Welcome, Guest
You have to register before you can post on our site.



Search Forums

(Advanced Search)

Forum Statistics
» Members: 940
» Latest member: karynthirty
» Forum threads: 19,825
» Forum posts: 19,366

Full Statistics

Online Users
There are currently 36 online users.
» 0 Member(s) | 36 Guest(s)

Latest Threads
Forum: Giving to Charities
Last Post: Tessa
12-05-2017, 01:12 PM
» Replies: 0
» Views: 8,529
What Stoic Philosophy Can...
Forum: General Advice
Last Post: Williamjex
11-02-2017, 01:13 AM
» Replies: 1
» Views: 66,094
IRS is a private collecti...
Forum: History
Last Post: keltan
05-30-2017, 05:06 PM
» Replies: 1
» Views: 6,449
Interviewing a Financial ...
Forum: 5D Investing for Profit
Last Post: Swier
03-21-2017, 07:12 PM
» Replies: 2
» Views: 27,827
Private Banking Can Help ...
Forum: Charity & Giving
Last Post: hollyrbraswell
10-18-2016, 05:53 PM
» Replies: 1
» Views: 5,415
Overview of Effective Inv...
Forum: 5D Investing for Profit
Last Post: SunnySmiles
03-27-2016, 01:05 AM
» Replies: 1
» Views: 10,031
Impact of Sudden Wealth
Forum: Miscellaneous
Last Post: it-man
11-24-2015, 01:37 AM
» Replies: 0
» Views: 5,691
What will happen in Germa...
Forum: 5D Investing for Profit
Last Post: Lady Nana
10-23-2015, 07:07 PM
» Replies: 3
» Views: 10,861
Using Legal Entities for ...
Forum: Things the Wealthy Do
Last Post: it-man
10-16-2015, 03:04 AM
» Replies: 0
» Views: 5,486
Money and the Law of Attr...
Forum: Blocks to financial well being
Last Post: Amma-la
09-12-2015, 08:52 AM
» Replies: 0
» Views: 89,310

  Forum rules
Posted by: it-man - 08-09-2015, 05:34 AM - Forum: Moderators explain purpose of site and outvesting - No Replies

The following rules need to be followed when using this forum:

1.   No advertising will be tolerated on this site. Anyone posting ads will be banned and their posts will be deleted. The mods have the right to suggest a person or company that offers help or services relating to the topics on this forum, but members do not have this privilege.

2.   Posts that are off topic will be deleted. If the member who posts off topic material may be banned at the discretion of the moderator(s).

3.   No cussing or bashing/name calling of any members. This includes comments about gender, race, or ethnicity.

4.   If you are not admin or a mod, please help us police people and their posts by reporting them to the mods in a private message (copy and paste or links for forum are very helpful).

5.   Sharing info, even if it is from a different view point than what you got from this site, is perfectly fine. If you do not like the info someone is sharing then ignore it or discuss it politely.  If you feel it is being posted to purposefully insult someone or upset the board then just report it.

6.   No self-promotion or 3rd party business promotion.

7.   EMOTICONS are OK, but when they are used in the course of a conversation. Full line emoticons are OK occasionally while you are part of a conversation. 

8.   Leave all caps to the MODS only. 

9. No sexual references.

If you have an issue with a post or another member you can contact a mod/admin and we will handle it. 

Thank you for your cooperation.

Print this item

  Common blocks to financial well being
Posted by: it-man - 08-04-2015, 10:22 PM - Forum: Blocks to financial well being - No Replies

In this post, I will list a number of the most common blocks to financial well being. I have looked at dozens of articles on the web in order to compile this list. The list is not meant to be exhaustive. We are all unique which implies that we can each have one or more factors that affect our financial well being.

What do I mean my blocks to financial well being? A block is anything that stops you from being financially stable or having all of your financial needs met.

Here is the list of some of the top factors that block financial well being:

