4 Reasons You Should Never Rely on a Promised Inheritance

4 Reasons You Should Never Rely on a Promised Inheritance

Cindy Lamothe   Fri, October 25, 2024   GOBankingRates

Many adult children see their future inheritance as a safety net — a lump sum of money they can rely on for financial security.  But that’s the worst way you can think about it, say experts. “Counting on an inheritance to secure your financial future is akin to building a house on quicksand,” said Kevin Shahnazari, founder and CEO of FinlyWealth.

“The foundation is unstable and can disappear in an instant, leaving you vulnerable and unprepared,” he explained. “I’ve witnessed clients who postponed crucial financial planning, banking on a substantial inheritance, only to find themselves in dire straits when that inheritance failed to materialize or was significantly less than expected.

“One particularly poignant case involved a client who delayed retirement savings for years, assured by her parents of a seven-figure inheritance. When her parents’ business unexpectedly failed, not only did the inheritance evaporate, but she found herself supporting her parents financially — a double blow to her retirement plans.”

Shahnazari said this scenario underscores the unpredictability of inherited wealth and the importance of building your own financial foundation.

Marty Burbank, elder law attorney and owner of OC Elder Law has witnessed the same. “Relying on a promised inheritance to achieve financial goals is risky.”

“I’ve seen many cases where expected inheritances were drastically reduced by unexpected medical expenses, estate tax liabilities or even family disputes. In my experience with estate planning, I’ve witnessed situations where parents had to sell assets for long-term care, leaving heirs with far less than anticipated.”

Below are some more reasons why you should never rely on a promised inheritance.

It Strains Family Relationships

According to Shahnazari, relying on an inheritance can strain family relationships. “I’ve seen siblings turn against each other and children grow resentful of parents when inheritances don’t meet expectations or are distributed unevenly,” he said.

Shahnazari explained these emotional costs can far outweigh any potential financial gains.

It Fuels Complacency

Additionally, promised inheritances can lead to complacency in personal financial planning, Burbank said. “For example, in my work at OC Elder Law, I encountered clients who deferred retirement savings, thinking they would inherit a significant sum.”

He said this mindset hindered their financial growth, leaving them unprepared when the inheritance fell short.

It Can Lead To Missed Opportunities

TO READ MORE:  https://www.yahoo.com/finance/news/4-reasons-never-rely-promised-170010670.html

6 Obstacles Women Face While Building Wealth

6 Obstacles Women Face While Building Wealth

Kimberly Lankford   Tue, October 22, 2024  GOBankingRates

Women face extra challenges when working toward building wealth. Not only do they tend to earn less than men, but taking time off from work (or reducing their schedules) to raise children or care for aging relatives makes it more difficult for them to save for the future — even though they may need a larger nest egg to help cover their longer life expectancies.

“Women continue to face headwinds that put them at greater risk of not achieving a financially secure retirement — the persistency of the gender pay gap, time out from the workforce for parenting and caregiving, and [the fact that] statistically, women live longer than men, which implies we have to save even more for retirement,” said Catherine Collinson, CEO and president of the Transamerica Institute and the Transamerica Center for Retirement Studies. “These factors can put a woman on a very different trajectory in terms of her long-term retirement savings and retirement outcomes.

Here are obstacles women face when building wealth, and advice to learn what you can do to overcome them.

The Gender Pay Gap

Women on average earn less than men — 83 cents for every $1 paid to men. This gender pay gap has a snowball effect on so many other aspects of a woman’s financial life, making it harder to save for retirement, easier to land in debt and even affecting the size of their Social Security benefits.

Starting out with a low salary can impact your earnings for years, especially if raises are based on a percentage of your income and future jobs base your salary on your previous earnings. That’s even before considering that many women take time off to raise children or care for aging parents.

But there are several things you can do to help improve your income. Start by doing some research to assess how your pay compares to others in similar positions.

“Have conversations with peers outside of your company so you can get that comparison,” said Samantha Garcia, a wealth advisor with Halbert Hargrove in Long Beach, California.

If you find you’re being underpaid, you should be proactive and ask for a raise. It may be intimidating to have this conversation when you’re young and getting started in your career, but that may be the best time to bring it up.

“Sometimes it’s easier to have those conversations at the entry-level positions, rather than when you’re 10 years in and you realize there’s a 20% difference between your pay and a male’s pay. There are bigger dollars then,” Garcia said. “The earlier you can start to have those conversations, the better.”

Now is a particularly good time to ask for a raise or other benefits because employers are making extra efforts to keep good employees.

“If you’ve been sticking with the company during COVID and now realize there’s a pay differential, it’s a great time to use that leverage to go after what you want — that pay or benefit increase. Have that fearless conversation with your boss,” Garcia said.

