Make Money Easy For You

Fixed Asset Management

Managing fixed assets can prove to be a nightmare, especially when one has to indulge in time-consuming depreciation calculation while following complicated IRS regulations and procedures. The process becomes all the more complicated if the person doesn’t even have a proper listing or valuation of the assets that they own.

The problem is not only of assessing the value of these assets. If they are not properly classified, they may not be utilized productively. Given this scenario, fixed asset management program offers the perfect solution to work towards optimum returns.

The first step in this program involves the classification of the company’s fixed assets. These can include physical assets such as office furniture and fixtures, infrastructure including the plant and expensive machinery and equipment. In research companies, the laboratory will also be classified as a fixed asset.

A fixed asset can loosely be defined as any asset that can be used again and again in the process of production and services. Fixed assets can also include returnables such as containers and pallets. Therefore, the fixed asset program also takes these into consideration while classifying inventory.

There are many advantages associated with a fixed asset management program. First of all, it helps cut down on tax assessment. This is because someone can cut down on unnecessary capital expenditures and also calculate the depreciative value of their assets. This in turn ensures that they obtain correct valuation for insurance purposes. Otherwise, if they don’t take into consideration the correct depreciation value, they may end up paying higher premiums for them.

Another advantage that follows their evaluation is that people reduce their inventory time. This means that they can reinstate assets that they had written off. They may also ‘find’ assets which they previously thought were lost.

To implement a fixed asset management program, three basic assets are required. These include a host system with a PDCD(portable data collection device) software to maintain the master record and a bar code scanner that reads the identifying fixed asset ID tag.

Read more: Fixed Asset Management

Money Habits: How to Build Good Ones

We all have money habits – some good, some bad. This brief article will give a few tips on how to build up the good ones and squash the bad. It all starts in your mind and heart – what you think and feel about your money habits. Lots of people feel very guilty about their overspending habit, their eating out all the time habit, or some other bad money habit. If this is you, give yourself a break right now – they’re just habits and habits can be broken.

The way to break any habit is to realize that it’s only there because you’re on auto-pilot – you’re not making active decisions. Your bad money habit started probably because it made you feel good in some way. So you did more of it – but then, pay up time arrived and you started to beat yourself up about that. Guess what? Beating yourself up about a bad money habit will actually increase the likelihood of it continuing. Why? Because you’re focusing on it and what you focus on increases in your life. Instead, focus on what you want – which is a life free of bad money habits. You simply need to decide that you’re going to build a new habit that will take the place of the old habit. Researchers say that you can build a new habit in as little as 3-4 weeks.

Focus on your new life pattern that incorporates the money friendly habits you want to build. An example: If you’re stressing your budget with eating out every night, build a new habit to eat at home a few times a week. Make it fun. Focus on learning to cook something you enjoy but have never made. You may find yourself enjoying the food more, having more fun with your family, as well as saving money! And improving your life is what building good new money habits is all about.

Read more: Money Habits: How to Build Good Ones

Investment Management Firms

When talking about investment management firms, it is very important to understand profit maximization and wealth maximization. According to the objective of profit maximization, the ultimate goal of a business enterprise is to maximize its profits. All the efforts of the organization are to be directed to achieve this goal. The profit maximization objective is justified, as business is conducted for earning profit. When profit earning is the aim of the business, profit maximization should be the obvious objective. Profitability is an indicator of the efficiency with which the firm is managed. The higher the profit, the better the efficiency. For growth and expansion, profit is the main source of finance. To meet unforeseen contingencies reserves are necessary, which is possible only if there is enough profit.

However, the profit maximization objective is objected to on some grounds. The term profit is vague. It may assume different meaning in different contexts. It may be short-term or long-term. The concept of profit maximization generally ignores the time value of money. All profit gained in different time periods are taken together. The risk involved in any given project and the uncertainty of return are not at all considered. Accounting bias influences profit.

On the other hand, according to the objective of wealth maximization the ultimate goal of a business enterprise is to maximize the wealth of the shareholders, which is represented by the market value of the shares of the firm. Wealth is defined as the net present worth of the firm, i.e., the present value of all future returns.

