Author Archives: Sherwin Brown

Sherwin Brown

About Sherwin Brown

Sherwin has been an entrepreneur since he was twelve years old. He currently teaches, writes, and speaks to people about how to improve and safeguard all aspects of their financial portfolios.

Why I Changed My Mind on Amazon

Three quick questions?

1) Are you one of the millions that shop on Amazon and just love getting that package delivered exactly on time?
2) Do You want to have more money in the future?
3) Do you own share of Amazon (AMZN)?

amazon books on stock investing

When it comes to companies as large and life-altering as Amazon.com, you have to make an exception to the Safe Investing Rules. The reason I always avoided buying Amazon stock for years is that they do not pay cash dividends (even though I’ve been watching and hoping it would have a huge correction almost every business day). I even sell amazon books on stock investing!

My strict rules when I buy a stock are as follows:

1) The companies must be profitable and since my background is accounting, I am an expert at reading, understanding, and knowing financial statements. A lot of people just look at the bottom line or listen to a financial news blip. However, a company may show a net loss on its income statements, but a closer look at their cash flow statements will show that they have very good cash flow from operating activities and are very profitable. And they know how to legally NOT pay any taxes by growing the company (by the way, Amazon is an expert at doing this).

2) The companies must produce goods or services that millions of people use in their daily lives. For example, hundreds of millions of people in America have a Visa (V) or a MasterCard (MA) in their purse or wallet and they use them to purchase goods and services. WShoes

3) The companies I endorse must pay, at the very least, annual dividends that you can reinvest in the form of additional shares of the same company stock at zero cost (that means no commission). Quarterly dividends are even better, but very few companies do this. My very favorite is a company that pays monthly cash dividends, such as Reality Income (O) .

4) They must be companies that have understandable “how and what” in what they do in

their business—the more basic, the better. For example: a shipping company, Navios Maritime Partners L.P. (NMM), brings huge bulk goods to and from countries around the world. Another company that has an important but simple mission is a freight train line, like Norfolk Southern Corporation (NSC),  and CSX Corporation (CSX)  which moves huge quantities of goods from the Midwest to Florida.

5) And most importantly, I have to believe that the companies will be around, at a minimum, for another twenty-five-plus years—Wal-Mart or Coca-Cola, for example.

Amazon surely fits all the above-mentioned safer investing rules, except they do not pay dividends as of yet. However, they have a unique CEO/leader in Jeff Bezos, who is a true visionary and has a very long-term view. Bottom line/net income is not his main concern; he is mainly concerned about having happy repeat customers and capitalizing on niche markets, such as now striking a deal with the U.S. Postal Service (USPS) to deliver goods on Sundays when most people are at home. This is the kind of creative, out-of-the-box thinking that keeps a company ahead of the competition and moving forward. They have dominated in book sales online including my amazon books on stock investing.

Here are some financial numbers on Amazon you simply cannot ignore:

Top line Revenue:      Year 2009: $24.5 billion

Year 2010: $34.2 billion

Year 2011: $48 billion

Year 2012: $61 billion

Year 2013: $74.4 billion

Year 2014: $88.9 billion

That kind of growth rate is simply hard to be maintained, but if they can grow that well in a recessionary period, they have a very good chance to improve as the U.S. and world economies get better. It’s just a matter of time before the board of directors starts paying cash dividends.

In summary, Amazon is one of those stocks you have to hold in the very long-term part of your investment portfolio. The grandkids or your much younger relatives will be very happy you did.

More Dividend Investing 101:

Here is a very good video on dividend dates:

Ex-Dividend Date – Video | Investopedia http://www.investopedia.com/video/play/ex-dividend-date/

 

Very Important 2015 IRA Changes

Very Important IRS IRA change for 2015: Please read, and save and share info:

New IRS IRA 2015 Rule

A) 60-Day Rollovers for IRAs – Effective for distributions taken on or after January 1, 2015, you are permitted to roll over only one distribution from an IRA (Traditional, Roth, or SIMPLE) in a 12-month period, regardless of the number of IRAs you own. A distribution may be rolled over to the same IRA or to another IRA that is eligible to receive the rollover.

