March – April 2019

What's in this issue

Real Estate Investment Trust

Have you wanted to invest in real estate but have never had the money it takes to invest? You may want to look into a real estate investment trust or REIT. A REIT is an organization that pools investors’ money to invest in commercial real estate.

You buy shares in the real estate called units. It’s like the stock market for real estate. You can buy and sell units in a similar way to stocks.

REITs pay no income tax on their earnings. Instead, it has to distribute 95 % of its net income and the distributions are taxed to the unitholders as dividends. Unlike investing in major companies that are taxed twice when they pay dividends. These are a few more obligations that a REIT must follow.

The REIT must have at least 75 percent of its assets invested in real estate, mortgage loans, shares in other REITs, cash, or government securities. The REIT must derive at least 75 percent of its gross income from rents, mortgage interest, or gains from the sale of real property. And at least 95 percent must come from these sources, together with dividends, interest and gains from securities sales.

The REIT must have at least 100 shareholders and must have less than 50 percent of the outstanding shares concentrated in the hands of five or fewer shareholders.

This provides an opportunity for those to invest in commercial real estate without having to commit your life savings.

realstate invertment trust

Once again this is still an investment and nothing is guaranteed. When dealing with the real estate market you have to be ready to accept the ups and downs of the market.


So when the real estate market is struggling you may struggle as well and it may have a bigger impact on your investments than if you were investing in stocks and bonds.


As you can imagine there are plenty of regulations and details that are involved with a REIT and we just do not have the room to publish them all. REITs can be confusing to the beginning investor and should be researched and analyzed before you decide you want to get involved. It is always a good idea to contact a local investment group and come prepared with many good questions. You may live in an area where there is not even many opportunities to invest in a REIT.


So if you have ever dreamed of being a real estate mogul this may be the opportunity you have been looking for. Just make sure you know what you are getting into.

Budget Boosters

As you can imagine there are plenty of regulations and details that are involved with a REIT and we just do not have the room to publish them all. REITs can be confusing to the beginning investor and should be researched and analyzed before you decide you want to get involved. It is always a good idea to contact a local investment group and come prepared with many good questions. You may live in an area where there is not even many opportunities to invest in a REIT.


So if you have ever dreamed of being a real estate mogul this may be the opportunity you have been looking for. Just make sure you know what you are getting into.


You may buy a membership card and then find out that there are not a lot of items that you care to buy in bulk. It is a good idea to visit the store with a friend who already has a club card. Take notes and look for items that you may purchase in bulk to help you save money.

Many of the same rules that apply for shopping at your local grocery store apply when shopping at a warehouse club.


Never go on an empty stomach and don’t buy an item that you don’t usually use just because it is on sale are two big shopping dont’s.


You should visit your regular grocery store to pick up things that you generally buy and price them. You can then compare prices to find out if you are actually saving on items that you buy. Follow some of these steps when shopping at your club warehouse.


Take a calculator. When dealing with bulk products you have to divide the overall price by the amount that you are buying or the unit price. This way you know if you are actually saving money by buying 48 oz. of ketchup for $5.99 over the grocery store price of $3.99 for a 20 oz. container.


Account for storage. If you find a great deal on some frozen foods but don’t have enough room in your freezer than you will be wasting food. An extra freezer can be a great financial tool when it comes to groceries.


If you don’t have a lot of room for storage you could always go with a friend or neighbor to buy items. Plan out ahead of time what you will buy, then you can agree to split everything down the middle.


Don’t plan on a lot of variety. If you have a favorite brand you might not be able to find it. Warehouse stores only carry a few different varieties of products and in some cases only one brand.


Another benefit of warehouse clubs is that they are beginning to offer gas. Depending on how much gas you use, you may be able to account for the cost of the annual membership in gas savings alone.


Warehouse shopping is not for everyone and you may feel uncomfortable spending that much money at once. Make sure to test the waters first, you may come to enjoy and find yourself shaving dollars off of your monthly grocery budget.

