Current - Episode 57 - a podcast by Fixed Cost Financial
from 2019-06-07T06:00
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NOTES
1. Thoughtful Conversations - Clients
A. Actionable information and knowledge
B. Busy clients, families, work, commuting,
C. Importance of delegation
D. CEO to Basic Blue Collar
E. No longer comfortable with own skin, skill set, making better use of time
F. Confusing, complex, contradictory information
G. Pointing in the right direction
H. We developed a comprehensive program for Retainer, User, Delegator, Abdicator, Ignorer
I. Financial planning by and for the individual, same with economics, individual basis
2. Personal Air Conditioner - Facebook, Advertisement
A. Show links
B. Evaporator
C. EvaSMART 2
D. Indiegogo smash hit
E. Entrepreneur
F. Hogwash
3. Apartment Building Owners Try to Grapple with Tougher Energy Use Requirements
A. how much it might cost co comply.
B. New York City is the first city in the world to require all large existing buildings of 25,000 square feet or more, of which there are 50,000 citywide, to make efficiency upgrades… or face steep penalties
C. sustainability requirements
D. Energy efficiency is a worthwhile objective, but NMHC has argued that the upfront cost needs to be kept within reasonable bounds
E. Nearly all (98 percent) of apartment developers said changes in building codes over the past 10 years increased development costs for the average apartment project, and these costs, when they exist, average 7.2 percent of total development costs
4. Tony Robbins
A. Tony Robbins Strikes Back: Own Your Own Firm, Never Get Fired
B. We’ve watched at least one high-profile RIA pull away from Tony Robbins after the latest wave of old scandals resurfaced.
C. The logic there is ruthless but clear. The firm tied its reputation to the celebrity figurehead but can’t supervise his outside activities.
D. As his disclosures routinely point out, Robbins owns 30% of retirement plan service group America’s Best 401(k). They can’t kick him out without buying him out.
E. There’s no regulatory disclosure on the site and while the principals are passionate about better retirement outcomes, they don’t show up in an SEC search.
F. Medical Practice owned by non-Doctors
G. Salesforce founder Marc Benioff technically plays a similar role in this particular firm. He doesn’t pontificate much about plan design or how great America’s Best 401(k) is.
H. Benioff first discovered the self-help guru as a 28-year-old. The aspiring entrepreneur was working at a big corporation when he began absorbing Robbins's tapes and attending his seminars. Eventually, he credited Robbins with his decision to start Salesforce years later, now a $6.6 billion San Francisco enterprise behemoth.
I. It may be among the most ancient pieces of leadership wisdom, yet when it falls from Robbins's lips, people listen, and they have for more than 30 years. "When everybody's unsure what to do, and there's somebody who fucking knows, everyone pays attention," says Robbins. "Someone who has certainty, even if they're wrong, will lead other people."
J. Robbins Research International, a life-coaching empire that includes a massive book business (15 million volumes sold globally), an audio business (50 million programs sold), a life-coach certification business, and seminars for which attendees pay as much as $8,000 to be in the same room with the man himself.
5. Stocks rose strongly on Tuesday morning after Fed Chair Jerome Powell said that the Fed would respond appropriately to trade war risks. The comments pointed to a future cut in interest rates and echoed comments from St. Louis Fed President James Bullard on Monday. Meanwhile, the Commerce Department reported that U.S. factory goods orders fell 0.8% in April, down from a revised 1.3% increase in March. T
6. Social Security was never really intended to be the sole source of income for older Americans. Originally developed in the 1930s to supplement employer-sponsored plans and other personal savings, it’s now become the major stream of income for many retirees.
A. Ninety percent of those 65 and older receive benefits today. More than 62 million Americans will receive approximately $955 billion in Social Security benefits this year.1 However, the gap between what we receive from Social Security and the income many of us will need in the years to come may be wide.
B. That’s why it’s crucial to consider how timing, income, and taxes impact your Social Security benefits. Understanding more about these factors can help you plan accordingly, avoid surprises, and prepare for what you may need to find other sources of income to fill any gaps.
