Who is investing with these fools?

Are people really this stupid? Sadly, apparently so. Some promoter of investments in Texas promised investors a return of 20% per year over two years. In addition, this Texas promoter promised that each investor would potentially receive another $15,000 to $18,000 over five years, plus even more crazy incentives.

I am not sure how many stupid fools invested with this guy, but the Texas State Securities Board's Enforcement Division stepped in and put a stop to it. Or, at least they thought so. The brazen nature of this promoter is unbelievable. While the promoter met with the Enforcement Division, after promising to stop his sham, he was still promoting it to investors on that very same day!

My book, Meet Wall Street. The Reason You're Stupid, 2nd Edition is on sale right now for $0.99 as an eBook at https://books.apple.com/us/book/meet-wally-street-the-reason-youre-stupid/id816020421?mt=11&app=itunes. The subtitle is very apropos for anyone fool enough to invest with this promoter. Hopefully the Texas State Securities Board stopped him before he stole too much money from investors. You can read the press release from the Texas State Securities Board here: https://www.ssb.texas.gov/news-publications/commissioner-enters-order-against-georgetown-promoter-fraudulent-medical.

If you had read my book, then you would not have fallen for an investment promoter like this guy. Let's have a little class on this, shall we? Your first clue to this being a sham was the 20% per year return promised over two years. He was only asking for $50,000 from each investor. That was your second clue. Your third clue was the additional return promised of another $15,000 to $18,000 over five years. Add these clues up and you have a sham investment of a 76% return on your money in five years. How can these guys even say this crap with a straight face? I would report a guy like this so fast they would not know what hit them. I majored in Criminal Justice and I believe in law and order. Besides, I am out here doing the right thing by people and these investment promoter types are ruining it for honest advisers like me.

Readers of my eBook will know that this type of investment violated my rules of investing. One of my rules is to "Keep it Public." By keeping it public, I mean that you should only invest in publicly traded investments listed on a stock exchange.  My other rule is to "Keep it Liquid." This investment was certainly not liquid. Once you gave this promoter your money, then that would likely be the last time you saw it. How are you going to comply with my two rules? This sham investment was not publicly traded and it was not liquid where you can get your money in as little as two business days. Therefore, as readers of my eBook know, this was a big, red flag and they would have never fallen for this investment promoter.

Oh by the way, did these investors check this guy's background? That's what I thought. Another egregious failure. Did they check to see if this was a securities offering registered in the State of Texas or granted an exemption from registration from the State of Texas? Of course, they did not. They just blindly hand their money over to investment promoters like this all the time. You can check an advisor's background at https://www.investor.gov/crs.

Ninety-nine cents will provide you the information to protect you from investment promoters like this guy. Now do you see why the subtitle of my book is "The Reason You're Stupid"? Unfortunately, you are very, very stupid if you invest with someone like this.

You need me in your corner. I am telling you.

https://www.marianfs.com

Direct Indexing

There is a new change coming in the area of investing called Direct Indexing. What is Direct Indexing? This is where you invest in a pool of stocks that follows a particular index such as the S&P 500® or the Dow Jones Industrial Average for example. Right now, financial advisors use ETF's that invest in a multitude of different indexes. Generally, most index fund charge fees for managing the funds. Recent competitive pressures have forced a lot of these management fees to come down significantly. These management fees can range from 0.50% down to as low as 0.03%. There are some funds with management fees higher than 0.50%, but for the most part, most of the well known fund sponsors with index funds charge less than 0.50%. If you are investing in one of these ETF's, then this is the fee that you pay the fund sponsor to manage the pool of money.

Direct Indexing is going to change the investing world significantly.  Suppose your financial advisor has you invested in a portfolio of ETF's. The total management fee is based on your financial advisor's fund selections. Let's assume that your total management fee is 0.50% per year. With Direct Indexing and free trading commissions your financial advisor will be able eliminate this 0.50% fee altogether. Now, this is not something that is going to happen immediately, but it will happen. The key to this is two fold. One is zero trading costs and the other big one is the ability to buy fractional shares.

You long had the ability to buy Mutual Funds in fractional shares, but you could not buy fractional shares of ETF's. ETF's trade like a stock. You cannot buy 0.3478 shares of a stock...unless you have a brokerage firm that has the software capability to allow it. The major players like Schwab, Fidelity, TD Ameritrade, E*TRADE and others will soon be allowing you to buy fractional shares in your account, if they are not already. This fractional share issue is the key to Direct Indexing. You may have seen an ad on television for Schwab Stock Slices. This is a form of Direct Indexing, but not the full freedom that financial advisors like me prefer. We want complete freedom to choose as many stocks as we want in each client account. This is when Direct Indexing will really take off.

