Part 3: What if I am Self-Employed

Many of you probably have access to employer’s 401K programs. I like 401K programs as long as they give matching funds into my account.  That means that they give me free money.  I was in a 401K program back in 1980 to 1985 that matched 50% for the first 6% that I put into the account.  I loved it because it matched my funds.  If the program does not match my funds then I don’t need 401K programs.  For people who are in such a program, you can take your money with no penalty at age 59.5.

However, if you are not retiring at that age, I would roll the money over into an IRA to avoid the taxes. You can take the money without penalty for some medical reasons or financial hardship. You can also take the money if you receive it after age 55 in equal installments based on your life expectancy.  However, if you do and you are under age 59.5, you will have to pay taxes and a 10% penalty. It is better to take a loan against the account if you badly need the money.  See your plan for details about how to borrow money from your 401K.

Firms with fewer than 100 employees can establish a SIMPLE plan (Savings Incentive Match Plan for Employees). This plan is a cross between an IRA and a 401K program.  The employee chooses where the money goes just like in a regular IRA. Here employers must match up to 3% of pay contributed to the plan. Another way it can be set up is to give every employee of the company, contributing or not contributing to the plan, 2% of their pay automatically. Employees are vested immediately in the employees’ plan.  The plan grows tax deferred. However, the rules for withdraw are more than twice as harsh as the other plans.

What if you are Self-Employed? Keogh Plans are favored by doctors, dentist, architects, lawyers, and other professionals. Moonlighting consultants and free-lance writers have been known to use Keogh Plans. You can have this plan while you are in your company's pension plan and your IRA. Money for this plan is deducted from your taxable income in the year in which you made the money. You can use the “Money Purchase Keogh Plan”, “Profit-sharing Keogh Plan”, or “Defined-Benefit Keogh Plan.” See your investment adviser on what type of plan to use. 

Dividends, interest, and other earnings accumulate tax-deferred. Most of the rules for this plan are similar to most regular IRA Plans.  You can take the money at age 55 if the business closes.  If you have full-time employees, they must be included in your Keogh plan. 

A Simplified Employee Pension (SEP) is a combination of an IRA and a Keogh. The annual contribution limit is about 20% of income, the same as for profit-sharing Keoghs, up to $44,000 per year. The rules governing deductibility of contributions, tax-deferral of earnings, and penalties are the same as with an IRA. The advantage of a SEP over a Keogh is that it is simpler to administer.  This program is ideal for people with businesses as second jobs. It cuts the tax bill while saving for retirement.    

In these last three blogs, we studied how to get started in retirement accounts. Whether you are self-employed, you work for someone else, or your spouse has income, we covered a retirement program that fits your needs. The key is to start building that account today with whatever money you can. As you can afford more, increase your contributions. Start with $25 a month if you have no money, take full advantage of your tax-favored investment vehicles now while you can. When you are old and your income is limited, it will be too late to do something about it.        

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.

http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html

The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.

Part 2: Moving Your Retirement Money

Over the past 40 years, I have moved my investments around from one place to another including my IRAs. You are not required to keep your money in the same IRA from the time you open it to the time you start withdrawing your money. Yes, the IRS has a penalty for premature withdraws. But the law also provides flexibility for moving your IRA from one type of account to another account for instance, a Bank to an Online Brokerage Firm.  You may find that you can do better at a self-directed IRA buying Discounted Corporate Bonds giving 8% while at the bank you are only getting 1%. You now have over $1,000 saved.  So you transferred the account. We will talk about two ways to do this.

Direct Transfers are done between the IRA sponsor that you have now and the IRA sponsor that you want to handle your account in the future. You can transfer your accounts this way anytime you like but keep in mind, these sponsors may have fees for opening and closing accounts. The future sponsor sends the current sponsor a transfer form and the current sponsor sends them the money. I usually do this type of transfer. But this type of transfer could cost you money if done too many times. Sponsors usually have a small fee to do this transfer. 

Rollovers are a transfer that I do not recommend. If you do this type of transfer, you better do it within 60 days from the time you receive the money to the time you place the funds in a new IRA.  If you do not, it will be considered a premature distribution.  That means that it will be taxed as ordinary income and trigger the 10% penalty, assuming that you are under 59.5 years old. This type of transfer can only be done once a year for each account that you own. 

