Why I am careful with oil!

Picture of Darnell L Williams running his lawn business at age 18.

On March 5, 1968, gas sold for 27 cents a gallon. I just got gas today March 5, 2001 for $3.49 per gallonWhen I started working, gas sold for 29 cents a gallon. Then came the end of the Vietnam War and the gas lines that the media blamed on the Arabs. That started the negative talk about the Arab World in this country. Next thing you know, we were bombing and shelling Arab Countries, calling them terrorist.

Then the Iraq Wars started and we find ourselves taking over Arab Oil fields.

People do not know that US Oil Field Production peeked in 1970. World Oil field Production peeked in 2001. Demand for oil is going up while the world supply of oil is going down. So prices must go up over time. This is why I have always bought cars giving good gas mileage.

The problem is, the United States runs on oil. Without Oil, the American economy would collapse. We can’t move away from oil because the people who run this country are controlled by oil interest.
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http://dieoff.org/page116.htm

Take a look at this chart created by Campbell and Laherre, Petroconsultants Pty. Ltd., created in 1995. The report, written for oil industry insiders and priced at $32,000 per copy, concludes that world oil production and supply probably will peak as soon as the year 2000 and will decline to half the peak level by 2025. Large and permanent increases in oil prices are predicted after the year 2000. I I said, production peeked in 2001. But this prediction failed to account for an increase in Third World oil usage by China, India, and the rest of the third world. So world wide oil supply will be depleted sooner than predicted.

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http://zfacts.com/p/35.html
Are you ready for another round of gas price increases? As the United States comes out of depression, (yes, depression), the public and industry will use more gas and oil. So will India, China and the rest of the world because they will produce more goods and services that use gas and oil. Even if OPEC increases world production, with aging oil wells, one day, they will not be able to keep up with demand. The price of oil and in turn the price of gas must go up because supply of oil must fall and the demand for oil must rise.

With limited energy; the world economy will have movements toward prosperity followed by periods of economic collapses for countries that have high labor cost and the greatest need for oil.
So what investments should you look for?

Corporate Junk Bonds are the safest investments. But Corporate Junk Bonds do not have the chance of making the most money. That lies with stocks. But in an economy that rises and falls sharply without warning, stocks carry the biggest risk.

I have been investing heavily in VENEZUELA REPUBLIC NOTES 8.500% 10/08/2014.

Venezuela is in South America but is a member of OPEC. This bond has a “BB-“S&P Rating. The reason why is because most American Capitalist don’t like the leader of Venezuela. But who is going to boycott buying Venezuelan Oil?

If this bond is bought on April 8, 2011 and kept until it matured, you make the following;

1. Bond bought at $867.50 and on October 8, 2014, you receive $132.50 at maturity.
2. The bond will give $85 per year, $42.50 twice a year (Oct 8 and April 8) until maturity or $340 received over 8 payments until and including maturity.
3. That would give you a total per bond of $472.50 over 3 years and 6 months on an $867.50 investment.

If the country and its oil company would go bankrupt in this amount of time, you may loose some money.
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How is Darnell's Portfolio doing?

"Year to Date," the stock market measured by the Dow is up 5.96% as of Thursday March 3, 2011. My portfolio made up of 95% Junk Bonds is only up 2.47%. For the past 26 months, it is up 82.85%. If the stock market continues to go up this year, it should out perform my portfolio for 2011. I am looking for at least a 10% return on my money but no more than 15% by the end of the year.

Using Your 401K Money with No Penalty

http://www.ehow.com/video_4981362_401k-ira-differences.html

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What is the difference between a 401K and an IRA ?

You can rollover an IRA from one account to another at any time, but if you are a victim of a corporate layoff, or considering changing jobs or about to retire and you are thinking of rolling over or contemplating withdrawal of funds from your 401k plan, then you have several options depending on your age, provided you are no longer working for the employer providing the 401k plan.

I have been laid off from Several employers. Since my first layoff in 1985, I transferred my 401K to a Self Directed Rollover IRA and invested the money into Discounted Corporate Bonds.

http://www.ehow.com/video_4992741_accessing-contributions-emergency.html

Your 401k withdrawal options are as follows if you are under 59 ½

The above video explains if you have an emergency, what you can do with your 401K. You can take a lump sum distribution, in which case your 401k plan provider will write you a check for the value of your account less a 20% withholding tax mandated by the IRS, and a 10% withdrawal penalty. The 20% tax that is withheld, but NOT the 10% penalty, will be counted against your income tax payable or will be counted towards any refund due for the tax year when you file your tax return.

The IRS has some 401k penalty free withdrawal exceptions.

You can do nothing and leave it with your previous employer as long as the amount is greater than $5,000. Amounts less than $5,000 will usually be distributed to you, less a 20% withholding tax, regardless of you age. (Check with your plan sponsor or employer for more details.)

Your 401k withdrawal options are as follows if you are over the age of 59 ½ but under 70 ½:

If you take a lump sum distribution, in which case your 401k plan provider will write you a check for the value of your account less a 20% withholding tax mandated by the IRS. The 20% tax that is withheld will be counted against your income tax payable or will be counted towards any refund due for the tax year when you file your tax return.

You can do nothing and leave it with your previous employer as long as the amount is greater than $5,000. Amounts less than $5,000 will usually be distributed to you regardless of your age. (check with your plan sponsor or employer for more details.)

Your 401k withdrawal options are as follows if you are 70 ½ or older.

If you take a lump sum distribution, in which case your 401k plan provider will write you a check for the value of your account less a 20% withholding tax mandated by the IRS. The 20% tax that is withheld will be counted against your income tax payable or will be counted towards any refund due for the tax year when you file your tax return.

