The Investor Blog

Know If Your Advisor Is Qualified

Posted on February 19th, 2018 by Paul Winkler | No Comments

I see recommendations for financial people thrown around all the time, but what I almost never see raised as a question is what qualifies this person to be a financial planner. They might be recommended because they work at your bank, your friend uses them, or they seem nice or smart. Are they qualified though? Did you know there are a wide range of designations that can qualify someone to give advice? And many of them don’t require as much education or training as you would expect.

If I have a medical issue, I know I can go to a doctor, and I know they’ve gone through rigorous training because they have “M.D.” after their name. If I’m dealing with a legal issue, I can go to an attorney, and I know that for them to practice law, they must have “J.D.” after their name. I know I can trust these people with major concerns in my life, because I know they have received the required training, and there are strict regulations on their profession. How about financial planning?

The Standards are Lower Than You Think

Jonathan Clements from the Wall street Journal explains, “In Malaysia, to call yourself a financial planner, you must be qualified, such as earning the local equivalent of the CFP or the Chartered Financial Consultant designation. However, in the U.S. to hang out a shingle as a financial planner, all you need is a shingle and a place to hang it.” In fact, in the U.K. and Australia, it’s illegal to give investment advice and receive commissions, because commissions skew the advisor’s ability to give unbiased advice. In the US however, the requirements for financial advisors are not nearly as strict.

A lot of people in the financial profession can go out and get a designation that takes them anywhere from a couple days to a couple weeks, and this is all they need to give financial advice. The designations he mentions in the article, however, are much more intense. For example, to become a CFP you must have classes in the financial planning process, insurance, taxation, planning for retirement needs, investments, and the fundamentals of estate planning. All topics you assume would be required for every financial planner, but unfortunately, this is not the case.

Always Check Their Qualifications

The CFP and CHfC designations generally take over a year of study to get, and give a planner the educational foundation needed to advise, but most people out there don’t have them.

Retirement money is one of your biggest assets. You should consider your financial life along the same lines as your health. You owe it to yourself to make sure you’re dealing with someone who is a qualified professional.

When it comes to retirement planning, you don’t know what you don’t know, but you also don’t know what they don’t know. Always check up on your advisor’s qualifications before entrusting them with your financial life.

Reasons to Rethink REIT’s

Posted on February 2nd, 2018 by Paul Winkler | 2 Comments

As you near retirement, someone might have approached you with the idea of investing in a real estate investment trust, or a REIT. These are typically marketed by enticing promises such as 6-7% returns, quarterly dividends, and long-term leases. You will be told that these are incredibly safe investments, because they are attached to stable properties like fast food restaurant franchises. The salesman can make them sound great, but there are some major underlying issues he won’t mention.

What’s a REIT?

REIT’s are simply companies that invest in income-producing real-estate, such as apartment complexes or shopping malls. Owning one let’s you get in on a share of the profits made by these properties, without having to put a massive amount of money down. Because of this, and the lofty promises made with their sales pitch, they can seem very attractive. Problem is, there are some nasty hidden issues that come with them.

Why not a REIT?

1. High Commisions: They are usually high-commission products where the seller can make 8-10 percent just to get you in. That’s a big chunk of change that significantly lowers the overall investment; not to mention that it gives the salesman an incentive to sell it to you, even if it’s not in your best interest

2. Fluctuating rate return: If the underlying properties of the REIT go out of business, the REIT makes no income, and you don’t get paid. The rate can drop to zero, or they can suspend the payments, and there’s nothing you can do about it. And this is common, especially since the retail industry is declining, and most REIT’s are heavily invested in retail.

3. You can’t get out: they tend to very illiquid – you can get in any time you like, but getting out may be a different story. You might say, “Well that’s not what I signed up for”, and then try to redeem the shares; but you’ll find that the company won’t redeem them. You’re stuck. This is because these products are often not trade-able on an open market. Usually the only way you can sell it is to try and find a third-party speculator that might be buying; typically for pennies on the dollar.

Am I the only one saying this? No, there are a lot of experts out there saying the same exact thing. Robert Schiller, who won the Nobel prize in economics, has an article all about the negatives of REIT’s entitled, “Why Land and Homes Actually Tend to be Disappointing Investments”. Investopedia, NASDAQ, and the NY times, to name a few, all have articles on the downsides of REIT’s as well.

Never make a hasty investment, do your research, or give us a call first. There is a large body of academic data and research on better ways to take income in retirement.

Why We Don’t Save Enough

Posted on January 24th, 2018 by Paul Winkler | No Comments
It is no secret that Americans struggle to save money for retirement. The statistics are staggering; 57% of Americans have less than $1,000 in their savings accounts, and 39% have no savings whatsoever. Not only that, but the mean retirement savings for fifty-six to sixty-one-year old’s in America is $163,000, which gives you about $6,000-$7,000 of income per year – not much to go on.

How did we end up here?

