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About this blog

All about Personal Finance, Money, Finance, and Business. I will throw in some helpful leadership advice from business leaders.

Entries in this blog

Best Stock Brokerages for the Average Person

If you have a lot of money and don't care about small fees per transaction.... Try TDAmeritrade.com which will allow you to research deeply and have access to almost every market available.   If you are the average guy who does care about fees and have $15,000+ to invest .... Try Robinhood.com it is an app on your phone and now a website which is the absolute best brokerage since there are no commission fees. That is right... you heard me correctly. ZERO Commission!!!   You really can't beat zero.     If you are the average guy with just a small amount of $ or even a child and want to learn about stocks You want to easily buy into some of the best stocks available out there such as Amazon and Google.   You want to see nice brand logos next to your purchases. The genius of Stockpile is that it allows you to buy fractional shares of the brands that you love. .99 cent commission per trade is not bad either.  

Money & Finance

Money & Finance

Understand the Concept of Passive Income

Essentially, passive income is money acquired without using your personal exertion . It’s income that is not linked to hours worked. If work is required, it is usually done one time with the money paid multiple times. There are two forms of passive income: Income derived from business and income derived from investments. Business income is the money that one receives without actually needing to work in the business. One acquires a business that is either run by someone else or is self sufficient. The profits generated are taken out by the owner thus yielding passive income. Robert Kiyosaki is the most famous advocate of this principle and has been teaching it for decades, read Rich Dad Poor Dad . Income derived from investments is making money from money. Instead of you working for money, it is putting your money to work for you. depending upon the investment, a rate of return is realized which generates passive income. Examples of this are dividends from stocks, appreciation in real estate, interest on savings, etc… The wonderful aspect of this type of income is that the money is created regardless of one’s efforts. If you don’t show up for work, the income still exists. You will earn the same while at work as you would sitting on the beach. In addition, this allows one to increase their overall efforts. If your money is working while you are focusing on something else, you are, in effect, paid twice for your time. This is called leverage and it’s easy to see how it is possible to create massive wealth under this scenario. Focus your attention on creating passive streams of income. It holds the key to all financial freedom.

Money & Finance

Money & Finance

 

Stop the Presses! - IBM Watson (AI) has been matched with an ETF

Innovation with IBM Watson The underlying fund investments in AIEQ are based on the results of proprietary quantitative models developed by Equbot with IBM Watson artificial intelligence. The AI Powered Equity ETF (NYSE: AIEQ) may help U.S. Equity investors enhance their ability to realize market appreciation and diversify their strategic alpha portfolio exposure.

Money & Finance

Money & Finance

 

ALEC Attacks State Pensions Funding Assumptions - Why?

The phony assumptions that go into calculating public pension underfundings in the United States are a frequent topic for us.  As our readers are aware, state pension administrators are given fairly wide leeway to simply pick a discount rate out of thin air.  Of course, since pensions are nothing but a massive stream of future liabilities that stretch out into perpetuity, every 100 bps increase can substantially, and artificially, lower the fund's reported underfunded level.   In fact, we estimated the impact of higher discount rates on underfunding levels in a post entitled "An Unsolvable Math Problem: Public Pensions Are Underfunded By As Much As $8 Trillion"...here was the result: Fortunately, we're not the only ones that see through the ridiculously phony assumptions that go into duping retirees and taxpayers as the team at American Legislative Exchange Council (ALEC) has just dropped a report which reviews the financial health of public pensions all over the country if you toss out their 7.5% discount rate and replace it with a risk free rate... Faulty accounting and reporting methods obscure the magnitude of unfunded liabilities. Partly in response to the devastating impact of the Great Recession, the Governmental Accounting Standards Board (GASB) made two significant changes in 2012 (Statement No. 67, Financial Reporting for Pension Plans and Statement No. 68, Accounting and Financial Reporting for Pensions) to the methods used for measuring the financial health of pension plans. GASB intended these changes to increase transparency, consistency, and comparability of pension information. Public pensions are now required to report their assets and liabilities using a standardized actuarial cost method, to disclose investment returns, and to include unfunded pension liabilities on state balance sheets. Unfortunately, states have found ways to work around these requirements and paint an unrealistically rosy picture of their pension funding status. The Center for State Fiscal Reform at ALEC analyzes the annual official financial documents of more than 280 state-administered pension plans using more realistic investment return assumptions in order to gain a clearer picture of the pension problem. The unfunded liabilities of each pension plan are revalued using a discount rate equal to a risk-free rate of return, best represented by debt instruments issued by the United States government. This year's study uses a risk-free rate of 2.142 percent, derived from an average of the 10- and 20-year U.S. Treasury bond yields over the course of 12 months spanning April 2016 to March 2017. Based on these revised investment return assumptions, we report on total unfunded pension liability, unfunded pension liabilities per capita, and the funding ratio of these plans. ...and as you might expect, the results are fairly bleak.  In terms on aggregate underfunding, ALEC figures our taxpayer-funded pension ponzis are roughly $6 trillion underfunded, or roughly 2-3x worse that the often-quoted $2-$3 trillion underfunding calculated by state pension administrators.  Meanwhile, using ALEC's discount rates, the state of California is nearly $1 trillion underfunded by itself. So, what is your personal share of these massive public liabilities?  Well, if you're in one of the 10 bottom states it's anywhere from $25,000 to $45,000.  Of course, that's the liability for every man, woman and child so the typical American household (with 2.57 residents) in those states is on the hook for $67,500 - $115,650. ALEC's full report http://www.zerohedge.com/news/2017-12-21/forget-phony-pension-accounting-heres-how-much-your-state-pension-really-underfunded ------------------------------------------------ Now ask yourself WHY such an already questionable lobbying firm of corporate overlords so tainted that even major corporations have had to disassociate themselves for backroom dealing would release such an apocalyptic view of our pension systems? I think it is because they want to undermine trust and eventually push for their extinction. Replaced by some weak and unsuccessful 401k plans used in their corporate world. Notice that instead of focusing on how they can FIX the problems they have been exaggerating they only offer Pension Armageddon as the ultimate fate. @Marra McDonald Johnson  

