Category Archives: Financial Advice

‘Tis the Season for…Taxes? 7 Tips to Prepare for the Inevitable

It’s that time of year once again, fellow taxpayers. Time to listen to the endless drone of Christmas music, time to fret over what to give whom, time to blow fuse or two on your home’s electrical grid trying to outdo the neighbor’s light show, time to see if you will trigger the AMT this year.

Yes, the Holiday Season is upon us once again, and, as if we didn’t have enough on our plates (both literally and figuratively), the remaining 20 days of December represent the final countdown to a manmade deadline for making and executing any personal and corporate decisions which may have a direct impact upon how much tribute one wishes to voluntarily report and render to their local and federal tax farm.

What might those decisions entail? Or, more precisely, what can I do (within the confines of the income tax code, of course) to lower my 2014 income tax burden?

2014 IRS Estimated Payment form
Is the IRS on your Christmas list?

The answers to the above questions are truly personal, as tax advice, like medical advice, depends entirely upon the individual’s history, present circumstances, and future plans. Here at The Mint, we highly recommend consulting with a qualified income tax professional that can sit down and give one a proper assessment of their situation and help them plan now in order to take the proper steps to help minimize their current and future tax burden.

Here are 7 tips to help you and your tax professional prepare your 2014 income tax return and, more importantly, estimate your tax liability while you are still in 2014 and can theoretically do something about it:

  1. Gather state and federal returns from the prior two years: This will give your tax professional a baseline, if you will, of your income tax situation and let them know, often at a glance, what steps can be taken to help minimize your liability.
  2. Think about any life changes you have had in 2014: Did you get married? Have a baby? Send a child off to college? Sell or refinance a home? Relocate for work? All of these actions, and many more, may have an impact on your tax bill.
  3. Gather documentation to support income and deductions: This may seem basic, but why not prepare for a potential IRS audit before it happens? Maintain any W-2s, 1099s, Investment account statements, and documentation related to deductions such as charitable donations, mortgage interest statements, and child care expenses and keep them in a file along with the corresponding tax returns. Viola! Should the IRS call you, you at least have something to back up your numbers.
  4. Know the basis of your stocks: If you own corporate or mutual fund shares, a very important data point in terms of tax preparation is how much was paid for it. As many people hold shares for relatively long time horizons, it is best to keep a running file that is updated with each purchase. Your broker should be able to get this information for you if you have not kept track of this to date.
  5. Measure your home office: The home office deduction is taboo in some circles as it is seen as a red flag for audits. However, if you legitimately have a home office, you could be leaving a decent amount of money on the table if you do not take it.
  6. Contribute to qualified retirement accounts: If you have extra money and sense that you may be staring a tax liability in the face, consider funding an IRA or contributing more to a 401(k) plan before year-end.
  7. Consult a trusted tax professional: As we stated before, everybody’s situation is unique when it comes to income taxes. While everyone has to file income taxes, we each have our own, unique financial fingerprint. A trusted tax professional can help you not only catch missed deductions now, they can help you to plan for future events that, if not properly planned for, could trigger large income tax liabilities.

In the midst of overeating, overspending, and generating outrageous electric bills in the name of the Holidays be sure to take a moment to consult a trusted tax professional. Who knows? Making a few of the right moves now may just pay for some of those Holiday bills come April.

Are you Street Smart?

10/24/2014 Portland, Oregon – Pop in your mints…

Are you teachable and willing to learn new things?  Are you interested in making better financial decisions? Are you interested in making more money? Then you may just be ready for Business Street Smarts.  What is Business Street Smarts?  According to the marketing copy, it is a program which will allow us to 1) Know our Finances, 2) be Efficient, 3) Control our taxes, and 4) Prevent Fraud.  What business owner wouldn’t be interested in these skills?

Best of all, it is a fireside chat with a former colleague or ours, none other than Mike Field, CPA, JD.  For those who don’t do acronyms, he is an accountant and a lawyer.  Despite these handicaps, Mike is a fun guy, and rivals Tom Cruise in the category of person producing the most dental glare when they smile.  Here he is laying out the virtues of Business Street Smarts:

We have just completed the first audio portion of the downloadable MP3 series, which is a lesson in establishing “hooks” for memory retrieval.  In this section, Field shows you how to organize Information in your mind so that you can instantly retrieve it.  He employs a unique teaching technique to achieve this goal.  The technique seems basic, and it is.  The jest of it is to use the familiar and join it, mentally, with the unfamiliar.

