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Two critical financial components that act in deadly unison are the twin evils of taxes and inflation. However, because inflation can actually drive purchasing power into negative territory, making you poorer, it is the bigger enemy of the two. ...Read More
Grossly over-inflated home values significantly contributed to the national housing debacle [1]. ...Read More
Tax credits allows you to offset your tax liability at a rate of 100 percent per dollar spent. What this means is that if your total federal income tax liability (including withholdings from pay) were $12,000, then, with a Tax Credit for $1,000, your total tax liability will be reduced to $11,000. That is, 100% of the credit is used to offset that same amount of tax liability. ...Read More
The average taxpayer may not be familiar with some of the rules that control the rate of tax on different types of income. You may find that you make better investment decisions when you understand the tax implications of certain choices.
Taxpayers must pay different rates of tax against varying types of income. The least favorable rate of tax is the ordinary rate. The ordinary rate is the highest rate of tax that an individual will pay; the actual amount is ...Read MoreQuestion: Is there an easy way to figure out how long it takes for an investment to double in value?
Answer:Many investors use "The Rule of 72" as a very easy mental short-cut to quickly get a gauge of how long a proposed investment would take to double in value. Simply divide 72 by the annual rate of return (expressed as a whole number) that will be realized; and the result is the approximate number of years that it will take for the doubling effect. For example, if a bank C.D. will earn 4% annually, then divide 72 by 4. The result, 18, is the approximate number of years that will elapse before the C.D. will double in value. Alternatively, if ...Read More
This essay is intended to highlight only one key aspect of financially-savvy real estate investing: a targeted area’s improvement of its infrastructure. Significantly improved infrastructure is one key marker for the real estate investor to distinguish between sustainable higher home prices and a group of factors that indicate an un-sustainable real estate bubble. The decision whether to invest and when will most likely be affected by the question of whether large gains in real estate prices are sustainable or not. Below is a short list of some of the factors that contribute to long term, sustainable gains in home values. Additionally, there is also a list of the factors that tend to make for unsustainable rise in home prices. Where the second list of factors plays an overwhelmingly dominant role, you can predict ...Read More
Synopsis: The typical savings account, which consists of
demand deposits, offers the convenience of immediate withdrawal;
however, where on-demand withdrawal of funds is not paramount, U.S.
savings bonds, generally, and the Series I Bond, ...Read More
Question: What are the benefits of U.S. savings bonds?
Answer:
Although
the typical investor may find clear advantages of holding "series I"
savings bonds to offset the negative effects of both taxes and
inflation, anyone interested in saving for a child’s college expenses
may be particularly interested in U.S. savings bonds. The following
advantages are specifically meant to be contrasted against what
investor/taxpayers do not receive with bank savings accounts (including CDs).
1) Income Tax Advantages (click here for more on this topic):
Taxes may be deferred indefinitely on ...Read More
Question: I have read somewhere that among America’s millionaires there is a disproportionate number who are small business people. Why is this so?
Answer:Unlike most top executives of very large corporations, the small business owner (SBO) has his or her own capital at risk in the business’ and it is often the SBO’s life savings at stake. Tom Stanley and William Danko published a financial classic in the mid-1990s, The Millionaire Next Door. Millionaire revealed that approximately two-thirds of non-retired millionaires were SBOs.1 The fact that ...Read More
Question: I’m trying to figure out by how much my 401k will grow over time, or for that matter even the exact amount to expect from a bank CD that I’m thinking about buying. Any easy ways to figure this out?
Answer:
If you want to see an excellent site that provides calculators to help answer your questions, check out www.moneychimp.com. To answer your questions directly, we’ll use a couple of hypothetical examples. You can change the inputs accordingly.
Please click here to follow along with MoneyChimp’s financial calculator.
To answer your questions, your ...Read MoreQuick Summary: A Roth 401k combines tax-free withdrawals and lack of mandatory distributions found in the Roth IRA with the higher contribution limits ($15,500) and lack of high income prohibitions found in the traditional 401k qualified retirement plans.
Although it has been available since January 2006, comparatively few ...Read MoreA June 2008 edition of the Washington Post recently provided an excellent opportunity to compare and contrast the significant differences between two banks’ invitations for individuals to deposit money. As the point of this article is to get readers to comprehend just how critical the fine print can be in advertising (rather than to evaluate a particular bank’s advertising practices), the two banks will be called Bank #1 and Bank #2.
Bank #1’s Ad:
Bank #1 offers a ...Read More
Growth in purchasing power of every dollar that you hold is indispensable to your wealth-building. The growth of investment assets, over and above the growth necessary to offset the negative effects of inflation and income taxes, is the key to wealth enhancement. That said, it is essential that you optimize your investment capital (dollars set aside for investment); however, you cannot optimize your capital allocation, unless you comprehend return on investment.
Calculating Return on Investment (ROI)
Return on investment (ROI) is ...Read MoreCapitalistCurriculum.com is designed to provide relevant financial information
necessary for comprehensive wealth building.
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