  • People spending more money than they make and often try to support a lifestyle they cannot afford. In some cases, people try to fill the pain in their lives with things they can not afford. In other cases, people lack the self-discipline to delay the gratification for the things they want till they can afford them. They do not live within a budget or spending limits, particularly on non-essential items. People can tie their self-worth to what they have rather than who they are. As a result, they overspend to improve their self-image. Rather than having a frugal mind set, people often have a pro-consumerism attitude. 
  • People do not know how to manage the money they do have (financial ignorance). We live in a world wide system that encourages the use of credit (buy now and pay later) and they fail to understand how expensive credit is. They fail to understand that the borrower becomes a slave to the creditor. They make major purchases using credit rather than saving money to make the purchase. Credit is so easy in our society that people often make impulsive purchases. 
  • People can be unemployed or under employed. They may lack education or training to get a better job. Getting a better job with more pay is only a stop-gap solution unless they also learn to live within their means.
  • People can have an addiction to drugs, alcohol or gambling that consumes a lot of their money and makes them function below their peak.
  • A recent divorce can start a financial problem because it can dramatically reduce income while having little impact on expenses. A divorce can point to deeper relationship issues.
  • Unexpected death or disability of a primary wage earner can dramatically reduce income while having little impact on expenses. These events can point a lack of planning or insurance to cover these contingencies. 
  • Medical expenses can overwhelm people. A lack of insurance or inadequate insurance can even create a lot of debt. Looking to traditional medical treatments may not be the answer to the health problems since most health issues can be traced back to an emotional root. A gap in insurance coverage or lapse in insurance policy can also cause financial problems.
  • Unexpected expenses can overwhelm people. But this can be caused by having too little savings to cover unexpected expenses.
  • People can lack money communication skills with their significant other. When a family does not effectively communicate about money, it can lead to poor decisions or overspending. Poor communication can have deeper roots such as fear of conflict.
  • People can fail to have a vision for their finances and then fail to create a financial plan. Where there is no vision, there is no direction.
  • People can find their assets wiped out in a market downturn. This problem can be caused by a lack of knowledge and/or a lack of diversity in their investments.
I would suggest that all of the problems listed above are not root issues. I have found that there is one area where you can find a root issue to any problem, financial or otherwise. The one place we can look for the root issue is inside of us - our thoughts, beliefs and feelings. These determine our outer world. Our thoughts, beliefs and feelings about money determine our financial well being. If there is a financial problem, you can be sure there is a problem with what we know, think, believe or feel about money. What we think can be greatly impacted by a lack of knowledge or ignorance. Our thinking, beliefs and feelings are shaped by the sum total of our life's experience. Our experiences create beliefs that control our behavior.

Many people believe they are victims. When we accept a victim mentality, we are 
blaming others for our problems. We can give all kinds of reasons for why we are in the situation in which we find ourselves. We might say, I can't earn enough money because I can't get a good job, because I grew up poor and had a poor education. Or we could say, the economy is down and there aren't any good jobs available.  We could say, my spouse over spends.  The list of reasons to blame others or forces outside of ourselves is endless. The problem with blaming others or circumstances for our issue is that it leaves us powerless. When we blame someone or something for our problem, we have given that person or situation power over us and our life. The way to regain our power is to take responsibility for everything that happens in our life. I realize that in some cases other people can hurt us. Children can be true victims, but adults always have a choice. Adults don't have to stay in a hurtful situation and they don't have to remain the victim in a situation. When we begin to realize that we create our own reality, we are no longer a victim. We can choose to change our beliefs, our thinking and our feelings.

I have talked about thoughts, beliefs and emotions. Let me break these three things down a bit further. I have found that my thoughts are determined or controlled by my beliefs. Beliefs are acquired through decisions we make about the things we experience in life. For example, if my parents got divorced when I was small, I could decide that my dad left because I was unloveable. It is not what happens in life that hurts us but how we react or think about what happens that hurts us. I won't go into greater details on this topic here because the book I mention below covers this topic brilliantly and thoroughly. 

I have found that emotions or feelings come from our belief system. There is room for debate about this view but perhaps an illustration would be helpful. A mom and dad have a teenage daughter who is very responsible. She has a curfew of midnight and she is always home on time. But one night the daughter is out on a date and doesn't get home on time. As the minutes tick by, her parents get worried. They are both up and thinking about why she is late. With each new thought, there is a new emotion. They think she has been in a car wreck and they are afraid. They think she forgot to charge her phone so she can call and they get mad that she is irresponsible. They think she has gone to some party and gotten drunk and they get angry at her irresponsibility. For every new thought about why she is late, there is a new feeling. I have found this interplay between a thought and a feeling for every feeling in my life. The time between a thought and a feeling is very quick and if you don't recognize the thought, you may miss it and be left with the conclusions that feelings just are and have no cause. Play around with this in your own life and see what you learn.

My experience has taught me that by looking at thoughts, beliefs and feelings, the most important one to focus on is beliefs. My perspective is that my beliefs control my thoughts and my feelings. I have found an extremely effective technique for dealing with my beliefs. I learned the technique in a book by Byron Katie call "Loving What Is: Four Questions That Can Change Your Life". You can find the book on Amazon by clicking here. In the book, Katie calls the process "The Work" or "inquiry". Byron Katie has a website with a lot of helpful information and tools, click here - http://thework.com/. There is another website where you can find trained facilitators who will help you do "The Work" on any issue you have where you need help, click here - http://www.instituteforthework.com/itw/content/helpline. Byron Katie does workshops all over the world to teach "The Work" but thus far I have found the book to be all I need. 

So learn to do "The Work" and I am convinced that you can resolve any issue blocking your financial well being. You can also resolve any other issue that is causing you a problem.