However, you can still do as many custodians to custodians transfer (also known as a Direct Transfer) as you want. A Smart thing to do is to save your one Rollover ( getting the money from the firm/custodian in a check to you in your hands or your non-IRA account at your bank) per every 12 months and only use that in an emergency, but do all other movements of your IRA’s by Firm to Firm transfer.

Just to be clear:

1) A rollover is where you get a check or funds distributed directly to you personally and you have the option to rollover it back into an IRA with a custodian/Firm within 60 days to avoid taxes (or taxes and penalty if you are under age 59 and half*)

2)A Direct IRA to IRA Transfer is where you do not take physical possession of the funds personally: (Hands off),It gets moved by going from one firm to another: Example if you have an IRA at Firm A and you Instructed firm B to take possession of the money from firm A;
Firm A will send the IRA funds directly to your IRA at Firm B; once it gets yours the transfer instructions from firm B.

A Direct IRA Transfer, is now you best option if you want to move your IRA money from one firm to another; less work and this usually does do not generate any IRS 1099R forms.
For more information on the new rollover limitations, please visit the IRS website at www.irs.gov..
*Like most IRS Rules there are always some exceptions

Please remember to check out my books for more helpful tips and paying less taxes and  Safer Investments  ideas:

As Warren Buffett  says: ” Rule number one do not lose money, Rule number two: see rule number one”   

Is The Stock Market Rigged?

Is the stock market rigged? Why does the Dow seem to be at stuck at 18,000 for the past few months: April -June of 2015?

Maybe or maybe not?

Why do the people–the Editors of the Wall Street Journal, parent company of the Dow Jones & Co.–who run the DOW, the thirty stocks (yes this may shock you but there are only 30 stocks that make up the all powerful Dow Jones Industrial Average) keep shuffling so many companies in and out in the past six years? Keep in mind; in the 128 years history of the DOW, they have only made 53 changes and average 1 every 2.4  years, but since 2008, they have made ten changes–that is about one shuffle every six months.

www.sherwinpbrown.com drip 2The DOW Jones lately reminds me of the twin brother marathon runners where only one brother starts the race and soon as he is tired, the other brother slips in for a few miles. As soon as he is tired, the they repeat the process and eventually win the race.

Now tell me that is not rigged?

Yes–in my opinion it is rigged! However, that is something you cannot control, but here is a sure way for you to win at this game and safely earn a lot more money.

Just in case some person or entity(s) is fixing the stock market, here is what you have the power to control when it comes to investing in the stock markets. You can earn millions of dollars over time by how and where you invest your money.

Invest in only the companies whose products and services you and millions of people MUST (Yes, MUST is the key word here) buy and use each day i.e. Do you, or someone one you know, must take a life-saving drugs or even simpler, do you put gas in your car weekly or pay your utility company monthly  for your gas and electric use?

www.sherwinpbrown.com drip 1Even simpler, how do you pay for most things such as your Nike shoes? Are you one of the over billion of people that use a Visa or Mastercard?

Also, to further protect the money you invest, make sure these companies pay at least an increasing quarterly cash dividend. Also, have the dividends reinvested in more of the same shares of the company; enroll your shares in a Dividend Reinvestment Plan (DRIP).

www.sherwinpbrown.co Drip phots

Remember, “Don’t hate the players, be part of the winning team.”

Want to learn more, please check out my books at

www.sherwinpbrown.com or wherever books are sold such as on Amazon, iTunes  and Google Play

You Can Never Save Money by Spending Money!

Money Lesson Number #129: You Can never save money by spending money!

Don’t let the Geico ad with that cute little talking and dancing  gecko lizard fool you–the only truth about that commercial is that every fifteen minutes, you and millions of people are just adding more money to Warren Buffet’s already $70-plus billion; he owns the Geico Insurance Company.

The-Geico-Gecko1

Always remember this: if you are spending any money, you are not saving, no matter how good the deal is, even if it is on sale for 99.99% sale off.

You did not save money if you bought it, you spent money (more often than not wasting money on junk that you will not need in a month), your money is going from your pocket to someone else’s pocket and, usually it is a billionaire or a multi-billion dollar company.

