Protecting Your Future by Investing In Gold IRA

By Arto Laakso

    

Investing in gold is considered to be the best investment these days, even suggested by various financial experts of the world. Some people are making gold investment to become wealthy whereas others are investing in gold IRA and buying silver to protect their hard-earned money for future.

Many economists and financial experts are predicting an economic disaster in near future after assessing the international economic condition and particularly the monetary policy of USA.
Economies of most of the countries in this world are facing various issues to retain their strength.

Even USA economy is staggering with $17 trillion debt with Federal deficit of nearly $ 1000 billion. These scary statements of the financial experts had compelled even the billionaires to invest in gold for their safe future.

Reasons to invest in gold

Gold investments are preferred at such an economically scary condition because it has been used as a store of value and a reliable currency since centuries apart. Any currency can be dishonored at such times by over printing the currency but at the time of such inflation gold is the only currency that maintains its value. Your investment since 2001 in paper products like bonds, stocks or mutual funds might have wiped out within no time or might have been influenced at the time of inflation but gold and silver had grown more than 400%.

Gold, the precious yellow metal, has special position for a common person since centuries and is being used as money since not less than 5000 years. The value of gold has increased during all these years whereas several currencies had faces problems in the meantime. On the contrary US dollar is losing its value every day even being a potential currency. If, in 1971, the US paper currency was not backed by gold then it would have lost its potential as currency. The credit potential of the US Government has backed the dollar at such a crucial time. All these facts are sufficient to be confident for investing in gold.

Why to invest in gold now?

Currencies of most of the countries, including USA, are facing financial crisis at present. The reason behind it is that they printed their currency whenever needed without supporting it with gold. When a country prints its currency without backing it with gold then its value decreases in international market. In such situation people lose their confidence on that currency and start avoiding it. It is the starting point of hyperinflation in the economy of the country concerned. Its situation becomes more critical if they print more currency to prove the potential. Though there can be possibilities in hyperinflation but it does not guarantees any certainty. Ultimately you have to return to gold to maintain the worth of your currency. The value of gold increases with the decrease in the worth of any currency even the dollar.

How to invest in gold?

The basic question arises at this point that how to invest in gold? You may know the facts that gold is tangible money which is used all over the world but neither can you manufacture it nor can delete through any computerized programming. It saves you at the time of economic collapse and inflation as a hedge. Though gold investment is considered as one of the most reliable investments but some people have various queries about gold IRA investment for securing their retirement. A review on gold IRA provided in this article may help you in this regard.

A review on gold IRA

E retirement account that holds approved coins and precious metal bullion instead of paper investments is known as Gold IRA. In gold IRA investing your metal is held on your behalf by a third-party. At present IRA approves bars and rounds of all precious metals including gold, silver and platinum, Australian kookaburra coins, Canadian maple leaf coins and American eagle coins for investing in Self Directed Gold Coins IRA after opening a gold IRA account.

Thus, gold IRA investment is the best investment in the present economic condition world over. Gold is considered as the purest form of money and the ultimate asset that can prove its worth in any condition. Neither any government nor any person can devalue its worth.

Gold Ira Investment

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Why Is Dividend Investing So Popular?

By Joe Barbieri

    

There was once a time when people never invested in equities. There was ample interest earned through bonds, bank accounts and Guaranteed Investment Certificates (GICs) such that buying equities was not necessary. As inflation and interest rates went down and stayed low for a long time, people began searching for other ways of creating income. The two most popular methods are rent generated from real estate and dividend investing. Real estate investment involves buying properties and renting them, and will not be discussed further in this write-up. Dividend investing through buying of equities will be explored in this article.

There are some key things to remember when it comes to dividend investments:

Dividends are Not Guaranteed
Most people know that equities and mutual funds are not guaranteed, unless there is a situation where Canadian deposit insurance takes effect. This is generally when institutions which hold your investments go bankrupt. The same thing holds true for mutual funds as for dividends. A company can change its dividend payout or cancel it altogether without a lot of notice. This is generally communicated at shareholders meetings and via media releases. It is true that companies who discard or reduce dividends tend to get bad publicity from the marketplace, thereby discouraging them from doing this, but it still happens. When dividends are cut, it could mean a change in company direction. A possible scenario is when a company decides to invest a lot of idle cash into a new product, a new line of business or another company which requires money to allow it to grow. Rather than pay dividends, the company has now decided to conserve capital and let the profits generate capital gains instead. A second scenario is that the company is not making as much money as it used to, and it cannot afford to pay dividends any longer. A third situation is when a company has a negative surprise occur, like a lawsuit, a change in regulation that adversely affects its business, a merger, a takeover or a natural disaster that causes the company to change its course on dividends. There are also scenarios when dividends increase more than expected, such as unforeseen extra profits, a onetime dividend payout resulting from a takeover deal, a lawsuit victory or a change in regulation favouring the company resulting in a large profit increase. To find out what is going on with a company, read the media reports and decipher what the current situation is.

Dividends May or May Not Keep Up With Inflation
Many companies will increase dividends each year. In some cases, people expect this to happen since it has happened for many years. These increases are designed to keep the income from the dividends steady as the stock price rises, thereby paying more dollars for each share of stock that you own. These larger payouts serve to keep up with inflation and allow your investment to maintain its value over a long period of time. If the share price is stagnant, and the dividend payouts are stagnant, this situation will not keep up with inflation as you would receive the same dollar amounts over many years. As the prices of things go up, you will find that your money will buy fewer and fewer things, resulting in a cash squeeze. This issue is particularly important if the dividends are your only source of income, or if you are living on a fixed sum of money. Many senior citizens and people on fixed government benefits fall into this category. To find out what is happening in this case, observe the dividend payout history for the company you are investing in, and find out if there are predictable increases in payouts. If they are mostly predictable, but there are a few unexpected changes in the trend, find out what happened to the company at those times. These periods will determine how reliable the stock is when paying dividends, and when they are not reliable.

Dividend Yields are Inversely Affected by the Stock Price
The dividend dollar amount received divided by the share price at the time of the dividend payout gives you a percentage called the "dividend yield". This calculation allows you to compare this yield to other investments, like a yield on bonds or a yield on GICs. This yield can also be compared over time to see what range the yield can obtain. Since the price of the stock is the denominator of this calculation; as the stock price goes up, the percentage given to you or the dividend yield would go down. Conversely, as the price of the stock goes down, this dividend yield would go up. If you are investing for steady income and you already own the shares, this calculation would not matter to you unless you want to change investments, or would need a certain amount of principle (money invested) for an alternative to owning dividend stocks. If you are putting new money into dividend stocks, this yield serves as a comparison to tell you if the stock you want to buy is "cheap" (the yield is high) or "expensive" (the yield is low). There are many things that affect the price of the stock, so this yield will fluctuate a lot depending on the stock price at a given time. The dividend payout would not fluctuate much unless there is something unusual going on - as explained in the prior paragraphs.

What About Interest Rates?
Interest rates should be watched carefully when investing in dividend paying stocks. The higher interest rates rise, the more likely it is that dividend stocks will be sold, because someone can buy an alternative, which is bonds or other interest bearing securities. It is like a substitution effect - if one thing becomes really expensive and a cheaper version of that thing comes around, you will buy the cheaper version of that thing instead. In this case, if a dividend stock gives you a 5% income stream, and a bond gives you a 2% income stream, you would likely buy the dividend stock after weighing risks, cost and taxes. Should the bond then give you a 4% income stream due to rising interest rates, this dividend stock does not look as attractive. If the bond then returns a 6% income stream, this would now be a better yield that the dividend paying stock. People would then sell the dividend stock until the price goes down enough that the dividend yield is close to 6%, or an equivalent return after risk, costs and taxes. Since the dividend payout does not change that quickly, the only other way for the markets to balance the two alternatives is to change the price - in this case the price of the dividend stock.