Print this item

  How to use this forum
Posted by: it-man - 08-04-2015, 01:49 AM - Forum: Moderators explain purpose of site and outvesting - No Replies

This site is intended to be used and helpful to those in the Many of One, Healing Earth Network and Hollow Earth Network families and anyone else who is interested in investing, financial issues and outvesting (click here for an explanation of outvesting) as the earth transitions to 5D (click here for an explanation of 5D) especially after the GCR takes place (click here for an explanation of the GCR and prosperity funds).

There are sections of this forum that will be used by the moderators to share information with you. Other sections of this forum will be used by the both moderators and registered users to share information. Each section of the forum has a description that is listed under the section name. The section description indicates how that specific section is intended to be used.

Forum Moderators

Print this item

  Why we believe outvesting will be possible
Posted by: it-man - 08-04-2015, 12:39 AM - Forum: Moderators explain purpose of site and outvesting - No Replies

If you have read the "What is 5d?" (click here to read it) article, you know that we expect major changes in the world economy in the near future. As a result of these global changes, there are two specific reasons why we believe outvesting (click here to read about outvesting) will be possible.

  1. We expect a number of currencies around the world to revalue at a much higher rate than exists as of 8/1/15. This revaluation is called the Global Currency Reset (GCR) or Re-Valuation (RV) in some circles. The GCR is expected to eventually affect every currency on the planet. Some currencies will go up in value and some will go down in value. When the GCR happens, those who purchased the currencies that go up in value before the GCR will be able to exchange them back into the currency for their own country and experience a significant increase in value.  The new value of some currencies is expected to increase in value by 3000 times or more when compared to their value as of 8/1/15. For example if someone purchase $1000 US dollars worth of a foreign currency, they might receive $3,000,000 or more in the exchange. There are many people in the Many of One, Healing Earth Network and Hollow Earth Network families that hold the currencies that are expect to increase in value. When the currencies revalue, many of these individuals will have more than enough to meet their own needs and the needs of their own families. The people in Many of One, Healing Earth Network and Hollow Earth Network families have big hearts and they will want to share with others.
  2. After the GCR takes place, we expect that what is called "the prosperity" funds in some circles will be released. We understand that these funds will be sufficient to pay off the debt of every person, government and business on the planet. Some estimate that the prosperity funds are worth at least 1 x 10^18. Said another way, 1 with 18 zeros behind it. The funds will pay for many projects to improve life on this planet. Examples might include cleaning up the environment, bringing out new technologies, improving the infrastructure (transportation, water, and power) on the planet. We expect the funds to also be given directly to every person on the planet to meet their basic needs. After the prosperity funds are released, there may no longer be a need for those who profited from the GCR to assist those who did not profit from the GCR.

This forum has been set up to assist those who suddenly have a lot more money from one or both of the two sources described above.

It is beyond the scope of this forum to discuss the GCR beyond what we are describing here. We do not intend to become a web site that covers this topic since there are many websites and forums that are devoted to this topic. Likewise it is beyond the scope of this forum to discuss the release of the prosperity funds. There are other web sites that discuss this topic and provide evidence that these funds exist and will be released to help humanity.

Forum Moderators

Print this item

  770 Account
Posted by: it-man - 08-02-2015, 01:50 AM - Forum: 5D Investing for Profit - No Replies

There is a little known type of investment that has some very attractive characteristics. Most  financial planners do not know about this type of account. Those who do know about this type of account call it by various names: "770 Account", "Income for Life strategy", "Secret Money account", "The Magic Contract", "The Babylonian Money Code", etc.

Characteristics of the Account:

