Contrary to a popular belief not all financial advisors are created equal.  The sad thing is that in the recession of 2008 most people lost 30%-50% of their retirement because most retirement investment advisors had no idea that the crash was coming.  After it happened you know what they then told us.  ‘You need to keep putting money into your retirement because now prices are low and it will come back.”

For me this was the last straw.  After my financial advisor told me that I pulled all my money out and knew I could find someone that would make me money during recessions instead of sitting there and making excuses for their lack of knowledge or accountability for loosing my money.  For me a safe investment is one that never loses money. Read the rest of this entry

Does it really make sense to spend the best years of your life working so hard so your golden years can be left for retirement?  Does it really make sense to put life off?  I don’t think so and I don’t think most people do either.

I believe that is the mold of our society.  Work for 30-40 years and then retire.  Senior financial planning and retiring after 60 was a good model for people in the early and mid 1900’s who were coming off the farm and working their entire lives.  However, in today’s information age it is no longer necessary there are some very easy ways to save money to make early retirement a possibility for you.

Most people have a good work ethic.  You might as well apply that work ethic to retiring early and throw senior retirement planning out the window.  It works because people believe in it and plan it.  If you make a plan to retire early and work that plan it will work also.  Read the rest of this entry

For most American households when you ask them what they invest their money in the reply is usually the same or very similar.  Most people have safe long term investments that will have steady growth around 7%-12% over the long term.  These types of investments are meant for people that plan on working for someone for the next 20-40 years and by the time they retire they will have a steady heap of money and if they are lucky they can keep their current lifestyle and have a ton of free time in their lives.

These investments usually include 401k’s, IRA’s, and Mutual Funds. These are usually the long term investments of the middle class.  What many of these people end up with is a million or so in their retirement plan and they are set.  Congrats, you retired a millionaire.  You deserve a pat on the back…..or a kick in the forehead.

What people overlook and let themselves be sold by the typical financial advisor is that in 30 years that million in the bank will be worth $300,000 of today’s money.  I don’t know about you but retiring on $300,000 sounds pretty miserable.  This is why people have to downsize when they retire.  401k’s, Basic IRA’s and Mutual Funds are investments for dummies….or the ignorant.

When you understand the basics of the economy you will see that when one asset class goes up the other goes down.  This means that there are great times to be in stocks and also horrible times to be in stocks…like 2008.  Those that were in commodities in 2008 made a nice little profit and when the time comes again they will move their money again.  Long term investments are meant to be moved.  If they stay in the same place you will ultimately loose and be in an investment for dummies.

If you are new to the whole stock market world, then it is important that you research and learn more about the science. Although it isn’t a new thing, stock market develops more and more new strategies and schools of thought that make your stock market experience more fruitful.

What is great about the stock market is the fact that there is no absolute guarantee of good stock investments. There is always a risk involved; something that would blindside you and even those professionals who have been in the mix for years. Indeed, this is a field with an excitement you can’t see anywhere else.

Stock market investors usually spend a lot of time researching about the particular companies they want to invest on. If you want to pursue this venture, then you should probably do the same. To help you out, there are online references or stock market tips that will teach you the ins and outs of the stock market. Read the rest of this entry

Many factors are taken into planning when deciding which retirement plan is best for a person. How old someone is, income level, beneficiaries, current state income tax, and other factors contribute to the decision. Listed below are advantages and disadvantages to owning a Roth IRA retirement plan, and the basic Roth IRA rules.

A Roth IRA is a retirement fund that is taxed as money is placed into the account, thus the amount withdrawn is tax free given certain requirements are met. The requirements include that the fund be at least five years old currently, and that the owner of the plan is 59.5 for growth above principal to be taken out penalty free. Traditional IRA plans are tax free as money is placed into the account, and the funds withdrawn are taxed as regular income.

The advantages to owning a Roth IRA include, assets in a Roth IRA can be passed to heirs unlike social security. Converting to a Roth IRA from a traditional IRA is simple, also the funds transferred from the traditional plan can be withdrawn from the Roth IRA tax free. The only stipulation is that the five year seasoning time must have passed on the transferred funds.

Estates large enough to be taxed as estate taxes can be reduced by a Roth IRA. This is because tax dollars have already been subtracted, thus a traditional IRA is valued at a pre-tax level for estate tax reasons.

One of the major disadvantages to having a Roth IRA instead of a traditional IRA is the tax benefits may never be realized. The reason for this is because in a Roth IRA an owner is taxed as the money is payed into the account and not taxed as money is withdrawn. But if an owner does not live to start withdrawing funds, or does not take out the full extent of funds, the full amount of benefit is not realized.

Granted if an owner dies whether or not all the funds are withdrawn may not matter, but then again why be taxed on incoming money when one may not live to see it taken out. Technically the matter is a personal decision, but the benefits of being taxed up front may not be realized and thus is a disadvantage of a Roth IRA.