Though the wealth maximization objective seems superior to the profit maximization objective, it is to be noted that the former is based upon the latter. The market price of shares, which is the indicator of the wealth of the firm, is based on the long-term returns of the firm. The returns that accrue to the investor would be a function of the earnings of the company. Thus it can be said that these objectives are not competing.

Read more: Investment Management Firms

Choose To Be Wealthy

You want to be wealthy and have unlimited income. You also have a dozen different books from famous authors sitting on your bookshelf collecting dust and you are still not rich. This means that either every one of those “get rich” authors were scammers or you have a shortcoming that is holding you back from achieving infinite wealth.

As I write, I am going to give you methods to increase your income as well as methods that will help you change habits that may be holding you back. So lets start with some of the wealth demons that could be keeping you from getting rich. Here are the big players; 1. Fear 2. Indecision 3. Laziness 4. Bad Patterns 5. Arrogance 6. Disappointment

Wealth Demon One: FEAR

Playing it safe has screwed more people out of their dreams than any other factor I can think of. I have seen people with no talent that bring nothing outstanding to the table excel and make a big name for themselves through nothing more than sheer guts. They just have no fear of rejection, failure, success or in other words they just keep on coming like a determined dog after a bone. When you want something so bad that all obstacles are merely interesting puzzles to be figured out and not mountains of woe, you are on your way.

Chances must be taken because fortune favors the bold. People that play it safe are the mainstream of society. This is the way things run from day to day. People wake up, go to work, pay the bills, and the machine of society keeps on churning in a predictable and easy to manage way. Most people like it that way. For the rich and those that are about to become very wealthy, the right chances taken every day are exciting and can be very rewarding. When you feel fear, you are in the right territory. Fear keeps the mainstream middle class society in their place and leaves the loot for you and I to enjoy. Leading us into the next point, remember that fortune favors the bold, not the stupid. There is a big difference.

Wealth Demon Two: INDECISION –THE PUPPET MASTER

Stocks are going to crash, the real estate bubble is about to burst and your mattress is the only safe place to keep your money. Unless your house starts on fire, so you better bury some money in the back yard too. The puppet master demon will keep you chasing your tail with doubts. These doubts will keep you from committing to any particular stream of income opportunity. Diversification is fine if you have enough resources to allot a fair amount to each, but it you never take the chance of putting a large amount of your eggs into a central money investment you will never get the big payoffs. Better yet, lets move onto point number three. That’s laziness and if you stop being lazy, you can learn how to invest without using much of your own money at all.

Wealth Demon Three: SLOTH –THE RULER OF LAZINESS

Getting rich and making a ton of cash isn’t really that hard. Its not hard once you learn a bit about how it all really works. Guess what though? You cant learn the system if you don’t get off your butt and do some learning. Shut off the T.V., get off the couch and go to the library. Find the books you need to learn the system of wealth and money. Find the book that answers the questions about money that have you stuck where you are now. Beating laziness becomes easy once passion bites you. Once you get a sniff of what is possible, Sloth wont have a chance.

If you don’t know where to start, then start general. Pick up a title that looks interesting and while you are reading that book, see where you get stumped. Is it the part about no cash down mortgages or is it the part about no load mutual funds? Wherever you are short on the I.Q. of wealth and money, get proactive and get the ammo you need for your upcoming battle.

Next time we will talk about the demon of PATTERN and some of his friends.

Read more: Choose To Be Wealthy

Buy Retirement Annuity

Buying an annuity is linked with a person’s age. When the investor is young the expectations are more. Since the investor is employed or running own business, the risk factors take a secondary position. However, when a person is about to retire, the earnings become as vital as the principal. The retirement annuity is quite ideal for those investors who are about to end an active working life. Since they can’t look forward to paychecks every month, the need for a secure and assured earning arises. The retirement annuity form of investment fills this gap.

To buy a retirement annuity, a one time investment or payment of policy amount in lump sum is required. The distributions range from a month to one year, based on the financial company offering retirement annuity. The earnings again depend on the type of retirement annuity purchased.