I own a regular IRA. That means that I take money from my paycheck, place it in my IRA and take deductions off my income tax. But when I am ready to withdraw the money and live off of it, I have to pay taxes on the money withdrawn.  

I could have opened a Roth IRA. Here, contributions are made with after-tax money. These people do not take a tax deduction at tax time. However, all earnings within the Roth are tax-free, not tax-deferred as it is with the regular IRA. Roth owners can withdraw money at any time without incurring a penalty or tax. Note that this rule applies only to your contributions, not  your earnings. If your account withdraws reach the point at which you are dipping into earnings, you may owe the penalty and tax if you are less than 59.5 years old. The tax and penalty are both waived on up to $10,000 of earnings withdrawn, after the account has been open for 5 years for the purchase of a first home.   

If you plan to live past 71 years old, you can continue to contribute to the account. There is no requirement that you begin withdrawing money from a Roth IRA at age 70.5 years old. If you wish, you can leave the money in your account until such time as death. If you die with a balance in your account, the money goes to your heirs tax-free. In a regular IRA, the beneficiary owes tax on the balance. If you earn less than $150,000, you qualify to open a Roth IRA.  

If you don’t know what type of IRA to open discuss it with your IRA Sponsor or your investment advisor.      

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.
http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html
The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.

Part 1: How to Get Started With Retirement Accounts

 Young Store Sales Assistant Amanda Ann Williams III has only 40 years to retirement.

We talked about the overall plan from when people are in their twenties and thirties, getting started with opening their retirement accounts. Now let’s pay some attention to the details.  In my day, my parents did not believe in teaching us about how to handle money or talk to us about objectives concerning money. In my day, talking about money was considered bragging or rude. Here is the reason why it is so easy to scam people out of their money. By acting like the use of money is so secret, families allow scam artist to use this lack of knowledge to remove the money from the ignorant. This is the major reason why I write this blog on finance.

We will start with the most common investment to your retirement, the IRA. IRAs can be opened and contributions made any time before the 15^th of April. That is the deadline for filing your Federal Income Taxes.  There is a maximum investment per year that you can make. Check with our custodian or trustee to see what that maximum is because it may change according to tax law in that year. You can contribute any amount under that maximum that you want.  Depending on how you are paid, for example, you can deduct $192.30 every two weeks from your paycheck or bank account and send it to your IRA custodian or trustee.  Recently, the maximum yearly investment was $5,000 and for people over 50 years old, it was $6,000. There is a 6% penalty tax on contributions over the annual maximum and the excess counts as taxable income when you withdraw it. 

The custodian or trustee that supervises the account and reports to the government each year are the Banks, Brokerage Firms, Credit Unions, Mutual Fund Companies, Insurance Companies, and other corporations. They have standard IRS-approved custodial or trustee agreements.  All you have to do is contact one of these companies and they will walk you through opening an account.

You have to know what you want to do first. You should also ask these institutions some questions before you commit money. I would shop around for the institution that fits my needs and fee structure. Some companies do not charge to open an IRA. Other companies have a set up charge. Some have yearly fees, yet others have exit fees when you want to move your IRA to another institution. I would ask about their fee schedules before I commit to any money. If you are just starting out at 24 years old and you can only spare $25 per month to invest in your IRA,  you may want to start with a Bank, Savings and Loan, Credit Union, or the Share Builders Plan. You may think that $25 per month is not worth it but consider that $25 per month is $270,000 saved over 30 years.  If it grows just by a total of 6% simple interest that is a total of $286,200. 

The Share Builders Plan allows you to buy stocks and sometimes bonds in an IRA brokerage account, purchasing full and fractions of shares. As I told you about income stock in a previous blog, you can buy income stocks in this account and have the dividends automatically reinvested into more stock that gives more dividends. This would compound your return in your Share Builders IRA Account.  Look up “Share Builders Plan” in your Web Search on your computer internet for more information.  If you are prepared to put the maximum amount of money into your IRA, just about any option is open to you.   

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.

http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html

The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.

I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.

