STAFFORD WELLS | personal wealth management

April 2012

Dear Clients & Friends,

The recent issue with Goldman Sachs and its “Muppet” clients compelled me to address this issue once again.  I believe that every individual who works with an advisor understands the potential conflicts of interest that exist when a firm is allowed to put its interests ahead of its clients. This does not make brokers “bad,” but one should, at the very least, be aware of the possible issues concerning such a relationship. I discuss this below in greater detail.

In addition, the topic of buying real estate seems to be one of the most common discussions on investors’ minds at this time. If you are considering buying a home, you may want to think about the not-so-hidden costs of higher mortgage rates. And if you are thinking about investing in a home, you may want to consider doing so through an IRA.

Moral Fiber, and How to Avoid Being a Muppet With Your Investment Advisor
A recent article in Crain’s Chicago Business Magazine commented that Goldman Sachs as the “arguably the most storied investment bank on Wall Street,  and has been compared to a money-sucking vampire squid called the evil empire of finance.”  Just recently, one of its (Goldman’s’) directors of the bank resigned with an editorial accusing the bank of losing it moral fiber and putting profits ahead of customer interests.  

These accusations are no surprise for registered investment advisors (RIA’s) such as myself. We have been getting clients that are tired of the broker-client structure for years.  Many of these clients have been invested in products that generate big fees for the broker and his or her firm and tiny returns for the client. ... Read More


Consider “Moving” Quickly on Your New Home Purchase. Here Is Why.
You want to buy a house for $625,000, and you can make a down payment of $125,000 (20 percent).  What happens if you wait too long and mortgage rates go up by the time you secure financing?

The cost of your home could rise by $106,920.

In today’s real estate market, we often think the benefit of waiting, is that the price of our dream home will decline even more. The home price is often the major factor in the decision whether to make a purchase. It is also important to factor in the cost of financing, as it very much affects what you ultimately pay for your home. ... Read More


Can you put your new home in an IRA?
I get that question often  Your IRA cannot purchase any real estate that you plan to live in personally or that will be used as a residence of your immediate family. However, the IRA can be used to purchase real estate investment properties or vacation homes.

The money that is collected each month from your rental or vacation home is deposited back into your IRA. The income that flows in from investment properties held in IRAs grows tax-free and can be distributed usually at age 59 1/2

In order to take advantage of this type of financial vehicle, you must use a self-directed IRA. This type of IRA does carry restrictions. The property must be used purely as an investment, with all the income going directly back into the IRA. The owner may not occupy the home or even use it as a vacation property. The owner can manage the property, doing maintenance and supervising the renting, or can hire a property management company which would be paid for out of the IRA. ... Read More

As always, thank you for your continued support, and please contact me if I may be of any assistance.

My Best,

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