Protecting Your IRA and Raising Smart Money Kids

February 2, 2017

As one of your fans, thank you for all the time and energy you expend trying to help those of us less trained and more nervous than you.” – Phillip R

Dear Friends,

Coming Soon! As I mentioned in the last newsletter, my team and I are working hard to produce the most exciting project I have been involved with in the last 50-plus years in the investment community.

I have so enjoyed the many years of helping people manage their money. It was so much fun (and hard work) building my investment advisory firm from $2,000 under management in 1983 to $1.6 billion 30 years later.  

My dream was always to help all size accounts but the reality was it was much easier to help very large accounts and, since a good advisor can only help a couple hundred accounts the $2,000 minimum had to go. As we started hiring advisors to take care of our clients, the minimums grew to $100,000 and now they are $500,000, although I now own no part of the firm that bears my name.

The reality is that the people who probably need the most help are those who are just starting their first IRA or 401k. In the coming weeks I will be telling you about a service that makes it possible for investors mange their money in the most efficient way I know for investors with under $2,000. Yes, those with more money to invest will be able to use the service too! But I am most excited about young people who are faced with an long list of headwinds in building toward a secure retirement at 60 or 65 instead of 70 or 80. Please stay tuned!

Beware “Prohibited Transactions” in your IRA

I want to alert you to huge possible penalties that may be levied if you put a “prohibited transaction” in an IRA. Many people are trying to find ways to put things into an IRA that typically don’t belong there (e.g., a house, commodities, etc.). Just because someone says it can be done, you may have IRS repercussions. One prohibited transaction inside an IRA could in essence cause immediate distributions of everything in the IRA, and you would pay taxes on the entire account. It is common to see advertisements for firms that will construct an IRA that allows ownership of homes, businesses and other alternative investments. It’s not that it can’t be done, but if not done properly it could be catastrophic. In this video, Ed Slott, CPA and respected expert on IRAs, explains about prohibited transactions. Click here to watch.

Raising Smart Money Kids

Check out Sam Renick’s new article on “Raising Smart MoneyKids” and also his website. I gave my grandson a Sammy Rabbit video and he loved it! My daughter said he watched it everyday for months. We won’t know for many years but I think Sam is having an important impact on children that could last a lifetime. And while on the subject of moneyand kids, I recommend you read the articles by our financial fluency expert, Joline Godfrey.

Upcoming Events

If you’ve not signed-up yet for Retiremeet, it’s almost sold-out, so I suggest you do so immediately.

Tune-In: Saturday Feb. 4, Noon – 2:00 p.m. 

I will be interviewed by Tom Cock and Don McDonald of Vestory, the sponsors of RetireMeet and hosts of “Talking Real Money” on KOMO, Seattle. 

Here’s the link for the live show: You should be able to call in and I will be happy to field and answer a few questions from our listeners. 

Feb. 11: RetireMeet Conference, Bellevue, WA.

It’s a great day for investors who want to learn more – not just about successful investing but also how to defend yourself against the scullduggery of the industry. I hope you’ll come out and have chance to say hello. I’ve mentioned “the most important work” we’ll soon be introducing, and I’ll be talking about it at this event. I will speak 3 times – the keynote is, “How to Avoid the Most Common Mistakes Retirees Make,” the two presentations are: “Everything You Need to Know About Value Investing” and “10 Things Index Fund Managers Won’t Tell You.

Feb. 13, Western Washington University, Noon – 1:50 p.m.

Bellingham, WA-area residents: I will be teaching a class at WWU again. I’ve heard from several people from the Bellingham area who’ve expressed interest in attending. If you’re one of them, please email me. I’ll see if I can get approval from teacher and contact you directly. To read more about this “Personal Finance 216” class, click here.

Feb. 16: Bainbridge Community Foundation, 6:30-8:30 p.m.

 “Maximizing the Value of Your Retirement Account” is the title of my talk, at the Bainbridge Island Museum of Art. Sign-in at 6pm. To register, click here.

Questions and Answers. Due to working full time on releasing our new recommendations, I have not had time to respond to your questions. I will hopefully get back up to speed on Q&A in March. Meanwhile, check out hundreds of Q&A’s at my website.

To your success,



7 reasons to be wary of small-cap value funds

For more than 20 years I have been recommending that investors of all ages put 20% of their equity portfolios into small-cap value funds and/or small-cap value ETFs. More






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