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Health is Wealth: Maintaining an Ideal Weight

The solution to too much or too little weight is solved with generally the same strategies. There are three things needed to maintain an ideal weight: diet, exercise and sleep. Do it right and you stand a good chance of living a long time. Do it right and you increase your chances at high levels of health and happiness. Do it right and your level of happiness should go up significantly. Do it right and you will truly be wealthy.

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Beat Index Funds Every Year

Beating the average is “not” about finding the best of the best winners every year! It is about avoiding the clunkers. (Remember Buffett’s two rules!!! The secret is buried in there when you understand what he was saying.)

Winners are harder to find. But losers? Some are hard to spot and others stand out like a sore thumb. These deadbeats will break the Buffett rules and put you in the position of catchup. Hard to beat the indexes coming from behind.

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Hidden Treasure in Altria*

I don’t know if Warren Buffett could actually deliver on his promise of 50% annual gains. I do know that arbitrage is an excellent way to spike your investment returns.

A Peter Lynch style review of Altria reveals massive unrealized value. It is easy to forget Altria is more than cigarettes. There is a dash of wine in the portfolio, non-combustible tobacco products, Juul, Anheuser Busch inbev NV (BUD), Cronos (CRON) and on! Nicotine Pouches in the product line as well. 

Let’s take an impossibly negative approach to Altria and see if the company survives or is loaded with large hidden treasures. 

For starters, let’s value Juul at zero. I know, I know. It is worth at least something, but we take no prisoners around here when we tally up a business’s valuation under a worst case scenario. 

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Should You Have a Financial Planner?

In 1968 Nick Murray had to sell investments the hard way. He met most clients in their home. The tool of choice was the mutual fund. Most people he sat with were hard working people, but unsophisticated  investors. Fee-based advisors were rare in those days for the small accounts families had. Fees were high and people were risk adverse. To top it off, the market was having bouts of volatility, suffering a noticeable decline even to those who didn’t follow the market on a regular basis.

It was in this environment Nick Murray had to convince his clients and potential clients the best course of action for them. Investing in mutual funds came at a steep cost. Loads (aka sales fees) were as high as 8.75%. 91.25% of your money went to work right out of the gate trying to get back to the even water mark.

Young families had to consider equities for at least a portion of their portfolio if they were ever to have enough money for a comfortable retirement, and Nick Murray knew it. The high fees were one issue; the market another. The question was always the same:

“Do you think the market will go up?”

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Financial Horror Stories II

Letters from the IRS scare the bejesus out of taxpayers. Unless you can see a check through the envelope window it is doubtful it is good news.

Office policy is straightforward. When a client comes in with the nasty-gram from the IRS (or state taxing authority) we immediately get a power of attorney (POA). Once the POA is signed we contact the taxing authority to get what they have and determine what they are looking for.

Income tax audits are most feared. However, the real audits that require a fresh Depends are the state sales tax audits. Sales tax has so many moving parts and is so complex it is virtually impossible in many states to avoid running afoul of the rules. Wisconsin is one of those states.

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Financial Horror Stories

It is temping to think you know more than you do when your stash grows. Success gives the illusion of intelligence. When the crisis arrives the illusion evaporates. 

Please, kind readers, use common sense. If you don’t fully understand the concept and the financials then take a pass. Better to miss a deal than to go all-in on a scam.

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How to Analyse a Stock

Back in the 1980s when Peter Lynch was the name you listened to when it came to expert stock advice a unique situation existed.

Savings & Loans were going public at a torrid pace. Once it was discovered how much money could be made, every S&L couldn’t covert to a bank and issue public shares fast enough. Lynch made a killing for the fund (Magellan) he managed at Fidelity.

The biggest problem was getting enough shares. Non-customers of the S&L were frequently locked out of the offering. Even depositors of the S&L could only buy a limited number of shares.

Most S&Ls were small. But there were thousands of them! 

Shares usually went public at $10 or thereabouts and almost always saw a sharp increase the first day of trading. Gains of 60% and more in the first month of trading were not unheard of. 

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Investing in a Retirement Account is Like Taking Out a Loan

Traditional retirement plan contributions come with a loan attached to it with a variable rate of interest, to be determined at a later date by the tax code and your income level.

We all know that traditional retirement accounts get a tax deduction at your ordinary tax rate to the retirement plan contribution limits. We should also know that these account grow tax-deferred and that all distributions are taxed at ordinary rates.

This is a real problem if your goal is to maximize your net worth. In the early years the tax benefit makes it seem like it is the best deal on the planet. But as time passes the math tells a darker tale.

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