Uncle Sam is Coming For Your IRA

This post Uncle Sam is Coming For Your IRA appeared first on Daily Reckoning.

One of the advantages of 401(k)s and traditional IRAs is tax deferral.

Whatever amount you contribute today lowers your taxable income for the year and you don’t pay any taxes on that money until you withdraw it.

But this perk only lasts so long…

When you reach age 70 ½, Uncle Sam comes calling for his cut, and how the government takes its share is through something called Required Minimum Distributions (RMDs).

The idea is that the government wants to collect taxes for all that tax-deferred growth and the original tax-deferral you’ve benefited from but it’s willing to wait until you’re in a lower tax bracket in retirement.

However that last piece is not always the case. RMDs are meant to help supplement a retiree’s income. But some retirees don’t need the extra cash flow from RMDs and would rather minimize them and the resulting tax bill.

If you’re close to age 70 ½ and you don’t plan on using RMDs to cover your living costs, here are four ways you can limit or even eliminate RMDs altogether:

Take Your First Distribution ASAP

A big reason why RMDs get such a bad rap is that the amount you’re required to draw down can sometimes push you into a higher tax bracket, which means you end up giving away more of your hard-earned cash to Uncle Sam.

When you turn 70 ½, you have until April 1 of the following calendar year to take your first distribution. After that you must take it by December 31 on an annual basis.

A mistake I see a lot of retirees make is they opt to hold off taking their first RMD because they figure it doesn’t really matter since they’ll be in a lower tax bracket regardless.

While holding off makes sense for some people, it also means you have to take two distributions in one year, which can bump you back into a higher tax bracket.

A better strategy is to take your first distribution as soon as you turn 70 ½ to avoid having to draw down twice in the first year.

Convert to a Roth IRA

Another strategy I recommend is converting all or part of your traditional IRA to a Roth IRA. Unlike traditional IRAs or Roth 401(k)s, which require RMDs, a Roth IRA doesn’t require any distributions at all.

This means your money can stay in the Roth IRA for as long as you want or it can be passed down to heirs.

When you convert part of a traditional IRA account, you’re reducing the amount subject to RMDs later on. This strategy requires some planning and you’ll need to still navigate taxes due on the amount converted.

But you can maximize this strategy by converting during years when your income is lower than usual. Typically during your first few years of retirement,

Don’t Stop Working

As mentioned above, the reason for RMDs is that the IRS wants to get paid for previously untaxed income. If you’re still working and you don’t own 5% or more of the company you work for, you can delay distributions when you turn 70 ½.

This exemption only applies to your 401(k) at the company you currently work at. If you have money stashed away in an IRA or 401(k) from a previous employer, you’re still on the hook for those RMDs.

What happens if you don’t take your RMD?

If you forget to take your RMD or miscalculate how much you owe, you’ll be subject to an excess accumulation penalty, which is 50% of the required distribution.

For example, if your RMD is $3,000 and you don’t take it, you’ll have to pay an additional $1,500.

Give It Away to Charity

This last strategy won’t reduce your RMD, but it will lower your tax liability from the RMD you owe. You’re allowed to donate part of your RMD, up to $100,000, directly to a qualified charity.

The donation is not included as part of your income and you’re also not eligible for a charity deduction on top of this. But the benefit of this strategy is it can significantly lower your adjusted gross income.

Qualified charitable distributions apply only to IRAs and not traditional 401(k) accounts.

Final Word

A lot of retirees rely on RMDs to cover their basic living costs. If you’re one of the lucky ones who don’t need the money, consider implementing some of these strategies to limit the amount of tax you owe from RMDs.

Working longer, converting to a Roth IRA, taking distributions early, and donating to qualified charities are all solid strategies to keep what’s rightfully yours.

To a richer life,

Nilus Mattive

Nilus Mattive

The post Uncle Sam is Coming For Your IRA appeared first on Daily Reckoning.

The Upside to Downsizing

This post The Upside to Downsizing appeared first on Daily Reckoning.

When someone tells me they’re considering downsizing, I like to ask a few questions to see how much thought they’ve given the idea.

My first question is always how much do you think your house is worth on the market today?

The answer is almost always a best guess and usually very generous.

The second question I ask is do you know how much a one- or two-bedroom home costs in the neighborhood you’re looking to buy?

Most people grossly underestimate the price of smaller houses these days.

The reason why retirees choose to downsize can vary, but it’s usually for one of two reasons:

  • More money
  • Forced to move due to health issues

I’m sure you’ve dreamt of one day selling the family home and going on an extravagant trip or buying a brand new car with the profits. Heck, you might even settle for just one less bathroom to clean or driveway to shovel.

But downsizing doesn’t always get you ahead. Sometimes it’s a whole lot of work for nothing or a lot less gain than you originally thought.

There are a few questions you need to ask before you put up that For Sale sign on the lawn. Here are five things you need to consider before downsizing.

  1. How Much is Your Current Home Actually Worth?

Famous Duke psychology and behavioral economics professor Dan Ariely, conducted an experiment where he raffled tickets to a major basketball game in one of his classes. He asked his students to guess how much the tickets were worth.

The students who didn’t win any tickets estimated around $170 a ticket, whereas the winning students would not sell below an average of $2,400.

Ariely’s conclusion was that ownership makes us add zeros to the selling price. Also known as the endowment effect.

Your home and possessions are no different. This is why so many people overestimate how much their house is worth and underestimate how much a new home costs.

To get a more accurate price on your house, there are few things you can do. First, visit sites like Realtor.com and Zillow.com and see how much houses in your neighborhood are selling for today.

Next, try some of the online estimators from major banks, like Bank of America and JP Morgan Chase. These will give you another set of numbers you can cross reference. The last option is to talk to a real estate agent.

I usually recommend this step last because the agent may or may not give you a rosy estimate in order to win your business. If you have friends who are agents, it’s best to consult with one of them to at least make sure you get an honest opinion.

Lastly, if the numbers look promising and you’re leaning toward selling, consider some inexpensive upgrades to boost your home’s selling price even more. Be careful though, most major home renos rarely recoup their cost.

For example, a bathroom remodeling recoups on average 72% of it’s cost. Save yourself the time and money by investing in smaller upgrades like outdoor lighting and landscaping that can help sell your home faster.

  1. How Much Will Your New Home Cost?

Once you’ve established how much your current home is worth, you need to look at how much it will cost to move to a smaller place.

The opposite effect is at work here. Now that you don’t own the property, your estimate is usually quite different.

You also have to realize that potential sellers are thinking the same way you were and overestimating how much their house is worth.

Here’s where to start: Use the tools I shared with you above and research selling prices for the type of home you wish to buy.

What you’ll find is the one- and two-bedroom houses are in short supply and not as cheap as you probably imagined. This is because you’re now competing with young couples looking to buy their first starter home.

Also consider where you want to move to. If you’re considering a new city or state, make sure you visit at least a few times at different points throughout the year so you know what you can expect.

If you can afford it, rent a place for one year in the city you want to live before you buy. This way you don’t have to fully commit and if you don’t like the community you can always move somewhere else.

  1. How Will Downsizing Affect Your Taxes?

This could be good or bad news depending on how you look at it. For gains less than $500,000, couples don’t owe any income tax on the profits. For singles, you’re excluded up to $250,000.

The rules also take into account how long you’ve lived in your house and how long you’ve owned it. You can find the current rules in IRS Publication 523, “Selling Your Home.”

If the sale of your home exceeds the exclusion or you’re in a much higher tax bracket, you might need to consider other strategies like tax-loss harvesting to offset other investment losses with the gains.

Also, consider how much your new property taxes will cost you. Some states with lower property taxes might have higher sales or income taxes, or your pension might be taxed differently.

First, estimate how much you are likely going to profit. This is not just the difference between what you paid for your home and what you sold it for, it’s the difference between the selling price and your home’s cost basis.

Cost basis is what you paid initially plus any permanent improvements you made over the years. IRS Publication 523 explains.

Even if you don’t owe any income tax on the gains, you should still try to compare the income and property taxes of your new retirement destination with those of your current location.

Start by researching the state’s tax or revenue department website. Try to determine how much you’ll pay in taxes at your new location compared to what you’re paying now.

  1. What Other Hidden Costs Are You Forgetting?

If it’s been awhile since you’ve bought a new home, you probably don’t remember all the closing costs you had to pay. These add up quickly and can erode any gains you might be making.

Closing costs typically include legal fees, recording fees, title insurance, and real estate agent commissions. You can try to get the seller to absorb some of the closing costs, but keep in mind that whoever buys your home will try the same maneuver on you.

Other hidden costs include furniture. Downsizing to a smaller house or condo usually means most of your old furniture won’t fit or match your new home’s decor.

Buying new furniture and decorating can eat into profits as well. It’s also worth considering how the sale of your home will affect any medical aid or benefits you’re currently receiving.

In some cases, you may lose benefits temporarily until you spend down the gains you made on out-of-pocket medical expenses.

Final Word

Downsizing can be a great way to boost your retirement nest egg, simplify your life, and live out your golden years in a new location. But, it’s not always a profitable endeavor.

Sometimes the timing doesn’t work and it pays to retire in place, at least for a little while longer. So, before you start packing, run the numbers to be sure you’re making the best decision.

To a richer life,

Nilus Mattive

Nilus Mattive

The post The Upside to Downsizing appeared first on Daily Reckoning.

“It’s the Economy, Stupid!”

This post “It’s the Economy, Stupid!” appeared first on Daily Reckoning.

The trade war is taking a heavy toll on China. Chinese growth slowed to 6% in the third quarter, slower than expected and the slowest growth rate since 1992.

That 6% growth represents a sharp drop from the 6.8% growth China registered in the first quarter of 2018. China’s growth still exceeds developed economies by far, but it is notably weak relative to China’s past performance and relative to expectations.

China is the world’s second-largest economy (after the U.S.) and produces over 16% of global output. A 0.5% decline in Chinese output slows global growth by 0.08%, which is nontrivial considering that global growth is expected to be only 3% in 2019, according to the IMF.

More importantly, China’s growth figures are almost certainly overstated.

About 45% of Chinese GDP is “investment” (compared with about 25% for a developed economy), but 50% of that investment is wasted on white elephant projects and ghost cities that will not earn returns. If that wasted investment were subtracted from GDP, China’s actual growth rate would be 5.8%.

Other adjustments for overlooked bad debts and “smoothing” of official figures would put China’s actual growth closer to 4% or even lower.

China’s economy is a house of cards and even government figures are beginning to show that’s true. The real figures are worse. China’s best case is a possible recession and its worst case is a full-blown financial panic.

China is losing the trade wars, losing the public relations wars and beginning to show cracks in the foundation. All are good reasons for investors to keep away.

The news might be bad for China. But it’s good for President Trump, despite the latest impeachment nothingburger.

The economy will be the deciding factor in next year’s election.

The 1992 Bill Clinton election campaign war room had a sign that said, “It’s the economy, stupid.”

That was intended as a constant reminder to campaign staff that they were to focus on U.S. economic performance almost exclusively in their efforts.

Clinton had come from nowhere to become the Democratic nominee and challenge George H. W. Bush, who was running for reelection. Bush’s approval ratings in 1991 were over 90% after he led the successful campaign to oust Saddam Hussein from Kuwait.

He looked unbeatable for reelection in 1992, which is one reason so few Democrats jumped into the race. Yet Bush had an Achilles heel, which was the economy.

The U.S. had a fairly mild recession from July 1990–March 1991. The recovery was weak and most Americans believed we were still in recession in 1992 even though the recession was technically over by then. Jobs are a lagging indicator and many workers who were laid off in 1991 still had not returned to work by 1992.

Clinton’s strategist, James Carville, understood that jobs were more important than foreign policy triumphs. He urged Clinton to run on the economy, and Clinton won.

In fact, presidents running for a second term almost always win reelection unless there is a recession late in the first term. That’s what cost Bush and Jimmy Carter their reelections.

Otherwise, it’s smooth sailing for second-term victories. The good news for Trump is that he fits the mold of presidents heading for reelection.

A new projection by Moody’s shows Trump winning as many as 351 electoral votes (only 270 electoral votes are needed to be president). Moody’s analysis is based on state-by-state economic conditions and historic voting patterns, not polls.

Trump should win all of the swing states (Pennsylvania, Ohio, Florida, Michigan, Wisconsin) and pick up new states won by Hillary Clinton in 2016 (Minnesota, New Hampshire, Virginia). It looks like a victory of historic proportions for Trump — as long as he avoids a recession.

Below, I show you how Trump’s tariff policies have simply resurrected an old American tradition that served the country well for nearly 200 years. Read on.


Jim Rickards
for The Daily Reckoning

The post “It’s the Economy, Stupid!” appeared first on Daily Reckoning.

Turn Your Fun, Into Funds

This post Turn Your Fun, Into Funds appeared first on Daily Reckoning.

During the 9 to 5, 40 hour a week working life, there’s not a lot of time for your passions. Between work and family obligations, you’re lucky to fit in a few hours to relax and flex your creativity on the weekends.

Once you retire, though, you’ve suddenly got an ocean of time to fill. You can totally indulge in your hobbies, and if you like, you can even use them to make some extra side cash.

If you’ve got a creative hobby already, great! From teaching a course to coaching one on one to selling your goods locally and online, there are many ways to monetize your pastime.

If you’re still looking for a lucrative but fun way to use your imagination, here are some pursuits you can get into and then use to make extra money down the road.


No matter how online and digital our world gets, there will always be a need for woodwork. Accomplished woodworkers can build cabinetry, create specialty molding, make furniture, and more. Because this skill has flown under the radar in the recent past, there’s more call than before for expertise in woodworking. Dedicate an area of your garage, get the tools you need, and get to work!

Photography / Videography

From baptisms to weddings, crime scenes to travel websites, photographers and videographers are always needed. If you have a knack for visual arts, why not pick up a camera and apply that talent? One thing to note – you do need to make sure your skills are up to par before you start offering your services. Some moments (like weddings) can never be replicated, and bad photography or videography will result in missed memories. Hone your craft, and then set out your virtual shingle. Your would-be clients will appreciate the professionalism!

Flip Antiques

History buffs and avid “treasure hunters” alike love experiencing the past made tangible feeling that only real antiques can give. With just a little know how, you can start hunting for special pieces at garage sales, estate sales, and secondhand shops and then offer those pieces for sale – either online in marketplaces like eBay or in an antique shop of your own. Pro tip – if you specialize in one particular type of antique (like World War II memorabilia or pocket watches, for example), you can grow your expertise and profitability faster than as a generalist.


Maybe there’s no place you like being better than in front of your own grill. If so, chances are good you’ve picked up a trick or two, and you probably have secret recipes of your own, too! Good news – if grilling is your creative hobby, there’s a huge market for special spices, rubs, and sauces, and it’s never been easier to bottle / package your own “top secret” stuff for sale. If you don’t want to sell specialty foods, that’s ok – you can enter into grilling / smoking / barbecuing competitions. Even local competitions offer cash prizes – and of course, major bragging rights.

Car Restoration

Classic cars can be an investment in and of themselves. These beautiful machines require both money and time for the motivated restorer, but the end results can be more than worth it. Put some time in on the front end to find the right vehicle, and then go the extra mile to restore it right – you’ll see big rewards when you finally put your precious baby up for sale. (Don’t blame me if you end up keeping her for yourself, though!)

Brewing / Distilling

Like most hobbies, making craft alcohol has a little bit of a learning curve when it comes to getting your product just right. Luckily, there’s a large online community of brewers, vintners, and distillers out there and a wealth of resources so you can troubleshoot just about any problem you have. Check your local laws, perfect your brew, and then approach local restaurants about your products. With a little luck, you can have your own profitable label in a few years – or even less.

Drone Flying

Realtors, builders, farmers, sports teams… the list of people who need drone video footage gets longer every day. If you enjoy driving RC cars or playing video games, you’ll probably have a natural affinity for flying a drone, and you can use this fun hobby to sell videos to the wide variety of folks who need them! Again, check your local laws before you get too deep into drone flying, but once you know what you can and can’t do, the sky’s the limit!


Playing an instrument might take longer to learn than most other things, but the thrill of performing makes it all worth it. Once you’ve got the hang of your instrument, you can join a cover band or get gigs as a session musician. If you’ve into writing your own original music, you can create and license songs for use – with the internet, making money as a musician doesn’t have to be impossible.

Print on Demand

What should you do if you’re not into any of these things? What if, for example, your favorite pastime is RVing, riding your motorcycle, or golfing, but you still want to make some money creatively? Check out Amazon Merch, Teespring, Redbubble, or any one of the big print on demand services. You can take the quirks or phrases you and your buddies say, make a cool graphic design with the phrase, and then list shirts, hats, notebooks, and more. With a little bit of knowhow, you can turn your inside jokes into real money – and you won’t even need to carry any inventory or even pay a single employee to do it.

Now that you’ve got the time, why not use your talents to make your fun hobby into a profitable side hustle? There are few things more rewarding than being your own boss and seeing someone fall in love with your creations, and like they say, if you’re doing something you love, you’ll never work a day in your life.

To a richer life,

Nilus Mattive

Nilus Mattive

The post Turn Your Fun, Into Funds appeared first on Daily Reckoning.

Keep Your Heart Healthy with These 7 Numbers

This post Keep Your Heart Healthy with These 7 Numbers appeared first on Daily Reckoning.

According to the Centers for Disease Control and Prevention (CDC), every year about 735,000 Americans have a heart attack.

Of these, 525,000 are a first heart attack and 210,000 happen in people who have already had a heart attack.

The CDC says that heart disease takes the lives of around 600,000 Americans every year or 1 in 4 deaths. And, it’s the leading cause of death for both men and women of most ethnicities.

If you’ve been blessed with good health up to this point, it’s easy to ignore some of the early signs of a major health crisis.

Take Your Health Seriously

We tend to throw caution to the wind after our annual visit to the physician where our doctor tells us that our numbers are fine except for a few that are slightly out of the ideal range.

Maybe your blood pressure isn’t where it should be (could be whitecoat syndrome?), or your blood sugar is a tad high that day (that donut probably did it!). We tell ourselves excuses to avoid the reality that we might not be taking the best care of our bodies.

High blood pressure, high cholesterol, and smoking are key risk factors for heart disease. About half of Americans (47%) have at least one of these three risk factors, says the CDC.

Earlier this year, the AARP ran an article that highlighted seven numbers most important in reducing your risk of heart attacks and strokes.

I thought it was interesting because there was one number (VO2 Max) I hadn’t thought of checking and my doctor has never mentioned.

Today I’ll show you how to calculate your VO2 Max, what it means for your heart health, and list the six other numbers you should be tracking.

Here’s a quick recap of what the AARP recommends for a healthy heart and stroke prevention:

Cholesterol Under 200

Ideally, your cholesterol should be under 200. But, according to AARP, a score of up to 240 may still be considered borderline. If you’re over 240, you should be worried.

Lowering your consumption of red meat and full-fat dairy products is one way you can begin reducing your cholesterol. Mixing in a few vegetarian meals once or twice a week also seems to make a difference according to researchers.

And on top of your diet, increasing the amount of exercise you do will also help lower your cholesterol.

Blood Pressure 120/80

If you don’t own a good quality blood pressure monitor, I would suggest buying one. They’ll run you about $40-$75 at CVS or another pharmacy retailer.

Your ideal blood pressure should be 120/80. But some doctors are comfortable if it’s as high as 140/80. Try taking your blood pressure at different times of day, especially before you exercise and before you consume anything with caffeine.

If your numbers are off, an easy way to bring them back to normal is eating more home cooked meals. Not only will eating a home cooked meal save you money, you can also control how much salt goes into your food.

Controlling your salt intake is one way to regulate high blood pressure but another is increasing your potassium levels by eating avocados, bananas, potatoes, spinach and other vegetables. Potassium lowers the sodium and water retention in your body, which helps decrease your blood pressure.

Heart Rate Between 60-100

Most newer blood pressure monitors will tell you your resting heart rate. Even some of the new fitbits and other health tracking bracelets can give you a pretty accurate estimate.

If you don’t have any hardware, you can monitor your heart rate with an ordinary watch. Count your heart beats for 15 seconds and multiply by 4.

Ideally, your heart rate should fall between 60 and 100 beats per minute. Athletes are likely to have a lower resting heart rate. If yours is outside this range, talk to your doctor to find out if there’s any cause for concern.

Blood Glucose Under 100

When your body becomes unable to regulate your blood glucose, you are at higher risk of diabetes, which also increases your heart attack and stroke risk.

Your blood glucose should be under 100. Your doctor might also want to measure your A1C blood sugar level. This test looks at your blood sugar levels over the last three months, so trying to beat the test by eating healthy for a few days won’t improve your score.

A normal reading is under 5.7 percent. To keep your blood glucose and A1C levels in check, you should eat a diet that’s low in sugar and high in protein, fruits, vegetables and whole grains.

Avoid sodas and juices. AARP also recommends talking to your doctor about taking Vitamin D, which can lower your blood glucose levels and help other systems in your body, as well.

BMI Below 24.9

In recent years, doctors have discovered that Body Mass Index (BMI) is a better indicator of health than your actual weight.

But, it’s not always the case. A lot of athletes will appear to have a high BMI, when in reality their body fat is quite low. If you’re not a high-level athlete, don’t kid yourself.

Ideally, your BMI should be below 24.9. If you’re in the range of 25 – 29.9, you’re considered overweight. A BMI over 30 is considered obese.

The best way to lower your BMI is by losing weight. Even a reduction of 5 percent of your current scale weight can make a significant difference in your health.

Waist Circumference

All you need is a tape measure to find out if you’re carrying too much weight around your stomach. Exhale, and measure your waist. If you’re having trouble finding where your waist begins, bend to one side and you’ll find it.

Most men should have a waist circumference under 40 inches; women should have one under 35 inches.

VO2 MAX Score Above 30

Like I said, this is a number I hadn’t really considered before. VO2 Max is a measure of your total aerobic fitness. If you belong to a gym, they might be able to calculate your score by having your run on a treadmill to exhaustion.

If that sounds too hard, the good news is there’s a written questionnaire that’s surprisingly accurate online. Go to worldfitnesslevel.org and fill out the questionnaire. Your VO2 Max score is based on your age.

If you’re between the ages of 56-65, a “good” VO2 Max score is 36-41. If you’re 65+, a “good” score is 33-37. Anything over 32 for both age categories is considered above average.

The Bottom Line

It’s important to keep your health in check, especially as you get older. These numbers are a good place to start having more informed discussions with your doctor. Without good health, wealth means nothing.

To a richer life,

Nilus Mattive

Nilus Mattive

The post Keep Your Heart Healthy with These 7 Numbers appeared first on Daily Reckoning.

Live Like You’re on a Vacation–Permanently

This post Live Like You’re on a Vacation–Permanently appeared first on Daily Reckoning.

If you hadn’t picked up on it yet, I’ve had a bit of a travel theme this week. Between how I fly for free, and the dangers of traveling abroad, you should now have a pretty good idea of how to get where you’re going cheap, and how to stay safe while you’re visiting.

When most people think of getting a change of scenery, a vacation is the first thing that comes to mind. You think of heading to your favorite destination for a week or two and soaking up the sand and sun, or the snow, if you’re the winter sports type. Personally I like the beach, but snowboarding with my daughter is great too.

But what if you didn’t have to wait for just two short weeks of the year to enjoy lush tropical locales or mountainous adventures?

What if instead… you could choose to live in that kind of environment all year round?

Unfortunately in the USA, the most desirable vacation locations are also pretty expensive. Beach living is costly, as is the cost of living in major cities or other desirable locales. The price of real estate in the “fun” cities seems to be on the rise all the time.

Here’s the thing, though. You don’t have to stay in the US.

Pack Your Bags, and Sail Away

If you want a comfortable lifestyle with a low cost of living, it’s easier than ever to retire and live out your days however you want – as an expatriate.

More and more people are choosing to move out of the US once they have retired than ever before. With the resources we have available to us today, it’s not even hard to research the best country for you, and everything you’ll need to know in order to move there.

Sure, you might have a couple of concerns first, but that’s okay! With the power of the internet on your side, you can generally answer your questions quite easily.

If you’re considering living as an expat, I have a few questions for you to get your started in your research.

Do You Want to Stay in One Country or Move Around?

When you’re living as an expat, there’s no reason you have to tie yourself down to one place. Not only can you treat yourself to a variety of experiences, you will also have the peace of mind just knowing that if you don’t like a place, you can just move on.

If you’re interested in staying in one country, on the other hand, review your information carefully. A longer term commitment will probably be less expensive in the long run, but you’ll be subjected to all sorts of laws and customs you’ve never thought of before, much less experienced, so do your homework thoroughly.

Which Countries Will Allow You to Have Citizenship?

Unlike the USA, which offers people the chance at citizenship no matter where they’re from, most countries have strict rules about who can and can’t live, work, and buy property there.

Some countries are more accepting than others, though. Peru, Singapore, the Dominican Republic, and Ireland, for example, all have easily achievable citizenship requirements. If none of those are to your liking, see what countries do strike your fancy and then research what their requirements for citizenship are.

The Language of The Locals

Are you already fluent in a second language? Great! That could easily help in your new life as an expat. If you already speak Spanish, you’ve got a leg up, as there are many countries who have Spanish as a national language.

If you’re eager to learn a new language, that helps, too. Once you know the country that you are interested in moving to, you can research the language that is primarily spoken there. Apps like Duolingo are free, and can help you learn languages quickly and easily.

If that’s not your cup of tea, that’s ok – most countries have at least a portion of the population who speak English. You may run into roadblocks from time to time, but with the help of translation apps like iTranslate, Google Translate, and TripLingo, you can get by, and once you move, you’ll find that you pick up the local dialect fairly quickly, as you go.

What Will Your Friends and Family Think?

This is a common question that keeps a lot of people from moving abroad. If you want to consider the idea, but worry about what your closest friends and family will think, consider what your obligations are.

If you have an ailing parent to take care of, for example, then moving abroad might be something to plan for a few years down the road. If you don’t have these kinds of obligations, but you’re still concerned that you’ll get pushback, broach the conversation with your loved ones early on.

Chances are good they’ll be happy for you and even want to visit. If they’re not happy, then at least they have time to get used to the idea. Who knows – in the long run, they might even wind up being inspired by your decision to move!

What Will You Do With All of Your Stuff?

This question seems simple, but it’s a little more complicated than just moving it with you. You’ll have to decide if you want to keep it, store it, or trash it.

By the time you retire, you’ve got almost a lifetime’s belongings to deal with, and many of them have memories and emotions attached.

Review what you definitely want to take with you, and what you don’t want to take but can’t bear to trash or donate. When you know what you want to keep in your life, but not take with you, start getting creative with solutions.

Perhaps these special items could find a new home and a new lease on life in the home of a child, or grown grandchild. For example, I have a friend who moved to China – when she was there, she couldn’t take a large piece of artwork with her. The piece stayed in the home of another friend of mine where it was loved for many years. When the original owner who was living in China came back, the painting went back into her new home. It was a win for everyone involved.

What Happens If You Change Your Mind?

Well, the short answer here is that if you don’t like it, you can always come back home to the States!

The long answer is you need to consider the best way to reintegrate and realize that moving back to the US will entail a period of transition. After all, if you leave the country, life goes on here, too, so don’t expect everything to be exactly the same when you come back.

Once you have the answer to these questions, as well as any that you come up with yourself, you can decide if expat life is for you. If you’re even the least bit curious, you should look into it.

After all, living frugally but fabulously is a pretty great way to spend your retirement!

To a richer life,

Nilus Mattive

Nilus Mattive

The post Live Like You’re on a Vacation–Permanently appeared first on Daily Reckoning.

Travelers Beware

This post Travelers Beware appeared first on Daily Reckoning.

Finally, you get to cross Rome off your bucket list for travel destinations!

While exploring the Colosseum, one of the locals offers to snap a photo of you and your group in front of the busy landmark. Without thinking, you agree and hand over your smartphone.

As you’re getting ready to pose, you look up and see that your new “friend” has just run off with your phone.

In your twenties, you might have chased after the thief. But, as you get older, you can’t rely on your physicality as much. Instead, you need to stop crooks before they even have a chance to act.

Traveling tops most American’s lists of things they’re most looking forward to spending money on in retirement.

This year alone, baby boomers spent an average of $6,600 on leisure trips both domestically and abroad, according to AARP. So before you book any flights, make sure you read my post from yesterday about how I fly around the world, and stay at luxury hotels for free, and how you can too!

Now, if you’re planning an international trip or even looking to travel within the United States, I have a few recommendations on how to stay safe.

  1. Learn the Common Scams

It doesn’t matter where you go in the world, there’s always shady people willing to trick you out of your hard-earned cash. Even Canada has its fair share of tourist scams.

But the best way to avoid being scammed is learning what the most common “tourist traps” are. I recommend you start by searching, “Most Common Travel Scams” in Google. Then narrow your search to your specific destination, “Most Common Scams in Paris…Rome…Mexico…etc.”

You’ll quickly learn some of the common tricks these con-artists try like broken taxi meters, “free” bracelets and flowers, fake rental damages, etc. The more scams you’re aware of the less likely you will be to fall prey.

  1. Check The U.S. Department of State’s Website

Before you buy airfare or book accommodations to your next trip abroad, make sure you visit The U.S. Department of State’s website.

The U.S. Department of State lists every country in the world, and all known dangers and current threats to visitors.

There’s one major caveat here: the State Department’s job is to warn travelers about everything that could go wrong, which is not necessarily what is likely to go wrong.

This means their advice is typically overly cautious. Keep this in mind while researching your destination of choice. But, generally speaking, the State Department’s travel warnings will give you an idea of what’s going on in a country and if there are any specific problem areas you should avoid.

  1. Register With STEP

The U.S. Department of State also offers the Smart Traveler Enrollment Program (STEP), that notifies your destination country’s embassy of your arrival and will keep you updated on the latest safety information.

STEP is free to all U.S. citizens and nationals living abroad. It’s a great way to get reliable, up-to-date safety information as you travel.

If an emergency were to happen, like a terrorist attack or natural disaster, the local embassy can get a hold of you quickly to help with evacuation.

  1. Write Down Emergency Info

You might be tempted to skip this tip. After all, we live in a time when information we want can easily be found on the Internet or on our smart devices in a matter of seconds.

But if disaster strikes, you might not have time or be in the right mindset to look up emergency information.

Don’t put yourself in that situation. Instead, write down local police or ambulance service numbers on a piece of paper. Create an “Emergency Plan” on a recipe card and keep it in a dry place like a ziplock bag or waterproof pouch.

Also save a copy of the emergency plan on your phone so you can quickly access it in case you lose the written copy. This way you won’t have to think of who to contact if disaster strikes.

  1. Email Friends/Family Your Itinerary

Once you know where you’re going and when, make sure you tell someone your plan.

Email your full itinerary to a family member or close friend back home. If your schedule is evolving day-to-day, then spend five minutes texting someone your plans for the day first thing so they know where you’ll be and when.

This way, if they don’t hear from you for a few days after you’re supposed to return, they can notify local authorities, the embassy, etc.

  1. Use ATMs with Caution

Covering your hand when keying in your PIN is a good start but there are a few more steps you should take if you plan on using an ATM abroad.

Always take a close look at ATM machines before you use them. Pull on the card reader, run your finger along the card slot. Look for any signs of tampering. If you suspect the machine has been compromised, go into the bank and notify the clerk to come out and have a look.

If the ATM seems to have eaten your card, run your finger along the card slot to see if you feel anything protruding. The “Lebanese Loop” is a scam where a thin plastic sleeve captures your card, then as soon as you walk away, a thief pulls out your card and runs away with it.

Also, never let anyone “help,” you with an ATM. This is a common trap that typically ends in you getting robbed.

  1. Little White Lies Are OK

The last thing I’ll recommend is keeping your travel plans and accommodation details to yourself. If strangers or shop owners ask where you’re staying, feel free to mislead them a bit. Give the name of a different hotel or be vague.

You don’t have to be rude, just be cautious with what information you share. The same goes for anyone asking if you’ve been to a destination before. Saying it’s your first time traveling some place could give a con-artist the impression that you’re less savvy to some of the local tricks.

My final travel tip is don’t put the “clean my room” sign on your hotel room door. Those signs are like big advertisements telling crooks that your belongings are ready to be stolen.

Thieves know that travelers leave their passports, extra money, jewelry, and electronics in their rooms locked up. These crooks also know how to jimmy door and suitcase locks and will steal your belongings.

Rather than advertise your absence, once you leave the hotel call the front desk and notify them that your room is ready to be cleaned.

Traveling should be a rewarding experience. Something that you’ve worked hard for many years to be able to enjoy. Don’t let a small group of scammers ruin your retirement travel plans.

To a richer life,

Nilus Mattive

Nilus Mattive

The post Travelers Beware appeared first on Daily Reckoning.

My Secret to Traveling the World for Free

This post My Secret to Traveling the World for Free appeared first on Daily Reckoning.

A few weeks ago, we talked about a recent offer that I received in the mail – one that promised a dirt-cheap trip to Kauai for two hours of my time.

It was a good deal, but as I mentioned in that article, I was just in Kauai less than a year ago, so it wasn’t some must-do thing.

Meanwhile, I’m in Italy right now – taking my mom and daughter across the country from Rome to Venice.

Based on these little tidbits, you might think I spend a lot of money traveling. But that’s not true. I employ one simple travel hack that you can also take advantage of today!

No need to sit through any type of timeshare sales presentation, either!

My Free Travel Secrets

In short, I use generous credit card signup offers to accumulate large amounts of airline miles, free hotel rooms, and other perks at absolutely no cost to me.

Just as an example, when I searched return flights from Venice I was shocked to find the best offers were running $3,000 per person!


Fortunately, I have a lot of American Airline miles from previously signing up for an AAdvantage credit card from Citi and then flying the airline for business trips and other purposes.

With that $3,000 flight only running 30,000 miles, I ended up getting all three of our tickets for free and at a very good exchange rate.

Of course, that’s just one example. Here’s a better one from last winter…

My daughter and I were looking to take a snowboarding trip to Lake Tahoe during the insanely-busy President’s Day weekend.

Well, one of the best places you can stay would be slopeside at Northstar’s Ritz Carlton.

The only problem? Rooms were running roughly $1,500 a night.

Good thing I was able to sign up for two different American Express cards affiliated with the Bonvoy rewards program … including this one.

We ended up using our points for five nights during that long holiday weekend – getting something like $7,500 in hotel rooms for a couple of card signups and points accumulated with our regular spending.

It ended up dumping snow all weekend and my daughter and I were able to go straight from the luxury hotel to the lift chairs and then straight back to a hot tub over and over again!

I’m planning on doing the same trip again this year and just signed up for a third Bonvoy card – this time the business version – to top off my points and get us another five-night stay at the Ritz for free. (One really cool perk of the Bonvoy program is that you get a fifth night free when you book four using points.)

What’s the Catch?

You may know that many airlines, hotels, and rental car companies partner with banks to create special rewards credit cards.

Maybe you even have one already.

But unless you’ve spent a lot of time researching these programs, it’s quite likely that you’re not getting the most out of them.

Most people think these cards are simply good ways to earn airline points or other perks while making purchases.

What they fail to realize is that the biggest windfalls come from signing up — and those offers change all the time.

Recently, I’ve been pretty hot on the Bonvoy cards because of my specific desire to get premium hotels at world-class ski destinations.

But they’re not necessarily the absolute best deal going.

Just as another example, one I’ve mentioned before …

At the beginning of 2013, I signed up for two Southwest Rapid Rewards Plus Visa cards — the regular version as well as the business one.

By doing so through a special promotion, I got 50,000 Rapid Reward miles for EACH enrollment.

That’s sweet enough, good for four or five free roundtrip domestic flights.

But even better is that Southwest has a little-known perk for anyone who accrues 110,000 miles in a given calendar year.

It’s a special pass that allows you to take a companion with you on every flight for the rest of that calendar year PLUS the next one. Your companion just pays taxes. And yes, the companion pass even applies to free travel you book with miles!

So just getting those two cards and earning an additional 10,000 miles afterward essentially got me 10 free roundtrip flights plus an unlimited number of additional buy-one-get-one-free flights through the end of 2014.

Even though each card had a first-year annual membership charge of $69, ($138 in total) it was a terrific deal — especially since I was doing a lot of domestic flying.

I ended up taking my entire family to Aspen for a long weekend at a luxury slopeside hotel using more Southwest miles and points from another rewards card.

How to Take Advantage of This Hack Yourself

If you want to take advantage of this particular hack, you can sign up for various Southwest credit cards here. (As with the American Airlines link earlier, we can both earn points in the process.)

Of course, I’m not even saying this Southwest deal is the right one for YOU.

It really depends on what special sign-up bonuses are in effect at any particular point in time, as well as your personal travel preferences.

Some people like to get lots of travel for free.

Others like to use rewards to splurge on hotels or first-class international flights they couldn’t afford otherwise.

The point is that a little investigating goes a long way. Do a quick web search and you’ll find plenty of websites that offer in-depth profiles on various mileage programs and current offers. Two of my favorites are www.millionmilesecrets.com and www.thepointsguy.com. And for the truly obsessive, there’s also www.flyertalk.com.

“Hidden” Costs

Okay, but what about the OTHER financial impacts of doing this?

The process of signing up for multiple credit cards just to get bonus rewards is commonly known as “churning”. Most financially conservative people avoid doing this for a number of reasons.

The first is because they don’t want to take on new debt.

But I am NOT advocating piling up bigger credit card balances or making unnecessary expenditures.

Instead, I’m saying you should take advantage of the most generous sign-up offers, put all of your regular expenses on the new card, and pay the card in full to avoid any interest charges or other fees.

That’s just using credit wisely and getting free perks for doing so!

Personally, the reason I used to avoid credit card churning is because I believed it would negatively impact my credit score. But I’ve changed my tune on that. In fact, I’ve seen credit scores go UP after opening a new card!

The reason behind that is how your credit score is calculated. Generally, debt-to-available-credit is a primary factor in how your score is determined, and taking on a new line of credit boosts this number.

So unless you’re planning on getting a major new loan, or your credit score is already lower than average, I wouldn’t worry too much.

And again, even if this particular strategy isn’t for you, it still illustrates the idea that a little knowledge and research can help you live a richer, more rewarding lifestyle no matter how much money you have in the bank.

To a richer life,

Nilus Mattive

Nilus Mattive

The post My Secret to Traveling the World for Free appeared first on Daily Reckoning.

10 Tips That Will Add 10 Years to Your Life

This post 10 Tips That Will Add 10 Years to Your Life appeared first on Daily Reckoning.

One hundred years old is an age most people, including the average American, won’t reach yet certain areas in the world are hotspots for centenarians.

In 2012, National Geographic and a research team headed by Dan Buettner set out to learn why do people in some parts of the world live so much longer than others?

What they discovered were five “Blue Zone” regions, where the people not only lived longer, but better.

“Besides having a large percentage of people that live to 100, the aging population also remains active well into their 80s and 90s, and typically do not suffer the degenerative diseases common in most of the industrialized world,” says Buettner.

The five Blue Zones around the world are:


A small Greek island where the elderly nap every day, garden regularly, eat well, and even stay sexually active. One in three Ikarians live to the age of 90, and this population tends to outlive the rest of Europe and America by a decade or more.


A southern Japanese island where men live to about 84 while women of the area reach almost 90 years old. In Okinawa, there is no word for traditional retirement. People are farmers and fisherfolk, even as they get older.

The Okinawan diet consists of lots of vegetables and leafy greens, sweet potatoes, and lots of fresh fish. The locals practice hara hachi bu, which is the Confucian teaching that promotes eating until you are 80 percent full.


A small village located on the island of Sardinia in Italy, Villagrande has no retirement homes, and seniors enjoy an active lifestyle and moderate daily intake of wine.

Men tend to outlive the women in this area thanks to a long life of labour. Most of the men in Sardinia are either raised to be farmers or Shepards. Since childhood, these men were used to a lot of physical exercise.

Nicoya Peninsula

Costa Rica is a place where males who reach 60 years old are seven times more likely than their Costa Rican counterparts to live to 100.

The people of Nicoya tend to eat large breakfasts and small dinners. Staples of their diet include squash, eggs, black beans, corn tortillas, lots of local fruit, more than any of the other Blue Zones, and is meat-heavy (mainly chicken and pork).

Loma Linda

A small Californian suburb in the United States home to about 9,000 Seventh-day Adventists — approximately half the population. Seventh-day Adventists believe that maintaining good health is a key part of their religion.

They typically abstain from alcohol, caffeine and other “stimulating” foods and habits, like smoking. They also set aside the Sabbath each week to spend time in worship, socialize with their family and friends, and enjoy nature.

I have to admit, I was a bit shocked to see an American suburb make the list.

While it’s easy to accept the idea that people living in distant, exotic places around the world may live exceptionally long and healthy lives, how can a small suburb on the inland, and the polluted side of Los Angeles, be producing people who live longer than typical Americans?

Dan Buettner and his team of medical researchers, anthropologists, demographers, and epidemiologists, found that there are a few evidence-based common denominators to all the Blue Zone regions.

The Power 9

1. Move Naturally. Moving naturally throughout the day — walking, gardening, doing housework — is a core part of the Blue Zones lifestyle.

2. Purpose. The Okinawans call it ikigai and the Nicoyans call it plan de vida. Knowing why you wake up in the morning makes you healthier, happier, and adds up to seven years of extra life expectancy.

3. Down Shift. Stress is part of life, but Blue Zones centenarians have stress-relieving rituals built into their daily routines. Adventists pray, Ikarians nap, and Sardinians do happy hour.

