Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts

Monday, March 14, 2016

Your Guide to the 2016 Presidential Election – April Primary Update

“Nobody will ever deprive the American people of the right to vote except the American people themselves and the only way they could do this is by not voting.”         -Franklin D. Roosevelt



One of the very few things we can control in our politics is who we elect into office. As a democratic republic, we don’t vote directly on the issues like a literal democracy would, instead we vote for people who make it their jobs to pass legislation which represents the people. As part of the industrialized world who claims to be the freest country on earth, the United States has the lowest voter turnout!

This is why voting is so important, because to fully express our views and freedom, it is our civic duty to vote. As much as 60 years ago, the ability to vote left out certain demographic groups. From a voting perspective, we have breached this barrier, however, voter turnout is still incredibly low. Personally, I think this is because the American people don’t believe their vote means much (for instance, Illinois always votes democrat, so why bother voting republican), being informed is incredibly difficult, and the voting process is antiquated and limiting. In many of our fellow industrialized nations, the voting process can last several days, including weekend days, and is much more accessible to everyone regardless of location or voting medium.

As far as being informed, it seems easy to be informed about a nationally covered event like the presidential election, but it is not so easy to find, or stay current, on the smaller local and event senate elections. There are simply too many people to consider in all of these different elections. As a result, I find it hard to be informed and to really understand who I am voting for when it comes to, say, local judges and commissioners. Many people have told me they vote based on the name, or just blanketing their vote for the party they register as. While this might be fully representative of a voter’s view, this can’t possibly be the best way to vote.

This guide is designed to give you all of the information necessary to understand the backgrounds and the political views of the 6 remaining presidential candidates.






Current primary standings:

Democrat


On the Democrat’s side, there are 717 superdelegates. “[These] include distinguished party leaders and elected officials, including all Democratic members of the House and Senate and sitting Democratic governors. Other superdelegates are chosen during the primary season. Democratic superdelegates are free to support any candidate for the nomination.”
“The Democratic Party has faced accusations that it has been conducting its nominating process in an undemocratic way, because superdelegates are generally chosen without regard to their preferences in the presidential race and are not obligated to support the candidate chosen by the voters.”


Republican

UPDATE: Marco Rubio suspended his campaign for President on March 15, 2016, after losing the Republican primary in his home state of Florida to Donald Trump by double digits. 
http://www.nytimes.com/2016/03/16/us/politics/marco-rubio.html?_r=0 








Democrat candidate’s background/bio



“Hillary Clinton has served as secretary of state, senator from New York, first lady of the United States, first lady of Arkansas, a practicing lawyer and law professor, activist, and volunteer.”

Born: Chicago, IL in 1947 making her 68 years old.

College: Wellesley College 1969. First student Commencement speaker
                Yale University 1973 for her J.D.

Early Career: Started as a legal counsel. Co-founded Arkansas Advocates for Children and Families in 1977. First female chair of the Legal Services Corporation in 1978, and was named the first female partner at Rose Law Firm in 1979.

Political Career: First lady of Arkansas 1979 ~1992. First lady of the US 1993-2001. US Senator of New York 2001-2009. US Secretary of State 2009-2013.



Bernie Sanders - https://berniesanders.com

“In 2006, he was elected to the U.S. Senate after 16 years as Vermont’s sole congressman in the House of Representatives. Bernie is now serving his second term in the U.S. Senate.”

Born: Brooklyn, NY in 1941 making him 74 years old.

College: University of Chicago 1964. Active civil rights protest organizer.

Early Career: Worked as a carpenter and documentary filmmaker.

Political Career: Mayor of Burlington, Vermot 1981-1989. US House of Representatives 1991-2007. US Senator of Vermont 2007-Present, Chariman of the Senate Committee on Veterans’ Affairs 2013-2015.






Republican candidate’s background/bio



An American businessman, politician, television personality, author, Chairman and president of The Trump Organization

Born: Queens, NY in 1946 making him 69 years old.