The Mechanics of Dividend Investing
So how do you go about getting these dividends? The traditional way is to open up a trading account with a bank or brokerage firm. The account has to be such that it allows you to buy individual stocks. You can buy these stocks yourself or have someone do it for you. Make sure you ask questions about costs, account access restrictions and taxes before you set up the account. You would buy shares in each individual company. As an example, you would buy 100 shares of Bell Canada Enterprises (the trading symbol is BCE). These shares would cost you $50 per share as an example. If you buy 100 shares, the amount invested would be $5000 plus any fees to buy the shares. Some accounts also have fees to keep the account open, so ask questions upfront before you start buying stock because these fees will reduce the amount of money you are getting out of the whole exercise. Once the shares are in your name, you would be entitled to a dividend payment each quarter. The quarter end date is the company fiscal quarter end date, not necessarily the calendar quarter end dates. If you own the shares, your name or the name of the brokerage account will be registered with the company and when the dividend payment date approaches, the name of the account holding the shares will be scheduled to receive the payment. If you buy shares before this date, you would receive the dividend. You would then see a cash payment in your account where the shares are held. In some cases, you can have the dividends reinvested into more shares of stock instead of cash to make sure you continue to buy more shares instead of doing this yourself. This method is good if you want to grow your stock holding. If you want to use the income, this shouldn't be done because shares would have to be sold periodically to generate cash, which would incur a lot of trading fees as well as headaches trying to time your trades to get the best price. Timing the market is very difficult to do, so it should be avoided unless you have some skill in doing it.

When Should You Not Invest in Dividends?
The answer to this question depends on what your reasons are for buying dividend yielding stocks in the first place, as well as your risk tolerance. If you are only looking for income, and you can get that income through buying bonds, the latter would be a safer bet. If you are very risk averse to losing your money, and a guaranteed alternative investment presents itself to you, the guaranteed alternative should be bought instead. If you prefer dividend income but also like the capital gain that sometimes come with it, you may want to keep your dividend stocks even if other alternatives present themselves to you. If interest rates rise sharply and you take a large loss on your dividend stocks, this may be a turn off on the whole idea of dividend investing. If you love real estate and can create similar income through real estate as opposed to dividend investing, real estate investing is the way to go for you since you are more familiar with how it works.

How to Tie This All Together
Investing in dividends should always be considered along with everything else that is going on in your life, both financial and otherwise. Take note of what you want to achieve with dividend investing, what your options are, and how comfortable you feel about each of the options. The amount of knowledge you have about each alternative should also be considered. The more you know about something, the better you will be at it. If you know little about something, treat it as an experiment and wade in slowly with whatever help can be found until you know a fair amount about it.

Do you want to:
Learn how the world of money really works without the need of a time consuming or expensive course of study
Discuss what you want to achieve according to your horizon
Restructuring your finances to achieve your goals
Advice that is not affiliated with any institution or any product - an independent opinion
If you answered yes to any of these questions, contact me at: Contact me, Joe Barbieri by email at joetheinvestor.today@gmail.com, my web site at http://www.joetheinvestor.ca or by telephone at 647-286-8020 for an independent consultation on what your options are. Note: This article is intended for people who want to learn about the world of finance and how to research for themselves. If you would like to buy or sell investment products, or specific advice on investment products, tax or legal issues, please consult your investment advisor, accountant or legal counsel.

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Explaining Dividend Yield

By Chris Blanchet

 

For many investors, earning income used to be an easy and simple process. You would invest $100,000 on, say January 1 and over the next five years you would earn a steady 8% on that investment. At maturity, you would get your $100,000 back and you would have renegotiate your term deposit rates with your banker. Over the years, the process became marginally more complicated. Rates on term deposits dropped, allowing fewer people to enjoy the lifestyle they had become accustomed to. And so the choice of investment changed as well. Instead of term deposits, investors might have shifted into fairly safe government or corporate bonds. For a slightly higher rate, investors needed to take on a little higher risk. And while bond prices would fluctuate between the day you bought and the day the investment matured, at the maturity date the face value of that bond was repaid to the investor. It was all good.

But as many people know quite well these days, fixed income investments like bonds come with considerably more risk. In periods of increasing rates, those bond prices will drop. And while the face value will be repaid at maturity, there is always the "what if" of needing the investment prior to that maturity date. With liquidity such a big concern for a lot of investors, they have had to look elsewhere. And of course, to add salt to the wound, rates are just not as attractive as they used to be.

This is how dividend paying securities have gained a lot of traction recently. With the expected rate increases in the near future as well a need for liquidity thanks to the current economic state, dividend paying stocks have meant a return to higher income while taking on only marginally greater risk.

Companies like General Electric, most of the big Energy companies, many solid banks both domestic and international, as well as many other blue chip companies will pay income in the form of dividends. This income, as a percentage of the price of the security, is what is known as the dividend yield.

The dividend yield on any given security will fluctuate each time the security trades at a new price. For example, a $3.00 dividend on a $50 stock is a 6% yield; but once that stock goes to $75, that yield drops to 4.5%. In other words, as the security price increases, the yield drops. This is exactly how things work with bonds. And like bonds, the income stream to the investor remains the same.

For example, an investor who bought at $50 will control the same amount of shares regardless of what happens to price. As well, the income will always be 6% of their investment. If they invest $100,000, the income will always be $6,000, even when the security price rises to $75 and the yield drops to 4.5%. So when the stock price increases, the <i>value of the investment</i> will increase on paper. The income remains the same at $6,000.

Essentially, dividend yield matters only when the original investment is made. As the security price increases, the yield will drop, but the investor's income in dollar terms remains the same. The biggest difference with stocks versus bonds is that the investor will have a little more pressure to sell at market prices. But the problem will be how to replace the original income.

So while dividend yield only matters when making the original purchase, comparing one dividend for one stock to another dividend on another stock whenever a change is made in one's portfolio becomes an ongoing concern. And investors needs to stay abreast of these yields, rising or otherwise, so that they know what the "going" rates are.

--> Have you considered Dividend Funds? Find out the Top Dividend Fund Pick by MutualFundSite.org.

Chris has more than 17 years of financial services experience. He currently manages a website about Roll Roofing [http://www.roll-roofing.com/] at Roll-Roofing.com where he discusses different roll roofing alternatives.

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Why Add Gold and Silver to Your IRA Account?

By Josh Holliday

 

    

Adding precious metals to Individual Retirement Accounts (IRA) was made possible by the Tax Payer Relief Act in 1997. This now includes gold, platinum, and silver. As a method to achieve diversification of investment funds, some account holders place gold in their IRAs. As a general rule, when stock prices drop the price of gold rises. This can even out the value of your portfolio in a weak period for the stock market.

Steps to Take:

1. Inquire of your IRA custodian if you have the right type of account you can add gold too. Some plans do not allow this. In which case, you need to start a new silver-gold IRA.

2. Choose a custodian who has a lot of administration experience with gold-silver IRA plans. It is possible to add silver or gold to most types of IRAs, including Roth, traditional, simplified incentive match plans for employees (SIMPLE) and simplified employee pension (SEP) plans.

3. To open a silver-gold IRA account, send the signed paperwork to your new IRA custodian. Usually the charges will also include a storage fee for any silver or gold coins you keep in your account. Your gold has to be stored with an approved depository pursuant to current IRS rules, which has to be in a completely different location than your IRA custodian's location.

4. To initially fund your gold account you just transfer funds from your bank account to your IRA account. If you desire to roll funds over from a 401(k) or company retirement account your custodian can instruct how to do this, it's quite easy and they can accomplish it in one day.

