Managing Your Ira Made Easy

By Charles ODonnell

If you could improve your retirement plan results by growing more money faster, without putting any more money out of your pocket, would you do it? That is what this book is all about.

This book provides simple strategies and techniques that help you pick the best retirement plan options, allocate your money properly, dispel misinformation, and avoid the many common mistakes that people make, costing them thousands of dollars of potential growth over their working life,

Charles O’Donnell is a retired executive, manager and former supervisor of hundreds of workers. He has watched them repeatedly make the same mistakes and consistently listen to the wrong people for financial advice. He decided to write this book after he was able to dramatically improve his own results by simply doing a little research and using a few quick techniques to separate the good from the bad and the ugly.

• Language: English
• Publisher: Xlibris US
• Release date: Jun 20, 2022
• ISBN: 9781669825586

Charles ODonnell

Charles O’Donnell is a retired executive, a certified project manager, a Toastmaster DTM, and former CEO. He is revered for being articulate, innovative, detail-oriented, and someone who “can get things done”. He has worked for two airlines, a city transit agency, a major Seaport, a multi-state retailer, a billion-dollar grocery wholesaler, and the State of Washington. He developed one of the first college-accredited Grocery Management courses in 1980 and was CEO for a regional retailer from 1985 to 1995. He then managed one of the largest distribution centers in the U.S. (1.5 million sq. ft) and went on to manage Washington State’s liquor distribution center in 2011 before retiring. He has authored several books on a wide variety of subjects. He loves to travel and has visited over 50 countries. In his spare time, he enjoys reading, boating, landscaping, restoring old cars, and genealogy. He has been married for over 55 years and has three grown children. He and his wife now live near Seattle

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Copyright © 2022 by Charles ODonnell.

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the copyright owner.

Any people depicted in stock imagery provided by Getty Images are models, and such images are being used for illustrative purposes only.

Certain stock imagery © Getty Images.

Rev. date: 08/03/2022

Xlibris

844-714-8691

www.Xlibris.com

842414

Dedicated to my father

Joseph A. O’Donnell

PREFACE

If you could improve your retirement plan results by growing your money faster, without taking any more money out of your pocket, would you do it? That is what this book is all about.

This book written by a retired executive, provides simple strategies and techniques that help you pick the best retirement plan options, allocate your money properly, dispel mis-information, and avoid the many common mistakes that people make, costing them thousands of dollars of potential growth over their working life.

One of the most consequential decisions that you can make, is determining what to invest in, how much, and why. The decisions you make about where to put your money can have a dramatic effect on your retirement, especially when compounded over 20, 30, or 40 work years. We are talking about thousands, if not hundreds of thousands of dollars. Don’t you think you should have a pretty good idea of how you are going to evaluate the choices being offered you?

This book tries to help you in making solid decisions about your future.

* * *

When I was working, I soon realized that much of the advice I had been given about my IRA choices were not only ill-advised, but just plain wrong. This occurs because in general, we are naïve and gullible about things which we know little about. Fortunately, I did something about it.

What I learned will surprise you. As a result, this book is not intended to be the end-all financial reference guide. It is intended to pass along some sound advice to a person who is working towards retirement, or is already retired.

If you already have a 401K / 403B or 457 individual retirement account with your employer, read on. If you work for a Governmental agency, your 401K is called a 457 Investment account. If you are a teacher, your plan is probably a 403B plan. In either case, making sense of the options you have available to invest in, and what to invest in, can be confusing and in many cases disastrous, when it comes to saving for your retirement. This is because many of the folks dishing out advice are not yet retired themselves, and as a result, much of their advice is mis-guided. This book helps you better understand the investment options open to you, and sharing with you what no one else ever told me.

Many plans now offer Target Date funds; Retirement 2045, Retirement 2050, Retirement 2065, etc. These may not be your best choice. Some offer Bond funds, these also, may not be your best choice. Then there are a wide variety of standard Mutual funds, which in my opinion, may be the best options, but the 401/ 403b/ 457 fund options available to you may not be.

This book cuts through all of this noise to help you quickly and smartly choose the best investment Fund options you have available, without a calculator or a financial advisor sitting at your side.

My approach in this book was born out of a desire to recover financially from being unemployed for 8 months at age 50, and having limited time left to build up a meaningful retirement nest-egg, as quickly and as safely as possible. l started at age 51 with zero dollars and had grown it to over a quarter of a million dollars by age 66.

I did it by becoming self-taught in what makes an investment work, and why some individual’s, were just ignorant of what they were doing with their hard-earned money.

Over the years I had invested in Company stock, U.S. Savings Bonds, and the Stock Market directly as an individual investor. I was disappointed by how long it took to actually build up my account.

In 1985, I quit my job and invested my prior 20-year 401 savings effort into a small business. After 10 years of struggling with a tight-fisted Banker who never once came to my business, despite growing it from a one location; $400,000 a year enterprise, into a multi-location, four million dollar a year business. In 1995, with mountains of debt, I decided to quit.