Penny Pinchers Club

Are you the type of person that comes up with terrific ways to Pinch Pennies? If so please email us and share your ideas.


Easter is a fun time for our kids but we try not to go overboard with too many store-bought trinkets. We make homemade easter baskets out of the strawberry baskets you get at the store. We hand shred old magazines and newspaper for the grass and spend the night before easter dying eggs and making our own candy.


Lynn K. IA

Counting on Social Security?

There has been a lot of talk about Social Security lately. A lot of it has to do with the fact that the benefits of Social Security are slowly deteriorating and may not be there for the next generation of retirees. There are countless amounts of information about Social Security and it can become confusing trying to sort it all out.


Social Security is a form of retirement and disability benefits that is taken out of your payroll through the Federal Insurance Contributions Act (FICA). This money is invested and then when you choose to retire the government will pay you back. This money will also be used to assist you if you become disabled. Dependents may collect Social Security if the beneficiary has passed away.


There are many political debates that revolve around the state of Social Security and what needs to be done to fix it.


It is important to note that Social Security was never intended to be the sole provider of a person’s retirement funds. Even if there were no problems with Social Security it would be difficult to financially survive on Social Security alone.


You should receive statements that will keep you updated on how much you have accumulated and begin collecting once you turn 62. If you do not receive statements you can request one by contacting the Social Security office.

You can go online and fill out a request, then you will receive your statement in the mail in 2-4 weeks.


For security reasons you will need to provide them with your name as it is shown on your Social Security Card, your date of birth, your place of birth, and your mother’s maiden name.


Unless things change, the government will be paying out more Social Security than it is collecting. This of course, is bad news for everyone. We are still approximately a decade away or so depending on whom you ask. That gives the government some time to figure out a plan to fix the problem.


The consensus believes that it is the younger generation (those who are just entering the workforce) that has to worry about Social Security benefits. Politicians have been debating the problems for some time now with mixed resolutions. They have yet to come up with a plan that they can all agree on.


It is important that you begin to take control of your own retirement security instead of gambling on the outcome of Social Security.


In the previous year the Pioneer Pilot has featured many articles on retirement options. Plans like IRA’s, 401(k)’s, and mutual funds provide a lot better financial security for you when you retire. You will want to explore and research one that best fits your needs and lifestyle.


So you can continue to listen to the debates and political finger pointing and hope that they get it fixed or you can be proactive and invest in your future wisely.



RESOURCES: – The government’s website on Social Security. – Many questions and answers regarding Social Security.

COBRA Coverage

Insurance Benefits

Health insurance is a great part of any job. If you lose that job for certain reasons you may find yourself un-covered and susceptible to large doctor bills in the event of an accident. COBRA or the Consolidated Omnibus Budget Reconciliation Act of 1985 is an insurance program that may allow you to carry your health insurance coverage after you have left your job.


Cobra allows you and your immediate family members who were previously covered by your health care plan to keep coverage if you have lost coverage due to a “qualifying event.”


Here are a few of the general “Qualifying Events” that will make you eligible for COBRA coverage.

1. The death of the covered employee.

2. Termination or a reduction in hours that causes the worker to lose eligibility for coverage. This includes resignation, discharge, layoff, strike or lockout, medical leave, or slowdown in business operations.

3. Divorce. If you or your ex-spouse’s benefits were concluded once the divorce was settled you might be eligible.

4. A dependent child reaches the age at which he or she is no longer covered under their parent’s health insurance.

Even though COBRA extends the benefits that were provided to you by your previous employer, you are now responsible to pay the premiums in full. There may also be an additional 2 percent administrative fee. This can obviously be a strain on your finances, especially if you are still unemployed. However, you are taking a real risk by not having any health coverage between employment.


The premium rates may be high but you will be paying group premium rates, which are lower than individual rates.


COBRA coverage begins on the date that your health care coverage would have been canceled due to a qualifying event. Your previous employer must notify insurance administrators of a qualifying event within 30 days if the event is employee death, termination, reduced hours of employment, or privilege to Medicare.

ualifying event is divorce or legal separation or a child who is no longer qualified as a dependent.