Generally, there are two types of retirement annuity offered in the market, quite like the deferred annuities. It includes fixed retirement annuity and variable retirement annuity. As the name itself suggests, the fixed retirement annuity offers fixed income payments based on the amount invested and prevailing interest rate at the time of buying the annuity. The variable retirement annuity offers varying returns based on the prevailing market conditions.

In most of the cases, retirement annuity typically serves the income needs while in retirement. However, they can also be directed to perform other purposes too. It can serve as a source of income to recipients of the investor and specific funding which includes education, alimony and other expenses.

There are a number of private companies offering retirement annuity. Hence it is important to ascertain their credibility ratings before making any investments. The fees charged by these companies come second on things to watch out for. Similarly it’s advisable to understand the surrender charges and withdrawal options as set by financial companies.

Read more: Buy Retirement Annuity

Lemon Laws May Not Cover Recreational Vehicles

Although the price of gasoline continues to climb upwards, Americans still love driving recreational vehicles. They are big and bulky, and get poor gas mileage, but the convenience of driving a vehicle that also contains some of the comforts of home is appealing, particularly since an RV will allow you to stay in national parks and other campgrounds. Why stay in a hotel when you can stay by a lake? A recreational vehicle does offer vacation opportunities that other types of transportation, such as sport utility vehicles, do not. But like any other vehicle, an RV can break down, and when it does, the repairs can be expensive. They can be even more expensive if you are unprepared for something that many RV buyers don’t know – the lemon laws of most states do not cover recreational vehicles.

Recreational vehicles are not cheap; the price tags of some of them can exceed one million dollars. But while they are legally motor vehicles, most states exempt them from coverage under the lemon laws. Lemon laws are statutes designed to provide consumers who buy defective motor vehicles with recourse against the manufacturer should the vehicle prove repeatedly unreliable. Given the fact that RVs tend to be rather expensive, one would think that they would be covered under these laws, but in most states, that’s not the case. Why not?

Unlike most cars, which are mass-produced by the millions, RVs are mostly assembled by hand. Not only that, but the parts tend to be made by a number of different companies. The drive train might be made by an auto manufacturer, and the body and living quarters might be made by several other companies. There is really no single manufacturer to hold responsible for vehicle defects. A handful of states have some coverage for RVs, but those that do tend to cover only the drive train, and not the living quarters of the vehicle. If you have a transmission problem, you may have recourse under the lemon law. If the stove quits working, the problem is your responsibility.

If you are planning to buy an RV, you should take precautions to minimize the likelihood of problems:

Check your state’s lemon laws to see if the type of vehicle you plan to buy is covered.

Look at vehicles from a number of different manufacturers and examine the warranties offered with the vehicles carefully. You may wish to consider purchasing an extended warranty, if one is offered at the time of sale.

Do some research on past reliability of the type of vehicle you are thinking about buying. If that manufacturer has a history of problems, you may wish to consider buying from a different company.

See if the vehicle carries the seal of the Recreational Vehicle Industry Association. This seal means that the manufacturer belongs to an industry group that requires its members to meet a set of safety standards that includes more than five hundred items.

Owning a recreational vehicle is a lot of fun and can make vacations enjoyable. The last thing you want, however, is to spend your vacation at home while the RV is in the shop. Remember, your state’s lemon law will probably not protect you.

Read more: Lemon Laws May Not Cover Recreational Vehicles

How To Invest Your Money Safely

When it comes to making investments, most people know that there is always room for a possible loss. Stock market investments in particular are rather notorious for taking a rather well funded portfolio and emptying it rather quickly. Of course, that does not happen all the time, otherwise no one would do it. If, on the other hand, you do not want to take what many consider to be an unnecessary risk, there are a number of other investments that are reasonably safer, can still bring a good return, and are definitely worthwhile. Here are a couple of them.

