Tag: Prof Note

9 August 2018

 

Question: According to MSN:Money, what are 10 things to do if you’ve been a victim of identify theft?

 

China slaps duties on $16bn of US goods – Pg. 1

–        China to impose 25% duties on $16bn of US goods including oil products, steel and cars, …

–        The announcements mean that $100bn worth of bilateral trade will be subjected to duties, since the two sides imposed tariffs on $34bn of each other’s goods last month

–        The US says its own latest tariffs are part of its response to “China’s unfair trade practices related to the forced transfer of American technology and intellectual property”

–        The tit-for-tat has done little to curb Americans’ appetite for Chinese goods.  The dollar value of China’s exports to the US rose 12.2% in July compared with a year earlier, …

–        Beijing’s trade surplus with the US fell only slightly in July to $28.09bn from a record $28.97bn in June, largely due to a 27.3% jump in Chinese imports from the US

 

Ageing societies – Pg. 7

–        …The 100-Year Life first appeared in mid-2016, the book about longevity and societal change sold only modestly in the west

–        [Japan]…where 27% of the population is over 65, half is over 50 and deaths have exceeded births for more than a decade, ….

–        …Japan has embraced the idea of the 100-year life as an overarching policy directive

–        In 2017, consumption expenditure rose most strongly in the over-59 group

–        …by 2025, when the immediate postwar baby boomers turn 75, social security expenditures will surge under a scheme in which patients become responsible for a smaller ratio of their medical costs as they get older

–        Fifty years ago Japan had just 327 centenarians; in 2017 it had 67,824, and the largest per capita ratio of them in the world

–        (Prof Note: Outliving one’s wealth is a SERIOUS problem/consideration.   When I was talking with Bill Hudnut about his wealth planning, he was 25+ years older than his wife, and he wanted to provide for his wife it was difficult.  He lived a long life to 80+ but then needed his wealth to last another 25 – 40 years.  It was/is difficult!)

 

Answer: (1) Pick up the phone (Prof Note: Notify your bank(s)); (2) Inform the credit bureaus; (3) Find all inaccuracies; (4) Get the Federal Trade Commission involved; (5) Get back-up; (6) Close all accounts you did not create; (7) Repair your credit report; (8) Keep the watch dogs out longer; (9) Fix the breach; (10) Stay on top

8 August 2018

 

Question: According to MSN:Money, what are 10 reasons people aren’t buying houses?

 

Japan medical school admits favouring men – Pg. 3

–        A prestigious Japanese medical school has confessed to systematically rigging its entrance exams against women in a scandal that has highlighted the nation’s deep problem with gender discrimination

–        …more than a decade subtracted marks from female applicants in a deliberate effort to produce more male doctors, and falsified exams to help specific individuals

–        They show an ingrained culture of sexism in Japan, which is stuck at 114 out of 144 on the World Economic Forum’s rankings of gender inequality…

–        The manipulation at Tokyo Medical University came to light only after prosecutors began a corruption investigation against the school’s officials for allegedly admitting the son of a bureaucrat in return for government grants to the university

–        For the crucial essay section of this year’s entrance exam, the university first subtracted 20% from all marks.  Then it gave 20 bonus marks to men who had taken the exam three times or less.  So if a woman and a man had both scored 70 out of 100, the woman was given a score of 56 while the man was given a score of 76

–        The proportion of women admitted to Japanese medical schools rose steadily until 2003 when it peaked at 33.8% and has remained broadly stable

–        Whereas Japanese women have a higher pass rate on entrance exams for almost every other university subject, including physics and engineering, in medicine the pass rate is 6.85% for men and 5.91% for women

–        People connected to Tokyo Medical University told local media the reason the exams were rigged was that women were more likely to quit the profession when they had children

 

Financial Services – Pg. 7

–        Higher expectations are not the only problem the insurers are facing.  IN many parts of the world, their core markets are mature, competitive and barely growing at all.  And since the financial crisis they have had to grapple with low interest rates and new capital rules, both of which have dented their traditional business models

–        Technology has made it easier for insurance companies to monitor what their customers are doing

–        Reinsurance companies, which help traditional insurers to reduce their own risks, are also getting into the act.  Their business model has involved taking on risks in return for a premium, much as any insurer would

 

Answer: (1) Interest rates are on the rise (Prof Note: Every 1bp rise on a 30-year loan costs the borrower $1,000.  So, a 100bp increase cost the borrower $100,000 over 30 years); (2) Student credit scores are feeling the pressure (Prof Note: Average student debt is $37,000); (3) People are looking to avoid any additional risk (Prof Note: Houses need to get back to forced savings vehicles.  HELOCs need to be more regulated); (4) Millennials are opting for a new lifestyle (Prof Note: I talk to a LOT of millennials.  They are not “opting” they are being pushed.  Who does not want a house?!); (5) A 20% down payment is hard to come by (Prof Note: Do the hustle, i.e. the side hustle and save!); (6) Supply is low; (7) Houses aren’t being built; (8) Renting is more attractive (Prof Note: The millennials did teach me something in Baltimore.  It is not $/sf that is the important metric but rather $/bedroom.  Millennials will sleep in spaces smaller than my closets!); (9) Baby boomers aren’t selling; (10) People live in fear of another crisis (Prof Note: My prediction: 15 months!)

7 August 2018

 

Question: According to MSN:Money, what are 40 secrets only divorce lawyers know?

 

Chinese police lock down financial district – Pg. 4

–        Investors who had lost money in the recent collapse of P2P platforms had organized a protest in Beijing yesterday, ….

–        China’s online P2P lending market is the biggest in the world, with $175bn in loans outstanding at the end of last year, …

–        But over the past two months a wave of defaults shocked families who believed their investments were safe

 

Renminbi decline overwhelms central bank intervention as Chinese stocks slide – Pg. 17

–        The renminbi resumed its drop yesterday as the downward pressure on the Chinese currency overwhelmed the first effort from the country’s central bank to temper its four-month slide

–        In contrast to notable renminbi drops in 2015 and 2016, the currency’s 9% slide against the US dollar since April has yet to alarm global investors, who believe it is in the crosshairs of both the trade war and attempts by Beijing policymakers to reverse a recent tightening in monetary policy as the economy slows

–        Some $2.3tn has been wiped off the value of Chinese stocks since their high in January

 

Answer: (1) Don’t let emotions dictate your financial decisions (Prof Note: I remember a student calling me with a problem.  It started like this, “Prof, I did what you say do not do, I bought a house with my gf.”  I said, “Great, now marry her!”  He said, “Welllllll, she’s not my girlfriend anymore.”  I said, “Ok, talk to me…”  He said, I have this spreadsheet showing I have contributed 91.7% to the household expenses you would be proud!”  I said, “I am proud.  Now give her half, move on with your life and listen to me from the beginning!” J), (2) Everything is fair game (Prof Note: Make certain you know what “everything” is!); (3) Make big purchases before filing; (4) Keep track of your spouse’s spending (Prof Note: The devil is in the details); (5) Gather key evidence before filing (Prof Note: I have advised so many, female and male, on this.  Everyone wants to confront the other person.  Get your ship ready to sail first!); (6) Get property appraised before you part ways; (7) Don’t hide assets (Prof Note: Be transparent but also be strategic); (8) You can write off alimony payments on your taxes (Prof Note: I thought, but am not a tax accountant, this was negated with the tax changes); (9) If you receive alimony, you must report it; (10) Watch out for Hidden Tax Implications; (11) Get job training or update your education before filing (Prof Note: A spouse that works at home for the family has value!  Replacing the person that cooks, cleans, drives carpools, loves on everyone when they are sick, is priceless…remember this!); (12) Familiarize yourself with your finances before you split (Prof Note: I recommend both spouses understand the finances.  In fact, part of my estate plant explains my finances); (13) Consider mediating your divorce (Prof Note: One of my good friends is a divorce mediator.  The few people I have sent his way have spoke highly of him and the services provided); (14) Know what your biggest asset is; (15) If your lawyer recommends a PI, hire one (Prof Note: In my family saga I hired two PIs.  What a joke!  All they did was google search.  I would have been better off hiring two 12 year olds!); (16) The most expensive lawyer isn’t always the best (Prof Note: It is important to have benchstrength.  Single practioners are just that, single.  Benchstrength baby!); (17) Understand debt obligations; (18) Don’t forget about beneficiary designations (Prof Note: Change your Will!); (19) Pay court-ordered attorney fees; (20) Consider your income before asking for all deductible items; (21) Take advantage of free legal advice (Prof Note: Remember, you generally get what you pay for); (22) Be mindful of the date when initiating divorce; (23) Design a joint parenting arrangement wisely; (24) Plan finances for after the divorce; (25) Have a paper trail; (26) Division of property can be complex; (27) Retirement accounts are not worth the balance; (28) Division of property depends on where you live; (29) Some states are better for getting a divorce; (30) Be mindful of the worst states for divorce (Prof Note: Remember, the most important finance decision one makes in life is their spouse!  Also remember the greatest destroyer of wealth is NOT a financial crisis but rather….DIVORCE!!!)

4 August 2018

Question: According to MSN|Money, CNBC, how does one avoid becoming a human ATM?

 

Static US wage growth adds to argument for rate rise caution – Pg. 4

–          Solid hiring by US employers failed to boost the annual rate of wage growth in July, feulling arguments for the Federal Reserve to tread carefully as it raises rates

–          Unemployment dropped to 3.9%.  a broader measure of labour market strength that includes people who are in part-time work but want a full-time position was just 7.5%, a full point below where it was a year earlier and its lowest level since 2001

–          …wage growth flatlines at 2.7%

–          The Fed is widely expected to move rates up by another quarter-point next month as it continues its gradual process towards tighter policy

 

Trial paints Manafort as big spender – Pg. 4

–          The prosecution has sought to paint Mr Manafort as a man who lied to dodge taxes when times were good and lied to obtain bank loans when times were bad

–          Mr Manafort is the first person to be tried in Mr Mueller’s investigation into alleged links between the Trump campaign and the Russian government (Prof Note: How is Mr Manafort involved with the Russians?  How are these charges related to Mueller’s investigation?  I am NOT saying Mr Manafort is guilty/not guilty, I just do not see the connection!)

–          The allegations concern some $60m Mr Manafort earned between 2005 and 2014 in Ukraine…

 

Answer: (1) Ask what it is for (Prof Note: If someone asks you for $$$, be certain you understand the need.  Do not be frightened to pay the bill directly.  Also, be certain the money is not being used to buoy an unsustainable lifestyle); (2) Feel free to say no; (3) Set terms; (4) Accept that you might never get it back (Prof Note: While not for everyone, consider funding a Foundation.  This way your philanthropic goals are met and you can address the ask with, “Please contact my Foundation for a donation.”)