Consider a Roth IRA

Have you heard about this recently? The government has set up Roth IRA rules that allow you to save and earn money for retirement that won't be taxed when you take it out. Does it sound too good to be true? Well, it isn't. You can really save the best for last when you set up this type of savings account.
The definition of a Roth IRA, named for U.S. Congressman, William V. Roth, Jr., is a retirement savings account in which an individual is allowed to set aside a specified amount of their income, after taxes. Earnings grow tax free and can be withdrawn, tax-free, at age 59 ½.

Allowable Contributions

In 2008, Roth IRA rules limit allowable contributions $5,000. Making maximum contributions annually, while earning just a modest 8% interest, means that you could build a substantial, tax-free nest egg. While this type of retirement savings plan may seem ideal, there are some additional Roth IRA rules that you should be aware of.

Allowable contributions must come from income that your earn from a job. If the income from that job is over $101,000, your maximum contribution will be lowered, from $5,000, incrementally, according to your income amount. If you file a joint tax return, your combined income cap is $159,000. Above that amount and, again, your allowable contributions will be lowered accordingly.

If you are at a point in your career where your income is well below the maximum cap, but you expect to meet and exceed that cap in the next few years, you would still be well advised to take advantage of a IRA. The earnings from contributions made even over a short period of time could add a substantial tax free bonus to other retirement savings.

Added Incentives

And speaking of bonuses, Roth IRA rules provide some added incentives for individuals holding these accounts. For example, you can withdraw your contributions (not your earnings), any time, tax free. This may come in handy if you find yourself in financial dire straits. Ideally, though, this money really is for retirement and shouldn't be touched, if possible.

If you've had a IRA for at least five years, you can also withdraw up to $10,000 ($20,000 if you're married) tax free to purchase a home. If you've had your account less than five years, you can still withdraw the maximum amount for a home, but you will have to pay taxes on it. However, there is no 10% early withdrawal penalty.
Roth IRA rules also allow you dip int
o your savings to help pay college expenses. You are allowed to withdraw contributions tax free, but if you take out earnings, they will be taxed accordingly, without the 10% penalty ¬ provided that the funds are being used for college.

Allowable Investments

You may notice that the definition of a Roth IRA doesn't cover investing your contributions so that you can grow your earnings. However, according to Roth IRA rules, you are allowed to invest in almost anything ¬ stocks, bonds, CD, mutual funds and even real estate.

You can set up a self directed IRA that will give you decision-making authority over investments. If you don't care to be more involved beyond making contributions, your financial institution or investment counselor will invest your money for you. In both cases, the custodian of your account will be responsible for generating reports, regulation compliance, and other applicable paperwork.
If you follow Roth IRA rules, you can get your taxes out of the way, save and earn money and never have to give Uncle Sam another dime. This allows you to truly save the best for last!

Disciplined trading

The Equity Scholar Team

As an investor it is important to understand how economic indicators can impact stock markets, investing, and the value of your investments.

The key to your success will be looking at these economic indicators, extracting what Economic Indicators and key statistics that show where the economy is headed by monitoring inflation.

The reason why inflation is of importance is based on the fact that it influences the level of interest rates. Stability within the economy is maintained as long as inflation is kept under control. Rising inflation reflects rising prices caused by increasing demand and decreased supply.

In other words, the increase in prices of goods and services would erode the purchasing power of the money you make, on the assumption that the money you earn does not increase in line with inflation. To put it simply, Governments use economic indicators as tools to ensure stability within the economy. Consequently the individual indicators of inflation like the consumer price index; unemployment and gross domestic product cannot be directly manipulated.

Interest rates determine the willingness and ability of individuals and businesses to borrow money and make investments. Changes in economic activity, when triggered by changes in interest rates, for companies, higher interest rates often mean lower profits. If interest rates rise, companies have to pay more, to borrow the money they require to fund growth of their buisness.

This translates into higher prices for their goods upsetting the price supply equilibrum. Especially if customers are buying on credit and have to pay higher interest rates for them to borrow. Potential customers may decide they cannot afford to buy products as the cost of credit is high.

The eventual decline in company sales and earnings is something investors anticipate as soon as rates go up. The result is that stock prices go down before the effects of the increased interest rates are actually felt on the company's bottom line.

When interest rates fall, company borrowing costs are lower, so their profits on the same level of sales will be higher. so , customers who buy on credit are more comfortable buying if they are paying lower rates, so the more they purchase.

This creates higher sales, which will lead to increased company profits. Eventually higher profits will lead to an increase in stock prices. This situation creates an environment where investors are typically ready to pay higher prices as soon as the Central Bank intervene to cut interest rates in the anticipation of the cycle of increased profits. As an investor it is important to remember that the price of your stock will change throughout its lifetime because the price you actually obtain will be determined by current market conditions and more importantly interest rate fluctuations.

Helping you with your Financial Education

The Equity Scholar Team

Equity Scholar

Financial Education – An Important Prerequisite for a Financially Secure Future

The continuously changing economic, political, social and environmental contexts continue to exert a pronounced and far-reaching influence on all our lives. The way things are going these days, it is important that everyone seek to develop a solid financial capability to negotiate through the many financial challenges that lie ahead.

Realizing the importance of financial literacy in these times of economic hardship, many educational institutions have become actively involved in introducing people to the fundamental aspects of finances and in teaching informed investment. People from all walks of life are encouraged to attend a form of financial literacy education that can help them grasp the knowledge and skills necessary to avoid debt and to build their way to financial security through strategic investment.   

Financial experts point out that there are four key aspects of financial capability: financial understanding, financial competence, financial responsibility and financial enterprise. Next, we will address each of these dimensions separately.

