Archive for Missed Fortune

Procrastination into Success

One of the major reasons people fail is due to procrastination. Action leads to success. Og Mandino, a great motivational writer of countless books, shows the steps to success. Here are a few quotes from his book, The Greatest Salesman in the World.
Wisdom in the Scrolls

My dreams are worthless, my plans are dust, my goals are impossible. All are of no value unless they are followed by action.

I will act now.
Never has there been a map, however carefully executed to detail and scale, which carried its owner over even 1 inch of ground. Never has there been a parchment of law, however fair, which prevented one crime. Never has there been a scroll, even such as the one I hold, which earned so much as a penny or produced a single word of acclamation. Action alone is the tinder which ignites the map, the parchment, this scroll, my dreams, my plans, my goals, into a living force. Action is the food and drink which will nourish my success.

I will act now.
My procrastination which has held me back was born of fear, and now I recognize this secret mined from the depths of all courageous hearts. Now I know that, to conquer fear, I must always act without hesitation, and the flutters in my heart will vanish. Now I know that action reduces the lion of terror to an ant of equanimity.

I will act now.
Only action determines my value in the marketplace, and to multiply my value I will multiply my actions. I will walk where the failure fears to walk. I will work when the failure seeks rest. I will talk when the failure remains silent. I will call on 10 who can buy my goods, while the failure makes grand plans to call on one. I will say it is done before the failure says it is too late.

I will act now.
For now is all I have. Tomorrow is the day reserved for the labor of the lazy. I am not lazy. Tomorrow is the day when the evil become good. I am not evil. Tomorrow is the day when the weak become strong. I am not weak. Tomorrow is the day when the failure will succeed. I am not a failure.

I will act now.
When the lion is hungry, he eats. When the eagle has thirst, he drinks. Lest they act, both will perish. I hunger for success. I thirst for happiness and peace of mind. Lest I act, I will perish in a life of failure, misery and sleepless nights. I will command, and I will obey my own command.

I will act now.
Success will not wait. If I delay, she will become betrothed to another and lost to me forever. This is the time. This is the place. I am the man.


Dow 15,000

The history of the stock market shows over 141 years of equity performance, and that there is a straight-forward cyclical pattern that emerges: Periods of worse-than-average returns followed by periods of better-than-average returns and vice versa. The most recent five years have definitely been in the worse-than-average period. Plus, since 2000 the market has been flat. (Keep in mind from 1980 to 2000 the markets produced way above average returns. Therefore, one knew that from 2000 to current would have to be below average to regress to the mean).

Jeremy Siegel, Wharton School professor and author of “Stocks for the Long-Term,” also notes the standard cyclical movement of stocks. He concludes with the following:

Earnings growth rates determine stock market performance. In 2011, earnings per share of the DOW grew at 12%. Most estimates are for earnings to grow at 9% each year for the next two years. To get to a 15,000 DOW in two years would require an 8% annual earnings increase and the Price Earnings (PE) ratio moving from 13.1 to a modest 13.6. Reaching this level is very feasible since the long-term average return of the stock market has been about 12% per year. Thus, an 8% per year increase, is right in line.
Others estimate that DOW 17,000 in two years is not out of sight. In spite of all the Anti-Business, heavy regulated prose from the present administration, the stock market has roared back over the past three years.

Let us look at the pattern: From 1982 to 2000 the stock market soared at above average returns. From 2000 to 2011 the market has been flat. So, it is rational to assume that returns will resume in an upward pattern. If all your friends, coworkers and contacts are convinced the market is dead…that is a good contrarian sign. Remember…the crowd rushed into the market full force at the top in 2000. This same group rushed out of the market when it hit bottom in 2009. Remember the success motto on Wall Street…buy low – sell high… which is the opposite of what the crowd did recently, and at EVERY market top and bottom.

Tax Strategies for 2012


It is evident that the Bush tax cut extension will fall by the wayside on December 31, 2012. Aside from all tax rates going up at least 5%, there are deduction changes that will also raise your taxes (For those that itemize, the threshold for medical deductions will increase from 7.5% of gross to 10%. So if you have $100,000 in AGI you will now need at least $10,000 of medical deductions instead of $7,500 for the next dollar to be deductible.). Thus the new tax rate for those in the top brackets will be 42%. Also an additional 3.8% Medicare tax on investment income will be added for those earning over $200,000…that’s 45.8% – YIKES!!

Here are some tax strategies you should consider now instead of waiting until it is too late.