College: Fordham University for two years.
University of Pennsylvania, Wharton School of Business 1968. Attended due to one of the few real estate departments. Also worked at his father's company, Elizabeth Trump & Son.

Business Career: Elizabeth Trump & Son focused on middle-class rental housing across New York City. Unfortunately, the company was accused of violations of the Fair Housing Act. 1971 he got involved in larger projects. Eventually turned the bankrupt Commodore Hotel next to Grand Central into the Grand Hyatt and created The Trump Organization. 1988 he bought the Taj Mahal Casino in Atlantic City, NJ which later went into business bankruptcy in 1991. In 2001 he completed the Trump World Tower and other buildings in the prime of Manhattan. In the later 2000’s, he has acquired many golf courses, very intelligently branded and licensed the Trump name, made large investments in fortune 500 companies, bought sport’s teams, created beauty pageants, and created and stared in TV shows.

Political Career: “Trump has described his political leanings and positions in various, sometimes contradictory ways over time. Politico has described his positions as "eclectic, improvisational and often contradictory." He has listed his party affiliation as Republican, Independence Party, Democrat, and "decline to state." He has also run as a Reform Party candidate. Specifically, he has changed his positions on taxing the wealthy, abortion rights and health care.” (Wikipedia) His best run for political office was in the 2012 presidential race until the recent 2016 campaign.



“Throughout his entire life, Ted Cruz has proven to be a passionate and effective fighter for limited government, economic growth, and the Constitution. Ted’s calling to public service has been inspired by his first-hand observation of the pursuit of freedom and opportunity in America.”

Born: Calgary, Alberta, Canada in 1970 making him 45 years old. While being born in Canada, the Illinois Board of Elections ruled in Cruz's favor, stating, "The candidate is a natural born citizen by virtue of being born in Canada to his mother who was a U.S. citizen at the time of his birth."

College: Princeton University 1992. Harvard Law School 1995.

Early Career: Director of the Federal Trade Commission 1999-2003.

Political Career: Solicitor General of Texas 2003-2008. US Senator of Texas 2013-Present


Marco Rubio - https://marcorubio.com

“As a U.S. Senator, Marco has led a bold offensive to institute innovative, conservative ideas to address these fundamental issues and to restore hope in the American Dream.”

Born: Miami, Florida in 1971 making him 44 years old.

College: University of Florida 1993. University of Miami School of Law 1996 for his J.D. Rubio has said that his education resulted in $100,000 of student loans, which he paid off in 2012.

Early Career: Worked on Bob Dole’s 1996 presidential campaign. In 1998 became City Commissioner for West Miami.

Political Career: House of Representatives of Florida 2000-2008, Speaker of the Florida House 2006-2008. US Senator of Florida 2011-Present.



“As Chairman of the U.S. House Budget Committee, John Kasich spearheaded the successful effort to balance the federal budget for the first time since man walked on the moon.”

Born: McKees Rocks, PN in 1952 making him 63 years old.

College: The Ohio State University 1974. Researcher for the Ohio Legislative Service Commission.

Early Career: Administrative assistant to Senator Buz Lukens 1975-1978.

Political Career: Senator of Ohio 1979-1983. US House of Representatives for Ohio 1983-2001, Chairman of the House Budget Committee 1995-2001. Governor of Ohio 2001-Present.








Democrat candidate’s political views and campaign promises


Hillary Clinton
  • Overturn Citizens United and establish a small-donor matching system.
  • “Enable Americans with existing student loan debt to refinance at current rates.” “Hold colleges and universities accountable for controlling costs and making tuition affordable.”
  • “Close corporate tax loopholes and make the most fortunate pay their fair share.”
  • Invest in infrastructure to create good jobs.
  • “Defend the Affordable Care Act and build on it to slow the growth of out-of-pocket costs.”
  • “Tackle dangerous risks in the big banks and elsewhere in the financial system.”



