Month : August 2016

Investing

Can’t Contribute More to Your IRA? Consider an HSA Instead

IRAIf you find that you are curious about the benefits of opening an HSA, or health savings account, you are not alone. The HSA is one of the more popular new health care management tools on the market today. It also offers several other attractive benefits beyond the simple ability to choose how, where, when and with whom to spend your health care dollars. One of these benefits is the flexibility of the HSA to function as a savings and investment account. For some people who are close to maximizing their annual contributions to an IRA (individual retirement account), opening an HSA account begins to look like a particularly attractive retirement planning option. Before you decide to open an HSA as an alternate savings vehicle, however, it is important to understand how these unique accounts function.

The HSA Defined

The health savings account is a relatively new entrant into the greater health care arena. For employers, the HSA is a way to help employees take charge of their health care choices and also to save money on insurance-related overhead expenses. Opening an HSA allows employees to plan for future unknowns in health care and life. The formal definition of an HSA according to the Internal Revenue Service (IRS) is “a tax-exempt custodial account that you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur.” The trustee is an IRS-approved individual who has earned the credentials to allow him or her to manage financial accounts on behalf of others.

How the HSA Works

Learning what is a health savings account and what isn’t, who is eligible to open an HSA and how the funds can be used can pave the way towards deciding if this type of investment vehicle is the right choice for your needs.

  • HDHI. The HSA is designed to work in a complementary way with the high-deductible health insurance (HDHI) plan. Only participants in an HDHI are eligible to open an HSA as well.
  • Tax-free contributions. The funds deposited into an HSA are tax-free until a distribution is taken. At that time the distribution is taxed like ordinary income.
  • HSAs and health care costs. While there are undeniable tax and savings advantages to opening an HSA for qualified participants, it is important to remember that the primary purpose for the HSA in the eyes of the IRS is for managing health care expenses.
  • Penalties for withdrawals. As with IRAs and other similar retirement-focused investment accounts, a 10 percent penalty will be assessed for any non-health care related withdrawals made before the age of 65.
  • Income reduction. Because contributions to an HSA account are not considered income, maximizing contributions can help reduce annual income for both federal and state income tax purposes.
  • HSA funds can be used for non-traditional health care expenses. In addition to qualified medical expenses, the funds deposited into an HSA account can also be used for vision, dental, alternative and other types of medical care, including Medicare expenses.
  • HSA funds can be directed towards other purposes. While there is a 10 percent penalty for withdrawal before age 65, and withdrawals are taxed in the year of withdrawal regardless of the participant’s age, there is no restriction on how withdrawn funds can be directed, making it a handy account to turn to in times of crisis or the simple unexpected.
  • Contribution limits. The IRS sets the contribution limits annually. These limits are typically based on the cost of each individual’s annual insurance coverage expenses and are rounded up to the nearest $50. Over-contribution will trigger an automatic six percent financial penalty plus normal assessed income taxes on the amount of over-contribution.
  • Contribution cutoff dates. The cutoff for contributing to an HSA account in any tax year is April 15.
  • Tax forms. IRS Form 8889 is the official tax form that is required for HSA account holders.

Retirement Planning

One of the single best benefits of choosing to open an HSA as part of your investment planning is that all accrued funds can be used to pay long-term health care and living expenses once you reach age 65. With this additional benefit, it is easy to see why the HSA has become such a popular investment vehicle. 

Minolta DSCAbout the Author: Wiley Long has been helping individuals and families get coverage and save money for over 20 years. He owns HSA for America.

Image By http://www.123rf.com/photo_10073848_charismatic-businessman-saving-money-in-a-piggy-bank.html

 

Passion

Let Me Help You Live Your Passion

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I was just let go from my full time job. It’s scary but at the same time I know that another window is opening up.

I was holding off on revealing this new part of Financially Poor because I wanted to make sure all of the little details are ironed out like price and such. But now that I was just thrown off of a mountain, I’m going to jump into this head first.

What is it you ask? Hold on a sec. Let me lead up to it so I can give it some suspense.

