Archive for financial adviser

You Cannot Save Your Way to Retirement!…Featuring Michael Douville

Posted in Michael Douville with tags , , , , , , , , , on September 2, 2017 by paulthepoke

MichaelProverbs 3:1-2 My son, do not forget my teaching, but let your heart keep my commandments, for length of days and years of life and peace they will add to you.

Everyone looks forward to the day you stay home when everyone else is working. A lifetime of work obligations has finally come to an end; your time now belongs to you! Unfortunately, a new set on concerns emerges: how will the bills get paid when you quit working? Will the Nest Egg last 30 years? How much is enough?

It is always a surprise to realize just how expensive Life can be. Retirement is not necessarily cheap. This is the time when dreams are realized and Cruises are booked, Flights are booked, Motor Homes bought and travel plans are made. You and your spouse have planned for years to enjoy a trouble free and worry free life. Grandchildren are visited and taken to Disneyland or Lego Land, memories are made to last forever. However, very few will enjoy their “Golden Years”.

The average baby Boomer turning 66 today has earned a Social Security payment of approximately $1404 a month. This is for someone who has forgone “Early” payments and has waited to receive the “Full Retirement” benefit. Unfortunately, most Retirees take early retirement as soon as they qualify at 62 and the monthly revenue drops to $1077 per month. Either way, most working couples can count on Social Security for well less than $2800/month; for Life! Hardly riches to fund Cruises or Motor Homes! In addition, the average “Nest Egg” is $109,000. Sorry, it needs to last a long time and annuitized, results in a monthly payment of less than $400 per month. The Government Accounting Office tracks these statistics and it is even worse than this scenario: the average Baby boomer receives less than $19,000 a year and has a net worth of less than $35,000. Further, many retirees are 100% out of money within 10-20 years of retirement. This has resulted in a record labor participation rate of 62% for workers aged 75+; retired and back to work! Saving and conserving is woefully lacking in preparing for an American Retirement. Everyone MUST invest.

There are basically 4 asset classes for the average American: Stocks, Bonds, Commodities, and Real Estate. Stocks and Bonds have done incredibly well since 2009. So well, many believe a bubble exists in both asset classes. Stocks have enjoyed a Market with virtually no corrections or downturns for years and may be extremely overdue and overvalued. Risk in the Stock Market may be much higher than many realize. An average recession results in a 39.6% loss in most portfolios; at 66, there is not time to re-build. Bonds have been calculated by Martin Armstrong to be close to a 5,000 year high with interest rates below the ancient Sumerians! Any rise in rates devastates a Bond portfolio and with rates this low, yields are likely to rise more than fall.

Commodities have been devastated and although prices seem to have stopped falling, it may be after the next recession before they recover. Real Estate is also subject to Market Declines that devastate other Asset Classes, but the Cycle length is much longer while the Cash Flow component mitigates any market turbulence. The Cash Flow is a great help during Recessions when business is struggling.

Rental homes continue to consistently provide monthly cash flow even in down turns and historically have appreciated gaining in value and monthly rental cash flow. Rental homes are perfect for Retirement planning and can be held inside retirement vehicles like Self-Directed IRA’s or can be held personally where they often offer Tax Shelter to qualified owners. Cyclically, Real Estate enjoys a long 18.5 year average duration and although corrections in an ongoing Bull Market can occur, accumulation for a cycle review in 2023/2024 could be appropriate.

It is never too late to start an Investment Program. Please review with your financial Adviser. If I or my staff can help, the first step is just to ask and the first consultation is always FREE!

https://michaeldouville.com/cannot-save-way-retirement/

 

Rule #1 – Never Rob Your Own Bank…Featuring Michael Douville

Posted in Michael Douville, Uncategorized with tags , , , , , , , on August 16, 2017 by paulthepoke

MichaelJeremiah 22:13 Woe to him who builds his house by unrighteousness, and his upper rooms by injustice, who makes his neighbor serve him for nothing and does not give him his wages.

“Willie” “Joe” and “Al” have lived their entire lives in the “Neighborhood”. Their total working career consisted of working for Semtec Steel; a company very similar to many current Companies that have promised to repay their employees for their Loyalty and Sacrifice by promising benefits for Retirement. Through bad business practice, mismanagement, and possible shady deals with Williamsburg Savings Bank, the Pension is now broke. The three are devastated and realize their feeling of Loyalty to the Company has been misplaced and NO ONE CARES! The Bank is at the center of the Default and the three Retirees decide to “get their money back” and rob the bank!

What a delight to watch acting legends Michael Cain, Alan Arkin, and Morgan Freeman portray these stunned and desperate Pensioners. Very endearing performances bring the story to life. Veteran actress Ann Margret plays the female love interest with charm and allure. Going In Style is entertaining and enlightening; well worth the time and money. Going In Style is fictional, the story is not!