I knew we had to change our financial trajectory, so we decided to liquidate everything, including everything I had worked for, the first 30 years of my life. I gave up my home, my boat, a fleet of vehicles, and some vacant parcels of land, not to mention my self-esteem. All of my equity went to pay off debts. In the end, we were debt-free at last.

Within the next 15 years. I had made much of it back, and when I retired in 2011, I was in pretty good financial shape. But now I wanted more!

Today, in early 2022, ten years after I retired, I have more money than I thought possible, given my age and circumstances. Now I am sharing my approach with others to provide them both inspiration and hope, because it is possible to recover financially. It doesn’t take a financial Guru, and it doesn’t even require a lot of money, but it does require some effort, mainly in the form of reading, and being willing to put a little more risk into your financial life. (You are probably already taking this level of risk & you just don’t know it).

After reading this book, you should have enough knowledge and confidence to make decisions that will put more money into your account with no additional money out of your pocket.

My focus in this book is on Mutual Funds. They offer less volatility and offer less risk. In particular, how to evaluate the funds that are, and are not, available, in your retirement plan. Some of you may find, as one of my children did, that their retirement plan was lousy and as a result, they only chose three funds. Others may find that their fear of risk or loss, may have steered them towards investments that appear to be safe, but contain just as much risk with almost no return. Remember, the goal is to grow the value of your holdings.

If you are afraid of losing a few bucks because the market has dropped, you had better head for the nearest bank. At the local bank you can have insured Savings that will pay you ¼% interest per year, less their fees, while the bank itself is getting rich off of your hard-earned money by investing in many of the same funds you rejected or ignored.

Mutual funds are one of the best investment tools available to the average person who wants to grow their savings. While they are not insured, like Savings accounts at the bank, they do offer returns far greater than you can ever expect to make from a Bank or Credit Union. How would you like to make a 15 or 20% gain on your savings in a single year? I do, & sometimes more.

To make sense of what, at first glance appears to be a jumble of names and Brokerage companies, this book attempts to simplify the entire process of identifying, selecting and investing in specific Mutual funds.

Unlike Stocks, which are traded minute by minute, Mutual funds typically are purchased for the long haul and are seldom traded by individuals more than once or twice a year depending on how the Funds are doing.

I review my Mutual Find holdings in-depth each quarter and make 2 or 3 changes a year. This only takes me a couple of hours of concentrated effort at most, to consistently achieve better-than-average results year after year.

There are lots of ways to analyze a Mutual fund and it seems there is no end to someone coming up with a new algorithm which claims to be the newest and best forecaster of performance. For a price, they are willing to sell you access to their so-called secret Winning formula.

That is too much effort, too expensive, and too much information for the average person to absorb or use, so I came up with a simple method that does not even require a calculator. It is not infallible, but it has proven to be as good, or better, than many other methods. (See my disclaimer at the back of this book). My broker chuckled when I first told him about my method, but when he saw my results, the skepticism disappeared and I am smiling all the way to the bank so to speak.

This whole book is intended to make Mutual Funds easy to understand, easy to select, and easy to Manage with the goal of significantly increasing the value of your retirement holdings by a minimum of 12.5 % annually.

In most cases, the gains are often closer to 20%, but you have to realize that the Stock Market does occasionally have down years and the point is to identify funds that have a record of doing well during both good and bad times. So, stop fretting, and start reading about the easiest way to improve your 401k, 403b or 457 results with the same money you are already putting aside.

In 2020, my 457 was up over 40%, your results may vary depending on your balance and the Funds available to you. Here is how long it will take to double your money at a given growth rate. This is how quickly your money can grow with 15, 20, or 25% gains per year. (See the following chart).

Note: At ¼ % interest at the bank, it will take you 288 years to double your money.

Table of Contents

Preface

Introduction

Chapter 1 Evaluating funds

Chapter 2 Selecting a Fund

Chapter 3 Panning for Gold

Chapter 4 Diversification versus Dilution

Chapter 5 Allocating your money

Chapter 6 Rebalancing & Reinvesting

Chapter 7 Measuring your choices

Chapter 8 Fees and Charges

Chapter 9 Dividends & Capital Gains

Chapter 10 Required Minimum Distribution

Chapter 11 Other Investment Options

Chapter 12 Avoiding Portfolio mistakes

Chapter 13 Frequently Asked Questions:

Chapter 14 Market Crash Strategies

Chapter 15 Taxes and your retirement

Chapter 16 The Future

Reference

INTRODUCTION

Why Mutual Funds?

Mutual Funds, and Bonds are the two primary investment options that are offered in most retirement plans. I chose to focus on Mutual funds after years of dabbling in the Stock market, and a short exposure to some bonds many years ago.

Most mutual funds hold shares in 25 to 150 companies in what they call their Portfolio. They also list those holdings in their prospectus, and their top 10 holdings are published daily in numerous Media sources. Typically, the top ten stocks they hold represent close to 33% of their funds’ total investments. They have a lot at stake and have a lot more to lose than I do, so investing in a Mutual fund allows me to share a small portion of the investment company’s expertise and success and limit my downside in the event that they are wrong.

Unlike Stocks, which typically pay dividends every quarter,