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INVESTMENT INSIGHTS & SPECIFIC RECOMMENDATIONS

INVESTMENT INSIGHTS & SPECIFIC RECOMMENDATIONS. Most Frequently Asked Questions. 1. I have some extra money, what investment would be good for me?. 1 – Diversified 2 – Allocated 3 – Low Expenses. Vanguard meets these three requirements.

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INVESTMENT INSIGHTS & SPECIFIC RECOMMENDATIONS

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  1. INVESTMENT INSIGHTS & SPECIFIC RECOMMENDATIONS

    Most Frequently Asked Questions
  2. 1. I have some extra money, what investment would be good for me? 1 – Diversified 2 – Allocated 3 – Low Expenses Vanguard meets these three requirements Found at: https://personal.vanguard.com/us/content/Funds/FundsVanguardFundsTargetOverviewJSP.jsp
  3. 1. I have some extra money, what investment would be good for me? … as of 8/31/2010 Companies Bonds 3,381 4,762 478 493 831 TOTALS 5,183 4,762
  4. 1. What Investment 1. I have some extra money, what investment would be good for me?
  5. 1. What Investment 2. I want to do my own investing, where can I find quality information? 2. Quality Information
  6. 1. What Investment 3. I have some money that I am going to use shortly, where should I put it? 2. Quality Information 3. Short Term Money Depends on your Time Line Less than 2 years = Money Market 2 to 5 years = Conservative Portfolio 5 to 10 years = Balanced Portfolio More than 10 years = Equity Portfolio Where can I find these Portfolio? – Next Question
  7. 1. What Investment 4. Where can I find good Portfolio Allocations? 2. Quality Information 3. Short Term Money
  8. 1. What Investment 4. Where can I find good Portfolio Allocations? 2. Quality Information 3. Short Term Money ALLOCATION
  9. 1. What Investment 4. Where can I find good Portfolio Allocations? 2. Quality Information 3. Short Term Money 4. Good Portfolios
  10. 1. What Investment 5. I heard I should invest in Index Funds, would you agree with that? 2. Quality Information 3. Short Term Money 4. Good Portfolios Active Investing vs. Passive Investing http://www.ifa.com/12steps/step3/step3page2.asp
  11. 1. What Investment 5. I heard I should invest in Index Funds, would you agree with that? 2. Quality Information 3. Short Term Money 4. Good Portfolios Active Investing vs. Passive Investing http://www.ifa.com/12steps/step3/step3page2.asp
  12. 1. What Investment 5. I heard I should invest in Index Funds, would you agree with that? 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds
  13. 1. What Investment 6. What company is the best to set up my account at? 2. Quality Information 3. Short Term Money 4. Good Portfolios A Discount Brokerage 5. Index Funds 6. Discount Brokerage A Discount Brokerage gives you: Money Market Checking Account Higher Interest Lower Fees (no overdraft penalties) Much easier investment buy/sell options Highest Ranked = Charles Schwab
  14. 1. What Investment 7. Should I invest in Real Estate 2. Quality Information 3. Short Term Money Positives Leverage - Debt 4. Good Portfolios 5. Index Funds 6. Discount Brokerage $ 40,000 Down $ 40,000 Gain 100% Gain 10% Appreciation $400,000 Duplex $ 40,000 Gain $ 40,000 Down $ 40,000 Loss $ 40,000 Down 100% Loss Your Investment $ 360,000 Debt Borrowed Money
  15. 1. What Investment 7. Should I invest in Real Estate 2. Quality Information 3. Short Term Money Positives Leverage - Debt 4. Good Portfolios B. Rent – ‘Free (unearned) Income’ 5. Index Funds C. Depreciation – ‘non-cash’ expense 6. Discount Brokerage
  16. 1. What Investment 7. Should I invest in Real Estate 2. Quality Information 3. Short Term Money Positives Leverage - Debt 4. Good Portfolios B. Rent – ‘Free (unearned) Income’ 5. Index Funds C. Depreciation – ‘non-cash’ expense 6. Discount Brokerage D. Behaviorally sound 2. Negatives Leverage – High Risk Investment B. Landlord – High Maintenance investment
  17. 1. What Investment 7. Should I invest in Real Estate 2. Quality Information 3. Short Term Money SOUND REAL ESTATE PRINCIPLES Avoid “nothing down” workshops Avoid real estate “counselors” Avoid time share “investments” Employ an excellent CPA advisor Establish a relationship with a bank appraiser Guidelines: 50% vacancy for six months Don’t own long distance Be sure you’ll live in the area for, at least, 5 years The first home – a duplex 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate
  18. 1. What Investment 8. Should I invest in Gold or Precious Metals 2. Quality Information 3. Short Term Money Worst Investment for the past 30 years 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate Dow Jones Gold Index
  19. 1. What Investment 8. Should I invest in Gold or Precious Metals 2. Quality Information 3. Short Term Money Best Investment for the past 3 years 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate Gold Dow Jones
  20. 1. What Investment 8. Should I invest in Gold or Precious Metals 2. Quality Information 3. Short Term Money 4. Good Portfolios Brigham Young The time will come that gold will hold no comparison in value to a bushel of wheat . . . Gold is good for nothing, only as men value it . . . It is not half so good as the soil from which we raise our wheat. - June 5, 1853, Journal of Discourses 1:248 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals
  21. 1. What Investment 9. Somebody tried to sell me an Annuity or Investment Life Insurance Policy, are they good investments? 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage Very High Commissions Surrender Penalties High Investment Fees Capital Gain Income become Ordinary Income Equity Index Annuities – a good deal! 7. Real Estate 8. Precious Metals Hot Deal!! An investment Goes up, but never down No commission
