HigH income guide

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Second edition

HigH income guide

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Discover the Powerful Secrets to Achieving Superior Returns

revised and expanded for 2013

by andrew packer & the financial brain trust

Second edition

w w w.humanixbooks.comBoca Raton, FL, USA

Humanix BooksAftershocks High Income Guide 2013 Humanix Books, 2nd Edition2012 by Humanix Books, 1st EditionA Humanix Books publicationAll rights reserved

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ISBN Paperback: 978-1-63006-004-6ISBN (eBook) 978-1-63006-006-0

LCCN 2012019073

contents. . . . . . . . . . . . . . . . . . . . . . . . . . introduction . . . . . . . . . . . . . . . . . . . . . . . .

Retirement Has Become a Pipe Dream for Millions of Americans

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . part one . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Todays Retirees Face Significant Headwinds

chapter oneThe Stealth Tax Takes the Biggest Bite of All ...................................... 3chapter twoBankers, Can You Spare a McMansion? ............................................... 7chapter three One Nation, Under Massive Debt, With Spending and Entitlements for All ............................................................................ 11chapter four Social Insecurity: Americas Pension Plan Currently Running in the Red ............................................................................ 15

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . part two . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Why Income Investments are the Key to Retirement Success

chapter fiveThe Largest Factor in Investment Success ......................................... 21chapter sixThree Dividend Giants Safe for Income ............................................ 25chapter sevenBecome a Landowner Without the Hassle: Real Estate Investment Trusts ............................................................. 33chapter eightBuilding Wealth the Rockefeller Way: Use the Corporate Structure That Pipelines Use .............................. 39

chapter nineThe Preferred Way to Invest for High Income and Low Risk .......... 45chapter tenThese Funds Have You Covered for Alternative Sources of Income ............................................................................... 49chapter elevenPublicly Traded Private Equity Offering Fat Yields: Business Development Companies ................................................... 55chapter twelveIncome Outside the U.S. Dollar: Currency Plays Offering Higher Interest Rates .......................................................................... 61

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . part three . . . . . . . . . . . . . . . . . . . . . . . . . . . .How to Get Your Retirement Income Portfolio on Track

With a Three-Step Plan to Generate Substantial Income in Your Retirement Years

chapter thirteenA Three-Step Plan: Step #1: Setting Up an Income Plan Thats Right for You ..................................................... 69chapter fourteenStep #2: How You Can Turn $50,000 Into $1 Million ...................... 73chapter fifteenStep #3: Stay on Course to Power Your Retirement With Respected Guidance ........................................................................... 77chapter sixteenBonus Step: Stay Continually Informed in a Continually Changing Investment World ........................................ 79chapter seventeenBonus Chapter Earn and Extra 20 Percent Annually .................. 83appendix aGetting Started with Investing for High Income ............................. 87conclusion ........................................................................................ 91about the author ........................................................................... 93

Retirement Has Become a Pipe Dream for Millions of Americans

introduction

Typically, Americans have relied on three financial sources to se-cure their golden years: Social Security, retirement accounts, and the value of their homes when they sell to downsize.

This diversification provided for a safe, sturdy, and worry-free re-tirement, akin to the three legs a stool needs to be stable.

Unfortunately, that nest egg people counted on is no longer there. Social Security benefits are designed only to provide a minimum standard of living, and have barely increased over the past few years. Retirement savings are not as high as most had hoped due to a lost decade in stocks and low interest rates on bonds. Home values, typ-ically the single largest source of wealth for middle-class America, have plunged and arent likely to rise anytime soon.

This problem cant be fixed with a few weekends working over-time. The job market remains weak, and many are simply hoarding cash out of fear of unemployment (or the next market crash).

Many baby boomers set to retire already have deferred for a few years (if theyre lucky). Thats probably because they dont have the kind of nest egg they need to retire. Its shocking how little the aver-age boomer has saved for retirement. Its nowhere near $1 million, a number that could fund a middle-class lifestyle for a 20-year retire-ment. Its nowhere near half that, $500,000, which, invested properly could do almost the same.

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The average boomer has saved less than one years salary for retirement.

A 2011 survey by Wells Fargo revealed that the average boomer has about $29,000 saved up for retirement, down from $34,000 before the credit crisis. Most boomers will have to find a job they love, because theyre not leaving the workplace anytime soon.

Whats worst, a 2013 report in the Washington Post reported that millions of Americansmore than one in fourare tapping into their retirement accounts to pay their current bills. And thats three years after our most recent recession ended.

Meanwhile, for those fortunate and frugal enough to build up a substantial nest egg, typical sources of retirement income such as bonds and CDs have meager yields.

In some cases, the yields on government TIPS (Treasury Infla-tion-Protected Securities) have been negative, meaning investors bought the bond knowing theyd take a loss!

How we got here is no surprise. Low yields on bonds and CDs are just part of the problem. Investors also face the challenge of ul-tra-low interest rates set by Federal Reserve Chairman Ben Bernanke. And thats to say nothing about Washingtons insane, out-of-control spending, sending our debt to exceed $17 trillion. Now the threat that our Federal debt is so high, the United States. has no choice but to default on its debts through a massive inflation.

In this report, I hope to give you the tools you need to save your re-tirement. How? Primarily by showing you little-known, income-gen-erating investments that you can buy right now. Thats because, whether youre near retirement or not, income plays a driving role in your ability to retire with the lifestyle you want.

Some income-producing assets turned out to be toxic, like sub-prime mortgage bonds that nearly brought down the financial sector in 2008. So its not just income that todays investors need, its safe income.

The investments in this report are designed to generate loads of cash in spite of the ultra-low interest rates currently set by the Feder-al Reserve. Some investments even kick out monthly dividend pay-ments, unlike bonds. Others have exposure outside the United States, giving you diversification away from the dollar.

Adding a mix of these investments can reduce risk in your portfo-lio, substantially boost your and, in some cases, provide capital gains.

introduction | ix

But before we get to that, I need you to understand the current investment horizon.

Americans arent just being hit with poor returns in stocks and housing. Theres a political angle, including the greatest secret that politicians and central bankers dont want to mention: a stealth tax that destroys returns.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .oneTodays Retirees Face

Significant Headwinds

chapter 1The Stealth Tax Takes the Biggest Bite of All

The biggest tax you pay isnt on your 1040 form. You wont find it listed with your property at City Hall. It doesnt show up on any of your utility bills, or on your brokerage statement.

Its a stealth tax quietly eating away at all of your wealth, not just your house. It hits your investments. It hits you at the gas pump. It hits you at the grocery store.

This tax is inflation. And it hits rich and poor alike. If politicians in Washington wanted to stop it, they could. Congress could fold the Federal Reserve. The president could order the Treasury to stop print-ing physical currency. But the lure of easy money and a managed economy promised by the Federal Reserve is too great.

Were told that this inflation isnt a concern. The Federal Reserve insists that their decisions to prop up asset values arent leading to inflation. In fact, were told that theres nothing wrong with a 2 to 3 percent inflation rate per year. Not only that, were told thats a good thing, because it means we wont have deflation, the perceived evil of falling prices.

I guess central bankers never get a thrill buying something on sale!In all seriousness, the Feds policies couldnt be more destructive.Thats because inflation erodes the purchasing power of the dollar.

But beyond that, its the reason why the price of everything, from shoes to groceries to gas to haircuts, costs more than it used to. Along

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the way, infl ation has been so strong and pervasive that the govern-ment has taken the dollar off a gold backing, and adjusted the way infl ation is measured to understate its eff ects.

A Destructi on-Compounding MachineMost investors are familiar with the concept of compound interest. Albert Einstein is attributed to calling it the most powerful force in the universe. Simply put, one dollar invested today, with the interest re-invested, performs substantially better than if you dont re-invest (more on that later).

Infl ation is also a compounding force. Thats because the Federal Reserve targets 2 to 3 percent infl ation annually. While that doesnt seem like much, over time its quite destructive.

Over the past quarter century, for example, a period that included falling interest rates and a prolonged period of low infl ation, the value of the dollar still fell by half 50 percent. And thats according to the government-adjusted statistics.

Since 1971, when Nixon offi cially severed all ties that the dollar had to gold in the international markets (gold was still banned domestical-ly), the dollars purchasing power has plunged more than 80 percent.

Dollars purchasing power has plunged as currency circulati on has exploded!

source: dollardaze.org

United States Dollar

900

800

700

600

500

400

300

200

100

0

100

80

60

40

20

0

Billi

ons

of D

olla

rs in

circ

ulati

on

1971

dol

lar p

urch

asin

g po

wer

1971 1975 1979 1983 1987 1991 1995 1999 2003 2007

Percentage of U.S. Dollars Value

U.S. Currency in Circulati on

chapter one | 5

The farther back your starting point, the greater destruction of purchasing power. In fact, what used to cost only $1 in 1870 now costs more than $17 today. Look at the chart above. Youll see Im not joking when I talk about the destructive tax of infl ation

Or, to look at it another way, a mere six cents in 1913 would buy one dollars worth of goods today.

The sad irony is, this destruction of value couldnt have been made possible without the creation of the Federal Reserve and the aban-donment of the gold standard. How is this ironic? One of the Feds stated goals is to foster price stability.

This goes beyond a simple oops. The destruction of the dollar is clear. It likely wont stop anytime soon. For the average American looking to retire, it should be a big, red, burning fl ag.

Its clear the Fed has been too infl ationary, especially for the last decade.

When measured in the performance of gold and silver, hard assets that used to back paper money, the decline of the dollar in the past

Persistent infl ati on has sent consumer prices up over 17-fold since 1870.

SOURCE: DShort.com

Fourteen Decades of Price In ati onAdjusted to the 1871 Dollar Value

$20

$18

$16

$14

$12

$10

$8

$6

$4

$2

O cial in ati on based on the BLS Consumer Price IndexIn ati on esti mate before creati on of Bureau of Labor Stati sti cs

$1=$1

1880 1900 1920 1940 1960 1980 2000 2020

Federal Reserve opens for business: 1914

Roosevelt abandons the gold standard: 1933

Nixon closes the gold window: 1971

BLS began changing methods to calculate cpi: 1982

$17.76

6 | aftershocks high income guide

10 years has been staggering. Gold has surged from a low of $250 per ounce to more than $1,500. Silver has moved from a low of $5 to more than $48 per ounce.

To some investors, gold and silver make sense as long as interest rates are so low, since the metals themselves dont pay a dividend. Add in inflation rates greater than zero percent, and its clear we havent seen the top in precious metals prices yet.

Thats because precious metals really arent rising; its the dollar thats falling.

As the dollar goes, so goes your prospect for a sound retirement in traditional, dollar-based assets like bonds and annuities. Even stocks, when adjusted for inflation, arent the fast-paced source for generat-ing wealth that many think.

And, of course, the most relied-upon retirement asset of all, housing, is still in the throes of a free-flowing-dollar-induced real estate bubble.