Bernie Sanders
  • “Demanding that the wealthy and large corporations pay their fair share in taxes.”
  • “Increasing the federal minimum wage from $7.25 to $15 an hour by 2020.”
  • Rebuild our crumbling Infrastructure and create good jobs.
  • “Making tuition free at public colleges and universities throughout America.”
  • “Guaranteeing healthcare as a right of citizenship by enacting a Medicare for all single-payer healthcare system.”
  • Overturn Citizens United and change campaign finance and strengthen voting rights for individuals, not corporations or big money.





Republican candidate’s political views and campaign promises

Donald Trump
  •  “A simpler tax code with four brackets – 0%, 10%, 20% and 25%.” No business, big or small, will pay more than 15% in taxes of their income.
  • Repeal Obamacare, fully deduct premiums on tax returns, and “remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products.”
  • “Declare China A Currency Manipulator. End China’s Intellectual Property Violations. Eliminate China’s Illegal Export Subsidies And Other Unfair Advantages.” Improve US corporate advantage with the proposed 15% tax cap.
  • “There must be a wall across the southern border” paid by Mexico. Enforce current immigration laws, give American’s priority for jobs.
  • “Defend The Rights of Law-Abiding Gun Owners. Fix Our Broken Mental Health System.”
  • “Ensure veterans get the care they need wherever and whenever they need it,” both physical and mental.



Ted Cruz
  •  Protect the Second Amendment.
  • “Restore the Constitution as a standard. Protect the people by rolling back the federal government to the functions the Constitution sets out. Give power back to the states and the people.”
  • “Stop illegal immigration, Build a wall that works, triple border security, and put in place the surveillance and biometric tracking to secure the border.” Stop Obama’s Amnesty.
  • “Fiercely defend our allies and interests. Immediately repeal every word of President Obama’s dangerous Iran deal and will prioritize American national security interests in every instance.”
  • Instruct the Department of Justice, the IRS, and every other federal agency that the persecution of religious liberty ends today.”
  • Implement a flat tax; Personal – 10%, Business – 16%. Abolish IRS, eliminate death tax, overseas profit tax, alternative minimum tax, Obamacare taxes.



Marco Rubio
  •  “Stop China from undermining America.”
  • “Fight for a Balanced Budget Amendment and force Washington to live within its means without raising taxes.” “Repeal ObamaCare and cut trillions in spending.”
  • “Rewrite the Obama Administration’s Flawed Five-Year Offshore Drilling Plan. Immediately Approve the Keystone XL Pipeline. Expedite Approval of American Natural Gas Exports.”
  • “Establish income-based repayment (IBR) as the universal repayment method for federal student loans; Empower new borrowers to make loan payments in proportion to what they earn, and give graduates the option of consolidating existing loans into the new, simplified IBR system.”
  • “Deport criminal illegal aliens, Hire 20,000 new Border Patrol agents, Finish all 700 miles of walls on our southern border, Implement a mandatory eVerify system.”
  • “Boost the size of our forces to do the jobs we ask them to do, and modernizing them to meet the threats they will face so that when efforts to deter conflict fail.”



John Kasich
  • “Work with Congress to balance the budget in eight years by reining-in spending, reforming our broken entitlement programs such as Medicaid and Medicare, sending federal programs back to our states and communities where they belong.”
  • “Work with Congress to cut personal and business taxes, simplify the tax code and initiate a top-to-bottom review of our tax system to eliminate barriers to innovation, and root-out bias, arrogance and corruption in the Internal Revenue Service.”
  • “Begin dismantling Washington and taking our power, money and influence back to our states and communities.”
  • “Approve the Keystone XL pipeline, bring common sense and science to energy regulation in order to properly balance environmental stewardship and job creation, and encourage research in new technologies.”




I hope you have found this guide useful. Let me know in the comments below and be sure to submit your e-mail to follow our blog and share the posts you like! If you would like to write a blog post for us sharing your experience or a review on your product, contact us for more details.

-Andrew 


Be sure to let your voice be heard and vote!!! 




