ITA Wealth Management

Readers interested in supporting small businesses in Nicaragua and Afghanistan are able to do so through a charitable organization known as MEDA Trust.  I’ve mentioned this organization before so run a search for MEDA to read those entries.

Phil Smith, co-author of “A Billion Bootstraps,” estimates funding one business impacts another 100 people. Assuming this to be true, my wife and I set a goal to impact 10,000 individuals over the next few years.  Currently, we are involved in 44 businesses.  Actually, it is only 34 at present as ten already paid off their loans.  We are nearly half way to our goal so it will not be long until we need to look to the next level.

How does this work?  Go to the MEDA Trust site and set up an account.  You will see the types of businesses men and women are attempting to launch.  Locals in the country test the business plans and approve them to be listed on the MEDA site.  MEDA provides the front end and computer accounting.  The money loaned to these small businesses is a charitable donation.  One does not invest in these businesses in order to obtain income.  As a donor, you are actually setting up a small foundation where the donations are loaned to individuals to begin a business.  Those loans are paid back so money will flow back into your account to be reloaned to another business of your choice.

It is possible to totally finance a business on your own or you can partially fund a business.  Partially funding businesses is new for MEDA and a good idea.  If someone is trying to launch a business that requires $10,000, it may take a long time to find funding.  But if many folks band together, it is possible to launch that $10,000 business.

Take a little time and look into MEDA Trust.  It is a worthwhile effort to help those who have so much less than many of us.

Lowell Herr

Action has been the name of the game as the market declined.  A number of limit orders were struck.  These purchases plus all the portfolio updates combined to generate considerable reporting, particularly over on the Premium Content side of the blog.  It is time to take a deep breath over this weekend.

Here are a few things to focus on over the coming weeks.

• If you have not made the move to set up an investment plan, begin to lay out your long-term goals.
• An investment plan should begin with an outline of what asset classes you want to use.  Do you want to use index funds or ETFs?  If you are making small monthly deposits, be sure to use index funds so commissions do you eat up a significant percentage of your investments.  If you are investing larger amounts, then ETFs will serve you well.
• Once you have the asset classes identified, go to Vanguard as they are the standard in offering low cost investment vehicles.  If you cannot find an ETF or index fund to meet your asset class of interest, then check out Barclay’s iShares.  Don’t get fancy and fall into the trap of investing in actively managed ETFs.
• Before you make any purchases, lay out what percentage you want to invest in each asset class.  This is going to be your most difficult decision.  To aid in this decision, I highly recommend investors check out the IFA web site.  Be sure to take the Risk Capacity Survey.  Take the time to complete the survey of 25 questions.  It is also a good idea to have Mark Hebner’s Index Funds book in your hands so you can look through the portfolio you will be assigned as a result of taking the survey.  Note: The survey is free.
• At this point, your investment plan shows the seven to fifteen asset classes you are going to use to construct the portfolio.  Also, you came up with target percentages for each asset classes.  Don’t become paralyzed over the target percentage decision as you will most likely change these over time as your career or financial situation changes.  You will want to revisit your target percentage asset allocations each year.  It is a good idea to completely review the portfolio each year.
• Set up an account with a discount broker.  I happen to use TDAmeritrade, but there are others.  I happen to like TDA’s monthly broker statements and their commissions are low.
• It is now time to begin buying index funds or ETFs to populate the portfolio.  From time to time you will likely want to add a specific stock that you have analyzed and feel quite comfortable adding to the portfolio.
• How are you going to monitor the performance of your portfolio?  What benchmark are you planning to use?  Check out our spreadsheets over on Premium.  I recommend the benchmark be VTSMX.
• Now go do it.