Newsletters - Past Issues

Income versus growth A new way to invest May 10 2023

 

 

 

 

With markets in continued disarray for well over a year now, investors may be looking at ways to solidify income instead of pursuing traditional growth strategies.

You really can’t blame them. The longer the market falls, the more discouraged an investor may become.

There are solutions to be able to abandon growth for long term income and looking in this direction can open up more possibilities than just buying a handful of stocks and sweating out market crashes.

Certificates of Deposits (CDs) are available both through your local bank or credit union and through most financial advisory firms. Right now, the return on CDS are healthier than they’ve been in decades due to the increase in interest rates by the Federal Reserve.

Time Frame Laddering CDs (my term here) is a sound strategy to both garner possibly higher returns along with a 100% government guarantee on principal. Laddering means buying different maturity dates which enables you to lock in returns for a longer period of time yet have some level of liquidity. For instance, buying a 6 month CD, a 1 year, 2 year and 5 year CD is an example of laddering. Although a 5 year CD would be essentially tied up for 5 years, the shorter duration CDs convert back to cash sooner according to each maturity date that you select. I wouldn’t recommend buying anything longer than 5 years out as there is too much that could happen to interest rates given the current crazy economic environment, but that’s just me.

One could certainly consider 10, 20 or even 30 year products be added to a ladder portfolio. Just make sure you understand the advantages and drawbacks of longer time commitments.

You could use the same strategy for Treasury Bills, notes or bonds. Seek out a financial professional or discuss with your local bank to understand the differences between CDs and Treasury products. These are also government guaranteed.

Buying a basket full of dividend stocks is another way to garner long term income. Dividends are sort of like thank you gifts from the publicly traded companies that offer them.

Basically if you buy a share of a dividend paying company, they pay you a certain amount for every share you own every so often.

Some dividend paying companies have paid dividends for decades, and some have increased their payments every year for just as long. Be aware however that dividends can be reduced or even eliminated by the company at any time. As a general rule however, if a company have been paying dividends for years and/or has never cut them, there is a good chance they would want to preserve that track record. Another consideration of dividend paying stocks is the price of the stock could drop or go up. Going up would be nice of course but a drop in price could sting a bit. Price changes do not necessarily change your payment however but it could.

Buying bonds (debt from companies, municipalities or even states) are usually regarded as a bit more stable than stocks. They pay an interest rate and you can buy insured bonds if you’re worried about a default, and yes, defaults can happen.

Many conservative investors hold just a portfolio of bonds, having been taught by their grandfathers that bonds are a stalwart of a consistent investment strategy. Some argue however that this way of thinking is old fashion and indeed, the bond markets have been hammered like stocks on numerous occasions.

I would tend to agree that bonds, albeit, the RIGHT ONES, can be safer than holding some stocks, but in the last few decades, even bonds have, at times, been uncharacteristically volatile.

Like all investments, make sure you understand the ins and outs before venturing into the arena.

Income annuities are contracts from insurance companies that, in exchange for a payment(s) to them, they promise to pay you a certain amount for a certain period of time. Lifetime income is available and you can even select the percentage return you desire, locked in for life, if you meet certain conditions.

Not falling into the traditional discussion of what is called equities, you can always dip your toes into being a landlord and garner a property to rent out. Renting out a home, condo or mobile home, or taking advantage of the Airbnb phenomenon can supplement ones income. This route is a popular one should you be able to manage the work and investment required of such an endeavor.

Concluding, altering ones focus from capital appreciation (growth) to securing income can open up more avenues of consideration rather than just watching Wall Street all day.

“Watching the markets so you don’t have to”

(end)

(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249. (530)559-1214.

 


 

MORE BANKING COCKROACHES MAY 8 2023

Another cockroach.....

 

A few weeks back I penned a Money Matters article quoting famous investor Warren Buffett, that when it comes to a banking crisis, he said “there is never just one cockroach”

Buffett nailed it years ago when he coined this ever so accurate assessment of how banking problems progress along no matter where or when they have occurred.

Buffet, in his annual shareholder meeting last week, addressed the current crisis, blaming the problem on everyone from bank managers, auditors, regulators, the Federal Reserve and even the U.S. government. Buffett stated that bank oversight is “messed up” and many people “want it messed up”.

