Retirement planning for 2015
Interested in tax-free or tax-deferred monthly income?
A New Year’s resolution should be at the top of your list: Invest for retirement in a tax-deferred self-directed regular IRA or a tax-free Roth IRA. The sooner you start, the sooner you will reach your goals. The longer it takes to start, the less you’ll have to enjoy later. Don’t let your retirement planning down.
Investing tax-free or tax-deferred will maximize your retirement savings. Why share your hard-earned savings with Uncle Sam by paying unnecessary taxes? The more you keep, the faster it multiplies, and the sooner you’ll have a jobless retirement.
What is the key principle of wealth accumulation?
Not investing or investing foolishly will cost you dearly in the long run. To avoid this mistake, you must understand a key investing principle; it is the foundation of wealth accumulation; it works consistently for everyone who uses it. The amazing process that I am recommending is called the principle of compound interest. When you understand compound interest, you’ll realize that receiving tax-free or tax-deferred monthly or quarterly income is the foundation (the foundation) of successful investing and wealth accumulation.
What is the Rule of 72?
The Rule of 72 is a simple, abbreviated mathematical concept that calculates the approximate time to double your money when your money generates various rates of income. To use the rule of 72, divide the interest rate by the number 72; The answer you get is the approximate number of years it takes for your money to double the presto!
• Examples: 72/5% = 14.5 years twice; 72/7% = 10.3 years twice; 72/9%
= 8.0 years doubled.
• Example: Investing $1,000.00 at 9.0% doubles to $2,000.00 in eight years; the $2,000.00 is invested for another eight years and doubles to $4,000.00. The sixteen years of compounding results in the original investment increasing by 400%. This increase happens without you adding a penny to it and without doing any work.
The cause of money continually doubling in value is because interest is earned on interest. This activity is called “compound interest.” It’s making your money work for you instead of you working for your money. Compound interest is how great retirement savings and wealth are created.
What investment pays 7.0% to 9.0%?
Popular investments such as stocks, mutual funds, or bank certificates of deposit generally do not provide returns of 6.0% to 9.0%. Today, they are yielding between 1.0% and 2.0%. Some publicly traded bonds will provide higher yields. However, most note investments can be tailored to earn a 6% to 10% return. Notes and mortgage notes, if used and understood correctly, are an excellent investment for the conservative long-term investor. They are bought for the performance of their income, not to actively buy and sell.
What is a promissory note?
A promissory note is a debt agreement, or a promise to pay a debt that an individual or business uses to raise money; it is a loan instrument. The borrower promises to return the investor’s (principal) funds and make fixed interest payments to the investor. Notes have set terms, or payment periods, ranging from a few months to several years; they also have a specific annual interest rate and specific monthly payments; they also specify the collateral that supports the promise to pay.
What is a tax-free or tax-deferred IRA?
The US government has created tax-deferred and tax-free retirement investment accounts to help people save for retirement. Individual Retirement Accounts are called “IRA Accounts”; one type is a tax-deferred regular account and the second type is a tax-free Roth account.
Self-directed IRAs are protected from income tax; You can invest in many types of income-producing assets, including notes; benefits from the principle of tax-deferred or tax-free compound interest. Earlier we discussed the Rule of 72 which tells you how long it will take for your money to double through compounding interest.
If you invest your self-directed IRA in income-producing assets, such as notes, no taxable income is reported annually. If you make withdrawals from your IRA tax-deferred, they are taxable. Tax-deferred means you don’t pay tax on capital gains or interest income you earn during the years your investment grows. Taxes are paid when you withdraw the money. A Roth IRA is tax free. IRA accounts should be a key part of your retirement savings plan.
Summary:
Take advantage of tax-deferred or tax-free retirement savings and benefit from compound interest. Use regular IRAs or Roth IRAs. Invest in notes with a yield of 6.0% to 9.0% and quickly compound your money. Start now. Enjoy the convenience of monthly income from promissory notes.