An old mentor of mine said that there are two types of people in the world. First, you have the person that tends to spend first and then save what’s left over, and then the person who saves first and spends what is leftover. The problem with the first is that there’s never anything left over. He said the most powerful concept in finance is that the first group of people tend to be dependent upon the second group of people. You don’t want to be in this first group.

“But I don’t make enough money”

You might think, “I know I need to save more, but I just don’t make enough money”. Income is not the problem though. Here’s a secret of finance: People tend to spend all their money, regardless of their income. We have different occupations with different incomes; some make less, and some make much more, but they all end up in the same situation with little or nothing saved, because they’ve spent it all. People who spend first, spend all the money that comes in, leaving nothing saved.

How do we get out of this position?

First, I want you to think about the bills that you have. You pay for your auto insurance, telephone bills, heat and air, electric bills, and mortgage or rent. You would never think of not paying those bills; you consider them necessities.

I want you to think about making YOU the number one priority. You need to be the first bill that you pay. When you put saving on the same level as paying your bills, you will find that many other things you spend your money on are not as important as you thought they were. If saving becomes a non-negotiable item, your spending habits will automatically adjust to your new budget. This is how you will get ahead when it comes to your finances.

Make you priority number one in saving for the future.

RMD’s from an IRA

Posted on December 21st, 2017 by Paul Winkler | No Comments

As the year comes to a close, I thought I would post about RMD’s. RMD stands for “Required Minimum Distribution”. When you have a traditional IRA, you must start taking these distributions out of your account once you turn age 70 ½. These are very important to understand, because if done wrong, there are massive penalties.

If you turn 70 in March of a given year, by September you are 70 ½, and you must take your first distribution either that year or by April 1 of the following year. If you wait until April 1st of the following year you will need to take 2 distributions that year – one by April 1st, and the 2nd one by the end of the year. The level of taxes you are paying each year may affect your choice of when to take them.

An RMD is figured by a calculation that uses the December 31st value of the account from the previous year, and the age of the person taking the RMD.  If a person has a spouse that is more than 10 years younger, then that can also affect the calculation.  The purpose of RMDs is that the Federal Government wants these assets distributed so the IRS gets to tax them, creating revenue for the government.

It is ultimately your responsibility to make sure your RMDs are distributed properly. Custodians often will help, but it is up to you. You want to make sure you get it right, because there is a very stiff penalty of 50% for failure to take your RMDs.

As you can see, RMD’s can be a very complicated process. This is just an introduction to them and should not be taken as financial advice.  It is a good idea to get a financial planner and a CPA involved in making sure you make the right choice in this area with RMD’s.


Posted on September 22nd, 2017 by Paul Winkler | No Comments

Many of you may have heard about the Equifax hack—or perhaps you have even been contacted by Equifax to notify you that you were affected. According to Equifax, the names, social security numbers, birth dates, drivers’ licenses, some credit card information, and credit history of 143 MILLION Americans has been stolen. Considering the size of the over-18 population of the U.S., that’s a better than 50% chance you have been hacked. If you have been hacked, you are 11 times more likely to be a victim of identity fraud. The breach occurred between May and July, the company became aware of the breach on July 29, but did not announce it for well over a month. This means that if your information was compromised, the hackers could have been using it since May of this year! They can use this information to open new accounts in your name, get credit cards in your name and use them, take out loans (for which you are responsible), file for a tax refund, or try to hack into bank and investment accounts. So what should you do about it?


Equifax provided a link on its website to help you check if this hack affects you. Go to Fill in the requested information and it will tell you if the hack affects you. They also plan to send out written notification to the affected persons. Next, get a copy of your credit report. By law, you are entitled to a copy of your credit report annually for free. You can do this at If you don’t check your credit report regularly, you really should start doing so. It will tell you new accounts that were opened, accounts that remain unpaid and which affect your credit, and other useful information. If you see that a new account was opened in your name that you did not request, bills unpaid by creditors you are not familiar with, or calls, liens or lawsuits for collection by creditors you don’t know, your information has been compromised—and yes—you are responsible for it, unless you take action to notify the creditors and prove that you did not take out the loan or credit or make the charge.

If you are affected, it may also be beneficial to order a credit freeze, in which case you will need to call all three credit bureaus. However, this will leave you unable to open new lines of credit, such as loans, and it may cost some money directly out-of-pocket. Consumers may place, temporarily lift, or remove a security freeze to an Equifax Credit File by going to There is no charge for this (even though originally some people were charged and are to be refunded). To call for a Credit Freeze:

TransUnion: 1-888-909-8872
Equifax: 1-800-349-9960
Experian: 1-888-397-3742

This is a way that you can better control who accesses your credit file. You must release the security freeze to apply for credit. While this is helpful, will this solve the problem? Probably not. This is because if hackers have all of an individual’s personal information, they also have all the information needed to unfreeze an account. Think about the last time you forgot your password or user id and contacted your bank or on line provider to reset your password. What did they ask you for? Probably your social security number (or a part of it), mother’s maiden name, birth date or other information, much of which these hackers now have if you were a victim of this breach.


