24Option is one of the first Binary Options Brokers to arrive in 2010. 24Option is regulated and uses TechFinancials Trading Platform, which is considered one of the best trading platform available to date. 24Option has superior payout which’s up to 95%, this’s significantly higher than other Binary Options Brokers which offers payout varying between 71% […]
Talking about stockpair.com, we could consider it as the king of stock pairs trading in binary options. Besides regular assets like Forex Pairs, Commodities and Indexes, StockPair also includes the trading of relative strength between 2 stocks. Stockpair is very similar to Forex that we look at the relative strength of two assets and measure […]
TradeRush was found in 2011 but it already looks like a mature Binary Options broker. Traderush has their headquarters in Cyprus, I don’t think there’s a big problem since I’ve always been using broker from Cyprus, so far they’ve treated me nicely. SpotOption is their chosen platform with at least 85 different assets and a […]
OptionFair was first landing on Binary Options industry in early 2009 and it’s considered one of the older Binary Options broker around. Like 24option, OptionFair use TechFinancials trading platform, which’s tested and tried platform. The payout is up to 89%, and it’s considered one of the better one for payout. In fact, there’s only a […]
Mortgage Secret Lets First Time Home Buyers Benefit
After having a few years of Mortgage Banking experience under my belt, I made the decision to expand my horizons into the world of Real Estate Sales. Several couples that I had the pleasure of dealing with, during my short career as a real estate agent, were first time home buyers. These couples admittedly found the process of buying a home as equally difficult and frightening as it was exciting.
For their first tours of available properties, they wanted to focus their attention strictly on single family homes. Then, after making the determination that they would probably qualify for mortgage financing, I happened to mention that they would probably still qualify if they were to look into making an investment into a multi-family unit, provided they occupy one of the units as their primary residence. Instead of buying one residence, they could invest in several. This would alleviate some of the financial strain as they would be collecting monthly rent from the occupants of the other units. They could take advantage of a quirk in the classification of mortgages.
Mortgages are made in two categories:
* Owner-Occupied, 1-4 Family Units (NOT strictly Single Family)
Generally, it is easier for a purchaser to qualify for an owner occupied property, even if the property contains multiple dwelling units. A prospective mortgagor can usually obtain the same loan terms, and have the same down payment requirement, on 2-4 unit properties as they would be able to get on a single family home. Loans for investment properties, where the buyer of the property does not intend to occupy the premises as a principal residence, or the property has more than 4 dwelling units, are more expensive and more difficult to qualify for.
To put it simply, by occupying one of the units as a primary residence, a home buyer can actually purchase more than one housing unit. They will, at the same time, reap the benefits of having monthly rental income and an increase in tax deductions.
When a 2-4 unit property is purchased, the world of trying to qualify for a mortgage on solely the mortgagor’s income changes. Mortgage lenders will also consider the better portion, approximately three-quarters, of the anticipated rental income as part of the prospective mortgagor’s income. The increased income will qualify the home buyer to borrow more. This also means that the loan costs that will be incurred can be offset by the monthly amount that will be collected in rent.
So why will the lender only take into consideration three-quarters of the anticipated rent? Simply because the lender must assume that there may be vacancies, that there may be necessary repairs, insurance costs, taxes and other expenses associated with the rental units. For tax purposes, the lender also considers three-quarters of the property as “investment.”
Because three-quarters of the property is considered investment, when tax preparation time comes around, the property owner can list the rents received and the costs involved with maintaining the rental units. The home owner can also take advantage of the cost of depreciation. This device will result in lower taxes and at the same time require no out-of-pocket cash from the home owner. Lenders also add back the cost of depreciation when calculating the prospective mortgagors income, increasing the effective, loan qualifying monthly income even more.
Needless to say, the first time buyers that I made mention of the multi-unit purchase option to, thought it made a lot of sense. They were especially relieved in that they would have rental income to help them with meeting their monthly mortgage payments. They were admittedly nervous about their ability to continually meet the monthly mortgage requirement because they knew it would be difficult during the first few years of their home ownership. They were also excited about the tax advantages.
Like any other investment, there is no guarantee of a set annual income or that property values will increase. Also, as the owner of a multi-unit property there is a lot to learn about such things as making repairs, how to deal with tenants, hiring contractors and property maintenance. But they are valuable lessons that can lead to real estate income and wealth over the course of a lifetime. Many a successful real estate investor started out in an owner-occupied, 2-4 family dwelling, taking advantage of owner-occupied mortgage financing terms and with only the minimal down payment.
Investing in Income Annuities Will Give You Guaranteed Income for the Rest of Your Life
Are you concerned with not having enough money for retirement? Most of us are. We are living longer and healthier lives, our 401k and pensions could not be enough to survive. An income annuity could give you guaranteed extra income, monthly or yearly. This could reduce the risk of running out of money due to living to long.