  • The entire program is based on a very specific type of insurance policy called a "participating whole life insurance policy". Participating whole life policies are sometimes called dividend-paying whole life insurance; offered by a specific type of insurance company.
  • There are two types of insurance companies:"stock insurance companies" and "mutual life insurance companies". Stock insurance companies traded on the stock exchanges are not good candidates for this type of policy because these companies answer to stock holders and often make financial decisions to please the investors but that may be bad for the policy holders. Mutual life insurance companies are owned by the policy holders and the decisions made by these companies are only trying to please the policy holders.
  • There are only 35 mutual life insurance companies in the US. The oldest is 177 years old, the average age is 106 years old and 19 of them are more than 100 years old.
  • The agents that focus on this type of account focus on the very best of these mutual life insurance companies and these companies have paid dividends, on average, for 121 years in a row. This includes the worst economic times in the financial markets like during the Great Depression and the 2008 crash.
  • One reason you may not have ever heard of these policies as an investment strategy is because there are laws in place that preclude them from being advertised as an "investment".
  • When you purchase a participating whole life insurance policy, you become a part owner in the company and you share in the profits the company makes from underwriting and investments. The profits are received and dividend paid each year.
  • A participating whole life insurance policy allows you to add Paid-Up Front (PUA) rider to the policy. Which allows you to put more money into the cash value of the policy. Using the PUA also allows you to minimize the amount of commission paid to the agent who writes the policy which means more money goes into the cash value of the policy.
  • There are annual limits to the amount of money you can put into a participating whole life insurance policy. If you exceed these limits, the policy becomes a "modified endowment contract" (MEC) and the profits are taxable. If the policy is not a MEC, then the profits are non-taxable. The objective would be to have a policy that lets you put the maximum cash value in without the policy becoming a MEC. We use the PUA rider to put as much money into the policy as possible without it becoming a MEC. 
  • These policies are very safe because of their track record of paying dividends. The are so safe that many large banks and corporations put money into these accounts as a safe place to park their cash. When a bank puts money into one of these policies, the money is considered a "tier 1" asset on the banks books. Other types of tier 1 assets are cash and gold. This gives you an idea of the safety of this type of account.
  • When the policy is written, it has a guaranteed interest rate that is paid on the policy each year. The typical guaranteed interest rate is currently 4%. This guaranteed rate is affected by the age, gender and health of the insured person.
  • The annual rate of return on these policies average about 5% per year which includes the guaranteed interest plus the dividend paid by the insurance company. This 5% is far better than you can get on a Certificate of Deposit from a bank. This annual growth dividend is tax free. 
  • The cash value of the policy grows or compounds each year is tax-deferred.
  • With this type of policy you completely avoid risk of principal loss. The laws in most states protect the value of the policy from creditors and lawsuits. 
  • You do not have to report this policy to the IRS and it does not show up on your credit report.
  • You can access the cash value of the policy any time without penalty or withholding taxes through a "policy loan". The cash value of the policy continues to grow even though you are using the money for other purposes via the "policy loan".
  • Many financial advisers recommend not purchasing whole life policies because they say the fees are to large. It is accurate to say that in the first 2 years of the policy the fees can be high. The fees in the first 2 years include the commission paid to the agent and the mortality expense charge by the insurance company. As a percentage, these fees can be quite high but in actual dollars they can be much lower than the annual management fees charge by financial advisers to manage your money. One example, compare a situation where put in $50k for years 1 through 4, then $17,500 for years 5 through 50. The fees taken by the insurance company was $17,494 year one, $875/yr years 2-10 and $175/yr years 11-50 for total fees of $34,319. The total cash value of the policy after 50 years was $5.7M. A comparable example of investing the same amount of money in mutual fund that is assumed to pay out the same return with a 1% management fee would cost $727,311 in fees and total value would be worth $3.9M. The reason for the big difference is that the fees on the insurance policy are front end loaded but the management fees on the mutual fund is 1% per year which means the actual dollars paid in the latter years can be quite high. 
  • The estimated return of 5% per year on a policy may actually be conservative. About 65-80% of the investments that the insurance company make with the funds from these policies is in bonds. Currently the bond market is at at historical lows right now. If bonds go higher, the annual return will be higher.
  • You have several option each year when you receive the dividend from the policy (received on the anniversary date of the policy). You can: allow the dividend to remain in the policy to compound by purchasing another PUA, elect to take it as cash tax-free, use it to reduce a policy loan, or it could pay your policy premium.
  • Typically in the first 2 years, the annual rate of return is a negative number (what you have put into the policy vs cash value of policy) because commissions, the mortality expenses and other fees. But then it goes positive and stays that way.
  • What you contribute into the policy (your payments) and the dividends are tax-free. Evidently you do have to pay taxes on what you withdraw beyond your payments and dividends (call this the taxable portion). You can legally avoid the taxes on the taxable portion by taking out policy loans rather than withdrawing funds. You don't pay back the loan but it is paid back on the payout of the death benefit on the policy.
  • By using the PUA, which lowers the death benefit as much as possible, you can slash the insurance agents commission up to 70%. This reduces expenses and increases the cash value of the policy. It may be able to reduce the fees down to 30-40% of the first year premium.
  • When you purchase a participating whole life insurance policy, you will have to continue to make policy payments. So don't open it unless you plan to keep the policy for a lifetime. Because of the initially higher commission in the first year, you will lose money if you cancel the policy after just a few years. After some time, usually four to seven years, the annual returns will be large enough to pay the annual premium payments. At that point, the policy basically covers itself. The insurance jargon for that is ‘automatic premium offset.’ 
  • In the first several years the policy is held, the return rates is not that good. However, the longer the policy is held the better it gets. After about 10-11 years, it gets close to the 4% return in the policy quote examples that have been reviewed. Returns on policies for older people, for example, aren’t as great as they are for younger people.
  • With a participating whole life insurance policy, the cash value will never exceed the death benefits in order to stay within the IRS guidelines to stay below the MEC.
  • Mutual life insurance companies invest in bonds. They rarely trade in and out of them but rather hold them to maturity. If you invest in bonds that are safe and hold them to maturity, it doesn’t matter if a bond’s price fluctuates. You’ll collect interest along the way. Then, when it matures, you’ll get your principal or original investment back. It doesn’t make sense for mutual insurance companies to invest in bond funds. Bond funds trade like stocks, so they have stock market risk. Bond funds also usually come with management fees, which eat into overall returns.
  • A list of some of the Mutual Life Insurance companies that offer these policies: New York Life, Security Mutual Life, Lafayette Life Insurance Company, Guardian, One America, Ohio National Financial Service, Union Central, Northwestern Mutual, Mutual Trust.
  • Some of the mutual life insurance companies offer service called a "Premium Deposit Account" (PDA). The PDA is a great place to park your cash If you have the cash up front to pay for the policy until the policy is self-funding. The PDA pays an annual rate of return for 3-3.5%/year.