C. Today, 66 is full retirement age for anyone born before 1960 and 67 for those born after. Your benefits grow by 8% every year that you delay claiming them. The longer you hold off, the greater your benefits will be.
D. There are certainly pros and cons to taking them early or waiting. You can actually delay taking them all the way to age 70 before you stop seeing incremental increases in the benefit amount. If you can delay taking benefits until at least 70, you’ll have increased your annual Social Security income by 76% relative to someone who began taking benefits early at 62.
E. If you’re thinking about working while receiving Social Security benefits, your benefits may be reduced depending on when you file.
a. Before full retirement age, benefits are reduced $1 for every $2 above $16,920 in earned income.
b. At full retirement age, benefits are reduced $1 for every $3 above $44,880 in earned income.
c. After full retirement age, there’s no limit on earnings. Withheld earnings are returned.
F. Your benefits may be taxed. The question is if they are, at what percentage? That depends on what tax bracket you’re in. If your combined income is equal to or less than $25,000 if you file as an individual ($32,000 if married, filing jointly), then none of your Social Security benefit is taxable
a. If it’s more than $25,000 and equal to or less than $34,000 ($32,000 and $44,000 if married, filing jointly), up to 50% is taxable. If your combined income is more than $34,000 ($44,000 if married, filing jointly), it goes up to 85% being subject to taxation
b. Speak with your tax advisor for guidance concerning the calculation of taxes.
G. Catastrophe Bonds
a. Catastrophe bonds (also known as cat bonds) are risk-linked securities that transfer a specified set of risks from a sponsor to investors. They were created and first used in the mid-1990s in the aftermath of Hurricane Andrew and the Northridge earthquake.
b. In the first quarter of this year, a record $4.24 billion in new catastrophe bonds was issued in 17 separate transactions,” said Robert Hartwig, associate professor and co-director of the Risk and Uncertainty Management Center at the University of South Carolina’s Darla Moore School of Business. “What this says is that cat bonds are no longer the interloper or the disrupter. They’ve become a mainstay fixture.
c. First, a bit of history: In 1992, Hurricane Andrew caused $17 billion in insured losses in Florida—a loss figure double the modeling estimates at the time for the financial costs emanating from a severe hurricane. Several insurers were forced into bankruptcy, and reinsurance capacity dried up for the remainder. A new source of capacity outside traditional reinsurance was needed to fill the void. In 1996, according to Aon Securities, the first catastrophe bond drawing risk-bearing capital from the capital markets to satisfy this need was developed by St. Paul Re UK.
d. Two main parties are involved in the issuance of a catastrophe bond—a sponsor and investors. Sponsors include insurance companies, reinsurance companies, large multinational corporations and even governments, all looking to spread the risk of loss from hurricanes, earthquakes and other natural disasters. Investors generally are pension funds and hedge funds looking to diversify their investment portfolios with a new asset class.
e. Pension funds, retirees should know how their pensions are invested. The have no say, the trustee has all the say, but are these people making solid decisions?
f. catastrophe bonds are a complement to traditional reinsurance, presenting the opportunity to hedge the risk of loss from a natural disaster. The bonds function just like a reinsurance contract structured over several years or a single year. When the sponsor’s property damage losses exceed a specified indemnity trigger ($2 million, for instance), the bond kicks in to absorb the financial impact up to a stated limit (say $3 million), making it similar to traditional reinsurance, in which reinsurers assume layers of risk within a so-called tower.
g. Lloyd's of London, generally known simply as Lloyd's, is an insurance and reinsurance market located in London, United Kingdom. Unlike most of its competitors in the industry, it is not an insurance company; rather, Lloyd's is a corporate body governed by the Lloyd's Act 1871 and subsequent Acts of Parliament and operates as a partially-mutualised marketplace within which multiple financial backers, grouped in syndicates, come together to pool and spread risk. These underwriters, or "members", are a collection of both corporations and private individuals, the latter being traditionally known as "Names".