What is an annuity? An annuity is a sum of money given to a person at regular intervals. It can also be an investment. You pay a lump sum of money to an insurance company or bank and buy the annuity. When you retire the financial institution pays you regular income for the rest of your life.
Annuities have two phases: Accumulation phase abd annuitization phase. During the accumulation phase, you give your money and it earns a rate of return. During the annuitization phase, you receive regular payments from that contract, until your death.
There are two ways to purchase an annuity: A one lump sum payment or ongoing contributions. Usually you should’nt invest more than 30% of your retirement savings to an annuity.
Annuities are tax friendly, if you follow their guild lines. You can rollover your IRA or 401k, to an annuity, and it’s a tax free transfer. You can also transfer from one annuity to another tax free, this is called a 1035 exchange. If you’re, at least, 59 1/2 years old and use your Roth IRA assets, the IRA has met the five year period for tax free distributions, the transfer is tax free. With your Roth IRA assets purchasing the annuity, even the payments to you are tax free. You will have life long income that is tax free. If you purchase an annuity with a mutual fund or individual securities, a portion of each annuity payment is tax free. You’ve already paid taxes on your original investment.
Annuities have death benefits also. If you die before receiving any payments, your beneficiary will get the current value of the annuity or the money you put into it, whichever is more. If you start receiving payments and die, the insurance company keeps your money. If this concerns you, purchase a “term certain” annuity. This annuity guarantees you or your beneficiary will get payments for a certain period of time. Ex. 10 years, even if you die, your beneficiary will get payments for ten years.
There are three different types of annuities:
- Fixed Annuity – The money you invest has a fixed rate of interest that is guaranteed by the insurance company. This is a no risk annuity. If the stock market does well, you will receive a fixed rate.
- Variable Annuity – The money you invest is placed in subaccounts. The subaccounts are in aggressive growth funds, stocks, and bonds. This is a risky annuity. If the stock market does well, so will you but if it doesn’t, neither will you.
- Equity-Indexed Annuity – The money you invest in is in a fixed account although you can still earn interest based on the performance of a stock index. Ex. of stock indexes: S&P 500, Dow Jones, Russell 2000, and NASDAQ Composite Index. You can earn interest and have a fixed account. When you recieve payments, they are fixed.
The average annuity buyer is 55 years and older. Young people don’t usually invest in annuities. There’s a 10% penalty tax if you withdraw money from the annuity before 59 1/2 years.
Before buying an annuity:
1. Shop around, find the best insurance company for you. Annuities are long term, make sure the company is solid.
2. When judging performance of a specific company, do your homework. Don’t look at last month’s top performers, look at the last 3-5 years. Check the annuities history from The Barron’s, The Wall Street Journal, Morningstar, and Lipper Analytical Services.
3. You’ll want to know your insurance company’s rating. You can contact your states Department of Insurance, A.M. Best, Standard and poor’s, and Moodys rate the stability of insurance companies. You can also go to the library for information on the insurance company of your choice.
Retiring should be a pleasant experience in everyone’s life. An income annuity in a retirement income plan will give you a higher cash flow throughout retirement. This extra security will increase your confidence to spend money and live without financial worries.
Since the latter part of the 1990’s, an estimated fifty percent (50%) of the world’s wealth were placed in various financial entities outside of the United States. While some critics would readily undermine the benefits of offshore investing by branding the practice as a mere ploy to evade taxation, the fact remains that in a global free market economy the main driving force is still competitive advantage. To date, with trillions of dollars at offshore financial centers worldwide, there is clearly much advantage to be had in offshore investments.
We define offshore investments as a broad variety of investment strategies that make the most out of favorable financial conditions in jurisdictions outside of an investor’s country of residence. Investing offshore could be as simple as keeping a bank account in another country, or as complex as setting up an International Business Corporation (IBC) in an investor-friendly nation.
There are however divergent views to offshore investing. Advocates emphasize the pecuniary advantages of offshore finance while critics argue its deficiencies in terms of regulation and a tendency towards fiscal abuse. Wealthy countries seek cross-border restrictions to protect their interests. On the other hand, the developing nations that provide tax relief for foreign entities and are the staging grounds for offshore investments welcome the trend as it generates domestic revenue and further opportunities to develop their own economies.
Despite the global debate on the virtues of offshore investments, it continues to be a viable alternative for both corporate and individuals to go outside the restrictions of their respective domestic spheres and participate in a dynamic developing global financial market.
Some of the advantages of offshore investments are as follows:
Historically, taxation is the primary impetus to consider offshore investments. By placing funds in tax haven regimes with zero to low tax incentive programs for foreign investors, companies and individual persons can reduce the amount of tax that must be paid. Offshore investment parlance refers to this action as “tax avoidance” which is within legal limits as opposed to blatant tax evasion.
Another advantage of offshore investments is the level of confidentiality afforded by offshore jurisdictions when it comes to banking and financial transactions. Many investor-friendly countries do not implement reportorial requirements for foreign businesses and accounts. Detractors however cite this practice as inviting to unscrupulous parties to conduct money-laundering activities.
Protection of Assets
Offshore investments can also shield individual or corporate assets from creditors or in the untoward event of future judgments. Ownership of assets can be nominally transferred from individuals to foreign trust accounts, foundations or offshore corporations.
Flexibility to Diversify
Offshore investments simply carry greater flexibility for the investor to diversify and build an attractive portfolio. Furthermore, offshore entities provide access to international markets offering highly competitive returns on various investment vehicles.
On the other hand, as in any other endeavor, offshore investments also carry several drawbacks as enumerated below:
Evolving Tax Regulations
With billions of dollars in potential tax revenue channeled offshore, tax bureaus are resolved to amend existing policies in order to reduce or eliminate loopholes involving offshore investments. For instance, the US Internal Revenue Service has announced recently that it is forging new regulations to tackle foreign tax credit abuse.
Depending on the individual idiosyncrasies of the investor, offshore accounts can be very costly. In certain jurisdictions, offshore corporations or holding companies may be required to be setup to legitimate the investment. In other countries, it may be necessary for the investor to own a residence before acquiring an offshore account. Intermediary businesses involved in offshore investments can indeed facilitate an investor’s entry but their services come with an expensive price tag. In many cases, offshore opportunities require minimum investments anywhere from $100,000 to $1 million.
As with any form of financial activity, offshore investments carry risks as well. Compared to traditional investment practices, the risks can be greater in offshore investments. For the wealthy, they can stand to lose thousands of dollars but it can be overwhelming for the average citizen. There have been incidents of offshore investment opportunities that attracted millions of dollars only to close shop leaving the investors high and dry. It is always advisable to consult with reputable finance professionals before taking the plunge into offshore investments.
Pursuing offshore investments requires due diligence and sound judgment. Offshore investments have opened up the global financial system within reach of the average person. With proper financial planning and support from reputable companies, the option to invest offshore can well be a promising option to a well-diversified financial portfolio.
I was walking into Wal Mart the other day and was greeted by a nice fellow in his 70’s. He offered me a cart and went on my marry way. I thought that being a greeter has to be a really easy job. You get to stand around all day and say “Hi” to people all day! Then again, I thought that when I’m 75, the last thing I want to be doing is working a service job! If you don’t be wise with your money now and make some investments for the future, you could be a greeter in an advanced Wal Mart from the future about 30 or so years from now. We all know that we need to make investments for retirement, however how much does one need to invest?
Unfortunately, it’s time to do some mathematics. I know, after you walked out of your college algebra course in college you thought you’d never have to use a calculator again, but it’ll only take a few minutes. First and foremost, you have to figure out if you retired today, how much would you need to live on? This part is pretty easy. Just figure out how much you spend right now a month on everything, subtract work related expenses, and expenses which won’t be there when you retire such as a mortgage payment, and you’ll have a pretty accurate figure. For a simple example, let’s say I make $50,000 a year and spend $3,000 a month.
Now we need to account for inflation, you’ll need a calculator for this. Windows’ built in calculator will even work for this one. Of course in our planning we have to account for inflation, you’ll need significantly more money each month than what we figured out above. Figure out how many years from now you are going to retire. For example, If I was 25, it would be 40 years. Inflation averages about 4% a year. So we’ll have to put 1.04 into the calculator, click the exponent (x^y) button, and enter 40. Multiply that with the amount of money you need to live a month that we did above, and that’s how much money we’ll actually need a month to live on. In this example, I would need nearly 5 times what I would today! So instead of needing $3,000, I would need $15,000.
Take your future monthly expenses and multiply that by 12, that’s how much you’ll need per year. A good rule of thumb is that you should never take more than 8% of your investments out per year because investments in the stock market average 12%, and you can leave 4% to give your self an inflationary raise each year. So take how much money you will need to live on per year, and divide it by .08 (or 8%). In my example, I’ll need $2,250,000 dollars to retire. It seems like a big number, but I’ve got 40 years of compound interest on my side.
The math gets a little bit harder here, so go search out a savings calculator for this part, there’s a link to one below. BankRate.com has an excellent one you can use. Enter how much you want to save, how many years you have to retire, and the interest rate you should expect to receive (12% for the stock market). In my example I only need to save $187.22 a month! That’s not too bad at all to ensure retirement with dignity! Have that amount of money automatically drafted from your checking account and put into a good investment each month, and your retirement will be on autopilot!