5. You may want to determine if you desire to buy gold mining stocks or silver and gold coins and will have to inform your custodian to purchase them for you from the funds in your account.

Current Tax Rules RE: Precious Metals in IRA Accounts
1. Investments in Collectibles
Collectible coins are transactions prohibited via an IRA account according to the IRS. Purchasing any collectible coins with funds from your IRA is called a distribution of the same amount you used to purchase the coins. The distribution will then be added to your gross income on your tax form by the IRS and penalized 10 percent if you are under age 59 1/2.

2. Minted Coins Exception
The precious metals that are allowable with IRA investments are U.S. minted coins. The coins need to hold a minimum amount of platinum, silver, gold, or palladium metal to qualify. Gold coins need to contain either one-quarter, one-tenth, one-half or a whole one-ounce mixture of gold. Silver, minted as one-ounce coins, designated bullion, are acceptable. Any coins not designated qualified minted investments by IRA regulations need to be bought with funds outside your IRA and held outside of your IRA account to avoid a penalty.

Your IRA Custodian
3. The custodian of your account is the one responsible to the IRS to report the investments held in any IRA account including any distributions or contributions to or from the account. Which investments are allowed for investors by the account custodian is not regulated by the IRS. What the account can or cannot allow is up to each account custodian to decide. It remains extremely important to always remember coins designated precious metal must be bought through a precious metal IRA, frequently called a "gold IRA." Any good account custodian should be able to assist anyone to buy the appropriate investments for their IRA to not get hit with a penalty. You should never buy any precious metal coins through an IRA account not authorized for precious metals. If you make that mistake, it could result in what's called a distribution, which is then taxable & can cause you to lose the protection of your IRA. Be sure to study the IRA rules beforehand. Most investment counselors advocate the use of an IRA account which allows a person to accumulate profits tax-free over time.

We have many articles on related subjects you should read and learn about at Josh's blog at: http://www.financialmoneytrends.com.

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Cheers, Josh Holliday

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Why Investing In Gold Is Smart Especially For Retirement Plans

By Richard Suchorzewski   

 

    

I recall my time, originally as a Bank Manager and more latterly as a Wealth Manager when my customers would ask me what are the best accounts they can place their money in to get the maximum interest possible. Diligently I would refer them to some form of High Investment Account subject to a notice period or Money Market Account for overnight deposits.

Then in the 80's and 90's - Privatisations resulting in wider share ownership - opened all sorts of avenues to stock market investments, unit trusts, investment trusts, mutual funds etc for the ordinary "man in the street". More serious investors and corporations placed their money into hedge funds, corporate bonds and other more elaborate on and off-balance sheet investment vehicles.

In addition to the above, Property Investment became prevalent and anyone with capital or access to borrowing became a "buy-to-let" property investor. The less risk averse individuals took courses on, and dabbled in, options and other highly geared investment strategies.

All of the above have their place and have provided wealth to a large number of individuals. However, that wealth has been eroded to some considerable extent by inflation, currency devaluation and taxation.

It's wonderful to earn a capital gain on an investment which then becomes less exciting once 40% tax (or more in some countries) is levied. It's wonderful to see one's savings rise each year, and less attractive when those savings purchase less than they would have done the year previous, even allowing for the addition of interest earned.

Now I come to the "Boom and Bust" Scenarios in Property, the Stock-Market and Currencies. For those who purchased those investments when their price was at an all time high then experienced 10%, 20%, 30%, 40% falls within weeks. I remember the 1987 Stock Market Crash when I sold all of my shares at a considerable loss and these bubbles and collapses continued in each passing decade.

I remember purchasing a House in 1989 having to wait 5 years before it reached the price I originally paid.

Despite all of this, the one investment I have made which has protected me against inflation, stock-market crashes and property fluctuations and most important of all, currency devaluation, have been my investments in gold.

My only regret is that I did not have more liquid funds available in which to invest in this commodity.

The past 10 years has witnessed the rise in the price of gold from $360 per oz to $1900 with it currently standing at $1360 as I write this article. A number of experts predict that $1200 is the approximate extraction price of gold (i.e. the cost to get it out of the ground) and therefore, if accurate, the downside appears very limited indeed.

What captures my interest in Gold is the number of Countries, which in recent years have purchased considerable volumes of the commodity, especially China and India (Two of the world's fastest growing economies). They consumed 52% of the world's gold in 2010. In 2011, increases in demand from China and India have driven a 7.5 percent increase in demand for gold jewellery during the first half of the year, despite a 25 percent increase in the price. In 2012 China averaged an import of 65 tons of gold per month placing it in the top 6 World holders of gold.

Even conspiracy theorists advocate gold investment because of the information derived from Wiki-Leaks (now in the public domain) which specifies China's motives for this investment onslaught:
"The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold's function as an international reserve currency.They don't want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency. China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold."
- Leaked Wiki-leaks Cable

Quantitative Easing, resulting in currency devaluation and the building up of future hyper-inflation, only bodes well for Gold (and Silver) as an important asset to own for the future.

All of these circumstances lead to only one logical conclusion (in my view) and that is the inevitable rise in the Gold Price over the long-term.

We have seen in the UK, Europe and the US major pension devaluations and with an increasing aged population, the need for increased personal pension provision has never been greater.

With currencies devaluing at the rate of 40% every 10 years, hyper-inflation being predicted for the latter end of this decade and unemployment rising to unacceptable levels, to me, it makes sense for everyone to consider Gold as both an investment purchase requirement (not just a hedge) for existing portfolios and any retirement plan.

As Billionaire Thomas Kaplan who has $2 Billion invested in gold recently stated:
"People view gold as emotional, but when they demythologize it, when they look at it for what it is and the opportunity it represents, they're going to say, "We really should own some of that.' The question will then change to "Where do we get the gold?"

For more information on this subject view my website at:
http://www.goldirafund.com

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"Secured Retirement Investing" Requires Thoughtful Planning and Education

By Randall D Cox

 

    

 

Many financial pundits embrace grandiose theories and use mathematical formulas to convince the vast sea of American Investors to accept their vision of the perfect American Retirement Account Balance. They make statements like "by the time you are sixty five you should have X$ in your retirement portfolio to cover health care costs or to live the perfect dream of exotic travel and extravagant lifestyle of spend, spend and more spending. Retirement plans and accounts, however, are like "beauty" it is in the "Eye of the Beholder"! My perfect retirement lifestyle is not necessarily my cousin's or for that matter my next door neighbor's. We all have different interests, needs, and desires. But we all do share one thing in common we deal in a risky business indeed called Investing.

It may not be a forgone conclusion; that Penny Stock Investors are investing for retirement. Some will develop an investment portfolio to hedge their current business needs whatever that may be. Some may invest just to prove to themselves and others that they can, while still others invest as a business to generate their monthly income in order to meet obligations. Still others invest for one goal, to build up a massive amount of cash these are typically referred to as "Day Traders.

This article is not an attempt to convince anyone how to invest or why for that matter, it is simply to give another point of view for the motivation of investing. The need to think about retirement whether you are a full time investor or just starting out or you have been a "bi-vocational" investor for years.

No matter your motivation allow me to make a case for you to invest with one eye looking down the road to retirement regardless of how long or short that may be. We all know instinctively that one day we will "give up", "give out", or "wear out"! Now I am not trying to be pessimistic or to be a bearer of bad news especially for those of you in your twenties and thirties. But what I am tying to impress on everyone is that just like in the market, life has no guarantees! By that I mean life and the market share the same propensity for change, volatility, risk, and dare I say fees, loads, and charges. Why do you think that the game of Monopoly is so popular? Because Monopoly like real life reflects the whole concept of "Time and Chance".

