Let’s take a look at some of my Super Star stocks and see how they have performed over the last 20 years. This chart show how much a $100,000 investment would be worth today based on selecting individual stocks vs core ETF’s and bonds. 

Building long-term financial freedom doesn’t require choosing between safe index funds and high-upside stock picking. By combining equities over bonds, establishing a massive core ETF base, and reserving an intentional portion of capital for individual hyper-growth leaders, investors can build a resilient, high-outperformance portfolio.

For those of you who follow Jim Cramer on CNBC you may have noticed a completely different strategy just in this last year. In Jim’s newest book, How to Make Money in Any Market. He suggests a large allocation of core EFT’s, like 60%, and then using the remaining 40% to pick 4-5 high growth stocks to maximize wealth.

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Why do you invest … hopefully to make money.

Why money … well it can help you achieve goals in life and provide you with a sense of security and freedom.

What makes some investors better than others? Sometimes it just to have a better plan.

Over the course of my career—building businesses as a tech CEO, mentoring entrepreneurs on the board of SCORE, leading a local community investment club for over 10 years, and spending tax seasons as an advanced IRS-certified volunteer tax preparer—I have seen the good, the bad, and the downright ugly sides of personal finance…

Summary

• An annuity can provide a steady stream of reliable income during retirement
• You can build your own annuity with benefits not available elsewhere
• Dividends completely cover my Required Minimum Distributions and the principle continues to grow
• Commercial annuities invest if the same types stocks and bonds you can purchase
• Commercial annuities have substantial fees, end of life limitations and no return of capital
• My investments include a taxable account, ROTH IRA and a IRA. This article covers my IRA “annuity”

Do You Own Mutual Funds – Just Beware

This is only for people who own mutual funds in a taxable account. This year some people will get clobbered with a huge tax bill and our mutual fund is losing money. They call it adding insult to injury. If you own ETF’s instead, you don’t have this problem.

So how does this happen? It’s almost a perfect story, one you won’t like. Many mutual funds had substantial gains earlier this year, then the market started to turn south and a massive number of people sold. How do we know this, well if the mutual fund price drops 25-30% like the rest of the market, then a massive number of people sold!

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Shame on all of them, Democrats and Republicans

OUT OF TOUCH!

We send our representative to Washington to work together to get things done for the American people. We aren’t looking for total BS and self-serving interests.

The Inflation Reduction Act has a lot of shame to go around, the final bill has a lot of benefits, in my opinion.

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Summary:

• Large numbers of refineries have closed
• Policy-driven Global Warming have forced refineries out of business
• No one is going to build a new refinery
• We need a better policy-plan for the future
• The US should be the world leader in energy of all types, including fossil fuels

Let’s look at a critical component of the overall US Oil/Gas infrastructure – refineries.

Most of you know, the price of oil, natural gas, gasoline and diesel is set by the global futures market …. NOT BY OIL COMPANIES

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Yes, this is the cover a 1973 Money Magazine about a year after it started publishing. Easy money policies of the Fed are designed signed to generate full employment. However by the early 1970s inflation forced the Fed to raise interest rates to almost 20%! This inflation spiral lasted almost 10 years as we went into a bad recession.

Since we are a consumer driven economy, high inflation crushes our spending power, it tends to be a spiraling process. What has traditionally stopped inflation …. a RECESSION.

Here is what you should know about our current situation.

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We all know that the Economic Impact Payments will be giving us $1,200 per adult and parents get $500 for each dependent under age 17. (subject to income limits)
That leaves out anyone 18 and older, who can still be claimed as dependents on another person’s tax return.

A taxpayer is allowed to claim a full-time student between the ages of 19 and 24 as a dependent, so the parent will not get $500 for a college student, nor can the college student generally claim $1,200. Also anyone supporting adults with disabilities and elderly dependents also will not qualify for the additional $500 check!

Furthermore, the you have to have filed a tax return to get your $1,200. Many low income and senior citizens currently don’t file, they are not required to do so. The IRS is saying that they now have to file basic information to get their checks.

While on the topic of college students, I hope parents know how to get the maximum American Opportunity Credit by claiming the right “Qualified Educational Expenses” on their returns and letting the student show the most “scholarship income” on their returns

Did you change bank accounts since your last tax filing? If so the Treasury will build a web site to allow you to make this adjustment.

The IRS has a new web site dedicated to the details of the Coronavirus Tax Relief, https://www.irs.gov/coronavirus

Among the good and bad provisions of the massive Coronavirus Aid, Relief, and Economic Security Act or CARES Act, are waivers for your 2020 required minimum distributions (RMD). Many people don’t need this money for day to day expenses, but they have to take it anyhow. 

Who Does This Apply To?

If you have to take a RMD in 2020 from any plan. for example a 401(k) or your IRA the new law says you no longer have to take it in 2020. Also included are beneficiaries, and including those who turned age 70 1/2 in 2019 and had to take their first RMD by April 1, 2020.

Benefits and An Interesting Strategy:

1. As we all know our 2020 RMDs were sky high. Our 2020 RMDs were based on our retirement account values on December 31, 2019, when the Dow was over 28,000, now it is around 22,000. 
2. When you take your RMD you pay income tax on it at the ordinary income rate and it increases the amount of your Social Security that is taxable and it can roll you into a higher tax bracket for dividends and capital gains. You get NO special tax treatment for RMD.
3. STRATEGY – since you don’t have to take an RMD, you could decide to take advantage of this situation to do a ROTH conversion. First of all, any amount converted removes those funds from your IRA, lowering the balance that will be subject to your future RMD, therefore lowers your income and tax bill for future years. Secondly, once the funds are in your Roth IRA, they will become lifetime tax free. Your Roth will also pass income tax-free to your beneficiaries. Most importantly, converting now when market values have dropped will mean that any future rebound will now accumulate tax free to you in your Roth IRA. Which is better, price appreciation of a stock in an IRA or a ROTH? ROTH!!!!!!
4. Yes, a ROTH conversion is taxable as ordinary income, just like a RMD! However, today we may be paying mush lower taxes that we will be in future years as we pay for all of this new government spending.