You will then receive an election notice about 14 days after you notify the administrator. You then have 60 days to decide if you want to elect COBRA continuation coverage. If you choose to elect coverage then you have 45 days to pay the initial premium payment.


There is only a certain period of time that you can be covered by COBRA. Beneficiaries are eligible for group coverage during a maximum of 18 months for qualifying events due to employment termination or reduction of hours of work. Some qualifying events or a second qualifying event during the initial period of coverage, may permit a beneficiary to receive a maximum of 36 months of coverage.


You will want to make sure to make your monthly payments on time and do not miss a month or you are risking the chance of having your COBRA coverage dropped.


This information can be a lot to absorb in a small amount of time. Make sure to explore your own coverage and ask your insurer questions. It is easy to forget about insurance if you have left or have been terminated from your job. But if you go without coverage you will be taking a huge risk. Insurance should be one of your top concerns and COBRA is at the very least a temporary solution until you can get back on your feet.



Resources: – Department of Labor’s page for COBRA coverage. Features many answers for specific questions. – A website that will help answer your questions about COBRA

Questions & Answers

Q: Should I get flood insurance?


A: This really depends on where you live. If you like in an area that is more prone to wet seasons then you may want to consider it. Consult your insurance agent for plans and rates. Most homeowners insurance plans do not cover damages caused by flooding. Damage caused by flooding can add up to thousands of dollars in repairs Not only do you have to replace many items you may have to tear out carpets and drywall that has been infected with mold if you do not want to buy flood insurance you should at least make sure that you have a functioning

If you do not have a copy of our FREE “Simplified Guide to Financial Life Skills” workbook, contact us and we will ship one to you at – NO COST! –

Pioneer Credit Counseling Clients receive The Pioneer Pilot for FREE. If you are not a client of Pioneer Credit Counseling, and would like a subscription to our monthly newsletter discounted to only $30 per year (a $60 per year value), please send a check or money order to:


Pioneer Credit Counseling

Attn: Newsletter Subscription

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Rapid City, SD 57709



Pioneer is not responsible for any advice given in The Pioneer Pilot. Everyone has a different set of circumstances that would determine if an idea or plan is the best one for them. Information provided should not be intended as legal advice.









The Millionaire Next Door
by: Thomas J Stanley and Willam D. Danko


The authors debunk the myth that most American millionaires have inherited their wealth. By demonstrating how hard work and smart investing have made millionaires out of average Americans, this book shows us that we too can be among the ranks of the wealthy. An inspirational book that offers some sound advice.

My Financial Journal

It’s been a busy month for me. Got my taxes done and juggled with a car dealership.


Let’s start with taxes. My wife and I went online to do our taxes similar to what we have done the two previous years because we are big fans of them asking you questions and you filling in the answers and numbers.


We had a hunch that this year would be a little more difficult because of the addition of our daughter and the fact that we bought a house. After a few frustrating hours we finally got it finished after going back and forth to fix our errors. My wife and I couldn’t figure out why this apparently intelligent program couldn’t figure out that our daughter was born in August so she did not live with us for more than 6 months. 


I guess technically she did, but you would think if it was a really easy program it would figure it out for us. So we felt a little stupid, but finally got it all ok. That is until I received the lovely email the next morning saying that our return was rejected because they couldn’t accurately confirm our identities. Once again we (mostly my wife) figured it out and we were finally approved and don’t have to worry about it for another year.

We received our return and actually made some good financial choices. We paid off the remainder of a small loan we took out a year and a half ago and put the rest into savings. By paying off that loan we opened up $140 into our monthly budget.


In March my wife’s car lease was up and we needed to figure out what we wanted to do. We chose to lease the car in the first place because it was the best way for her to get into a reliable vehicle for such a small payment.


