Invest to Get Tax Breaks

Average investors need all the tax breaks they can get, especially when they invest for retirement. All investments are not taxed the same. Consider this your basic investment guide to understanding the tax breaks available to most investors.

Ordinary taxation offers investors no tax breaks. For example, you hold a CD jointly with your spouse or in your name only, and earned $4000 in interest last year. At tax time this is considered interest income, and is taxed at your normal tax rate. If you are in the 25% tax bracket, you will pay $1000 in income tax on the $4000.

Long-term capital gains is a tax treatment or tax break for investors who hold an investment long enough to qualify, and sell it for a profit. For example, you hold a stock for a couple of years, then sell it for a profit. Instead of your profit being taxed at your normal rate of 25%, it is taxed at a lower rate, like 15%. Note that this is only a basic investment guide, an example to illustrate a concept. Tax law here is notorious for changing.

Tax deferral is a popular tax break for folks who invest for retirement. The traditional IRA and 401k offer this advantage, as do tax-deferred annuities. For example, in a traditional 401k plan your money grows uninterrupted by income taxes. When you retire and pull money out of your plan the amount pulled out is then subject to income taxes at your ordinary rate. In your working years you avoided paying income taxes on earnings and interest, when you were likely in a higher tax bracket. In retirement you will likely be in a lower tax bracket when you pull money out and pay taxes on it.

Tax-qualified retirement plans like the 401k and IRA offer many folks tax deductions as well as tax deferral. For example, you invest $4000 in a traditional IRA. If you qualify, at tax time you deduct $4000 from your income as an adjustment. If you are in the 25% tax bracket, you just saved $1000 in income taxes.

Tax-free or tax-exempt investments or accounts should not be overlooked. Folks in higher tax brackets benefit from tax-exempt income from municipal bonds and mutual funds that invest in them. If you invest for retirement in a Roth IRA or 401k, you invest income-tax free. Your money grows free from income tax. The money you pull out in retirement is free from income tax as well, as long as you follow the rules. As a basic investment guide, tax-free investing is about as good as it gets for most of us. If you want to invest for retirement, consider Roth plans.

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Car Insurance – The Simplest Way To Save Money On A Good Auto Insurance Policy

Who Wants To Save Money On Car Insurance?

Lots of us are trying to cut back these days. We may be cutting coupons, switching power companies, or trying to use less gasoline. Some people can save a lot, but lots of us seem to work pretty hard to find we have only saved a few dollars. However, there is one fast and convenient way to save a lot of money ever month. That is by finding the best auto insurance deal for our families. Many people can save hundreds of dollars every year without giving up good coverage too!

Does Auto Insurance Company Loyalty Pay?

Have you been with the same insurer for years? Some drivers may enjoy a loyalty program, but most people should shop around periodically to make sure they are getting the best possible deal on high quality vehicle coverage. Markets change all of the time so insurers are always coming up with new programs to attract more clients. It can pay to shop for a better deal. At the very least, you can satisfy yourself that your old insurer is the best one for you!

Compare Insurers and Policies

Experts tell us to compare insurance rates every year or so. This is because things change in your own live, but also because the insurance market changes! In order to make sure that you are getting the best possible deal, you should take the time to compare deals and policies every 12 months or so.

Back in the day, it was time consuming, difficult, and maybe even stressful, to shop around You can use the web to help you now, and many online insurance systems make it simple to get the information you need to find a better rate. In fact, some sophisticated insurance quote systems even allow you to compare and purchase policies online.

How Much Can Car Insurance Discounts Save You?

Look for insurers that offer discounts that help you. Some types of vehicles or drivers are entitled to big money saving price breaks from major companies. At first glance, it may not seem like you save that much. But saving 10% for one discount, and then saving 15% for another discount, can really add up over the course of a year.

Look at some typical family who pays $200 a month to insure a husband, wife, and young driver. That adds up to $2,400 a year. A 20% discount saves $40 A month. When you consider that you pay premiums every month, you can save almost $500 over the course of the year. That is enough to pay a car payment, visit the grocery store a few times, or treat yourself to a luxury you have been wanting.

You do not have to sacrifice anything to save this money either. All you have to do is comparison shop for an auto insurance company that is eager for your business. Many of the top insurers, with very good customer service, offer discounts.

Plan Your Car Ownership Budget

Are you shopping for a new car or truck? This is a great time to compare car insurance quotes too! When you are trying to budget for your purchase, also consider the impact that new or used vehicle will have on your budget. Online quotes make it easy to comparison shop for insurance while you are comparison shopping for a car.

