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Category: Financial Products

Paul Mershon: “Where to Invest $1 Million Right Now”

March 10, 2021

 

Paul Mershon Was Featured in Bloomberg’s “Where to Invest $1 Million Right Now”

On March 5, Bloomberg updated their article, “Where to Invest $1 Million Right Now,” featuring six national experts offering investment ideas for a post-pandemic future, including Paul Mershon, CFP®, CLU, ChFC®, RHU and Founder & CEO of Silverhawk Private Wealth.

As Bloomberg put it, “the Covid-19 pandemic and its impact have dominated investment ideas over the past year, but with more than 270 million vaccine shots given and lockdowns easing, expectations are rising for a return to a new normal. With that in mind, our panel of experts recommend infrastructure stocks, mobile-home parks and equities to fulfill energy-storage needs. There are also more unusual and potentially fun-filled opportunities, for those fortunate to have the money to invest: vintage Mercedes, soccer jerseys and music royalties.”

 

Paul Mershon’s commentary was as follows:

We see a lot of attraction in real estate for manufactured housing — or what you might call mobile home parks. It’s an area many institutions are starting to wake up to. The returns are ridiculous. Over the last decade, investors have seen appreciation as high as 600% to 700%.

When you look at the demographics, there’s logic to it. Baby boomers have had a huge economic impact during each decade of their life. Over the next 12 years, the youngest of the boomers are turning 65, so 20% of the U.S. population will be over 65. That means a high percentage of people selling homes to capture liquidity and becoming renters, or seeking lower-cost housing. A mobile home is a third of the cost of a stick-built house. The average tenure in these parks is 15 years and occupancy rates are high nationwide. Renters tend to be older, fiscally conservative and capitalized adequately and you don’t see problems with rent abatement.

There are about 50,000 of these manufactured home parks in the U.S., but there’s only been about 10 developed in the past decade. Most city councils aren’t very excited about a brand new trailer park and there are zoning restrictions so it’s pretty hard to build a new park. Those that remain dominate the space. Large investors like Zell’s Equity LifeStyle Properties and Sun Communities still only control 5-6% of the market; 95% are mom and pop operators. It’s highly fragmented. That’s the definition of opportunity for the private-equity world.

Another way to play: Investors should consider the Mercedes Benz 300 SL. These models were manufactured between 1955 and 1961 and really represent the gold standard for classic car collectibles. If the car market migrates higher, they will be some of the first to rise in value. If the market declines, these models will typically experience only about 30% to 50% of the general market decline. And the Mercedes is recognized worldwide and followed by the global collectible market, not just limited to U.S. buyers, so that serves to increase demand.

Depending on condition, they tend to sell for about $800,000 to $1,500,000 most years. We’ve seen a drop in price in the last 24 months of about 15% to 20%, as we have across the spectrum of classic-car collectibles, so this may present a great entry point assuming you can find a willing seller.

 

Read the entire article here:

https://www.bloomberg.com/features/how-to-invest-a-million-dollars/

September is Life Insurance Awareness Month

September 24, 2018

Risk Management Is About More Than Your Investments

A lot of financial services professionals talk about “risk” when it comes to your stock market investments. But risk can encompass more than your investment risk tolerance. The broader definition of financial risk is the possibility of loss from any unexpected life event.

For instance, what will happen to your family’s income if one spouse passes away, becomes disabled or unable to work, or needs long-term care? What happens to your kids’ education fund, or your retirement? Risk management in this case means shifting risk of financial loss from adverse events to an insurance company in order to protect your family’s assets and lifestyle.

New Innovations in Life Insurance

First and foremost, life insurance offers financial protection to your family by helping mitigate the risks that you face from life’s unexpected tragedies, as it has done for hundreds of years. But in the last decade, life products have expanded and improved to offer much more.

Many new types of insurance policies and policy rider innovations have come about in order to answer the needs of Baby Boomers–10,000 of whom are turning 65 every day and will continue to do so until 2030.1

Life insurance companies are now covering a whole host of pre-retiree and retiree risks with permanent universal insurance policies and fixed annuities which offer features like:

1) Lifetime income in retirement

2) Spousal survivorship benefits

3) Long-term care coverage if needed

4) Disability coverage if needed

5) Income tax advantages

6) Tax-advantaged wealth transfer or death benefit

Universal Life Insurance or Fixed Annuities as Part of the Retirement Portfolio

In addition to the many retirement risks they can help address, new types of life insurance policies and fixed annuities may have other attractive advantages. Some of the newest policies offer the chance for growth by earning interest linked to market performance. And this potential growth comes with guaranteed* principal backed by the financial strength of the insurance carrier.

These are just some of the reasons more and more financial advisors are including permanent life insurance and/or annuities as part of the retirement portfolio itself.

Let’s Talk About Your Family

For help with your financial planning needs, please reach out to your personal wealth advisor at Silverhawk Private Wealth.