At the end of the first day, we are aware that we will do the following over the course of the next 15 days in terms of sections:

1) Build a Foundation of Primary Financial Statements, Balance Sheets, Income Statements
2) Learn how to analyze these statements
3) Understand Business Taxes and the interplay with one’s personal taxes
4) Learn how to detect and prevent Fraud, as well as some basics in bookkeeping

However, all we know at this point is our way around an unfamiliar house with some incredibly strange things involving Olympic gymnasts, Count Dracula, and a cat happening in the front yard, on the porch, and in the living room.  Yet somehow, it all makes sense.  Will it translate into better financial and business decisions for The Mint?  Stay tuned.

If you are as intrigued as we are and want to learn more, visit: http://www.businessstreetsmarts.com/ for more information on this unique and entertaining program.

And by the way, don’t believe the hype on deflation, for the debt based monetary system cannot tolerate it.  The economy is going gangbusters, and will continue to until further notice.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for October 24, 2014

Copper Price per Lb: $3.06
Oil Price per Barrel (WTI):  $81.01

Corn Price per Bushel:  $3.53
10 Yr US Treasury Bond:  2.27%
Bitcoin price in US:  $358.50
FED Target Rate:  0.09%
Gold Price Per Ounce:  $1,231

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.9%
Inflation Rate (CPI):   0.1%
Dow Jones Industrial Average:  16,805
M1 Monetary Base:  $2,747,700,000,000

M2 Monetary Base:  $11,514,900,000,000

What to do if You are Laid Off in Portland, Oregon Circa 2014

10/22/2014 Portland, Oregon – Pop in your mints…

Approximately one year ago, we had the good fortune of being laid off from our most recent employer of seven years.  We say good fortune as the first time this happened to us, after seven years at our first employer (on September 10, 2001, which is a story for another day) it marked the beginning of what continues to be the greatest adventure of our lives.

Staying in one place is comfortable, one knows what to expect, what to do, more or less what the rules are.  It is easy to see why many people get a job and then go on autopilot for 30 years.  However, staying in one place is also dangerous in that one runs the risk of stagnating to the point that they unwittingly join the ranks of the walking dead.

Humans desire to be comfortable, but it is only to the extent that they are uncomfortable that there is any hope for them.  Margie Warrell, writing at Forbes, sums up this sentiment well in her April 2013 article, Why Getting Comfortable with Discomfort is Crucial to Success.

If you have just been laid off, you are likely uncomfortable, which is good, because there is hope for you.  There will be time for that hope to blossom and trust us, it will.  However, if you have just been laid off from a long time employer, chances are that what you feel at the moment is intense discomfort laced with panic.  This is normal, and should drive you to take decisive action.

Flag of Portland Oregon
Laid off in Portlandia? Here’s what to do!

What should that action be?  As a public service here at The Mint, we are offering a series of steps that were applicable to our situation in Portland, Oregon, circa 2014.  They may or may not be useful and/or accessible to you depending upon your situation, and are not to be taken as any manner of legal/financial/tax or any other sort of advice.

With that disclaimer out of the way, we hope to guide others and save them some time and confusion in navigating the system of public support available in the Willamette Valley.

One last caveat, the following list is comprised primarily of public resources.  At this moment in time, faced with losing a primary source of income, it is unlikely that one’s political ideology will stand in the way of taking advantage of the resources available to them.  If you find yourself struggling at all with this, be reminded that these public resources are absolutely necessary given the broken monetary system that we live in.  Indeed, the use of debt as money and the economic distortions it causes every day is likely the indirect cause of your present circumstance.  Acknowledging this fact should put to rest any hesitations about whether or not to apply for public assistance, not matter what your present circumstance.