4. 80% Rule. People in Blue Zones areas stop eating when their stomachs are 80% full and eat their smallest meal in the early evening.

5. Plant Slant. Beans are the cornerstone of most centenarian diets. Vegetables, fruit, and whole grains round out the rest of the diet and meat is eaten in small amounts.

6. Wine @ 5. Moderate but regular consumption of wine (with friends and/or food) is part of the Blue Zones lifestyle.

7. Belong. Being part of a faith-based community adds four to 14 years to life expectancy.

8. Loved Ones First. Having close and strong family connections (with spouses, parents, grandparents, and grandchildren) is common with Blue Zones centenarians.

9. Right Tribe. The world’s longest lived people have close friends and strong social networks.

The Mythical Fountain of Youth

Buettner says, “There’s no physical fountain of youth — you don’t have to move to these far-flung places to add years to your life. It also can’t be chalked up to just “good genes.” The Danish twin study shows us that genes dictate only 20% of longevity. Lifestyle and environment account for the rest.”

To this, I would add a final tip

10. Control Your Environment. Your environment dictates how you live, work, and play.

And in the United States, we have built environments that facilitate unhealthy lifestyles. The majority of Americans live in cities built for cars not pedestrians. Instead of cooking healthy meals and socializing with friends, we gravitate toward fast food and eating alone in front of our TVs.

To bring the Blue Zone lifestyle into your everyday life, you need to setup an environment that creates these healthy habits by default. Buettner says the people living in the Blue Zone regions weren’t trying to be healthy.

Get rid of unhealthy food inside your house. Arrange your living room furniture so that your sofas are not facing your television. Commit to joining a club or volunteer group that meets regularly so social gatherings are part of your regular routine without you having to think about it.

There’s a lot to take away from the Blue Zone study even seven years later. Control what you can, cope with what you can’t, and it will all work out in the end.

To a richer life,

Nilus Mattive

Nilus Mattive

The post 10 Tips That Will Add 10 Years to Your Life appeared first on Daily Reckoning.

Let’s Steal My Neighbor’s Yacht

This post Let’s Steal My Neighbor’s Yacht appeared first on Daily Reckoning.

I still remember the day my college girlfriend told me her dad’s stock portfolio was worth $110,000.

I was floored. Between that, a good job, and a nice house on Long Island— the guy was rich!

Twenty years later, it would take a little bit more to get my attention.

I tell you, as modestly as possible, that my current home is worth eleven times as much as that $110,000 stock portfolio. My investments, cash accounts, and other assets are worth many times that amount as well.

So yeah, life has been pretty good to this kid who grew up in a Pennsylvania coal mining town.

Yet I’m also aware that even my current wealth is merely a drop in the bucket to loads of other people.

Heck, I’ve hung out with men and women worth tens of millions … some worth hundreds of millions … maybe even a billionaire or two. Everyone from third-generation trust funders to self-made Internet entrepreneurs.

I’m relaying all this to explain why I’m troubled by Bernie Sanders’ recent proposal to tax billionaires, a group of people he says “shouldn’t exist.”

Bye Bye Billionaires

In a nutshell, Sanders says we should implement a “wealth tax” – as high as 8% — on the richest people in America.

About 180,000 households would pay some form of the tax.

It would start applying to individuals with a net worth of $16 million or married couples with $32 million. They’d pay 1% a year.

The top group – married couples worth at least $10 billion – would pay 8% a year.

Now, I’ll admit. There’s a small part of me that wants to agree with this idea of taking a couple percent from our country’s billionaires.

Do they seriously need that extra several million?

Of course not.

Would it be awesome to just take some of that money and create a universal income plan … raise Social Security benefits for millions of Baby Boomers … or give everyone free healthcare?


There’s just one problem …

It would also be theft.

Consider the following.

Here I am in my million-dollar shack – and it really is just a simple home – albeit with a great view, staring out at the Pacific.

Meanwhile, right on the bluff above the ocean, are a row of houses worth many times as much as mine.

I know a few of the people who live in those houses, including a guy who has a lobster yacht docked down at the marina. His boat is also worth more than my house.

He doesn’t really need that boat. I’m pretty sure he could just go out and buy another one if it disappeared. Heck, he might not even miss it all that much on a day-to-day basis!

Does that mean I can go down there and take it out to the Channel Islands whenever I feel like it?

Or that someone getting evicted from their apartment can go down and live on it for a while?

Or that he should be forced to sell it and donate the money to charity?

Well, Bernie’s plan is basically this very thing writ large.

Bernie’s Burglary

It’s an asset seizure based on people’s relative wealth … just like me going down to the harbor and taking my friend’s lobster yacht simply because he has a lot more money.

Moreover, Bernie’s plan uses definitions of “too much wealth” that are arbitrary – and subject to change – just as my own have been over time.

And it feeds upon our own greed, self-righteousness, and jealousy to justify taking someone else’s stuff.

It isn’t taking some of what they’re earning, like our current income tax.

Nor is it taking some of their stuff once they die, like our current estate tax.

It’s a third layer of taxation that takes existing stuff from people every living year as long as they continue to have “too much wealth.”

Again, it’s easy to look the other way and dismiss the actual proposal because it only applies to the Zuckerbergs of the world.

Indeed, you’ll hear a lot of people say they don’t understand why more low-income Americans – particularly poor, rural Republican voters – can’t support this kind of policy.

Well, it isn’t because they’re all stupid.

Nor is just because they’re aspirational.

It’s because they know that no matter how much anyone else has, it’s simply wrong to steal from them.

And just so you don’t think I’m only picking on Bernie, other presidential candidates have proposed similar plans that are just as morally flawed.

So as appealing as it may seem to drain a little bit of wealth from the people who “won’t notice it” at the top of the ladder, at the end of the day, you have to face the facts. No matter what you want to call it, it’s theft, and stealing from people is not a great way of writing government policy, no matter who you are.

To a richer life,

Nilus Mattive

Nilus Mattive

The post Let’s Steal My Neighbor’s Yacht appeared first on Daily Reckoning.