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Delusional Financing

Zero-percent financing! Instant approvals with no credit check! Poor credit? Still get great rates!

There are ads online and in print which make no sense and are in fact clearly delusional or intentionally misleading; making statements and offers so far out of reality that how can they be taken seriously? Bait-and-switch tactics come to mind when lured into providing credit information, don’t qualify for the “preferred program” and then get stuck with double-digit interest rates and high documentation fees to pad the lender’s pocket. It happens in all industries but probably more so with lending. Another pet peeve are online payment calculators; in the late 90’s I worked with a company which had an online calculator with rates so low that only A+ credit would qualify and since Apple and Intel never applied, nobody ever got those contrived finance rates.

Let’s briefly take a look at reality.

1) Zero-percent interest? In order to borrow money, the entity lending it has to make money. Lending at below prime interest rates usually means they are making their profit up in the equipment they are selling. This is very legitimate and companies big enough to subsidize their sales in this manner can offer you a flexible program but don’t believe you are paying zero interest. Offer to pay cash and watch the price of your equipment get discounted; then you’ll see how much interest you are really paying.

2) Instant approvals with no credit check are for pawn shops; you bring in your gold watch, they check if it’s really gold and you get 10% of the value. A credit check or review means someone is actually evaluating key factors like time in business, profitability, cash flow, assets and experience. It takes skill and good judgment to consider all the elements when evaluating risk which is why underwriters are so highly regarded in lending circles; I haven’t seen a software program perform this function at a high level yet. If you get a “no credit check” offer, you better think twice.

3) Poor credit means something financially bad has happened in the past, whether it was your fault or not. So, if a business creates bad luck or attracts it, it’s still bad luck and shows up on a credit record. Lenders want a return on their investment based on the risk they take when lending money. You can get a decent rate with bad credit if you own an asset, like a building but then you’ll be asked to use your property for collateral so it’s not just your credit which is qualifying for that better rate. Bottom line – if you have poor credit and no assets, you will pay higher rates.

The adage, “if it seems too good to be real, it usually is” applies to financing offers which are outside of the industry standards for qualifying and approving requests for capital. Watch out for deals which engage you with a super-one-time-only program and then becomes so complex that you’re likely to accept a marginal finance offer due to emotional fatigue.

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Millennials and the Social Business of Today

Each generation has its thing. That special something that defines it and its contribution to the world. There was The Greatest Generation, people who came of age during the Depression and helped lead the country to victory in WWII. Their children are the Baby Boomers, who up until now was the largest generation in American history. It gave the world many things, including the personal computer. Baby Boomers completely changed the way we live and do business. Their kids are known as Generation X. The generation stuck between the protests of the sixties and the Internet revolution, it also brought the world Google and delivered hip hop culture to the masses–you’re welcome. Then came the Millennials, it doesn’t matter what you think their thing is. They aren’t much interested in being defined.

Like the generations that preceded it, Millennials or Generation Y, see the world a little differently than their parents, as more interconnected and therefore more global. It is also responsible. For Millennials, it is not just about making money for its own sake but about the pursuit of one’s purpose and solving a problem. According to a 2015 Deloitte survey of Millennials and business, an overwhelming number (75 percent) feel that businesses are focused on their own agendas rather than helping to improve society. Many Millennials see social business beyond social media or social media marketing, to a more personal way of conducting business, working together to change society.

Millennials are a more tech savvy generation. Using technology to collect and build data sets to better understand customers and competitors may allow a business to tailor specific marketing campaigns and product launches, but it is not engagement, and that is what social business is all about. Millennials communicate via digital media but also view business communication as more of an exchange. This generation of entrepreneurs are more likely to see customers as well as employees, as partners in building their dreams.

Social business means bringing out the best in employees through social interaction and collaboration to improve productivity and gain a competitive edge. Social business allows companies to make better, faster decisions, and adjust to changes in a more nimble way. Millennials tend to operate with this business philosophy. Having grown up with the Internet and social media where everything moved quickly and interaction was instant, they understand what it takes to create a strong network. This is what social business is all about, enabling a network of collaboration to help drive performance.

The future of business is as much about technology, as it is imagination and communication. For this generation nearly everything is interconnected–including business. Developing a social business philosophy and establishing a program allows companies to improve client relations and employee success, while measuring results. It also helps develop more efficient ways of getting work done and create valuable relationships.

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