Month End: December Snapshot

As 2016 ends, I’m thankful to have survived another day, month, and year. I think you can agree that this year has been filled with loss. Loss is a nature of life, but for me there is always hope in me. Hope of a new day, hope of a better future, and hope of a good ending. Earlier this year I started with $31,846.67 in total debt, and at the end of the year the debt has been reduced by $8,061.53. During the year, my debt did increase, but now at the end of the year the debt has been reduced. I guarantee you will have challenges, and your debt repayment plan may have to restructure, but at the end of the year, if your debt is lower than when it started then you are making progress.

I believe in your journey to a debt free me. It begins with one dollar at a time. Every dollar that comes into your account you can control. I suggest following my process to help you in your debt repayment plan. My process will help you not only create a budget but ultimately teach you how much comes out, and even more importantly when it comes out. At the end of this year, I added to income producing assets in the form of two businesses. My fiancé and I had fun growing our business, and at the end of the year I could bring two associates one for my business and one for her business. Thank you for being a part of my journey this year, and next year brings a new chapter in my life as I prepare to marry the love of my life. In the new year, I’m preparing to be even more aggressive with my debt reduction, increase income through my assets, and lower expenses where I can. I’m excited to see what the new year will bring. Also, I’m to be adding videos each month so be sure to scroll to the bottom.

If you want to learn more about how I’m increasing my income, while reducing debt or if you want to have someone to discuss your debt reduction strategy with, or if you need a financial check-up, contact me.

The rich ruleth over the poor, and the borrower is servant to the lender.

I believe in your journey to….

A Debt Free Me

Here’s this month’s video

December 28, 2016

Every morning, the top venture capital investors in the world wake up, drink a fresh cup of coffee, or Soylent, and mine these blogs and newsletters for insight and the latest deal news. The top online reads among the investors were AVC, a blog by venture capitalist Fred Wilson, whose firm has invested in companies such as Twitter Inc. TWTR, -1.32%   and Tumblr and Term Sheet, a daily deals newsletter, formerly run by journalist Dan Primack, according to blogger Joe Hovde. generation. Blogs and newsletters are an influential source of influential source in the venture capital and startup arena. Other top choices are Mattermark Daily, Ben Evans’ Newsletter, and Feld Thoughts. It’s important to remember that we now live in the Information Age, information is valuable currency. The more relevant your information, the more valuable it is in your decision making when it comes to investing. You always have two choices: invest for capital gains or invest for cash flow.

Recent predictions that the value of Bitcoin would skyrocket as Donald Trump takes over the presidency appear to be coming true—weeks before the change in administration even happens. In its annual Outrageous Predictions report, the Danish firm Saxo Bank stated that America’s expected spending binge in 2017 and beyond by the Trump administration will cause “U.S. growth and inflation to sky rocket, forcing the Federal Reserve to accelerate its hikes and the USD dollar to hit the moon.” As a result, Russia, China, and other emerging markets could likely shift away from mainstream banking options, and Bitcoin, the alternative virtual currency, could emerge as newly valuable amid the chaos. “We could see Bitcoin easily triple over the next year goi 1ng from the current $700 level to +$2,100,” Saxo Bank researchers wrote a few weeks ago. As of today, Bitcoin was trading at $950.  It hasn’t been trading at this level since November 2013. Despite current events, Bitcoin’s value is increasing could possibly be increasing because of the perception that the value could increase in the future.

For this month, the stock I recommend looking at is GBTC – Bitcoin Investment Trust. This company is a private, open-ended trust that is invested exclusively in bitcoin and derives its value solely from the price of bitcoin. It enables investors to gain exposure to the price movement of bitcoin without the challenge of buying, storing, and safekeeping bitcoins. The BIT’s sponsor is Grayscale Investments, a wholly-owned subsidiary of Digital Currency Group. On 1/4/16, the stock was trading at $64.00, and as of today, the stock is trading at $120.00. This stock is one that is worth keeping an eye on.

 If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section.

For this week, I’ve included Meet Leonard Kim – Professional Branding Expert from MONEYTALK WITH #WINNIESUN (@SunGroupWP) YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs 28:26 MSG