  1. Unemployment Insurance: The first thing we recommend, unless you have a job that you will start within the next 5 days, is to file an unemployment claim against Oregon here: https://ssl8.emp.state.or.us/ocs4/index.cfm?u=F20141022A163756B40164586.0519&lang=E if you were working in Oregon and laid off (not fired with cause), you should have no problem qualifying.  The reason not to delay this step is that you have the right to claim the first day you are out of work and have to wait a week before you can claim a week of benefits.  They last for six months and are usually ~$500 per week on the high end as of this writing. Even if you were fired for cause, you may still qualify for unemployment insurance.  Oregon is generous in this sense and many employers are paying for it in the form of an employment tax anyway and will encourage you to take it.

Do not delay on this step!  Call the same day you are dismissed, otherwise you are literally leaving money on the table.

The next two steps may or may not apply to one’s specific circumstance as they are income qualified programs which take into consideration other income sources that a household may have.  If you and your household have no other income source, bear in mind that you are below many of the income thresholds as of the day you were laid off and are likely to qualify based on the current circumstance.  This is important, because certain programs, such as SNAP, last for six months before you have to recertify income.  At that point, you will be employed (we here at The Mint believe in you!), but in the meantime, you get a six month stipend

2.  SNAP (Food Stamps):  They usually will give these within a week as they are considered essential.  It is scaled on income and you qualify the minute your income drops below a certain level based on the number of people in your household.  Below is the website to apply through if applicable: http://www.oregon.gov/dhs/assistance/pages/foodstamps/foodstamps.aspx

3.  OHP (Obamacare): If you qualify for SNAP, you are likely to qualify for OHP, Oregon’s version of Medicaid, which is basically free health insurance thanks to Obamacare.  The website is here: http://www.oregon.gov/oha/healthplan/pages/apply.aspx

In some cases, enrolling in SNAP will automatically qualify you for coverage, which is nice, because by this time, you may be getting sick of pulling together all of your personal data and submitting it to a government agency that will no doubt be hacked.This step is important as, once qualified, you will not have to pay COBRA or a private health insurance.  The coverage may not be great, and, depending upon how much you use your health insurance, it may be best to stick with the current provider, but if all you need is peace of mind on this front, it will save a chunk of change.

4.  Housing Assistance:  Depending upon your housing situation, there may be rent or mortgage assistance which you now, overnight, have become eligible for.  They can be a pain to apply and take a while to kick in (if they do at all), but may be worth it if they do.  Here is a list of resources in Oregon:  http://www.oregon.gov/dhs/assistance/Pages/housing.aspx

The above four steps are “defensive,” now for the job search, or “offensive” side, assuming you will be looking for a job, at least for the short term until your next movie deal comes through.

  1. Networking:  There are a number of networking opportunities that any job seeker or small business owner would be wise to attend from time to time. Attending these events will not only give you something to do other than surf the internet for jobs, it will inevitably encourage you to see you are not alone.  You may even be inspired.  One of the best in Portland is Portland Connect, you can request an invite here: https://www.linkedin.com/groups/Portland-Connect-36370/about They host a number of popular events and is a nice and efficient way to get to know some people who are there to mutually help each other.  The group drives home an oddity that we have found to be true in Portland, that it is a town where you must network face-to-face.  Portland Connect is a great place to do just that.
  2. Recruiters: If your profession is in such demand that it can support a recruiting industry, reach out to them, as they are literally in the business of finding you a job.  In Finance and Accounting, which happens to be our industry, we recommend Robert Half.  There are many others as that are industry specific.  Find them, call them, they will help.
  3. As for internet job searching: For the most part, applying online, while giving a strange sense of accomplishment, is akin to sending a message in a bottle. Chances are it will never get read and, if it does, the chances of it reaching the intended recipient at the right time may be slim.  It is always best to call someone at the company if possible to at least know you are not sending an “SOS to the world.”  Nevertheless, there are some sites which tend to be more responsive than others.  We seemed to have the most luck in terms of response from Craigslist posting, and Mac’s List: http://www.macslist.org/ which is specifically targeted towards non-profits, our present area of expertise.  Idealist: http://www.idealist.org/ also has good leads in terms of non-profits.   Generally speaking, we had little luck with large companies and wasted a lot of time on their sites applying, though it can be good practice.
  4. Friends and Family: Now is the time to reach out rather than retract.  Theoretically, your friends and family are another set of eyes and ears on the ground and generally be willing to assist you in your plight if it is within their means.  Reach out to the great brother and sisterhood of mankind, for we were made to help each other.  Indeed, disinterested service to others is the sure path to happiness.  Just remember to lend a hand when you are on the other side as well!

