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Don Paul

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Everything posted by Don Paul

  1. # i dont think you can work with a real number here, but you certainly can start a very important calculation: I think you could use this time to delineate which things you should take care of first regardless if RV comes in at one cent or 3 dollars. MY OWN OPINION HERE 1. Pay off all your credit card debt. Its the most insane debt you have. Even when asked what the worst invention of mankind, T Edison stated 'compound debt'. 2. See what other debt you have (cars, mortgages) and calculate the TIME VALUE OF MONEY and decide if they are worth paying off. Usually it is. 3. Calculate and plan for worse case scenario and bare minimums to live, including inflation of at least 5% per year. 4. Find low risk pleutoria of investments which would provide what you have calculated the bare minimum you could live off yearly. I have found several good investments paying 12-15% without risking the barn. 5. Make sure you have covered catastrophic scenarios like accidents, long term care (or do you want your children burdened with changing your depends when your old?) :-) What ever is left over you can then look at luxuries... either way, the above works in a best/worse case situation, regardless of the spread.
  2. I totally understand your fustration. i think there are several things at play lately that have made these forums just a pletoria of good, bad, crazy, funny - but in the end, just a means to pass another day especially for those addicted to ANY information is good for they are hanging on the edge of ruin. It is actually the HUGE demand for information (which many have resorted to just creating) that have made others compelled to give them just that. Luckily, I DO PERSONALLY feel, that more things have occured in the last 60 days than in the previous 2 years of this crazy ride. But can I make a suggestion? just make your dinars part of an overal plan of an international 'fall-back' and perhaps you'll see it differently. I PERSONALLY feel the dollar is eventually going to DV (trying to be coy - devalue) over time. I just can't imagine the debt burden placed on it from just this last administration, and their solution is just to print more. Its a very interesting way of taking money out of your pocket without even sticking their hand in. IF you can, get some bullion gold, some say swiss francs, or whatever currency you like that has low debt-ratio and just add your dinars to the lot. You know have a fairly intelligent grouping of products. And maybe you look at Dinars a bit differently when grouped for an overall plan. (Course, maybe some good farmland and some seeds may be the best investment of all in a worst case scenario) :-) Remember, that we are at worse risking a say 20% downside with an incredible upside. There arent many times in our lifetime we've had a shot like this... Im just trying to make light of the really tense situation on these forums lately. I know Im guilty of morbid daily curiosity; of looking at even the crazy rumor postings, like watching bad Jerry-Springer TV, but you cant take your eyes off to see what you might be missing... :-) and can I be honest with you? for the first time in many years I have really dreamed about doing things that had faded away in my memory. Even thoughts of helping some family members which hadnt come to mind before. Overall JUST THE THOUGHT has made me a much more reflective person, and am somewhat feeling a little bit more alive considering JUST THE POSSIBILITIES...
  3. i dont think you can work with a real number here, but you certainly can start a very important calculation: I think you could use this time to delineate which things you should take care of first regardless if RV comes in at one cent or 3 dollars. MY OWN OPINION HERE 1. Pay off all your credit card debt. Its the most insane debt you have. Even when asked what the worst invention of mankind, T Edison stated 'compound debt'. 2. See what other debt you have (cars, mortgages) and calculate the TIME VALUE OF MONEY and decide if they are worth paying off. Usually it is. 3. Calculate and plan for worse case scenario and bare minimums to live, including inflation of at least 5% per year. 4. Find low risk pleutoria of investments which would provide what you have calculated the bare minimum you could live off yearly. I have found several good investments paying 12-15% without risking the barn. 5. Make sure you have covered catastrophic scenarios like accidents, long term care (or do you want your children burdened with changing your depends when your old?) :-) What ever is left over you can then look at luxuries... either way, the above works in a best/worse case situation, regardless of the spread. Im sure someone on this forum can add to the 1-2-3 of what to do first regardless
  4. To sort of add to the post there are a couple of things of interest One, is that he mentioned he had a means to get in at the beginning of the RV and most interestingly he said 'it would probably go up". That in itself has an interesting thought behind it. Since I consult in a third world country, I think I can safely say that there are very weathy people with enough clout to both avoid big market moves as well as take advantage of them, and I assume its worldwide. As an example, in Mexico, the very wealthy had enough 'juice' to be told just before the peso took a hit, and they moved all their money to dollars within hours. This is the reality of the world when you are high up in the 'food chain', so I do believe this 'prince' having that possible of a situation completely and it makes a lot of sense. Money is smart and they have priviledges. It also happens in our own stock market. Just google HFT (hi frequency trading) and you'll be shocked to learn that 73% of trades are made by these big boy computer programs and they know beforehand what YOU just bought before it hits the buy pits... kinda gives them a 'one-up' on us street folk or what in Vegas is called 'hedging" your bets... you may not play the markets short term ever again! :-) I appreciate the contribution. Seemed honest enough.