December 21, 2016

The Roth IRA offers a huge tax break to retirement savers. Even though many people prefer the tax deductions that only traditional IRAs offer, Roth IRAs have the trade-off benefit of letting you take tax-free withdrawals once you retire. However, there are some things about Roth IRAs many retirees don’t realize — things that could help them plan even more effectively. Below, we’ll talk about three Roth IRA facts that should be on every retiree’s mind as they plan their finances. The three facts are: you don’t have to take minimum distributions, the beneficiaries can get tax benefits throughout their lifetimes, and Roth IRA withdrawals can help you avoid having your Social Security taxed. Before following this author’s advice, I would consult with a tax advisor or licensed financial planner. Traditional IRAs require you take minimum distributions at age 70 1/2. If you don’t you’ll be charged a 50% tax penalty. RMDs (required minimum distributions) are based on age and life expectancy. Fortunately, Roth IRAs do not have RMDs. Because you don’t have to take RMDs, you can preserve the tax-free treatment of your Roth IRA assets throughout your lifetime. Moreover, if you name loved ones as individual beneficiaries of your Roth IRA, they can get those benefits as well. A surviving spouse beneficiary always has the right to take inherited Roth IRA assets and roll them over into the spouse’s own Roth IRA. Non-spouse beneficiaries don’t have that amount of flexibility, but they can elect to take withdrawals from their inherited Roth IRA that can stretch throughout their expected lifespans. Using rules similar to those for retiree required minimum distributions from traditional IRAs, those who inherit Roth IRAs have to take out a certain amount of the assets inside the Roth each year. However, the ability to stretch those distributions out across an entire lifetime dramatically increases the total tax benefit from using a Roth. Income from a traditional IRA or 401k combined with your Social Security income can push your income into a bracket where you will lose money to taxation. It’s important to understand the difference between the income tax and wealth tax. See last week’s blog post for an examination of the difference. However, Roth IRA distributions are not added to your outside income for purposes of the threshold. By monitoring how much you take from traditional retirement accounts and how much you use Roth IRAs, you can find a balance that will reduce or eliminate any income tax on your Social Security. Even if you’re in your early 20’s or 30’s, go ahead and plan for your future and create a strategy which will build a legacy for your next generation.

In 2010, Leonard Kim unplugged his microwave, picked it up, walked out of his apartment, down the hallway, and plugged it into the outlet at the end of the hallway usually used only by maintenance staff. He couldn’t pay his electric bill and it was the only way he could heat his $3 dinner. Soon after he was unable to pay the rent and homeless. Three months ago he was named by Inc. Magazine as one of the top youth marketers in the country. Kim has written thousands of articles over the last few years, including as many as 1000+ in 2015. His writing catapulted him to more than 200,000 followers on Twitter. It changed, he says, because he “was sick and tired of being sick and tired.” After working with several startups, building them up to generate healthy revenue, and watching them fail, Kim began focusing on personal branding. Leonard’s tips for branding are: discover your brand, humanize yourself, get noticed, provide extreme value, and stack your success. The article goes into the details of each tip, and it’s worth reading. Because of Leonard’s enthusiasm, the author shared her three financial tips for 2017. The tips are: the emergency fund is non-negotiable, duo purpose your savings, and save like you’re in a recession all year long. Your life has value, and you should share your life with others, because in sharing you will add value to someone else’s life. Sharing can be of your time, financial resources and or energy. Think of one way you can add value to someone’s life, and see what happens next.

If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section.

For this week, I’ve included How ‘Mr. Money Moustache’ Retired at Age 30 from ABC News YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs 28:26 MSG

December 14, 2016

Tobacco companies and gun manufacturers get plenty of scorn. Yet for some reason, the multinational corporations that make and sell perhaps the most addictive and damaging legal substance of all get a free pass. To the point that when such a company is the target of an acquisition or merger, senators and governors of opposing parties will band together to see that nothing even threatens to jeopardize the company’s future. We’re referring to purveyors of alcohol in general, and Anheuser-Busch InBev (BUD) in particular. The world’s largest brewer sells $43.6 billion worth of the demon liquid (and related, less satanic potables) every year, boasting a high gross margin of 60.7% and inspiring some of the strongest customer loyalty this side of Harley-Davidson Inc. (HOG). The result is a $177 billion company that seems capable of doing little wrong in the eyes of investors. In 2008, InBev merged with Anheuser-Busch. Anheuser-Busch InBev operates in 25 countries. The company divides its operations into 9 regions: North America, Mexico, Latin America North, Latin America South, Europe, Asia Pacific North, Asia Pacific South and Global Export & Holding Companies. The company’s North American region was responsible for 25.8% of total volume in 2015 – totaling in 118 million hectoliters (over 3.1 billion gallons). We take it for granted that the region that includes the United States has to be Anheuser-Busch InBev’s largest, right? Wrong. That would be Latin America North, at almost 27%. This includes Brazil, one of the combined company’s countries of origin. The Asia Pacific region follows at 19.3%. On a per-capita basis, no one drinks like Europeans do. Volume there accounted for 9.4% of the company total, followed by Mexico at 9.1%, and Latin America South at 7.9%. Anheuser-Busch InBev has announced plans to buy SABMiller, the world’s second-largest brewer. The investor who goes long on Anheuser-Busch InBev stock is rarely disappointed, whether in the short term or beyond.

