Danielle DiMartino Booth tell us what is really going on at the federal reserve board and why this might not end so well. We discuss her new book, Fed Up: An Insider’s Take on Why the Federal Reserve is Bad for America.
How to Detect Investment Fraud
I am on an email list for the State Board of Securities. They send out emails about investment advisors that they have caught in investment scams. Unfortunately, these come out on a regular basis. There is a lot of fraud occurring. What’s worse, these fraudsters advertise on credible mediums such as the radio as well as websites. This leads investors to believe that they must be credible. After all, what investment advisor is dumb enough to advertise a fraudulent scheme right out in the open for regulators to see? You might be surprised! This is happening. The bottom line is that there is a lot of fraud occurring and I want to make sure that you don’t end up being a victim.
Fraudulent investment selling is not hard to spot. They have 4 characteristics.
First, they could be asking you to write the check directly to the investment advisors firm or the investment advisor. (All the same thing!) In legitimate investment scenarios, checks and balances exist and the investment advisor never has access to client money. There are walls of separation. First, there is the investment advisory firm. Then there is the broker dealer that monitors the investment advisor. Finally, there is the clearing house which handles the money. To be fair, there can be legit situations where the check is written to the firm and it could be within the bounds of security laws. Regulators are discouraging that type of arrangements so you see less and less of it. Plain and simple – an investment advisor that asks you for a check made out to any type of an account where there is ownership is a huge red flag.
Second, is the advisor licensed? This is a easy clue to investigate. The majority of time these fraudsters aren’t even licensed to sell investments. You can actually go online and check the investment advisors registrations. Go to https://brokercheck.finra.org/and look up the investment advisor.
Third, is the security that is being offered a registered investment? The vast majority of cases of fraud include unregistered securities. Basically, you have unregistered advisors selling unregistered investments.
Fourth, are the benefits and claims almost too good to be true? Oftentimes, they will include high guaranteed returns. There is a litmus test you can run. If it is a guaranteed rate of return they are promising, compare it to the going rate. If there is a big gap, then something is not right. For example, let’s say that CD’s are paying 1.5% and fixed annuities are paying a maximum of 3%. The investment scam is offering a guaranteed rate of 9%. The gap between 9% and the going rate would signal that something is not right and potentially be a scam.
Years ago, I had someone call me wanting to know what I thought about a guaranteed CD that was paying 7%. Knowing that the going rate was 3%, I warned the caller that this could be a scam. The individual went ahead and placed the money with the bank. They ended up losing $250,000 because it was indeed a scam.
We live in a day and time where you don’t have the luxury of being so trusting. Do your due diligence and you will prevent yourself from being another investor who has been scammed.
Is Walmart Being Treated Unfairly?
A group has organized to expose Walmart and their treatment of their employees. The group is organized by Making Change at Walmart and the United Food and Commercial Workers Union. They are also supported by the AFL-CIO. The 22 state, 30 city cross country tour made their stop in Dallas last week. This was from their press release:
“Walmart’s failure to pay a living wage costs taxpayers an estimated $682.0 million annually for its employees’ public assistance needs (as of 2014). Because Walmart refuses to do the right thing, thousands of its workers are forced to rely on government assistance programs to survive. In fact, a single, full-time Walmart employee, working 34 hours a week with 2 kids, still qualifies for Medicaid and food stamps even if they make Walmart’s average wage claim of $13.75 for full-time, hourly workers.
Irregular schedules and insufficient sick days also make Walmart a difficult place for families to work. Walmart’s low wages and poor benefits drain our community’s taxpayer-funded resources and hurt working families. Walmart already costs federal taxpayers an estimated $6.2 billion every year to cover their employees’ government assistance needs, like food stamps, CHIP, Medicaid, and subsidized housing. With Walmart profiting $13.6 billion last year, it is outrageous that a company this wealthy would depend on taxpayers and the community to subsidize its operations.”
The last sentence of their press release I think creates the question. Just because they make 13.6 billion, should Walmart pay more? Is this a classic call for wealth redistribution? Is Walmart being unfairly attacked? Let’s think about this for a second. Are they paying at least the minimum wage? Are the labor laws being violated? Did employees know what they were getting when they accepted employment at Walmart? Are they being forced to work against their will?
It doesn’t seem like they can answer any of the above questions and point to unfair treatment of Walmart employees. Having said that, it is unfortunate that Walmart does not value things such as the work/family balance. Further, it is even more unfortunate if employees are not offered fair compensation that is line with industry averages.
Then there is the accusation that Walmart is costing taxpayers hundreds of millions of dollars of taxpayer money through government assistance programs. There is a portion of the workforce that gets paid hourly and needs help taking care of their families. That is why we have government assistance.
Don’t get me wrong, I am not a fan of Walmart. I do think there is a lot of truth to the dark side of Walmart. I also think that there are some moral issues at stake here. Expose them breaking labor laws and then you have something to expose. What are your thoughts?
Is Being a Millionaire a Worthy Goal?
Since most people don’t have adequate education on how money works, they end of relying on Pop Culture Finance as means of education. They read articles on the fly and attempt to get education along the way. The problem with that approach is Pop Culture Finance oftentimes sends incomplete information leaving the reader to rely on assumptions which are based on misleading, unclear points. In this latest article, they are writing about attaining the goal of being a millionaire by age 67. They rightly make the point that the earlier you start saving and investing the easier it will be. However, they leave out two very important points.
