The biggest lifetime expense we ever encounter is neither a home nor a college education, but income taxes. One-third to one-half of all wealth we accumulate in our life time is dependent on our tax-reducing plan and not our income, investments, or retirement program. A tax plan that uses the tax laws to decrease instead of increase your taxes.
There are specific rules and regulations governing taxation, and our only obligation, as a taxpayer, is to meet those obligations while at the same time arranging our affairs to pay as little tax as possible.
Paying as little tax as possible is not only your our right but our duty- to ourself. If the government finds itself “short” in a given fiscal period it will undoubtdly find a new and interesting way of balancing its budget.
Plan for your own future, and be assured that the government will plan for its own also.
One question people ask: “Is paying less taxes really legal, patriotic, and moral?”
By following the tax laws and regulations when we use tax strategies, we automatically pay our fair share, even if your share amount is zero.
Two neighbouring families, each with 3, 00,000 annual income and two children, could both paying their fair share of income taxes, even if one family paid 5000 and other paid nothing at all. It is the way the system was designed.
People who pay more to help poor, homeless, education, health may find it surprise that very few of your tax money go to the poor or places you might prefer the money to go.
Paying taxes has nothing to do with the patriotism whether you pay a lot or none at all. The money goes to the economy whether paid to the government or used by you for a deductible purpose.
Sunday, April 5, 2009
Wednesday, July 30, 2008
THE IMPORTANCE OF INVESTING
If you don't expect to win a lottery, and you don't have the option of inheriting vast sum of money, you have only five ways to increase your wealth:
1. Putting yourself to work - Employment.
2. Putting other people to work - Business.
3. Putting your ideas to work - Inventing, marketing, or consulting.
4. Putting your money to work - Investing.
5. Putting other people's money to work - Leverage.
Working for someone else is the first money making experience for most of us. There are two limiting considerations when you put your financial future in the hands of 'Company'.
* Your success is directly tied to the success and attitude of your employer, over which you have no control.
* Your income and lifestyle are limited by your experience, age, education, the opportunity for advancement, and your ability to sell yourself on the job.
If there are any two words that no longer belong together, they are "job" and "security." Putting together a powerful investment program will put an end to the lifelong dependency on others (employer or government), even if you don't want the responsibility of starting your own company.
There are two approaches to investing- putting your money to work, and putting other people's money to work. you put your money to work when you invest in
* Stocks
* Bonds
* Mutual funds
* Guaranteed Investment Certificates.
* NSC
* Any other direct investment using your own money
You put other people's money to work when you
* Buy a home with a mortgage
* Take an option on a piece of real estate
* Borrow money for your business
* Invest in leveraged limited partnerships
Putting your own money to work is direct and easy to understand, but limits your benefits to the profits to the profits that can be generated by your own capital.Putting other people's money to work can be more profitable, but can also be more risky and difficult to understand. the main benefit of OPM is that you can create profits and/or tax deductions far beyond what your own capital can generate. Using OPM is a step you will certainly want to consider once you have mastered the basics of investing your own money.
1. Putting yourself to work - Employment.
2. Putting other people to work - Business.
3. Putting your ideas to work - Inventing, marketing, or consulting.
4. Putting your money to work - Investing.
5. Putting other people's money to work - Leverage.
Working for someone else is the first money making experience for most of us. There are two limiting considerations when you put your financial future in the hands of 'Company'.
* Your success is directly tied to the success and attitude of your employer, over which you have no control.
* Your income and lifestyle are limited by your experience, age, education, the opportunity for advancement, and your ability to sell yourself on the job.
If there are any two words that no longer belong together, they are "job" and "security." Putting together a powerful investment program will put an end to the lifelong dependency on others (employer or government), even if you don't want the responsibility of starting your own company.
There are two approaches to investing- putting your money to work, and putting other people's money to work. you put your money to work when you invest in
* Stocks
* Bonds
* Mutual funds
* Guaranteed Investment Certificates.
* NSC
* Any other direct investment using your own money
You put other people's money to work when you
* Buy a home with a mortgage
* Take an option on a piece of real estate
* Borrow money for your business
* Invest in leveraged limited partnerships
Putting your own money to work is direct and easy to understand, but limits your benefits to the profits to the profits that can be generated by your own capital.Putting other people's money to work can be more profitable, but can also be more risky and difficult to understand. the main benefit of OPM is that you can create profits and/or tax deductions far beyond what your own capital can generate. Using OPM is a step you will certainly want to consider once you have mastered the basics of investing your own money.
NEVER USE A COMMISSIONED FINANCIAL SALES PERSON AS A FINANCIAL ADVISOR
A commissioned investment salesperson should never be used as a financial advisor for two reasons:
1 BIAS- The sales person will always recommend as your investment solution the investment he or she sells, whether or not these are the investments you should be using.
2. LACK OF INVESTMENT KNOWLEDGE- Brokers and other licensed salespersons are required to know only two things; the securities laws and how to sell investments successfully. Too many strategies recommended by investment salespeople are either too risky or 20 years out of date.
