How Much Money to Invest

Many new investors make the mistake of thinking that they should invest all or a large percentage of their savings. This is a common misconception that new investors should avoid falling under. To invest wisely you should determine how much you can really afford to put into your investments as well as clearly map out what your financial goals are for the short term as well as long term. The remainder of this article provides a blueprint for determining how much you can actually afford to spend on investments.If you are planning on using your savings to begin making investments you should proceed carefully. Leave at least six months of living expenses in your savings account and do not use this money to make investments. Avoid borrowing money for investment and do not dip into your emergency savings fund to make any investment. Leave yourself a cushion to fall back on in case there are fluctuations in whatever market you may be investing in.Depending on your individual financial situation you may find that you do not have at least six months of living expenses in savings. If this is the case you may wish to reconsider investing until you do so. Do not be discouraged if the amount that you have to invest is less than you wish after deducting your six month cushion, quite often investments can be made for much less than you expect. Speak to your financial adviser about options available to you for low cost investments. If you have a surplus of capital after deducting six months of expenses then calculate those funds and set them aside for investment purposes.Now you can be begin to think about the purpose of your investments. Are they short term or long term, do you seek capital growth or a high rate of return? Developing an investment plan early on can save you hassles later on. Spend time outlining a budget for you investments as well as clear ideas of goals as well as time frames for reaching those investment goals. Sort your plan by month year and longer terms if this is part of your overall goal.Start talking to a qualified and professional financial planner or investment adviser about the option available to you and develop a budget for your investments. There are a wide range of investment options available today and each carry their own individual risks, rewards, funding requirements, legal and technical issues. Discuss these issues with your financial planner.

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Travel Planners for Great Holidays

You might wonder what a travel planner is in case you are not familiarized with this notion. This is a sort of organizer (can be a person or a machine) that makes sure your checklist for traveling is complete and you don’t forget to bring the most important things in your vacation. This is great because it will help you get organized and keep a close focus on your itinerary.Types of plannersTaking this into account, you are able to utilize the help of a trip planner (manual) or even software which can be installed in the personal phone or tablet. Not only will it help you get great maps, but will also provide information on the weather forecast or the best exchange rates. The option of hiring a travel agent is also available and can really help you in your mission of planning a trip.Road MapIn the case of the planner software for trips, this will prove to be incredibly helpful if you want to start your trip by car. The road directions will be complete and very easy to follow. They will provide insight on the remaining destination or on the amount of miles that you have already traveled. Not to mention that you will be given street names and the numbers of the roads. In case you do not have road maps installed, go online and search for a map that will help you get around easily.ItineraryOne of the best advantages provided by a planner is that you will be able to keep an eye on your itinerary and you will manage to check all the important places or events on the road. Nothing will get by you! The online planner can come as an interesting option because it will provide places and elements that may not be on the list. It adds instructions on the manner in which you can reach various destinations and will make things much easier. A planner will definitely assist you in everything from cheap flights, accommodations, itinerary and everything you need to know. Just keep in mind that a travel planner will cost you a few bucks depending on the hourly rate they require.What to bring in your trip?Software that deals with travel planning will act as a constant reminder of the things that you have to use during your traveling experience. For instance, always remember that if you go to the United States during winter, the right type of clothes have to be brought and of course, a visa. If you decide to hire a travel planner this will manage to resolve all these issues for you.VisaIn addition to this, the travel planner can also get a passport or even a visa for you or your family in case of need. Everyone knows that this process can take quite a long time and it can be very stressful so there is no point in doing this for yourself when you can have someone else do it for you. Those people who are busy or simply too comfortable to handle these situations, can use the travel planner as the best solution.

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How To Save Money Buying A House

Buying a new home is a significant investment that can sound scary sometimes. But, it is also a relatively safe bet, and it could even help to boost your retirement savings. However, if you play your cards right, you can get your home at a much more affordable price. While getting a good deal is very important, there are a few other factors at play that can save you money in the long run.

Shop For An Affordable Mortgage Rate

Mortgages are very important, and the rates vary from lender to lender. So a great way to reduce your cost is to shop around a bit for competitive rates for investment home loans for up to five firms.

Also, it would be of great help if you learn about the options available to you. For instance, a shorter loan term might mean higher monthly fees. Most importantly, ensure you have options, so you don’t feel trapped when making a choice.

Use An Experienced Agent

This might sound counterproductive as agents cost money. However, they also come with years of experience, and if you get a good one, they’ll ultimately save you money. This is because they will negotiate a great deal and protect you from unnecessary costs that you might have never heard of.

Get A Fresh Pair Of Eyes

Finding the perfect home is a collective effort that could involve your family and friends. For example, you’ve just been shown a lovely home and are over the moon. Stop for a second and call a friend or family member to also look at the house as they are more likely to point out defects that will cost you more money.

Improve Your Credit Score

The simple rule is that the higher your credit score, the lower your loan will be. This obviously means you stand to gain a lot if you have a better credit score. You can improve your credit score in several ways, including paying your credit card balance, and so on.

