Fortune Watch

Have lost jobs all of a sudden? Or struggling with health issues like a chronic problem or an accident that impaired your working abilities? It is important that you know all of your present income source, understand the income needs after retirement and finally find successful ways to ensure those for better livelihood.

Income protection insurance is such dependable armour that can satisfy when you are not in a condition to get monthly paycheck for some unavoidable reasons. With the insurance you can cover up to 80% of the income that you bring in on a monthly basis. So before you apply for an income protection insurance scheme, disclose all sources of income. It may include additional revenue sources like car allowances, regular overtime pay, incentives, house rents and other monetary benefits received in every month.
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Over the past 30 years Federal Tax receipts (Corporate, Personal, Estate, Excise, Gift, Social Security, Medicare, Medicaid, et al) have averaged less than 20% of Gross Domestic Product (GDP). Read that again, and don’t think for a minute that it’s not a large number.

But it’s not nearly large enough to pay the bills, reduce the national debt, grow the economy, and come to the aid of all of the people in the world who need us. Why, because nearly half of us (some legally, some not so) pay little or no federal income taxes at all— and because our elected representatives have no financial management skills.

The only taxes that always get paid are those that reduce the amount of spending money in our pockets and which raise the cost of the goods and services we purchase — thus retarding economic growth.

There is no doubt that a Federal Sales Tax on consumption by final consumers would produce more revenue than all of the other taxes combined — but how much, and is it OK to single out things like cigarettes and gas guzzlers for extra taxes?

We need to give it a try, and there would be added benefits: (a) we would be collecting taxes from all of those folk who earn incomes that are just not reported at all, (b) the products we try to sell in world markets would be more competitive, and (c) all of us would have more money to spend on stuff that could actually become lower in price.

There are no purely economic problems with making the shift to a consumption tax — just political ones. The legislation has been “on the hill”, and summarily ignored for decades. We need to apply cool economic sense to the elimination of the Internal Revenue Code and the Social Security Ponzi scheme.

First KISS: Create Jobs Right Now
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Fascinating, isn’t it, this stock market of ours, with its unpredictability, promise, and unscripted daily drama. But individual investors are even more interesting. We’ve become the product of a media driven culture that must have reasons, predictability, blame, scapegoats, and even that four-letter word, certainty.

We are a culture of investors where hindsight is rapidly replacing the reality-based foresight that once was flowing in our now real-time veins — just like in basketball, golf, and football.

The Stock Market is a dynamic place where investors can consistently make reasonable returns on their working capital if they comply with the basic principles of the endeavor AND if they don’t measure their progress too frequently with irrelevant measuring devices.

The classic investment strategy is so simple and so trite that most investors dismiss it routinely and move on in their search for the holy investment grail(s): a stock market that only rises and a bond market capable of paying higher interest rates at stable or higher prices — just not going to happen.

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Weekend Humor

A correction is a beautiful thing, simply the flip side of a rally, big or small. Theoretically, even technically I’m told, corrections adjust equity prices to their actual value or “support levels”. In reality, it’s much easier than that.

Prices go down because of speculator reactions to expectations of news, speculator reactions to actual news, and investor profit taking. The two former “becauses” are more potent than ever before because there is more self-directed money out there than ever before. And therein lies the core of correctional beauty!

Mutual Fund unit holders rarely take profits but often take losses. Additionally, the new breed of Index Fund Speculators over-react to news of any kind because that’s what speculators do. Thus, if this brief little hiccup becomes considerably more serious, new investment opportunities will be abundant!

Here’s a list of ten things to think about doing, or to avoid doing, during corrections of any magnitude:
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I am sure that no matter where you are in your career, you desire to create more income for yourself. For most people, only two options come to mind.

Either they work much harder in their job and hope their boss notices their efforts and gives them a raise of 5-10%, or quit their job and find another company that will pay them 10-20% more.

When I talk about increasing your income, I don’t just mean by a measly 5%, 10% or 20%, I am talking about massively increasing your income by 50%, doubling it or even increasing it by three to five times, within 12 months!

Is this possible? Yes it is! And you can achieve this without quitting your job.

How? By not just focusing on your single, primary source of income. The only way to double or triple your income to create for yourself multiple streams of income. The rich never depend on one stream, but have multiple streams.

What Determines A Person’s Income?

Before you can increase your primary source of income, you must first understand what determines a person’s income.

Why is it that one person is paid $3,000 a month while another person is paid $30,000 a month?
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Rising markets require GREED CONTROL just as surely as falling markets demand protection against FEAR — the two heads of the “ole” Uncertainty Monster!

While the media and your buddies drool or cringe, respectively, your Working Capital focus keeps you on target, looking for higher yielding, quality, income securities and/or quality equities that have fallen from grace with the Market. Remember that Smart Cash is only “smart” if it doesn’t burn a hole in your Asset Allocation.

Knowing that excessive cash is the result of profit taking should encourage investors to avoid the purchase of high priced old favorites, hot new issues, and the best performing funds. When the FEAR head is talking to you, The Working Capital Model will be whispering in your other ear to get that Equity Allocation back where it belongs with lower priced quality issues — possibly the same ones you recently sold for profits.

I know of no other Investment Manager anywhere (other than those who have contacted me and obtained my consent), private or public, that uses The Working Capital Model to direct individual investor portfolios — certainly none of the major operators, who are dependent for their survival upon the whim of even larger “others”.
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The Asset Allocation formula is the mission statement that defines the long term structure and nature of the portfolio. By simply stating, for example, that the portfolio is to be 70% invested in equities and 30% in fixed income, an investor has proven that: (1) he has analyzed his personal situation carefully and, (2) determined that this structure is most likely to achieve his long term goals.

Asset Allocation is often misused and abused in an effort to superimpose a valid investment planning tool on speculation strategies that have no real merits of their own. For example, “annual portfolio repositioning”, “market timing adjustments”, and shifting between Mutual Funds. To be effective, Asset Allocation must be implemented as an on-going process that is to be tended to with every investment decision.

The Asset Allocation Formula itself is sacred, and if constructed properly, should never be altered in any respect due to conditions in either equity or income markets. Changes in the personal situation, goals, and objectives of the investor are the only issues that can be allowed into the Asset Allocation decision making process. It operates above the whims and cycles of the markets — Income or Equity.

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