Federal Government · investing · Personal Finance

The Terrifying Future For Stocks

No, this article falls outside the category expected. It is not destined to be some foreboding warning about the threats of excessive fiat printing, or monopoly money stock buybacks. Nor are bonds the subject to be promoted as a safe alternative. Those are all great angles, but they fail to seize the goose.

What we’re concerned with is a little different. Over the last several days it dawned on me that stocks might be unsafe from the standpoint of maintaining legal ownership. Forget about the respective firm going bankrupt, or a market downturn burning the green. Might corporations or states one day simply require shareholders to surrender their stake, or, in the former’s case, revoke your assembled stocks completely? 

The idea is not as far-fetched as gullible GOPers probably believe. The State could certainly nationalize retirement and investment accounts to generate more revenue, or perhaps jack up tax rates on any sales/withdrawals. The easiest justification for an act is embodied in Social Security’s fractious position, and the move would be advertised as a question of patriotism.

Corporations on the other hand merely have to follow current social trends. They have already bent over backwards to appease the street-based terrorist group known as BMM, firing people for dissenting opinions and donating millions to “civil rights” despite their property being destroyed. How long until they bow to communist pressure and dilute or withdraw shares held by individuals who do not tow the party line?

But that’s impossible, you will say. Really? The present Supreme Court just barred churches from holding large religious services, and endorsed the undemocratic immigration power grab by an esteemed progressive. If little people stand to lose their financial holdings, would the Supreme Corporate actually care?

Not to interject with a Godwin’s Law moment, but our friend Joseph Goebbels had some great insight on this issue. Writing after his boss moved to snatch up the estates of a less-than-cooperative German monarchy, Joey said: “Real estate is the foundation of economic independence, and economic independence always furnishes a basis for political influence.”

Absolutely, and stocks are similar in nature. Will the likely Biden presidency, free of all legitimate DOJ scrutiny, defend the economic rights of the Right?

The answer, my friends, is blowing in the NASDAQ.

investing · Personal Finance

My Investment Arsenal

A few folks have requested to see my approach to investing in more detail, so I decided to conjure up the following post. It obviously features a level of diversification, but more in style than substance. I see investments as both ways to grow money and also explore different concepts, so at times certain targets are selected more for interest than practicality.

Stock Accounts

1. Individual Account (Taxable)

This houses the bulk of my investing money, at times to great annoyance. The biggest upside is easy movement of funds If I need to do something important in the short-term, but the negative surrounds tax policy requiring me to hold longer than I would prefer in some cases.

2. Individual Robo-Managed Account (Taxable)

I got this to take some weight off my shoulders on a weekly basis. My broker service offers different plans optimized for taxes, conservative wealth strategies, or growth, and I place a small amount in each month with minimal overhead where management fees are concerned.

3. Roth IRA (Non-Taxable)

Probably the best place to store your investment holdings for the long run. The money goes in post-tax, but then grows without penalty until you’re older, providing no early withdrawals have been made. I do my best to max this out each year, though I fell short a few years back, and more recently got penalized by the IRS for contributing too much based on my salary.

4. Employer 401k

While I am not a fan of 401k programs, I started putting in 5 percent this year (pre-tax) because my income was creating expensive charges when tax filing rolled around. I made sure to pick the lowest fees for my funds, and generally don’t pay much attention to it other than the occasional checkup.

Fixed Income Sources

1. Savings Account

One can shop around, but I use the decently-high option from my broker service. This account yields a little over 1 percent and is effectively an airlock for money that will journey to any of the first three accounts mentioned.

2. Lending Club

This is more of a novelty than anything else to me. The site allows participants to purchase loans and get paid interest, providing you meet specific income standards. I tossed a grand in at the beginning of the year, focused on two different lines of credit. Probably should check it more frequently, but they don’t come due until a few years from now.

Real Estate

1. Fundrise

Not sure this goes here exactly, but I started with the REIT broker last year, and have enjoyed their products thus far. They offer different portfolios depending on your priorities, but I mostly bought in to take advantage of the projected growth in Midwestern city redevelopment. Biggest downside is receiving multiple forms to enter for taxes, which can create a problem if your software (*cough H&R Block*) doesn’t recognize small dividend amounts. That becomes a non-issue after you have been with them a while, however.

2. Physical Real Estate

As some of you know, I purchased a house earlier this year. Thus far it has required time and pennies, but the goal is to have at least half the mortgage paid by renters, and possibly as much as 100 percent. It also gives me the space to start a new business venture I have been planning for some months now. We’ll see whether I was smart to buy or not in the years to come.

Alternate Hedges

1. Cryptocurrency (Coinbase)

I’ve been nibbling on Bitcoin, Litecoin, Ethereum, XRP, and even 0x for a while now. Can’t say any of them have done spectacularly well, or at least not long enough for me to react. I keep adding despite Coinbase’s obnoxious fees because we can never know what will happen to fiat currency in the future.

 2. Precious Metals

I continue to accrue silver whenever possible. A key thing to consider is WHERE you are purchasing it. Going to a pawn shop or metals joint can lead to astronomically higher prices with no chance of a refund. Make sure to Google the value of whatever you choose to buy, and check online retailers to ensure there is no extreme markup.

investing · Personal Finance

The In-SECURE Act

I have a general rule for life in the United States: anything which saves you money is eventually removed.

A few of you may know about the passage and signing of the SECURE Act in December 2019. This drama-free legislation made some interesting reforms to retirement plan rules, allowing Americans to make certain penalty-free (but not tax-exempt) withdrawals for qualifying reasons, and also lengthened the timeline under which required minimum distributions (RMDs) must be taken by retirees.

That all sounds good, but there is something else to the story. A separate shift in distribution laws could leave you seriously screwed down the road where taxes are concerned.

Under previous rules, people who inherited an IRA from their parents had the liberty of “stretching” RMDs over the course of their own lifetimes, thus reducing the taxes paid on that money and building inter-generational wealth. Not anymore.

The SECURE Act upends this tradition by placing a 10-year distribution requirement on such inheritance IRAs. So if your parent dies and hands over an account with $500,000, you would need to withdraw something like $50,000 annually to spread it out over that period, or take the lump sum. In either case, taxes will be high.

Perhaps the rule won’t be so horrible for folks who inherit at the age of eighteen, but for others it is bad news. Imagine pulling in a six-figure salary at age 45 and having to stack $50,000 on top of that. Your taxes will giggle with delight.

A broader issue relates to how America prevents people from building wealth if they are not extremely rich. Under current tax laws you can even be penalized for making too much while also maxing out a Roth IRA, and few lucrative deductions are available for middle class people. The SECURE Act is just a garnish on that system.

Culturalism · Personal Finance

While You Were Outraging…

Is any anger campaign organic?

It might seem like a silly question, as we already known that “going viral” is largely a planned and calculated event, designed by firms to generate followers and purchases. That’s old news. The real query relates to whether these “outrage activist” movements are not aligned with the same interests.

Think about it for a second: at the beginning of December, Peloton’s cute holiday mom ad began to generate substantial controversy for its depiction of a woman working out.

Fat activists were furious at the misogyny and sexism, because the husband is not shown working out, and his wife already happens to be slim. Those who thought the fury was silly probably pointed out that exercising is not just about losing weight, but also remaining healthy.

 Now, I will not pretend the Denny’s Division was not at some level legitimate; after all, we are well aware of the Trigglypuff saga.

But what was the broader objective? Let’s take a look at Peloton’s stock price right before this controversy blew up around December 2nd:

And now December 5th:

As you can see, Peloton suffers a nearly six-dollar drop over the course of a few days, the perfect opportunity for someone SHORTING the stock. In the event they chose to wait a bit longer, Peloton actually hit $27.00 per share on December 26th.

So, is Wall Street paying for SJW campaigns in order to rig speculative bets on stocks?

I’d lean yes, but no one is really paying attention.