May 28, 2012

Globalize your money

Have you noticed that several corporations today have no loyalty to the country from which they started?  Several corporations nowadays are global brands and their first objective is to generate profits for the shareholders (or owners) that they serve.  Think about it - McDonalds, Siemens, GE, Sony, Microsoft, Catepillar, BP, Exxon, ADM, etc.  All of these listed corporations and several others do not wave a particular flag for its countrymen's sake, but for profit's sake.  

Corporations today are looking for the best labor markets to take advantage of (hence, manufacturing jobs in America being moved to China, Brazil, Mexico, etc).  They're looking for the best tax advantages that will allow the best return on their investment.  If one country enters a period of war, has a riot, or becomes politically unstable, a corporation can easily say goodbye and look for new fertile ground to plant seeds in.  

So, why not be like a corporation yourself?  Why not globalize your money?  Don't just keep your money in US dollars!  You'll have more flexibility if you have some investments in Euros (assuming it doesn't all go away), Real, Yen, and my absolute favorite - Gold and Silver.  Imagine the turmoil some individuals must have if all of their investments were in Euros?  The negative affect caused by extreme austerity measures being forced on the citizens of Greece and other surrounding countries must be very painful and causing serious psychological damages as well.  What would you do if you woke up one day and realize that the 401K you've been saving up was all of a sudden worth 50% less than what you had?  And you were 60yrs old?!  You'd probably riot too...all hope would be lost.  Look at our colleges here in America - students are having protests all over in response to tuition hikes.  This "Occupy Wall Street" thing is still going on as well in some form or fashion.

Take some time and look at what's going on.  Things are changing.  It doesn't make sense to me how the media, our place of employment, and our government tell us that we should invest in a 401K given all of the inherent scams that causes these "retirement plans" to lose so much money.  It infuriates me how Goldman Sachs, JP Morgan, private investors, and other institutions can bribe Moody's, Standard and Poors, to give an excellent rating on a stock or security, trick us investors into thinking that we're investing in something credible, then pull the rug from under us.  This causes us to lose significant wealth - which is what happened to several "soon-to-be retirees" in 2007 and these individuals are forced to find a minimum wage job flipping burgers or greeting customers at Wal-Mart.  You think they want to be there?  Or do you think that 70yr old grandma would rather be at home watching re-runs of Matlock and living out her the rest of her life in peace?

The odds are against us - but it is up to us to beat them at their own game.  It is possible.  Globalize your money into several worldwide investments and hard assets.  Take control of your investments (or pay someone to do it) and learn how to use leverage in order to generate a larger return.  Leverage is a tool, and can be used to help generate huge profits for us- it can also harm our portfolio, so take calculated risks.  Be creative and search for extra income opportunities.  Learn new investing techniques by using free resources like YouTube, OptionsXpress, Investopedia and other web-based programs.  

There is a lot of opportunity in America and other countries abroad - take advantage of it.  What do you have to lose?  What are you afraid of?


May 19, 2012

Frankfurt March Protests Unchecked Capitalism -

Frankfurt March Protests Unchecked Capitalism -

Perhaps a glimpse of what is to come?  Several people around the world are feeling the pressures of the bad economy and manipulation of the currency by central banks all over the world.

This is an election year and the stock market seems to be OK, and jobs seem to be coming back.  But I can't help but wonder what will happen after the election is over.  I think that we could be in for a rude awakening.


May 18, 2012

Facebook IPO is today! Is it worth it?

The big banks are valuing this "company" at $100 Billion dollars!  And the estimated stock price is around $38 to $40 dollars!  Time to grab some of this stock before it hits $400/share, right??

Absolutely not.

I really don't understand where these numbers are coming from...?  $100 Billion???  Does Facebook even $500 Million in Assets?  What do they produce?  What is preventing the stock from nose-diving after the banks have made all of their money?

Maybe I'm completely wrong - but we will see what happens to all of these dot-com investments in the long term and whether people will be happy or forced to live with regret.  I think it makes more since to invest in something a bit more tangible, or perhaps a company that produces something like General Electric, BP, Ford, etc.

Besides, regular investors like you and I have to wait in line to purchase a "popular stock" such as this.  So the actual purchase price will be about $60/share or more.  They're better investments in the market today.


May 12, 2012

Day Of Reckoning

Day Of Reckoning

Interesting article - who knew?  What I find ridiculous is how 401K participants have to still pay fees even when their portfolio loses money!  For instance, if I'm part of a 401K plan through my employer and the plan loses 15% or more during the course of the year - why should I pay management fees for poor performance?  This just makes my losses greater when you add it all up.


May 10, 2012

Investing vs. Cash flow - Just two quick thoughts of mine

I'm still bullish towards REITs (Real Estate Investment Trusts) - these are the best investments since sliced bread.  Where else can one get more than a 15% return on their money?  And pay minimal taxes?  Two REITs that I own are IVR (Invesco) and NLY (Annaly Capital Management).  This allows me to use my money and own a portion of commercial real estate.  

Given the volatility swings consistent in the stock market for the last 4 years - REITs have been a steady stream of income for most investors.  The stock doesn't fluctuate as much as other stocks, and they pay a consistent quarterly dividend that provides a residual income to its investors.  Although my REITs may not be as stable as my investments in utility companies, they still have a place in my overall portfolio.  And it generates a pretty good cash flow.


Had a thought today - what if everyone stopped investing in their 401K?  What would be the outcome if the money we were saving for retirement was instead used to help pay off debts today...?  What if we used our money today to generate cash flow today?  

Would we be better off once we're in retirement?

I'm just thinking of all of the dangers of stashing away useful cash for tomorrow...instead of putting that cash to use today.  Here are some dangers to waiting until you're 70+ to retire off a 401K:
  • Most people investing in their 401K will face increased taxes when it's time to utilize all of this money that has been saved over the years.  
  • Most people 50+ are not on track to retire and have not saved enough in their 401K
  • Adam Smith thought that saving money - similar to how a squirrel stashes away nuts, was ridiculous. Instead, it is better to have nuts (or cash) come to us every day for the rest of our lives.
My theory:
If we used our money today, that we normally and lemmingly send to our 401K plans, to instead pay off debts early, and build up our cash flow - we perhaps could be better off in the long run.  Why?  Because the government will eventually find a way to go after a person's 401K, IRA, 403B, Roth IRA, Pension, etc. sooner or later (got to pay off the multi-trillion dollar deficit somehow, right?).  

Maybe 401K's will be the first to be overly taxed first before they come after the investors with multi-levels of unearned income...after all, the rich stay rich don't they?