Equifax has offered a free service, called TrustedID Premier, to all those affected by the breach, for one year. The service includes (1) copies of your Equifax Credit Report; (2) 3 Bureau Credit File Monitoring, including automated alerts of key changes to your Equifax, Experian and TransUnion credit files, (3) Equifax Credit Report Lock, which allows you to prevent access to your Equifax credit report by third parties, with certain exceptions; (4) Social Security Number Monitoring, which searches suspicious web sites for your Social Security number; and (5) Up to $1 million in ID theft insurance, which helps you pay for certain out-of-pocket expenses in the event you are a victim of identity theft.

Should you wish to enter legal proceedings for claims directly related to the breach, Equifax has waived the arbitration clause specifically for their TrustedID Premier, meaning you will not waive your right to enter legal proceedings. Originally, consumers were required to waive their right to sue and agree to mandatory arbitration. Equifax has reversed this decision and will not enforce it, even if you already signed up and agreed to it. You can also opt out of all arbitration clauses by sending a written notice via mail or overnight delivery service, which states that you are opting out of all arbitration clauses. Timely written notice of opt out must be delivered to Equifax Consumer Services LLC, Attn.: Arbitration Opt-Out, P.O. Box 105496, Atlanta, GA 30348, and must include your name, address, and Equifax User ID, as well as a clear statement that you do not wish to resolve disputes with Equifax through arbitration. If you decided to opt out, I recommend that you send this notice via Certified Mail. Return Receipt Requested or overnight delivery service, so you have a record of delivery.

Should you accept their offer? You may want to consult with your attorney about this. Provided you are not prevented from taking other legal action if you decide to, you may want to consider it. However, the question remains—can you trust a company to protect you when they already failed to protect your data and notify you of the breach in a timely manner? Or might other credit/identity theft services be a better option, even if you have to pay for them? If you decide to use another vendor, be sure to find a service that not only does credit monitoring, but also provides identity protection insurance. I’m reminded of the commercial where the patient in the dentist chair is told he has a cavity and then the dentist walks out and the patient says “Well aren’t you going to fix it?” and the dentist says “I am a dental monitor. I just let you know you have a cavity. You have a cavity.” Credit monitoring without identity theft insurance protection to help you fix issues and pay expenses for losses incurred is like the dentist identifying the cavity but not fixing it. It’s not that helpful.


You might wonder if your accounts with Paul Winkler, Inc. and the financial firms we work with have been affected. This hack has not affected any of our accounts at this point. Paul Winkler Inc. (PWI) and our servicing financial entities have many safety protections in place. First and foremost, your accounts are held at an independent third party custodian. In addition, PWI and the financial firms we work with use security protection on our systems designed to help protect against unauthorized access. PWI does not have discretionary authority on any account which would enable us to enter into your accounts and place trades or take out money without your permission. We also have certain cross checks in place to help further protect your information in case we have reason to believe that a request on your accounts seems irregular. For example, nearly every distribution must be facilitated with a signed LOI, and there is a system in place to follow up on items flagged for potential fraudulent activity. Keeping your money and your confidential information safe is of utmost importance to us.


Despite the many precautions we and others take on your behalf, it is impossible to guarantee that somebody has not or will not some day hack any of your accounts on line. Therefore the best thing you can do is be more diligent than ever when it comes to personal accounts and protecting your information. Signing up for the Equifax or other credit/identity theft protection insurance is a start. But even if you do this, it is important for you to consistently monitor bank accounts and credit activity for anything suspicious. Be wary of clicking links via email or social media claiming to originate from Equifax, as thieves are likely try to further capitalize on the event through malware. Make sure you have anti-virus and anti-malware protection on your computer.

Please do whatever is necessary to protect your identity! Take the breach seriously. Your social security number alone being stolen makes it very simple for someone to open a line of credit in your name, putting you in a very bad place for getting loans, a mortgage, a new apartment, a new car, a new house, or even a new job.

Anne Sawasky, Esq.
Chief Compliance Officer
Investor Coach
Business Succession Planning Advisor

3050 Business Park Circle Suite 503 Goodlettsville, TN 37072
Tel: (615) 851-1950 Mobile: (920) 915-5510
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Paul Winkler, Inc. does not provide tax or legal advice. All decisions regarding the tax or legal implications of your investments, or client investments, should be made in consultation with an independent tax advisor or attorney. The views expressed herein are those of the sender only, are not intended to constitute an advertisement for Paul Winkler, Inc., have not been reviewed as firm marketing literature and should not be used or distributed to any other person as such. Firm marketing literature is available on the firm’s website or upon request. Nothing in this email is designed to meet the specific needs of an individual investor or intended to be used as a basis for investment decisions.

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