In keeping with our goal of bringing you important medical issues for yourself and your family this week’s Health tip addresses sports hernia and the importance of treating it properly.

Our Wealth tips address insider trading as a stock investment tool, and three new values of life insurance a benefit in small businesses due to the Tax Act of 2017.  

Jump around or read the entire issue.  Is any of this important to you?  We need to know if our efforts are worthwhile or should be re-directed.  We don’t really expect that every article will be of interest to every reader but there ought to be at least one important article in each issue that presses some of your ON BUTTONS.  Let us know if we are wasting electrons!!

Be sure to be in touch with Richard Gray, Editor, at rgray@fjmc.org with your articles, comments, appreciation and critiques. Each issue is brought to you by your editorial staff that includes:

• Richard Gray (Editor in Chief)
• Steven Mandel MD (Medical Editor)
• Gary Smith (Wealth Editor)
• Mark Druy (Publisher)

This HWR was sent out on , at approximately 9:15 PM (Eastern and prior to Shabbat).

HEALTH TIP

Sports Hernia - Minor Then Chronic
Dr. Mark Zoland

You are sitting on your couch watching your home team and hear that your favorite player is out with a groin injury. You think he will be out for a week, maybe two; but then you hear that surgery is required, and that his season is over. And this seems to be happening with more and more frequency. Even your neighbor's kid, who has played soccer since she was 7, who is now in college, is going for this "groin surgery." So you ask yourself, what is this injury? Who gets it? Do they always need surgery? Why have I never heard of this before? Shoulder surgery, sure. Knee reconstruction, definitely. But groin surgery?

The answer to your question is: yes, there most certainly is an injury which has become far more prevalent in recent years known as a Sports Hernia, or Athletic Pubalgia. The injury is characterized by a weakening and ultimately a tearing of the attachments to the pubic bone, which is the front of the pelvis. This point of attachment is extraordinarily strong and important, as it is the confluence of many structures which are all involved in propelling the body forward. It is a hard area to injure, but once a tear occurs, it is even harder for the body to heal the separation. The reason for this is two-fold; first is the aspect of chronicity--the injury becomes chronic when it has not had a chance to heal, and the second is the aspect of mobility--most injuries require a degree of immobility or fixation (think cast with a fracture), but this is virtually an impossible area of the body to immobilize.
 
Regarding who gets the injury, generally any person who puts enough strain on the area with enough force and frequency is a potential candidate. The typical person in this category, of course, is the athlete. The higher the level of athlete, the more speed, force, and frequency we see. Similarly, in this day and age of intense athletic competition starting at a rather young age, the player who has a minor groin injury rarely sees it as an issue, and tends to wrap it, ice it, and take a few anti-inflammatories. Thus, what easily begins as an acute, healable injury, becomes a chronic, non-healing syndrome, which ultimately requires surgical repair. 

Dr. Mark Zoland, MD is a general surgery specialist in New York, NY and has been practicing for 25 years. He graduated from J & S Weill M C Cornell Univ in 1993 and specializes in general surgery.

WEALTH TIPS

Wealth Tip - #1

How to get a special edge when desiring to buy or sell a stock
By Gary Smith

How to be a successful trader!  Since we have given so many tips over the last 3 years, I want you to recall some of the tips in our past issues.  Then I would like you to create a tool box for investing with another tip.  We have talked about Alpha and Beta, position sizing, trading for income (options), stop losses, when to buy and sell, trend investing and much more.

In this issue we will review one of my favorite tools to put into your tool box.  The more specialized the tools you use in trading the more money you will make.  Today’s issue involves public information that most people do not know about or do not know how to interpret.

It is called INSIDER TRADING - corporate insiders are a company’s management team, directors, or shareholders that own at least 5% of the company.  They have access to information the public does not. But they cannot trade based on that information. That is illegal.  However, legal insider trading is allowed once the information is released to the public and based on their deep understanding of their business. Most of the time they have to report their trade to the SEC (Securities and Exchange Commission). Then their trades become public.