1) Present estate and gift exemption is $5 million (or $10 million for a couple). It is slated to drop back to $1 million ($2 million for a couple). Make use of gifting and make changes to your wills and trusts.
2) Use a family limited partnership (FLP) to channel estate transfers. The FLP allows you to give away a great deal but remain in control of the assets.
3) Open a donor advised fund to make use of charitable deductions.
4) Use highly appreciated stocks for charitable giving instead of using cash. It will save on paying capital gains tax.
5) Gift out any required mandatory retirement account distributions.
6) Look at municipal bonds to create income and not pay taxes.
7) Look at investment interest expenses for deductions. Many people overlook this.
8 ) Invest in an independent film. Section 181 of the IRS code allows this write off.

Remember if you have a traditional IRA or 401K, you may get the deduction now, but you will be paying a higher tax when you withdraw it. Consider it as a partnership account with the IRS. For every $100,000 in your account the IRS owns at least 35% or $35,000 of it (slated to go higher in the near future). So, plan your retirement on the net value in your account.


The fees associated with 401k investments have been hidden as have the entities claiming those fees. New Labor Department regulations will break down and make transparent those fees for the employers and workers. Additionally, there is a requirement that benchmark performance be provided so you can judge how your investment is doing relative to an index.

The rules are in place and the implementation has been delayed from the original date in July 2011.

Here is a really “sick” survey. The AARP found that 70% of 401k investors think they do not pay any fees for their 401k plan. When people state the same to me I ask…Tell me how long would you work at your job if you were not getting paid your salary? For the 70% that claim there are no fees, you are saying to me… all the people in your company, the custodian as well as the advisors who prepare all the reports, do the investing and those who handle the phones do it for free? Duh! What a rude awakening people will get when these 401k fee reports come out. You see, the fees are taken from your account returns. If there are no returns then your account loses value as they extract the fees from your account value.

There are a few major fees associated with 401k plans: One for managing the specific investment (usually mutual funds, annuities, or ETFs). Second are fees for record keeping, plan administration; e.g., transferring money, providing education, customer service, and keeping the plan compliant with the government.

There is a third fee for actions taken by you, such as, a loan, hardship withdrawal or actions related to a divorce. So even if you do not have actions such as above, you will pay a portion of the fee for the action your coworker took. Ah yes, socialism at its greatest!

Oh, one other thing: Remember, the mutual funds you invest in may have an up-front load fee (commission), and all of them charge a management fee of 1-4% per year.

Those of you in small firms — fewer than 100 employees — well, the boss (owner) is paying for a lot of those annual fees. In my experience, many owners are getting fed up, closing out the 401k plans, and offering employees much safer non-qualified plans instead.

In 2013 those 401k’s that have ETFs in them will be under the same requirements to disclose all the fees.

Why not consider better alternatives to IRAs and 401k’s that allow your money to grow tax free. You can withdraw it at any time without any tax or penalty, and when you die, it transfers the income tax free.


In less than 11 months from now a new Congress will be elected. In addition, you may have the same or a new administration in the White House.

What will the economy be like? What will be the “mood” of Americans? Monetary policy has been used up, and only fiscal policy tools remain. A major fiscal tool is tax policy.

The present tax law is set to expire on December 31, 2012. Will politicians kick the can down the road again? Everyone knows that there are a few major changes that need to be done to have the U.S. economy thrust forward with dynamic vigor. One aspect that must be noted: Any tax policy change must be cemented in place for at least five years. Any prudent individual or business cannot do any worthwhile planning or changing behavior with any shorter time period.

Here are a few changes that will transpire when the extended “Bush tax cuts” expire. Remember, it was the largest tax cut in history when first implemented and got us out of the 911-tech stock implosion of 2000-2003. Consequently, if it is not extended…it will be the largest tax increase in history. Here are just a “FEW” of the changes:

• All tax rates basically go up around 5%. The 10% bracket is eliminated and will be at 15%.
• Dividend rates will go from the present 15% rate to your ordinary tax rates.
• Capital gains rates go from the present 15% rates to rates of 25%. (Gee, I wonder what this will do to your stock market investments? DUH!)
• Elimination of the tax credit for having children. (This will hurt the unwed parents and illegal immigrant parents.)
• The marriage penalty tax will go back into effect. (This will encourage married people to not stay married.)

Since it is obvious that you will be taxed more in every area of your life, doesn’t it make sense to develop a plan to place your monies into programs that will never be taxed? We are here to help at any time.

Come November 2012 it may be beneficial to heed the words of the former Mayor Daly of Chicago, “Vote early and vote often.”

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