October 14, 2017

Items in italics are direct quotes from the articles below

http://www.businessinsider.com/bitcoin-gold-opposites-why-you-might-want-to-stock-up-2017-10

Bitcoin is frequently compared to gold. But it’s not an either/or proposition… and I’ll tell you why. Indeed, gold and bitcoin are the only two widely distributed, decentralized methods of exchanging value as currency. There is no central authority issuance like there is with U.S. dollars or any other fiat currency. Likewise, neither bitcoin nor gold can just be “printed” at the push of a button by an anxious central banker. You have to either earn your gold by mining it – which is also what you do to get bitcoin, but with computers instead of picks and shovels – or you can pay cash for it. But there’s one big difference between the two…Gold is the very opposite of new technology. Gold is a physical, tangible and real asset. Gold is a physical tangible asset that has held value for thousands of years. Bitcoin is a code that is store on the internet, and if you lose it, then you lose your bitcoin. I’ve had friends that have lost their private key and as a result have lost access to their bitcoin. Bitcoin is built on blockchain technology and the distributed ledger system and it’s not easy to explain to the average person. Bitcoin will never be gold. Gold is the standard when it comes to being a store of value and medium exchange. But… you should still own bitcoin.  Bitcoin is the ultimate in freedom of asset ownership. The government can’t confiscate it from you, as it did from owners of gold in 1933 in the U.S. under Executive Order 6102. You can cross national borders with bitcoin in your possession on a USB-stick device, a piece of paper… or if you can memorize your private key, with no physical object in your possession of any kind. Whether your bitcoin is worth US$100 or US$100 million, it makes no difference to how you move and store it (which is clearly not the same with gold). You don’t need a trusted middleman to send it, and you can move it around the world, securely, in a matter of minutes. And if you’re looking for gains… bitcoin is a lot likelier than gold to be up 1,000 percent three years from now. Even though its price has soared over the past few years, it’s still nowhere near mainstream yet. So gold and bitcoin both deserve a place in your portfolio. Gold has stood the test of time and is a medium of storing value. Bitcoin’s time, on the other hand, is just beginning. Blockchain is the future, and when you have an opportunity to buy the future and tuck it away, you should take it. If you’re interested in learning how I purchase bitcoin or other cryptocurrencies, feel free to contact me.

http://www.businessinsider.com/how-to-spot-stock-market-bubbles-2017-10

They don’t ring a bell at the top and tell you to get out, but I have to say that I’m pretty sure that I can hear something. I’m not sounding the alarm on the entire market, but I think it is past the point where buying certain very popular technology companies is a good idea.  In fact, I’d go as far as to say that you do not want to own this group of companies today. More on that in a moment. First, let’s look back at some helpful history… I mentioned that there isn’t anyone who rings a bell for us at the top to tell us that it’s time to sell. That isn’t fully accurate, because there are always signs.  The trouble with those signs is that while they are very obvious with the benefit of hindsight, they aren’t so easy to see in real time. In 1929, JFK’s father Joseph Kennedy Sr. picked up on one of those subtle signs and didn’t just get out at the top, he scored a massive windfall on the way down as well. Kennedy had made a lot of money in the 1920’s with the market going up, but it was when he was getting his shoes shined one day that he changed his strategy and made even more money. What happened? While sitting in the shoeshine chair, Kennedy Sr. was alarmed to have the shoeshine boy gift him with several tips on which stocks he should own — yes, a shoeshine boy playing the stock market. This unsolicited advice resulted in a life-changing moment for Kennedy Sr. who promptly went back to his office and started unloading his stock portfolio. In fact, he didn’t just get out of the market, he aggressively shorted it — and got filthy rich because of it during the epic crash that soon followed. They don’t ring bells at the top, but apparently when shoeshine boys start giving stock advice it is time to head for the exits. Why was this moment important? Because someone with no education of the financial markets was gambling with the market, and if the average person with no financial experience is gambling, then when the market starts to turn down, those with financial and emotional intelligence can make a lot of profit. The author goes on to express his concern with the high level of concentration in technology companies specifically FANG+.  In fact, there is the NYSE FANG+ index comprised of Facebook, Apple, Amazon, Netflix, Google, Alibaba, Baidu, Nvidia, Tesla, and Twitter. From September 2014 to 2017, these group of stocks have had a 28.44% annualized return. The author would’ve owned these stocks three years ago but would he own them today? No!  As a group these stocks are frighteningly expensive today. That is generally what happens when stocks go up that fast, they become much less attractively valued. Rather than just take my word on that, let’s look at some facts. Here are the current trailing price to earnings multiples for each of the members of the NYSE FANG+ index:

  • Facebook – 37 times
  • Apple – 17 times
  • Amazon – 242 times
  • Netflix – 215 times
  • Google/Alphabet – 35 times
  • Alibaba – 62 times
  • Baidu – 47 times
  • NVIDIA – 51 times
  • Tesla – Doesn’t even turn a profit
  • Twitter – Doesn’t even turn a profit