There are innumerable resources out there which may or may not apply to your situation.  We provide those listed above as a public service, for they were pearls of wisdom that we had to grasp for mostly in the dark, if it sheds the light on someone else’s way as they walk the path of unemployment, the time spent compiling it has been well worth it.

Above all, stay encouraged!  The US economy is going gangbusters and you have a place in it, it may require relocating, training, and generally becoming uncomfortable.

Get used to it, for you are now being asked to play a larger part of the long story of human progress. Embrace it.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for October 22, 2014

Copper Price per Lb: $3.02
Oil Price per Barrel (WTI):  $80.42

Corn Price per Bushel:  $3.53
10 Yr US Treasury Bond:  2.23%
Bitcoin price in US:  $383.00
FED Target Rate:  0.09%
Gold Price Per Ounce:  $1,241

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.9%
Inflation Rate (CPI):   0.1%
Dow Jones Industrial Average:  16,461
M1 Monetary Base:  $2,815,400,000,000

M2 Monetary Base:  $11,513,000,000,000

Entrevista con Mel Lagomasino de WE Family Offices

Hoy presentamos The Mint en Español con motivo de compartir una entrevista muy importante con Mel Lagomasino, una mujer que sabe algo de inversiones y la gestión de grandes patrimonios.

Ya puedes leer más acerca de los credenciales impresionantes de Mel Lagomasino en la página de sus servicios de Family Office:

WE Family Offices

En la entrevista que se puede ver en versión complete abajo, Mel abarca temas interesantes con franqueza. Entre ellos:

-Como preservar el dinero, como ganar el dinero, y como separar la vida personal de la vida empresarial de la familia.

-Lo que es un Mapping y por que es importante

-La diferencia entre ahorrar e invertir

Hay también unas frases y pautas claves compartidas, por ejemplo:

– Diversificar activos si uno quiere preservar el capital

-Los grandes patrimonios se ganan por la concentración, y se conservan por la diversificación.

-Es importante reflexionar en donde uno quiere llegar y cuando con su patrimonio y imponer una estrategia de inversión de acuerdo con este deseo.  Una vez impuesta, es aún más importante mantener la estrategia pese a los cambios temporales en el mercado.

-Que tengo?  Que es lo que me cuesta dinero? Que es lo que me gana dinero?

-Hay que separar lo acumulado por cubos e asignarlos un valor monetario.

-Empresa operativa = Crecer el capital

-Empresa patrimonial = Conservar el capital acumulado

Es importante la distinción  entre que tipo de empresa conviene porque hay que separar los intereses de los miembros de la familia quienes quieren seguir creciendo el capital de los a quienes no tienen interés en aportar al negocio.

-Hay que entender bien a los asuntos financieros y fiscales.

-Establecer la sucesión y comunicar/conversarlo.  La conexión entre el dinero y el amor está muy fuerte.

La entrevista termina con las reglas de oro de Mel Lagomasino:

-Ten un propósito

-No invierte en algo que no entiendes

-Entiende las emociones involucradas

-Maneja los costos que se pueden comer la rentabilidad

La entrevista reveladora, “Invertir: ¿Por Dónde Empezar?” se puede ver a continuación en YouTube.  Disfruta de la entrevista e intenta poner en práctica algunos de sus consejos. Sobre todo, irespectivo del tamaño de tu patrimonio, comienza a vivir e invertir bien!

 

Fine Wine Investing – The London International Vintners Exchange

11/04/2013 Portland, Oregon – Pop in your mints…

For those of you who thought we had forgotten to complete our mini-series on Fine Wine Investing, we admit that we nearly did.  Between the excitement of Halloween and painstakingly formatting the print version of our Economic and Philosophical Treatise, a proper completion of the Fine Wine series nearly escaped the steel trap of our mind, until today!

Throughout this series, we have dabbled into a world that, for a time, appeared to be the playground of those with a penchant for refinement or those with enough money to appear refined.  After all, mustn’t one have an intimate knowledge of the Bordeaux region and at least have heard of Robert Parker;s nose before daring to invest in Fine Wines, an asset class which not only carries principal risk, but the risk of direct consumption?