A common phrase that is often used these days to refer to the making of your investments safer is having a balanced portfolio. This means that you are not putting all of your eggs into one basket. You know that some markets are a much greater risk than others, such as trading on the stock market, and so you put some of your investment capital into some that are much safer and less likely to be lost. This “balance,” created by placing some of your investment into a variety of potential interest bearing accounts, should result in an overall gain.

Investments Depend On The Person

If you are a young person, then it should mean that you would be willing to take a higher risk (assuming you have some capital that may be lost). The possibility of the highest gains, unfortunately, also come from the markets with the potential for the highest change. This means that there is a much greater likelihood of a real loss – especially if you do not know what you are doing. By using the services of an experienced trader however, a stockbroker that has been doing it for years, you minimize the possibility of loss. But you should only invest a portion of your finances into the stock market.

If, on the other hand, you are much closer to retirement age, then you do not want to take such a risk with your funds. Instead, you would want to place your soon to be needed funds into a much more stable growth account, where the loss can be minimized and yet still bring a return in interest.

Stable Investing In Trust Funds

If you are looking to stabilize your investments in the stock market with something that is relatively sure, then you need to consider mutual funds. This form of investing places your investment into the hands of investors that basically do the investing for you. They watch the market, manage the funds, and make the changes necessary in order to keep your account growing. After you inform them of what level of risk you are willing to take, then the rest is done for you. They take your funds and spread them over a diverse sort of investments, and it gives you a much more stable package.

The Most Stable Investment – Bonds

Probably the most stable investment you can make is to buy bonds. The safest, of course, are the US Savings Bonds. These are purchased at a set price and guarantee a set interest amount in a specified time period. You cannot get much safer than that – and probably not much is safer than the US Government – investment wise. If you are looking for the highest stability available, then you need to take some of your investment portfolio and add some bonds to it. Bonds are also available from other corporations, cities, etc., but their strength is limited to the financial strength of the company. The longer the time period of your investment – the greater the risk that the company may not be around.

In addition to creating a balanced portfolio, you need either to become very knowledgeable about financial investing, or you need to seek professional counsel. Many people lose a lot of money every year simply because of unnecessary risks. These risks would never have been taken if they had sought counsel from someone who knows much more than they did about the market and investing methods. A truly balanced portfolio will also have an expert to help guide you through the many potential hazards of the investment world.

Read more: How To Invest Your Money Safely

Money Flow: How to Increase It

Increase the flow of money into your life with these simple but powerful tips:

1. Modify what you think and feel about money; find a way to think positively and feel good about it, even if you’ve gotten yourself into a temporary jam.

2. Be open both to expected and unexpected ways to increase the flow of money.

3. Give when it feels like the right thing to do, but don’t ever do it out of guilt or due to manipulation – see #1.

4. Act when it feels right to act. If you feel genuinely afraid or have an unpleasant gnawing in your gut, trust your instincts – it usually means you still have some unfinished business elsewhere to take care of before proceeding. On the other hand, if the fear you feel is just a nervous excitement and you know in your gut you’ll be ok, it’s probably time to suck it up and act.

5. Make sure you’re following fundamental guidelines regarding money. Spend less than you earn. Go easy on the credit usage – the less the better. When you use credit, you’re lining someone else’s pockets with your future earnings in the form of interest payments. If you’re carrying debt, create a plan to get out of debt, set it on autopilot and start focusing on growing your income. After your debts are paid off (with the exception perhaps of your home mortgage) – start putting away at least 10% of everything you earn into a 401K or other investments you are comfortable with (always get professional advice before making any significant money decision and realize that you alone must make the final judgment about whether to proceed or not – everyone’s situation is unique.)

Do all of the above and your money flow will surely grow. If there is one single tip to focus on more than the others, it’s #1: feel good about money. Make your peace with it. Realize money is just a tool to be mastered and that only the misplaced love of it is the root of evil. Don’t listen to negatives stories of loss and anger about money. Feel good about sharing money when the time is right – greed is a negative emotion that will eventually block the flow of money into your life. Realize that there is more than enough money in the world to meet all your needs and the needs of everyone else around you. Don’t give your money fears the time of day – focus on building plans, taking action, having faith and feeling good about money.