Here is a list of insurance agencies that are experts in the participating whole life insurance policies:
Paradigm Life is the agent recommended by one well known financial news letters. Research has discovered that Paradigm Life offers policies from several of the top rates mutual life insurance companies. It is not clear at this time if the other two insurance agencies offer policies by multiple mutual life insurance companies. So do your own research.

The forum post called "Critical difference between savings and investing" (click here to read it - http://5doutvesting.info/mybb/showthread.php?tid=34) talks about asset classes that fit the savings profile. You might consider using the participating whole life insurance policy as another asset in this same class since it is considered a "tier 1" asset by banking regulators.


Print this item

  Three buckets to manage your financial life
Posted by: it-man - 08-01-2015, 08:49 PM - Forum: 5D Investing for Profit - No Replies

In this article we're going to use a metaphor of a well and three buckets to represent the money game we all play in life.The three buckets are labeled “spending”, “savings” and “investing.” The well represents the amount of money available to you in any given year. The spending bucket represents the money you must spend to enjoy the quality of life you want. The savings bucket represents money you absolutely can’t afford to lose. And the investing bucket represents your future wealth.

The challenge with the three buckets is to balance the amount of water (representing money) in each one. There are two problems with this challenge. The first is that the well will give you only so much water within a given time period. The second problem is that the "spending" bucket has a big hole at the bottom of it. The hole in the spending bucket indicates that water that leaves the bucket is no longer available just as money that you spend is gone. If you can manage to fill all three buckets, you have won the money game because you have achieved balance in your financial life. 
So can this money game be won? Yes, if you play it smart. And you can win it relatively easily if you use the ideas shared here.
The money ­management system that will be discussed here is quite simple. It can provide for all of your financial needs. It will allow you to live well now... and live well in retirement.  Here each of the three buckets will be described. 
Spending Bucket
Using this system, everyone should be able to live a rich life while your assets grow, so long as you are willing to work diligently and you are smart about your spending.
Think of the typical earning/spending/saving pattern of most people who want to retire well. 
During their twenties, people spend every nickel of their modest income to make ends meet. It is nearly impossible to put aside money for the future at this age.
Their income increases during their late twenties and thirties. However, this is when they start a family and their expenses soar — children to feed, buy a family car, and the buying the first house. In most cases, they don't save nearly as much as they thought they would.
Income climbs much higher in their forties and early fifties if they work hard and make good career decisions. They have more money to put aside for the future, but they are also tempted to buy nicer stuff — cars, clothes, exotic vacations, and their dream house.
Income plateaus or even dips in their later fifties and sixties. Often this is when they realize their retirement funds are not where they would like. They may start to invest aggressively to try to make up the difference.
It often happens that they realize that they don’t have enough money to retire comfortably in their late sixties. They have spent almost forty years working hard and chasing financial security, but they never managed to attain it.
This is the sad pattern repeated by most people. This pattern even holds for high ­income earners like doctors, lawyers, and high level executives.
There are two lessons to be learned from this pattern. First, it is very difficult to acquire financial security if you increase your spending every time your income increases. Second, setting unrealistic investing goals to make up for lost time means taking greater risks. And taking more risks, makes you poorer in most cases, not richer.
The bucket spending strategy is very simple. Discover your own, less expensive way to live a rich life. What do I mean by “rich life”? I mean a life free from financial stress, but also filled with things that give you pleasure.
You can be just as comfortable in a house that costs $100,000 or $200,000 as one that costs millions. A car costing $24,000 will take you where you want to go just as well as a car that costs ten times that amount. There are many ways to live a "rich life" on a modest budget. You will be able to keep more water in your spending bucket if you figure out how to live the kind of "rich life" that suites you because you will spend less. 
So, make smart spending decisions. Do not allow yourself to think that because you are earning more money, you should be spending more. Your future financial well being is determined by how much you save and invest, not by how much you spend.
This is what you can do to live your own "rich life". Figure out how much you will spend to live your own personal version of a “rich life". You might be thinking about all the things you truly enjoyed in the last year. In many cases, you will find that the things you enjoy require very little in the way of money.
Learn to keep the biggest wealth ­stealing expenses (house, cars, and entertainment) to a necessary minimum. Carefully avoid any expenditure that has a brand name attached to it because they consume a disproportionate amount of money.
Do not give mental ascent to the idea of controlling your spending and promise to get to it sometime in the future. Begin to figure this out today. If you procrastinate, you will never get it done. 

