INVESTMENT INSIGHTS & SPECIFIC RECOMMENDATIONS Most Frequently Asked Questions.

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Presentation transcript:

INVESTMENT INSIGHTS & SPECIFIC RECOMMENDATIONS Most Frequently Asked Questions

1. I have some extra money, what investment would be good for me? 1 – Diversified 2 – Allocated 3 – Low Expenses Found at: OverviewJSP.jsp OverviewJSP.jsp OverviewJSP.jsp Vanguard meets these three requirements

1. I have some extra money, what investment would be good for me? CompaniesBonds 3,381 4, … as of 8/31/2010 5,183 4,762 TOTALS

1. I have some extra money, what investment would be good for me? 1. What Investment

2. I want to do my own investing, where can I find quality information? 1. What Investment 2. Quality Information

3. I have some money that I am going to use shortly, where should I put it? 1. What Investment Depends on your Time Line 2. Quality Information Less than 2 years=Money Market 2 to 5 years=Conservative Portfolio 5 to 10 years=Balanced Portfolio More than 10 years=Equity Portfolio 3. Short Term Money Where can I find these Portfolio? – Next Question

4. Where can I find good Portfolio Allocations? 1. What Investment 2. Quality Information 3. Short Term Money

4. Where can I find good Portfolio Allocations? 1. What Investment 2. Quality Information 3. Short Term Money ALLOCATION

4. Where can I find good Portfolio Allocations? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios

5. I heard I should invest in Index Funds, would you agree with that? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios Active Investing vs. Passive Investing

5. I heard I should invest in Index Funds, would you agree with that? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios Active Investing vs. Passive Investing

5. I heard I should invest in Index Funds, would you agree with that? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds

6. What company is the best to set up my account at? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds A Discount Brokerage A Discount Brokerage gives you: 1.Money Market Checking Account 1.Higher Interest 2.Lower Fees (no overdraft penalties) 2.Much easier investment buy/sell options Highest Ranked = Charles Schwab 6. Discount Brokerage

7. Should I invest in Real Estate 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage $ 40,000 Down $ 360,000 Debt $400,000 Duplex Your Investment Borrowed Money 10% Appreciation $ 40,000 Gain $ 40,000 Down 100% Gain $ 40,000 Loss $ 40,000 Down 100% Loss A.Leverage - Debt 1.Positives

7. Should I invest in Real Estate 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds A.Leverage - Debt 6. Discount Brokerage 1.Positives B. Rent – ‘Free (unearned) Income’ C. Depreciation – ‘non-cash’ expense

7. Should I invest in Real Estate 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds A.Leverage - Debt 6. Discount Brokerage 1.Positives B. Rent – ‘Free (unearned) Income’ C. Depreciation – ‘non-cash’ expense D. Behaviorally sound A.Leverage – High Risk Investment 2. Negatives B. Landlord – High Maintenance investment investment

7. Should I invest in Real Estate 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds SOUND REAL ESTATE PRINCIPLES 1.Avoid “nothing down” workshops 2.Avoid real estate “counselors” 3.Avoid time share “investments” 4.Employ an excellent CPA advisor 5.Establish a relationship with a bank appraiser 6.Guidelines: 1.50% vacancy for six months 2.Don’t own long distance 3.Be sure you’ll live in the area for, at least, 5 years 4.The first home – a duplex 6. Discount Brokerage 7. Real Estate

8. Should I invest in Gold or Precious Metals 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds Worst Investment for the past 30 years 6. Discount Brokerage 7. Real Estate Dow Jones Gold Index

8. Should I invest in Gold or Precious Metals 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds Best Investment for the past 3 years 6. Discount Brokerage 7. Real Estate Gold Dow Jones

8. Should I invest in Gold or Precious Metals 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals Brigham Young The time will come that gold will hold no comparison in value to a bushel of wheat... Gold is good for nothing, only as men value it... It is not half so good as the soil from which we raise our wheat. - June 5, 1853, Journal of Discourses 1:248

1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 1.Very High Commissions 2.Surrender Penalties 3.High Investment Fees 4.Capital Gain Income become Ordinary Income 5.Equity Index Annuities – a good deal! 9. Somebody tried to sell me an Annuity or Investment Life Insurance Policy, are they good investments? Hot Deal!! An investment Goes up, but never down No commission