 

How many workers have spent their career working for Fortune 500 companies that have gone broke and taken the Pension with them? Who can remember Pan Am, TWA, Piedmont Airlines, America West, Patriot Coal, Bethlehem Steel, LTV Steel, or the infamous Enron Energy. These were great companies; great places to work. The bankruptcy always seemed to be a surprise to the employees. However, the results were predictable; the Employee Pension went into default and benefits were either completely eliminated or greatly reduced. A complete shock and disruption to the Retirees. The pattern seems to be repeating.

Pension funds in general are enormously underfunded. States such as Illinois, California, Maine, and Connecticut, as well as municipalities like Hartford, Connecticut, Stockton or San Bernadino in California, or even Puerto Rico may renege on promises and devastate those depending on benefits. THE BENEFITS ARE NOT COMING. Many, many Fortune 500 companies have Retirement Accounts vastly underfunded. As a result the next Recession will have casualties beyond corporate Liquidations, many Pension Plans WILL default. It is time to make tough decisions.

 

Discuss options with your Financial Adviser as to early withdrawal penalties for any fixed benefits you may be entitled. Those that exit early are often the greatest winners. Cut expenses, pay down debt particularly Home Equity and credit cards. Eliminate unnecessary purchases. Build a reserve; accumulate at least 60-90 days worth of expenses in Cash; keep the Cash close and NOT in a Safe Deposit Box in any Bank! Consider taking profits on a significant portion of your Stock and Bond portfolio which might be re- deployed in cash flowing assets to mitigate any losses from Wall Street or a Benefit Plan. Entry level single family homes in the growth corridors of Florida, Houston or Dallas in Texas, or Maricopa County in Arizona should provide a safer re-allocation strategy with conservative, consistent monthly Income. Take your personal preparations very serious; these are “Interesting Times” we live in!

https://michaeldouville.com/rule-1-never-rob-bank/

Retiring Wealthy Today, Back to Work in 10 Years?…Featuring Michael Douville

Posted in Michael Douville with tags , , , , , , , on August 7, 2017 by paulthepoke

MichaelProverbs 6:6-8 Go to the ant, O sluggard, observe her ways and be wise, which, having no chief, officer or ruler, prepares her food in the summer and gathers her provision in the harvest.

Plans! So many plans are made for the “Golden Years” when the kids braces are paid, first cars have been bought, tuitions have been paid, and the Age of Retirement has been attained. The “Nest Egg” of Retirement Funds, Savings, and Social Security should last a lifetime. A Lifetime can be a long time!

The GAO (Government Accounting Office) keeps track of the Retirement Statistics and reports startling findings:

A) 52% of Americans 55 and over have NO retirement Savings.

B) 48% that have Retirement Savings have a median amount of $109,000. This annuitizes to $405 a month.

C) 50% of Baby Boomers will be out of money within 10-20 years

D) The average Baby Boomer’s net worth is $34,760 with Income of $18,932.

These terrible facts have resulted in Seniors returning to the workforce in vast numbers distorting the employment statistics. Notice who is ringing up your groceries, stocking the shelves at the hardware store, or preparing your coffee. These retirees are not in the workforce for entertainment or to pass the time, they need to pay the electric bill, buy tires for the car, and pay for their prescriptions. In 2013, 9.6 million jobs had been recovered, 7.2 million went to those over 55. The trend has accelerated. Here is a Chart of age labor participation:

Retirees are Broke! The highest participation rate for 2017 is the 75 years old and up (10 years after retirement?) with a participation rate of 62%! Failure to plan is planning to fail. Those that planned have higher risks they may know.

There are so many Red Flags and Black Swans in the Global Economy; there should be none. Recessions are the final segment of the Business Cycle and they come with regularity. It has been 9 years since 2008; the cycle may be completing. Also, the average Baby Boomer’s wealth is parked in the Stock Market; typically 70% with 20% in Bonds. The regular, average Recession causes losses in Equities of 40%. At 65, you do not have time to wait for a rebound! A Recession is coming, no one knows when. What will happen to your Dreams, your Plans, your Security if you lost 40% or more? Still feel Wealthy? Still feel Secure?

It is not necessary to consistently place your Portfolio at Risk. In times of uncertainty, consider taking profits and going to CASH with a significant portion. Speak to your Financial Adviser about an Exit Strategy if the Market turns against you. Review your debt load and monthly obligations; reduce your costs. Consider other asset classes that do not correlate with Wall Street like very conservative rental properties managed by Professionals which will provide consistent, conservative Income for a portion of your portfolio. Remember to have fun, you earned it.

https://michaeldouville.com/retiring-wealthy-today-back-work-10-years/

 

Paul the Poke

Habakkuk 1:5 Look among the nations, and see; wonder and be astounded. For I am doing a work in your days that you would not believe if told. -LORD God

%d bloggers like this: