Tools
The bank you use
I use EverBank which is an online bank that is the best bank that I have seen in 40 years!!
They pay excellent interest on checking and money market accounts. I recommend 1 months income in checking and 3 months in the money market accounts. You can do CDs that are backed by different countries currency. You earn more with the value of money if the dollar goes down. They also have normal CD’s. At this time, I don’t recommend normal CD’s because of the low interest.
They have a net worth (worksheet) statement for clients that will show you all the assets you have. I update the net worth statement at the end of each month. We keep a small local checking account but only keep a nominal level in that account. If the balance goes over the set limit I simply transfer the money to EverBank. We also have a safe deposit box at the local bank.
EverBank has over 7 billion in assets and did not do sub prime mortgage loans. Their earnings increased this year. Call Gina as she can help you understand all the benefits and she is great to work with.
Gina
Private phone: 1-904-623-6751
Fax: 1-904-470-2653
Note: Tell Gina that Roy Henry referred you to EverBank.
http://www.everbank.com - More information here
CD’s versus Small Loans
I use a company called Lending Club. They cover a market for small loans (5000-15,000). The main reason for these loans is to pay off credit cards and get out of debt in 3 years. The loans pay from 9 to 17% based on risk. What I do is set up 3 portofios - low, medium & high risk for equal amounts. I am currently earning 14.2% average on all 3 portfolios.
Studies show about a 2% to 4% default rate. I would still net 10% on my money versus 2% on a CD. The largest amount I have in one loan is $250.00, so I spread over 1400 loans and now have $50,000 invested and growing. I plan to have 7% of my net worth in this area. I have the Lending Club hooked up with my EverBank checking account so at the end of the month I pull the interest paid and reinvest the principal back into new loans. This is a great idea that I am very comfortable with. Of course, some of this money could go to CD’s, but the interest rates would have to be much higher. Those kind of changes would be spelled out in monthly changes made in the website.
To make sure you understand the Lending Club Investment, please see the following:
Lending Club has small loans that are made to people with various levels of risk which sets the interest rate. Most loans are used to pay off their credit card debt. I have 3 portfolios; one at 12%, one at 14% and one at 16% with a net average rate of 14%. You will always have late pays and some defaults, but keep in mind you are earning 14%, so it would take a very large default rate to still have 10% net return and your money still safe. You can also borrow from Lending Club if you have high credit card debt or want to start a small business.
I have set up my EverBank checking account, so on approximately the 25th of each month I transfer the income and reinvest the principal into more notes making sure I keep the average rate at 14%. I have scanned my account so you can see what it looks like.
This investment makes much more sense than a 2% +/- CD. Please email me with your phone number if you have any questions. Also, call Meredith as she is great to work with.
Contact info - Lending Club
440 North Wolfe Road, Sunnyvale, CA 94085
- Meredith Kramon - mkramon@lendingclub.com
- Lending Services - www.lendingclub.com
- 408.524.3069 Direct phone
- 408.524.1527 Fax
The Broker-Dealer you should use
The best I have seen for normal people is ETRADE which is one of the largest financial institutions in the USA.
The trades cost only $9.95 (or less) and are by far the easiest to use. You should set up three accounts that I will explain later.
http://www.ETRADE.com - More information here
Ohio National and Prudential Variable Annuities
We have 13% of our money in each Ohio National & Prudential. The products are Variable Annuities with over a 70 choices each of investment accounts managed by the best managers in the world. The variable annuity is tax deferred like a 401K , but has more choices. Please see the January 2009 newsletter for more details.
Ohio National uses Wilshire (one of the world’s largest investment advisors). They have 5 models, depending on your risk tolerance. I use Model 5 (the highest risk) which uses accounts balanced to get the hightest gain at the lowest risk. I recommend you use either model 4 or 5. You can take more risk because of the guaranteed income that will compound at 5% per year with Ohio National and 7% with Prudential (which are the worst case results). These are the products that you can take out 5% average per year without a worry. These products do not guarantee principle, but it compounds your deposits at 5% and 7% respectively, and if your account earns less, you would still receive a monthly income for life based on a 5% and 7% compound rate of return, when you retire.
The death benefits will guarantee a minimum of your investment or more as a death benefit. Thus that lump sum would be paid equal to or more of your investment or your account value, whichever is greater.
These options would cost 1.5% to 2% more a year if you could do the same thing elsewhere.
I put 6.5% in each of two variable annuities issued by Prudential. I have designed models that I feel will work - one with the 7% rider and the second variable annuity without the income rider. This gives us a balance of risk, but keep in mind that we time these accounts with VectorVest so we go to the money market account when they call out. I feel we should make more than 5% counting Ohio National and Prudential, over the long haul.
To make sure you understand variable annuities:
Variable annuities are tax deferred! This means that you pay no taxes on your investment until you start withdrawing income. Example: If you are withdrawing 5% and your variable annuity earns 20%, you will pay taxes on only the 5% withdrawn. Ohio National has over 70 sub accounts (like mutual funds) to choose from. Sub accounts have outperformed mutual funds that are similar because there are much less surrenders of subaccounts compared to mutual funds.
With Ohio National, we use model #5 that is designed by Wilshire, one of the largest investment advisers in the world. We are in this model only when Vector Vest calls in the market. When Vector Vest calls out, we go into the money market account. I have scanned a report on one of my accounts so you can see how it looks.
Ohio National Variable Annuity Account Scan
With Prudential the tax benefits are the same and they have over 70 sub accounts to pick from. They have more special equity funds which can give more options than Ohio National. I like to split this area of investments with both accounts to increase returns and lower risk. On Prudential Variable Annuity with a 7% rider, we keep 20% in bond funds in or out of the market. Balance is placed in the money market account until called back in. I have scanned one of my accounts for your review.
Prudential Variable Annuity Account Scan
Variable annuities are one of the best ways to invest in the stock market. If you have any questions, please feel free to email me with your phone number.
http://www.ohionational.com - More information here
http://www.annuities.prudential.com - More information here
For Ohio National and Prudential, please email me for referrals of who I use.
Top 10 Reasons to Use Variable Annuities in Your Retirement Plan
Email: roymeredie@aol.com
The people I use know my system and they can do the same for you as they do for me. I ”time” both companies using a service called VectorVest that tells me when to be in the market and when to be out. I simply send an email to people I use to go out or go in the market and they do it for me. I also follow up with a phone call to make sure they got the email.
VectorVest has a track record of over 13 years and is the best system I have seen in over 40 years on timing the market.
http://www.vectorvest.com - More information
Three Equity Accounts
The final three equity products I use are done in three ETRADE accounts as they are traded in the market. You can test VectorVest for five weeks for $9.95. The first product for 10% of your net worth is the top 10 VST Stocks (Value, Safety & Timing). VectorVest monitors about 8000 stocks and ranks them from 1 to 8000+. When I am in the market, I buy the top 10 stocks ranked by VectorVest. I check at the end of each month and I sell the stocks that have gone off the list and replace them with the new stocks on the list.
I made $100,000 in 2007 on a $100,000 investment for 3 months in the market. I have made over $10,000 for 2008 (I did not lose money in 2008, while most people lost 25% to 35%) on an $80,000 investment. I was in the market for just 2 months. I take some of the profits each year and place them into the retirement plan where needed. When VectorVest calls out of the market, I go into cash until VectorVest calls back in.
This is a list of the Top 10 Stocks on 12/24/2009. I run the report at the end of each month and rebalance owning the current Top 10 Stocks.
The cost of VectorVest’s service is approximately $650 per year and it is worth every penny.
The 4th equity product (for 10% of your net worth) I use is PowerShare ETFs called Global Growth Asset Allocation. It does something similar to Wilshire. It balances you in 27 to 30 ETFs (Exchange Traded Funds) to give you the highest yield for the lowest risk. They have 3 EFTs that give you low, medium and high risk. I recommend using the medium or high risk ETFs (or both). When we are out of the market, I transfer this to my EverBank’s Money Market to earn higher interest. When I am in the market, I am in the ETFs.
See Power Shares for scan
http://www.powershares.com - Go to products and see the 2nd group target allocation. The second and third ones are what I use.
The fifth equity account is Gold & Silver, Oil & Gas in ETF’s stocks for 5% of your net worth. The stocks are bought in even dollar amounts. I also use special EFT’s that are a hedge run by very smart people. The EFT’s I own will be in the ‘changes’ section of the web site. This account is a hedge against inflation, so I don’t take income from this account, or time it with VectorVest.
See ProShares for scan
You would set up three accounts with ETRADE.
http://www.etrade.com - More information
Services that are recommended
The service I recommend is VectorVest at a cost of $650 per year. There are many things you can do with VectorVest but so far I am using the 10 top VST stocks and timing. I check VectorVest each day to make sure I am following their calls. This service has saved me from thousands of losses over the last 3 years. In 2008, I know it saved me more than $200,000 in losses that year.
http://www.vectorvest.com - More information
Steps to never run out of money
As I have outlined I have 13% of my money in each of Ohio National & Prudential Variable Annuities and 10% in the top 10 VST stocks and 10% in PowerShare’s Global Asset Allocation ETF’s. All four are timed by Vector Vest. The 5th account in Gold, Oil and Special EFT’s is not timed as it is a hedge against inflation at 5%.
This gives me the best chance for yield at the lowest risk possible which is based on the Modern Portfolio Theory and Vector Vest picks with rebalancing done when needed. This forces me to buy low and sell high. When the market is bad I am in the EverBank money market account earning interest on the first two ETrade accounts. I go to their money market accounts with Ohio National and Prudential.
Each year I set up income based on 5% from the Variable Annuities (5% from Ohio National & 5% from Prudential) and 5% from Top VST stocks and PowerShare’s Global Assets Allocation ETF’s, based on the value on 12/31 each year. All of these strategies should earn much more over the long term than I am taking out. This means your income should increase each year over your lifetime.
Real Estate
Triple Net Lease Real Estate.
I use a company named AEI. I have invested with them for many years and I have never lost any money. They buy a portfolio of triple net lease real estate all paid for (no mortgages) with long term leases with major corporations like Staples, Best Buy, Applebees and Steak ‘N Shake, just to name a few. They pay 5% rent that will go up over time. I recommend 10% of your net worth in this area. You can start with as little as $5000 and increase as time goes on.
AEI Capital Corporation
Click here to see one of my Quarterly Reports
Robert Johnson, CEO
1300 Wells Fargo Place
30 East Seventh Street
St. Paul, MN 55101-4939 USA
Phone: In U.S. only - 800-328-3519 Outside U.S. or local - 651-227-7333
http://www.aeifunds.com - For more info
Oil and Gas
I recommend 10% in developmental and royality income and 10% in developmental drilling. I have invested with a number of companies and so far recommend three companies I feel comfortable with. These investments provide tax benefits and can help shelter other income.
Please see the January 2010 section of the Newsletter for more info on Oil and Gas investments. The benefits are tax savings, excess income for future investment and a hedge against inflation. You would do (over time) 10% in drilling and 10% in income or 20% of your net worth with very little out of pocket in 4 to 5 years.
Drilling: See
M&W Financial
Robert Stewart
800-616-3334
rstewart@mwfin.net
Income: See
Chestnut Energy
2201 North Central Expressway
Suite 240
Richardson, Texas 75080
972-233-9200
Valor Development, LLC
207 S Denton Tap Road
Coppell, TX 75019
Christopher D. Wolf
214-496-0000
Gold
I recommend 8% of your assets in gold and gold rare coins 50/50 as a hedge against the falling US dollar. With goverment spending out of control, gold is the best way to protect the value of other assets in your retirement plan.
The best system for gold is coins like the Canadian Maple Leaf and rare US gold coins, which is what I use. They are easy to buy & sell. This breaks your gold down to smaller pieces. I buy my gold coins from Blanchard & Company and they send them to me. You can keep them in a safe at home (make sure it’s bolted to the floor) or in your safety deposit box at your local bank. Between gold coins and EFT accounts with Gold & Silver, Oil & Gas EFT’s at 5%, you have a 13% hedge against the falling dollar and inflation. Susan Sierra is great to work with and can help you balance your gold investments.
See for more info on Blanchard and Company, Inc.
Susan Sierra
Senior Account Executive
888-447-8726
Blanchard & Co.
P.O. Box 61740
New Orleans, LA 70161-1740
Final Note: The hard part part is setting up the accounts which I will help you with if you have qustions. You can do this if you take one step at a time.
Roy M. Henry