Bad Money Moves to Avoid

What are truly the very worst investments and financial products you can buy with your money? Those things that when all things are considered provide you the lowest chance for profit. 

According to the AARP, they include five primary types: alternative investments, time-shares, equity-indexed annuities, private and non-traded REITs, and oil drilling partnerships. You can read why each are to be avoided right here. To that list I would add most permanent (whole, universal, variable) life insurance policies, deferred annuities and non-publicly traded partnerships. 
In that same article, AARP also provided five clues to watch for to tell you when something isn’t right about an investment that is being sold to you. These are all good things to watch for:
1. An impossible promise: There’s no such thing as high returns with little or no risk. The best opportunities typically go to institutional investors: it’s much easier to raise money from a few big fish than to solicit thousands of small fry.
2. Complex terms: Perhaps the offer comes with hundreds of pages of technical and legal disclosure, and you’re required to sign a document saying you read and understood it all. Good investments are easy to grasp. My rule is never to buy anything I couldn’t explain to an 8-year-old. Ask yourself: would they write hundreds of (legal) pages to protect you or themselves?
3. A ticking clock: If you hear that this investment opportunity is available only for a short time, it’s the reddest of flags. The salesperson doesn’t want you to think it over or ask others for their opinion. Run, don’t walk away from these investments.
4. Fancy language: That would be words such as “structured,” “managed,” “deferred,” “derivative,” “collateralized” and even “guaranteed.” Of course, there is nothing wrong with an FDIC guarantee on your CD. But leaving cash at a bank or brokerage firm is a bad investment if you are earning 3 percent or less: you’re losing ground to inflation. A higher-paying CD is a better option if you’re not willing to take risk with your money.
5. A stranger calls: Be very careful of accepting a free-lunch “educational seminar.” I have yet to meet someone unknown to me who truly wanted to and could make me rich. Someone once said that you truly can’t afford “free”, and I have come to believe it.
Millions of investors fall prey to bad investments usually out of fear or ignorance. In addition, no matter how smart you may be or how much experience you have, studies also show that all of us can be very gullible and blinded by our greed.

Nevertheless, knowing what to avoid is an important part of being successful with investing and managing risk. Most of the time, anything sold to you by others as terrific alternatives to equities and fixed income, especially those with lots of hype, complexity and outrageous fees, must be avoided. Eliminating these bad investments from your consideration and portfolios is a must if you desire to give yourself the best chance for long-term investing and financial success.

If you have any questions about any investments or insurance products you might be considering, please don’t hesitate to contact us or visit our web site at As a fee-only fiduciary financial planning firm, we always put your interests first, and there’s never a charge for an initial consultation.



The Kirk Report

What is Uncle Sam doing with your tax money?

Now that your tax money is in the hands of Uncle Sam, what will he do with it?  How will the government allocate your contribution to the overall budget?
Your Social Security payments are easy; they go to pay Social Security benefits to current retirees, and for now (the future is another matter), they fully fund that obligation. Some of that money also goes to cover a portion of Medicare’s expenses; the remainder is covered by general federal revenue.
Your income taxes are divided among several broad budgetary categories.  A surprisingly large chunk is spent on the military (27%) and military-related veteran’s benefits (5.1%).  Another 22.7% goes to various forms of healthcare for U.S. residents, including the rest of the Medicare bill plus Medicaid.  13.9% of your tax money goes to pay interest on Uncle Sam’s debt–paid out to Treasury bill and bond holders every six months.  Unemployment benefits take up another 9.8%.
In the “Everything Else” category on the government spending pie chart, a surprisingly low 4.5% is spent on running the government, including various agencies such as the FBI and immigration services.  A total of 4% goes to housing programs, community development and block grants, while education gets a 2% slice of the pie–for programs like Head Start, and also the Pell Grants for college students.  Less than 2% is spent on scientific research, international affairs, transportation and energy.
If you’d like to get a receipt from the government for your taxes paid, which itemizes how that money is spent, well, good luck petitioning the IRS.  But you can get a fairly accurate receipt from the National Priorities Project here: Just type in this year’s tax payment from your 1040, find your state, click a button and you’ll see what you paid for in terms of government services, interest and overhead.  Depending on how you feel about our government spending priorities, it may make your tax experience more or less painful.

If you have any questions about how to plan to pay less in taxes through tax and financial planning, please don’t hesitate to contact or visit us at