Having Less in Retirement Savings

Earning less money and taking time off to raise kids makes it more difficult for women to save for retirement — even though their retirement savings needs are usually larger because of their longer life expectancies.

“Because they earn less, they save less,” said Shelly-Ann Eweka, senior director of financial planning strategy for TIAA. “In general, women invest more conservatively, women retire on average about two years younger, and they live on average five years longer than men. It’s all compounding. They have less income and are living longer in retirement.”

TO READ MORE:  https://www.yahoo.com/finance/news/6-obstacles-women-face-while-110029206.html

The Dirty, Four-Letter Word That Keeps the Lights On

The Dirty, Four-Letter Word That Keeps the Lights On

Notes From the Field By James Hickman (Simon Black) October 24, 2024

There’s a really dirty four-letter word that starts with a “C”. No, not that one. This is a word you simply cannot say around Greta Thunberg, otherwise her ears will melt off of her face. 

I’m talking about coal. And it’s about to have its moment.

One reason is that global population grows each year, and every one of them needs energy in some way or another—to keep the lights on, to fuel the machines that harvest their food, to power virtually everything that keeps life going.

Second, the world population generally becomes wealthier each year. Billions of people in China, India, and Southeast Asia are better off now than they were ten years ago. As economies develop, they consume more food, more goods, more electricity— and all of that requires more energy.

More efficient technology offsets some energy use, like switching from old-school incandescent light bulbs to LEDs.

But the general rule is that as energy becomes cheaper, people tend to use more of it, i.e. the world always finds a way to use that energy savings somewhere else.

Plus there are some technologies (AI, crypto mining) which, in aggregate, consume a ton of energy.

So overall global energy demand keeps rising.

Energy supply, on the other hand, is REALLY hard to come by. Exploring for oil, drilling, constructing power plants, building hydroelectric dams, wind turbines, etc. is capital-intensive, labor-intensive, resource-intensive, and very time-consuming.

Meanwhile, many sources of energy supply are dwindling.

Some major shale fields in the US, which were once the biggest source of growth in energy supply, have peaked.

But perhaps an even more significant obstacle to supply is how the government and hyperventilating, pearl-clutching leftists do everything they can to reduce supply.

These people who stop traffic, throw glitter bombs on priceless works of art, and deface public property, in their efforts to “Just Stop Oil” want to turn the clock back to 1750 on human civilization.

Plus there are fanatics with real political power— like California Governor Gavin Newsom— who insist on replacing conventional electrical plants with extremely inefficient wind and solar.

I like clean air and water as much as anyone, but wind and solar aren’t anywhere near as environmentally friendly as people claim. They require tons of dirty minerals and chemicals, and barely produce enough energy yield to offset the inputs.

This is why big technology companies (who are looking to power their massive AI electricity needs) are going all-in on nuclear power.

Nuclear is absolutely the power of the future. It’s clean. It’s safe. It’s absurdly efficient.

By comparison, a single kilogram of Uranium can produce as much electricity as an entire square kilometer of solar panels. The difference in energy yield is not even close.

Tech companies understand this... hence why Google, Amazon, Microsoft, etc. are investing billions in nuclear energy as the ultimate solution to power their electricity-hungry AI data centers.

But it takes time to build nuclear power plants. And the most advanced “small scale” nuclear reactors are still in development.

In the meantime, tech companies still need power. The world still needs power. Lots of it. And more every year.

We’ve already talked about how natural gas (especially US natural gas) is THE cheapest energy source on earth right now. In fact, at its current price of roughly $2.40, US natural gas is priced at the energy-equivalent of oil selling for $15 per barrel. That’s cheap.

But there’s another cheap, abundant energy source that is going to be extremely relevant in powering the world’s energy needs for the foreseeable future: coal.

Yes, it’s a very, very dirty word. Climate fanatics don’t want to hear it. But until the world builds sufficient nuclear energy infrastructure, there’s still a critical need for conventional fossil fuels. And that includes coal.

Like it or not, coal is still vital to energy infrastructure, accounting for more than a third of global electricity production. In fact, global coal consumption has consistently INCREASED over the past few decades despite the environmental backlash against it.

Coal is still an extremely efficient source of energy, compared to wind and solar. On an energy return basis, it’s about 6x more efficient than wind and solar— i.e. less energy input required per unit of output.

And if you think coal is dirty, then you should check out how environmentally damaging cobalt mines are (a key ingredient in solar batteries). Not to mention, most cobalt mines in Africa are teeming with child labor.

Coal power plants have the added benefit of being very quick any easy to build. That’s why China— in addition to investing heavily in nuclear power— is also still buying a lot of coal.

It’s also worth pointing out that coal is an essential ingredient in iron and steel production. So even though the leftists hate it, coal will likely remain a key resource in human civilization for the next few decades.

However, from an investment perspective, hardly anyone wants to touch coal. Investment funds are afraid of government blow-back and the wrath of the left... so they don’t invest in coal.

And for individual investors, coal is uncool and unpopular. Thanks Greta.

As a result, there are some coal companies out there making money hand over fist. They have a bright future with plenty of demand down the road. Yet their valuations are a total joke.

TO READ MORE:  https://www.schiffsovereign.com/trends/the-dirty-four-letter-word-that-keeps-the-lights-on-151675/

Rich Americans May Be About To Lose A Tax Benefit They Love

Rich Americans May Be About To Lose A Tax Benefit They Love — and now they're racing to get their affairs in order

Christy Bieber  Mon, October 21, 2024    Moneywise

Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience.

Generate Key Takeaways

The clock is ticking for wealthy families who want to take advantage of a major tax break that allows for the tax-free transfer of up to $27.22 million in assets.

The tax break was established by the Tax Cuts and Jobs Act, which was signed into law in 2017, and it is sunsetting automatically in 2025 — so it could disappear for the foreseeable future.

Here's what the tax break is, along with some details on how families are rushing to take advantage of it and some advice on whether you should do the same.

Tax breaks on wealth transfers could be cut in half next year

The Tax Cuts and Jobs Act made many changes to the tax rules, but one of the biggest modifications involved a significant increase to the estate and gift tax exemption.

In 2017, wealthy individuals could transfer a total of $5,490,000 in assets without incurring estate or gift taxes. This is called the lifetime exemption and it applies to gifts you make above the annual exempt amount, as well as to assets that you transfer upon your death.

The new law significantly increased the amount you could transfer. The limit jumped up to $11,180,000 in 2018 and has been adjusted upward automatically each year.

In 2024, it's possible to transfer as much as $13,610,000 without owing taxes. This is per person doing the transferring. Married couples can combine their exemptions to transfer $27.22 million.

That big increase will go away next year unless lawmakers act again. When it goes away, the amount you can transfer tax-free will fall to somewhere in the $6 million to $7 million range. Assets above that threshold will be subject to a 40% transfer tax.

As a result of this change, many wealthy families are eagerly transferring assets this year while they can still take advantage of the larger exemption to move money to children and other loved ones without owing the IRS a cut.

Should you follow the lead of wealthy families?

While the change to the estate and gift tax exemption could profoundly impact wealthy Americans, it is likely to have no consequences at all for the vast majority of people.

TO READ MORE:  https://www.yahoo.com/news/finance/news/rich-americans-may-lose-tax-105500873.html

13 Lessons From Millionaires

13 Lessons From Millionaires

Laura Gariepy  Mon, October 21, 2024   GOBankingRates

13 Lessons From Millionaires That Financial Planners Use To Help Others Get Rich

Financial planners have seen it all while working with clients — from financial ruin to financial freedom. Over the years, they’ve learned what separates millionaires from those who struggle to get their monetary footing.

Eight of them shared the insights they’ve picked up from clients in the seven-figure club that they now use to help others build the life of their dreams. Here are 13 of those lessons below, and when you’re done, check out these lessons too.

Create a Financial Plan

Joe Petry, CFP and founder of Mayfair Financial, said, “My wealthier clients have figured out that having a plan can make a big difference. Lower taxes, maximized Social Security, and a sound investment approach can represent a million dollars or more over a 30-year retirement.”

He added, “Having a [financial] plan can also save us from ourselves. Our financial decisions are emotional, whether we realize it or not. A plan can help us avoid trying to time the market or putting too much of our nest egg in one or two hot stocks.”

Limit Debt

Limiting the amount of debt you carry to a mortgage and maybe an auto loan is key to building wealth, said David E. Barfield, CFP and founder of Datapoint Financial Planning, LLC.

However, if you’ve got other types of debt or your current debt prevents you from saving for the future, don’t panic. You can take control by implementing one or more debt repayment strategies.

Maintain an Emergency Fund

Barfield also recommends building and maintaining an emergency fund. That way, you can cover urgent, critical expenses with cash. While everyone’s situation is different, the consensus is that you need at least three months’ worth of living expenses stashed away.

However, if that amount feels impossible to amass right now, squirrel away what you can. Some money in the bank is better than no money in the bank.

Live Below Your Means

“A common trait among millionaires is living below their means,” said Jorey Bernstein, founder of Bernstein Investment Consultants. “To cultivate wealth, focus less on your income and more on your spending habits. Budgeting isn’t about limiting your freedom; it’s about making your money work effectively for you.”

However, as you look for ways to improve your spending habits, be aware that you can slash your expenses too far. If possible, don’t reduce your insurance coverage or skimp on healthcare. Doing so could cost you more money in the long run.

Prioritize Your Spending

“I have a single female multi-millionaire client,” Petry said. “She never had a particularly high-paying job. Her superpower is knowing what things bring her joy and what things don’t. She doesn’t value a big house or lots of new clothes. Cruises are her passion.

TO READ MORE:  https://finance.yahoo.com/news/13-lessons-millionaires-financial-planners-110024932.html

7 Frugal Money Habits That Could Destroy Your Finances

7 Frugal Money Habits That Could Destroy Your Finances

Cynthia Measom   Wed, October 16, 2024  GOBankingRates

If you find yourself constantly looking for ways to save every single penny, you might be overlooking the bigger picture. Frugality, while an admirable trait, can lead you to make choices that might seem smart in the short term but actually cost more in the long term regarding finances, time and quality of life.

 “Letting the concept of frugality take over life so you are neglecting the bigger picture for small savings can backfire,” said Allison Sanka, accredited financial counselor, financial coach and principal and founder of Journey Financial Wellness. “That immediate dopamine hit of saving a few cents that makes you feel like you’re making progress towards your financial goal — like paying off debt or saving — can actually cost more if you do the math.”

Here are seven frugal habits that aren’t actually good for your finances.

Driving Miles to Different Stores To Get Good Deals

Sanka said that while the savings you might gain by driving from store to store to save a few dollars on sale items versus shopping once a week at one store might seem like a good idea, it’s not. Instead, she said any savings will likely be wiped out when you figure in the cost of your time, gas and wear-and-tear on your vehicle.

Driving To Another Town To Save on Gas

Sanka also said that driving to the next town to save 10 cents a gallon on gas could be more costly than the savings. For example, if your car holds 15 gallons, and you need 14 gallons to fill it up, you’ll save $1.40. Arguably, that could add up to over $140 over the course of the year if you fill up a couple of times a week, but you also have to think about whether that savings is worth your time, gas expenditure to get there and back and the wear-and-tear on your car.

Totally Depriving Yourself of Something You Enjoy

“You will not get rich by not ever buying a $4 coffee and depriving yourself of something you enjoy from time to time,” Sanka said. “Again, it’s about balance; instead of coffee out every day, try buying coffee as a treat on Monday mornings to get you going for the workweek. Then you can look forward to it as a treat.”

Buying Stuff Only Because of the Low Price

Sanka said that focusing on the low cost of an item instead of the need is a mistake that’s not good for your finances. “I see people in the frugal community buying things simply because they’re 75% off or they have a coupon for it (sometimes a marketing tactic to get you to spend) even if it’s not a need,” she said. “If you spent $5 on something you don’t really need, you spent $5 too much.”

Buying Items in Bulk When You Don’t Really Need Them

TO READ MORE:  https://www.yahoo.com/finance/news/7-frugal-habits-aren-t-110109306.html

6 Wealth-Destroying Mistakes People Make Every Day Without Knowing It

6 Wealth-Destroying Mistakes People Make Every Day Without Knowing It

Nicole Spector  Fri, October 18, 2024   GOBankingRates

When we think about wealth, we tend to think mostly about building and maintaining it. But we need to look at the other side of the equation, too: losing wealth. It’s easier to do than you think, and you could be losing wealth regularly with no idea that you’re doing so.

GOBankingRates spoke with financial experts to learn about wealth-destroying mistakes people make every day, without even knowing it.

Not Monitoring Expenses

Got an iron-clad budget in place? Great! But are you also meticulously managing and monitoring your daily expenses? If not, you’re likely losing wealth.

“Many misjudge their expenses or don’t keep an eye on their spending patterns,” said Steven Kibbel CFP, ChFC, CLU, senior editor at InternationalMoneyTransfer.com. “The ‘leak’ may impede attempts to increase wealth. You may reduce wasteful expenses and increase your savings by keeping a close eye on your spending and developing a thorough budget.”

Holding Too Much Cash

It’s crucial to have liquid cash easily available in the event of an emergency, but it’s important not to store too much cash in a savings account, even if it’s generating interest. By keeping too much of your savings in cash, you’re losing money in the long run.

“You’re not only missing out on a huge opportunity to invest and grow your money but you are also allowing your money to erode in value over time relative to inflation,” said Carla Adams, founder and financial advisor at Ametrine Wealth.

“Certainly you should keep a portion of your money in cash (an emergency fund should typically be about 3-6 months of your living expenses), but long-term savings should get invested in stocks and/or bonds.”

Yes, investing in the stock market does come with risks, but there are ways to go about it so you still come out on top.

“Investing in the stock market may seem incredibly risky — and it can be if you’re investing in individual stocks — but if you invest in broad index funds, you can expect an average return rate of about 10% per year,” Adams said. “Short-term market fluctuations can be huge at times; but, for long-term savings, the risk you take on will pay off and your money will double roughly every seven years if you’re invested in an all-equity portfolio.”

Making Just the Minimum Monthly Payment on Credit Cards

TO READ MORE: https://finance.yahoo.com/news/6-wealth-destroying-mistakes-people-130115750.html

A Real Asset With A 12% Dividend Yield

A Real Asset With A 12% Dividend Yield

Notes From the Field By James Hickman / Simon Black October 17, 2024

It’s very hard to overstate just how obliterated the global economy was following World War II. Europe was in ruins, with many major cities having been bombed back into the Stone Age. Japan had literally been nuked.

And just about every economy around the world that still had any manufacturing capacity was pumping out guns, bullets, and bombs; there was hardly any economic activity taking place that wasn’t somehow tied to the war.

It was sort of like Covid— the regular economy was shut down... and governments discovered very quickly that they couldn’t simply turn the global economic machine back on with the flip of a switch.

The transition from obliterated war economy to booming peacetime economy was an incredibly difficult one. So, in 1948, the United States (which was among the only developed major economies still standing) launched the Marshall Plan.

The idea was simple: America would shovel $13 billion (which, as a percentage of global GDP, is equivalent to around $5 trillion today) around the world to facilitate trade and economic edevelopment.

But alongside the financial aid came a promise: the US Navy would protect the seas, ensuring that the global flow of goods could continue unimpeded.

For decades, American naval dominance guaranteed a level of safety and stability that allowed international trade to thrive. Shipping routes were secured, costs remained low, and commerce could flow relatively uninterrupted across the world's oceans.

The post-WWII era ushered in an unprecedented period of cooperation and prosperity, making international trade easier, faster, and more profitable.

But those calm seas are growing choppy again.

The war between Russia and Ukraine, for example, has drastically altered oil trade routes. Russian crude oil, which once flowed easily into Europe, is now making much longer journeys to places like India, where it’s refined and then sent back to Europe as diesel.

This convoluted, inefficient process is adding enormous strain and cost to shipping routes, increasing the “ton miles”, i.e. each mile that a ton of product must travel.

But this is just one example. In the Middle East, the Houthis in Yemen have launched attacks on vessels transiting the Red Sea, creating a new chokepoint in global shipping lanes. Pirates have increased their attacks in the area as well.

Many oil tankers are now rerouting entirely around the southern tip of Africa to avoid the Suez Canal, extending travel times significantly.

The further oil must go, the more tankers are needed. The problem is, these changes took place quite rapidly, yet shipbuilding is not an industry that can quickly respond to that demand.

Shipbuilding is a slow, capital-intensive process. And after years of underinvestment, there are hardly any new tankers being built. Shipyards are busy constructing other types of vessels, but the number of new oil tankers remains near record lows.

At the same time, a large chunk of the existing global fleet is over 20 years old, nearing the end of its lifespan. This imbalance is going to worsen before it gets better, leading to a serious shortage in oil tankers at the exact moment when the world needs them most.

The combination of more ton miles and fewer ships is creating a perfect storm in the tanker market.

This imbalance is inflationary. Both shipping and energy are core components of nearly every supply chain. Higher costs to transport oil mean higher costs for just about everything else we buy—from groceries to manufactured goods.

Climate fanatics can pretend that the world is ready to run off wind and solar, which is why they suppress investment in everything from new drilling, to transport ships. But the reality is, oil is still the most important energy source on earth.

Energy is a prime example of a real asset— a critical resource that keeps the economy going, and cannot be created out of thin air by governments and central banks.

And the shipping companies which transport that oil are real asset businesses... which is why we have been following this industry closely.

One company in particular that we told subscribers about in our premium investment research stands out as being uniquely positioned to capitalize on these trends.

It has a fleet of 82 ships, with an average age of just over 10 years, meaning they have plenty of life left. They can also continue to benefit from the shortage of ships as long as it lasts— which we know from the global orderbook for new ships, will be several years at least.

But this also means the company won’t have to spend huge amounts of capital in the near future buying new ships. And already, it carries little debt... yet still pays around a 12% dividend.

Again, in addition to the dynamics of debt, deficits, and dysfunction in the US government which promise to increase inflation, global conflict is also inflationary.

This is another example of the real asset companies not only poised to do well in an inflationary world, but that are also trading near historic low valuations.

This shipping company, for example, is trading at a P/E (price to earnings) ratio of just 4.44.

While we can wish all we want that the world was not becoming less cooperative, that won’t change the reality. Better to position ourselves to benefit under these conditions, by investing in companies that actually gain from that disorder.

We’ve talked a lot about this same dynamic when it comes to gold, and why central banks around the world are turning to it, and away from the US dollar.

We also talked about it recently in relation to how the prices of certain critical metals have been artificially suppressed by climate fanatics who think the days of gas vehicles are past. They are wrong.

The best way to fight back, while inflation-proofing your future, is to invest in critical real asset companies at historic lows.

To your freedom,  James Hickman  Co-Founder, Schiff Sovereign LLC

PS-

Our premium investment research service, The 4th Pillar, has provided recent, in-depth reports on several undervalued real asset businesses, which we believe are set to boom under these conditions

https://www.schiffsovereign.com/trends/a-real-asset-with-a-12-dividend-yield-151662/

A Real Asset With A 12% Dividend Yield

A Real Asset With A 12% Dividend Yield

Notes From the Field By James Hickman / Simon Black October 17, 2024

It’s very hard to overstate just how obliterated the global economy was following World War II. Europe was in ruins, with many major cities having been bombed back into the Stone Age. Japan had literally been nuked.

And just about every economy around the world that still had any manufacturing capacity was pumping out guns, bullets, and bombs; there was hardly any economic activity taking place that wasn’t somehow tied to the war.

It was sort of like Covid— the regular economy was shut down... and governments discovered very quickly that they couldn’t simply turn the global economic machine back on with the flip of a switch.

The transition from obliterated war economy to booming peacetime economy was an incredibly difficult one. So, in 1948, the United States (which was among the only developed major economies still standing) launched the Marshall Plan.

The idea was simple: America would shovel $13 billion (which, as a percentage of global GDP, is equivalent to around $5 trillion today) around the world to facilitate trade and economic edevelopment.

But alongside the financial aid came a promise: the US Navy would protect the seas, ensuring that the global flow of goods could continue unimpeded.

For decades, American naval dominance guaranteed a level of safety and stability that allowed international trade to thrive. Shipping routes were secured, costs remained low, and commerce could flow relatively uninterrupted across the world's oceans.

The post-WWII era ushered in an unprecedented period of cooperation and prosperity, making international trade easier, faster, and more profitable.

But those calm seas are growing choppy again.

The war between Russia and Ukraine, for example, has drastically altered oil trade routes. Russian crude oil, which once flowed easily into Europe, is now making much longer journeys to places like India, where it’s refined and then sent back to Europe as diesel.

This convoluted, inefficient process is adding enormous strain and cost to shipping routes, increasing the “ton miles”, i.e. each mile that a ton of product must travel.

But this is just one example. In the Middle East, the Houthis in Yemen have launched attacks on vessels transiting the Red Sea, creating a new chokepoint in global shipping lanes. Pirates have increased their attacks in the area as well.

Many oil tankers are now rerouting entirely around the southern tip of Africa to avoid the Suez Canal, extending travel times significantly.

The further oil must go, the more tankers are needed. The problem is, these changes took place quite rapidly, yet shipbuilding is not an industry that can quickly respond to that demand.

Shipbuilding is a slow, capital-intensive process. And after years of underinvestment, there are hardly any new tankers being built. Shipyards are busy constructing other types of vessels, but the number of new oil tankers remains near record lows.

At the same time, a large chunk of the existing global fleet is over 20 years old, nearing the end of its lifespan. This imbalance is going to worsen before it gets better, leading to a serious shortage in oil tankers at the exact moment when the world needs them most.

The combination of more ton miles and fewer ships is creating a perfect storm in the tanker market.

This imbalance is inflationary. Both shipping and energy are core components of nearly every supply chain. Higher costs to transport oil mean higher costs for just about everything else we buy—from groceries to manufactured goods.

Climate fanatics can pretend that the world is ready to run off wind and solar, which is why they suppress investment in everything from new drilling, to transport ships. But the reality is, oil is still the most important energy source on earth.

Energy is a prime example of a real asset— a critical resource that keeps the economy going, and cannot be created out of thin air by governments and central banks.

And the shipping companies which transport that oil are real asset businesses... which is why we have been following this industry closely.

One company in particular that we told subscribers about in our premium investment research stands out as being uniquely positioned to capitalize on these trends.

It has a fleet of 82 ships, with an average age of just over 10 years, meaning they have plenty of life left. They can also continue to benefit from the shortage of ships as long as it lasts— which we know from the global orderbook for new ships, will be several years at least.

But this also means the company won’t have to spend huge amounts of capital in the near future buying new ships. And already, it carries little debt... yet still pays around a 12% dividend.

Again, in addition to the dynamics of debt, deficits, and dysfunction in the US government which promise to increase inflation, global conflict is also inflationary.

This is another example of the real asset companies not only poised to do well in an inflationary world, but that are also trading near historic low valuations.

This shipping company, for example, is trading at a P/E (price to earnings) ratio of just 4.44.

While we can wish all we want that the world was not becoming less cooperative, that won’t change the reality. Better to position ourselves to benefit under these conditions, by investing in companies that actually gain from that disorder.

We’ve talked a lot about this same dynamic when it comes to gold, and why central banks around the world are turning to it, and away from the US dollar.

We also talked about it recently in relation to how the prices of certain critical metals have been artificially suppressed by climate fanatics who think the days of gas vehicles are past. They are wrong.

The best way to fight back, while inflation-proofing your future, is to invest in critical real asset companies at historic lows.

 To your freedom,  James Hickman  Co-Founder, Schiff Sovereign LLC

PS-

Our premium investment research service, The 4th Pillar, has provided recent, in-depth reports on several undervalued real asset businesses, which we believe are set to boom under these conditions

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Do I Need to Worry About Gift Taxes?

Do I Need to Worry About Gift Taxes?

Eric Reed  Tue, October 15, 2024  SmartAsset

I Want to Give $50k to My Daughter for a Down Payment on a Home - Do I Need to Worry About Gift Taxes? 

Imagine you have $50,000 to give to your daughter and her husband for a down payment on their new home. The question is, will you owe gift taxes because of your generous gesture?

Despite popular framing, the federal gift and estate taxes only apply to very wealthy households. Unless you have approximately $13 million to give away over your lifetime, these taxes likely won’t apply to you.

A financial advisor can help you navigate and plan for gift and estate taxes. To be very clear, these are the rules for federal taxation. Every state also has its own tax laws and every tax profile is different, so make sure to speak with a financial or tax professional before making any plans for your own assets. However, there are two main issues to consider within this scenario: the mortgage process and potential gift tax implications.

Down Payments and Gifts

With the mortgage and lender process, you want to ensure that you fill out all forms and requirements correctly. It is extremely unlikely that you can complicate the title to this property, but you can certainly complicate or invalidate the loan by making a mistake.

When your daughter applies for her mortgage, the lender will go through her finances in detail. They want to know what assets she has, where they came from, what income she has and any other information related to how she will repay this debt. The down payment is intended as an indicator of this financial stability, so receiving it from a third party can raise concerns.

Many lenders have rules around who can provide the money for a down payment. It’s common for them to reject a mortgage with a gifted down payment unless that money comes from someone with a longstanding relationship to the borrower. Among other issues, this is intended to prevent fraud and money laundering. Since the borrower is your daughter, that shouldn’t be a problem.

If you are giving the money directly to your daughter you will typically either need to “season” the money or provide a gift letter. Seasoning the money means transferring it more than 60 days in advance, again as an indicator of legitimacy against fraudulent transfers. A gift letter is a document signed by both the giver and the recipient confirming that this is a unilateral transfer with no right to repayment.

The specific format of the gift letter will vary based on lender and jurisdiction, so consult an attorney about this document. A financial advisor can also potentially help you through this process.

TO READ MORE:  https://www.yahoo.com/finance/news/want-daughter-her-husband-50-120000119.html

Financial Role Models of Millionaires: Who Do They Look Up To?

Financial Role Models of Millionaires: Who Do They Look Up To?

Cindy Lamothe  Sun, October 13, 2024  GOBankingRates

Many people seeking to grow their wealth may look up to millionaires as a source of inspiration, But who do these wealthy individuals admire?

According to Stephen Greet, CEO & co-founder of BeamJobs, self-made millionaires often seek advice from bold thinkers outside of traditional finance. “While this advice can be valuable for people with lower net worth, it’s crucial to adapt it carefully to fit your financial situation,” he said.

Below are some of the types of financial role models that inspire millionaires.

They Admire Contrarian Thinkers

“In my experience, self-made millionaires often look to contrarian thinkers or those who have succeeded by taking calculated, unconventional risks,” said Greet. He noted that they don’t always rely on traditional financial advisors or family; instead, they value perspectives from entrepreneurs, innovators or even mentors outside finance.

“These are individuals who see the world differently and aren’t afraid to break from the norm — a mindset that resonates with those who have built wealth from scratch,” he explained. “Now, are these good sources for people with lower net worth? I think the answer is yes — but with a caveat.”

While following these bold thinkers can open your eyes to opportunities others might miss, he said it’s essential to temper their advice with a strong understanding of your own financial reality. “For those with less wealth, risk tolerance is lower, so applying insights from these contrarian sources means adapting strategies to fit your financial situation.”

In other words, he said you can learn how to think differently, but the execution must be more conservative.

