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CALLING ALL 70.5 YEAR OLDS!

31/3/2014

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Editor: Crass Cash
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When you hit the age of 70.5 years old, which means you were born before June 30, 1943, then you can no longer deduct a traditional IRA contribution while do your taxes.  This does not apply to 401k's.  

This makes sense because by 70.5 you're required to start taking mandatory deductions from your retirement plans.  Adding to them would be counterproductive in the eyes of the IRS.  Thus, they don't allow.  

NO TAX DEDUCTION FOR YOU!!
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Here’s Proof Buying More Stuff Actually Makes You Miserable.

30/3/2014

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Editor: Crass Cash
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This article on time.com (TIME MAGAZINE) traces humanity's roots as to why we like to hoard stuff and how it makes us feel better.  The problem is we're no longer clinging to life inside of a cave somewhere.  It's actually the opposite.  Over population abounds!  

 I've seen people in incredibly poor countries do amazing things with leftover garbage.  Plastic water bottles as sandals, shoe soles as door hinges, etc.  Just like with not saving for retirement, infidelity, over eating, and accumulating warehouses full of stuff, humans now find themselves in a position where they are fighting their animalistic instincts.  And just like having self-discipline for the activities above, accumulating stuff will make you miserable as well.  

Buying stuff, culinary gluttony, sexual infidelity, and spending all that you make will bring you random moments of 'happiness', but it's no way to achieve long-term contentment.  DON'T BE MODERN SOCIETY'S BITCHES!!!
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RICH DAD PROPHECY book review

29/3/2014

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Editor: Crass Cash

I read this book so that you don't have to.  Here's the simple gist of the book: Starting around 2016 there could be a long prolonged stock market crash.  Why?  Because the Baby Boom generation will start doing the mandatory minimum retirement withdrawals as underlined by federal law.  For almost all retirement plans, except for Roth IRA's, you need to start taking mandatory minimum withdrawals starting at the age of 70.5 years old.  

This starts to happen for the Baby Boom generation in 2016.  Since they're the largest generation and also hold a huge amount of securitized investments, then I believe this to be a very real threat.  I've read a number of other articles that take the opposing view and haven't really found them to be that legit.  Sometimes the math and assumptions are entirely wrong, which worries me greatly.  

There's an even bigger problem.  The stock market and bond markets are currently very expensive and will probably become even more so over the next two years.  I think the Federal Reserve will continue to hold down interest rates until 2016 and the stock market will continue to head higher (with short term dips, maybe even full bear markets) until the yield curve becomes inverted.  That in turn will cause a recession and then you could easily see a 50% decline, which could possibly not recover for a decade or more.  If you're relatively young like me this is great because stocks will be on sale, but if you're close to 10 years from retiring, then you need to take money off the table now.  

I know returns for the bond market suck, but they don't suck as bad as losing half your net worth.  As a general rule you should move money to bonds as a proportion of your asset allocation that corresponds to your age.  So if you're 50, then 50% of your securities need to be in bonds.  If you're 60, then 60% needs to be in bonds.  70 years old, then 70% and so on...

Kiyosaki is a big advocate of real estate and home based businesses.  He wants people to move into this area instead of the stock market.  I agree with this if you feel comfortable with doing so.  As always though, don't over pay for any investment, especially real estate.  

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    This website was created due to the atrociously misguided financial advice that I've heard over the decades.  Financial freedom is not intellectually strenuous, but it takes discipline. 

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