 Individually these stocks range from expensive to absurdly expensive. On average though, I’d have to say the valuation of the group is close to the absurd. The average price to earnings ratio of the eight companies that actually have earnings is 88 times. Yikes! Does it mean these companies are bad companies and are going to collapse? No not necessarily, but are these prices possibly too high? Only your fundamental and technical analysis can give you the answer. Again, having financial and emotional intelligence is important when building wealth. As volatile as the stock market, you should watch the prices of the cryptocurrencies, and you’ll see truly volatile swings. Markets are controlled by supply, demand, and emotion. Carefully monitor the market and understand these tech companies to find your entry point, and always ask yourself what is your exit strategy? What are your plans with the capital gains?  Are you willing to lose it all?

If you are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about the self-lending principle in the mustard seed section.

This week, I’ve included HOW BAD DO YOU REALLY WANT IT? [SUCCESS] – Motivational Video from the Mulligan Brothers 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

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March 22, 2017

http://www.investopedia.com/articles/personal-finance/070115/3-secrets-you-didnt-know-about-estate-planning.asp

Estate planning is complicated, which is why it’s highly recommended that investors seek an experienced financial advisor and/or attorney to help sort everything out. The three estate planning secrets below will help investors stay on the right path. (For more, see: Estate Planning: Introduction. The three secrets to know is avoid disinheriting children, divorce inheritance protection, and trust beats probate. If you have children from a previous marriage and want to pass your assets to them, then it’s possible that the stepfather or stepmother could pass those assets on to their children or even new spouse. A good way to prevent this event is using a living trust instead of a beneficiary designation or joint ownership. If you have a six-year-old child, then you’re not going to be very concerned with that child getting divorced at some point down the road. However, it’s never too early to start planning, and the divorce rate is currently around 50% in the United States. If you don’t take the correct actions, your child’s inheritance could end up in the hands of his or her ex. This is surely not what you have in mind for an inheritance, especially if your child is currently married and you’re not fond of the spouse. The solution is a specially designed trust. With this approach, trust shares are created when you pass, and each share will remain in the trust so the trustee can handle the shares. As a trustee, the child will be able to handle those funds as he or she desires, and this trust is protected from creditors and bankruptcy. An exception to the previous statement is if the trust is used to guaranty a loan, in which case the creditor can look for repayment from the trust. Finally, if your estate is planned through a will then it must go through the probate court system which often involves fees, taxes, and legal fees. An important note is that having a living trust doesn’t guarantee that you will avoid probate. In order to avoid probate, all assets must be titled in your name. This includes bank accounts, certificates of deposit (CDs), stocks, bonds, real estate, etc. (For more, see: 6 Ways to Lose Your Estate.) It’s important to consider the benefits of a living trust vs. a will. Trusts take a little more money to create, however as the author states in the long term, there is more money that can be left to your children. It’s important to be able to provide for your children’s children. If you’re interested in learning more about how I can help you with setting up a living trust contact me, and I’ll be glad to offer a direction.

http://www.investopedia.com/investing/alternative-investments-stock-market/

Most people think of investing as buying stocks and bonds. The more adventurous might think about a real estate investment trust (REIT). Also, some people consider buying stocks of mining companies or investing in a metals exchange-traded fund (ETF) as a way to invest in gold, silver, platinum and other metals. But what if you want to avoid anything that trades through a broker or online discount broker? There are alternative investment opportunities. Some of them can make you a lot of money, and some of them may make you a little money. Either way, you are not trapped into choosing stocks, bonds and ETFs that are traded publicly. When you start thinking about alternative places to put your money, you need to stay away from scams and get-rich-quick schemes. You need some legitimate investment vehicles that may help you prosper. (See also: Should Your Retirement Portfolio Include Alternative Investments?). The author made sure that all facts and figures were current as of February 15, 2017. The four alternative investments are peer to peer lending, real estate, gold, and owning your own business. With Peer to Peer Lending, your money is invested with a pool of other investors to loan money to people for either personal or business purposes. Your rate of returns is typically, however the risk is also higher, because these borrowers are typically not able to get loans through traditional lending institutions. I’ve discussed gold, real estate, and business in previous blogs, but it should be noted that the author recommends that an allocation of five to 10 percent in gold is considered healthy for an individual’s portfolio. It’s important to have a knowledge of each asset class. The question you should ask yourself is am I investing for capital gains or cash flow? Have I properly protected my assets? How liquid am I? Are my assets creating wealth? My strategy may not work for you because my wants, needs, goals and vision is different. Create a foundation for yourself and build from it.

Items in italics are direct quotes from the articles above

If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about the self-lending principle in the mustard seed section.

For this week, I’ve included Don’t Allow Them to Doubt You – best motivational video from the Motivation Archive 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