Once you have figured out the size of your spending bucket, you can begin to figure out the size of your saving and investment buckets.
Savings Bucket 
You may be thinking that saving and investing are the same things. If you distinguish between them, you will find it easier to safely attain financial security. 
You are setting aside some portion of your current earnings for the future with both savings and investing. However, savings and investing have a different purpose. Saving is to safeguard the money you set aside. Investing is to grow your money.
The money in the savings bucket should comprise two things really. One, money that I refer to as your disaster fund — the money you put aside in case of a financial disaster. And two, anything you are saving for that you will be paying for in less than 7 years.
What would you do if one day you found out the company that has employed you for the last twenty years has shut its doors, and the pension plan that was holding you retirement was worthless?
You would have to start over. You would need money to pay for your expenses while you found a new job. That’s why you need money in your savings bucket. And that money has to be absolutely safe.
Now imagine you called your broker to get the cash in your disaster fund and he told you its value had suddenly crashed and was now worth 10 cents on the dollar? This exact scenario happened to millions of Baby Boomers when the market crashed in 2008. The reason it happened was because these folks did not distinguish between saving and investing. They had all their money tied up in investments advertised as safe, but were actually quite risky.
You don’t want to take any risk with your disaster money. The primary purpose of that money is to preserve, not increase, the money you set aside. Putting it at risk, even average market risk, is too dangerous.
The money you have set aside for any future expenditure that is coming up relatively soon should also be kept in your saving bucket. By relatively soon, I mean, seven to ten years.
Why 7-10 years? This range is somewhat arbitrary but it is considered by many to be an average
business cycle. You can put money for retirement and college into investments but when they get close ... 7-10 years or closer ... move them into safer instruments so that you can be extra sure you will have enough.

If your retirement is twenty or thirty years away, you can afford to invest the retirement money in places that are safe, but not super­-safe. However, if you retire in 10 years or less, you can not take the chance of seeing your retirement fund drop by 20% to 30%, because you will not have time to let the market correct itself.

So if you plan to retire in 7-10 years and you will be drawing on your retirement savings, you want to transfer at least 7 years’ worth of your retirement fund from your investing bucket to your savings bucket. To make sure that you will be able to have the retirement life you want, you can not afford to have that money at risk.
As you plan for a future event (retirement, college fund, etc), you will have to assume that the interest you will be getting for those 7-10 years will be small because you will be using the only the safest vehicles. This means you will have to put more money into them than you would otherwise. 

For your savings bucket, your money should only be in super-­safe investments. These are investments that are highly unlikely to go down in value in the next ten years. Given our current economy there are only a hand full of investments that might provide this safety: cash, gold coins, quality municipal bonds, and well-­bought rental real estate.  Another asset type called a "770 Account" may be stable enough to fit into this list (click here to read more). One simplistic approach would be to decide which of these vehicles you will use and then divide your savings bucket funds evenly among them. For example, if you use four of them each would get 25%.

Investing Bucket
The purpose of your investing bucket is to grow your money. This is the bucket you will use to fund all future, long ­term expenditures. "Long ­term” means more than ten years.
If you are young, you may use this bucket to set aside money for your children’s college education. But the most common reason of these funds will be for your retirement. When you look at investment returns from a long ­range perspective, even a few percentage points can make a huge difference.
Discussing specific strategies for your investments is beyond the scope of this article. However, it is appropriate to set your expectations. The returns you expect for your long term investing should be no more than 10-­15%. This might seem small to people who want to double or triple their money in the market every year, but those kinds of investors usually end up broke. And making 10-15% on your money over the long term will give you terrific results.
Your Well 
If your income is not sufficient to fill all three buckets, you have only two choices: You must increase the flow from the well you have, and/or you must dig some new wells.
You can increase the income from your primary well (your job) by becoming a more valuable employee. You may also want to create other streams of income.