For taxable accounts, Individual, Joint or Trust accounts, there is a tax advantage utilizing Direct Indexing. Stocks by themselves are tax deferred. After you buy a stock and hold it, you only pay taxes if you sell it. Of course, the amount of taxes that you pay depends on the time period that you held the stock (i.e., short-term capital gain or long-term capital gain) and whether you have a profit or a loss. You can still do Direct Indexing in your IRA and Roth type accounts. There just will not be any tax advantage in doing it. However, you will save in management fees from a formerly all ETF portfolio.

In the very near future, probably in 2021, your financial advisor may come to you to discuss Direct Indexing with you. Direct Indexing will allow you to hold a portfolio of, for example, 500 stocks in fractional shares in your Individual account without having to pay an ETF management fee. This will save you somewhere between 0.03% and 0.50% or higher in fees each and every year. Your financial advisor will be fairly compensated by their normal assets-under-management fee or annual flat fee that they charge. The reason this is true is because, they have to research the 500 fractional share stocks to put into your account! This takes a lot of time and their time is valuable.

I am working on a new relationship with a firm that will be able to offer this sometime late this year or perhaps early next year. It is something that I am personally really excited about. More to come.

Let me know you I can help you today. Visit https://www.marianfs.com give me a call and/or request a Zoom Meeting via email.

2018 Census Data vs Local Police Forces

Wikipedia defines critical thinking in this manner.  

"Critical thinking is the analysis of facts to form a judgment. The subject is complex, and several different definitions exist, which generally include the rational, skeptical, unbiased analysis, or evaluation of factual evidence. Critical thinking is self-directed, self-disciplined, self-monitored, and self-corrective thinking."

Count me in the group who are normally skeptical, require unbiased analysis and factual evidence. This is especially true in matters of media reports and political statements.

Keep in mind that this is just a blog post and not a peer reviewed data study. However, I will provide sources. In order to keep things simple, my sources are: 

https://data.census.gov/cedsci/all?q=Race%20and%20Ethnicity&tid=ACSDP1Y2018.DP05&vintage=2018&hidePreview=false 

https://www.bjs.gov/index.cfm?ty=tp&tid=71 (Local Police Departments, 2016: Personnel, Full Report)

I will start this blog with the question..."How many White people, Black people, Hispanic people, Asian people, Native American people, mixed race people and Native Hawaiians should we have in our local police forces?"

According to the latest Census, specifically 2018, we should have the following percentages:

• Black or African American - 12.3%
• White - 60.2%
• American Indian or Alaskan - 0.7%
• Asian - 5.6%
• Native Hawaii or Other Pacific - 0.2%
• Hispanic - 18.3%
• Two or more races/other 2.7%

Then, I wanted to compare what the 2016 Bureau of Justice Statistics says about local police forces. Here is what I found.

• Black or African American - 11.4%
• White 71.5%
• Hispanic - 12.5%
• Other/Unknown 4.7%

This local police study did not exactly correlate with the Census numbers, but I was amazed at how closely the local police forces tracks our overall Census population. Remember, we are taking a macro or helicopter view meaning we are just looking at the entire population of the United States versus the entire population of local police forces.

Where is the problem? If anything, I would say that Hispanics and Asians are underrepresented. Blacks or African Americans are pretty representative with a 12.3% versus 11.4%. 

My critical thinking conclusions would be that we need more Hispanics and Asians in the local police forces across America. Further, I feel that the distrust of local police forces in Black and Hispanic communities probably contributes to them being under represented. More so for Hispanics, than Blacks. Asians, at the risk of sounding racist here, teach their children that their education is the most important thing in life. Asian parents expect exceptional educational performance from their children. It stands to reason that local police force education requirements and the compensation that goes with it conflicts greatly with what Asian families teach their children.

I do not really think we have a problem as far as race and ethnicity is concerned with local police forces. Now, if you disagree with that, then you must answer this question:  

"What is the correct percentage for each race that should be employed by local police forces?" 

You cannot answer that question. All you can do is make an assumption that there is a problem that requires "fixing." If you do make an assumption, then I would conclude your critical thinking skills to be lacking. Show me your data to back up your assumption. When you do that, then you have begun to think critically.

I majored in Criminal Justice, in case you were wondering why I have a blog post like this one, plus my father was a former Chief of Police in California and Arkansas.
 

The Difference Between Me and You

My paternal family came to this country before America became the United States of America. Our family was known as "MacAllister" or "MacAllistar" depending on the spelling. James Cuthbert MacAllistar moved to Northern Ireland after having changed his last name to Allison. He was the first Allison in our paternal family tree. His middle name is the name of a Catholic Saint, St. Cuthbert of Northumbrian. It was thought that James Cuthbert Allison left Scotland to move to Northern Ireland to become a farmer. Some Scottish MacAllistar's were under attack at the time in land disputes. James Cuthbert Allison just left the area and started over in Northern Ireland.