Please note: Being transparent, I wanted to present the information above in as unbiased manner as possible, however, I fully support Bernie Sanders. I hope this didn't sway the guide in any direction, however, there are many issues on each candidates website not discussed here. I tried to present the hottest issues as discussed in the debates and online. 

Wednesday, January 27, 2016

UOH Book Summary - Rescue Your Money by Ric Edelman


      For those of you interested in personal finance, Ric Edelman is one of the most popular authors on this topic. His 2009 book titled, Rescue Your Money, makes for a quick read, but the content is very powerful. Below is a summary of the book.
            
Book Summary:
Essentially, the trick to investment success is buying low and selling high. People want to beat the market which they typically gauge as the S&P 500. This is a basket of the top 500 US public companies. The problem with this mentality is that your investment happiness is determined against the index rather than the overall performance.

For example, in 2008 if you lost only 20% instead of 35% that the market lost, you would have beat the market and therefore consider that a success. But losing money should not be a happy event. Ric states “only one thing matters when it comes to investing: achieving financial security. That is your one major goal.” (Page 8)

      His book, and our Personal Finance Under One Hour both explain that the main reducer of return on investments are taxes and investments, and there are multiple levels of taxes. See the two charts below:

 
Top Tax Rates (Page 13)              Inflation (Page 15)              

These are the biggest reducer because they generally are overlooked! Ric shows a great example in his book of this very concept.

“Let’s assume that you pay both federal and state income taxes. Let’s further assume that your combined federal/state tax bracket is 30 percent. Since the CD paid 3.1%, you lose .93% to taxes, leaving you with a profit of 2.17%. But let’s not forget inflation. If inflation is averaging 3.2%, you’re actually losing 1.03% on every dollar you invested in that CD. Now, losing 1.03% annually might not seem like much, considering the S&P 500 lost 38.5% in 2008. But the stock market doesn’t lose every year, while the CD does.” (Page 16 & 17)

The figure below shows the numerical example of taxes and inflation affecting your CD returns.


         Taxes and Inflation (Page 18)  

We explain CD’s in our book, Personal Finance Under One Hour, and they can be a good investment in some cases. For instance, today’s CD rates are better than leaving the money in a savings account, however, you cannot touch the money and you still lose on the taxes and inflation. Safety is the main reason consumers like CD’s. “As a result, millions of Americans are going broke safely and they don’t even know it!” (Page 20)


This next picture lists all of the products that are safe, but not great for generating the returns to rely on.


    Product Returns (Page 25)

Parts of this next section in his book are worth quoting directly. It is a great look into the big picture of consumer investing. It explains the issues with fads and the media.

“What about CNBC’s Jim Cramer, who offers a barrage of advice on each night’s broadcast? Barron’s studied each of Cramer’s recommendations in 2006 and 2007, and in its August 20, 2007, issue concluded that his picks gained an average of 12 percent. Barron’s noted that for the same period the S&P 500 gained 22 percent. Cramer was about half as good.” (Page 39) 
“Clearly, trusting the media’s investment advice is not a successful strategy, yet judging from the millions of people who read, listen, and watch all the commentaries, it’s also clear that most people don’t know this.” (Page 42)
“It doesn’t surprise us when the weathermen get it wrong. It doesn’t surprise us when sportswriters get it wrong. Why, then, does it surprise us to think that an investment analyst or portfolio manager might be wrong? And why are so many people willing to invest their life savings on the prognostications of such a person?” (Page 44)
  
Another common pitfall is investing in large companies. There is nothing wrong with investing with them, however, they do lose money from time to time and many people focus solely on these companies for the majority of their retirement or investing.

One of the biggest mistakes can be investing the most in your employer. Typically, you can buy your company’s stock at a slight discount which makes buying very beneficial. While you may believe in the company you work for, what happens if the company folds? Not only do you lose a job (your source of income) but you could also lose all you have invested over the years. “Do you really want to risk your financial security on the fortunes of a company over which you have little knowledge and no control?” (Page 49)



The basics of Buy Low, Sell High.