One option is to start a side business. One kind of side business with a low start up cost is in entering the multi-level marketing segment. If you choose this route, pick a product you really believe in. Other ideas would be to turn what you are passionate about into a business.
Another approach would be to invest in rental property. After you have paid down the mortgage, the rental will become its own well, pumping out money to you every year thereafter.
If you decide to start your own business, find some good books to educate yourself because there will be a lot to learn.
The major point that needs to be made is if the income you are earning is insufficient to achieve your financial security goals, you should not try to get there by taking on more risk with your stocks. Instead, figure out ways to create more income.
That's it. The concepts are simple and they can work for you if you use them. So, spend the time required to figure out your own approach to “living rich” now and in the future. Make your spending bucket big enough to allow you to enjoy your life now, but small enough to enable you to fill up your saving and investing buckets too.


Print this item

  What The Rich Do With Their Cash
Posted by: it-man - 08-01-2015, 07:56 PM - Forum: Things the Wealthy Do - No Replies

If you are specifically interested in what the rich do with their short-term cash, comparable to the middle class putting money in a checking or savings account, there are several popular alternatives for those with at least a few million dollars:

  • Establishing a so-called zero-balance account. The rich investor has his or her money in bonds, certificates of deposit, commercial paper and other highly liquid debt instruments. They write checks out of the account, which has $0 in it, and at the end of the business day, the private bank sells off enough of the highly stable, liquid investments to wipe out the negative balance in the account, bringing it back to $0. That way, if the bank fails, it doesn’t hurt the investor because the underlying assets are held in his or her name, not the name of the institution. (This service is known as custody or, in some cases, global custody. The banks will charge a small fee for it as a percentage of assets in most cases.) Almost every intelligent rich person on the planet uses some form of global custody because you don’t want to worry about losing your shirt because a broker failed.
  • Parking the money directly with the United States Treasury in an account backed by the taxing power of the United States government. They can buy short-term Treasury bills and keep rolling them over until they need the money. Unless the United States goes bankrupt by hyper-inflating, they are safe.  Buffett literally has tens of billions of dollars of Berkshire Hathaway’s money parked in Treasury bills, bonds and notes at times.  There is no risk of default or bankruptcy unless the entire nation goes bust!
  • Physically holding cash in multiple currencies in safe deposit boxes throughout the world. These aren’t insured, though, so there is that risk.

Print this item

  What is the fiduciary standard?
Posted by: it-man - 08-01-2015, 07:51 PM - Forum: 5D Investing for Profit - No Replies

When it comes to financial reform, individuals should pay the most attention to the regulations surrounding the fiduciary standard. It sounds complicated, but it essentially refers to the guidelines that spell out the obligations financial services professionals have to their clients.

Currently, there are two standards that advisers and financial planners are held to -- the suitability standard and the fiduciary standard. The suitability standard gives advisers the most wiggle room: It simply requires that investments must fit clients' investing objectives, time horizon and experience.
"You can satisfy the suitability standard by recommending the least suitable of the suitable options, as long as it falls within the general suitability test," says Barbara Roper, director of investor protection for the Consumer Federation of America.
The suitability standard invites conflicts of interest pertaining to compensation, which can vary greatly from one product to another.
"And you don't have to disclose your conflicts of interest. You don't have to appropriately manage your conflicts of interest or minimize your conflicts of interest. So what that means is often the products that are best for the broker have higher costs for the investor," Roper says.
The other standard of care, the fiduciary standard, basically charges advisers with putting their clients' best interest ahead of their own. For instance, faced with two identical products but with different fees, an adviser under the fiduciary standard would be compelled to recommend the one with the least cost to the client, even if it meant fewer dollars in the company's coffers -- and his or her own pocket.
Unfortunately, many investors can't distinguish among financial planners and advisers. Studies have shown that individual investors don't know who is a fiduciary or what a fiduciary actually is.
Read more: http://www.bankrate.com/finance/investin...ard-1.aspx
A fiduciary duty is a legal duty to act solely in another party's interests. Parties owing this duty are called fiduciaries. The individuals to whom they owe a duty are called principals. Fiduciaries may not profit from their relationship with their principals unless they have the principals' express informed consent. They also have a duty to avoid any conflicts of interest between themselves and their principals or between their principals and the fiduciaries' other clients. A fiduciary duty is the strictest duty of care recognized by the US legal system. https://www.law.cornell.edu/wex/fiduciary_duty
Choosing A Financial Adviser: Suitability Vs. Fiduciary Standards
The Fiduciary Standard
Investment advisers are bound to a fiduciary standard that was established as part of the Investment Advisers Act of 1940. They can be regulated by the SEC or state securities regulators, both of which hold advisers to a fiduciary standard that requires them to put their client's interests above their own. The act is pretty specific in defining what a fiduciary means, and it stipulates that an adviser must place his or her interests below that of the client. It consists of a duty of loyalty and care, and simply means that the adviser must act in the best interest of his or her client.
Read more: http://www.investopedia.com/articles/pro...z3WFzgd1w8
The application of the fiduciary standard when applied to a trust as opposed to a charitable foundation. Very simplistic description but effective.