James Cuthbert Allison had a son named John Allison I who was born in Avondale, Lanarkshire, Scotland. His son, John Allison II had a son, John Allison III who came to Colonial America settling in Lancaster, Pennsylvania. John Allison III was politically involved and was a signer of the Lancaster Petition along with his son, William Allison. You can read about the Lancaster Petition here: 

http://www.phmc.state.pa.us/portal/communities/documents/1681-1776/lancaster-petition.html

William Allison had a son, Colonel John Robert Allison who moved to Orange County, North Carolina from Pennsylvania. He fought in the Revolutionary War for North Carolina. Colonel John Allison had a son, Lieutenant Joseph H. Allison who also fought in the Revolutionary War. Lieutenant Allison's son was a General in the North Carolina Militia. His name was General Joseph S. Allison and he helped keep the peace in North Carolina after the Revolutionary War.

General Joseph S. Allison had a son who moved from North Carolina to Texas and became a Medical Doctor who rode on horseback to treat patients. His name was John James Allison whom they called Dr. J.J. Allison. One of Dr. Allison's children was named William L. Allison and is sometimes referred to as William L. S. Allison. William moved to a small town in Arkansas called Hattieville to become a farmer. Hattieville is an unincorporated community made up mostly of farmland about 10 miles north of Morrilton, Arkansas off of Interstate 40. One day, William went to the General Store by wagon and never returned. The story goes that Indians from Texas followed him to Arkansas, sought him out and killed him. Supposedly, he left Texas to escape the Indians. William had only one child named John Washington Allison. The Allison family tree came perilously close to ending right there, but luckily, John Washington Allison was born. Here is a picture of John Washington Allison standing in front of his Hattieville, Arkansas home. Just a pillar of wealth, don't you agree?

John Washington Allison had two children by his first wife, Cassie Simons. One of those was my grandfather, Terry Francis "Fred" Allison and the other was his little brother, Perry Roosevelt Allison. Here is a picture of these two young guys standing in front of the pure wealth of the Allison family. My grandfather is on the right. Notice the wealthy background that I came from. I just love this picture.

John Washington Allison remarried and went on to have another six children. His second wife was named Elizabeth "Eliza" Menees. He was a baseball player and notice that he is the one in the black uniform holding a baseball. I assume he is the pitcher. Hattieville, Arkansas is a very rural area in Arkansas and I cannot even imagine that they could field a baseball team, but they did. Here is the proof from a 1913 newspaper article.

There are two Simons in the picture and they must be the brothers of John Washington Allison's first wife Cassie Simons. I am a baseball player and fan myself and this is obviously where my love of baseball comes from. I inherited it.

My grandfather Terry Francis "Fred" Allison was probably wondering why the hell his parents gave him a middle name of Francis while naming his little brother after Teddy Roosevelt. After all, his first name Terry can be a girl's name, too and he didn't want to go by Terry or Francis. You cannot really blame him for going by Fred.

Fred Allison had four children, three girls and a boy and that boy was my father, Billy Joe Allison. That is an Arkansas name if I ever heard one. Of course, he didn't much like to be called Billy Joe, so he went by Bill. Bill Allison, my father, married my mother Donna Jean Bridges who was born in West Covina, California. They were married in Little Rock, Arkansas in 1955. I was their only child, Richard Mark Allison.

My mother still has a picture in this wedding dress hanging on the wall in her house. Unfortunately, Bill and Donna did not stay married long. Less than two years in fact. However, both remarried and had three more children each and lots of grandchildren that followed.

Bill Allison joined the Army when he was 15 years old. By the time that he was 21, he had already served in Korea as a member of the 187th Airborne which merged into the 101st Airborne Division. His 187th unit was known as "Rakkasans" and they earned the Presidential Unit Citation. Here is a picture of him and one of his Army buddies with their Presidential Unit Citation and other badges. The Presidential Unit Citation is for extraordinary heroism in action against an armed enemy. Their unit accomplished their mission under extremely difficult and hazardous conditions so as to set it apart from other units participating in the same campaign. Bill Allison is on the right.

 

Bill had two combat jumps into North Korea. He had married my mother upon winding up his Army service in 1955. Shortly thereafter, they had me as a baby. Consequentially, he joined the Air Force in order to take care of me and my mother. However, my mother's father was not a man who wanted his daughter to be moving all over the place with a young child and he kind of put pressure on my mother to stay home in Arkansas where her family could help out. My mother's story was disparagingly different, but this is what I believe to be true. My mother changed my name later on to Richard Allison Johnson. It always felt wrong to me that my name was changed and I did not like it. In 2019, I finally changed it back to Richard Mark Allison and I have never been happier about my decision. With this paternal family tree, who wouldn't want to be an Allison? Before that however, I was known as Richard Allison Johnson and had my children with that last name.

