Your Safe Money Show Worst Assets to Inherit 5 11 24

Highlights for May 11th Your Safe Money Show

 Coming up on this Saturday's May 11th Your Safe Money Show. Todd will help you get a lower credit card annual percentage rate. He’ll tell you the worst assets to inherit. And if you’re married, it’s so important to understand the 5 options when it comes to claiming Social Security. Listen at 8 a.m. at Nice 95.5FM KBEK. They stream live at kbek.com. Hear recent shows by going to yoursafemoneyshow.com.

Tee hee

 

Real Rate of Return

 I had a client recently ask me about something that a broker had said to him about the “average return” on the S&P 500. He said that the S&P 500 had returned an average of (approximately) 10% over the last 20 years, even when you include the terrible results of both the tech crash and the credit crisis. Well, that statement may be factually true, but in reality, it’s misleading. Why? Simple. There is a difference between the average return and the actual return or (some call it the real rate of return), within an account. Let me explain: If you have $1000 in an account and in the first year you lose 50% you now have $500. Now if that account has a 50% gain the second year, it will increase back up to $750. So, at the end of two years, even though the average return is zero percent, the account actually experienced a 25 percent drop. How can this be true? If the average return is zero, how can the ending value be significantly less? Why aren’t these values the same? It’s very simple. The actual return and the average return will never equal one another anytime you have to factor in a negative number. So, since markets do experience negative years, the averaging method just doesn’t work. It will never work. It’s not an accurate picture of how a market or an account has really performed: unless, of course, every year during that period has experienced a positive return. This may help you understand why your 401(k) or brokerage account balance doesn’t necessarily reflect the average gains you’ve seen reported. I shared this with the client. I explained to him that the safe money strategies I talk about, where you never experience a single year with a loss, your average return and actual return will always be the same because this strategy is contractually guaranteed to never have a negative return. No matter how much a stock (or other market) goes down. The worst you can do in any given year is zero. And as I always say, zero is our hero. And when the market rises you grab the gains, and you get a reasonable rate of return. And if you’re looking for a lifetime income, a pension, make an appointment with me and I’ll explain this in more detail and see if Safe Money Strategies are a good fit for you. yoursafemoneyshow.com.

Your Safe Money Show Is 100 the new 70 5-4-24

 

Your Safe Money Show content for May 4th

 For our 12th Anniversary Your Safe Money Show this Saturday May 4th at 8 a.m. at Nice 95.5FM KBEK Todd will answer the question "Is 100 the new 70"? He’ll also have things to teach your children and grandchildren about money and happiness. And he’ll break down 8 personal finance ratios you need to be keeping track of. Listen to the live stream at kbek.com. Go to yoursafemoneyshow.com.

Are home improvements tax deductible?

 One of our topics on last weeks Your Safe Money Show was about home improvements being tax deductible. One of the questions was: Are home improvements tax deductible? Generally, most home improvements, especially cosmetic ones, aren’t tax deductible. However, the IRS does offer some tax benefits for certain capital improvements, such as renovating your home office or a space you rent, making energy-efficient improvements or making changes due to a medical condition. But as I said you need to know that whatever the improvement is you can't deduct the cost in the year you spend the money. But, if you keep track of those expenses, they may help you reduce your taxes in the year you sell your house. To hear the segment on this topic go to yoursafemoneyshow.com.