You can leave it with your employer 401k plan but start taking the required minimum distribution.

You can do nothing and leave it with your previous employer as long as the amount is greater than $5,000. In this event, you will be taxed 50% of the required minimum distribution. If the amount is less than $5,000 per 401K account, the money will usually be distributed to you regardless of your age. (Check with your plan sponsor for more details.)

No matter what, you still have to take the required minimum distribution even if you roll it over to an IRA.

Hardship Withdraws When Times Are Bad

All of us fall on hard times some where in your life. When I was in my twenties, a coworker in his 50s told me that God mapped out a plan for all of us. He said that we will have so many days of good times, so many days of bad times, and so many days when we wish we never came here.





So what happens when you have been out of work for a year? You will probably have a lot of bills to get caught up on. You just started back to work. You have no money, your mortgage or rent is due and the children need shoes? You look at your IRA with $20,000 in it but you know at age 40, you would take a big hit in taxes and penalties if you withdraw that money. Do you know that you may qualify for an IRA Loan?

The first thing you must do is familiarize yourself about the IRA withdrawal rules of the IRS and of your IRA Host Program. This is crucial. While Individual Retirement Accounts (IRAs) are created to be distributed after becoming 59 ½ years of age, you may qualify for special cases and instances that will allow hardship loans due to severe financial difficulties. The good news is that for most IRA accounts, there is always an exception that permits you to procure money out in specific bad luck circumstances. These distributions are governed by the IRA hardship withdrawal rules, which may or may not allow you to take funds without reimbursing a ten percent penalty on the money.

For example, your retirement account might only permit you to pay for new home loan expenses. Thus, if you need funds for your child’s college education, you will not be able to take money from your retirement plan without receiving a ten percent penalty from the IRS.



Once you know the qualified rules for an IRA Withdrawal, you should learn about the process that your provider has to carry out for your request. Every provider has their own set of procedures for accepting and approving a hardship withdrawal. They may ask you to write a letter about your situation with a few attachments as proof of your hardship. Some companies ask you to completely fill out a special form with notarization. They may ask that you send in the form to the firm by mail or by fax. You should determine how much money you need to withdraw from your IRA before you make your request.



Last, make sure you set up a plan to pay your IRA back over time. Usually, you pay the money back with interest to yourself not to your IRA provider.

What Will You Do If Someone Steals Your Identity?

So you think that it will never happen to you? Most of the time, it will be someone you know that will steal your identity and rip you off. It could be your wife, your husband, your children, even your grandchildren. Maybe your brother or your sister might need a few dollars. Your mother, who borrowed secretly from the church may need money from your credit card to make things right with God! It could be your best friend who has a drug or drinking problem. It could be the gambler, next to you at work. He just needs another turn at the cards and he will make it big. It does not have to be someone who you don't know. It could be the person looking at your right now.

About 5 years ago, I was sitting in my cube fixing a computer program for my employer’s client when I overheard the programmer next to me talking on the phone. He started receiving Visa Bills and other charges that did not belong to him. He found out that his neighbor intercepted his mail about 2 months ago and took over his credit card accounts and opened several more. He did not know what to do.

After over hearing his conversation on the phone, I went over to him and offered my assistance. The first thing I had him do was to call the police and report the crime. Then I had him call the 3 credit Bureaus and report the situation to them.

Credit Bureaus

Equifax
1-800-685-1111 or http://www.equifax.com/

Experian
1-888-397-3742 or http://www.experian.com/

TransUnion
1-800-916-8800 or http://www.transunion.com/

You should get a free copy of your Credit Report every year. This way you can check your three reports to see if anyone is using your credit. Another thing that you can do is check to make sure that your credit report is correct. One year, I found that five (5) Darnell Williams’s charges were on my credit report. One of them busted up a bar and owed over $20,000 in damages.

FREE Annual Credit Report Request Service
1-877-322-8228 or www.annualcreditreport.com
Annual Credit Report Request Service
P.O. Box 105281, Atlanta, GA 30348-5281


Then I had him read about the other steps he could take in his situation. The Federal Trade Commission and the Pa. Commission have some good information on their website.

Federal Trade Commission
1-877-ID-THEFT or www.ftc.gov/idtheft
FTC comments on credit monitoring services
www.ftc.gov/bcp/edu/microsites/idtheft

Pennsylvania Commission on Crime and Delinquency
www.identitytheftactionplan.com/actionplan.pdf


Some criminals will assume your identity by using your social security number. This is one step that they take in opening accounts in your name.

Social Security Administration
1-800-772-1213 or http://www.ssa.gov/

They can take over your Identity by applying for a driver’s license in your name. Here is the driver’s license site for people living in Pennsylvania.

PennDOT
1-800-932-4600 or http://www.dot.state.pa.us/

It might be a good idea to stop pre-approved credit offers. This is what criminals like to get their hands on. They can take your mail, spend your credit and do it all before you get home from work.

Opt Out (stop pre-approved credit offers)
1-888-5opt-out (888-567-8688) or www.OptOutPreScreen.com
Deaf and hard of hearing consumers can call 7–1–1 and refer the
Relay Operator to 1–800–821–9631.


Here are some other websites that might help you with telemarketers, cutting down on getting mail, and help with your finances.

National Do Not Call Registry (stop telemarketers)
http://www.donotcall.gov/

Direct Marketing Association (cut down on catalogues)
www.the-dma.org/index.php

Credit Freeze Information
www.attorneygeneral.gov/consumers.aspx?id=2085
www.consumersunion.org/pdf/security/securityPA.pdf

Pennsylvania Office of Financial Education
http://www.moneysbestfriend.com/
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