We determined that we couldn’t increase our payment because it was not in our budget, so a new car was probably out of the question. We went in and explained why we were there and the polite salesmen said, “Why don’t you drive a new one while we get the paperwork ready.” Big mistake, because the upgrades they made to this car* were great and I loved driving it.


After our little test drive we were still firm that we couldn’t afford a higher payment. The dealership worked out a couple of scenarios that involved buying our current car that was leased and what a new lease would be. As we suspected the newer car was out of our price range and we would probably have to buy out our current car. Not one to make hasty decisions we said that we would have to think about it. They let us take the new car for the weekend to see if it might change our mind. Come Monday we were still determined that we couldn’t afford it and regretfully told them it was not in our budget.


Then there were the magic words of “Let’s see what we can do.” They came back with an offer that was actually cheaper than if we decided to keep the older one. My wife and I spent one more night debating if we wanted to extend making lease payments over making similar payments and having the car paid off in four years.


We felt that we liked the new safety features and gas mileage (almost 10 more mpg) for the new one and knew how well this brand retains it’s value and walked away with a new vehicle.


Well, until next month, have fun and good luck.

*As to not endorse a specific brand I chose to leave the brand anonymous.

Beware of Predatory Mortgage Lenders

How many people out there have not heard of Ebay, or Amazon? I would hopefully assume a majority of you have. Internet commerce is as popular today as spending the weekend at the mall, and why not, you can bargain shop for items all across the country without having to fight crowds or sift through unorganized flea markets.


There are plenty of ways to both save and make money on the Internet. The important thing is that you have to do it right while protecting your security.




There are millions of products that you can buy online and not everyone is a reputable online business. Whenever you give out payment information you are putting yourself at risk.


It is important that you stick with dealers that are more nationally known and have better security protections. A secure website will feature a tiny icon of a padlock in the lower part of the web page.


Many online retailers accept payment with online payment tellers. The most popular one used is PayPal. These companies help ensure that you will be protected against fraud and identity theft.


Some retailers do not accept credit card orders and you will have to send them payment through the mail. You do not want to send a personal check through the mail that contains your routing and checking number, as well as your personal information. It is better to send a cashier’s check or money order. You are still taking a risk by sending money through the mail and you may not get the item that you paid for.


Make sure that you print or keep copies of receipts and confirmation numbers that are given to you for online transactions.


These are some tips for you if you want to sell some items online.

Your best bet would be to choose eBay for the item you want to sell. They are the most popular and safest choice out there. They can also assist you with setting up your items.


Find out if your item has any value. Search for it online to help you determine what you can sell it for. If you find that there is a bunch of them and they are not selling you can choose to sell yours for cheaper or decide to not sell it at all if you don’t think that it will sell.


By researching your item, you can make sure that you are not selling too high or too low. How red would you be if a rare item that you sold for a few bucks was actually worth a couple hundred?


A way to avoid having to price the item yourself is to set it up for auction. You set a minimum price and then set a timeframe where shoppers can put bids on the item and when the time is up the item goes to the highest bidder.


How do most businesses sell their products successfully? By advertising. When selling your product online you want to write a captivating description along with a few clear photos of the item.

You want to draw in potential buyers with exciting words. If you are not the most creative person, look around and take notes on how other people sell their items. Just make sure that you are telling the truth and honestly describing your product.


Even though it can be intimidating, buying and selling online is a good way to find bargains and by being cautious can be just as safe as walking into the mall and purchasing items.


Resources: – Online provider of secure money transactions. Many online retailers encourage the use of PayPal. – The most popular and widely used online auction site where you can either buy or sell items.

Teen Times

Hey Seniors, start compiling your list of family and friends that you want to include on your graduation announcements.


Your announcements should soon be arriving and it will take a little time to get them all addressed and personalized.


You can start now by getting all of your addresses gathered and your senior pictures signed and ready.


Buy thank you cards now and get them all addressed to save you time after your graduation party. The last thing you want to do during the summer is write thank-you notes. Don’t forget to save a little of that money you get from graduation.