Read more: Money Flow: How to Increase It

The Benefits of Snow Blower Tire Chains

Snow blowers generally come in two styles: one stage or two stage. Two stage snow blowers have one or more low-speed metal augers that break up the snow and movie it into a separate high-speed fan that blows the snow out the discharge chute. These machines are usually self-propelled, either with large wheels equipped with tire chains or, in some case, tracks. Snow blower tire chains are important for these large wheels because, without them, they would not be able to force themselves through the snow, much less clear it out of the way.

Like other tire chains, snow blower tire chains are available in a few different styles. They can be purchased in two link or four link spacing. In two link spacing, there is a cross chain every second side chain link. Similarly, four link spacing means that there is a cross chain every fourth side chain link. Two link spacing generally provides for a smoother ride and better traction. As with other tire chains, snow blower tire chains can be purchased with an optional V-Bar chain in both two link and four link spacing. V-Bar chains are especially recommended for snow use because they provide extra traction for use on hills, ice, and hard packed conditions. However, drivers should not use V-Bar chains on pavement since it can damage the surface.

Although snow blower tires are built to provide for extra traction in winter weather, snow blower tire chains will give drivers the extra grip they need to make it through even the worse snow conditions.

Read more: The Benefits of Snow Blower Tire Chains

But Will You Even Be ABLE to Retire?

Everybody envisions the golden years as a time to relax away from the stresses and strains of working life, but for for many baby boomers it may be a far different picture.

The majority of boomers’ health is better than is their financial health. Many might be falsely assuming they will be fit enough to work past age 65. Plus, there is always the looming spectre of long term care.

At 56, Lana Linder knows her savings aren’t enough to enable her to retire in her 60s. So she is counting on being strong enough to keep on working past retirement age, and now is the time for her to do her long term care insurance planning. Now, Linder is a very fit woman. A former professional dancer, she discovered weight training at the age 50, and she regularly goes to a gym to build muscle.

“I got pretty serious about it when I was 50, and I didn’t like what I saw in the mirror,” the freelance filmmaker said. “Once I met a personal trainer who made a custom program for me, I began to see dramatic improvements in my body.”

In a perfect world, Linder would also see dramatic improvements in her savings. But as a freelancer who has always worked in the arts – first theatre, then dance and now film – financial planning wasn’t always her priority. At 57, she knows her savings portfolio isn’t healthy enough to enable her to retire in her mid-60s.

“I wouldn’t consider retiring even if I had the money to do so,” she said. “I love what I do, and I hope to be able to do it forever.”

But she’d also like not to worry about her retirement finances.

Linder falls into the same category as 67 per cent of working respondents who told a poll for Investor Group that their health is better than their finances. They may be fit now, but this segment of the population is in no condition to retire, according to the survey. And many said they’d have to rely on good health to allow them to work past retirement age.

The Investor Group poll is typical of the kind of marketing being done by financial services companies world wide. Surveys suggest boomers are financially unprepared for retirement, and advertising designed to alarm them into stashing cash is a far cry from advertising of the 1980s, which depicted fit 50-somethings frolicking on tropical beaches in retirement.

Nowadays, the message is more about whether aging boomers are financially prepared for retirement at all, or if they will be forced to spend those twilight years flipping burgers and working as store greeters.

In another survey, 37 per cent of respondents predicted they will not be able to enjoy their current standard of living in 10 years. The question is, “Can you afford to go to the movies in 2017?”

What is most alarming is the baby boomers’ lack of planning for is long term care, and this is planning that must be initiated early enough to take advantage of good health and lower insurance rates.

Read more: But Will You Even Be ABLE to Retire?

Baby Boomers: 6 Major Issues You Need To Address In Retirement Planning

People are retiring earlier. The average age for a first retirement is 57.5 years. According to the latest statistics, if you are in good health now, you are probably going to live another 30-40 years. If you are like most people, you planned for previous stages in your life. Retirement is no exception.

What are the six major issues you need to be considering before you retire?