For the past 2 years I’ve been doing a job that has given me knowledge and skills to do what I love, which is help people.

I’ve also, on the side, been building up a web empire, once again doing what I love. I truly believe that the web is the place to be when it comes to making your passion = your lively hood.

There is no easier, cheaper way with as much reach as the internet. Dreams can be made, and passions can be followed for next to nothing.

What I want to do now is teach you all of the knowledge I’ve soaked up through the years of what it takes to Live Your Passion. Is it easy? Meh, It’s not the most difficult thing in the world and with the knowledge and motivation that I can provide you, it will be even easier.

I want to teach you that you can do what you want and make an income doing it. If I can do it, I know anyone can.

I’m just like you, but I probably had a less likely chance of succeeding. I only have some college experience (because what they were teaching, I didn’t want to learn), I slacked off in high school because I was bored and just wanted to have fun.

I’m not a a regular 9-5 worker like the world wants to be and I don’t think most people should be. It takes away from your short life.

Now with that info you may ask yourself why you should listen to me. Well, because despite not having a college degree, or the best high school GPA, I’m making a living doing what I love. Can you say that?

I want to teach you that you can do it. It’s not impossible like you think. All it takes is a little switch to be turned on in your mind and I can flip that switch for you.

I’m not going to do a long spiel here, so find out more by clicking below. I really hope you do take the leap to Living Your Passion and not put it off until tomorrow because you’ll never succeed with the cycle of putting it off.coachingsales[1]

Home Ownership

10 Steps to Take Before You Buy Your Home

Purchasing a home is a complicated and time-consuming process, and staying on track is important. Proper planning will make the process go more smoothly and ensure that you end up with the best house possible. Putting in some work before you make an offer can also save you some serious cash. Here are 10 of the most important steps to take before you purchase a new home.

1. Sell Your Current Home First

If you already own a house, consider selling it or renting it out before looking for a new one. Doing so will save you the trouble of making two complex transactions at once. Selling before you buy will also make it easier to determine an appropriate amount for your down payment. 

2. Find an Agent

Even experienced home buyers can benefit from the services of a professional real estate agent. Agents have access to information on neighborhoods and other industry buzz that can help you find the best home possible. They can also navigate the tricky negotiations process to get you a low price with plenty of perks.  A great agent has attended a reputable real estate school and understands the in’s and outs of most deals.

3. Decide What You Want in a Home

People purchase homes for a wide variety of reasons. Figuring out your family’s specific priorities will help you to narrow down your search by eliminating homes that fail to meet all of your requirements. 

4. Check Your Credit History

Obtain a copy of your credit history as soon as possible, especially if you plan on getting a mortgage. If there are any dings or errors in your credit report, try to clean it up as much as you can before you start the mortgage process. 

5. Find a Lender

When seeking a mortgage, compare the rates of different lenders and keep an eye out for programs that cater to your specific situation. Focus on finding a mortgage program with low interest rates and lender fees. 

6. Pre-Qualify for a Mortgage

To make an offer on a home, you will first need a pre-qualification letter from a lender proving that you can afford the mortgage. The pre-qualification process involves a cursory review of your financial situation. Pre-approval is much more extensive and provides a better estimate of your financial capabilities. Pre-approved buyers are generally preferred over pre-qualified buyers.

7. Save Money for a Down Payment

Although the Federal Housing Administration allows payments as low as 3.5 percent, try to make a down payment of at least 20 percent of a home’s contract sale price. A higher down payment will lead to lower mortgage payments and may also reduce your interest rates.

8. Start Researching Neighborhoods

Before you consider buying a house, make sure you know as much as possible about the surrounding area. Search online for information like crime statistics and transportation options. Even if you do not have children, look for an area with good school districts as this will boost the value of your property. 

9. Have the Home Inspected and Appraised

Hiring a professional home inspector is the best way to avoid costly repairs in the future. You will also need to determine the market value of the house and provide your lender with the information. Keep a copy of the appraisal for your records. 