According to Greet, the takeaway for those with lower net worth is this: don’t limit yourself to traditional advice. “Look for insights from innovators who challenge the status quo. The key is blending their visionary mindset with practical, scalable steps that fit your financial capacity.”

They Look Within, Not Out

TO READ MORE:  https://www.yahoo.com/finance/news/financial-role-models-millionaires-look-170108523.html

6 Frugal Habits of the Super Rich and Famous

6 Frugal Habits of the Super Rich and Famous

Caitlyn Moorhead  Mon, October 14, 2024  GOBankingRates

In order for you to live frugally, you might want to take a page out of the super-rich. Though it may seem counterintuitive, wealthy people often practice a frugal lifestyle as they only spend their money when they see that money’s worth. In other words, they don’t just throw their money around, but rather make it work for them by forming healthy habits.

No matter if they are just making a good living or they have the net worth of Warren Buffett, the super-rich are also often frugal people. It’s not necessarily about clipping coupons or not using your credit cards, but it is about reshaping your spending habits in order to meet your long-term financial goals. Here are six ways millionaires practice a frugal lifestyle.

Pay Using Cash

Just because you have enough money to buy whatever you want, doesn’t mean you shouldn’t just stick with what you need. Next time you go to the grocery store, make a list and only bring enough cash for you to buy the items on this list. It will help you not make impulsive purchases and stick to your budget.

Try this practice every time you go shopping for clothing, household items or other specific things you can gauge the price beforehand. Only use the cash you bring on these outings and fight the temptation to use your debit or credit card to buy other stuff outside the budget you’ve set.

Pay Yourself First

Paying yourself first, or reverse budgeting, is when you create your budget around your savings goals and not your expenses. Here are a few key takeaways:

Allocate a percentage of your paycheck into savings each month.

Saving money can be done by setting up direct deposit so your savings are automated.

If you don’t want to directly deposit a percentage of your paycheck into a separate bank account you can also try setting up a recurring transfer from your checking account.

These automatic savings can pay future you in the form of investment accounts, retirement plans or IRAs.

You can spend what is left of your paycheck after savings on necessities and wants.

As your pay increases so should the amount you pay yourself each month in savings. Make sure to grow this annually to create a brighter financial future.

Travel on a Budget

Though there are exceptions, even the super-rich don’t always book the most expensive hotels or transportation accommodations. Instead, they opt to travel frugally and spend below their capability. All traveling frugally means is to not be wasteful with your money on your next trip- which often saves you the money you can then put toward other savings goals or even future vacations.

Live Beneath Your Means

Slight edits to your budget make a big difference has certain discretionary choices can save you hundreds per month. Being able to afford something doesn’t make it a good investment. Here are some ways you can live below your means like the rich do:

TO READ MORE:   https://www.yahoo.com/finance/news/6-frugal-habits-super-rich-140004741.html

3 Things the Wealthy Worry About Most

3 Things the Wealthy Worry About Most

Christy Bieber   Updated Mon, October 14, 2024  Moneywise

2 out 3 millionaires in the US don’t consider themselves rich — here are the 3 things the wealthy worry about most

Most people in America don't believe they're rich.  In fact, only 12% of the population thinks they're wealthy, according to recent research from Edelman Financial Engines.

Surprisingly, it's not just low- and middle-income households who don't feel flush with cash. A separate Northwestern Mutual study revealed only 33% of millionaires count themselves among the rich.

With so many millionaires reporting they don't feel great about their finances, it's worth looking at exactly what has this demographic group so concerned.

Here are three top fears of wealthy Americans so you can see how their fears compare to what average Americans worry about.

How Taxes Impact Retirement

For wealthy Americans, their No. 1 retirement concern isn't whether they'll have enough money to retire comfortably or have enough cash to last for life. Instead, Northwestern Mutual reveals their top fear is how taxes are likely to impact their retirement.

Concerns about taxation have prompted 61% of millionaires to create a plan to reduce the share of their retirement savings going to the IRS. These plans include strategic withdrawals, using a mix of traditional and Roth accounts, and claiming tax breaks for charitable deductions.

For Americans who are living on less, obviously running short of money is a more pressing concern than future tax bills. Still, even lower and middle-income individuals should consider how their retirement income will be affected by taxation.

The Senior Citizens League reports around half of all households now face taxes on Social Security benefits. Many older Americans whose income comes primarily from 401(k)s, IRAs or other accounts with taxable withdrawals could easily find themselves among this group. Taxes on withdrawals from these accounts will also cut into the amount of money they have to spend.

Making a strategic tax plan by borrowing the techniques of the rich and choosing a good mix of tax-advantaged accounts is a smart move no matter how big your bank account.

The Political Environment

TO READ MORE:  https://www.yahoo.com/finance/news/2-3-millionaires-us-don-105500922.html