Bill’s By The Number$

Posted by: Kim Vo | Posted on: May 22nd, 2017 | 0 Comments

1. SINCE NOVEMBER – In the 132 trading days since the 11/08/16 November election, the S&P 500 has gained +12.6% (total return). A typical calendar year has 252 trading days. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. MORE MONEY OR MORE TIME – A 30-year old individual investing $523 at the beginning of every month in a pre-tax account earning +8% annually would accumulate $1 million by age 60 assuming the monthly investment is increased +3% per year. A 30-year old will need a monthly investment of $730 (assuming a +3% increase per year in the monthly investment) if the pre-tax account earns just +6% annually in order to accumulate $1 million by age 60. A 30-year old individual investing $523 at the beginning of every month in a pre-tax account earning +6% annually would accumulate $1 million by age 64 and 4 months assuming the monthly investment is increased +3% per year (source: BTN Research).

3. MANY YEARS, NO CHANGE – The Social Security payroll tax rate paid by employees has been 6.2% since 1990 except for a 2% reduction in the rate during the 2 years of 2011-12 (source: Social Security).

4. MORE TAXES – Proposed House legislation (“Social Security 2100 Act”) by John Larsen (D-CT) would increase the Social Security payroll tax rate paid by employees from 6.2% to 7.4%, to be phased in over 24 years from 2019-2042. Larsen’s plan would also phase out the current $127,000 ceiling on earnings subject to payroll taxes so that by the year 2047 all earnings would be taxed (source: Social Security Office of the Chief Actuary).

5. ON YOUR OWN – 44% of American private sector workers (i.e., 55 million of 124 million private sector workers) lack access to any employer sponsored pre-tax retirement plan (source: AARP).

6. BIG PROMISES – The unfunded pension liability of the city of Chicago is estimated to be $27 billion, an amount equal to 11 years worth of the city’s current annual tax revenue (source: City of Chicago).

7. REDUCE GLOBAL SUPPLY – OPEC leader Saudi Arabia and non-OPEC member Russia announced plans on Monday 5/15/17 to extend the oil production cuts of 1.8 million barrels a day that were originally agreed to on 11/30/16. The supply cuts will now continue to March 2018. Increased oil production from the United States since late November 2016 has muted the production cuts’ intended impact to raise oil prices. Crude oil closed at $49.44 a barrel on 11/30/16. Crude oil closed at $50.53 a barrel on Friday 5/19/17 (source: BTN Research).

8. STILL BROKE – The finance ministers of the 19 Eurozone nations meet today (Monday 5/22/17) in Brussels, Belgium. On the agenda is the topic of debt forgiveness for Greece. Athens has received 3 bailouts in the last decade – May 2010, February 2012 and April 2016 (source: BTN Research).

9. PART TWO – When the CBO originally “scored” the AHCA on 3/13/17, they estimated that 14 million more Americans will be uninsured in 2018 under the AHCA than under the ACA, a combination of people forgoing coverage due to no forced mandate and others dropping their coverage due to higher premiums. The CBO is expected to release its revised “scoring” of the updated AHCA legislation on Wednesday 5/24/17 (source: CBO).

10. NO DEDUCTION – The deductibility of mortgage interest expense reduces individual income taxes by $77 billion per year. Canada and Australia do not allow its taxpayers to deduct mortgage interest expense (source: IRS).

11. GRASS IS GREENER – 34% of American workers anticipate that they will have a different job with a new employer within 12 months (source: Met Life US Employee Benefit Trends Study).

12. HERE TODAY, GONE TOMORROW – 23% of American workers surveyed in April 2017 are concerned about losing their jobs (source: Fannie Mae).

13. I DON’T SEE IT – A painting sold for $110.5 million at Sotheby’s in New York City on Thursday 5/18/17. The art was sold for just $19,000 in 1984. The staggering sale price for the art equates to a +30% annual rate of return over the 33 years from 1984 to 2017 (source: Sotheby’s).

14. MIDTERMS – Democrats lost 63 House seats and 6 Senate seats in the November 2010 elections, i.e., 2 years into the Obama administration’s first term in the White House (source: Congress).

15. NUMBERS – The New York Yankees retired Derek Jeter’s # 2 on 5/14/17. The Yankees are tied with the Boston Celtics with 21 retired numbers each, the most in professional sports. The Yankees’ 21 retired numbers were worn by 22 different players. Both Bill Dickey and Yogi Berra had their # 8 jersey retired (source: MLB).

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