Silverhawk Private Wealth – Headquarters
21090 N. Pima Road
Scottsdale, AZ 85255
Irvine Office 
949.207.6036
Seattle Office
1601 5th Ave Suite 1100
Seattle, WA 98101

 

1 Pew Research Center “Baby Boomers Retire.” http://www.pewresearch.org/fact-tank/2010/12/29/baby-boomers-retire/ (accessed September 10, 2018).

This article is for informational purposes only and is not intended to provide any recommendations or tax or legal advice. We encourage you to discuss your tax and legal needs with a qualified tax and/or legal professional.

*Guarantees and protections for fixed or fixed indexed annuities and/or universal or indexed universal life policies are subject to the claims-paying ability of the issuing insurance company. These policies are contracts purchased from a life insurance company. They are designed for long-term retirement goals, and also intended for someone with sufficient cash and liquid assets for living expenses and unexpected financial emergencies, including, for example, medical expenses. Depending on the product, they may include surrender charges, rider charges, life insurance premium charges and/or other fees as detailed in the individual contract.

An indexed annuity or indexed life insurance product is not a registered security or stock market investment. As such, it does not directly participate in any stock, equity or bond investments, or index. Gains on indexed accounts are based on participation rates and other conditions offered by the issuing insurance company. Depending on the nature of funds used to purchase annuities, withdrawals may be subject to income tax and withdrawals before age 59½ may be subject to a 10% early withdrawal federal tax penalty.

 

A Brief History of Annuities

June 14, 2017

With June designated as “Annuity Awareness Month” one can argue that many Americans are aware of the word “annuity” but may not understand how annuities actually work.

The annuity concept has been traced back to the Roman Empire. In return for their service, soldiers and their beneficiaries would receive annual payments for life known as “annuas,” the basis for the word annuity.

In the 17th century, these contracts were structured in the form of a “tontine” by feudal lords. Investors would contribute to a large pool of cash and receive annual payments for life. Upon death the payments ended and the remainder was redistributed among the group. If you were lucky enough to outlive everyone else in this arrangement you received the balance of the pool.

Today

Despite their simple structure in the beginning, annuities have become increasingly sophisticated over time. When you invest in something, typically you assume all the risk. Since annuities are not investments, but are contracts with an insurance carrier, they allow you to transfer investment risk to the carrier. The risk you assume is that annuity payouts are subject to the claims-paying ability of the insurance company. (The only exception might be “variable annuities,” which are linked to a market index and rise–and fall—in value with the index.)

Recent innovations like fixed indexed annuities allow for growth in relation to an index, but the owner is protected from loss of principal if the index falls. With people living much longer and pensions quickly becoming a thing of the past, annuities can help provide income throughout retirement without the fear of running out of money. If you are considering the purchase of an annuity, it’s important to speak with a financial professional who understands them, and can explain the fine print of an annuity contract.

Contact your personal wealth advisor at Silverhawk if you have questions about annuities. Silverhawk Private Wealth has offices in Scottsdale, AZ, Irvine, CA and Seattle, WA to serve you.

Curious about fixed indexed annuities? Here are a few facts about them.

June 16, 2016

In our commitment to making our clients’ money go further, Silverhawk is constantly monitoring the economic environment, including government regulations and taxation policies as well as the changing landscape of financial opportunities.

FIAs are just small one tool in a complete arsenal of strategies we use to help you. Here are some of the benefits of fixed indexed annuities, and why we sometimes recommend them as part of a balanced portfolio.

  1. Protection and safety

A lot of people lost money in the stock market in 2008. However, no one with an FIA lost money. Some financial experts believe that FIAs more closely approximate bonds, CDs or savings accounts in terms of safety, even though they are not backed by the government. Fixed indexed annuities are backed by the insurance company which underwrites them, and unlike variable annuities, do not directly participate in the stock market. Some of the insurance firms offering FIAs have been in business for more than 150 years.

  1. Tax-deferred growth

Much like 401(k)s, traditional IRAs or other defined benefit plans, some FIAs earn interest which is not taxed until withdrawn. In fact, many of the same tax rules apply.

  1. Interest and accumulation potential

Too many baby boomers and retirees have money sitting in CDs or savings accounts where they’re typically earning only 1-2% interest. Annuities offer the chance to protect principal while participating in a higher return rate linked to the market.

  1. Customization

There are attractive annuity riders which offer lifetime income, long-term-care coverage and joint or spousal survivorship, in addition to many other options.

It is important that you work with a financial advisor to develop a complete financial plan. At Silverhawk Wealth Management, we have more than 50 years of combined experience advising high-net-worth individuals, closely-held corporations, physicians, professional athletes and celebrities, tax attorneys and CPAs. Our mission is to plan, grow and protect the assets of high-net-worth clients.

Email or call us for more information:  Silverhawk Wealth Management in Scottsdale

Like and drop us a comment on Facebook:  https://www.facebook.com/SilverhawkFinancial/

 

If you’d like to read more about FIAs, download this whitepaper: FAQs for FIAs: What Is a Fixed Indexed Annuity?