Dad was a zookeeper. My sister Sandra and I benefited from this because dad brought baby lions for us to raise at home. What fun! We loved them… so cute, warm and cuddly… sort of like a pension.
Portland news article about us raising “Boots” our first lion.
Pensions can make us feel all warm and cuddly… safe in the future… with not a care in the world. Then like lions they can grow up.
Oops. Here is dad with Boots some months later… not so cute… not so cuddly and he might just bite us in the… but there is a solution.
The first chapter in this series The Great Pension Robbery reviewed three ways that the purchasing power of pensions can be stolen away.
That article examined the first way pensions can be robbed through under funding from insufficient contributions.
Two other forms of pension theft… are lowered return on assets and the destruction of the pension currency in upcoming messages.
This message looks at pension theft from lowered return on assets
Thomas Fischer speaking at the Writer’s Camp delegate at our summer home.
Thomas Fischer sent me this note (bolds are mine): Hi Gary, Yesterday the ECB lowered interest rates by 0.25% (deposit and loan rates).
As a consequence Denmark also lowered its interest rate by 0.25% (loan rate reduced from 0.45 -0.20%) and the Central Bank also lowered its CD rate (banks deposit rate at the Central bank) by 0.25% to minus 0.20%. It’s the first time in the Central bank´s 200 years history they have had negative CD rates.
They are doing this to keep the currency peg towards the EUR (it can move within a 2.25% band). The Danish kroner is a safe haven and the Central Bank has taken this step to stop the rise of the kroner.
Danish 1 year government bonds yield minus 0.268% whereas investors can get a “whopping” 1.232% on a 10 year bond!
Great if you a looking for financing but for savers it’s awkward! Thomas
Ways how to get ideas on better returns from Jyske contact: Thomas Fischer at firstname.lastname@example.org
Canadians and other non Americans should contact Jyske’s René Mathys at email@example.com
There you have it… you have to pay to have a bond in a safe currency issued by a safe government. This is not a low return. This is a negative return.
Your pension contributions may be based on the expectations of earning 8% per annum.
Here is an excerpt from a New York Times article entitled “Public Pensions Faulted for Bets on Rosy Returns” by Mary Williams Walsh and Danny Hakim: While Americans are typically earning less than 1 percent interest on their savings accounts and watching their 401(k) balances yo-yo along with the stock market, most public pension funds are still betting they will earn annual returns of 7 to 8 percent over the long haul, a practice that Mayor Michael R. Bloomberg recently called “indefensible.”
In New York, the city’s chief actuary, Robert North, has proposed lowering the assumed rate of return for the city’s five pension funds to 7 percent from 8 percent, which would be one of the sharpest reductions by a public pension fund in the United States. But that change would mean finding an additional $1.9 billion for the pension system every year, a huge amount for a city already depositing more than a tenth of its budget — $7.3 billion a year — into the funds.
But to many observers, even 7 percent is too high in today’s market conditions.
Projection 7% or 8%. Reality – .02%.
Most pensions are being robbed through these unrealistic projections. The high estimated return reduces the contributions that will be needed for the retirees in later years. This is a very subtle theft but just as deadly to purchasing power as an armed bandit with his kerchief and gun.
The past wisdom of relying on pensions for retirement may not be so wise in today’s economic and demographic environment.
One adventurous way to extra earn income is with a seminar tour or events business. To see more details on how to start an events business, click here.
Another way to have a steady income is through agriculture.
Ecuador Agricultural Real Estate Tour
For current Ecuador Agricultural Real Estate information send me a note at firstname.lastname@example.org
Ecuador coffee farm entrance.
The original owner spent two years searching for the perfect location to duplicate the exact terrain, altitude and growing conditions of the most successful coffee farms of Boquete, Panama and Columbia.
Terrain and coffee plants.
After walking with an altimeter in hand and talking to reclusive indigenous farmers, this region was discovered with all the perfect conditions to cultivate exceptional Arabica coffee trees.
Owners house with roof terrace.
This is a micro climate, blessed with abundant rainfall, in clean mountain air, bounded by a clear trout filled year around rushing river, protected from extremes of wind and large temperature fluctuations, perfect for growing coffee.
Open drying patio.
It has 11 hectares planted (manageable for a single owner), with approximately 50,000 Arabica, varietal Caturra (self pollinating) coffee trees which are perfectly distributed over a hillside interspersed with a variety of fruit trees for shade.
Oranges grown to protect coffee trees.
No problem selling this crop for top dollar due to its proven high quality. The coffee sales last year grossed $70,000 so after $25,000 expenses, $45,000 was the net income.
As well, an experimental 1 hectare of Geisha varietal. Geisha is considered to be one of the finest coffees in the world and garnered the highest auction record in coffee history, fetching $170 per pound in 2010. The first harvest of this varietal is expected in about 2 years.
Coffee plants grown in greenhouse on farm.
This Andean location provides an ideal environment for coffee growing without damaging the unique habitat of many species of birds. Arabica coffee trees are a major source of oxygen production. Each hectare produces 86 pounds of oxygen per day which is 50% of rain forest habitat. Ecuador is a biologically diverse country with an abundance of birds, amphibians, reptiles and butterflies. Inca Mountain Coffee Farm is ecologically in harmony with its environment.
The Arabica coffee trees are 6 years old, providing remarkable yields, allowing for continuous flowering and two annual harvests (major harvest Feb-Jun and minor harvest Oct-Nov).
Covered drying patio.
In the yearly Golden Cup competition, coffee from this farm was a finalist in 2011.
Seasonal worker harvesting coffee.
Owner’s house – 900 sq/ft, 2 bed, 1 bath, with lots of marble, built in cabinets in both bedrooms and upper roof porch
Caretaker’s house – divided into multiple rooms with bathroom
Land line phone installed and operational
110 and 220 volt electric lines
Equipment: 2 coffee bean pulpers with 2 water tanks, 2 weed whackers, misc. tools, scale for weighing coffee bags
1 large uncovered drying patio and 1 covered drying patio
2 full time highly experienced workers – monthly payroll is $650 (plus more during harvest for seasonal workers)
Average yearly expenses: $25,000 (all payroll, fertilizer, harvesting expenses, utilities, taxes)
This clean mountain river that runs year around with trout. Also, access to mountain water for farm irrigation, though it is rarely needed.
Farm is fenced along road.
You can set the date for your own tour.
Case Study #3: This third case study shows an American who has created a large Ecuador agri operation. This is the farming operation set up by Young Living Essential oils.
After creating a marketing system for the oils and farming in the USA, Gary and his wife…
moved to Ecuador… began a large farming operation as well as…
there own processing and a health spa.
Ecuador is a perfect place for many types of agriculture… large and small. Find your farm in the safe and efficient way on an Ecuador Agricultural Tour.
For efficiency and logistics this tour is strictly limited to 15 people… 4 persons per four wheel drive vehicle.
You can set the date for your own tour.