The only time you save money is when your hard-earned money stays in your pocket, whether it just sits at your home, in your checking account or in a portfolio that you own.

Learn the little tricks that corporations use to get your money.  Every time you see any kind of ad, such as TV commercials, printed ads, a sponsor page on your Smartphone via Facebook or Google, they have one goal in mind; to take your money from you forever!

The old saying is true: “A fool and his money are soon parted,” or even worse, “A fool and his money are soon partying.” But there is even a much better saying: “A Penny Saved is a Penny Earned.”

My favorite stratagem is to pay yourself first. Each time money comes into your hand, save/invest twenty percent (20%) and spend the other eighty percent (80%).

I know at times you must buy goods and services, but what you should know is that each time you spend money, it is going to make a large multinational corporation or someone wealthier and you poorer

(Please see one of my earlier  blog: Get Rich off the Very Companies You Pay Each Month for Goods and Services [Gas, Electricity, and Water Companies]). 

Most people have been duped into spending money. All ads no matter how simple or sophisticated are designed to wire your brain to make you give up your money to someone else. It is not easy, but you have to rewire your brain to know when you are getting duped.

A good way to start is with your children by letting them know that most TV and other commercial advertising are not 100% true. Our seven-year-old now always asks us each time he sees a TV ad, “Is it true?” and rarely are any of them true!

But, you can also always ask yourself by saying, “Can I go one day without it?” and the next day, ask the same question and most of the time, you will keep you hard earn money. The products or services are often things that you can live comfortably without.

Here is a quote from one of the first book ever written about money that will never change, The Richest  Man in Babylon“; Ten percent of what you earn is yours to keep.” 

buffet20My hope is that one day, people will realize that they have been tricked emotionally always to turn over their money to billionaire or people who already have more money than they do. 

“Too many people spend money they earned..to buy things they don’t want..to impress people that they don’t like”. –Will Rogers

Thank you for reading, please share my blogs and books with someone you love.

Love Always

www.sherwinpbrown.com

Two Financial Headlines That Will Shock You

Here are two money news headlines that will have you shaking your head

Breaking News

1) Per CNN Money.com: Only 48% of Americans have invested in the Stock Markets, this includes 401(k) money. That means 52% are missing out on the over 200% return in the past six years. There will be a lot of broke retired people in the future.

2) Per NPR.org:  So much money is going into Swiss Banks that the Swiss government is paying a negative rate of return, in other words, people are paying the Swiss Government to hold their own money … that is stupid.

Here is the great news; sooner than later, they have to come back in the stock market, and this will push the markets higher. I will make a prediction that within less than 18 months, the DOW (the 30 industrial stocks) will move from 18,000 to over 20,000!

In addition, these people are who work for a company that matches their employees’ contributions are actually saying to their employer, “That extra money that you are paying me so I do not have to work for forever and will have better much better financial life when I retire? Keep you money I do not want it, I want to be a worker bee for the rest of my life.”

Per CNBC .com:  Seventy-three percent of employers who have a 401(k) Plans for their employees match their employees contributions. Companies such as Wal-Mart Google, Medtronic, Starbucks will match 100% of your first 4-6% contribution.

So simple math: if you are earning $50,000 and you contribute 10% each year ($5,000), then your employer will contribute a matching amount the first 6% that is $3,000. So now you have a total of $8,000 starting to work for you each year.

But, say you work there 20 years and do not contribute a dime, then you gave up over $60,000! And if that $3,000 only compounded at 7% per year with dividends plus growth, you are missing out on $122,986, not to mention the tens of thousands of dollar of taxes savings that will be working for you if you are an intelligent investor.

And keep you money in a traditional 401(k) Plan and not a Roth.

4fatcat 001

Please do note: Each company has different vesting periods on the money they match, for example the first year is 20% vested, second year is 60% vested then, after three years you are 100% vested. However, there are no vesting periods on the money you contributed for yourself–you are 100% immediately vested, and you can rollover/take this money with you any time you leave the company. In addition, the IRS and sometimes your employer set the limits each year on how much you can contribute each year.

 As of 2015, the limited by the IRS is $18,000 if you are under age 50, but if you are 50 or older (up to age 71-and-a-half), you can do an additional $6,000 for a total of $24,000 per year.

You can read more about investing in one of my very easy to read investment books that are sold everywhere in paperbacks and eBooks such as on Amazon .com, Google play. iTunes Kobo book and Barnes and Noble,  just to name a few

 www.sherwinpbrown.com

Last Minute Tax Tip To Get A Bigger Refund!

Here is a quick and very easy way to get a bigger refund (or owe fewer taxes) while saving for your retirement at the same time!

1) Contribute $5,500 ($6,500 if you are 50 or older) to a traditional IRA … do not do a ROTH

2) Invest the money in FIVE different dividend paying companies for at least the next TWENTY years

Make sure these companies are companies that you and millions of other people must use their products and services every day. Here are some great examples of stocks & companies I’m talking about:

  • Your utilities company (Gas and Electric) you pay every month
  • a freight train companies such as CSX
  • Visa or Master if you use those cards daily or weekly
  • Food companies such as Sysco Corp.
  • The very company you pay for mobile phone service every month such as AT&T or Verizon
  • And last but not least, the gas company where you fill up your car bi-weekly, such as Chevron, Exxon Mobile, Marathon Oil, etc. (please read this very short blog)

Stop Paying your Electric Bill

3) Make sure that your quarterly (or monthly) dividends are enrolled in a Dividend Reinvestment Plan, also known as a DRIP.

4) Do not invest your money in Mutual Funds–over the long run, you will just get an average return and will not do as well as the top 5% of intelligent investors.

5) Here is how you will benefit; you pay fewer taxes now, and you should have a lot more money in 20 years from now because the taxes you did not pay are working for you!

6 You can thank me by downloading a copy of my book far as low as $4.99 at www.sherwinpbrown.com

7) *** Please READ DISCLAIMER ON MY WEBSITE AT www.sherwinpbrown.com

Stop Paying Your Electric Bill

How to get your current gas and electric company to eventually pay you more than you’re paying them each month.

 

nexteraenergya23Did you know if you live in Florida and you pay your utility company, such as FLP {real name is Nexta Energy—(NEE)}, at the average monthly cost of $183 for 32 years, it will cost you a total of $70,272 ?

 

But, if you had just invested only two years of the same payment $4,392 ($183 x 12 x 2 = $,4,392), it would now be worth $251,376 as today. At a dividend yield of 3% per year, you would now be earning  $ 7,541 per year–that is $628 per month. You would now be getting $445 per month more than the $183 you are paying them.

Here is a second example: If you live in Chicago, and you pay COM Ed (ED). Culling data from Yahoo Finance for the past 45 years, and using the current average $135-per-month x 45 years, your total bills paid would amount to $72,900.

mYXT0ThmBut, if you had just invested only two years of the current annual cost $3,240 ($135 x 12 x 2 =$3,240), your investment with growth and enrolled in a Dividend Reinvestment Program (DRIP), it would now be worth $579, 292 and  with a current dividend yield a 4.2 percent.

Your current yearly investment income from them would be $24,330 or $2,027 per month. That is; you are now getting $1,892 more than you are paying them.

How much do you pay your utility company and how long have you been paying them?

What other company do you buy something from each day?

Are you a Starbucks junkie? Do you pay about $2.50 per cup twice per day? Plus tip?

starbucks_1798272c That is at least $1,825 per year, or in 23 years you will have spent $41,975. But, that is okay if you just had put one year of your coffee cost of $1,825 twenty-three years ago and let it compound via growth and dividend

The value of that $1,825 as of today would be worth be $282,521 with a cash dividend yield of 1.3%, and  it would be paying you $3,672 per year or $10.06 per day. You could still enjoy your two cups per day and have $5.06 more than you are paying them.

Money Lesson #140: As it says in my book “Simpler, Safer Investing”, invest where millions of people such as yourself buy and use the companies’ products and services each day, such as your electric and gas company, or your favorite coffee chain.

To lean more on this subject, please check  my book on my web site www.sherwinpbrown.com  or an Apple ITunes,  Amazon .com,  Google play, Barnes and Noble, Kobo Book are anywhere books are sold.