For those folks who are the always the winner at Monopoly remember this, life isn't a board game and you cannot ever memorize all the cards that will be thrown at you. This is just like Investing! Multiple volatile conditions affect your investments 24/7 and there is nothing that can stop Time and Chance from happening to you or anyone else for that matter. Since we are all equipped with this basic knowledge wouldn't it be prudent to at least look down the road and work up for yourself a basic vision of what kind of retirement you would like to have and at what age? Here are a few topics for your consideration.

Living arrangements - Family residence, condo/town home, retirement village? How much will that cost based on today's economy and then calculate from your current age to your perfect retirement age how many years that is multiplied by 3% for inflation. You will need to revisit this about every year to adjust for current inflation rates. Currently inflation isn't really an issue but that wont always be the case.

Health Care Costs- we don't really know what these will be any more than we can actually count the stars in the night sky. This is true for most investors living in the U.S. now days. Since this is a High Risk area we need an alternative plan other than just cash accumulation. There are two key concepts you need to study "Mortality & Morbidity". They will make you feel real happy! Not!

Food - Now here is a topic that whole 2hr seminars have been based around. Many folks living today who are in the Boomer generation can remember when the cost of a loaf of bread was.75
Cents and a cup of coffee at a restaurant was.25 cents. How about the incredible edible Egg? from 1985-1987 the price per dozen ranged from 42.9 cents to 51.5 cents.
(Cooperative Extension University of California Number 85 June 30, 1988)

Currently in 2012 one dozen large grade "A" eggs are selling for $1.7059 while the organic brown shell eggs in a carton range from $2.61- $3.16
(http://www.ams.usda.gov/pymarketnews.htm or PYMNDSM@ams.usda.gov)

Based on just these three areas of life we can deduce that living will be more expensive in the future than it is right now. And this is not taking into consideration the punitive tax system we are under in the United States currently or the new taxes that have and will be voted into existence before and during our retirement.

What areas can we offset the risk with careful planning? Well for one, risk can be reduced by a well thought out investment plan focusing on an annual return that will beat inflation and keep up with the market while never delivering bad news like a negative return. I think that you would agree that these types of accounts would be the perfect holding area for your "Bread and Butter" retirement fund.

What are these types of accounts? Well they are widely available in every city, state and the whole nation for that matter they are Indexed Annuities.

The Indexed Annuity with safety and a guaranty income provision can provide income protection for you for life and while you wait to start the income the account can grow and compound the returns on the interest generated, and on the Taxes you would have paid if the money were in another type of interest bearing account. And never give you a negative return.

Some investors work from a forward looking strategy and determine what there Social Security income will be when they reach either their max retirement age or when they can take it the earliest and begin to accumulate that much cash reserves or purchase an annuity with that much money and let that keep up with inflation. Then go along there happy way being the raging stock investor they are on the inside.

Now couple this with a disciplined Investment Strategy and you have a retirement focused plan where you can have the peace of mind that your retirement funds will always be safe and growing, while at the same time focus on the business at hand that of being the best penny stock investor you can be.

All the Best & Happy Investing!
Randall Cox
www.PennyStockSuccessTips.com

P.S. In my next article entitled "Create an Investment "Safety Net" with Old Fashioned Insurance". I am going to reveal little known tips and strategies that most married couples have not considered. These concepts will help married couples who have one investor minded partner and another who is so frightened about risking their financial future that they wont even dole out a quarter in a payphone for fear of losing it.And the secrets that affluent people have used in order to get their hands on tax free cash to invest and buy businesses.

http://www.PennyStockSuccessTips.com

A site dedicated to providing information and resources to help you along your Investing Journey.

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Understanding Forex Trading

By Stephen S Alison

 

 

 

The Foreign Exchange market, also referred to as the "Forex" or "FX" market, is the largest financial market in the world, with a daily average turnover of well over US $1 trillion - 30 times larger than the combined volume of all U.S. equity markets. The word FOREX is derived from the words FOReign EXchange.

Spot and Forward Foreign Exchange

Forex trading may be for spot or forward delivery. Spot transactions are generally undertaken for an actual exchange of currencies - delivery or settlement - for a value date two business days later.
Forward transactions involve a delivery date further in the future, sometimes as far as a year or more ahead. By buying or selling in the forward market, it is possible to protect the value of any anticipated flows of foreign currency, in terms of one's own domestic currency, from exchange rate volatility.


Difference Between Foreign Currency and Foreign Exchange

Anyone who has traveled outside their country of residence would have had some exposure to both foreign currency and foreign exchange.

For example, if you live in the United States and travelled, lets say, to London, England you may have exchanged your home currency i.e. US $ for British Pounds. The British Pounds are referred to as a foreign currency and the act of exchanging your US $ for British Pounds is called foreign exchange.


The Foreign Exchange Market

Unlike some financial markets, the foreign exchange market has no single location as it is not dealt across a trading floor. Instead, trading is done via telephone and computer links between dealers in different trading centres and different countries.

The FX market is considered an Over The Counter (OTC) or 'interbank' market, as transactions are conducted between two counterparts over the telephone or via an electronic network. Trading is not centralized on an exchange, as it is with the stock and futures markets.


Reasons for Buying and Selling Currencies

Through the mechanism of the foreign exchange market companies, fund managers and banks are enabled to buy and sell foreign currencies in whatever amounts they want. The demand for foreign currency is stimulated by a number of factors such as capital flows arising from trade in goods and services, cross-border investment and loans and speculation on the future level of exchange rates. Exchange deals are typically for amounts between $3 million and $10 million, though transactions for much larger amounts are often done.

There are two basic reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. The other 95% is trading for profit, or speculation.


Currency Speculation

Speculators desire to trade forex for the opportunity to profit from a movement in currency exchange rates. For example, if a trader believes that the Euro will weaken relative to the U.S. dollar, then the trader can sell Euros against U.S. dollars in the Forex market. This is referred to as being "short Euros against the dollar" which, from a trading perspective, is the same as being "long dollars against the Euro". If the Euro weakens against the dollar, then the position will profit

For speculators, the best trading opportunities are usually with the most commonly traded and therefore most liquid currencies, called "the Majors." Today, more than 85% of all daily transactions involve trading of the Majors, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar.


True 24 Hour Market

Forex is a true 24-hour market and trading begins each day in Sydney, and moves around the globe as the business day begins in each financial centre, first to Tokyo, then London, and then New York. Unlike any other financial market, traders can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.

As with all financial products, FX quotes include a "'bid" and "offer". The "bid" is the price at which a dealer is willing to buy - and clients can sell - the base currency for the counter currency. The "offer" is the price at which a dealer will sell - and clients can buy - the base currency for the counter currency.


The US Dollar is the Centre-piece

The US dollar is the centre-piece of the Forex market and is normally considered the "base" currency for quotes. In the "Majors," this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the other currency quoted in the pair.

The exceptions to USD-based quoting include the Euro, British pound (also called Sterling), and Australian dollar. These currencies are quoted as dollars per foreign currency as opposed to foreign currencies per dollar.


What Affects the Currency Prices

Currency prices are affected by a variety of economic and political conditions, most significantly interest rates, inflation and political stability. Moreover, governments sometimes participate in the Forex market to influence the value of their currencies, either by flooding the market with their domestic currency in an attempt to lower the price, or conversely buying in order to raise the price.

This is known as Central Bank intervention.

Any of these factors, as well as large market orders, can cause volatility in currency prices. However, the size and volume of the Forex market makes it impossible for any one entity to "drive" the market for any length of time.