1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Somebody tried to sell me an Annuity or Investment Life Insurance Policy, are they good investments? 1.Very High Commissions 2.Surrender Penalties 3.High Investment Fees 4.Capital Gain Income become Ordinary Income 5.Equity Index Annuities – a good deal! Hot Deal!! An investment Goes up, but never down No commission

Those Investment Management Fees 2% to 3% higher than necessary 2% difference 8% = $527,454 10% = $ 1,048,250 3% difference 9% = $740,488 12% = $ 2,114, Somebody tried to sell me an Annuity or Investment Life Insurance Policy, are they good investments? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities

10. I don’t have any money but I want to start investing, what can I do? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals Minimums For Investing 1.Checking Account = $10 2.Mutual Fund/Brokerage 1.Lump Sum = $500 - $2,000 2.Automatic Withdrawal = $50/month 9. Insurance & Annuities 10. Minimum Investments

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments Recommended Books This list is found on Blackboard

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments Recommended Books

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments Recommended Books

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments Recommended Books

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments Recommended Books

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments Recommended Books

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments Recommended Books

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments NOT Recommended Books

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments NOT Recommended Books

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments NOT Recommended Books

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments NOT Recommended Books

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments NOT Recommended Books

11. What books should I read to learn more about investing? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments 11. Books

12. Have you heard about ____ investments, do you like those? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments 11. Books If you have to ask if I have heard about it, it is most likely an Alternative Investments These investments are too risky or speculative. Examples: 1.Tax Liens 2.Discounted Notes 3.Hard Money Lending 4.Real Estate Flipping 5.Options 6.Hedge Funds 7.Margin Trading

12. Have you heard about ____ investments, do you like those? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments 11. Books Something we found recently An ad on Yahoo!

12. Have you heard about ____ investments, do you like those? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments 11. Books Something we found today! An add on Yahoo 12. Alternative Investments

13. I have some debt, what is the best approach to get rid of it? 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments 11. Books Australian Loan 12. Alternative Investments 13. Debt

14. Should I put money in a Roth or Traditional IRA 1. What Investment 2. Quality Information 3. Short Term Money 4. Good Portfolios 5. Index Funds 6. Discount Brokerage 7. Real Estate 8. Precious Metals 9. Insurance & Annuities 10. Minimum Investments 11. Books If you pay Taxes = Traditional IRA 12. Alternative Investments If you Don’t pay Taxes = Roth IRA 40% of People Don’t Pay Taxes 13. Debt 14. Roth vs. Traditional IRA 20% of People Pay 80% of the Taxes

Invest Taxes Saved - R.E.S.I.R.V. Contribution = $500/month ROTHROTHROTHROTH ROTHROTHROTHROTH ROTHROTHROTHROTH Federal Tax = 0% State Tax = 0% TOTAL TAX = 0% Federal Tax = 15% State Tax = 7% TOTAL TAX = 22% Federal Tax = 25% State Tax = 7% TOTAL TAX = 32% $ 5,250,000 TRADTRADTRADTRAD TRADTRADTRADTRAD $ 6,720,000 TRADITIONALTRADITIONALTRADITIONALTRADITIONAL $ 7,710, % +32% EMPLOYEREMPLOYER TAXTAX MATCH MATCHEMPLOYEREMPLOYER TAXTAX MATCH MATCH $ 10,170, % Investment annual growth = 10% Employer Match = 100%

How much tax do retirees’ pay 72% in lower tax bracket than when IRA was contributed 50% of all Americans pay no income tax Which tax will increase? Value added, consumption, federal sales tax transaction Capital gain tax increase does not apply to IRA accounts Qualified charitable contributions Tax paid on conversion now can never be reclaimed Many withdrawal options pay no tax or result in no tax Energy saving tax credits Any tax deductible expense Payments to long-term care policies Payments to a Health Savings Account Withdrawals where disabilities or unemployment have reduced tax bracket Taxes saved and invested are matched by employer doubling the tax saved benefit WHY ROTH

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