THE FED is Always late to the party

Money Lesson #128: The Federal Reserve Board, (THE FED) is Always late top the party: The earn very good money in the investment world you have to stay ahead of them.

WOW! WOW! GREAT JOB Numbers:
Last month, February 2015, The US Economy add over 295,000 new Jobs! Over 3 million in a year! Unemployment is now at 5.5% Please click the link below to see all the data
http://www.bls.gov/news.release/empsit.nr0.htm

This kind of data is solid proof that the American economy is fully recovered. Time for the Fed to get out of the way and raise interest rates NOW!

The people who are currently suffering the most from this very long period of sky-high rates are the millions of people who cannot invest in the stock or real estate market. They are compelled to keep their meager funds in checking/savings accounts that are paying from zero to less than one percent (1%).

There are millions of retirees who have to play it safe by keeping their money in CDs and Money Markets Accounts that are yielding next to nothing. And if you add the taxes that they have to pay, plus inflation, they are losing purchasing power.

Currently, only Big Banks, the Super wealthy, and Mega Corporations are the only ones benefitting by keeping interest rates so low. Big banks are taking the millions of retirees’ dollars and paying them very little while using that same money to lend to only to the very wealthy and the mega-corporation at a higher rates.

Microsoft and Apple who are currently borrowing tens of billions, despite the fact that these two firms have a combined $121 billion in cash that they disclosed on their most recent balance sheet.

(Microsoft currently has closed to $90 billion in cash and Apple has $32 billion and this what they have disclosed–this does not include the tens of billions they are hiding offshore.)simple

The history of the FED is that they are always too late or too early–they have NEVER gotten it right. If they knew what they were doing, we would never have had the housing bubble that caused the recession that started in 2008 in the first place. Did they step in the first place? No!

Taking too long to raise interest rates is causing new bubbles in Stocks and the Housing Market. Remember Alan Greenspan, the former Fed Chairperson who raised interest rate eleven times, trying to cool down the US economy? He just kept his foot on the gas and eventually rates got so high that the US economy did not just slow down–it collapsed.

Yes, the recession is over, and the Fed needs to learn from their past mistakes. Time to move on and raise interest rates, this will take help to keep the stock market and the housing market from over inflating and creating future problems.
YES!! NOTE to The Federal Reserve Board (THE FED): It is time to start raising interest rates

 

It is All Greek To Me?

I am shocked that anyone would invest or not invest their money based on the Greek Financial problems?

The Greeks having Financial crisis is the same as a cat hacking up hairballs. It is their way of life, get use to it!

greek to me

Tune out the noise and learn how to invest in safer ways by reading one of my books. If you do not have a lot of time on your hand, just read chapter 19 ” The Interview” in my New Book  “Simpler, Safer Investing: How NOT to Lose Money, Over 110 Years of Investing History Cannot be Wrong” and I guaranteed The chance of you ever making foolish investing with your money is very slim.

The Hacking of America

Why We All Have Been Already Hacked!

Hacked! 80-plus million Anthem-Blue Cross, over 60 million Target Stores, over 56 million Home Depot,  JP Morgan has been hacked over 76 million …  E*Trade?

And these are just the ones who are coming forward . There are hundreds, if not thousands, of companies who have not come forward.

We all know that Facebook has been hacked many times, and they boast that they have over a billion users.

However, they have not been forthright about this because it would be very damaging to them.

Here is a direct quote from James Comey, the FBI Director; “There are two type of companies in the United States; those that are hacked and those that do not know they have been hacked.”

The Hacking of AmericaWhen the Anthem, Inc (ANTM) the health insurance providers were hacked on January 29, 2015, most people just yawned and moved on with their daily life.

And why should they worry? This type of hacking is now commonplace–so many companies like Target, Home Depot, JP Morgan, E*TRADE  have come forward and announce that they were hacked (and I imagine many are not being honest by not coming forward).

One of the frightening things about these companies that have been hacked is that the ones that come forward always delay telling us about the hacking of our personal data. They never tell us immediately of the hacking, it is always months later, and the information they release is always in a drip, drip manner.