1. Financial Understanding – The first step in ensuring that people have the skill set required to deal confidently with everyday financial obstacles, this curricular dimension aims to help attendees make informed decisions and choices about their personal finances.
2. Financial Competence – This means being able to understand advanced financial matters in a variety of contexts and to apply the knowledge as needed.
3. Financial Responsibility – This principle promotes a caring and responsible attitude towards the allocation of resources. It teaches people how to plan for the future and solve financial problems maturely and intelligently.
4. Financial Enterprise – This is about being able to deploy resources in a resourceful and confident way. It places the focus on teaching people how to make informed spending and saving decisions while being creative and inventive in various personal, business and economic contexts.

A complete financial education curriculum should bring all these four aspects together in a coherent and homogenous format that is easy to grasp even without previous financial skills. There is a universal consensus surrounding the idea that the development of the four interrelated concepts of financial capability – understanding, competence, responsibility and enterprise are paramount to young people in the modern world.

On a different level, teaching financial capability also means working to develop informed attitudes and behaviors to money that can help prevent a negative effect on personal health and wellbeing. Pressured by financial burdens, many people these days suffer stress and depression, and financial education can provide a helping hand in relieving such problems induced by poor financial management.

Financial literacy education is aiding schools and centers in making connections across capital themes such as enterprise, citizenship, sustainable development and international education. Financial education should be embedded not only within numeracy across learning, but also with disciplines such as economics, politics and philosophy. 

Conclusion

The many changes introduced in taxation, employment, pensions, the welfare state and international trade exert a significant impact on individuals. In light of this, many educational facilities have started using financial education as a key area for interdisciplinary learning.

How to Invest in Stock

When shopping for investments, perceptive investors always make a priority of identifying and buying profits. This holds true irrespective of whether someone is investing in stocks, bonds, real estate, or any other asset for that matter. The ultimate goal is to buy profits.

Everyone dreams of financial stability and wealth, but very few out there really are confident that they can turn their dreams and ambitions into reality. Many aspiring investors are completely oblivious of the fact that 1 out of every 25 people in the US is a millionaire. Some of these magnates like to boast about their success publicly, flaunting around their Bentleys, private jets or yachts, but most financially successful people prefer to keep a low profile and live ordinary lives in ordinary towns, driving ordinary cars.

The point is financial success is not something that only a few privileged people can enjoy – it is in fact within the reach of most people. With proper financial education training, and lots of perseverance and hard work, in a few years’ time you too could rank among the capitalist class. To speed up your way to success, here are some rules to guide you in your investment ventures:   

• Rule No. 1 – Stick to What You Know

Since you are buying profits, you will need to focus on acquiring assets that you are familiar with. Stick to what you know and try to leverage your unique knowledge to the fullest. If you are a construction engineer, you will probably have an edge when evaluating construction companies over a banker. Similarly, a food industry professional will probably do a better job evaluating food stocks as opposed to an expert in computers.

• Rule No. 2 – Pay a Fair Price

The price you pay for investment plays an essential part in determining your potential for profit. If your job is to buy profits, the logic is that the lower the price you pay, the higher your return. In other words, if you are buying $1 in profit, your return will be 10% if you pay $10, or 5% if you pay $20. The price you pay is key to your future results, it is the main secret of successful stock investors.

• Rule No. 3 – Always Count in a Margin of Safety

A margin of safety is a buffer you will need to build in to the price you pay for a stock to keep you safe during stages of downturn. If a company is prosperous and you believe it is worth $20 per share, you might want to only buy if it trades at $16 per share on the stock exchange. Only buying stocks for less than their real value can create the opportunity for a pleasant upside over time. On the premises of an eventual market crash, it can prove helpful in mitigating your losses as the underlying dividends and earning power of the business carry you through until the situation redresses.

• Rule No. 4 – Stock Value Regression and Stagnation Are Normal Occurrences

Be ready to accept the fact that your stocks can and will go through stages of regression or stagnation at some points in time. Sometimes the depreciation may be very pronounced (up to 40-50%) and may last for long periods, even several years in a row.
Although such abrupt changes in value can be scary, stock value fluctuations shouldn’t really matter that much for a true investor. To paraphrase Benjamin Graham, stock prices are there for you to ignore or take advantage of depending on what the situation calls for. Their role is not to provide an exact reflection of a company’s intrinsic value. That is your job to determine.

• A Word about Equity Scholar

Equity Scholar is a market-leading financial education service for traders and investors alike. Equity Scholar offers a full range of educational products and services that provide lifelong learning and support to those seeking improvement in their trading and investing performance. The complete financial education program offered at Equity Scholar is the key to investing knowledgeably, intelligently and responsibly in an ever changing and at times difficult to negotiate market environment.

For additional details about the company and a complete list with available courses, please visit http://www.equityscholar.com/

Make Success With Financial Education

In general, economic success means the freedom to live their lifestyle and spend more time with family and friends. Not for 10 years or five years, but now. The hardest part is that the equation is to achieve economic success. If you like the idea of someone else to take responsibility for economic success, then go see a financial advisor, although it is unlikely that will offer the same definition of financial success you had in mind. But it is better that you learn about financial deals which can help you to deal with all financial issues in future.

Financial advisers are limited to traditional investments, and we all know what happened to them over the past two years. If you are looking for financial success, which is outside the vocabulary of financial adviser you must take responsibility for their own financial matters. What are the secrets of the success of financial education? To answer this, let's see first the components of the traditional financial education. The three basic components are the short, medium and long term financial training and know what to do in each of these for achieving your financial success.

http://www.earticlesonline.com/Article/Make-Success-With-Financial-Education/1161531