How would you like to have over One Million Dollars?

Well I am not giving it away for free; you have to do a few things first to get it. I am starting an online stock club. I will help you open an IRA with an independent online brokerage firm. You will control the account and do the trades. I will supply you with what to buy and if need be what to sell. You will be buying the same type of corporate bonds that I buy.




This is what you must do.

1. Send me your email address so that I can send you the information needed to open your account at the independent online brokerage firm that I suggest.

2. Follow the instructions of that firm to open the account. This will be your personal account and I do not need to know the contents of the account, the number of the account, or your name on the account.

3. Only people who I sent this information to will be on this special stock club mailing list along with my “Greedy Friends” who are already in my club. Now you know the name of my stock club, the “Greedy Friends” stock club. You can be just like them, complain all the way to the bank.

What do I get out of this? As you all know, my objective since age 25 has been to train the public on investing in income securities such as income stocks and junk bonds. My blog has a following around the world.

What is your risk? You will be dealing with corporate securities not government securities such as your bank CDs. That means that you are paid to take the risk of Corporate America. Many times you make money like me but sometime you may lose money. I hope that is not me or you.

Do I give you any money? No, I will not know who you are let alone get money from you. I will not have access to your account. Your money is between you and your online broker. Only the people in the club will know the name of your online brokerage firm. No one will know your name or account number unless you tell someone.

Can I take my money out of the club or my account? The money is your money under your control. You invest as much as you want when you want or invest as little that you want when you want. If you want to take your money out of your account, that is between you, your online broker and the government.

So send me your email address to WDarn44243@aol.com. Tell me that you want to join the “Greedy Friends” stock club. I will put you in my “Greedy Friends” Stock Club with its special mailing list. Only the club members will get this information given with this list.

Investing in First Mortgage Pro-rata Corporate Bonds

Every 6 months, I go through my bond portfolio and review any bonds that have fallen into a Standard and Poor’s “CCC+” or has a rating below that.  Recently, I found a bond in my portfolio that was rated “CCC+” and would not mature until 2018. I decided that I did not want to take the chance on such a low rated bond that would not mature for 6 years. At my age, I can’t afford to take the business risk since I will be retiring in 2 to 3 years.  So I sold the bond issue and immediately bought another bond with the proceeds. 

I bought two (2) Golden State Petroleum Transport Corporation 8.04% of 02/01/2019 on May 31, 2012. The bond ISIN is US38121EAJ29. The bond is rated by Standard and Poor’s at BB- and by Moody’s at B2. I bought the bonds for $870.20 each.  My yield to maturity is 11.473%. The bond pays principal and interest on February 1 and August 1 every year until February 1, 2019. 

Wait a minute! Didn’t I tell you that bondholders get paid interest usually twice a year and the principal at maturity? In most cases that is true. But this bond is a First Mortgage Pro-rata Bonds. The word pro-rata is used to describe a proportionate allocation. This is a method of assigning an amount to a fraction, according to its share of the whole. In other words, the company pays interest and principal every six months just like homeowners with a mortgage pays the bank every payment period until the loan is paid off.  

I have been investing in Corporate Bonds since 1972 and never ran across a bond issue like this. So I had to talk to my Online Brokerage Firm to get an education on this type of bond. 

This is the formula that they used to calculate where I am in relation to my ownership of this bond.

$2,000.000 in bonds times a principal factor of 0.75393391 times the Quoted Point Price of  87.021 = $1,312.16  

is the price I paid for these two bonds. I did not have to pay the seller any interest because they received payment of interest last February. The principal factor was reduced to satisfy any accrued interest. 

   

Golden State Petroleum Transport Corporation operates as an agent for two affiliated entities, Golden State Petro (IOM I-A) PLC and Golden State Petro (IOM I-B) PLC. They issued serial and term mortgage notes in 1996 and 1997. The proceeds were used by the affiliated entities to finance the construction and acquisition of two very large crude carriers for charter to an unaffiliated third party. The issue date for this bond was 12/24/1996.

The company was incorporated in 1996 and is based in Hamilton, Bermuda. Golden State Petroleum Transport Corporation is a subsidiary of Golden State Holdings I, Limited.