WHO’S  BUYING?  How important is insider buying?  Generally, you want the top insiders in a company buying its stock. Mainly the CEO, COO, CFO’s, others are important but one of the criteria rests on how much they buy.  If they buy a small quantity of shares compared to their salary it is probably insignificant. How much is relevant?   If you are interested in a particular stock it is important to figure out if the stock purchase is relevant to the amount of salary that insider makes.   For instance if a CFO of a 30 billion dollar company buys 50,000 dollars worth of stock it is probably not significant. But if that same CFO makes about 7 million a year and buys 10 million dollars worth of stock that is quite significant. It is saying she believes in the future of their company.

This is a very nice tool to put into your tool box.  I use this technique repeatedly to help me make decisions. Frequently when we are out to parties we talk about stocks. People give tips.  If you want to take one of these tips and research the insider buying it should help you make an informed decision whether you want to buy this stock or not.

Information gleaned for this article includes discussions in Bogleheads, Defying the Markets by Leeb, Finding the Next Superstocks by Capiella, and Stansberry Daily Wealth Trader.

I hope you enjoyed this tip. Please use it when you are considering investing in a company. It may help you make a rational and informed decision.

Please contact Gary Smith at gsmith@fjmc.org if you have any comments or questions.

Wealth Tip - #2

Three tax act changes impacting corporate owned life insurance… for the better.
By David Hillelsohn

While taxpayers continue to evaluate the impact of the new Tax Act on their pocketbook, one thing has become clear; the tax bill supports the life insurance industry.  Cash value accumulation remained a tax-deferred growth vehicle, loans against cash value continue tax-free, and income tax free death benefits reserved for the individual market now have similar advantages in the corporate market.

Here are 3 tax law changes impacting the corporate owned life insurance market which every business should know:

Reduction in the Corporate Tax Rate: The reduction of the corporate tax rate to 21% for C-Corporations fundamentally changes the approach to purchasing life insurance for owners and for businesses looking to reward key employees. With the higher personal tax brackets, there is a distinct advantage to having life insurance policies owned by the corporation.  One advantage is using the lower corporate tax bracket to purchase the policy; the second advantage is realized when the employer pays out a retirement income to the key employee.  As example, if the agreement is to pay the key employee $50,000/year for 10 years at retirement age, the after tax to the employee at the 37% rate would be $31,500 and it would take $39,873 of cash value from a corporate owned life insurance policy to generate that amount at the 21% corporate tax rate.

Elimination of Corporate Alternative Minimum Tax: A permanent change in the tax code, this eliminates the additional tax levied to corporations owning life insurance on key employees and owners/shareholders. Previously, any death benefit proceeds above cost basis would have been included in the corporate AMT which could lower the net proceeds from life insurance to the company up to 20%.  This allows the employer to fulfill their retirement income obligations to the key employee, and retain the policy as an asset on the balance sheet with no corresponding liability.  Corporate owned life insurance can also be of value to a business as collateral when seeking additional financing.

Tax Savings for 2018: Life insurance is an attractive vehicle for cash accumulation within a corporation as the cash values remain accessible for liquidity to the business and the funds avoid the additional tax associated with retained earnings. Using the 2018 tax savings to purchase corporate owned life insurance allows the business to build cash reserves as working capital, a rainy day fund, or for succession planning to assist with ownership transfer.  Companies that spend time preparing for ownership transition are typically the most successful at making the change.  Having assets available to assist with the buy-out makes the company attractive to the next generation of ownership.

Life Insurance can be an effective tool for cash accumulation and wealth transfer, and the new tax law changes make corporate owned life insurance even more attractive.  Corporate owned life insurance requires notice and consent from the insured and annual tax reporting; make sure to work with an experienced insurance professional who can design a plan that’s right for your organization.

David Hillelsohn founded DHill Financial, LLC with the mission of enhancing the cohesion among families and businesses by prioritizing meeting obligations and taking steps to ensure people know you care.  His vision is for people to want to do for others thereby doing for themselves.  David is an independent agent licensed in the majority states around the country, and he can be reached at 703.435.6028 or by email at david@dhillfinancial.com.  This article is not meant to be tax advice, please consult a tax professional for details.

This issue is prepared by a bunch of guys who are continuing to GIVE BACK to FJMC.  We invite you to also give back to FJMC through your participation and most importantly through donations supporting FJMC as Friends of FJMC.  Participate by clicking on “Become a Friend of FJMC” on www.FJMC.org or contact Gary Smith at gsmith@fjmc.org.

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