  5. Readers here should take a moment and think about this. I found it more than interesting than more than a few bank employees had read a 'memo' from their own bank that buying dinars was a scam. Yet, mayor US banks have been selling them (IE: 5/3, etc) If you bought yours from a US bank were that were true, I cant imagine how much you would make in a class action lawsuit :-) I think bank themselves are discouraging the 'lower' employees from making a run on dinars for obvious reasons, not to mention if they all did, NOT MANY WOULD BE AROUND WORKING FOR THEIR F-N Bank POST RV, WOULD THEY? Im very sorry to say this, Im a grown person, but I have become more and more cynical over time, and there is a part of me that ponders how the Powers-that-be dont particularly want the bourgeois up in their financial level. There is a lot of good-ol-boy clubs that would just as well keep us working stiffs out of their 'country club' of life.
  6. Not sure you want to deal with Warka. Have you seen the latest on Warka. Looks like they are not doing good.
  7. thanks. though many teachers didn't read the writing on the wall soon enough
  8. Many Pension Funds are Doomed The following article is one example of why "dot gov" will basically collapse, at every level. The threat is faced by teachers and all public service employees et cetera. All of their "retirements" are doomed. Fort Worth pension bubble will blow up in our faces ( ) Almost all gov pension funds have put IOUs in these programs, like the teachers fund in Texas to build bridges. And they didnt even ask permission. You don't have to be an actuary to know that this pension plan will end badly. The technical phrase is "trending toward insolvency." The key problem is that the city is on the hook for all the promised benefits. Taxpayers will have to pony up hefty contributions for years, even generations, and the city may have to cut services to afford it. The pension for city employees is currently projected to pay out $432 million more than it brings in over the next 30 years. - K.T. Jon A. in New York recently sent me this: DiNapoli: Local governments face huge jump in pension costs.( ) Jon's comment was: "I truly believe this is where the unrest will come from in this country: pensioners and/or welfare recipients ultimately receiving less than what they expected from the government." Meanwhile, we read: President Obama Plans to Cut Social Security Next. ( ) The bottom line: Plan your own retirement, and as part of that, have a component that is heavy into tangibles. This will be your "fire insurance" against a collapse in the U.S. Dollar as a currency unit.
  9. IF you bother to read the description it is very clear 'This is a beautiful mirrored finish 24kGold layered bar. Not solid gold.
  10. I have to agree. Spelling was pretty bad and numerous, and that usually does not concur with the extremely high credentials - which is not a slam per se in my book of the information, but a knee-jerk reaction to give the credentials part a question mark.