Currency traders make decisions using both technical factors and economic fundamentals. Technical traders use charts, trend lines, support and resistance levels, and numerous patterns and mathematical analyses to identify trading opportunities. Fundamentalists predict price movements by interpreting a wide variety of economic information, including news, government-issued indicators and reports, and even rumour.


Rewards and Risks in the Forex Trading Market

Trading foreign currencies is a challenging and potentially profitable opportunity for educated and experienced traders.

However, there is considerable exposure to risk in any foreign exchange transaction. Any transaction involving currencies involves risks including, but not limited to, the potential for changing political and/or economic conditions that may substantially affect the price or liquidity of a currency.

Moreover, the leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin call within the time prescribed, your position will be liquidated and you will be responsible for any resulting losses.

Before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, you should not invest money you cannot afford to lose.

As an investor you may lower your exposure to risk by employing risk-reducing strategies such as "stop-loss" or "limit" orders.

There are also risks associated with utilizing an Internet-based deal execution software application including, but not limited to, the failure of hardware and software.

Stephen S Alison is a retired "bean counter" who spent 26 years in middle management positions for major US financial institutions in Europe and a further 10 years as an adviser/consultant to a number of European financial institutions. He owns and operates a number of "hand built" niche websites including: [http://www.24carat-gold.com] [http://www.forex-arbitrage.com]

Article Source: http://EzineArticles.com/?expert=Stephen_S_Alison

Forex Options Trading for Hedging Currency Risk

By Nelly Naneva   

 

Currency risk is part of the financial risks associated with adverse movement in the exchange rate of a particular currency relative to another. As compared to investments in local assets, the fluctuating foreign exchange rates represent an extra risk factor for traders who want to protect their portfolios. The control and management of foreign exchange risk is part of business management. One generally accepted method for hedging currency risk is the Forex options trading. This article reviews the practices of currency risk hedging and their efficiency to control foreign exchange risk through Forex options trading. (Hedging is any action or a set of activities, aiming reduction or neutralization of identified potential risks.)

The use of Forex options trading for exchange-rate risk management is widespread in developed economies and a routine part of the business of financial institutions and companies. By its nature, the currency option differs from the other types of options by its economic function; it hedges the exchange-rate risk and the underlying asset is a particular currency or set of currencies.

Options are derivatives, they derive its price from the value of a particular underlying security, currency or commodity. Forex Options trading are an agreement that gives the buyer the right, but not the obligation, to buy or sell the underlying asset (currency) at a strike price on or before a predefined future date when the option expires. In legal essence, the Forex options trading are provisional and fixed-term transactions. The deal is conditional, because it becomes effective only if the buyer desires. It is also a fixed-term agreement, because its execution is at some time in the future. Currency option is a financial asset like shares or bonds and forms a legally binding agreement between two parties with strictly defined terms and conditions.

There are two basic types of options. The buyer of a Call option owns the right, but not the obligation to buy the base asset on or before specified date at an agreed-on price. Put option confers the holder the right, but not the obligation to sell the underlying asset on or before expiration date (depending on the style of option) for a specified price. Each option contract is a legally binding agreement between two counterparts. On the one side is the buyer of the option who takes "long position." On the other side of the agreement is the seller (issuer) who issues the option and takes the so-called "short position." The seller normally receives from the buyer a specific monetary compensation, named "premium" for the underwriting; at the same time he takes in practice unlimited risk of adverse price movements of the underlying asset.

The strike price is the agreed-on price, at which investors buy or sell options (also "exercise price".) The holder of an American-Style option may exercise his right to sell or buy the asset at any time before the end date. The owner of a European-Style option exercises it at the expiration date only. Options are both exchange-traded and OTC traded financial instruments. They are suitable for hedging and speculative purposes in both upside and downside price movements of the underlying assets by diverse options trading strategies.

When an investor determines a particular type of risk can affect his business, he may decide to protect himself against the particular risk by becoming a party to options contract. A European importer of goods from the United States, apprehending of eventual rise of the dollar and increased delivery costs, could decide to fix the U.S. Dollar to EUR buying a call option. Let us assume that the U.S. Dollar falls at the date of purchase. In such case, the importer will lose only the premium paid for buying the option. However, if the U.S. Dollar rises steadily, the value of the option will also go up thus compensating the increased value of the delivery denominated in EUR.

The derivative contract leads to financial result, just the opposite of the result generated by the risk. When the market price of the hedged currency falls, the value of the derivative contract increases, and vice versa. Although most participants on the derivative market use these instruments for hedging purposes, the companies often trade derivatives for speculation: aiming to generate profits for when of favorable price movements.

Let us assume a Great Britain company expects to receive $ 420,000 after three months and must exchange the US Dollars to Pounds (USD/GB). The current exchange rate is 1 = $ 1.50. The company anticipates revenue of 280,000 (420,0001.50), but the conversion rate of US Dollar to Pound Sterling may move up or down at maturity. During the three-month period, the firm takes the risk of an adverse movement of exchange rates, unless it decides to take some measures to hedge the currency risk.

• If the exchange rate at maturity of the obligation is 1 = $ 1.60, the revenue in GB will be only 262,500, 17,500 fewer than initially expected and the financial result will be a loss as a result of exchange rate impact. If the company finds the risk acceptable, it may do nothing. In case it decides to hedge the potential currency risk, the firm can buy a put option to sell $ 420,000 against GB at executive price of 1 = $ 1.50. This means the seller of the option will need to buy the dollars for 280,000.

• If the exchange rate in three months is 1 = $ 1.40, the revenue of the company in Pound Sterling will be 300,000 (420,0001.40), i.e. with 20,000 more than expected. This way the company profits as a result of foreign exchange rate movements. In such a situation, the option will expire worthless and the company will lose only the premium paid for the purchase of the option.

Currency options trading are widely used investment tools for management and protection against currency risk. Forex options trading makes future risks negotiable; it leads to removal of uncertainty through the exchange of foreign currency risks.

The investors and financial institutions use Forex options trading as insurance against undesired price fluctuations, which in turn leads to more reliable forecasts, lower capital requirements, and higher productivity. Besides, Forex options trading provide protection against currency risk with minimal investment and consumption of capital at exceptionally high adaptability of the contractual terms and conditions. Forex options trading also allows investors to deal with future price expectations, purchasing a derivatives instead of the base security at a very low transaction price in comparison with direct investment in the underlying asset. In addition to hedging currency risks, currency options are also proper instruments for exchange-rate speculations.

Nelly Naneva works as CEO of the Financial Institution Freetrade JSC, Sofia, Bulgaria and as Editor of the Online Financial Magazine Markets Weekly. ( http://marketsweekly.net )

She holds Masters' Degrees in Law from Sofia University St. Kliment Ohridski, Bulgaria and in Banking and FInance from Institute of Financial Services, School of Finance, London, Great Britain.

Article Source: http://EzineArticles.com/?expert=Nelly_Naneva

Investing in Gold - Factors That Influence the Price of Gold

By Gregory Neilson

 

    

Understanding the factors that influence the price of gold is crutial before making an investment in the precious metal. Equally important is to be aware of the key differences in the supply and demand of gold compared to other investments such as commodities, stocks and bonds.

Another factor to keep in mind; gold is not the only precious metal to consider when making this type of investment. Silver, Platinum and Palladium are also highly sought-after as investment vehicles, offer similar fundamentals to gold, but each have their own unique characteristics as an investment.

Factors Influencing the Price of Gold Bullion
The value in a gold coin or gold bullion is found in its precious metal content. While gold is pretty to look at in just about any form, when sought after for investment purposes its aesthetic appeal is not usually a consideration. Because of this, the value of gold bullion is tied directly to the market price for gold, and will fluctuate as the market moves, just like stocks, bonds and commodities.