S&P 500 (Page 57)

This chart shows how the stock market typically performs during the booms and busts. The market typically rises for a longer period of time than the market falls. This is due to more money going into the market, companies continuing to grow, and the economy expanding. Essentially, every time the market falls from a previous high, it will climb even higher over time. The market never falls and stays down.

So when the markets are troubled, such as January of 2016, it is usually a good time to buy, not sell. The key is your intention for investing, and typically that is not to pull your money out within a month or two. Usually, you are looking at investing for a long period of time. That said, Ric asks,

“Why bother looking at your account each hour, day, or month? Looking often at your investments is likely to make you do the opposite of what you should do. If you see that prices are down, you’ll become upset and want to sell. If you see that prices are up, you’ll get excited and want to buy.” (Page 64)
“History provides the reason why you shouldn’t do that: past recessions, panics, and depressions have taught us that stock markets recover with astonishing suddenness and velocity. By the time you realize that the bottom has been reached, prices have already risen sharply – meaning that you are forced to buy back in at prices that are higher than when you sold.” (Page 113)
Can you predict when those short spurts are going to occur? Me neither. That’s why we remain invested the entire time, so we can catch the profits when they come.” (Page 107) 

Ric, and many other advisors, recommend patience with the market. Diversify your portfolio, then let it sit. Over time, he recommends strategic rebalancing.

        
   
     Jan 1st Portfolio (Page 117)            Dec 31st Portfolio (Page 119)

The idea is counterintuitive at first. You would think that since Stocks performed better than cash, we would take money out of cash and put more into stocks…However, this is not what Ric recommends, and so many investors do what was just mentioned. Instead, he recommends selling stocks as that has become the majority of the portfolio and therefore subjects the portfolio to the ups and downs significantly more; If the stock market declines, your portfolio will be affected much greater.

“In other words, we sell the asset that made the most money and we buy the asset that made the least (or maybe even lost) money.” (Page 120) This is kind of like buying and selling on Ebay; you want to buy coins when they are cheap, and sell them at a higher price. Most of the time, investors want to buy the investments that made the most money recently.

“No one wants to buy gold at $200 an ounce. But when it reaches $1,000 an ounce, they load up. Later, when it falls to $700 and they’ve lost 30%, they sell and swear that never again will they buy gold.” (Page 123) 
For instance, a short-term anomaly might cause an asset class to jump in price momentarily. A quick sale of high-priced assets and a purchase of low-cost assets would have locked in your gains. But calendar rebalancing will miss it.” (Page 127)

      To diversify, Ric, as well as our book, recommends exchange-traded funds (ETF’s). With mutual funds, the fees will eat into your returns while ETF’s have very low or negligible fees. Mutual funds might also trade in and out of stocks meaning that the short-term gains and losses actually turn you into a short-term trader when tax time comes around.

“In all, you’re paying the average retail mutual fund 2.67% per year. Based on the stock market’s average annual return of 9.6% a year, that means you’re giving away 28% of your profits on an annual basis.” (Page 148)
The U.S. retail mutual fund industry is a $9.4 trillion industry. Collectively, U.S. equity and bond mutual funds charge $248 billion in fees each year. No wonder these guys are among the wealthiest people in America.” (Page 151)

As a recap, Ric’s advice sums up to the following:
·       Diversify into several non-related asset classes (S&P 500 ETF, International ETF, Bond ETF, Short term Security ETF, and cash to name a few)
·       Rebalance periodically based on the pieces of the pie in your portfolio becoming too large compared to your other investments. Sell the part that made the most money, and put that in the parts that lost money.

·       This is not to say sell the S&P 500 ETF to put in your single failing experimental biotech stock, but instead put it into another non-correlated ETF. Avoid putting a significant amount of money in a single stock.


Buy the book:
      Have you read this book?  If not, does this summary inspire you to read it? If you are interested, you can get Rescue Your Money by Ric Edelman here.

Let us know your thoughts in the comments, and make sure to subscribe!