Savings Management Tag's Archives
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Treasuries can be considered as the safest investments in the world and they earned a good reputation from that.
Treasuries are backed by “the full faith and credit” of the U.S. government. The risk of default on these fixed-income securities is NIL. Not even the safest corporate bond in the world can make that claim. If you’re primary goal is to not lose money, treasuries are for you. When you buy a Treasury Bill, Bond or Note you’ll get your interest payments and you’ll get your principal back.
They are not a risk-free. There are, in fact, two very clear risks to holding Treasuries.
business environment, Business Sense, Cash Investment, corporate debt, Extra Income, Financial Competence, Financial Market, Government Bonds, Inflation risk, Investment Opportunity, Market Value, safest investment, Savings Management, Treasuries Investment, Treasury Bill, Valuable Investment
In most financial textbooks, they advise diversifying your funds into many different investment vehicles like bonds, stocks, mutual funds, money markets instruments as well as spreading your money across numerous different sectors and different countries to diversify your risks. To an average investor who has low financial competence and needs the wide diversification to lower risk, this makes sense. However, while this kind of broad diversification guarantees low risk, it also guarantees low returns of 5%-8%.
Don’t follow those strategies. Warren Buffett advises that ‘broad diversification is used by people to protect themselves against their own ignorance.’ If you know what you are doing (high financial intelligence), you should concentrate your portfolio into equities (stocks & mutual funds) as they achieve the highest return. And you can achieve low risk not by simply spreading your money around, but by your competence of knowing which funds and stocks to pick.
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a.k.a. “Savings Incentive Match Plan for Employees“
The plans are designed for small businesses with no more than 100 employees who earned $5,000 or more on the payroll for the previous calendar year. But some advisers and tax professionals think these plans are more suited for much smaller companies.
It’s easy and simple. Including instructions, the account application is about four pages to fill out, and you can do it in 10 minutes.
- Who can open one: Generally an employer with no more than 100 employees.
- Cost and complexity: Low.
- Employer contribution limit: 3 percent of employees’ pay, matching, or 2 percent non elective.
- Employee contribution limit: $11,500 for 2009.
- Annual reporting requirements: None.
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Next year will be the retirement year for Uncle John. He’s been toiling in one Flint GM factory or another for 35-plus years, and he’s about done with it. Work— tinkering with cars, boats, and home remodeling tasks— can still give him a charge, but crawling out of bed every weekday morning at 5 to slap together torque converters wears on him. He’d rather spend time hunting and fishing, and also with his grand-kids.
John is pretty young for retirement. He’s in excellent shape— SAY NO TO Alcohol and Cigarettes and he’s able to carry his 150lb outboard trolling motor down a flight of stairs into his basement every winter’s eve for storage. He’s paid into the Social Security pensions system since he was a teenager, when payroll taxes were 6%. Most of that money went straight to retirees drawing direct benefits at the time. Today, payroll taxes are 12.4%, a partial reflection of a trust fund set up in 1983, so John’s kids and grand-kids, and nephews, wouldn’t have to worry about their Social Security later on. Just like John isn’t one to worry.
Americans business nature, Better Retirement Life, Business Culture, Economy Inflation, Extra Income, Financial Freedom, medical expenses, payroll taxes, Pension Plan, Retirement Life, Savings Management, Social Security, solvency crisis, Western Society
