Does cash flow your way? Here are a couple of suggestions that might help. www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

 

GENERATING CASH FLOW: FEW GOOD CHOICES

 

A revealing Online article appeared not long ago: “Turn Your Nest Egg Into Steady Cash.”  It compared two routes by which retirees might invest their available cash so to obtain a steady flow of income. The methods offered were predictable: an insurance company annuity or a mutual fund’s payout fund.  Both techniques are highly promoted by their respective industries. Unfortunately, each presents defects.

 

The annuity route, both fixed and variable, doesn’t entice me. The industry specializes in high fees and burdensome withdrawal penalties. In addition, the initial cost of the annuity is lost to your forever. An added disadvantage is that the payments you receive become worth relatively less over time; you’ll not grow old in comfort.

 

The mutual-fund industry’s alternative, referred to as “managed payout” or “target distribution” funds, introduces uncertainties of its own. Although the management fees are somewhat less, and the amount you invest doesn’t automatically cease to be yours, there are no assurances cash flow will continue at a predicted rate. If the mutual fund managers guess wrong in their investment decisions, you may find your income stream reduced to little or nothing … with no recourse.

 

Sorry I can’t recommend a technique for you to realize a predictable annual return on your money of 10 percent or greater. Although I regularly generate this for myself, it constitutes a full-time job, not passive investment. Most persons shy away from these sorts of tasks, as expending effort seems to take the fun out of their lives.

 

So what do I suggest?  Here in 2018, for pure passive return with no risk, a deposit into a number of Online banks will pay interest of up to 2½%. Better yet, if you’re willing to take a little time and effort in analyzing offerings, there are firms which make mortgage loans and then sell portions of them to investors to yield returns of 7% or better. In most cases they’re relatively sound, though you must be selective.

 

A final thought: There’s really no one around to guide the average American through the investment thicket. Most financial advisors specialize in taking a fee while providing little of substantive value to the client.  Welcome to the world of reality.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

 

SEARCHING FOR A FAIR RETURN

 

A recent online article illustrates a problem facing many Americans. It describes a young couple with a manageable home mortgage, no other debt and extra money for investment. But things aren’t going well; they can’t find anything to invest in.

 

Their problem isn’t unusual. Most persons seeking good spots for their investment dollars can’t find them. I’m convinced the investment industry operates to make the most at the investors’ expense. The most sought-after arena, mutual funds, operates mainly as a device to skim a portion of a fund’s assets, regardless of performance. The majority, now numbering more than fifteen thousand, operate with no concern for investor return. They’re mostly an exercise in pure marketing.

 

At an earlier time, your bank’s savings and money market accounts produced fair revenue. Today it’s tough to get 1% – though most banks aren’t ashamed to charge you over 20% on credit card cash advances. A bank’s only value is a place to park funds while waiting for a better use for the money.

 

As a last resort, you may turn to a financial advisor. Competent advisors aren’t available unless you have several million dollars. The rest aren’t really in the advisory business; they’ll just take a fee to throw you into anything. You’re better off at a casino.

 

So what do you do? Direct your own program. Thoroughly investigate whatever field you choose. Accept advice from persons you trust and don’t profit from you. Move slowly and cautiously and try to know what you’re doing.

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

Do you live by the slogan? Maybe you’ll like the ones I’ve got for you here. www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

 

THE WORLD OF THE SLOGAN

 

During a visit to one of our major discount stores the other day, I spotted an impressive display of large American flags protruding from a box containing the caption “Cherish our country.”  Down lower, in smaller print, I found “Made in Bangladesh.” This caused me wonder which country I was supposed to cherish.

 

I’ve since become more tuned in to messages directed at the public.  As I think back, I recall Democratic presidential candidate Barack Obama at a campaign rally, with a backdrop of signs proclaiming “Change we can believe in.”  I guess something to believe in sounds good in the advertising business. On the matter of belief, my favorite is from that comic W. C. Fields, who declared: “A man must have something to believe in … I believe I’ll have another beer.”

 

I’m told nothing sells better than FREE. A full-page ad offers some worthless trinkets costing $29, plus shipping and handling. The bonus: a free offer of five 25¢ pieces. Worse yet: a free real estate seminar where you’ll be pressured to enroll in a “$2,950 weekend of “priceless instruction.” But best of all is the Pontiff’s free memorial prayer card containing a blessing … providing you purchase the papal Rosary at a price to be disclosed when you contact the National Direct Hotline.

 

We’re lost in a world of pointless slogans – the less sense they make, the better they seem to sell. Do you think the advertisers consider us to be dimwits? Could they be right?

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

 

A LESSON IN FAMILY SPENDING

The number of people that live paycheck-to-paycheck is frightening. If there’s one reason, it’s because of credit cards. I’ve heard that a third of American families couldn’t meet their household expenses if family income stops for sixty days. With the universal use of the cards, on which a flood of interest continually flows, together with consumer borrowing for every impulse item the marketing industry can devise, it’s no wonder.

 

Life in America was once quite different.  As a young adult, like so many of my friends, I possessed no credit cards.  We all met our walking-around expenses with the money in our pockets. The only installment purchases we made were for a mortgage on our home or perhaps an automobile loan. The bulk of day-to-day expenses were covered by cash or check. You may consider this overly restrictive, but the benefit is obvious: When purchases are restricted by your cash on hand, there is a built-in limit on what you can spend.

 

I believe the overuse of credit is America’s worst habit and that the banks, which have been encouraging everyone to borrow, are mainly to blame. Consider one the nation’s largest banks, Bank of America. On money you loan to them, in a savings account, you receive interest of four-hundredths percent annually.  However, on loans to you through their Visa card, the rate is 23.49 percent.  Do you see how the board is tilted?

 

The lesson is simple: Avoid borrowing whenever possible. To prosper in this world, don’t pay interest.

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com