  11. See what Im seeing
  12. * An Attorney’s Opinion: Why that CPA is wrong on taxation as capital gains September 16, 2010 · Why that CPA is wrong on taxation as capital gains Dear DD, Thanks so much for all you do on this site. As a former attorney who hates misinformation (!!), not too long ago I posted what I am going to share here in response to someone else who had raised the very same issue about the paragraph quoted by the CPA from IRS publication 525 page 33 about capital gains treatment for personal foreign currency transactions. It’s true that there is that one paragraph in that publication. The problem is that that paragraph does not define “personal transaction” and therefore becomes totally misleading for people who have bought foreign currency as an investment, because section 988 of the code defines “personal transaction” in a way that does not apply to us. And that little paragraph in publication 525 comes right out of section 988. The definition of “Personal transaction” basically distinguishes between the traveler who happens to cash in excess currency from a trip and the person who buys foreign currency as an investment. According to section 988, when read in its entirety, the capital gains treatment is only for the person who did not purchase it as an investment, i.e., the traveler. As to the traveler types, it is considered as a “personal transaction,” under Section 988 which carves out a special exception for such transactions, and they are taxed only on any gain over $200 as capital gains. However, in the very last part of section 988, the definition of “personal transactions” specifically EXCLUDES “any transfer to the extent that expenses properly allocable to such transaction meet the requirements of …section 212…” Section 212 has to do with expenses related to the production of income, in other words, if the transaction involves expenses relating to the production of income, i.e., investment, the transaction is NOT considered to be a “personal transaction” under Section 988. Rather, it is an investment transaction. If someone has the dinars because they were actually in Iraq and had some left over that they’re now exchanging because they are not planning to go back to Iraq, that’s one thing. Although, even in that case, if they’ve been home in the US for 3 years now and have been holding on to their leftover dinars in anticipation of the RV, then it would appear that what was initially a “personal transaction” has now become an investment transaction. Gains under Section 988 which are not “personal transactions” are taxed as ordinary income, and treated like interest. Recently two tax attorneys and one CPA (the latter of whom who specializes in taxation of foreign currency trading transactions) have told me that the gains will be ordinary income under section 988, no matter how long a person has held them, not capital gains. One of the attorneys that I had first consulted many months ago told me at that time that the gain would be treated as capital gains. When more recently I heard from these two other sources that it was all to be taxed as ordinary income under section 988, I contacted the first tax attorney again and explained that I had been given advice from other professionals that conflicted with his, and explained what they said, and asked if he could please either confirm his original advice or correct it. He corrected his. So that is all to say that that one little paragraph in Publication 525 is correct as quoted, but unfortunately it fails to explain the very important point that “personal transaction” is a defined term in the code and it does not mean what we would like to think it means because our situation does not fit the exception it carves out for “personal transactions.” So having said all that, perhaps you should share this information with your members so they can take both opinions to their own tax professional. Thanks very much. DDT Member
  13. Qman Just hang for awhile. There has been so much wrong intel lately that people are REALLY on edge. Jokes can and will be taken wrong by angry wolves, and you have to temper your opinions when there is so much emotion oozing everywhere. In fact your comments can become their "fustration focus" outlet. Its close to a mob mentality. There are some people who have been on this roller coaster ride for MANY YEARS, I cant imagine what their nerves must be like. You can bet your bottom dollar many of these are counting on this RV to bail them out of SERIOUS problems. They arent in a humorous mood... DONT take it personally... just take a step back and look at the whole picture.
  14. Nothing has changed. I bought some from Ali just to give me his lock in option on ALL my dinar, but Ill probably only lock in a small percentage for a 'worse case' scenario insurance. If you remember what happend to the Kuwait RV, it went all the way up to 9 dollars then dropped to 2+ shortly thereafter
  15. Its a hard decision. Most cities have a BOA, Wells Fargo or Chase. All would take direct deposits after RV and you would save the cost of trips, and also establish a probably real healthy relationship with that banker. He would probably on his best behavior with you. Your account is credited immediately but will have a hold on it till the currency is verified, It is CORRECT that if you didnt buy ANY of your currency from Ali, you wouldnt be able to lock in with him anyway.
  16. thanks Jac considering the number of postings you have made on this site, its a compliment coming from you.
  17. take a look at this article on CNBC that just came out today Gold to Surge 50% to 'Real' Record?
