Inexpensive, Effective Tips for Protecting Your Identity (Part 2)

Given that this is Part 2 to my December 12 post, you might want to read that one first – if you haven’t done so already.


I’ll be the first to admit that some of these tips might sound like we should be walking on pins and needles. Remember, though, that identity thieves are growing increasingly sophisticated in the schemes they use to snatch people’s information, so it behooves you to leave absolutely no stone unturned. Better armed than sorry.

Tip #6: One thing you need to bear in mind is that wireless networks in public areas like restaurants, coffeehouses, airports, and hotels most often have very low security settings – because the idea is to allow easy and/or free access. This, however, increases the possibility of someone intercepting your information.

 Tip #7: Always access your financial accounts from your very own computer because “public” computers may contain software that captures logon information, which could wind up in the hands of identity thieves. Of course, not everyone owns a computer, so if you must use another computer, please, be sure to completely delete all history of your use when you finish.


If possible, your passwords should combine letters, symbols, and numbers. It’s a great idea to mix upper and lower cases when composing your passwords. Make it a point to change your passwords on a regular basis – experts suggest doing this every 90 days or so. And desist from using the same password for multiple accounts. I know this is very tempting, but it’s a very dangerous habit. One last thing: Do not store your passwords on your computer or smartphone because should you ever lose it, you don’t know who might gain access to it.


Tip #8: Be sure to “logout” at the end of all your web sessions that involve your personal information. As it turns out, your access does not necessarily terminate by simply hitting the little “x” to close a browser or moving on to a new website.


Before you download anything, be sure you are fully aware of exactly what you are downloading. In this day and age when the face of this crime is getting more and more sophisticated, I’d strongly advise that you surf only those sites you know and trust and do your very best to avoid clicking on pop-up windows, no matter how tempting they may seem.


Let me mention here that, these tips are of course, not a guarantee that you won’t or cannot become a victim. But I believe they will go a mighty long way toward helping you  keep your information secure.


What to Do When You Discover Your Identity Has Been Stolen

• Place a fraud alert on your credit file by contacting one of the three national credit reporting bureaus. Call Equifax at (800-525-6285), Experian (888-397-3742), or TransUnion ( 800-680-7289). You need to contact only one of these credit bureaus, as whichever one you contact is required to notify the other two.

• Close accounts you know or believe may have been tampered with or opened fraudulently.
• Notify your local police department and get an “Identity Theft Report.”
• File a complaint with the Federal Trade Commission’s Identity Theft hotline at 877-438-4338 or by visiting their website. 

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Contact a financial professional at Laser Financial Group for a complimentary consultation to craft a personal plan that works for you. 877.656.9111 or LaserFG.com.

Season's Greetings from the Team at Laser Financial Group!

Season's Greetings from the team at Laser Financial Group!

Dear friend,

As you take some time off to gather with your family and friends, my team of exceptional professionals and I would like to express our sincerest gratitude to you – we thank you for your business, and most importantly, your friendship. We also extend to you and your family our wishes for a holiday season filled with love, joy, and hope.

Take care. Stay warm and blessed!


Samuel


PS: I’ll continue the ID theft series in my next post.

Inexpensive, Effective Tips for Protecting Your Identity (Part 1)

Inexpensive, Effective Tips for Protecting Your Identity (Part 1)

The Federal Trade Commission, estimates that somewhere in the neighborhood of 9 million Americans experience the horrible ordeal of having their identities stolen each year – a number that is growing by the hour.

Inasmuch as I wish no one would ever have to deal with the quite costly and cumbersome aftermath of this insidious crime, identity thieves are, unfortunately, REAL. And they have come up with countless, unassuming schemes (with new methods being discovered daily) that make it possible to rent apartments, obtain credit cards, sign up for cable TV and just about anything in their victims’ names.

So how do you ensure the safety of your personal information? Personally, (and I’m not an expert on this), I don’t think there’s any silver bullet, but I believe that by implementing these simple, everyday steps, you can greatly increase your chances of not becoming the easy prey of these good-for-nothing idiots who think they should make a living out of stealing other people’s credit and identities.

Tip #1: Understand that legitimate institutions will not and should not ask you to provide sensitive personal information via email. So, no matter how “official and legitimate” it may seem to you, DO NOT respond to any emails requesting personal information, such as your social security number, user IDs, passwords, credit card numbers, etc.

In that same spirit, NEVER release your personal information over the telephone, unless you initiated the call – as in, you dialed the institution’s number and know exactly whom you’re talking to.

Tip #2: Make a habit of reviewing all your account statements immediately after you receive them. Please pay attention to the transactions reported and be sure to promptly report any mistakes to your financial institution(s). 

Tip #3: Keep all documents containing your personal information in a secure place. It may be true that you live by yourself and that you allow only those you trust into your home, but there have been many cases of breached trust that resulted in stolen identities. Besides, keeping those critical information in a secure place does not necessarily mean you don’t trust people – it’s just good, old common sense.

Oh, and while on that subject of trust, remember to shred such documents before disposing of them, because some bad folks make a living out of Dumpster-diving, and you do not want them gaining access to your personal information.

Tip #4: Review your credit report for inaccuracies and unauthorized activity. Be sure to check and double-check for inquiries from companies you haven’t contacted, because someone else could have contacted them claiming to be you.

Everyone is entitled to a free copy of their credit report – each year – from the three major nationwide credit bureaus (Experian, Equifax, and TransUnion), so that could be a great starting point. The caveat here is that you must actually ask for your free report by calling (877) 322-8228 or visiting AnnualCreditReport.com.

Tip #5: Make sure your computer has security software and firewalls with the latest updates. Almost all security software has automatic update features, but to be sure and for the sake of safety, which by the way is the whole idea here, double-check that yours is configured to routinely perform those updates.

In my next post, I’ll share Tip #6 through #10, all of which are simple yet very effective ways of shielding your personal information from bad guys and gals.
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Contact a financial professional at Laser Financial Group today to schedule your complimentary, no-obligation consulation to review your financial goals and the best ways to reach them. 877.656.9111 or LaserFG.com.

The Surefire Way to Manage Your Holiday Shopping Budget

The Surefire Way to Manage Your Holiday Shopping Budget

It’s once again that time of year when we go shopping for our loved ones. Just so I don’t raise your hopes, this column is not about where you can get the best deals. Instead, let’s talk about what I call the “year-end shock syndrome.” Have you noticed that most people end up spending w-a-a-a-y much more than they actually “intended” – or rather, “expected” – when it’s all said and done?

Of course, that doesn’t happen to everyone, and I am by no means claiming to have a crystal ball, but I think I do know how it happens. You see, most of us want our loved ones to know how much we really care about them by the kind or size or price of the gift we give them. So we make a list of people (sometimes with gift items intended for them), and then we shop for the best deals we can find.

But at the end of it all, nine out of 10 people end up breaking their budgets – that’s if they had a budget to begin with. To be totally honest, that used to be me many, many years ago before I came up with this slightly different (yet powerful) approach that ensured that I stick to my budget.

Here’s what you need to do:

Understand the fact that the true value of a gift is not measured by its retail price. Just the thought behind presenting the gift trumps the price you paid for it at the store. I realize that conventional theory seems to suggest the opposite, but you’re going to have to make a shift in your thinking or be prepared to face the ugly consequences of excessive spending.

Just to be clear, I’m not suggesting that you give inexpensive gifts. Not at all. Who wouldn’t want to give their loved ones the entire world, so to speak? But to do that at the expense of staying financially sound is quite frankly foolish, wouldn’t you agree?


With that in mind, when you make your list of names, you MUST place dollar amounts next to them. As simple as this sounds, without this step you are sure to spend more than you intended to. If you think about it, why shouldn’t that happen? It’s an open check book (or credit), because you’ve placed no limit on your spending. 


To state the obvious, by actually including dollar amounts, you’ll know how much you will be spending so that it doesn’t come as a surprise after the fact. This is the best way for you to make the necessary adjustments to prevent any unintended negative consequences down the road. Have fun shopping!

Only 3 Options Exist to End America's Fiscal Crisis – the Likely Answer Will Affect YOU!

Only 3 options exist to end America's fiscal crisis – the likely answer will affect YOU!

Remember a couple Mondays ago when I shared my thoughts on the Congressional Super Committee? Well, Thanksgiving has now passed, and official news of the outcome of several weeks of super-special negotiations is, in one word, nothing – as in they failed to cut even a dollar of their $1.5 trillion target. Yep, zero!

From day one, I expected nothing other than what is referred to in legislative terminology as a stalemate for the outcome, and boy do I feel like a genius now. But if you really looked at the dots, it was pretty easy to draw the connections: You have a Congress that is fully responsible for this country’s fiscal mess to begin with. Some of the esteemed statesmen and women have been in Congress for as long as I have been alive, or just a little less.

My point is that this current situation, which is completely unsustainable, didn’t just happen. It’s been a long time coming. Even though this same Congress had something of a change of heart, the entire 535-member body couldn’t come up with a solution to fix a “serious” problem, yet they believed a 12-member committee would be able to nail it? Really?

Meanwhile, the debt/deficit problem is growing much, much worse by the day. And it will have to be fixed, one way or the other, or else… As I have said all along, this is not as big an issue as it is being made out to be, in the sense that we have three options:

Option #1: Cut spending, only.

Option #2: Raise more revenue, only.

Option #3: Make some spending cuts and some revenue increases.

That’s pretty much it for our options!

Politics aside, I call on our dear Congressional leaders to muster the courage to find us all a real solution, because day in and day out of pandering is only making things worse for us the folks, the very same folks they are charged with looking out for.
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Contact a financial professional at Laser Financial Group today to schedule your complimentary and no-strings-attached consultation to discuss how the inevitable tax increases will affect your bottom line, and the steps YOU can take to hold on to more of your money. LaserFG.com or 877.656.9111

In Gratitude...

In gratitude...

As we pause to celebrate Thanksgiving Day 2011, on behalf of the selfless professionals here at Laser Financial Group and myself, I'd like to say a gigantic THANK YOU for being part of our family. Besides being thankful to the good Lord for our health and sound mind, we want you to know that we appreciate our association with you and will do all in our power to maintain your trust in us.


As you partake in the celebrations, don’t forget President Abraham Lincoln’s reason for proclaiming a Thanksgiving Day right in the midst of the Civil War:

“To heal the wounds of the nation and restore it, as soon as may be consistent with the Divine purposes, to the full enjoyment of peace, harmony, tranquility, and union.”

Life sometimes gets very challenging, but even in the face of every unpleasant circumstance we have encountered, let’s not forget that the gift of life itself is a great blessing.

Happy Thanksgiving!! Have a blast.

Is Your Financial Advisor Inadvertently Sending You MIXED MESSAGES?

Is your financial advisor inadvertently sending you MIXED MESSAGES?

Most financial professionals are good people who want the best for their clients – because it would be, literally, only a complete jerk who’d do the opposite. If that’s the case, don’t you find it quite odd (as I do) that on the one hand, you have investors who painfully look on helplessly as their lives savings erode – not because they are spending it, but because the stock market tumbles for whatever reason – and on the other hand, you have financial advisors who believe that’s the best approach for those investors when it comes to their nest eggs? 

The vast majority of retirement investors in America seem to be in a constant struggle, so to speak, with their financial advisors – the advisors encouraging them to stay the course without panicking. My question is: Why do we have this constant battle IF everyone knew exactly what they signed up for? Wouldn’t it be an ethical violation if a financial advisor hadn’t clearly explained the upside and the downside possibilities of their client’s choices?

Many in the financial profession, either intentionally or unintentionally, tend to magnify the upside possibility of gains associated with the stock market and, quite frankly, downplay the risk of loss. But does that sort of hope change the reality? It’s true that you can make a lot of money in the stock market, but it’s also true that you can lose a lot of money, including some or all of your seed money.

While I cannot exactly quantify it, the error of failing to put all the pieces on the table when it comes to saving for retirement has ruined (and will probably continue to ruin) more retirement dreams than the stock market itself.

How often does your advisor discuss the downside with you?

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For a realistic alternative to investing directly in the volatile stock market, contact a financial professional at Laser Financial Group TODAY. Schedule your complimentary, completely no-strings-attached consultation and learn how you can protect your nest egg and existing investments while continuing to grow your retirement funds. LaserFG.com or 877.656.9111.

Regardless of Super Committee Decision, Your Taxes are Probably Going UP!

Regardless of Super Committee decision, your taxes are probably going UP!


The story goes like this: a few months back Republicans and Democrats in Congress struck a deal (the key word here is deal) just in the nick of time to avert the Federal Government having to shutdown. You may remember that drama in D.C. 

The deal was, essentially, that a 12-member committee made up of six Republicans and six Democrats from guess where? – Congress – would come up with a $1.5 trillion deficit reduction plan for the next decade by November 23. Remember, this group came into being as a result of Congress not seeing eye-to-eye on exactly how to fix our deficit mess – whether to cut spending or raise more revenue. Well, long story short, it’s early November, and from what we know, see, and hear, the Deficit Reduction Super Committee is nowhere near (as in, hasn’t even begun to scratch the surface of) their $1.5 trillion target. 

What surprises me is that anyone is surprised by this outcome. Come on, are you kidding me? As I wrote on July 25, Americans should remember that we are in this fiscal mess because Congress (made up of both Democrats and Republicans) has proved to us again and again in unequivocal terms that they cannot embark upon any credible spending cuts.

As far back as I can remember, I’ve been hearing politicians campaign that, “America needs to put her financial house in order, the status quo is unsustainable, and we need to restore fiscal sanity.” Yet over each Congressional session and White House administration, for some strange reason – or, is it? – spending has always found a way to increase.


When Congress talks about cutting spending, what exactly do they mean? Social Security and Medicare? And that would be whose Social Security and Medicare? The same citizens’ who voted for them on Election Day? Notice that the whole of Congress could not come up with any credible cuts, so what are the chances that the 12-member Super Committee can pull it off by Thanksgiving? I think it would take a truly SUPER Committee to cut spending.


Let’s get realistic here. No politician – Democrat or Republican – wants to cut any spending in real life, because it could very well affect their constituents. On the other hand, it’s much easier to raise more revenue by taxing “only the ultra rich,” since most folks don’t consider themselves rich and think such raises will not affect them. After all we’re talking about “the rich people,” so taxing them more will not cause much harm. The problem with that hypothesis, as history tells us, is that most of us (the average folks, so to speak) end up paying for the revenue increases. Just look at history.


From where I’m sitting, here’s what I would tell retirement investors: If your nest egg is in the form of a yet-to-be-taxed program like a 401K or an IRA, you should seriously rethink your strategy by talking to a savvy financial professional who understands America’s current economic landscape – not one who goes along with the media frenzy of the day.


The fact is, no credible expert would argue other than that taxes are going up! Because that’s what “more government revenue” means in simple English. But for you, as a retiree, that translates to lower spendable income. Did you know, however, that some folks have their money in programs that, under existing tax laws, are completely insulated from tax rate hikes?
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Contact a professional at Laser Financial Group today to find out how to legally protect your retirement income from future tax hikes. 877.656.9111 or LaserFG.com.

Are You Following the Herd, or Blazing Your Own Trail to Financial Security?

Are you following the herd, or blazing your own trail to financial security?

Given my role at our firm, I find myself on an almost daily basis interacting with retirement investors, either in a group setting (when I’m teaching a workshop) or in private client meetings. Lately, I have noticed a very disturbing trend in the perception of a rather large number of folks. I’m talking about the idea that, when times are bad for the stock market, “Our investment portfolios lose money together” – and therefore, by implication, “We make money together when things are good.”


Given the fact that most American investors tend to follow the herd, so to speak, when it comes to planning their retirements – in the sense that whatever their favorite TV/radio personality, financial magazine, or smart cousin suggests is what they pursue – I can to a certain extent understand why this erroneous perception is so prevalent. The problem is that when one member of the herd loses or gains, everyone else must share the experience.


Here’s the thing, though. There are investors who do not lose even a dime when the stock market plummets. In fact, they are folks just like you. More interesting is that these folks are not using any out-of-this-world, special-omen financial products. We’re talking plain old 401(k)s, IRAs, tax-sheltered annuities, SEP IRAs, Roth IRAs, and the like. Really! I say this all the time, but this moment calls for me to say it again: not all financial strategies/products - even of the same kind - are the same.


Wait a minute here! Does this guy mean to say that some people actually did not lose any portion of their investment portfolios values during the 2008 stock market tsunami? Absolutely, yes! How is that possible? Simple! They utilize a strategy that, as a matter of contract, guarantees their savings will be completely insulated from stock-market risk. So when the market dips, they don’t lose anything. But whenever the market gains, their savings increase, up to a certain cap.


This is not a fantasy. Actually, for the nearly two decades that we’ve been around, these investors’ portfolios have gained money every single year. That’s definitely something to think about the next time you see and/or hear one of those reports that seem to suggest otherwise.
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Contact a financial professional at Laser Financial Group to schedule your complimentary meeting today. Learn strategies that will give you peace of mind and help your retirement income provide the security of which you have always dreamed. 877.656.9111 or LaserFG.com.

Financial FICTION #12: If a Particular Financial Product is Good, Most People Should (and Would) Know About It

Financial FICTION #12: If a Particular Financial Product is Good, Most People Should (and Would) Know About It – and Own It, Too.


Many people are under the erroneous impression that if a given financial product is good, then everyone should be using it. While a part of me understands the reasoning behind this belief, to some extent, that line of thinking should not be any serious person’s litmus test.

Not all financial products – even of the same kind – are equal


Unlike other stuff we acquire in life, personal finance should be and must be custom made for each individual – sort of like fingerprints. What that means is that a product that might work perfectly well for you could end up being terrible for your friend. I have seen several cases where a particular product (and we’re talking the same product by the same company) worked very well for one individual but turned out to be a complete disaster for another.


You should view personal finance just as you view your doctor-patient relationship, in the sense that your prescribed medications must be based on your symptoms, test results, allergies, and the other unique personal circumstances that doctors take into consideration. 


Additionally, just because a financial product is popular does not mean it’s the right solution for you. As basic as that statement may sound, many in this country guided by so-called financial advisors or gurus are doing just that – jumping on a trend because it’s popular, without doing the necessary research to determine whether it really is the right thing for their circumstances.


Here’s an important observation, though. Have you noticed the biggest trend of all: unfortunately, the majority of American retirees wind up in an inadvertent cycle of poverty, rather than being able to live their golden years in complete financial security? The interesting fact that seems to be escaping the notice of far too many is that the few who end up financially secure during their retirements tend to take an atypical approach with their investments (which means they’re not so trendy at all).
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Contact a financial professional at Laser Financial Group TODAY to schedule your complimentary session. Have them evaluate your current financial plan – and learn what might really work for you, specifically, even if it's not the most popular idea in your neighborhood. 877.656.9111

Financial FICTION #11: Roth IRAs Are the Best Known Tax-advantaged Vehicles Offered in the U.S. Tax Code

Financial FICTION #11: Roth IRAs are the best-known tax-advantaged vehicles offered in the U.S. Tax Code

Financial professionals overwhelmingly agree that it is a very smart move for retirement investors to pursue investment programs into which they can contribute after-tax dollars today, and be able to withdraw those funds (including all the gains) income-tax free later on. I wholeheartedly agree with this line of thought because it makes perfect sense in almost every situation I have witnessed to this point.


However, many financial advisors fall short by positioning Roth IRAs (and, more recently, Roth 401(k)s) as the absolutely best tax-advantaged strategy available to investors under current U.S. tax laws. Given the limitations associated with Roth IRAs, vis-à-vis what one could do within the confines of Sections 7702, 72(e), and 101 of the Internal Revenue Code, I don’t think anyone could argue otherwise that Roth IRA’s are not the absolutely best tax-advantaged deal out there.

For one thing, the maximum yearly contribution one can make into a Roth IRA is $5,000 for those younger than 50 and $ 6,000 for those who are age 50 or older – which means that under no circumstance can anyone contribute more than these limits, even if they wanted to.


Most folks are not aware of this, but not everyone can own a Roth IRA. Certain eligibility requirements which are generally based around Modified Adjusted Gross Income (MAGI) and tax filing status must be met to the satisfaction of the IRS in order to own them.


For instance, if your filing status in 2011 is single, head-of-household or married filing separately (and you did not live with your spouse anytime during the year), and your MAGI is more than $122,000, you cannot contribute anything to a Roth IRA. For those with a married filing jointly or qualified widow(er) status, the cut-off/disqualified MAGI figure is $179,000.


The situation gets somewhat worse for those with married filing separately status who lived with their spouse at anytime during the year, because they are completely disqualified from contributing anything into a Roth IRA if their MAGI goes over $10,000 (that’s not a typo – it’s $10,000).


The other thing is that, in general, the tax advantages of Roth IRAs will kick in only after waiting for at least five years after you make your first contribution into them AND until you, as the account owner, reach age 59½ OR you are deemed disabled (by IRS definition) OR you are going to use the gain to purchase your first home (with a $10,000 lifetime limit).

So, What Can You Do Within the Confines of Sections 72(e), 7702, and 101?


Basically anyone – irrespective of their MAGI – may contribute any after-tax amount. Unlike Roth accounts, there are no set dollar contribution limits in the real sense of the word. Rather, there are certain guidelines that must be followed. But you can effectively set your own contribution limit. The point is, the amount would be totally up to you, with the help of a truly savvy, well-trained, and out-of-the-box financial professional. In fact, without such help, you could create a disaster.

Another really nice thing is that these contribution amounts are “rolling,” in the sense that if for some reason you’re not able to make a contribution or to contribute the full amount in any given year, you can always catch up at a later time. Yes, they don’t expire! On the other hand, with a Roth, if you don’t make your allowed contribution in any given year, you lose that opportunity.


Then, all your after-tax contributions continue to grow, and you are able to access your money, completely income-tax free – including all the gains – without having to wait five years or to reach age 59½.


Upon your death, any remaining funds will transfer to your named heirs, again completely income-tax free!


Yes, I know it almost sounds unbelievable, right? At least now you may be able to understand why I’d argue that “Roth” options are not the absolute best for tax-advantaged accumulation and access.


Let me mention again that for you to enjoy these incredible tax advantages, you’d need to – and must – stay compliant. That’s why I strongly recommend that you hire a well-trained financial professional who’s very familiar with the tax requirements, as set out under Sections 72(e), 7702, and 101 of the U.S. tax code.
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Contact a financial professional at Laser Financial Groupt today to schedule your appointment and get valid, relevant answers about the best tax-advantaged program for your circumstances. 877.656.9111 or LaserFG.com.

Steve Jobs Reminded Us to Focus on What's REALLY Important

Steve Jobs Reminded Us to Focus on What's REALLY Important


Yet another detour from the financial fiction series – we’ll continue with the series next week.

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The reason for the detour is because I’d like to dedicate today’s column to the amazing and – in my opinion – unparalleled memory of one of the greatest, smartest success stories of our generation, a man who changed the face of life/communication as we knew it, revolutionizing everything for the much, much better. Yet in the midst of his remarkable achievements, he stayed as humble as one could be – a true icon and, personally, my inspiration in business ethics, ingenuity, resilience, and true success.

I am talking about the late Steve Jobs, who sadly passed away last Thursday, October 5. I was very much saddened when that evening’s newscast was interrupted with the breaking news of his death. But then I was reminded of the fact that that’s exactly how life is, so we must all strive to give it our very best shot, regardless of the circumstance we happen to find ourselves in. We must follow our passion like there’s no tomorrow and, indeed, live everyday like it were our very last day on this planet.


One question that came to me, and which you may have heard several times already, is: If you knew you were going to take your last breath in a matter days, what would you do? I’m sure most of us would answer that question with an answer like, “Focus on what is really important.” But what is really important to you? Have you really thought about that? If it’s people, do they know (and I mean really know) that they are that important to you? Do your words and deeds reflect that on a continuous basis?

Moments like this always remind me of a life – and death – lesson I learned from a mentor many years ago. Back then, he put it this way:

·        We’ll all die one day.
·        In most instances, our death will happen at the most inconvenient time.
·        Our time of death will either be before or after we have retired.

Think about that for a moment, and then start doing whatever it is that you’ve been putting off – that thing you know will positively impact mankind in your own small way.

My prayers and thoughts go out to Mr. Jobs’ family. May his soul rest in peace.
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Financial FICTION #10: If the stock market has averaged "x" percent return over a given time period, you'd have earned that return too

Financial FICTION #10: Learning that the stock market or a specific variable investment has averaged "x" percent return over a given time period means that if you had owned the same investment over the same time period, you’d have earned that return in reality.

The investing public is bombarded with "average return" information about specific funds over such-and-such periods of time. If you look at your mutual fund or 401(k) statement, you will see this information being advertised when the market is doing really well, or simply reported as required by law when things are not going that great.


The question is: What do those average return numbers mean to you? Does it mean that’s how much your investments made over the same period of time? Does it mean that if you don’t own that investment yet, that’s what you would have made if you had owned it? Think again, because it’s not even close!


Here’s what’s actually going on in nine of 10 such situations: those average returns that are being advertised are the simple average or arithmetic mean. But in investing, that average is bogus because that’s not how money grows. Instead, what you need to know is the real annualized return, also known as the compound return.


If you were to take any of those simple average numbers being advertised and do the math, you’d never even come close to the actual money in your account. Let me illustrate with this example: Over the past 10 years (from January 1, 2001 through December 31, 2010) the S&P 500 has averaged 3.55 percent. Which means (or is supposed to mean) that if you had placed your money in this investment, you’d have earned that “average” return.


Let’s say you had invested $100,000. So, at a 3.55 percent average per year over the past 10 years, you’d have had $141,743 in your account on December 31, 2010. Here’s the shocker, though: That’s a complete myth – one of those things that seems right but couldn’t be further from it.


In actuality, your $100,000 investment would have been worth $113,900, a whopping $27,843 less than the number we just figured should be the average return. I don’t know about you, but most folks who are caring for their families and focused on their careers probably would not appreciate any half-baked distortions that could cause them to improperly calculate their future income. The distortion arises because over that 10-year period, the actual compounded return of the S&P 500 (which, by the way, is how investment accounts grow) was 1.31 percent – that’s a 20 percent deviation from the 3.55 simple average – and used in 99.99 percent of cases.


Mathematically, compounded average is calculated quite differently than simple average/arithmetic mean. This is a classic case of not all averages being the same. And although those advertisers and advisors know full well the difference between the two, they choose to quote “simple averages” instead of “compound,” presumably because the numbers look more enticing. Talk about fiction versus fact for a moment. They may both be averages, but in reality, their results are very different.
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Call a financial professional at Laser Financial Group today to set up your complimentary, no-obligation consultation. They'll walk you through the complexities of compound interest, and look at your goals and current situation to help you determine the best path for your future. 877.656.9111 or LaserFG.com.

Last week's DOW plunge: A Lesson in Common Sense

Last week's DOW plunge: A lesson in common sense
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NOTE: Today, I’m taking a little detour from the Financial Fiction Series to discuss the current happenings in the stock market. I hope to continue with the series next week.
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This past week has been a nightmare for some (not all) retirement investors. Sadly, though, that number of investors in distress happens to be in the overwhelming majority. Personally, as someone who has been helping scores of hardworking Americans plan successfully for their golden years, my feelings are mixed about this ordeal – sad on the one hand, yet believing this should be an “Aha!” moment for the majority of retirement investors.

My Sympathetic Side

I’m saddened and feel the pain, so to speak, for those who are enduring this ordeal. They woke up Monday, September 19, with the Dow Jones Industrial Average (DOW) at 11,401. Then they went about their usual weekly routines, and by the end of the work week on Friday, September 23, the very same DOW had plummeted to 10,771.48. That’s a 5.5 percent decrease, decline, and loss of their hard-earned nest eggs – in just a week! That translates into a $100,000 nest egg on Monday having decreased to $94,478.38 by Friday, just like that.
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I know there are some who brush this off as trivial because, as they always say, “Of course you’ll make it all back in a matter of time.” Really?
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That’s complete baloney, because none of those investors who lost money this past week will ever make that money back! Such a thing has never happened since the beginning of time and will never happen, because that’s just not how investing in the stock market works. These investors may make NEW gains to reach the same totals they had before the plunge, but the money they lost is GONE, never to be recovered.

The other very important thing investors must understand and not take lightly is that whenever they lose money this way – in the stock market – they have lost that percentage of their entire life’s savings (all their principal, plus all the gains they have made up until that point in time). You might want to let that last point sink in for a moment.

This must be an “AHA!” moment

We financial professionals are highly skilled and educated ( or at least we’re supposed to be), but this statement by the late Robert Green Ingersoll also is true:

It is a thousand times better to have common sense without education than to have education without common sense.

Common sense tells us that there are only two possible directions for the stock market: up, when you can make an unlimited amount of money, OR down, in which case you can lose everything – including your seed money. Is there any other direction I’m missing here? Of course not!

So, if you want the certainty of enjoying your retirement one day (or right now), you probably don’t belong IN the stock market game. My clients – and I mean all of them – decided not to play in the market. Instead, their nest eggs are growing every single year, including those years that the market plummets, and they certainly enjoy night after night of tranquil sleep, regardless of which direction the DOW and the S&P 500 go. That means that they will not have to delay their retirements, or if they are already retired, endure any decreases in their investment incomes.


Media reports and our everyday encounters lead us to believe – wrongly – that we are all in the same boat when it comes to investing our nest eggs: that we all lose money together and make money together. That couldn’t be further from reality – just talk to any Laser Financial Group client. 

It’s YOUR retirement and YOUR common sense, so use it!
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Contact a financial professional at Laser Financial Group TODAY for a confidential, complimentary assessment of your nest-egg so that you can determine whether getting out of the direct line of the market's volatility may be right for you. 877.656.9111 or LaserFG.com. 

Financial FICTION #9: When you "break even" or receive a refund check from the IRS, you did not pay any income tax that year

Financial FICTION #9: When you file your taxes and break even or receive a refund check from the IRS, it means you did not pay any income tax that year. Alternatively, owing $500 means you paid just $500 in income tax that year.

This particular fiction is so prevalent that in all my years of consulting with people of all sorts, I don’t remember a situation where they didn’t give me a look of “you must be kidding” when I disagreed with their interpretation of how much they’d paid in taxes for a given year. As I have said all along, especially during this Financial Fiction series, when it comes to personal finance, most of what people have come to believe (and built their retirement livelihoods around) sadly enough amounts to little more than myth.

You see, just because you did not write a check to the IRS when you filed your tax return – or you received a refund – does not necessarily mean that you did not pay any income tax. Besides, in 99.99 percent of all cases, the amount you owed at the time of filing is not what you actually paid.

To explain this, I’m going to compress a typical tax return to just four lines you’ll find on every tax form (irrespective of which form you use to file):

• Taxable Income
• Tax
• Refund
• Amount Owed

Usually a portion of the paychecks (or if you’re already retired, your investment/pension income) that you receive throughout the year is withheld in anticipation of taxes due at the end of the year. Notice that these amounts are referred to as “withholdings” or “advanced payments.”

Come tax time, when you (or your tax preparer) fill out your tax return, this is what basically happens: Your “tax” for the year is calculated, based on your “taxable income.” Then, the amount of the “tax” you need to pay is compared against your withholdings (or advance payments). If your withholdings were more than your “tax,” you’ll receive the excess money back (a refund). On the other hand, if the opposite were true, you’d need to send a check for the difference – and you’d better sign and mail that check quickly.

Therefore, if you filed your taxes and broke even, in the sense that you didn’t have to pay anything extra, nor receive any refund, that only means that your “tax” amount for the year is equal to the amount you withheld in advance – it does not imply that you paid no tax that year. On the other hand, if you ended up having to send the IRS a check at tax time, that would mean that you were paying that amount in addition to what had already been withheld.

Just the other day, I met with a client who insisted that according to her CPA, she paid only about $800 in income tax as a result of the tax planning strategies/skills of the esteemed accountant. The problem, though, was that she’d paid a little over $7,600 in taxes last year. Of course, she at first thought I was probably not as competent as she would have preferred – because she insisted that she personally signed that $800 check and requested that I reexamine her tax returns, again! The difference? The client (and, interestingly enough, her CPA) were looking at line 76 of the Form 1040 which is the “Amount You Owe” line, instead of Line 44, the “tax” line.

Now, here’s a quick question for you: Would you rather know the total amount of tax you paid or just the difference you need to pay to top off what has already been withheld? The answer is a no-brainer, right? So the next time you examine your tax situation, please pay close attention and focus on the right line/box – remembering that there is a HUGE difference between “tax,” “refund,” and “amount owed.”

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Contact a financial professional at Laser Financial Group to schedule your complimentary, no-obligation consultation to review your last income tax filing and learn how to maximize your retirement income. LaserFG.com or 877.656.9111.

Financial FICTION #8: Term insurance is less expensive than permanent insurance for the same person

Financial FICTION #8: Term insurance is less expensive than permanent insurance for the same person

You may have heard again and again that term insurance is less expensive, compared to a permanent version of life insurance, but I’m here to tell that information is inaccurate. Please bear with me as I walk you through the intricacies of this issue.

The cost of life insurance – and by this, we mean pretty much all life insurance – is based on a mortality table that factors in several items, including an applicant’s age and health. Insurance companies, having been around for a while, seem to have noticed that, generally speaking and all things being equal, the probability of someone dying (and therefore requiring a benefit payout) increases with time and age. As a result, in reality, the cost of life insurance increases (yes, goes up) for EVERYONE in America each year as they age.

Please do not doubt that last statement because the premium payments you make to your life insurance company remain level every year. That’s a method the insurance companies have devised to keep things simple for policy owners. Notice also that your life insurance premium is not the same as your cost of insurance. What actually happens is that when you contact an insurance company to purchase, say, a 10-year- term-life policy, their computers add up the (increasing) cost for each of those 10 years. The total amount is then converted into equal monthly, quarterly, or annual payments based on your preference.

Now think about this: if you want a policy for 20 years (as opposed to 10 years), would or should the cost be the same? To answer this question, I just requested a quote from a life insurance company on a fictitious 35-year old female with a death benefit amount of $200,000.

• The monthly premium will be $16.72 for a 10-year-term.
• But if this very same female wants to keep that policy for a 20-year-term, instead, her monthly payments will increase from today (Day 1) to $24.64.
• She cannot pay the 10-year rate of $16.72 for 20 years. Pretty interesting, isn’t it?

Here’s the thing, this payment difference could be attributed to only one factor: the cost of insurance increases every year. That’s just an indisputable fact!

Let me ask you a very important question. If the premium payment for a 20-year policy is higher than that of a 10-year policy for the very SAME individual, what would be your guess/expectation about the premium on a policy that would provide permanent coverage for you for the rest of your life, until the day of your certain death? Higher, of course. Our 35-year old female would have to pay $53.08 a month for such a permanent policy. Given the facts as we know them, would you consider this to be expensive?

To restate: All insurance has the same cost for the same individual. The reason premiums differ is the length of time an individual needs that protection. Expensive is a very loose term that gets tossed around a lot, but in this instance, it’s just wrong.

You may be wondering, if that’s the case, then how come almost every financial advisor, media, and finance personality preaches otherwise? I’ve been wondering exactly the same thing. But then, on the other hand, it may very well explain why the overwhelming majority of Americans, at the end of their working lives, wind up in an inadvertent cycle of poverty. If you plan your finances around myths, what can you expect as a result?

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Contact Laser Financial Group TODAY to schedule your complimentary, no-strings-attached session with a financial professional who can help you determine which type of insurance policy makes the most sense for you and your family. 301.949.4449 or LaserFG.com.

Financial FICTION #7: Ignore the day-to-day gyrations associated with variable investments – you’ll end up well in the long run

Financial FICTION #7: Once you ignore the day-to-day gyrations associated with variable investments, you’ll end up well in the long run, when it matters most.


Any time the stock market plunges, you are sure to hear one explanation from conventional advisors: “Don’t panic. Focus on the long term.” That is to say that there’s supposedly a time called “the long term” which you will one day reach, and when you get there, your investments will do great and escape the day-to-day gyrations associated with variable investing.

I don’t need to tell you that’s not reality, do I? The reality that any honest, realistic financial professional knows and cannot deny is that the risks associated with investing directly in the stock market – whether via individual stocks or stock mutual funds – can NEVER be diminished and/or eliminated by anything, including the length of time you’ve been investing. To imply otherwise is completely bogus.

Let’s say the stock market plummets, and mutual fund A’s value drops by 10 percent. Jim’s investments in fund A would experience a 10 percent decrease, just as Tara’s would, regardless of the fact that Jim has owned his fund for more than 40 years and Tara has had hers for just one month. The age of the accounts is completely irrelevant. If anything, I’d argue that the long-timer Jim would have a tougher time sleeping at night because (all things being equal) he’d be likely to lose a lot more in absolute dollar terms than Tara.

Have you noticed that, for the most part, those who use this “wait for the long term” approach, which in my opinion is only good for calming investors’ frayed nerves, never specifically define exactly what they mean by the long term? Wouldn’t you like to know when you’ve hit “the long term,” so that you can rest assured you’ll never have to worry about losing any money in the stock market again? Well, I’m sorry, but there’s no such time – EVER!

Here’s my piece of advice to retirement investors: From my point of view, the long term is nothing more than an aggregate of short-term periods. So, if your nest egg keeps taking dips here and there during the “short-term,” guess what may well end up happening when your long term finally rolls around?
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Contact Laser Financial Group today to set up your no-cost, no-obligation consultation. We'll examine your overall retirement and investment strategies – right now, for the short term, and as they will affect your heirs in the future. LaserFG.com or 301.949.4449.