How to Measure the Price of Gold
When quoting the price of gold, most business reports will show the price per troy ounce in US dollars. If you are following the market from outside the US, make sure to convert this price into your home currency, and know that one troy ounce is equivalent to about 31.1 grams.

Also note that the price quoted on the market is always for pure gold. Most jewelry is much less than pure (usually between 40-75%), bullion and coins however, are usually fairly high purities (above 90%).

With an understanding of the mechanics behind the price of a physical sample of gold, you can start to look at the market forces that cause the wide daily swings in price. They are listed in order of their impact on the daily price of gold.

1. Macroeconomic Data
By far the most influential metric on the price of gold is the daily economic information coming out of the worlds markets. Gold has historically always been a "safe haven" type of investment. Like real estate and cash, it is a place to put your money if things aren't looking good elsewhere. When money is pulled out of the stock market it generally flows towards these types of investments, but in 2008 when the stock market and the real estate market experienced simultaneous crashes, gold seemed like the only safe play and, in turn, began its dramatic gains in price.

2. Inflation Pressure
Inflation is the theory that over time, the value of money will always go down as prices go up. While the average price of a house isn't $40,000 like it was in 1975, the number of gold bars it would take to buy the same house is pretty consistent: $40,000 worth of gold in 1975 would be worth a little over $310,000 today.

This means that no matter what the market is for gold, in the long run it's always better than holding cash without earning any interest on it. While gold doesn't pay interest, its price does generally track the rate of inflation or better.

3. Supply and Demand of Gold
Supply and demand is the main drive of market pricing behind most commodities. While the gold price is much more complex than this basic formula, these factors do come in to play.

The supply of gold is largely dependent on its price, as the cost to mine it has become so high. It used to be quite easy to prospect and mine for gold, with plenty of stories from the gold rush of hitting the mother lode. Nowadays, it's much more difficult to extract gold in large quantities and requires expensive equipment and technology. Also, since gold doesn't really get "used up" or consumed the way other commodities do, there is always a large reserve of gold regardless of supply. So unlike most other commodities, the supply of gold will likely continue to be more reactive to its price than to have a direct impact on it.

The demand side is similarly consistent. As the price of gold drops, its demand in the use of jewelry increases (as jewelry is a discretionary spending item), but the investment demand for gold will generally drop as prices move on a downward trend. The reverse is true, of course if prices rise: jewelry demand for gold drops, and investment demand increases.

Future of Gold Prices
Look to the economy and the rate of inflation as the most likely indicators of gold price in the future. Another big recession or a sudden increase in the level of inflation could cause gold to make another big run up. Similarly, if things continue to improve in the global economy and inflation remains in check, gold prices will likely remain fairly stagnant and could even drop a little more.

Canada Gold, through its 12 offices located from coast-to-coast, offers investments in gold and silver bullion. The supply of investment gold is limited and should be confirmed and reserved prior to visiting one of our offices.

In Vancouver, visit http://www.VancouverGold.ca to contact your closest office. For all other locations, visit http://www.CanadaGold.ca to find an office near you.

Article Source: http://EzineArticles.com/?expert=Gregory_Neilson

Wholesaling Houses: Finding Buyers for Homes in Distressed Neighborhoods

By Sean Terry

 

    

One of the biggest problems facing those wholesaling houses today is finding end buyers for properties in distressed cities and neighborhoods. So how can wholesalers get better at turning these units around faster and for more money?

Contrary to the impression being dished out by many media outlets foreclosures, and in particular new foreclosures are surging in many areas of the country. This also brings plenty more cheap house 'deals' for real estate wholesalers. However, it doesn't matter how cheap you can get them if you can't sell them and cash in.

Unfortunately, recently there has been more negative press about some of the nation's hardest hit areas like Detroit (whether deserved or not), and real estate investors are becoming more educated on the potential perils of buying dirt cheap properties. This doesn't mean that there aren't' huge profits to be made even in the hardest hit neighborhoods, in fact they can hold the biggest paydays if handled right. But some may be finding it a little more challenging to keep up volume and enjoying wholesaling all the houses they would like.

3 ways to attract more buyer leads and flip more houses in hard hit foreclosure zones...

1. Increase Visibility
If investors that are focused on wholesaling houses are not getting any leads or at least the type of volume of home buyer leads they want, perhaps the first step is to increase visibility. If you or your homes for sale aren't seen they aren't going to sell. Options here range from Craigslist to online networking with other real estate investors to setting up a global network of referral partners or listing home on the MLS.

2. Reduce the Fear Factor
If leads and inquiries are coming in but are bouncing quickly it's likely the fear factor that comes with low end or distressed properties. Build confidence and value by providing accurate repair quotes, access to discounts with contractors and vendors, and if possible contacts with the city for applying for tax breaks and getting permits fast.

3. Improve Area Appeal
Work to boost the reputation of the area. Collaborate with tourism boards, local government, Chambers of Commerce other real estate professionals and travel networks to increase the attractiveness of the area and keep your marketing spend down. Maybe you are in the next hot tech startup spot or investment hotspot. Get innovative, command the market and wholesale more houses.

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Sean Terry is a Real Estate Investing Mogul that hosts the #1 Real Estate Investing podcast in iTunes, if you would like more great information on Money Making in Real Estate please visit http://Flip2Freedom.com Today!

Article Source: http://EzineArticles.com/?expert=Sean_Terry

Using Insurance As an Investment Strategy

By Steve Beaman 

 

With the massive increases to our taxes taking place on January 3rd (barring any major changes), the notion of avoiding taxes or simply delaying payment becomes all the more attractive. Since the 1980's when deductions were largely eliminated except for mortgage interest and charitable contributions, it has become increasingly difficult to protect your hard earned money from the "redistributionists" who want to give it to someone else. Insurance is something you should consider.

Let's start at the basics, what is insurance? Simply stated, insurance is the act of transferring risk from one part to another. So you purchase auto insurance to transfer your driving risk to a company who, because of its broad coverage can pony up the cash in the event of a collision. Or you purchase life insurance to transfer the risk of the financial loss incurred by your death to an insurance company. It's pretty simple really, but there is one key component to insurance that makes it possibly quite attractive to you as an investor; the growth of your money inside an insurance contract is tax deferred!

Let's assume for a moment that you're in that hideous 39.6% federal bracket meaning that you and your spouse make more than $250,000 per year. So the next dollar earned, you keep (including State taxation) only about 55% of your earned money and that does not count the special investment taxes that have been placed on capital gains and dividends. So what do you do? Well, insurance may be an attractive idea. Let's assume you fund a variable life insurance policy and with it, rather than investing money in simply more ended mutual funds or ETF's, you put those investments under the insurance umbrella. The resulting returns are pretty staggering. Due to its tax deferred accumulation, the return inside the insurance contract can be ½ of the return outside and with no additional risk, yield the same future amount. Let's be specific, let's assume you're 35 years old, and earn just over $250,000, so you can save $1,000 per month toward your future retirement. With that money, option one is to invest it with a traditional investment product like a Mutual Fund or ETF, and option two is to purchase a variable insurance product. Here are the results, assuming they both earn 7% per year over the next 30 years, and taxes don't change, and you pay 1.5% per year in cost of the insurance product. At 65, you will have gained over $500,000 more by using the insurance vehicle to invest rather than the non-insurance way.

Now here's an interesting question that sometimes comes up, "what's the difference between using Insurance and other retirement plans like 401k's and IRA's?" Well I would say this, there has been talk in Washington of nationalizing the 401k's and IRA's and while this may be a long shot, there has never even been a discussion of stopping the insurance products. So you make the call, is it less risky to have an insurance product tax deferred or a 401k/IRA?