Credit card debt can be a major roadblock to your financial goals, such as saving for retirement or increasing your net worth. Unfortunately, new data from the New York Federal Reserve suggests that after a debt decline, Americans are borrowing money at a rate that approaches pre–Great Recession levels. The result: Household debt is rising and credit cards are a major driver, along with mortgages, student loans and auto loans. Here’s a quick breakdown of what the Fed’s research uncovered. Credit card debt continues to contribute to a household’s total indebtedness, as well as student loan and mortgage debt. The increase in household debt may be attributable to two primary factors: a steady increase in the cost of living and stagnation in wages. Since 2003 household incomes have increased by 28% but the cost of living has climbed by 30%. That gap doesn’t sound big, but the disparity between earning and spending may be a driving force for some Americans to turn to credit cards to cover the gap. Some items, such as medical costs (57%) and food and beverage prices (36%) increased massively more. The cost of living is going to force people to create a debt repayment plan, and at the same time force others to create additional streams of income. I suggest that if you haven’t created a budget, then you should. A budget will show you how much you are spending, and when your income is the most vulnerable.
If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section.

For this week, I’ve included How to Retire Early: The Shockingly Simple Math from Video School Online YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs 28:26 MSG

December 7, 2016

Income investors know how important consistent growth in payouts can be, and the dividend stocks that you’ll find among the Dividend Aristocrats are among the best in the business at providing dividend growth. With requirements of at least a quarter-century of annual payout increases, Dividend Aristocrats prove their success through good times and bad. Let’s take a closer look at why Medtronic (NYSE:MDT), 3M (NYSE:MMM), and Enbridge (NYSE:ENB) are among the top Dividend Aristocrats to buy this month. Meditronic had a rough 2nd quarter, and its revenue fell $110 million short of estimates. Despite this quarter, this company has recently received approval for the 1st artificial pancreas. Having raised its dividend in 39 consecutive years and averaged a compound dividend growth rate of 18% over that span, Medtronic does a good job of rewarding its shareholders. Yet with a payout ratio of just 40%, there’s plenty of coverage for this dividend to head higher. Smart income investors would be wise to give Medtronic a closer look. 3M is a recommended buy as a dividend aristocrat because of the company’s been increasing its dividend for 58 consecutive years. With earnings growth targets of as much 11% annually between now and 2020, 3M is setting its sights high to maximize its prospects going forward.  Finally, the author recommends Endbridge due to its average compound dividend growth of 10.6% over the past two decades. What’s even more impressive than this history is that the company is in the process of an enormous expansion program that will make it one of the largest energy infrastructure in North America. I recommend looking at these stocks’ financials, and their 5 year to 10 year charts. Decide if these stocks are a part of your long-term portfolio or midterm portfolio.  In my opinion a mid-term portfolio should have a 20-year decision point. If it’s a part of your long-term portfolio, then hold forever barring unforeseen circumstances.

Due to the content of this article, I’ll be quoting heavily from it. Many people use the words income, rich and wealth interchangeably. These words are often used in conversations with professional athletes and high-income professions such as doctors and attorneys. Investopedia defines ultra-high net worth individuals (UHNWI) as people with investable assets of at least $30 million, excluding personal assets and property such as a primary residence, collectibles and consumer durables. I define wealth as having investable accounts that will not run out in your lifetime. Simply having income does not mean that you also have significant wealth. I’ll focus on taxes and retirement savings to show what I mean.

The author clearly distinguishes the difference between income tax and wealth tax (long term capital gains tax). The author shows your normal income tax table, which you can view at  The author shows the difference in these types of taxes with this example:

Let’s say your job pays you $500,000 and you pay the highest earned income rate (marginal tax rate of 39.6%). It was nice that your contract said that you would be guaranteed $500,000, but due to the tax bite, you only net $317,000. Now, if your income came from the wealth tax (long-term capital gains), it would be taxed at 20%. You would gain $83,000.

Earned Long-Term
Capital Gains
Income $500,000 $500,000
Rate 36.60% 20.00%
Tax $183,000 $100,000
Net $317,000 $400,000
Difference $83,000

There is also a difference between retirement savings and retirement wealth. Your 401k or IRA isn’t retirement wealth. In most cases, they represent accounts that will be used to create retirement income for as long as there is money in the account. Money with a high probability of running out is not wealth. In contrast, if pensions don’t default, they won’t run out of money. However, 401(k)s and IRAs don’t have those guarantees. In fact, I have not found a non-certified financial planner professional that has a plan to turn IRAs into lifetime retirement income

If you have $1 million in retirement balance that you use for income, you don’t have wealth. Traditional IRA and 401(k) balances have never been taxed. That means that if you pull out $50,000, you will pay $5,684 in income tax on $50,000. If you withdrew the whole thing, you’d pay $356,875, only being able to spend $643,125. These numbers don’t include state taxes and other applicable taxes and fees.

Paid Out $1,000,000 $50,000
Tax $356,875 $5,684
Spendable $643,125 $44,316


If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section.

For this week, I’ve included The 2008 Financial Crisis: Crash Course Economics #12 from CrashCourse YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs 28:26 MSG