How to handle your financial future ...
Many Americans older than 60 have survived the Great Depression.
And despite being immigrants without connections, trust funds or a fancy education, they have built themselves a significant nest egg while providing their children and grandchildren with the education and advantages they never had.
Sadly, their thrift and determination wasn’t able to be passed down.
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Many seniors worry about passing a "legacy" to their heirs. Even worse, many of their adult children have consciously, or unconsciously, funded their current lifestyle with doses of financial “outpatient care” from their parents and grandparents
But as readers here know, to quote the late, great John Lennon: "There's no problem, only solutions."
You basically have three choices. You can:
• Keep complaining about Federal Reserve Chairman Ben Bernanke, our government and low interest rates;
• You can let someone who doesn’t care about you manage your money;
• You can do what you have done best all of your life. Become successful in allocating capital yourself by using your common sense and intuition.
People always tell me my yard looks great and I thank them. One of my neighbors said, “Billy, you don’t cut the grass, so why are you taking credit?” I replied that I hire and pay the person who does, and they do a much better job than I ever could.
Today, many senior citizens have their money in banks (which nearly went broke two years ago) and collect 1.5 percent interest. Banks are backed by a country that is $14 trillion in debt and running deficits that are shameful.
That sounds kind of risky to me.
During the recent debt ceiling crisis, the U.S Treasury had $65 billion of cash and Microsoft had $51.9 billion
The government runs at a $1.8 trillion deficit and has long term debt of $14.5 trillion.
Microsoft doesn’t have a deficit and makes about $27 billion per year and has long term debt of $13 billion at around 1.25 percent interest.
Microsoft pays a dividend around 2.5 percent but you can be reasonably sure they will be able to pay it.
Why not own a company which pays a handsome quarterly dividend and has a high probability of capital appreciation?
I would rather trust such a company with my money than the U.S. government.
The key is knowing at what price to buy such a company.
Your job is to find an adviser who you can trust to be honest and competent.
Honest is easy. Someone who charges you a low daily fee with a money-back guarantee isn’t trying to take advantage of you. But many so-called gurus want $5,000 or more upfront for a yearly subscription.
The second part is harder: finding someone who has already achieved great success in finding dividend-yielding companies.
Obviously, a person who at age 32 was nearly broke — and at age 48 has an annual dividend income of almost twice their annual living expenses — is better than someone 65 years old who went to Harvard and only has $10,000 of annual dividend income.
An adviser with a documented track record of success and recommended by a company that you can trust is who you want to find to help plan your financial future.
About the Author: Bill Spetrino
Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here
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