Find A Home In Need Of Maintenance

Everyone wants to buy a lovely house with all the upgrades and curb appeal. On the flip side, it means you can snag a great deal on a home that needs some work. This method is tricky as you need to balance the cost of maintenance necessary with the amount you’re saving.

So, if the work required is too much, it might be best to turn away. Finally, putting some work into the house and subsequently creating a masterpiece gives you a sense of pride (along with some money to spare)

Conduct Your Own Inspection

Agents can sway you with lovely words, and inspectors might not always tell you everything, so you’ll need to look out for yourself a bit. This means paying close attention during the house inspection and even taking notes if necessary.

Also, you can tag along with the inspector and take a look at a few things yourself. Who knows, you might find something that turns you off and potentially cost you money you don’t have.

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Eliminate Taxes Forever using an Irrevocable Life Insurance Trust

An irrevocable life insurance trust (ILIT) is simply an irrevocable trust that owns a life insurance policy. A dynasty trust, also known as a GST, legacy or perpetual trust, is a flexible irrevocable trust that a trust grantor funds using lifetime exemptions for gift & estate and GST taxes. An irrevocable life insurance dynasty trust (dynasty ILIT) can provide asset protection, wealth management and wealth accumulation for many generations, or even perpetually. A dynasty ILIT grows wealth tax-free, provides asset protection, and makes distributions to beneficiaries free of gift and estate taxes forever — a good way to protect hard-earned family wealth against punitive taxes, divorce and frivolous lawsuits.

When trust assets are invested in a life insurance policy, no income or capital gains taxes are paid on investment growth, and insurance proceeds pass income-tax free to the trust (IRC § 7702). Further, as noted above, there are no gift, estate, or GST taxes, not ever. Accordingly, trust assets continually invested in life insurance policies can grow and be distributed to beneficiaries completely free of taxes perpetually.

Irrevocable life insurance trusts (ILITs) are well-known estate planning vehicles, often used to generate sufficient funds to pay expected estate taxes. Funding an ILIT requires a grantor making a completed gift to the trust (making the trust “irrevocable”) and allocation of a corresponding portion of the grantor’s lifetime gift and estate tax exemption to the trust. A life insurance dynasty trust is an ILIT to which the grantor also allocates a portion of the lifetime GSTT (generation skipping transfer tax) exemption, thereby making the trust perpetually exempt from estate and GST taxes.

Different types of life insurance policies may be considered for a dynasty ILIT, as long as a policy meets the definition of life insurance provided in the Internal Revenue Code (IRC).

Generally, for tax-free retirement income, living benefits and death benefit, this author currently recommends a so-called Indexed Universal Life (IUL) insurance policy, specially designed to maximize cash-value growth and minimize death benefit. A well-designed, standard indexed universal life insurance (IUL) policy provides sustained, market-indexed growth and minimal risk (i.e., no exposure to market downturns).

An alternative to IUL is private placement life insurance (PPLI). PPLI is a variable policy and, therefore, may provide better investment returns (but with market risk) than conventional, non-variable domestic IUL life insurance. PPLI is protected in segregated accounts separate from the general fund of the insurance company. Foreign-based PPLI has advantages over domestic PPLI. It has lower minimum premium commitments (min. premium commitment usu. $1 million), and has lower start-up fees and carrying costs. In contrast to foreign PPLI, domestic PPLI requires a minimum premium commitment of $5 million or more, only in cash, has higher fees, and is subject to state-imposed investment restrictions.

In contrast to PPLI, domestic non-variable IUL policies mentioned above do not directly own investment assets (e.g., stock equity, mutual funds) in segregated accounts; rather, the insurer invests funds and credits the policy annually depending on performance of the insurer’s investments. A domestic non-variable IUL policy is generally less risky than PPLI because it is not exposed to negative market downturns, typically having a built-in floor of 0% regardless how badly markets perform. Depending on circumstances, therefore, domestic IUL may actually outperform PPLI.

Currently, the individual federal lifetime gift and estate tax and generation-skipping transfer tax (GSTT) exemptions are $12+ million. Although the U.S. Congress could lower the exemption amounts in the future, if a dynasty trust is already established, it will (presumably) be protected against prospective changes in the tax laws.

Dynasty trusts also protect family wealth against estate or inheritance taxes imposed by some states. For example, New York’s estate tax is 10-16 percent of estate values exceeding $10+ million. Yet, New York and all other states (except Connecticut) have no gift taxes. Thus, “gifting” of assets to a dynasty trust protects them from both federal and state estate (or inheritance) taxes, as well as providing asset protection against possible creditors of trust beneficiaries.

In a self-settled, discretionary asset-protection dynasty ILIT, the grantor can also be a trust beneficiary, if designed properly.

For more detailed information about US tax-law compliant dynasty ILITs, please consult the resources or contact the author for a free consultation.

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