1) Being a millionaire 30 years (as an example) from now is not like being a millionaire today
Say you are 37 years of age and your goal is to accomplish that goal by age 67. A million dollars is worth the equivalent of roughly $522,000 in today’s dollars given a 2% inflation rate. It is worth even less given a higher inflation average. At a 5% withdrawal rate, that produces a retirement income of $ 26,100 assuming that you survive future financial meltdowns. Can you live off of $26,100 and whatever is left of social security in 30 years?
2) It probably takes more than being a millionaire to make retirement work
In the article, the writer states that a million dollars “is not an adequate goal for every saver.” Considering how much future income that million dollars produces I doubt it is adequate for the majority of future retirees.
Instead, go through the proper process of setting your goals and know what your number is that you need to accumulate in order to one day claim financial independence and retire the way you want. The last thing you want to do is set your sights on the wrong goal and find out in 30 years that being a millionaire is nothing more than being a “thousandairre”!
To go through an individualized process of goal setting and planing, email me at firstname.lastname@example.org
An Easy Way to Teach Your Kids About Investing
When I come across a great idea, I want to share it with you. I am always trying to think of new ways to educate my boys on how the stock market works. Really the best way to do it is by participation. It is tough to purchase with a kid’s allowance. However, with Stockpile’s revolutionary platform, it is as easy as buying a gift card and purchasing and owning a share or part of a share in a company such as Apple.
Here is how it works:
You can purchase a gift card to purchase stock at over 14,000 grocery and retail outlets. You can also purchase stock at www.stockpile.com or purchase an e-gift and send it to someone.
The beauty of this platform is that your child can (with the supervision of an adult) purchase a stock such as Apple, Amazon.com, Tesla, etc. for $25.00. If for example your child wanted to purchase McDonald’s and the stock was trading at $50.00 a share and your child had $25 to invest, you would purchase the stock and own 1/2 of a share. The platform allows you to purchase fractional shares.
This platform allows your child to buy stock at low dollar amounts and be a shareholder in a publicly traded company. If the share price goes up, then the fractional shares will go up. Your child can go online to access the brokerage account and see the growth for themselves. You give them the decision-making authority to buy and to sell and they can learn in real time how the stock market works. It is a great way to have a conversation about how stocks grow.
Give the Gift for Stock for Graduation
Looking for a unique gift for graduation? Either send an e-gift or purchase a gift card to stockpile and gift the new graduate the ability to purchase stock of their choosing. I think it is a much better gift than the standard gift of money.
The bottom line is that we as parents need to educate our kids about how investments work and stockpile.com gives parents a perfect way to teach in real time.
For more information to go www.stockpile.com.
Should There Be Separation of Church and State?
Last week, President Trump signed an executive order aimed at the Johnston Amendment. First, a little history on the Johnston Amendment. This bill was introduced and written by Senator Lyndon B. Johnson in 1954. The story goes that he was angry that a few non-profits ganged up on him in his race for the Senate by labeling him as a communist. The bill was designed to authorize the IRS to take away their tax-exempt status if a non-profit ever heavily participated in politics by making endorsements and or getting involved in campaigns. Thus, this separated church and state. Of course, churches were included because of their non-profit status.
As a side note and from the dark world of politics, it was a brilliant political move. Can you imagine if organized religion were heavily involved in politics? I doubt that there are too many politicians who openly want to give the church a voice.
Did Trump give the church a voice? Well, sort of and not really. He signed the executive order so that people were not penalized for their “protected religious beliefs.” In the executive order, he strongly discourages the IRS for going after churches for engaging in politics. However, it doesn’t change the law. President Trump can’t pull that off with the stroke of a pen.
Is the Johnston Amendment a good thing or a bad thing? I really don’t know the answer to that question. The list of positives includes completely free speech for everyone. The church banding together to throw support behind a candidate would be strong. Unfortunately, the cons of repealing the bill seems to be much worst then the good that would come of it.
After all, you are bringing the dark underbelly of politics to the church. Pastors, if not careful, could be bought and sold with money changing hands. How about a huge donation to the church? The worst-case scenario is involving the church in questionable political processes and activities. Obviously, not every Pastor would end up being seduced by the world of politics. Why create temptations for churches and Pastors?
Would the good outweigh the bad? Would this executive order be enough to motivate a Pastor to take a chance and endorse from the pulpit? What is your take?
To spill the beans on America’s burrito-eating habits, Postmates [https://postmates.com/] (America’s most popular universal delivery app) partnered with the bean counters at NationalToday.com [https://nationaltoday.com/us/cinco-de-mayo/] to rank cities across the U.S. based on the total number of burrito deliveries, the frequency of these deliveries, and the overall preference for burritos over other foods.
*** POSTMATES CINCO DE MAYO BURRITO INDEX ***
(data analysis conducted by National Today Data Insights)
>> AMERICA’S TOP 30 BURRITO-LOVING U.S. CITIES:
#1: Los Angeles
#3: Bay Area
#4: New York City
#7: Las Vegas
#8: San Diego
#9: Washington, D.C.
#12: Dallas / Ft. Worth
#16: Kansas City
#17: Oklahoma City
#23: San Antonio
#25: St. Louis
2. Add a burrito to your cart from your favorite local or chain restaurant
3. Use code CINCODEMAYO to get it for free
To get the full rankings and unwrap other insights from the Postmates Burrito Index, visit: