Investments & Capital
Now’s the Time to Convert Your Retirement Account to a Roth!
Money held in a Roth IRA can be withdrawn tax-free. Money held in and withdrawn from other types of retirement accounts (regular IRA, SEP, 401(k), etc.) is taxed at ordinary income rates at the time of withdrawal.
Think about it. Income without taxation. How wonderful life would be!
13 Rock-Solid Reasons It’s Time to Buy, Not Sell Public Equities (i.e. Stocks)
1. Buy Low, Sell High. When we boil it down, life is not that complex. Just adhere to a few simple rules and we’ll do pretty darn well. One simple rule of investing is “buy low, sell high.” So why are you considering selling now when equities values are low? You should be buying.
Investment Losses: Use Them to Reduce Taxes
We know that investments go up and down, and that different types of investments tend to go up and down at different times. We also know that the IRS provides us with a couple of avenues for using our investment losses to lower our tax bill. The trick is to know the rules and then manage our investments in a way that gives us maximum tax advantage.
Here are the avenues for using investment losses:
Dollar Cost Averaging: Get Your Money in the Market at Reduced Risk
Not many people today think about getting their money into equity markets, but they should. As Warren Buffett says, “Stocks are on sale.” But if you have a lump sum you want to invest, what should you do? Just invest it all together in one lump sum? Many investment advisors would counsel against it. They’d tell you to dollar cost average into the market.
How to Protect Yourself from the Coming Capital Gains Rate Hike
Capital gains rates have been at historic lows since 2003. The result has been slim tax bills enjoyed by investors who have sold and taken gains, and record U.S. federal budget deficits.
Making Sense of the Sales Multiple
We’ve all heard that companies are valued by, and sell on, a “multiple.” The talk at the club and trade conference quickly moves to “who sold for what multiple.” We hear the multiples, but we almost never hear the definition of earnings used or important elements such as deal terms.
Too Much Cash in the Bank
If you are holding large amounts of cash in the bank, you’re losing money. If you’re too busy to mess with it, put the burden on your banker. Call and tell him or her to help you maximize the yield on your cash balances.
Book Review: “Rich Dad, Poor Dad”, Robert T. Kiyosaki
Personal-wealth books are a dime a dozen. Why would I want to read another? A friend gave me a copy of Rich Dad, Poor Dad. I held little hope that it would say anything eye-opening or original. But it was a gift; I appreciated the thoughtfulness and felt obliged to take a look and demonstrate that I did so. And you know – Mike Youngworth is a sharp man. He wouldn’t give it to me if it did not offer something of value.
C-Corp Stock Sale by “Middleman” Is Illegal
The May/June 2006 issue of this publication, The Business Owner Journal, page 9, contained an article titled “Selling a C-Corp? Try These Tax Strategies.” Item 4 of the article described a tax reduction technique called “Stock-buying Middleman.” We cautioned against the transaction but have since learned that this type of transaction is “listed” by the IRS. To quote from IRS Notice 2001-16:
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