Inside Perspective

rawpixel-com-255078

This 19 minute episode is incredible. The reporter wants to know why so many poor countries can’t ever seem to get out of poverty. He finds out just how much red tape has been put into place by the federal, state, and local governments when it comes to opening and running a small business. For example, in Peru, it takes 13 years to open a food market.

icon_510289

Hernando de Soto’s parents always talked about Peru as he was growing up. His family had moved to Switzerland after a coup. They were kicked out of the country, and for many years de Soto thought of Peru as this magical place.

When he was 38, de Soto moved back to Peru. He knew the country was poor, but he didn’t really understand the extent of the poverty until he got there.

He wanted to figure out what was trapping people in poverty. “There’s gotta be an invisible wall someplace,” he thought. “Let’s find the wall.”

Today on the show, you will hear how de Soto found the invisible wall that was trapping people in poverty, how it transformed poor countries around the world, and how his discovery almost got him killed.


News That You Didn’t See…

SpaceX sticks 11th rocket landing after launching first used Dragon capsule.

 Elon Musk’s company, SpaceX, has landed it’s 11th rocket. Which is a huge step in space travel. If success is continued, it is estimated the cost for space travel will decrease by x100.

American’s are paying $38 to collect $1 of student debt.

 A recent study released shows that the federal government is paying loan collections agencies to track down and collect on student debt the government has issued and guaranteed. However, the government is paying $38 for every $1 collected.

Walmart is asking employees to deliver packages on their way home from work.

 Walmart announced at their more recent shareholders meeting that they are going to test a new concept of having employees deliver packages on their ways homes. This is a way for them to compete with Amazon while giving their employees more pay

25 percent of U.S. shopping malls expected to close within next 5 years.

 Going with the times, the next 5 years are expected to have 25% of what shopping malls are left close. The increase in online shopping is causing low attendance rate which is making these wonder of the 1980’s and 1990’s obsolete.

Netflix plans to spend $6 billion on new shows, blowing away all but one of its rivals.

 Netflix is surging ahead with their attempt to make cable non-existent. They are spending, this year alone, $6 billion to develop content exclusively for Netflix. They have never spent this much before and they are now second in spending behind ESPN. If they continue their streak of success with Netflix only content we should expect good days ahead for their stock.

Amazon could ‘break open’ the pharmacy space, says health tech investor.

 Yes, Amazon is now testing the pharmacy market. And if they are as successful with this as with their other projects we can expect lower costs, better service, and more competition all around in the very expensive pharmaceutical industry.

Tesla releases details of its solar roof tiles: cheaper than regular roof with ‘infinity warranty’ and 30 yrs of solar power.

– Again, Elon Musk with another big announcement. One of his other companies, Tesla, just announced they are ready to start selling and installing tile like solar panels for homes. A huge step in the direction for independence.


Based On A True Story

Real Life Client Stories

Recent Grads Getting Into Investing

Occasionally our office will receive random, but relevant questions about everyday life. Not always are they financial related, but worth sharing.  I’m sure you can all remember a teacher telling you, “No question is a dumb question because someone else might be thinking the same thing, and not want to ask.”  Same philosophy here. No question is dumb and anything and everything is up for discussion.

I am 22-year-old recent graduate from UMKC in digital and graphic design. Unlike a lot of my classmates, I graduated with no student debt and was able to find a job in my career field in the city. During college, I worked part time and that basically money paid rent and the occasional college outing. So, when I received my ‘real’ first paycheck from my new job, I was pleased to see how much I made. I knew my yearly salary when I accepted the position, but didn’t’ understand the breakdown per paycheck. I also signed up to contribute to a 401(k) just because that is what the human resource lady said I was supposed to do. She told me to contribute 3 percent so that I would get a company match. Whatever that means? She broke down my vacation and how to submit it, and briefly touched base on my health insurance. Thank God I don’t get sick very often.  So I’ve been working here about 6 months, and noticed I have a lot of money left over after every paycheck.  I’m really wanting to build my net worth, but not sure how to go about it. I asked the human resource lady what I could do, and she said I could contribute more to my 401(k), but I would be limited to the options picked for me. How can I increase my retirement savings outside of my 401(k)?

This particular scenario happens all too often. Recent grads land a killer job, and are given so much information during their introductory meetings, but do not really absorb their options. They usually are not advised on the best ways to achieve their long term goals. Referred to our office, we sat down with this young investor, listened to her story, and then presented her with the following.

First, if your company offers it, change your 401(k) to a Roth 401(k). Everything in your Roth 401(k) will be invested with after tax dollars, meaning the taxes will have already been paid, and grow tax free. When it comes time to retire, you can use the funds in this account for income, and won’t have to pay taxes on the money you withdraw.

Second, and probably the most important note, is you are young. You have a long time horizon which gives you a lot of flexibility if the market dips low or rises high. Take an amount you are comfortable with, and invest in a fund that follows the S&P 500.  The indexes provide great diversity and a low cost.  Be simple. Don’t try and beat the market and get lost along the way.

This method isn’t just for young investors. Anybody can follow this method. In this case, however, recent graduates are not always equipped with the knowledge on how to approach everyday issues.

The client has now transferred her 401(k) to a Roth 401(k), and has increased her monthly contribution from $50 to $100.  We look forward to continuing advising her in the years to come.

Like we said, no question is a dumb question.