was debating the question about whether it would be better to put $75,000 more into improving their home for long term equity value or would it be better to put $75,000 toward repairing and restoring a 1970 Chevelle that they owned.   Without delving into the question of what would get more use, the home or the car, my immediate challenge was around what would provide ...

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The 15 Minute Plan

Have you seen those commercials for fitness programs that say all you have to do is spend 15 mins a day in their program and you will get lean and fit.  You know, they show a before and after picture of someone that has been through the program.  Now, I do not know if they work, but I do know if you stick with any kind of plan you will see some kind of results. It is no different with your finances.  You have to have a plan and stick to it.  Here are some steps to your 15 minute plan. The start of any plan revolves around cash flow management.   In the 17 years that I have been in financial planning, I have found that the most successful people are those that can create, manage and read an Income-Expense statement.  You start with a system for collecting your data.  You can use pen and paper; an Excel spreadsheet; a ...

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Three Investment Lessons To Teach Your Children

While many families across America are struggling to figure out how to save for retirement and handle their monthly budgets, it becomes more and more important to teach our children important investing lessons for their financial future.  21% of Americans think the best way to save for retirement is winning the lottery (http://www.retirementplanblog.com/defined-benefit-pension-plans/gambling-on-retirement/). That’s no surprise because everyone pretty much scrounged up money to buy a recent Powerball ticket.  Here are three different lessons you can teach your children about investing to make money. Win A Guinness Book Of World Records- This lesson is actually about teaching your kids the very valuable concept of investing in themselves.  We know that setting goals and achieving them have a very high correlation to financial success.  What about challenging your child to win a Guinness Record?  How would that be for a confidence and resume builder?  One of our very good friends Mike and Courtney Hoffman recently had their daughter Jace Hoffman win ...

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You Should Get To Know The Self Directed Brokerage 401(k)

You would think that because I’ve been doing financial planning for 25 years that I would be a flat out 100% advocate for 401(k) plans.    With the ability today to put away money on a pre-tax basis in your 401(k) or now the use of a Roth 401(k) there are many different ways to save for your future.    Many employers even offer a ‘match’ of some of the funds that you put away into your plan as an incentive and some companies even give a year end profit sharing contribution if the company has done well.    The 401(k) has now become the Gibraltar Rock for most people in their 30’s and 40’s as the main driving force for their future retirement.    In most 401(k) plans, the problem is that you are generally limited to choices of five or six target date/retirement date funds and with limited index fund choices you could be left in an absolute mess in retirement if ...

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The Five Best Infomercials Of All Time

Who doesn’t love the infomercial? When it comes to marketing, this is still one of the greatest methods to pull your heart strings and then throw you a scarcity mentality offer that will make you jump off your couch and order something today. Some historians say that Vitamix was the first infomercial ever made, and today infomercials are a lot longer than 30 seconds or two minutes. Some infomercials last as long as thirty minutes. I don’t know what your favorite infomercial was growing up, but odds are you purchased something at least once from an infomercial. Here are my five favorites. The Ginsu Knife– (circa 1980)- The original Ginsu Knife. It could cut a slice of bread so thin you could almost see through it. Remember that? This is one of those infomercials that is indelibly etched in my head from my early childhood days. It almost seemed impossible that a knife could do what the Ginsu Knife could ...

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Are Comic Books Better Than The Stock Market

Recently, the Wall Street Journal ran a tremendously powerful article (http://on.wsj.com/1PHs0Q8) about how bonds have outperformed stocks since 12/31/1999.   Over long periods of time, historically stocks are more volatile than bonds but also stocks outperform bonds over the long term.  The question is will this trend continue this century?  Since 2000, investors have turned to adding an additional asset class to the cash, stock, and bond mix by putting more money into ‘alternative investments’.  These include investments such as REIT’s, commodities, and precious metals.  However, one important alternative investment class that investors may want to pay closer attention is in the arena of collectibles, which could provide an investor with a true alternative to over the counter type investments.  Here are three to keep on your radar. Comic Books-  As Marvel has gained popularity in the theaters, so have the value of comic books.   It’s not just the original Spiderman, Superman, or Batman comic books that command large dollars.   Consider ...

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Can Bourbon Save Social Security

So I know what you are about to say, what does Bourbon have to do with Social Security.  Well nothing in regards to the distilled spirit itself.  But a possible excised tax could save the day.  Our Founding Fathers have used an excised tax on Spirits three times in American history to pay for wars.  Washington did it to pay for Revolutionary war debts.  The Great Whiskey Rebellion eventually forced a repeal.  But then Thomas Jefferson and Abraham Lincoln both used a Spirits Tax to pay for their respective wars; War of 1812 and the Civil War.  Today the Federal Government does not have tax on spirits, they leave that up to the state governments. Fast forward to today.  Social Security has been called the Third Rail of politics.  A subject that politicians do not want to tackle for fear of being ousted from their jobs.  So what are the three biggest problems with Social Security and possible solutions. The ...

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Seven Cheaper Versions Of Your Favorite Products

It seems that nobody can escape the clutches of websites like Amazon today, luring millions and millions of Americans shop at the comfort of their home computer.   As we are faced with a dizzying array of information about ratings, pricing, and performance, how are we to really know which products are better or worse?  Take a thumbs up from a friend on Facebook?  Do your due diligence through Consumer Reports?  Or, should you just hit the plethora of websites that will rate and rank everything.   Not only do we work hard on building financial plans and managing money, but we also look to see how can we can save our clients some additional money.  Here are seven ideas on getting a product that is priced higher at a similar product with a lower cost. Beats Earbuds The idea of dropping $78 on a pair of Beats headphones is completely reasonable for many shoppers. By significantly cheaper, I mean about  90% less ...

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My Roth IRA turned Five

Why is age 5 so important for your Roth IRA.  Well, there is a little discussed rule around Roth IRAs.  We know that they grow tax free.  We know that we can take contributions out at any time without penalty.  We also, know that at age 59 ½ we can start taking from either our IRA or our Roth accounts. But what most people miss is the 5 year clock on Roths.  The Roth rules say that to take distributions tax-free and penalty-free, your Roth account has to have been open for at least 5 years.  That means when you turn 59 ½ your account also has to be at least 5 years old.  I’ve been asked by clients if the clock resets each time they make a contribution; or does each contribution have its own 5 year clock.  The answer is no.  The clock starts when the account is first opened. In 99% of cases, the clock is a ...

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