10. Purchase Homeowner’s Insurance

Most lenders will only finance your real estate transaction once the property is fully insured. Homeowner’s insurance is often expensive, especially in areas that are prone to natural disasters like floods and earthquakes. Make sure you shop around to find a good deal, and see if your car insurance company will let you add a home insurance plan at a discounted rate.

Investing

Trading Terminology 101: What Are Securities?

 

binary optionsBecoming a trader can sometimes feel like you’re taking up a second language. There is a lot of terminology in this industry, which means you should really make a point out of learning as much of it as possible whenever you can. Start today by reading about securities, it’s a very common term you’ll hear for the rest of your life as a trader.

A Basic Definition of Securities

Securities are a broad term for various financial instruments. This could refer to an option, a stock in a publicly-traded corporation and a bond from a company or government. Therefore, a security really just represents some kind of financial value. Whoever issues this security, and it could be a company or some other kind of entity, is known as the issuer.

A Closer Look at Issuers

Given their relationship to securities, you’ll want to understand what an issuer is exactly. Again, all they do is provide the security to an interested party. For instance, it could be a municipal government that is issuing bonds to help raise funds. These traders buy securities for the sole purpose of later selling them. Wholesale investors do something similar, although they usually buy and sell bonds for clients. Of course, there are also institutional investors. They include pension funds, investment banks, insurance companies, and managed funds. All of these groups are issuers and they have that name because, at some point, they issue securities, whether those are bonds or stocks.

The Two Types of Securities

There are two basic kinds of securities: debt securities and equities. The former represents capital that is borrowed and must be paid back at some point. This will mean following terms that define the principal and interest rate as well as the maturity date. Government and corporate bonds, preferred stock, certificates of deposit (CDs) and collateralized securities (CMOs and CDOs) all fall under this type of security.

Equities represent a shareholder’s ownership interest in a corporation. Stock would be a good example. Unlike debt securities, where the owner usually only receives interest plus the principal back, those who hold equity securities can also profit from capital gains.

As you can probably imagine, the SEC is in charge of regulating the public offer and sale of securities. This is one more reason you should continue learning about them as much as possible if you want to deal with securities. While there are profits to be made, you have to play by the rules.

Business

Here are some of the qualities a good lawyer should have

When you were young you definitely had some dreams that you wanted to pursue, apart from the fictional fantasies, you had certain aspirations that could have been inspired by the people around you or something you saw. This was probably the first time you had a vision of your future.

You might have continued pursuing this dream and it could be what you are currently undertaking. Sometimes plans change and you get to know of other passions that you have in life. Whatever the case, the career goals you had, shaped your mindset and helped impart certain principles that have been helpful to you even till today.

If you are a parent right now, your wish is to see your children reach their full potential; you will most likely make some sacrifices so that your offspring can be able to have the opportunities that you did not. You are also to give the necessary love and support that they need.

One popular career that is known to be quite a high profile job is being a lawyer. This is a career choice that you are likely to be proud of, it is a job that entails standing up for justice and letting the truth be known.  This could be because you are a lawyer, and the child looks up to you, or the image portrayed about this job is very attractive to the kid.

You know that the career choice of an individual usually reconciles with the personality of the person. Just like people who work in the media and entertainment industry are normally outgoing people, with law, there are some attributes that you expect to see. Some of them can be developed over time. Here are some of the behaviors a good lawyer should have;

  • Be very good at communicating.

For lawyers especially the ones who go to court, articulation is something that is valued very highly. You are expected to clearly explain the case and your standpoint to the court, and to make the judge or jury understand why your argument is the one that should be taken as true.

  • Have great research skills.

In this career, you should know that your argument should be based on facts and there is no tolerance for opinions that do not have proof. If you have good research skills you will be able to give solid business legal advice to the clients that require this information from you.

You should encourage your child in every endeavor they decide to undertake. Strive to allow your offspring to enjoy every opportunity that they can access to make them acquire important skills and experiences. Law is a career path that is not easy, but with the right attitude and having these features, success is almost certain. 

Bio

Gerald Box is a well experienced lawyer; he has been in practice for over twenty years and has a specialty in business legal advice. Gerald is also a trained life coach and has conducted many seminars to young high school students on career paths.