  18. take a look at what GREESPAN himself had to say about gold before he went to the dark side... were talking about bullion gold here.. Its a great eye opener written by someone who at least at that time, was being forthright about things in the world. ___________________________________________________________________________________ Greenspan on Gold (1966) FORWARD by Gary North | August 29, 2003 You may already have read Alan Greenspan's essay, "Gold and Economic Freedom," which was published in Ayn Rand's "Objectivist" newsletter in 1966, and reprinted in her book, Capitalism: The Unknown Ideal, in 1967. Greenspan has never publicly retracted a word of this essay. This essay is a good introduction to the government's war on gold. It summarizes the basic issue: the comparative liberty that a government-guaranteed gold coin standard offers to a society. A gold coin standard places a restraint on the government's ability to defraud the public through monetary inflation. The problem is, a government-guaranteed gold standard is guaranteed by the government. As I like to say, a government-guaranteed gold standard isn't worth the paper it's written on. But, for as long as the government redeems its paper money or its credit money on demand – in gold coins of a fixed weight and fineness, at a fixed exchange rate with the government's money – the public does possess a lever of power against the government: the threat of a "bank run" against the biggest bank, the government's central bank. In the case of the United States, this is the Federal Reserve System. How ironic that Alan Greenspan is the chairman of the FED's Board of Governors. Please note: Greenspan can speak in English when he wants to. He is not confined to what James Grant has called central banker Esperanto. END _____________________________________________________ GOLD AND ECONOMIC FREEDOM by Alan Greenspan An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense – perhaps more clearly and subtly than many consistent defenders of laissez-faire – that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other. In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society. Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving. The existence of such a commodity is a precondition of a division of labor economy. If men did not have some commodity of objective value which was generally acceptable as money, they would have to resort to primitive barter or be forced to live on self-sufficient farms and forgo the inestimable advantages of specialization. If men had no means to store value, i.e., to save, neither long-range planning nor exchange would be possible. What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. First, the medium of exchange should be durable. In a primitive society of meager wealth, wheat might be sufficiently durable to serve as a medium, since all exchanges would occur only during and immediately after the harvest, leaving no value-surplus to store. But where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity. Precious jewels, for example, are neither homogeneous nor divisible. More important, the commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. Wheat is a luxury in underfed civilizations, but not in a prosperous society. Cigarettes ordinarily would not serve as money, but they did in post-World War II Europe where they were considered a luxury. The term "luxury good" implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron. In the early stages of a developing money economy, several media of exchange might be used, since a wide variety of commodities would fulfill the foregoing conditions. However, one of the commodities will gradually displace all others, by being more widely acceptable. Preferences on what to hold as a store of value will shift to the most widely acceptable commodity, which, in turn, will make it still more acceptable. The shift is progressive until that commodity becomes the sole medium of exchange. The use of a single medium is highly advantageous for the same reasons that a money economy is superior to a barter economy: it makes exchanges possible on an incalculably wider scale. Whether the single medium is gold, silver, seashells, cattle, or tobacco is optional, depending on the context and development of a given economy. In fact, all have been employed, at various times, as media of exchange. Even in the present century, two major commodities, gold and silver, have been used as international media of exchange, with gold becoming the predominant one. Gold, having both artistic and functional uses and being relatively scarce, has significant advantages over all other media of exchange. Since the beginning of World War I, it has been virtually the sole international standard of exchange. If all goods and services were to be paid for in gold, large payments would be difficult to execute and this would tend to limit the extent of a society's divisions of labor and specialization. Thus a logical extension of the creation of a medium of exchange is the development of a banking system and credit instruments (bank notes and deposits) which act as a substitute for, but are convertible into, gold. A free banking system based on gold is able to extend credit and thus to create bank notes (currency) and deposits, according to the production requirements of the economy. Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks). But since it is rarely the case that all depositors want to withdraw all their gold at the same time, the banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security of his deposits). But the amount of loans which he can afford to make is not arbitrary: he has to gauge it in relation to his reserves and to the status of his investments. When banks loan money to finance productive and profitable endeavors, the loans are paid off rapidly and bank credit continues to be generally available. But when the business ventures financed by bank credit are less profitable and slow to pay off, bankers soon find that their loans outstanding are excessive relative to their gold reserves, and they begin to curtail new lending, usually by charging higher interest rates. This tends to restrict the financing of new ventures and requires the existing borrowers to improve their profitability before they can obtain credit for further expansion. Thus, under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth. When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a world-wide division of labor and the broadest international trade. Even though the units of exchange (the dollar, the pound, the franc, etc.) differ from country to country, when all are defined in terms of gold the economies of the different countries act as one – so long as there are no restraints on trade or on the movement of capital. Credit, interest rates, and prices tend to follow similar patterns in all countries. For example, if banks in one country extend credit too liberally, interest rates in that country will tend to fall, inducing depositors to shift their gold to higher-interest paying banks in other countries. This will immediately cause a shortage of bank reserves in the "easy money" country, inducing tighter credit standards and a return to competitively higher interest rates again. A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.) It was limited gold reserves that stopped the unbalanced expansions of business activity, before they could develop into the post-World War I type of disaster. The readjustment periods were short and the economies quickly reestablished a sound basis to resume expansion. But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline – argued economic interventionists – why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely – it was claimed – there need never be any slumps in business. And so the Federal Reserve System was organized in 1913. It consisted of twelve regional Federal Reserve banks nominally owned by private bankers, but in fact government sponsored, controlled, and supported. Credit extended by these banks is in practice (though not legally) backed by the taxing power of the federal government. Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks ("paper reserves") could serve as legal tender to pay depositors. When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve's attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates. The "Fed" succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market, triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's. With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the Great Depression. If the gold standard had not existed, they argued, Britain's abandonment of gold payments in 1931 would not have caused the failure of banks all over the world. (The irony was that since 1913, we had been, not on a gold standard, but on what may be termed "a mixed gold standard"; yet it is gold that took the blame.) But the opposition to the gold standard in any form – from a growing number of welfare-state advocates – was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale. Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which – through a complex series of steps – the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard. END
  19. Is it REALLY worth saving about 10 dollars per 100k dinars to take ANY chance of getting fakes?? that would be the 10 dollars you would remember for the rest of your life. the difference of a possible 300,000 dollars versus funny money over 10 bucks. cant imagine a worse risk scenario. and you dont get to lock in a rate, probably worth 100s of thousands of dollars if the dinar starts going down (wich it very well could with everyone cashing in) not a good time to be cheap and risk it all.
  20. I should excuse the strict use of annuities in my above examples. They are just vehicles which I am more familiar with for some tax defferance purposes in large estates, as well as for medicaid protection, but there are other vehicles with low risk factors out there - too many to list for this example, some which have medium-term investment windows which can average 15% yearly, etc. I would recomend a commission-based estate planner as well as a non-commission analysis and just pick the best of both worlds. :-)
  21. Well, shooting from 'the hip" and not-withstanding anything about Dinar RVing I would say, that as you get older, its somewhat wiser to slowly move into more 'boring' yet less volatile vehicles for the MAJORITY of you portofolio. (I say this not knowing your total financial picture) but can leave a little to 'play' with depending on your tolerance for risk/loss. Let me give you a real lfe example. I had an elderly couple who's husband was just ademate about trading stocks himself within his trading account. Hed done well a couple of years in a row, probably averaging 15% (back in the 90s) and I had a heck of a time getting him to put a LITTLE back into something with a fixed rate annuity. Needless to say, his wife was not happy - she knew very little about the market and she would of been more prone to put the majority into safer vehicles. Well, what had to happen, happened. He shortly took a 22% hit to his portofolio. They called me, and I had to then explained to them that for them JUST to recoup back to their previous amount would have to have a STELLAR gain the next year, and it had to be more like 40% just to recoup the 22% loss. Something people dont realize the math of a loss. You see, when you are say 40, you are working, have income from work, and can afford to wait for a market recoup. At 69 you dont have that luxury. You shouldnt be risking the majority of your monies that way. He would of been better to spread his portofolio into some 6% x 5 year annuities, (various different companies) and if he wanted to 'play' maybe small indexed annuity with a 'racheting' factor. Racheting means it locks in a markety gain (say 7% of an 11% ) where you lock in a major % of a market gain, but have a fall back safety factor of 0 in a worse case scenario. Meaning if the market looses, you dont. and so forth. My suggestion without knowing your whole financial makeup is to consider how ANY income may affect your social security income next year/at retirement. Look at first in - first out vehicles. You can do this with certain annuities and immediate annuitizations to minimize your income 'penalties". You'll have to check with a CPA familiar with social secuirty. You do realize social security penalizes you for outside income and that is a factor to consider. If you decide to go that route, I recommend buying MANY small annuities (if that is your preference) that have 1 year or immediate annuitization options, so you can turn those into income sources as the need arises, and can do so in increments since it doesnt cost any different to break the investment amounts into smaller policies than one big one. Check track records of performance. On another note, I should say take a hard look at your medical coverage long term. Medicare/medicaid have very limited coverages in some areas I call 'holes'. I dont know if you can self-insure yourself, but consider things like long term care, especially for the surviving spouse if nothing else, which with a 25% incidence factor, can quickly decimate an estate with just a couple of hundred thousand dollars on an unforseen outset. I have seen recent policies which return all the monies paid if not used back, but see how much this 'option' really costs you... Back to the original story, I should state that when the husband passed away, the surviving wife decided to put it all into various type annuities and has a pretty good peace of mind and has an income she can put her finger on for years to come without having to nail-bite thru market upheavals, which in my OWN PERSONAL OPINION are going to get much more VOLATILE.
  22. Its very hard to recomend offshore investments to say, someone who has never travelled. By that I mean is that you may find that you can only deal with swiss anuities with someone outside the US, and also makes the liquidity in case of an emergency quite a hassle. Not sure if the benefits of that particular product outweigh the logistical limitations, especially if you dont travel there but again, a lot depends on where that vehicle falls in your overall strategy, but I have heard good things about Swiss annuities in general. In that same note, I would like to point out that if this investment pans out, that one should consider the 'outside' world a little more. As americans, we are somewhat geographically locked into two neighbors that are nothing like say europe or asia for diversity. Perhaps you already know that if you set an 'official' residence outside the US, you have a huge advantage where you dont have to pay US taxes on the first $82,500+ in income and many countries like Panama dont tax your outside income. I myself are taking advantage of that, and also of an offshore banking platform that lets you within 20 seconds change your account into any variable of other international currencies, such as one of my favorites, the swiss franc. With the advent of the world printing more and more debt-paper, it may not be a bad idea to have a little physical precious metals. Did you know that in WW2 you could of bought a house with just 5 grams of gold? During some extreme times, you'd be surprised what a hedge like that can do for you. I also would highly recommend looking at possible double citizenships, as I was able to do so just because I had a grandfather that was Irish. From there, there are a lot more 'options' if you get my gist.
  23. You only pay prop. tax in the country where the property is located. Capital gains may be another story, but luckily, you usually have a personal US tax exemption of around $82,000 dollars per year if you live/work overseas. As americans, I believe we are the only country in the world that taxes you regardless where you live... In acapulco, our property taxes on the beach are a ridiculous $800 on a prop. probably worth 800k dollars. The only thing is that electric costs are 40% higher, but we have found a way to work around that. Usually, a good rule of thumb for a personal residence is that IF you can RENT for less that 1% (per month) of the value of the property, you are better doing so. just a good generalization.
  24. When I worked way back when as an estate planner, it was interesting to see the products wealthier people had access to. Even I couldnt come up with the minimums required for some of the very same products I was marketing at times. This is not advice in particular, as everyones financial situation and desires vary wildly. Im just contributing some things I came across worthy of thought. I saw some postings of an 'investment' via some attorney which could pay 3% or so per MONTH. I have a sneaky suspicion its one of those HYIP programs (hi yield investment program) which involves a private contract and not much else. Be careful, there is no need to go into such Maddoff type programs to make decent money. Ask for long term referrals and you'll see how they back-peddle saying is a "invitation only, secret investment" BS. BEWARE Since starting in 2011, mr obama has returned the famous 'death-taxes' you need to consider how to structure your estate as well as your investments for worse-case scenarios. Dont set your legacy to get later 'bullet-ridden" due to bad planning. Look into Q-tip, ABC and living trusts as well. IF set up properly, you can DOUBLE the amount of estate tax exemption from the start. Both husband and wife can have their exemptions (I think its around 1 million each) be lumped together with the right trust.. I was also reading people putting down Whole Life insurance. Be careful, you dont know what its really all about. Life insurance, in an estate settement especially is particularly effective to pay these new estate taxes (as high as 55%) for inheritors since the proceeds are very fast and very liquid and particularly TAX FREE. If you dont leave adequate amounts of cash for these unforseen expenses, your progeny may have to sell your assets in fire-sale prices to pay for these taxes. Also, term life keeps going up with age, and whole life was designed in one respect to deal with the increase of life insurance costs. Supposedly, the internal growth of the policy would then cover the cost of rising insurance to make it a more longer term life product for the individual. I also remember when A L Williams made it a business to get people to cash out of their whole life policies to promote 'buy term and invest the rest'.... guess what happened? the majority of people bought term and SPENT the rest. So after a few years, they had to drop their term life due to rising costs and ended up with nothing at the end. Term by itself is a good product DEPENDING what you intend to do with it. Usually, its a good product to cover your liabilities and income temporarily WHILE you build up your estate. (term life only pays 3% of all the ins. written) Then when your estate is worth millions, your need for certain types of life insurance diminishes since you have enough in your own estate. Another product of interest, are annuities which have an annuitization option. Annuitization is an option you can excercise that lets you convert a lump sum amount into a guaranteed income. Even a combination of an IMMEDIATE annuity, which you can buy that guarantees an amount of income for LIFE... some with a clause that pays you REGARDLESS of how long you live, and this income is NOT accessible by lawsuits, garnishments, etc. Annuities can be a good base for a low-risk product, which offer tax-deffered growth (as opposed to bank CDs) and tend to have a better rate of return as well. We used them a lot to structure the base for many estates, due to their great tax deferred growth, and annuitization features, as well as access to moneys without penalties in case of medical emergencies. Warrent Buffett also invested heavily one time into life settlement products. It caught my interest, as it was another investment vehicle which offered consistent say 16% returns yearly with no risk of market, war, or oil effects. BUT I would only consider going with one of the companies who is PUBLICLY listed and has at least a 10 year record that you can look at so there is some accountability. A good option to DIVERSIFY your portofolio since so much is market-sensitive. You might want to also look at Texas tax certificates which I believe pay 15%, one of the highest in the nation, and if you want a small percentage in hi risk- hi return there are some registered institutions which are getting as much as 40-60% returns in the high frequency trading arena but of course require higher minimum participation. No surprise. What I recomend is that you set up an investment 'pyramid' with the bulk of you monies in low risk low return basics at the bottom, and move your way up the pyramid with investments based on your own tolerance for risk, age, financial responsibilities, etc. If we are all so lucky as to make a large amount here, start thinking like a rich person (read the Kiyosaki books PLEASE) and do things like buy your car at auction, buy ROI real estate, PAY OFF YOUR CREDIT CARDS ASAP> that is the worst invention from mankind... compounded debt.. and most cycling every 25 days to 'gig' your monthly-payment-mentality. Good luck to all, I do believe in positive thinking and thinking about how to structure your wealth is a good thing regardless... dont you think :-) Paul Acapulco PS: I/we are in the process of developing a get-out-of-debt program for dummies that we hope to have out to market next year. Sort of a web-based, plug-in-your-numbers, and just follow the emailed recomendations monthly. (You wont need it since you will have been smart enough to pay off compounded interest, but maybe your cousin Bubba who laughed at the dinar... may need it down the road...)
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