Alan’s Financial Tips – Ask Yourself

We saw a 50% or greater drop in equities as we did in 2008, at my age, could I absorb that loss??  Negative returns are painful. And the ugly mathematical reality is that gains and losses are nonsymmetrical.       For example, a loss of 14.08% requires a gain of 16.39% to break even.   A loss of 20% requires a subsequent …

Alan’s Financial Tips – Is There a Bond Bubble..

With interest rates for bonds so low and bond prices so high many fixed income experts think that we are in a bond bubble. Some bonds such as the Germany’s 10 year bond are selling at a negative interest rate. A COMMON MYTH IS THAT BOND INVESTMENTS ARE SAFE INVESTMENTS When interest rates decline the price and principal of the …

Norm’s Safari

Photos from Norm Olshansky’s Summer 2019 African Safari…

Alan’s Financial Tips – Tax Control

How your investments are diversified from a tax perspective will impact your ability to leverage your withdrawals during retirement. Looking at the Tax Control triangle below, there are four ways your withdrawals will be taxed. Moving clockwise from the bottom right, investments are either Fully Taxed at ordinary income, taxed at your Capital Gains Rate, and Never Taxed. A fourth …

Alan’s Financial Tips – Warnings for Excessive Debt

Rule 20 Total consumer non collateral debt should not exceed 20% of net monthly income. Rule 28 Total collateral debt should not exceed 28% of net monthly income. Rule 36 Total debt should not exceed 36% of net monthly income. There is a high incident of default when debt exceeds any of these limits, and most always when debt exceeds …

Alan’s Financial Tips – Trusts

Advantages of Trusts What is a trust? A trust is a legal entity that is created for the purpose of transferring property to a trustee for the benefit of a third person (beneficiary). The trustee manages the property for the beneficiary according to the terms specified in the trust document. Why you might consider discussing trusts with your attorney : …

Alan’s Financial Tips – Compound Interest

Those who do not plan, plan to fail. The first person to live to 150 is alive today. There is no such thing as a free lunch.  (Milton Friedman) Compound interest is the most powerful force in the universe.  (Albert Einstein) A $10,000 investment compounded at 7% would grow to:   $20,000 after 10 years $40,000 after 20 years $80,000 …