Today, thanks to the world’s leading electronic exchange for fine wines, the Liv-ex, price discovery is now within grasp of the commoner.

The London International Vintners Exchange, or Liv-ex, is like COMEX for Fine Wine.  Since is was established in 1999, it has performed an important public service, as do all exchanges, it allows the commoner a peek into the most recently discovered price points for certain vintages, which can greatly aid them as they begin their adventure in Fine Wine Investing.

Understanding the Liv-ex is crucial to today’s serious Fine Wine Investor.  The following are excerpts from a recent report on the market.  Enjoy!

THE LIV-EX and the Financial Markets

Liv-Ex, London International Vintners Exchange, is the world’s one and only leading electronic exchange for fine wines, based in London, UK. Founded in 1999, Liv-Ex provides a marketplace and online platform for wine merchants, traders and brokers to trade wines freely and easily, just as it is done by equity stockbrokers.

Liv-Ex FEW Compared to other methods of fine wine procurement, such as auction houses, the main difference is that not everyone can trade on the Liv-Ex wine platform; only registered wine professionals/experts who have a proven track record in the industry are able to place bids (buy) and offers (sell) on the platform.

Only investment grade and blue-chip fine wines are traded on the Liv-Ex platform. Moreover, unlike auctions, no antique or collectible items are traded. Therefore, the majority of trades carried out on Liv-Ex are for French wines, usually from the highest rated vintages, mainly the more recent ones.

The Liv-Ex online wine platform also publishes its own price indices based on the amount of transactions made and has developed further into becoming the leading information source for fine wines; current prices, price fluctuations, historical stock data and the fine wine market in general.

Like any exchange, the Liv-ex has also produced a series of indices, which allow the casual observer to gauge the performance of the overall market for fine wines at a glance.  It is these indices that give us the  means to compare the Fine Wine Market’s performance with that of other major asset classes.  The results may surprise you.

The following are the Liv-Ex Fine Wine Indices:

• Liv-Ex Fine Wine 50 Index

• Liv-Ex Fine Wine 100 Index

• Liv-Ex Fine Claret Chip Index

• Liv-Ex Fine Wine Investables Index

• Liv-Ex Fine Wine 500 Index

The Liv-Ex 100 Index is the fine wine industry’s leading benchmark index and even listed on Bloomberg. It includes and represents the price movement of the 100 most sought after wines, for which there is a strong secondary market and is calculated on a monthly basis.

By looking at the trading history of the fine wine market in the last decade, one may notice FWI demonstrated excellent track record which is appealing to absolute return investors.

According to the Liv-ex, FWI has consistently delivered positive absolute return over every.  Next 5-year holding period since 2000. Figure 1 below also highlights that the average 5-year foreword performance since 2000 is as high as 111%!

While the returns on the Liv-ex 50 are compelling, they become even more compelling when considered within the context of other asset classes.  The report continues:

It is also worth to note that while comparing FWI with global equities, FWI generated significant outperformance to global equities over any 5-year investment horizon since 2000, with hit rate as high as 98%, as shown in figure 2 below.

FWI provides diversification benefits to global equities portfolio. Besides outperforming global equities, FWI also gives diversification benefits as the correlation of FWI to global equities is only 0.19.

Whilst the above suggest FWI is attractive, recent trend has been less encouraging. Not only has the correction of the FWI market started to drag down the recent returns and out performance, but the diversification benefits also seem to have been diminished.

 Like any market, the Fine Wine Market must be enjoyed in moderation, as out performance tends to attract attention which generally leads to…underperformance.

It is worth noting that the Fine Wine Market, while unique, has behaved similarly to that of Crude Oil over the past 10 years, as pointed out by this excerpt from a 2011 post in the Sizemore Letter:

From 1990 to 2010, the correlation between fine wine and crude oil returns was a staggering 90 percent!

What is the takeaway from all of this?  While Fine Wines now have an established exchange, corresponding price index, and are a nice way to diversify from equities, they may offer returns similar to other commodities.

In the end, returns are returns, and from a pure numbers standpoint, the higher the returns, the better.  From a semantic standpoint, it is much more fashionable to talk about one’s Fine Wine investments than crude oil in many social settings.  Given this criteria, the answer is clear:

Fine Wine trumps Texas Tea.

