Financial Idea's Blog

Hard Assets Still Make Sense

The current Euro Crisis has given investors a chance to add commodity producers to their portfolios at cheap prices. Here are some broad ways to do that.

Technorati Tags: Euro Crisis, European Union, Financial Ideas, Investing strategy, Retirement

If I Do The Roth Conversion, Can I Finance The Tax Payment?

Okay, we’re putting the cart before the horse here, as the saying goes.

I assume you’re at least a bit read up on how conversions work or you wouldn’t have this question, but since I really shouldn’t assume anything, a brief review is in order first. If you don’t think you need the review and just want the question answered, skip down seven paragraphs….at your own risk, of course. ?.

Prior to 2010, converting from a Traditional IRA or an old company 401(k) was severely limited, in that if you, or you and your spouse, depending on how you file your taxes, made anything in excess of $100,000, conversion was not allowed. As of 2010, that restriction has been removed, so that effectively means that anyone can convert. The next question is whether or not converting makes sense for you. In 2010, as it has always been since the creation of the Roth IRA, you are allowed to make a conversion from your Traditional IRA….if you are willing to claim all of those converted dollars as additional income. That’s not different this year. What is different is that, for tax year 2010, while you convert the money and start growing it tax-free, you don’t have to claim the income right away. Wow, that’s huge! (Okay, it’s huge to me, but that’s because I’ve done the long-term math).

Read More …

Technorati Tags: Convert My IRA, federal, IRA, IRA Conversion, Roth IRA

Financial Ideas for ‘Would-Be’ Small Business Owners

Hmmmm….I guess the first question here is “why are you starting a small business?”

You should know that generally speaking I think that starting a small business is a great thing.  After all, this country was founded by entrepreneurs running their own printing presses or stables or whatever, and now only about 2% of Americans have their own businesses.  Most of us think quite wrongly that we have no choice but to work for “the man”, but guess what?  “The man” is just one of us who has already figured it out.

While there are distinct advantages to being a W-2 employee instead of being a 1099 contractor or your own boss, for many people it’s just not the fulfillment or the freedom that they were looking for.

Okay, with that disclaimer out of the way, the answer to the question in the first paragraph might be one of the following: Read More …

Technorati Tags: Small Business

USDA Sub-Prime Loans ­ Are They For Real?

Back up...What did you say?!?

As in, United States Department of Agriculture?
We’ve heard of USDA Prime Steaks, but USDA Sub-Prime Loans?
What are you talking about?

We’re talking about a previously almost unknown and little-used program founded in 1949 to encourage the development and sales of homes in mostly rural parts of the country by, see if this sounds familiar, not requiring any down payment on the loan.

Just like the “low-doc” and “no-doc” and “interest only” loans of the mid-2000s, over which we still have a major hangover and which have certainly contributed to the record number of foreclosures we’re seeing, any loan which requires no down payment means nothing at risk for the borrower except the possibility of bankruptcy or having a foreclosure on their record, and lots of people don’t know how bad those can be unless they’ve been through it. Read More …

Technorati Tags: Debt consolidation, Dept of Agriculture, How to Invest Stock, Interest Only, Prime Loans, Rule of 72, rule of 72, Sub Prime Loans, USDA, young investors

Inflation Isn’t Inevitable

As long as the Fed is responding to demand, an increase in the money supply is not inflationary.

The numbers are sobering. Over the past year, the level of bank reserves has soared more than tenfold, to $830 billion, and the total amount of credit the Fed has extended to the economy has doubled, to more than $1.6 trillion. Furthermore, the government is projecting that this year’s fiscal deficit will top $1 trillion, the highest level relative to gross domestic product since World War II.

Read More …

Technorati Tags: Financial Ideas, Inflation, Invest Stock, Rule of 72, What to Invest In