1. More than any other age group, Boomers are concerned about having a purpose during their retirement years. A purpose (goal) gives you a sense of meaning which contributes to your overall well-being and happiness. The challenge is to focus on who you are instead of what you do.

2. Now is the time to discover the things you feel passionate about, that you find engaging and meaningful. How you choose to spend your retirement years will depend on the choices you are making as you approach this next stage in your life.

3. The timing of when you retire can be critical. To determine when you will retire, reflect on who you are (your strengths and values) and what you want during retirement. Your experiences over the years, the knowledge you have gained, and self-awareness you have developed will help you make your decision.

4. Financial planning is one of the two main pillars of successful retirement. Because of the changing financial scene, there are three areas for you to consider for your financial plan to be solid: Social Security, employer’s pension plans, and your personal savings. Discussing your financial needs with a financial planner is highly recommended.

5. Once basic financial needs are met, other issues become more important. Your health is the second pillar of retirement. This is a time to learn more about wellness which includes making yearly physical, dental and eye exams. It also means making good choices about nutrition, managing stress, moderate physical exercise for your body, and mental exercises for your brain.

6. Some relationships change during retirement. If you end your career, you no longer have the built-in contacts with people you would see on a daily basis. It is a time to build new relationships and cultivate a deeper relationship with your spouse, children, grandchildren, and other significant people in your life.

This is a critical time in your life. Planning helps you maximize the unlimited possibilities and fulfill your purpose. Your journey will be unique to you. Make it be all that you hope for.

Read more: Baby Boomers: 6 Major Issues You Need To Address In Retirement Planning

5 Proven Steps To Budget Motivation

If you ever wanted to get ahead financially… if you ever thought you wanted to get out from under a sea of debt… if you ever wondered where the money went… YOU NEED A BUDGET! But how do you develop a good budget and how do you stick with it?

Developing a Workable Budget
Review your last 12 months of check registers. If you find any cash withdrawals without an explanation other than “miscellaneous”, you must record all cash transactions for the next 30 days. It is imperative that you know where ALL money goes.

Insure you can account for each of the last 12 months of deposits written in
your register. If not, find out what they are. You must know all incoming monies.

Beginning at the top in the left hand column of at least a 4 column note pad,
write all income source labels down the column– i.e. INCOME: Wages, Bonuses, Other, Total Income, etc. Below this enter the obligations found in the check registers such as: Mortgage/Rent, Food, Insurance, Utilities, Phone, etc. Don’t forget periodic expenses such as: Home or Auto Repair, Other Transportations, Entertainment, Gifts/Donations, Health care, Property or Other Taxes.

Leave a couple spaces labeled “Miscellaneous” and “Total Expense”.

Find the payments you have made in the check registers for each expense.
Enter the amount on your budget pad column 2. For irregular amounts take a three or more month total and divide by the total months. For annual or semi-annual expenses divide by 12 or 6 to get a monthly amount.

At the top of your budget pad, label the other two columns… “Actual Expense” and “Difference”.

At the end of each month, enter the actual total for each expense.
Determine the difference between budget column and actual column.

If there is a difference either adjust the budget or determine a way to reduce this
item.

Motivation To Stay On A Budget
Step 1: Write down specifically what you are trying to do and by when. It must have a concrete time frame, it must be written down, and it must be specific and realistic. For example wanting “more money ” is not the same as “10% increase over last year by October first.”

Step 2: What are the obstacles? What are your inadequacies? What do you need to get there that you don’t already have? What is it that’s blocking you? Why aren’t you already there?

Step 3: Write a plan to overcome EACH obstacle. List your action steps 1… 2… 3… etc. for each obstacle from above. Be as specific as possible. What will it take to get you past the obstacle that is blocking you from what you want?

Step 4: List the benefits to you. There is no such thing as something for nothing. You must replace a thought process and resulting action with a new thought process that will produce a desired result. There must be a benefit derived of sufficient value and meaning to you alone to be worth the effort necessary to do this and to overcome the resistance to change.