h. The business underwritten at Lloyd's is predominantly general insurance and reinsurance, although a small number of syndicates write term life assurance. The market has its roots in marine insurance and was founded by Edward Lloyd at his coffee house on Tower Street in c. 1686. Today, it has a dedicated building on Lime Street within which business is transacted at each syndicate's "box" in the underwriting "Room", with the insurance policy documentation being known traditionally as a "slip"
i. In 2018 there were 84 syndicates managed by 55 managing agencies that collectively wrote £35.5bn of gross premiums on risks placed by 303 approved brokers. Around 50 per cent of premiums emanated from North America, 30 per cent from Europe and 20 per cent from the rest of the world. Direct insurance represented around 70 per cent of the premiums, mainly covering property and casualty (liability), while the remaining 30 per cent was reinsurance. The market collectively reported a pre-tax loss of £1bn for 2018, resulting from above-average major claims and a weak investment environment.[4]
j. Lloyd's capital structure, often referred to as the "chain of security", provides financial security to policyholders and capital efficiency to members. The Corporation is responsible for setting both member and central capital levels to achieve a level of capitalisation that is robust and allows members the potential to earn superior returns
1. There are three "links" in the chain: the funds in the first and second links are held in trust, primarily for the benefit of policyholders whose contracts are underwritten by the relevant member. Members underwrite for their own account and are not liable for other members' losses
2. The third link consists largely of the Lloyd's Central Fund, which contains mutual assets held by the Corporation which are available, subject to Council approval, as required, to meet any member's insurance liabilities.[20]
3. In 2017 the first link (syndicate level assets) amounted to £51.1bn, the second link (members' "funds at Lloyd's") £24.6bn, and the Central Fund contained just over £2bn.
4. Lloyd's worst results in its long history were in the 1989 through to 1991 years, each producing overall losses of over £2bn; the late 1990s were also punctuated by repeated and significant underwriting losses.[23] In 2001 the calendar year result was a 140 per cent combined ratio, driven largely by claims arising out of the World Trade Center attack, reserve increases for prior-year liabilities and deteriorating pricing levels. However, since then, the market has generally enjoyed profitability in every year except those marked by large natural catastrophes. For example, in 2005 a spate of major Atlantic hurricanes including Hurricane Katrina drove the Lloyd's overall combined ratio to 112 per cent, while events including the Japanese earthquake and floods in Thailand badly impeded performance in 2011.
5. United States gun control advocates have accused Lloyd's of providing “murder insurance” because it underwrites several types of National Rifle Association-endorsed firearms policies, including for gun shows and personal liability insurance that covers criminal and civil defence suits. The NRA-endorsed personal liability policies are unusual, as insurance policies rarely cover costs from criminal prosecution. Gun control supporters argue that these policies could increase gun violence as they have the potential to reduce the negative consequences of firing a gun, similar to “stand-your-ground” laws.[44
6. According to the owner of Appalachian Promotions, which organises gun shows in several US states, Lloyd's is "the NRA’s choice” for gun shows and “there’s usually nowhere else to get it for gun shows.” Critics have accused Lloyd's of enabling the “gun show loophole” and “aiding and abetting the black market in handguns.”[45
7. New York state regulators are investigating the marketing of these “self-defense" insurance policies.[4
k. Thinking in Bets. Making smarter decisions when you don't have all the facts by Annie Duke. "Life is poker, not chess" "Quick or dead, our brains weren't built for rationality." "Learn
l. The Colorado State University (CSU) tropical weather forecasting team has increased its prediction for the number of hurricanes that will form during the 2019 Atlantic Hurricane Season and also its landfall probabilities, but still cite the significant uncertainty associated with El Nino’s influence this year.
LINKS
Meet the Smart A/C that is the Perfect Summer Desk Accessory
Evapolar 2 - Smart Personal Air Conditioner
Why you should not buy the Evapolar
Further episodes of Connecting Dots
Further podcasts by Fixed Cost Financial
Website of Fixed Cost Financial