I had my first son, Reese Cannon Johnson on September 4, 1989, but he only lived about three months as he was a SIDS baby. In November of 1990, we had another son, Marshall Reid Johnson. He is the greatest son that a father could ever ask for. I could not be prouder of him. He is amazingly smart and knowledgeable about cars, movies and just about anything under the sun. There is nothing that he cannot achieve.

After three miscarriages in a row, we were blessed with our daughter Rudi Michelle Johnson. She too is a gift from God, especially after three miscarriages in a row. I could not be prouder to be her father. She is going places in life as she is currently pursuing the academics to be a dentist. Don't ask me why, but she decided this all on her own.

My father went on to be in law enforcement and became the Chief of Police in Grover City, (now Grover Beach) California. He spent most of his married life there in Arroyo Grande, California where he was a police officer. The Arroyo Grande Police Station is named after my uncle, Former Police Chief James C. Clark who married my father's sister, Betty. 

Bill eventually moved back to Arkansas to take on the Chief of Police job at Camden, Arkansas. Sadly, he passed away at age 39 when I was a 17 year old senior in high school. He was planning on having a relationship with me once I turned 18 years old, but it was not to be.

My mother had three children with Hillman Johnson who was my father growing up. One of those, my brother David passed away in a truck accident when he was only 32 years old. We lived on the same street in Little Rock at the time. It was very hard losing David in this way. I still have a sister and another brother back in Arkansas, Sharri and Gary who are doing well.

On my father's side (Allison) of the family, it has been rough. My sister Tami passed away at age 53 from Lupus and other complications. My brother Jon Terry Allison, named after our grandfather passed away last year, 2019, at age 54 from heart complications. Very tough to lose Jonny. Such a great guy with a lot of love for his friends and family. He left behind a wife, Dena and son Riley Jon Allison who was named after his father and my brother Jon.

Consequentially, I see the world different from most people. All of this makes me look at the current looting and rioting going on in American cities right now in a very different light. 

Look at my life and tell me how tough yours has been compared to mine. I think what you will find is that it does not matter whether you are white or black. It only matters how you choose to live your life. As I watch young people rush into loot a liquor store, I cannot help but wonder how is that going to improve their life? Where is their faith? They do not care about God, or other people based on their actions. They are narcissistic and selfish. The fact that many of them are black makes no difference. Society does not owe them anything. Certainly not a stolen case of Bud Light.

You only get once chance at life. If you choose to be a criminal, rioter or looter, then you have devalued your own life. If you choose to fight the police when they go to arrest you, then you are risking your life even more. If you believe that cops go around killing people because of the color of their skin, then you are ignorant of reality. Therein lies the problem. This false narrative is simply not true. Visit the Bureau of Justice Statistics and see for yourself. https://www.bjs.gov. I majored in Criminal Justice and you can find the truth at this web site.

Racism is itself a form of dividing people. By you claiming to be black or me claiming to be white, we are immediately putting up a brick wall between us. If you want to get rid of racism, then you have to stop labeling people by the color of their skin.

In reality, if you are black, then you are no different than me. You have children and families and dreams for those children and families just like I do. If you are black, white or any other label, then you have choices to make. Do you choose a life of crime or refuse to be a criminal? Do you continue to be dependent on the government for the very little benefits that you may receive, or do you educate yourself and try and achieve a better life for you and your family? It has nothing to do with racism. Sure, I know there is poverty and poor areas of our country, but I also know that if you drop out of school, then you are killing your chances at a better life. Education is your way out. Blaming others and being a victim instead of looking in the mirror means accepting failure. Why do you want to be a failure when countless black Americans have enjoyed and continue to enjoy the American dream? Most of these black Americans chose to educate themselves and focus on a goal that was important to them and then they set about achieving that goal.

It really isn't about being black or white. It is about what you want out of life regardless of the color of your skin. Look at my life story. What advantages did I get by being white? I would gladly have traded my white skin for being black if I didn't have to lose my father, my son, my brothers and my sister.

I play baseball and have done so for a long time. Look at how many black guys are on my team from last year. If I was a racist, do you think that I would play with black players? The opposite is true also. These black teammates of mine have no qualms about playing with a bunch of white guys. Do you know why? We work together for a common goal, that trophy down in front and we are not stupid enough to put a wall up between us called racism. Racism is for losers and people who want to be victims of oppression. I'm not blind to oppression. The fact is that it does not matter what challenges in life are placed in front of you. What matters is how you overcome them. I could have given up when my father died, but I didn't. I could have given up when my son died, but I didn't. I could have given up when my brothers and sisters died, but I didn't. Instead, I chose to keep moving forward. Don't give up no matter what your circumstances.