• Real Estate is probably the most commonly held Alternative Investment. It can be held as Direct Ownership where title is held directly by an individual such as a rental home, or Fractional Ownership as a share in a Real Estate Investment Trust (REIT), or Partnership along with other investors. Although some REITs are actually traded in the Stock Market (“Traded REITs”) most actually started their lives as private offerings to investors outside of the market (“Non-traded REITs”). Common Real Estate categories include Residential, Office, Retail and Warehouse/Industrial.
• Life Insurance and Annuities. These are actually contracts that are made between an individual or special entity and a Life Insurance or Annuity company. Annuity contracts are set up with fixed or variable return rates based on various market returns. The contract benefits usually fall into two broad categories, Living Benefits, associated with Income payouts, or Death Benefits, associated with lump sum payouts. These benefits are guaranteed by the company issuing the contract. This guarantee can relieve and Investor of some of the market risk in stock or bond investing. A way to understand this investment market it is to realize that Annuity contracts often consist of a large current payment (the “Premium”) to the issuing company in exchange for a stream future payouts (the “Benefit”) to the Investor. Conversely, Life Insurance contracts consist of a current stream of Premium payments in exchange for a large lump-sum Benefit payout in the future. The issuing companies simply make their profit on the spread between these current premium payments and the payout of future benefits.
• Hedge Funds and Futures Contracts.  These are more sophisticated investment vehicles that involve contracts written against market performance, arbitrage on mergers and acquisitions in the market as well as foreign currencies. Arbitrage is the practice of taking advantage of valuations that are perceived as mispriced in the market.  They often involve smaller high-risk investments that are targeted for outsize returns.
• Commodities and Currencies. Typical commodities are of Oil and Gas, Precious Metals (i.e. Gold or Silver), Base Metals (i.e. Copper or Aluminum), Agricultural Products (i.e. Wheat or Soybeans). They can be held directly (i.e. Gold Coins) or they often take the form of futures contracts that are traded in the own unique markets that may or may not be correlated to the Stock and Bond Markets. One of the newer investment vehicles that may fit into this category are cryptocurrencies such as Bitcoin. This is could be considered as an undeveloped market that is highly speculative and volatile.
• Private Debt and Private Equity. One of the newer investment vehicles is the private placement of debt for mid-sized companies that too large to borrow from banks and too small for a debt offering in the Bond Market. Business Development Companies (BDCs) organize these offerings and sell them privately to sophisticated investors through the Broker/Dealer network. There are also offerings organized to pool investor funds and invest in start-up or later-stage financing of growing companies looking to raise equity privately.
• Conclusion. Alternative Investments are a good way to diversify and round out an Investment Portfolio without further exposure to Stock and Bond Markets. They are often used to dampen volatility (market price swings) and stabilize of a portfolio to smooth out investment returns. Many Alternative Investments also produce regular cash payments that may greater than the Bond Market but can be obtained with less risk. They should be considered as part of a sophisticated Investment Portfolio. Some of these Alternative Investments can only be obtained through a full service Financial Advisor.

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Views, opinions and analyses expressed in this presentation are those of Southwestern Retirement and not those of Independent Financial Group, LLC.

Registered Representative offering Securities and Advisory Services through Independent Financial Group LLC,

a Registered Broker-Dealer and Investment Adviser. Member FINRA/SIPC.

 Southwestern Retirement Planning Advisors, Inc. is not affiliated with Independent Financial Group LLC.

OSJ Address: 4041 MacArthur Blvd., Suite 240, Newport Beach, CA 92660

The post Alternative Investments appeared first on Southwestern Retirement Planning Advisors - Retirement Planning Chandler, AZ.

Your first move should be debt reduction. This frees up money for the other moves you can make and lessens the amount of money you pay to others, instead of yourself, each month.

Consider attacking your highest-interest debts first rather than your largest debts. If you have big credit card balances, high-interest car loans, or similar financial obligations, that borrowed money may be extremely expensive. Credit bureau Experian says that monthly household credit card balances in this country hover around $6,375. According to personal finance website NerdWallet, the average interest rate on a credit card right now is 14.87%, and the average U.S. household pays out $904 a year just in credit card interest. A constant debt of $6,000 is bad enough, but having to pay roughly another $1,000 a year just for the opportunity to borrow? That really hurts.1

Whether your major debts are larger or smaller, think of the progress you could possibly make by devoting thousands of dollars you pay to others to yourself. Say you direct $3,000 you would otherwise pay to creditors during a year into an investment account returning 6%. Say you do this for 10 consecutive years. At the end of that 10-year period, you are looking at $47,287, not simply $30,000. That is what compound interest – the best kind of interest – can do for you financially.2

Across longer time periods, compound interest has a proportionately greater positive effect. Stretch the above example out to 35 years and those annual $3,000 investments at a 6% return grow to $377,421. (Keep in mind, you may be able to save and invest considerably more than $3,000 annually as you earn more money per year.)2  

Save or invest whatever you can. Setting aside a little cash for yourself is good, too. You want to build some kind of emergency fund with money you can touch; money you can get at right away if you need it quickly.

Many retirement savings vehicles offer you tax breaks. The common workplace retirement plan or IRA is tax favored: money within the account grows tax free, and it is subtracted from your paycheck before taxes. You only pay taxes on the money when it is withdrawn. In addition, many employers will partially match your contributions if you meet a certain minimum. Roth IRAs and workplace plans allow both tax-free growth and tax-free withdrawals, provided Internal Revenue Service rules are followed. While you get no up-front tax break for contributing to a Roth account, you also have the potential to withdraw the money tax free for retirement, which is a great thing.3

Not using these saving and investing accounts could be a big mistake. Some people are skittish about Wall Street investments, but largely speaking, those are the kinds of investments that have the potential to return better than 5% a year (think about the scenario from a few paragraphs earlier). In fact, the S&P 500, the broad benchmark of the stock market, gained an impressive 19.42% last year.4

Parking too much money in cash and avoiding all risk can come with an opportunity cost you may not be able to afford. Sallie Krawcheck, the former president of the investment management division of Bank of America and CEO of Ellevest, estimates that a woman making $85,000 annually who puts 20% of her yearly pay into a bank account rather than an investment account could effectively forfeit more than $1 million after four decades of doing so.5

Now is the ideal time to plan to get ahead financially. Think about your future, and make the wise money moves that give you the potential to make it bright.

Kurt Rohrs may be reached at (480) 812-8640 or kurtrohrs@SWRetire.com

Southwestern Retirement Planning Advisors, Inc.

3800 S. Alma School Road, Suite 123

Chandler, AZ 85248

www.SWRetire.com

Registered Representative offering securities and advisory services through Independent Financial Group LLC,

a registered broker-dealer and registered  investment adviser. Member FINRA/SIPC

Southwestern Retirement Planning Advisors, Inc. is not affiliated with Independent Financial Group LLC

OSJ Branch: 4041 MacArthur Blvd. Ste. 240, Newport Beach, CA 92660

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – tinyurl.com/ybxskou6 [2/19/18]

2 – bankrate.com/calculators/savings/compound-savings-calculator-tool.aspx [2/22/18]

3 – fool.com/retirement/2017/05/20/taxable-vs-tax-advantaged-savings.aspx [5/20/17]

4 – ycharts.com/indicators/sandp_500_return_annual [2/22/18]

5 – money.cnn.com/2017/03/08/pf/financial-moves-sallie-krawcheck/ [3/8/17]

The post Wise Money Moves Young Women Can Make appeared first on Southwestern Retirement Planning Advisors - Retirement Planning Chandler, AZ.

Nearly everyone can save something. Even small cash savings may be the start of something big if they are invested wisely.

Sometimes, the immediate wins out over the distant. To young adults, retirement can seem so far away. Instead of directing X dollars a month toward some far-off financial objective, why not use it for something here and now, like a payment on a student loan or a car? This is indeed practical, and it may be necessary. Even so, paying yourself first should be as much of a priority as paying today’s bills or paying your creditors.

Some workers fail to enroll in retirement plans because they anticipate leaving. They start a job with an assumption that it may only be short term, so they avoid signing up, even though human resources encourages them. Time passes. Six months turn into six years. Still, they are unenrolled. (Speaking of short-term or transitory work, many people in the gig economy never get such encouragement; they have no access to a workplace retirement plan at all.)

Other young adults feel they have too little to start saving or investing. Maybe when they are further along in their careers, the time will be right – but not now. Currently, they cannot contribute big monthly or quarterly amounts to retirement accounts, so what is the point of starting today?    

 The point can be expressed in two words: compound interest. Even small retirement account contributions have potential to snowball into much larger sums with time. Suppose a 25-year-old puts just $100 in a retirement plan earning 8% a year. Suppose they keep doing that every month for 35 years. How much money is in the account at age 60? $100 x 12 x 35, or $42,000? No, $217,114, thanks to annual compounded growth. As their salary grows, the monthly contributions can increase, thereby positioning the account to grow even larger. Another important thing to remember is that the longer a sum has been left to compound, the greater the annual compounding becomes. The takeaway here: get an early start.1  

 Any retirement saver should strive to get an employer match. Some companies will match a percentage of a worker’s retirement plan contribution once it exceeds a certain level. This is literally free money. Who would turn down free money?  

Just how many Americans are not yet saving for retirement? Earlier this year, an Edward Jones survey put the figure at 51%. If you are reading this, you are likely in the other 49% and have been for some time. Keep up the good work.2

Kurt Rohrs may be reached at (480) 812-8640 or kurtrohrs@SWRetire.com

Southwestern Retirement Planning Advisors, Inc.

3800 S. Alma School Road, Suite 123

Chandler, AZ 85248

 Registered Representative offering securities and advisory services through Independent Financial Group LLC,

a registered broker-dealer and registered  investment adviser. Member FINRA/SIPC

Southwestern Retirement Planning Advisors, Inc. is not affiliated with Independent Financial Group LLC

OSJ Branch: 4041 MacArthur Blvd. Ste. 240, Newport Beach, CA 92660

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – bankrate.com/calculators/savings/compound-savings-calculator-tool.aspx [6/21/18]

2 – forbes.com/sites/kateashford/2018/02/28/retirement-3/ [2/28/18]

The post Why Do People Put Off Saving for Retirement? appeared first on Southwestern Retirement Planning Advisors - Retirement Planning Chandler, AZ.

Last year, a GoBankingRates poll discovered that 57% of U.S. households had less than $1,000 in deposit accounts (although, 25% reported having at least $10,000). A 2017 analysis from Moebs Services, a research firm consulting banks and credit unions, noted that the average U.S. checking account contained around $3,600.1,2    

Eyeing these numbers, you get the sense that – in an emergency – most households have less than a month before their liquid savings run out. Is this true for your household? Hopefully, your cash reserve is much larger; if that is not the case, now is as good a time as any to bolster your emergency fund.

Building up an emergency fund may be easier than you think. As financial upsets are thankfully infrequent, you have long periods of normalcy in which you can amass cash. Can you save $50 a month toward that goal? You will have $600 after 12 months if you do or $1,200 in 12 months if your spouse saves along with you. That may not seem like much, but even that little pool of cash could suffice.

Keep in mind, the whole goal of an emergency fund is to deal with sudden – and presumably acute – expenses. In the grand scheme of things, these emergency costs will likely be trivial compared to the total expense of your retirement. If you end up directing more of your money to your retirement fund than your emergency fund per month, who can blame you? Your retirement fund is presumably invested in equities and has the chance to grow and compound over time. It addresses what is arguably your top financial need – the need to provide yourself with financial stability after you end your career.  

Some households need larger emergency funds than others. A high-earning, child-free couple living without much debt in a relatively inexpensive metro area might need one to absorb only 3-4 months of expenses. A family reliant on one paycheck might need one that is much larger, as severe financial trouble could surface if the breadwinner loses a job or falls ill.    

Emergency funds can also help in other kinds of money crises. While an emergency is an unexpected event calling for an immediate response, you may be able to sense other financial disruptions and inconveniences coming. Maybe that garage door keeps malfunctioning or your eight-year-old computer has trouble booting up. These are signals that you will need to write a check or pull out that debit card soon.

Living without an emergency fund can invite worry. It is an anxiety too many households have had to accept. Plan to save a little each month (or more than a little, if you can manage), so that you may create a bit more financial “breathing room” in your life.   

Kurt Rohrs may be reached at (480) 812-8640 or kurtrohrs@SWRetire.com

Southwestern Retirement Planning Advisors, Inc.

3800 S. Alma School Road, Suite 123

Chandler, AZ 85248

www.SWRetire.com

Registered Representative offering securities and advisory services through Independent Financial Group LLC,

a registered broker-dealer and registered  investment adviser. Member FINRA/SIPC

Southwestern Retirement Planning Advisors, Inc. is not affiliated with Independent Financial Group LLC

OSJ Branch: 4041 MacArthur Blvd. Ste. 240, Newport Beach, CA 92660

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.        

Citations.

1 – cnbc.com/2017/09/13/how-much-americans-at-have-in-their-savings-accounts.html [9/13/17]

2 – tinyurl.com/yacqwq4p [7/13/17]

The post What Do You Have in Reserve for 2018? appeared first on Southwestern Retirement Planning Advisors - Retirement Planning Chandler, AZ.