Not much word mincing there eh?

Despite repeated regulations along with assurances over decades by all the above, we find ourselves once again being told banks are failing, that there is nothing to worry about, and that the event is over.

The only truth in that last statement is that banks are indeed failing. The rest is frankly a big pack of lies. And yes, lies is the correct word, because if they’re actually telling the truth, they are incredibly ignorant. And if that ignorant, incredibly dangerous.

Biden recently came out (again) and told us that the banking `system` is safe and that taxpayer money will not be used for bailouts.

It is said when the government denies something, it’s a sure sign it’s true.

I can say, from my point of view, your money is “kinda” safe, that the banking `system` is far from “safe”, and that taxpayer money will absolutely have to be used as the FDIC doesn’t have THAT much money.

Of course, when the FDIC runs out of money they just get more from the FEDERAL RESERVE, and the way the mechanics work, round about your taxes will pay for a lot of it.

Dissecting the most recent banking crisis in my last article (email me for a copy) I will only add the word “ditto”, and that you should read the last article.

The latest cockroach to scurry into view is First Republic Bank with branches throughout the San Francisco bay area. With assets worth an estimated 220 billion, the total bank failures that have occurred in the last few months now exceed the total size of bank failures by assets than the infamous 2008-09 banking implosion that almost brought down the global financial network.

You remember that one don’t you?

After four decades of studying economics, I am of the opinion the Federal Reserve, and other central banks like it, attempt the impossible while believing otherwise.

Originally established as the lender of last resort, we can better describe them as the printer of last resort. Money printer to be exact. Nowadays, and for many a past nowadays, they believe, as the does the governments that establish such entities, that an economy can be controlled like some sort of automobile. Step on the gas and away we go, apply the brakes and slow it down, turn right and we go off in one direction and turn the other way, and we go off in another.

Obviously, we have learned from decades of market crashes, recessions, depressions, and bank failures that the Feds obviously can’t drive very well. But even though its hit many a wall, it assures us it has the driving skills it needs to eventually get us to our destination.

The reasons are many why a central bank can’t do what it thinks it can, but without venturing out to far, I liken their efforts to weeding with hand grenades.

Yea, it’s sort of like that and the visual pretty much describes it. Basically its tools are incredibly massive and massive only. By its sheer size, the Federal Reserve cannot tread lightly, pulling troublesome financial weeds where they sprout. Instead it tosses their financial weapons to and fro, blowing up chunks of the economy while trying to remove a specific problem.

And what does it get for its efforts?

Much like weeding with grenades, its blows big holes in various spots around our economic garden, causing even more destruction.

Look no farther than the current (and reoccurring) bank crisis. Raising interest rates to quell inflation, it destroys bank profits by hammering the mechanics of where banks place your deposits. (Again read my last article).

In conclusion, one doesn’t have to understand how we get from there to here when it comes to the Federal Reserve. We just have to see the destructive holes it’s left, and right now they are currently all over the banking system.

“Watching the markets so you don’t have to”

(end)

(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249. (530)559-1214. Marc was voted best financial advisor in the county 2021.

 


 

4.93% APR on 3 months T BILLS

 

 

CD and T BILLS

100% guaranteed by Uncle Sam

 

3 months T bills now 4.9% APR 

Dont miss out

Let me build you a portfolio of these

 

Call me (530)559-1214

 

Lifetime annual payments yielding double digit returns for life depending on your age.

Let me run an illustration of what you would get today.

Only need your age for GUARANTEED lifetime payments

SEE WHAT YOU CAN MAKE


 

Lifetime income READ 4/28/2023

Income for Life

Super High Return

100% Guarantee

 

 

Nationwide Bonus Income builder is solving a lot of my clients need for high lifetime payments. Basically Nationwide adds 20% to your funds of whatever you put in on the day of signing. Make up stock losses the first day. Example- 67 year old male, opens an account and puts in 50,000.00. Nationwide credits the 50 K and adds 10K to the income base. If you decide to start lifetime income at age 74, you get 9.46% on your original amount for life. It also is tied to a stock index so you CAN MAKE MORE, but never less then 9.46% EVERY YEAR for life. Wait until you are 76 and make 11.32% annually. GUARANTEED. If you older you get even more. I can run your guarantee in minutes. Call me. 100% principal protected and guaranteed return as stated. Voted best of Nevada County 2021 and financial and insurance columnist for the UNION and 5 other newspapers and host of MONEY MATTERS on 67 radio stations nationwide. Calif Ins License 0L34249. (530) 559 1214


 

Earn 10% plus EACH YEAR on your money? Update LIFETIME INCOME

 

BIG CHECKS FOR LIFE?
REGARDLESS OF AGE?