This concludes our brief yet informative jaunt into the world of Fine Wines.  Again, if you are interested in hearing more about Fine Wine investing, please email us at the address below.

After one last goblet, The Mint must carry on, for the Bitcoin has nearly doubled in price, and there is much to explore in the fine autumn that is upon us.

Stay tuned and Trust Jesus!

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 4, 2013

Copper Price per Lb: $3.24
Oil Price per Barrel:  $94.62
Corn Price per Bushel:  $4.26
10 Yr US Treasury Bond:  2.60%
Mt Gox Bitcoin price in US:  $237.00
FED Target Rate:  0.07%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,315
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.2%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  15,639
M1 Monetary Base:  $2,515,000,000,000
M2 Monetary Base:  $10,867,000,000,000

Investing in Fine Wines has Never been Easier

Fine wines have always commanded a premium on restaurant menus, but have you ever stopped to consider the other side of the trade on a romantic dining experience?

Tempranillo Photo credit: Mick Stephenson
Tempranillo Photo credit: Mick Stephenson

Fine Wine Investing

Today we begin a short series on investing in Fine Wine.  Fine Wines as an investment opportunity may sound like something that well heeled folks with large estates and walk in wine cellars are equipped to dabble in.  However, as with many things the rich do, they tend to do it because there is money in it.

The market for Fine Wines is remarkably stable and refreshingly uncorrelated with other asset classes, which is why the rich, apart from bragging rights, have no qualms about storing a portion of their nest egg in corked glass bottles.

Today, the stability and out sized price gains in the Fine Wine market are available to almost anyone willing to invest.  The best part is, you don’t even need to build a wine cellar or worry about your retirement account spilling in an unfortunate accident or being accidentally enjoyed at a candlelight dinner at home.  You can now invest in Fine Wines as you would any other asset class, via the internet.

You still own the wine, naturally, you just don’t need to deal with the hassle of transport and storage.  All you need is a minimum investment of 5,000 British pounds and a bit of information.

If you would like more information on this investment opportunity, which is available through one of our partners, simply email us at: davidminteconomics@gmail.com with the word “WINE” in the subject line.

For the moment, we present the following information as a brief overview of the market of Fine Wines.  While it should go without saying, we present the following information as a general overview and cannot and will not comment upon whether or not Fine Wines are appropriate for each individual’s investment situation, this is a decision that must be made by the individual.  However, if you or someone you know determines that Fine Wine investing is agreeable to their taste, we will gladly facilitate the transaction.

Enjoy!

WINE MARKET ORIGINS

From its origins as an exotic drink, wine has become a long standing commodity, with a lineage that dates back to the Greek empire and beginning of trade in 1600 BC. The ancient Greeks carried wine throughout the Mediterranean coast, with Europe leading the way in consumption, production and movement. A major transformation occurred when Napoleon III requested a classification of best Bordeaux wines in France in the year 1855. Following this, wines were classified on a recognised price-based ranking, leading to the grading of the world’s finest wines.

PRESENT DAY INVESTMENT AND MARKET PERFORMANCE

The traditional notion that wine investment is about buying two cases of young wine so that, after a period of maturation, you drink one case and sell the other to finance both may have a certain romantic appeal.

As an investment philosophy, though, it is heavily discounted by today’s serious investor. Investment is all about risk and good investment choices are made when the exposure to risk is clearly understood.

Fine wines has been one of the strongest areas for investment in recent years What may surprise many is that an investment in fine wine has consistently been a low risk investment opportunity compared to oil, the FTSE 100 and even gold. Combined with strong absolute performance and low correlation to other assets, that has led wine to find a home in many serious investment portfolios.

Those interested in accessing the fine wine market have more options available to them than ever before with a range of tax-efficient structures available. The timing looks opportune too: prices came off significantly in 2011, leaving the possibility of a substantial upturn in the medium term, and inflationary fears are enhancing the attractiveness of physical assets.