And what about Chartered or Certified Financial planners? Be careful. Some "certified" financial planners have taken only a home study/formal course, and most have very little money or their own to manage. If you want to make money, you will learn the most from someone who has plenty of it.
1 BIAS- The sales person will always recommend as your investment solution the investment he or she sells, whether or not these are the investments you should be using.
2. LACK OF INVESTMENT KNOWLEDGE- Brokers and other licensed salespersons are required to know only two things; the securities laws and how to sell investments successfully. Too many strategies recommended by investment salespeople are either too risky or 20 years out of date.
And what about Chartered or Certified Financial planners? Be careful. Some "certified" financial planners have taken only a home study/formal course, and most have very little money or their own to manage. If you want to make money, you will learn the most from someone who has plenty of it.
1. 'Stocks and bonds are a good long term investment.'
There is no such thing as a good long term securities investment. The best investments change as the economy and the interest rates change.
2. 'We'll diversify into different investments-some bonds, some stocks for safety'.
Stocks and bonds are good investment at different time, but not at the same time.
3. 'Government securities are always good, safe investment for those who want income'.
Government securities are bonds. bonds drop about 10% in principal value for
every 1% increase in the prime rate. NEVER invest in government securities when the prime rate is going up.
4. 'This investment is a hedge against inflation.'
If you just keep pace with the inflation, your before tax profit is zero. If you have to pay taxes on the phantom capital gains, you end up with guaranteed loss of 19% or more.
5. 'I've got a hot tip on a good stock'.
Hot tips ruins most unaware investors. Stockbrokers are always least informed in a brokerage-firm hierarchy, and their hot tips usually lose investors' money.
6. 'Zero coupon or remainder bonds are great investment for your children.'
The best way to invest for the children under 14 is mutual funds, averaging over 15%. even with 10% withdrawal penalty the child's account will average over 15% per year.
7. 'You should pay commissions because you get better financial advice.'
A good financial advisor or money manager will earn you 20% or more per year after commissions, but those of this calibre only manage portfolios of 1,000,000 or more and spend most of their time on the ski slopes.
8. 'A TRUST company or bank trust department should become the trusty for your estate.'
Trust companies or bank trust departments have the worse track records of any estate managers, often losing 60% of an estate in five to ten years. Use your trustee a lawyer, friend or relative who will follow exactly the strategies you are learning now for building and preserving your estate.
There is no such thing as a good long term securities investment. The best investments change as the economy and the interest rates change.
2. 'We'll diversify into different investments-some bonds, some stocks for safety'.
Stocks and bonds are good investment at different time, but not at the same time.
3. 'Government securities are always good, safe investment for those who want income'.
Government securities are bonds. bonds drop about 10% in principal value for
every 1% increase in the prime rate. NEVER invest in government securities when the prime rate is going up.
4. 'This investment is a hedge against inflation.'
If you just keep pace with the inflation, your before tax profit is zero. If you have to pay taxes on the phantom capital gains, you end up with guaranteed loss of 19% or more.
5. 'I've got a hot tip on a good stock'.
Hot tips ruins most unaware investors. Stockbrokers are always least informed in a brokerage-firm hierarchy, and their hot tips usually lose investors' money.
6. 'Zero coupon or remainder bonds are great investment for your children.'
The best way to invest for the children under 14 is mutual funds, averaging over 15%. even with 10% withdrawal penalty the child's account will average over 15% per year.
7. 'You should pay commissions because you get better financial advice.'
A good financial advisor or money manager will earn you 20% or more per year after commissions, but those of this calibre only manage portfolios of 1,000,000 or more and spend most of their time on the ski slopes.
8. 'A TRUST company or bank trust department should become the trusty for your estate.'
Trust companies or bank trust departments have the worse track records of any estate managers, often losing 60% of an estate in five to ten years. Use your trustee a lawyer, friend or relative who will follow exactly the strategies you are learning now for building and preserving your estate.
Tuesday, July 29, 2008
NEVER INVEST IN BONDS WHEN INTEREST RATES ARE RISING
Bonds are good investments only when they are appreciating due to declining interest rates. When the prime rate is rising, any long-term bond will lose 10% of its principal value for every 1% increase in the prime rate. Stay away from financial advisors who tell you bonds(CORPORATE, ZERO COUPON, HIGH YIELD MUTUAL FUND, GOVERNMENT SECURITIES) are always a good, safe investment for those who want income.
BE YOUR OWN FINANCIAL EXPERT
'No one will ever care to your money or financial health as well as you.'
so your srategies must be related to reduce the waste of money and change into wealth.
* don't buy unneeded life insurance.
* reduce your tax libalities as leagally posible.
* invest in safe 15-20% annual return giving options.
so your srategies must be related to reduce the waste of money and change into wealth.
* don't buy unneeded life insurance.
* reduce your tax libalities as leagally posible.
* invest in safe 15-20% annual return giving options.
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