One final note, all insurance companies and all insurance products are not created equal! Your invested capital is regulated but that doesn't mean the insurance company will be around to honor its commitments to you, so conducting due diligence on your part is required, and is smart. As you evaluate your entire capital structure including your house, your cash, your equity assets, your debt assets and your commodity assets, keep in mind that only you have genuine concern about your future. Your advisor and your agents care, but they have many people to care about. You and you alone bear the ultimate responsibility to know where your money is, what your money is doing, and why it's placed as it is!

Steve Beaman is the Founding Member of The Society for the Advancement of Financial Education - S.A.F.E. He is the author of over 400 articles on better living; a 2 volume 12 CD Audio library and "The American Dream Under Fire".

Steve is a frequent keynote speaker, television guest and radio guest. He has appeared on Fox News, Heritage Foundation Radio, Politics Tonight with Paul Lisnek, and countless others. He performs live events with the "Arming America Band" featuring major rock talent.

To contact Steve or book him for an event, please write to info@societyforfinancialeducation.org.

Article Source: http://EzineArticles.com/?expert=Steve_Beaman

How to Fund College Education - Are There Options?

By Walter Seward

 

Our children are growing up. High School will soon be completed. What's next? College? Now for the hard questions. Where? How much will it cost? Where will we get the money?

Some families have set up a savings account when their children were born. Others have opened a 529 savings account. A few families have a participating permanent whole life insurance policy from which they may "borrow" funds for college expenses.

What is the best option you ask.

Before discussing your options. Let's talk about Investment vs savings.

An investment is always a risk, a gamble, an unknown. An investment may be money put into stocks or mutual funds or even a 529 College Savings plan. We invest with the HOPE for a financial gain. However, there are no guarantees!

Savings is when we have put money into a secure place and you know up front what the return or gain be. Your savings account at the bank states they will pay you a specific amount of interest.

College 529 Savings plans although the tax advantage is attractive. They do have some definite drawbacks. What if your child chooses not to go to college, wants to attend college in a different state, or is able to get scholarships to fund his or her education? Another point to be made is that the funds have to be used for education by the time the beneficiary (your child) turns thirty, to avoid the non-qualified use penalty. Also the government can change the rules of the 529 plan at any time.

The other viable option worth serious consideration is to purchase for your child a Participating Permanent Whole Life Policy. Why? There are several solid reasons which I will highlight here.

1. It is secure. It is not tied to the stock market.
2. This type of insurance is very low cost when purchased for children.
3. It has a guaranteed rate of return.
4. You may borrow from this policy cash to pay for college education without obligation to pay a set amount each month to replace that loan. The advantage of borrowing from "self".
5. Most important is that you have full control over these funds and their availability to you.
6. Additional benefit is that you will get additional money from the death benefit.

My advise is to consult with financial adviser and consider all your options.

It is my opinion that using your child's life insurance policy to fund College is a wise decision.

http://walterseward.com

Article Source: http://EzineArticles.com/?expert=Walter_Seward

Top 5 Advantages of a 401k Plan

By Teddy Dutch Danfield

 

We all know we need to save for retirement. The question becomes: Where should I save my money? The simple answer for many will be their work 401k plan. I want to give you five advantages of a 401k plan. Most people have a 401k plan, but they do not know how to take full advantage of a 401k plan.

#1 Just start saving money in 401 Plan
Most people associate a 401k plan with the stock market. The stock market is viewed as a risky investment. Therefore they do not want to save any money in a 401k plan. First of all you do not have to invest in the stock market if you feel it is too risky. This is a great advantage of a 401k plan because you can choose to invest only in bonds or even a guaranteed investment.

Now investing in only bonds may not give you the higher rates like stocks, but you will not have to worry about huge declines in value. However, a big mistake people make is not to save any money at all. Following a plan of not saving will only guarantee you will work forever.

#2 Company Match = Pay Raise
Typically employers offer a company match if an employee saves money in the 401k plan. A common company match is a 3% match. For you the employee a 3% match means if you save 3% of your paycheck in the company 401k plan then your employer will match this same 3%. Here is a mistake many people make when saving in a 40k1 plan. They decide only to save 1% of their paycheck, but the employer will only match the same 1% and not 3%.

Do not give up a 3% pay raise by not saving any money in the 401k plan. The company match is one of the great advantages of a 401k plan. Just by saving a little amount of your pay will lead to a pay raise. What a great benefit.

#3 Pay Less in Taxes
Who likes to pay taxes? No one. Well by saving money inside of a 401k plan can reduce your taxes. The government allows you do deduct any money you save inside your 401k plan. For example, you decide to save $2,000 into your work 401k plan the government allows you to deduct the $2,000 from your wages. If you earned $50,000 the government allows you to subtract the $2,000 from your income. In other words you would only have to pay taxes on $48,000 vs. $50,000.

All during your working years you can continue to save money in your 401k plan without having to pay income taxes. However, when you retire the government does want to start collecting taxes on your 401k savings. When you do start withdrawing money after age 59 1/2 you will pay current income taxes only on the amount your withdraw from your 401k.

Remember you only pay taxes on the money you withdraw; the remaining balance continues to grow tax-deferred. Deferring your taxes later in life is one of the huge advantages of a 401k plan. As I stated earlier just starting to save money in a 401k plans opens up all these advantages.

#4 Professional Money Management
In a 401k plan you only have to pick the mutual funds, not the individual stocks or bonds. Professional money managers who have expertise in researching companies pick the investments inside the mutual funds. By investing in mutual funds inside your 401k plan saves time and money.

You do not have to do your own research on each individual company. A typical mutual fund has between 100 to 300 different companies.

As an investor I know I do not have the time or expertise to research 100 companies to decide how to invest my money. Not having to pick our own individual investments is another one of the skey advantages of a 401k plan.

#5 The Money is Yours, Not the Companies
A common mistake people think about a 401k is the money is tied to the company. People believe if the company goes out of business they will lose their money. This is incorrect because the money is invested separately at a mutual fund custodian company. Your employer does not have any access to your 401k plan money.

The only amount of money an employer could keep if you leave the company is the company match. Some employers have a required amount of time you need to be employed at the company before you receive the amount they matched in your account. This is known as the vesting schedule. Companies may require you work at the company for three years before you receive the money the company contributed to your 401k plan.

However, they never have any right to the money you personally saved in the 401k plan. This is your money, not theirs. Not having to pick all your own investments is another one of the advantages of a 401k plan vs. a pension plan. Potentially an employer does not have to honor a pension plan if the company goes out of business. If you believe this could not happen to you just look at some of the airline and steel companies. When the companies went out of business they did not have any money to pay for the employees pensions.

Final Thoughts
We all plan to retire someday. To retire successfully we need to have some cash saved up to pay our living expenses during retirement. We cannot depend entirely on Social Security or a company pension. We do not have any control if the government or your employer decides to make changes in the future.

A 401k plan can give you some control of your retirement plan and your future. However, you do need to review your account periodically to see if changes need to be made.
Overall there are significant advantages of a 401k plan to your retirement plan. Take the time to review these advantages for your own retirement savings.

For more on Roth IRA information and receive a complimentary retirement ebook at http://rothirasecrets.com

Article Source: http://EzineArticles.com/?expert=Teddy_Dutch_Danfield

Love Your Investments With Highest Dividend Stocks

   

By Joe Mathrews

 

Lots of investors have gathered fortune with highest dividend stocks. However, stocks always call for uncertainties. Thus, investors constantly remain under the threat of losing money. Stocks often come at high price ranges. Thus, make sure to collect relevant information, before you start investing money in buying stocks from good companies. Stocks are assets. They help you grow financially and at the same time they can be means of regular income. It is important that you start searching for avant-garde stocks. This is sure to add to your accumulated wealth.