Print this item

  The Broker vs. Fiduciary
Posted by: it-man - 08-01-2015, 07:39 PM - Forum: 5D Investing for Profit - No Replies

Here is a youtube video called "HighTower Whiteboard Animation: Brokers vs. Fiduciaries" (click here to see it - https://www.youtube.com/watch?v=Dg5RRMAc1GY) explains the difference between a broker and a fiduciary. The video uses a metaphor of a  butcher for the stock broker and a dietician for a fiduciary. A butcher's job it is to sell you a cut of meat but a dietician's job is to give the best advice for you. Said another way, a stock broker may not have your best interest in mind and in fact may sell you the things that are best for him/her. However, it is the job of the fiduciary to look out for your best interest even it if it not in their own best interest. By the way, if you have a wealth manager at a bank or a financial adviser, you need to figure out if they are acting like a "butcher" or a "dietician".

Print this item

  6 Asset Protection Strategies To Shield You
Posted by: it-man - 08-01-2015, 07:18 PM - Forum: Things the Wealthy Do - No Replies

Have you heard of the homeless man who was sued for $5.5 million? Of course you haven’t. Lawsuits aren’t filed against those with few assets; they are filed against those with “deep pockets.” If you have substantial assets or are coming into a windfall from a sudden wealth event such as an inheritance, lawsuit, stock options sale, business sale or from a sports/entertainment contract, there are several money moves you should consider to best protect your new wealth against lawsuits and from others.

1. Increase your liability insurance. Your first line of defense in litigation should be insurance. Call your insurance broker and increase your liability limits. Make sure your personal umbrella liability coverage is for an amount at least equal to your new net-worth. For example, if you are going to receive $3 million from your Aunt Jane’s estate, tell your insurance broker that you want a $3 million umbrella liability policy. Rates are inexpensive – often $200 or $300 per $1 million of coverage. Bruce Givner, a Los Angeles tax attorney (http://www.givnerkaye.com/), recommends that his clients have a minimum of a $5,000,000 umbrella policy, and most of them opt for $10,000,000.

Tip: It’s best to make this five minute phone call before you receive the inheritance or windfall

2. Consider keeping assets separate. Depending on the state in which you live and the source of your windfall, if you deposit the money into a joint account with your spouse, this money could instantly become half theirs. For some, this isn’t an issue, but for others, this could pose a problem. For example, if you have children from a previous marriage and commingle an inheritance you receive with your new spouse, your children may get less than you expect when you pass away. This problem becomes even more damaging if you are contemplating a divorce.

Tip: If you don’t want your spouse to have ownership of your windfall, talk to an attorney and keep the assets in a separate account.

3. Protect yourself from renters. If you have rental property or expect to invest in rental property after receiving your sudden wealth, create a business entity such as an LLC or corporation to shield your other assets from a disgruntled tenant. By doing this, if your renter sues you for $5 million, they can attack the assets in the entity that holds the real estate but the rest of your personal assets are protected.

Tip: Create a separate business entity for each rental property or consider a Nevada or Delaware Series LLC, which is designed to protect each property within a single LLC.

4. Review all jointly held accounts. Any money you deposit into a joint account with your children, elderly parents, roommate, or business partner is at risk. If the joint owner files for divorce, incurs a tax lien, or lawsuit judgment, the entire account could be wiped out.

Tip: If there is a need for a joint account, keep the balance as low as possible.

5. Formalize informal partnerships. Business partnerships are ticking time bombs. Why? Just like joint accounts, you are responsible for the actions of your partner. But unlike a joint account, a lawsuit against your partner can put all of your assets at risk. For example, suppose you and a friend have an informal agreement to partner and provide consulting services. If your partner is involved in an accident on the way to a client, your personal assets can be in jeopardy.

Tip: Avoid partnerships. Form an entity such as an LLC or corporation to provide you with legal protection.

6. Create business entities to shield assets. If you have a small business or do part-time work on the side without having a formal business structure such as an LLC or a corporation, you are operating as a sole proprietorship. The “sole” means it’s just you, so unlike a partnership, you don’t have to worry about a partner’s actions . . . but all of your personal assets are at risk if you are sued.

Tip: Create a business entity that shields your personal assets from lawsuits against your company.

Sudden wealth can be a life-changing experience that can improve your life and the lives of those around you, but only if you keep it. Those with more assets are bigger targets for lawsuits. Don’t let your sudden wealth suddenly get stripped from you. Protect your assets before you get the windfall and you will sleep a little easier knowing your assets are better shielded.

(Original article posted here - http://www.forbes.com/sites/robertpaglia...ur-wealth/, but it requires registering on the site to access it.)

Print this item