There is very little correlation between financial markets and fine wine prices. For example, whilst many stocks, shares and markets crashed during the financial crisis of 2008, most wines continued to significantly appreciate in value. Whilst wine prices are not always free of volatility, the market tends to be far more resilient than many traditional investments that investors go for. The reasoning behind this is actually very simple. Fine wine is a completely tangible asset, a luxury product in which supply is always exceeded by demand. As a particular vintage wine is consumed, more of that wine cannot be produced, so the wine appreciates in value.

Fine wines frequently outperform share indices, for example between May 2010 and May 2011, whilst the FTSE 100 appreciated by 15.6%, the fine wine index increased by a considerably higher 21.1%. The Live-Ex 100 Fine Wine Index is the industry’s main performance benchmark, and represents the price movement of the 100 most sought-after fine wines. The price index is calculated on a monthly basis, with the vast majority being Bordeaux wines. Over the last 25 years the very best wines have appreciated by 15-25% per annum, a staggering return on investment very difficult to find anywhere else without very high risks.

THE FINE WINE MARKET AND SUPPLY AND DEMAND

It is the underlying supply and demand characteristics of wine which make it attractive as an investment proposition. On the supply side, Bordeaux (considered by many to produce the only investment grade wine) is a finite geographical area in France with an essentially fixed number of wine producers (châteaux). The initial supply of wine is therefore finite, and over time can only fall as bottles of the wine are consumed.

Meanwhile demand tends to rise, for two reasons. First, the quality of the wine improves over time as it matures, making it more attractive to drink. Second, global demand continues to rise as new markets for the wine open up. In the last 25 years alone we have seen Japan, Russia, Korea and China ‘discover’ fine wine and consume it in large quantities, with countries such as India and South America yet to come ‘on stream.’

Intrigued?  More to come on this interesting and exciting opportunity.

Stay Fresh!

Finding Financial Freedom by Living Out the Biblical Principle of the Jubilee

The following is a guest post on a timely topic by David Bonner, a financial consultant with a passion for helping people find freedom by becoming good financial stewards.  Enjoy and stay fresh!

There are many biblical principles when it comes to finance. Perhaps the most often cited is Jesus’s instruction to “Render unto Caesar what is Caesar’s.” Like most of the times that Jesus is quoted in popular culture, this is taken out of context at least as often as not. While I am very much in favor of personal responsibility, good stewardship, and accountability to authority and government, the concept of rendering unto Caesar is not anywhere near so valuable as the biblical principle of Jubilee.

In the book of Leviticus, debts and enslavement are both addressed as coming to an end after fifty years. The Covenant Code, taken from Exodus, includes similar provisions after a period of seven years. This code adds a layer to the idea of rendering unto Caesar in that the debt or the term of slavery – note the biblical application as given to Moses’s audience would have been much more of a household servitude like an indentured servant than our modern interpretation of slavery – should be served out for a reasonable period but not leave people laboring their entire lives under its burden. Unfortunately, apart from bankruptcy, our modern society doesn’t have many allowances for this form of grace. And even bankruptcy does not extend the full protection that many believe it will.

The best time to be responsible with debt management is before taking it on. For this reason, tools like a home loan calculator are invaluable. A mortgage loan calculator or similar tool can help you determine what housing options you can reasonably undertake based on an in-depth understanding of your finances. However, with the soaring costs of education, the massive investment of establishing oneself in almost any career, and the instability of most markets, debt is a reality of modern American life.

The important thing is not to let debt overwhelm you. Part of avoiding this would be to utilize a good debt repayment calculator to determine what money you actually have available to work with. A debt consolidation calculator can help you view all of your debts, credit cards and mortgages, car payments and education loans, together in one focused picture.

This focused picture will enable you to see your finances in terms of available funds rather than seeing your monthly income as being available. A debt elimination calculator will help you select the repayment timeline that works for you, and commit to following through on it. Utilizing debt calculator(s) applications when considering undertaking a big financial step will allow you to make a clear headed and responsible strategy, enabling you to both render unto Caesar and celebrate your own Jubilee before too long.

Dave Bonner runs a small business in the Greater Philadelphia Area, where he lives with his wife and their one-year-old puppy.  His consulting work includes applying sound Biblical principles in making economically sound business strategies, a subject on which he has also been privileged to teach.  Debt consolidation has become something of a hobby, as he works to assist his friends and family in the pursuit of financial stability and good stewardship.