Step 5: Is it worth it? This question must be answered very carefully and honestly. If the answer is yes, do it and DO IT NOW! However, if the answer is no, if the benefit derived cannot muster the desire to overcome the obstacle, you have three choices:

Change the goal thereby reducing the obstacle;
and/or increase the benefit to make it more meaningful.
Drop the entire issue and get on with your life without feeling guilty.

Bonus Step: If you really want to stay motivated you will have to reinforce your efforts through affirmations or self talk. In a few places around the house, place a simple statement of what you are trying to do and repeat the statement as often as possible. The more often you do it the faster the process.

Read more: 5 Proven Steps To Budget Motivation

Investment Property or Income Property?

If you are a young professional aspiring to be wealthy and looking for extra income opportunities, then you have probably checked out the real estate market. Many are making a fortune through real estate by cashing in on their investment property. At this point in your career, you have two real options you should consider. You could buy an investment property and hope to cash in on the property in the future, or you could look for an income property that will offer profitable cash flow from month to month. Let’s take a look at the advantages and disadvantages of investment properties and income properties.

Income Property
The methodology behind investing in an income property is focused around making money now. Not everybody can invest money in real estate and hope for a huge return 15 or 20 years down the road. For investors that don’t have a big stash of cash laying around waiting 15 or 20 years for a return on their investment is not a viable business plan.
Thus, as you might expect, an income property is a property that returns positive net income from month to month. For example, the typical income property for small real estate investors is a single family dwelling. Suppose a person much like yourself decides to invest in house that is being sold at or below market value. The business plan is to make minimal investments fixing up the house, and then rent out the house to somebody with sub par credit that can’t get a loan for their own house. To initially pay for the house a mortgage loan is taken out. The monthly mortgage loan payments are calculated to be $850 and you plan on renting out the house for $1100 since there is a shortage of rental homes in the area. Right off the bat you have a gross operating margin of $250 on this income property. Of course there will always be other expenses, such as maintenance and taxes, which you must pay. However, these additional expenses will still leave a nice little cash flow of profits for your efforts. Bigger investors follow this methodology and buy an income property like an apartment building and will make larger profits thanks to economies of scale.
Investment Property
The methodology behind an investment property is a bit different. Rather than focusing on current profitability like an income property investor, an investment property investor focuses on the big picture. The investor will buy an investment property which allows him to at least break even or perhaps make a small profit from month to month. However, his primary interest is holding onto the property for the long term and selling the property when the market value has risen significantly. Over a span of 15 to 20 years, it is not unreasonable to expect investment properties in hot real estate markets to double or even triple. Thus, the typical investment property investor has two resources. He has lots of money on hand as well as time to play the waiting game.
The investment property investor is not terribly interested in making money on his investment right now. That is not to say he is willing to lose money on the property from month to month, but he is willing to operate at much lower profit margins than your typical income property investor. The real objective of the investment property investor is to strike it rich down the road when he finally decides to the sell the investment property.
Both of these investment strategies serve as viable business plans. What suits you best will depend on your needs as well as your resources. If you have lots of money and time then an investment property could be way the go , but if you need to make money now an income property might be your best choice.

Read more: Investment Property or Income Property?

Who Should Be the Beneficiary of Your IRA?

You have a number of choices when it comes to selecting a beneficiary (or beneficiaries) for your IRA. Some are appropriate. Some are mistakes and can lead to delays and expenses in getting the funds to your desired recipients. Some may even exclude some of your desired beneficiaries. In addition, some elections are for estate planning purposes. Let’s take a look at your options.

No Beneficiary

Not recommended. This mandates your IRA be distributed according to your will, if you have one. If you don’t, each state has “intestate” rules that divide your estate up in ways you wouldn’t ever want.

An IRA with no beneficiary must be distributed within five years. By contrast, a named beneficiary can spread the distribution out over the balance of their life expectancy.

Your Estate

Naming your estate as the beneficiary is the same as not naming one. The rules require a “named” beneficiary. Now your IRA goes through the probate process. This costs money, takes time and subjects your IRA to your creditors.

