My Investing Notebook
:: Learning from the pros; making decisions on my own. ::
My Investing Notebook
:: Learning from the pros; making decisions on my own. ::
* Expanding the amount of your income that can be taxed* Taxing items that are tax-free under the regular tax system* Disallowing many deductions
With the passing of the Jobs & Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), AMT exemption levels have been increased, reducing the number of taxpayers who are required to pay the AMT. Because lower tax rates mean your regular tax is more likely to be less than your AMT, the increased exemption amounts are particularly good news. The increased exemptions will protect taxpayers who otherwise would be subject to the AMT because of the lowered regular tax rates enacted by JGTRRA.
Exemption increases are:
This change is currently scheduled to be effective in 2003 and 2004.
[Excerpt from Quicken.com TurboTax Letter]
This is my favorite business magazine. It is published weekly, so it gives you timely information on the economy and the markets. It is very reliable (I’m subscribed to other magazines, but this one stands out as the winner in that category). It covers other areas, like news & technology. And it gives you yearly company rankings and lots more. If I had to pick one financial magazine, I would pick Business Week.
If you want to get it, search for it on Ebay (~$10/year); or get it free for 6 months from MagazineOutlet.com; or, even better, get a year free from My Bonus Center here. For the latter two, you must pay up front and call before the term expires to get your money back.
How much money do you need to invest to become a millionaire? That’s a good question. I tried to answer that using a Financial Calculator found on Investopedia.com. I entered that I want to be a millionaire when I’m 50 years old, and that I think my money will grow at 10% (I think that’s actually mediocre growth — but hey, that’s not bad), so what did I get: I’ll be a millionaire if I invest $672 monthly. We’ll see. Actually, with my $500/month stock-investment, mutual-fund investment, and 401(k), I’m putting more than that so I’ll should be a millionaire soon — yeah, right. That’s not my goal; my goal is long-term, consistent investing.
Try out the calculator at Investopedia.com for yourself here.
Interpretation that I received:
If you are 25 years old with $10,000.00 invested at a rate of 10%, you will need to continue investing $672.02 per month to be a millionaire at 50 years of age.
The more you invest monthly and the more you already have invested, the less time you need to become a millionaire. Logically then, the amount you need to save monthly would increase if your time horizon, your already-invested money, or your investment rate were to decrease.
Investopedia.com: Financial Dictionary
For those of you who need to understand financial and accounting terms inEnglish this financial dictionary will be extremely useful. The dictionary hasseveral categories including buzz words (phrases whose meaning is unrelated to the words that make up the phrase) and terminology related to trading and taxes, among others.
Elsewhere on the Investopedia.com site are tutorials and lessons on finance andinvestments for students and others interested in the topic.
Pretty good resource — I came across it recently.
Forty-two percent of workers cash out their 401(k) retirement savings when they leave their jobs and take their accounts with them, according to Time. Big mistake. When you cash out, you pay taxes in your tax-bracket and a penalty of 10% of the accounts value (if you’re less than 60)! Also, your money no longer grows tax-deferred.
What you should do is roll the money into an IRA or your new employer’s 401(k), or leave it in the old employer’s plan — if it’s over $5K, your old employer is required, if you wish, to keep the account open.
Some information about taxes, which I found-out about recently. I thought that if you are in a 25% tax-bracket and you make, let’s say, $60K, you would pay $15,000 (25% * 60K) in taxes (oh, that seems a lot). Fortunately, it does not work that way: if you’re married (similar if you’re single, only the numbers change — see below for your bracket), you pay 15% for the first $56,800 (bracket below 25%), and pay 25% on $3,200 (60K – 56,800); so that comes out to $9320 ($8520 + $800) — still a lot but better than $15K!
Another, similar, misconception (I thought that way also) is the notion that your tax will suddenly increase by a huge amount when you move into a higher tax bracket. For example, if your taxable income is in the 15% bracket, but just a few dollars below the 27% bracket, you might be concerned that earning a few dollars more will cause you to pay a lot more in tax. Relax. The first $100 dollars you earn in the 27% bracket will cause your tax to increase by $27. You still pay only 15% on all the money you earned below the 27% bracket.
Here are current, 2003, tax brackets.
If you’re single, see your tax bracket here.
See a whole article (where I got the information from) here.
StockScouter gives you a 1-10 rating on a stock. I just found out about it recently, but it seems like a good investing-resource: it gives you a short company summary, pros & cons, outlook, and more. Not bad — try it out.
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