Money & Finance

Money & Finance

 

Small Cap, Mid Cap, Or Large? What is The Right Mix For Your Portfolio?

Before understanding the different types of mutual funds and ETFs, you need to understand market cap. Market capitalization is a quick way of determining how large a company is.
To calculate market cap, take the share price and multiply it by the number of shares outstanding (meaning shares that anyone can buy). This will give you a dollar amount, which is the company’s market cap.
Here are the most common names you’ll see, as well as their corresponding market caps: Large cap – $10-$100 billion Mid cap – $2-$10 billion Small cap – $250 million-$2 billion For example, let’s say Company A has a stock price of $10 and has 1 million shares outstanding. Their market cap would be: $10 x 100,000,000 shares = $1,000,000,000 So Company A has a market cap of $1 billion. According to the list above, this would make them a small-cap company.
Mutual funds and ETFs will often categorize themselves by the size of companies that they invest in. For example, a large-cap ETF will hold stock in only large-cap companies.
There are a few other types of market caps you may see, but not as often. They are: mega cap (> $100 billion), micro cap (< $250 million), and nano cap (usually <$50 million). Ideal asset allocation (and how to choose) One thing to consider is your own personal level of risk tolerance. Everyone’s asset allocation for stocks is going to be different based on the level of risk that they’re willing to take on. Here is the mix that I am currently investing with equities: Ticker ETF Name Indicative
Value
Ticker Equal Weight 30% RSP Guggenheim S&P 500® Equal Weight ETF RSP.IV       10% EWEM Guggenheim MSCI Emerging Markets Equal Country Weight ETF EWEM.IV 30% EWMC Guggenheim S&P MidCap 400® Equal Weight ETF EWMC.IV 30% EWSC Guggenheim S&P SmallCap 600® Equal Weight ETF EWSC.IV   It’s important to know the difference between ETFs and mutual funds, as well as their strategies, before investing. Also, understanding market capitalization is crucial before choosing your own investment strategy.
You will also want to make sure you’re comfortable with your asset allocation so you’re not too heavily weighted in one asset class. This will help you keep a well-balanced and diversified portfolio.  

Money & Finance

Money & Finance

 

Gold

Gold is a good first subject. It is also one of my foundation investments. I think it is the one investment that can get you out of the central bankers game. It is also what the elite bankers and tycoons hoard and trade among themselves. The IMF has at it's core a gold foundation. Daily you hear reports of the price of gold going up or down. I tend to view the world differently. I feel that gold is always gold. The only TRUE money. The rest out there is "currency". The value of the currencies is what goes up and down and not gold. Some other quotes about gold that I remember being told: "Gold must be bought" - Roman saying "He who owns the gold rules" - Not sure who said that first.   As for what I like to buy .... 1 oz. gold coins. I prefer Canadian Maple Leafs since they are 24K gold. I have in the past bought US 22K however I am heading toward all 24K. I stay away from Chinese Panda coins. Kruggerands are popular but are not very pretty as a coin. I really feel gold coins ought to "look" appealing. Remember though that I don't buy for numismatic value. Only for the value.   I will add more info about gold here as I come across it.

Money & Finance

Money & Finance

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