Example, they would say they only got names and addresses, and it is only 40 million. A week or so later, they say it is 60 million, and they did get social security numbers. Only a week later, they say that the hacker got all your information, and  it is over 80 million.

And to try and appease you, your consolation prize is one lousy year of free monitoring by the very same credit agencies that sold them your information in the first place.

We All Have Been Hacked!

Per Forbes.com : “Banks are hit by cyber attacks every and the one good news for us is that the banks, not you, are liable for any stolen funds as a result of cyber crime”  (http://www.forbes.com/sites/moneybuilder/2013/01/15/what-happens-if-your-bank-account-is-hacked/)

I am 100% sure if you do not have an account that has been hacked, you will and soon.

As a matter of fact, all of our data has been hacked/exposed.

Here is why I am so sure; when you call your credit card company, your cable company or your phone company, who answers the phone these days?

I am 99.9% sure when call your calls get rerouted; they go to someone, somewhere overseas. We’ve all been tempted to hang up on some phone rep with a heavy unintelligible accent. You see, in the race to save money on employee labor costs, all and I mean ALL of your person information is somewhere overseas.

And if you have a credit card or a debit card, not only your information out there, but also your children’s, and all your relatives/next of kin’s data is in many locations overseas.

Stop and think: If multi-million  dollar companies such as Comcast are paying people .20 per hour and this very low paid employee has a chance to make $1 million, what would you do think they are going to do, if some unscrupulous person or group offer them a lot of money for your personal data?

What is going to stop these employees from selling the security codes to someone who will pay them a thousand times the money they are earning at under one USD per hour. And even if they get caught, who is going to prosecute them? Remember, most of the US laws and rules stop at the border.

In addition to someone who is getting paid slave labor who have access to your data, all you personal  data is being backed up constantly off shores.

Your FICO Score is Not Legally Yours?

We all have a credit or debit card of some type in our purse, pocket or wallet and there are no secrets that Fair Isaac Corporation (FICO), the owner of your credit score,

Yes, you read that right; they own your credit score, not you. FICO sells not just your personal information, they sell your children’s, your mom and dad, your sisters and brothers, your aunts and uncles, your niece and nephews and an and all who are related to you every nanosecond.

I will further prove this to you there is a company/website call Ancestors.com  who, with just your name and a bit more information, can track down all of your lost ancestors with just a few clicks on the web in no time. How do you think they get that information? That information is pulled directly from your credit files for a fee, of course.

I have friends, and I am sure you too, who will tell you that they are not on Facebook or any of the social media sites because they “want to keep their privacy”  to which I reply do you have a credit card, a debit card or have ever taken out a loan for a car or a mortgage and when they reply “Yes.”  I say your privacy went the way of the Dodo bird.

Sad to say, but all you information is out there and with the outsourcing of jobs to very low wage earners overseas, your personal data is everywhere!

Hacking of our pesonal data

How Can You Protect Yourself?

While all you persona data can get in the hands of almost anyone with just a click, there are still some ways you can protect yourself from been taken financially:

1) As I mentioned  above per Forbes.com, banks, not you are liable for any stolen funds as a result of cyber crime. Thank you, FDIC!

2) Do have a lengthy and strong password that has nothing to do with your name or your family members name. You would be surprised as to home many people  password is “password” or “1234”  or “12345” or “123456”

3) When you get an email from any financial institution asking you to contact them by email, Do Not reply to the email, print it out and then call the company if you have an account with them.

4) The IRS does not send out emails–do not reply to any email that is from the IRS. Again print out and call the IRS to inform them of the email.

5) If anyone from any financial intuition calls you even if you have an account with them, simply say, “I am busy at the moment can you please give me your full name, your company main phone number and your extension and I will call you back. Then do call back the main line and asked if the person who call you work there.

6) Get your free, and I mean Free, (it is the law you are entitled to a no-cost credit report for free every 12 months) At least once a year, go over it with fine tooth comb.

https://www.annualcreditreport.com/index.action

7) Getting Hacked is the new reality, and it is something we have to live with until a 12-year-old solves this problem.

Thanks for reading my blog, please share with someone or people  you love.

Love Always

Sherwin