Invest Wisely and with CautionFor decades, dividend investments have been part of lives especially for dedicated investors. With the bonds and shares there has always been an improvement in business. You just need to concentrate on two things. You should take into account the total return of the stock and the amount of dividend it would yield at the end. Inflating the balloon is fine but putting in too much air can result in bursting. Thus, it is always advisable to cut your coat according to your cloth. Invest to a level where you would be able to handle the risk of bankruptcy. Do not ever keep your entire fortune at stake.

Judging the SafetyInvestors are always wondering about the safety of highest dividend stocks. Once you can take to the smart tactics, making an investment won't at all be a risk for you. When investing carefully one is sure to get safe returns on the amount of money being financed in the deal. When you have decided to spend in dividends, the first thing you require doing is to spot a company with a good track record in paying dividends. Finding a company sounds easy. However, this is not so in reality. It is hard to get hold of a consistent track record. Still the game is on, and you keep on making payments and repayments with the desire to hit the jackpot at the end.

Believing in Equality
There are certain things you should look into when planning to invest in the stock market. You can start with the dividend payout ratio. The percentage should not be more than sixty on the part of the company. If the company keeps the lion's share with the thought of expanding in the future, this can cause a severe cut down in the amount of dividend being earned. So the ratio should always stay leveled to make both the investor and the company enjoy a good amount at the end.

Securing Yourself is Important As a part of social security benefits, one can readily finance in highest dividend stocks. It is best to get in touch with a company with a standard price setting caliber. However, being overconfident in such matters is no way accepted. Market can crash at any moment. So expect the best and always stay prepared for the worst. Still, there are precautionary measures, which can save you from absolute bankruptcy. There is no point being a beggar at the end. Select and invest only after you have judged the authenticity in matters of investment returns.

Joe Mathrews as a part of social security benefits, has decided to invest in the genre of highest dividend stocks. Thus, he walks an extra mile explaining the methods of investment.

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The US Dollar

By Matthew Zorn

 

Over the last decade the US has gutted its manufacturing and professional services base by shipping them overseas, or as many call it, outsourcing. Since 2008, the Federal Reserve has been printing money at an alarming rate, tripling its balance sheet.

This is now starting to catch up with them and there is something going on behind the scene that has created a dollar protection policy. This is an all out operation to keep the value of the dollar up, make no mistake.

There is a huge supply of US dollars in the market from the printing that has been taking place and a lack of its use that is building. This is a perfect scenario for a collapse. Russia, Brazil, South Africa, and China as well as Australia, and now even perhaps France have all taken steps to eliminate trade in the reserve currency and are now setting up direct trade in the currencies of their own countries. The dollar is being threatened.

Okay, so what's the worry? What is the possible outcome of a devalued dollar?
First, the exchange value drops, followed by the cost of imports rising. Next we move on to domestic inflation. Domestic inflation will result in an environment that does not allow the Fed to keep interests rates low. The Fed is then forced to raise interest rates in an effort to keep inflation at bay.

Rising interest rates will signal the end of cheap money and will have an effect on expansion for business, additional costs for consumers who are in debt, and will have an adverse effect on the debt that the government holds. Taking more and more out of revenue streams to service higher debt costs. There are many more consequences, these are just a few.

So how does the Fed combat that?

Starting in April of this year, brokerage houses were told that hedge funds and institutional investors were going to start selling gold and silver. Goldman, then told their clients to take it one step further and to start shorting both metals, with an emphasis on gold. This is more than just selling; this is additional pressure being applied to the downside.

The Fed, as well as other sanctioned entities, are now using "Naked Shorts." Completely illegal, and you and I would go to jail if we did this. You can see by the action in the commodities sector, gold and silver specifically, that this is working. But, why is all this going on?

We are at a point in this money creation cycle that you cannot have any competition to the US dollar. It must remain being seen as a safe haven, and gold and silver are an alternative form of currency. That is a no, no in their eyes. It must be crushed. One thing to keep in mind is all of this is being done with paper gold and silver, not physical.

Bringing down the price of precious metals against the value of the US dollar make it look much stronger and helps to retain its safe haven status.

But, why would you want to scare people out of bullion, and are there unintended consequences?
People, and more importantly countries are backing up the trucks and taking advantage of the opportunity that these lower prices present. Although the paper market maybe taking it on the chin, the physical market is tighter than ever, and supply problems for delivery have been reported over the last month.

If too many people move to gold because they feel that the money printing will have unfavorable long-term consequences, it would surely disrupt or collapse the value of the dollar. The Fed needs confidence in the dollar so that they can continue to print huge amounts of paper money without crashing the price or value.

They are currently creating a situation and structure that will lead to an event in which we will see the collapse of our economy, and they know that. How do we know? One need not look any further than the growing police state that is the US. When we see the Department of Homeland Security buying bullets numbering in the billions that is one thing, suspicious, but explainable if you buy their story.

However, preparing and selling ARMORED TANKS to local police forces all around the country. You simply can't explain that away.

When this is all said and done, a new currency, perhaps global, will be necessary to instill confidence in fiat paper again. You may image that precious metals will be a part of that and this may be the reason that countries and central banks are stocking up now while the price continues to drop.

Matthew Zorn, who writes under the pen name M.P. ZORN, is a freelance writer and the author of the published books "Free Fall" and "Zero Hour." M.P. ZORN's books are available at in digital and print formats. Be sure to follow him at his website MP ZORN for more information on his books and follow his blog.

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Excellent And Simple Tips On Foreign Exchange Trading

   

By Leonard Lucas

 

You will find online business offerings which can be a lot better than other individuals, like their dimension. The foreign exchange market symbolizes the most important Forex trading platform for money on earth.

The speculation that pushes the price ranges up and down about the money exchanges tends to outgrow busting press. You have to set up electronic signals in the industry to allow you to utilize busting media.

Always have a laptop on hand. This may be used to make a note of any information and facts you find available on the market while you hear it so you won't neglect later. You may also use this in order to keep track of your development. Look back at your prior tips after a while to find out should they be nonetheless pertinent and successful.

You could turn out to be tempted to invest in several distinct foreign currencies once you begin Foreign Exchange trading. Commence purchasing just one foreign currency match until finally once you have acquired much more about the foreign currency market.

You may use all different forms of evaluation when buying and selling in the Forex marketplace. You should understand and comprehend all of them to become effective. As you may become more superior, you will discover strategies to pull benefits of the whole trio of evaluation varieties.
Consider transitioning up after you've become used to your Forex trading patterns. You may make trades rapidly.

Find a buying and selling foundation which is considerable. Numerous platforms permit you to have information and then make transactions over a Smartphone! This means that you may have more quickly allergic reactions and greater mobility.

You can find analysis of the most useful currency trading maps everyday and several-hour time periods. You can get Forex maps every quarter-hour. The disadvantage of these simple-term cycles is that they go up and down extremely and mirror an excessive amount of random good luck. It is possible to sidestep the vast majority of pressure and impractical enjoyment by avoiding quick-term cycles.

Make and stay with an investing program. Failure is probably going to come about when you neglect to build a Forex trading technique. Using a prepared indicates you can expect to avoid emotional buying and selling that is almost never successful.

Find out what little bugs linked to your trading computer software has. Even the best acknowledged computer software does have its defects. Expect to operate all around your computer software and learn the workarounds. You do not would like to stay away from finding out what information and facts can and should not be accepted when you're in the middle of your trade.

Approaching completely from specialist investors, these guidelines may help you business on the foreign currency market. Despite the fact that we could not ensure you will be profitable in your Forex trading, the following tips will assist you in turning into successful. If you stick to these guidelines, you will end up prone to make productive and rewarding transactions on the Forex market.

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