For about two months now I’ve been collecting some data and talking with investors on what will happen with the stock market under the next new President. Continue reading →
Ever see a run down home and thought
Beginning of February, California teachers decided to take a stand for the environment.
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Bernie Sanders has never held a real job in his entire life.
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Got some cash laying around to invest in? Maybe take a look at buying a piece of an NFL football player because they’re for sale. Continue reading →
WorldOil.com is showing interesting investment returns on state pension funds invested in oil. The study was done by Sonecon.
On average, $1 invested in oil and natural gas stocks in 2005 was worth $2.30 in 2013. By contrast, $1 invested in all other assets over the same period was worth $1.68.
While oil and natural gas stocks make up, on average, 4% of holdings in the top public pension funds, they accounted for, on average, 8% of the returns in these funds from 2005 to 2013, according to the Sonecon study.
The report examines the top two public pension funds in 17 states, which collectively cover more than half (55%) of all workers in the U.S. who participate in state and local government pension plans.
States analyzed in the report are: California, Florida, Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Mexico, New York, North Dakota, Ohio, Pennsylvania, South Carolina, and West Virginia.
American Morning News interviewed Kay Bell from BankRate.com explaining a survey they with 1,003 adults and how they will spend their tax refund. USA Today posted the survey and here is how it broke down:
34% say they’ll use it to pay down debt
33% say they’ll save or invest the money
26% say they spend the extra cash on necessities such as food and utility bills
3% want to use it to live it up and go on vacation or a shopping spree
Here is another snapshot of Americans thinking on income taxes/tax refunds that would make Dave Ramsey shake his head at:
Some people view having extra money withheld from their paychecks for income tax as a way to save, says Bankrate.com tax analyst Kay Bell. But she advises against it because “the bank of Uncle Sam” pays no interest.
The rest of the article is here and has some more good stats obtained by the survey.
Government wants you to invest in them. President Obama talked of a new investment fund in the past and now, without consent of Congress, has started it up through the Treasury Department. Here is more from the Wall Street Journal:
A form of Roth Individual Retirement Account that allows people to save after-tax dollars and watch them grow tax-free until retirement, the new myRA offers a single investment option. It’s a private version of the G Fund that is available to federal workers and has lately been delivering annual returns of about 2% on its portfolio of Treasury securities.
Government is guaranteeing no fees to the investor. That is political code for the taxpayer will subsidize it.
Treasury is funding the program out of the budget for its Bureau of the Fiscal Service. The assertion here is that existing law allows this part of the Treasury to hire financial agents as part of its mission to efficiently finance the federal government.
Taxpayers are covering the costs, though their elected representatives in Congress never voted to create the program. So far Treasury also hasn’t told us the fees it is paying Comerica.
For many months now I’ve been hearing and seeing commercials for a program geared towards parents that helps them save for college. The program is called the COLLEGE CHOICE 529 INVESTMENT PLAN. Per Indiana Department of Education website:
The program allows Hoosiers to plan for their children’s or loved one’s future, making contributions into an investment account for higher education expenses. Indiana also enacted a tax credit that makes the CollegeChoice Plan an even better option.
You are directed out of the state website and to a place called College Choice Advisor. To be very brief, this is the site where you sign up an account and it gives you investment options for saving /giving. That is the key component of why I think a program like this is unnecessary…..investing. Parents can easily do this on their own with more options. This website really doesn’t offer a variety like you could get with a local advisor or you’re own research.
The investing assumptions they provide are very broad and unrealistic in today’s income reality a lot of people are living in. Per the website:
If an investor opened a 529 account with an initial investment of $2,500 and contributed $100 every month for 18 years, there could be over $6,300 more for a qualified withdrawal than the same investment in a taxable account.*
There is a reason for an asterisk at the end of that statement:
Assumptions: $2,500 initial investment with subsequent monthly investments of $100 for a period of 18 years; annual rate of return on investment of 5% and no funds withdrawn during the time period specified; and taxpayer is in the 30% federal income tax bracket for all options at the time of contributions and distribution. This hypothetical is for illustrative purposes only.
Overall the 529 is a plan that allows people to throw their money in a fund and than forget about it. I think parents should be more hands on with their money they save which then leads to conversations about money responsibility.
The majority of parents will never to be able to fully fund their children’s college and their’s nothing wrong with that. Big percentage of children will not attend or finish college at all. No one knows what college will be like 20 years down the road in a traditional sense. Save wisely for helping your child in college or with something else they may strive for. Just don’t hand it over to investors to draw a 1% fee for 18 years because it sounds good.