  22. 1. What Investment 9. Somebody tried to sell me an Annuity or Investment Life Insurance Policy, are they good investments? 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage Very High Commissions Surrender Penalties High Investment Fees Capital Gain Income become Ordinary Income Equity Index Annuities – a good deal! 7. Real Estate 8. Precious Metals Hot Deal!! An investment Goes up, but never down No commission
  23. 1. What Investment 9. Somebody tried to sell me an Annuity or Investment Life Insurance Policy, are they good investments? 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage Those Investment Management Fees 7. Real Estate 2% to 3% higher than necessary 8. Precious Metals 2% difference 9. Insurance & Annuities 8% = $527,454 10% = $ 1,048,250 3% difference 9% = $740,488 12% = $ 2,114,546
  24. 1. What Investment 10. I don’t have any money but I want to start investing, what can I do? 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage Minimums For Investing Checking Account = $10 Mutual Fund/Brokerage Lump Sum = $500 - $2,000 Automatic Withdrawal = $50/month 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  25. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money Recommended Books This list is found on Blackboard 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  26. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money Recommended Books 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  27. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money Recommended Books 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  28. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money Recommended Books 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  29. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money Recommended Books 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  30. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money Recommended Books 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  31. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money Recommended Books 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  32. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money NOT Recommended Books 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  33. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money NOT Recommended Books 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  34. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money NOT Recommended Books 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  35. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money NOT Recommended Books 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  36. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money NOT Recommended Books 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments
  37. 1. What Investment 11. What books should I read to learn more about investing? 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments 11. Books
  38. 1. What Investment 12. Have you heard about ____ investments, do you like those? 2. Quality Information 3. Short Term Money 4. Good Portfolios If you have to ask if I have heard about it, it is most likely an Alternative Investments 5. Index Funds 6. Discount Brokerage These investments are too risky or speculative. 7. Real Estate 8. Precious Metals Examples: Tax Liens Discounted Notes Hard Money Lending Real Estate Flipping Options Hedge Funds Margin Trading 9. Insurance & Annuities 10. Minimum Investments 11. Books
  39. 1. What Investment 12. Have you heard about ____ investments, do you like those? 2. Quality Information 3. Short Term Money 4. Good Portfolios Something we found recently 5. Index Funds An ad on Yahoo! 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments 11. Books
  40. 1. What Investment 12. Have you heard about ____ investments, do you like those? 2. Quality Information 3. Short Term Money 4. Good Portfolios Something we found today! 5. Index Funds An add on Yahoo 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments 11. Books 12. Alternative Investments
  41. 1. What Investment 13. I have some debt, what is the best approach to get rid of it? 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments 11. Books 12. Alternative Investments 13. Debt Australian Loan
  42. 1. What Investment 14. Should I put money in a Roth or Traditional IRA 2. Quality Information 3. Short Term Money If you pay Taxes = Traditional IRA 4. Good Portfolios 5. Index Funds If you Don’t pay Taxes = Roth IRA 6. Discount Brokerage 40% of People Don’t Pay Taxes 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments 11. Books 12. Alternative Investments 20% of People Pay 80% of the Taxes 13. Debt 14. Roth vs. Traditional IRA
  43. Invest Taxes Saved - R.E.S.I.R.V. Investment annual growth = 10% Employer Match = 100% +64% $ 10,170,000 EMPLOYER TAX MATCH +32% $ 7,710,000 TRADI T IONAL +22% $ 6,720,000 TRAD $ 5,250,000 ROTH TRAD ROTH ROTH Federal Tax = 0% State Tax = 0% TOTAL TAX = 0% Federal Tax = 15% State Tax = 7% TOTAL TAX = 22% Federal Tax = 25% State Tax = 7% TOTAL TAX = 32% Contribution = $500/month
  44. WHY ROTH How much tax do retirees’ pay 72% in lower tax bracket than when IRA was contributed 50% of all Americans pay no income tax Which tax will increase? Value added, consumption, federal sales tax transaction Capital gain tax increase does not apply to IRA accounts Tax paid on conversion now can never be reclaimed Many withdrawal options pay no tax or result in no tax Qualified charitable contributions Energy saving tax credits Any tax deductible expense Payments to long-term care policies Payments to a Health Savings Account Withdrawals where disabilities or unemployment have reduced tax bracket Taxes saved and invested are matched by employer doubling the tax saved benefit
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