Why should you pay money to be represented by an attorney and have a judge in some probate court decide whom your beneficiary will be? Why should your beneficiaries have to wait around for your estate to be closed? What if your will is challenged? What if you have a big estate with estate taxes due and the IRS is questioning the valuation of your business? I have seen estates open for as long as ten years as the debate goes back and forth between your attorney and the IRS. The worst case I can think of is your IRA completely eaten up by legal fees inasmuch it may be the only liquid asset.

Your Spouse

This is the most common designation and makes the most sense for a number of reasons.

If the spouse is the sole beneficiary, he or she can elect to treat the IRA as his or her own. This opens up the possibility of delaying the start of the required minimum distributions (RMDs). This could be the spouse’s age 70 1/2, or for a Roth IRA, all the way to the death of the spouse. It also allows further “stretching” of the IRA as the spouse can spread the RMDs over their lifetime plus the lifetime of a beneficiary.

If the spouse is more than 10 years younger than a non-Roth IRA owner, their life expectancy can be used. Beneficiaries other than the spouse, who are more than ten years younger than the IRA owner, are treated as being no more than ten years younger for RMD purposes. This is another “stretching” advantage for naming the spouse as beneficiary.

Children

If children are beneficiaries, they can take the RMDs over their life expectancy. Since the RMDs are very low at the younger ages, the account can grow substantially over the years. For example, a $100,000 IRA could distribute literally millions of dollars over the lifetime of a young beneficiary.

If there is more than one child named, the youngest age is used for RMD purposes. However, if the children are beneficiaries of a trust, the oldest age is used.

Read more: Who Should Be the Beneficiary of Your IRA?

IRA Distribution Rules at Death: Critical Knowledge for Good Decisions

The distribution rules required at the death of an IRA owner depend on several things:

1. Did the IRA owner die before or after the “required beginning date”?

2. Who is the beneficiary?

In order to carry out the wishes of the IRA owner, evaluating both practical and estate planning implications of various decisions during the IRA owner’s life is essential. Important choices occur when the IRA owner makes his beneficiary election and, if married, by the spouse after the death of the IRA owner.

If you do not know the rules as they pertain to your choices, you are shooting in the dark. The wrong decision can cost money and likely cause the distribution of your IRA to be different than you would want.

Let’s make sure you know the rules of the game.

The first element is the required beginning date. For traditional IRAs, SEPs, SIMPLEs, this is Aril 1st of the year after turning 70 1/2. This rule does not apply to Roth IRAs, which have rules of their own.

There are several broad categories of beneficiaries:

1. The spouse.

2. A non- spouse beneficiary.

3. No beneficiary.

Let’s take each of these beneficiary elections and see how distributions are treated, depending on whether the IRA owner dies before or after the required beginning date.

The Spouse as Beneficiary

If the spouse is the only beneficiary, he or she can make an election that has a bearing on when the distributions must begin. The election is to treat the owner’s IRA as if it were their own.

Heads up: This election choice is unavailable if a trust is the beneficiary of the IRA, even if the spouse is the only beneficiary of the trust. A rollover may circumvent this problem.

If the IRA owner dies before the required beginning date, the spouse is the only beneficiary and the election made, the required distributions don’t have to begin until the IRA owner would have turned 70 1/2. The spouse would probably elect to apply this rule if the IRA owner was younger.

If the spouse elects not to be treated as the owner, the required minimum distributions (RMD) start right away and are based on the remaining life expectancy of the spouse. When the spouse dies, the distributions continue using the remaining life expectancy of the spouse.

If the IRA owner dies after the required distribution date and the spouse does not make the election, the distribution must be made over the life expectancy of the spouse; however, the life expectancy of the IRA owner can be used any year it is greater. Taking the attained age of the IRA owner at death and looking in a table determines the life expectancy. Then each year you subtract one. The point here is that the spouse needs to make a comparison every year to obtain the longest pay out.

The “takeaway” from this is that knowledge allows for good decisions. The best choice will depend on how old the IRA owner is when they die, the age of the spouse, health status and whether or not there are children or grandchildren to provide for in a distribution.

Read more: IRA Distribution Rules at Death: Critical Knowledge for Good Decisions