KEEP READING 

 

With the market in ongoing turmoil for well over a year now, and no way of telling if the recent rally in the first quarter of 2023 will stick, the annuity option has been a hot topic here on Money Matters.

Annuities are contracts between you and a large insurance company that states the insurer agrees to pay you over a period of time an amount based on the terms stated in the contract.

There are many variations on annuities and I have covered the few I recommend for many clients in past Money Matters radio and newsprint. I often use my own annuity names when describing these to better illustrate their advantages.

Today’s flavor of the month is what I call the “Bonus Income for Life Annuity”.

Unlike Participation Annuities that give you a portion of the stock markets increase measured over time, and Triggered Annuities, that promise a minimum and specific percentage return should certain things happen in the markets, Bonus Income for Life Annuities add a bonus payment to the amount a customer puts in as soon as the papers are signed, then pay a fixed lifetime income.

For illustration purposes, I always draw on real life annuity products that actually exist when describing annuities and today is no exception.

Similar to other income for life products, the Bonus Income for Life Annuity insures the customer won’t outlive their money. The payments are for life, even if it’s over and above the amount you put in. The bonus referred to means the insurer adds a bonus to the amount you put in at the moment you open the annuity.

Specifically, in this annuity, suppose you put in $100,000.00. The day the papers are signed, the insurers ADDS 20% to what you put in and subsequently would credit this account $120,000.00 immediately.

Yep, you read that right. 20% is added to your deposit.

You can’t then close the annuity and remove 120K obviously, but the 120K is there and used to calculate your lifelong payments.

You leave the money in the annuity until the day comes that you decide to “pull the trigger” and begin your lifetime payments. The payments will then continue until you die. If you want to add a spouse or significant other, you can, which means payments continue until both of you die.

Once pulled, you cannot “un-pull” the payments which means once you decide to start payments, that’s it.

How much will you get each year?

That depends on your age when you open the contract and your birth gender. The younger the age, the lower the payments. This is because the insurer is paying you for life, so the insurer rightly adjusts the payments assuming it will have to pay younger applicants for a longer period of time.

The payments can be surprisingly large. I ran one on myself at age 67, male, and if I waited only 2 years to pull the trigger at age 69, hypothetically they would pay me 8.01% on my original deposit every year for the rest my life.

Not bad.

Wait 4 years and the payment rises to 9.44% for life and if I wait 6 years, I get an 11.33% annual percentage until the day I die.

I ran one for a 71 year old male and the yield is even higher. If he waits 3 years, he gets 9.46% APR for life and waiting 5 years nets him an annual return on his money of 11.32%. Waiting 9 years gets him a whopping 17.22% on his original deposit for life.

Upon death, what hasn’t been paid out is returned to the estate and both the payments and the returned amount to the estate can also increase as the principal is tied to variety of stock indexes.

As with all the annuities covered here on Money Matters, there is no downside risk, you can withdraw a certain amount a year if needed, early withdrawal fees over the allowed annual withdrawals may apply, and there are no medical tests or preexisting conditions that will affect issuance.

Considering I-Bonds and Treasuries currently yield fairly healthy returns, the annual yields offered by certain annuities can exceed those amounts depending on age and time of investment.

And unlike the I-Bond or short term treasury rates, the annual percentage amount promised will never go down as long as you live. As mentioned, in fact under certain conditions, what you receive every year may even go up.

In conclusion, there may be other terms and conditions that apply and annuities are insured by the underlying insurance company and are currently not covered under the FDIC envelope. If interested, illustrations and the policies can be obtained through any annuity licensed agent or properly licensed financial professional.

“Watching the markets so you don’t have to”

(end)

(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249. (530)559-1214. He was voted best financial advisor in the county 2021.