GS's Club House (REF)

[Greenstream]

I think I'm going to give this board another try. I still have to remember time management as this site, as well as others, can suck the time out of your life. So be patient to an extent. Thanks.

GS

[Greenstream]

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[chunga1]

Rule of "Penny stock thumb" when they start hyping a short
sell...

[Greenstream]

Whom, how much and when to tip

Waiter/waitress
15% to 20% of pre-tax bill

Bartender
$1 to $2 per round or 15% to 20% of tab

Wine steward
15% of bottle's cost (less as price rises), clearly earmarked on bill

Room service
15% to 20% of pre-tax bill (if not already included)

Valet parking
$2 to $3 when car is returned

Taxi driver
15% plus $1 to $2 per bag

Hotel doorman
$1 to $2 to hail cab; $1 to $2 per bag for help with luggage

Hotel bellhop
$1 to $2 per bag

Hotel maid
$2 per night, paid daily, clearly marked 'Housekeeping'

Skycap
$1 to $2 per bag, $2 minimum, in addition to any fee

Hairdresser
15% to 20%

Manicurist
15% to 20%

Spa services
15% to 20%

Food delivery
10% to 15% with $2 minimum

Golf caddy
$20 or 50% of the caddy fee, whichever is greater

[Greenstream]

http://www.101kgb.com/cc-common/gallery/globalphotos.html?section=Whale%20Tail

[Greenstream]

I like AKNS @ 3.85. IMO, lots of potential...military supported and in CA.

[Specalculator1]

I like!!

[chunga1]

required link

http://www.sec.gov/edgar.shtml

[chunga1]

just found this, board marked. my advice flip em don't fall in love with em lol

[Greenstream]

test

[Greenstream]

To check the A/S:
State of Delaware [phone]
xxxxxxxxxxxxxx 7 digit Delaware Corp file number is: 2236242
Follow the prompts. Press #1 three times,

[Greenstream]

links to a video on kiddie tax

http://articles.moneycentral.msn.com/Taxes/AvoidAnAudit/The9WeirdestTaxWriteOffs.aspx

[Greenstream]

http://moneycentral.msn.com/investor/CreditReport/main.asp

[Greenstream]

Make your kid a millionaire

You may not have the cash right now, but you've got plenty of time if taxes, fees, mistakes -- or the child -- don't steal your thunder.

By Liz Pulliam Weston

Call it the ultimate Christmas gift for your child or grandchild: a cool $1 million.


It's a lavish gift, but not a prohibitively expensive one. A monthly contribution smaller than your current cable TV bill, made faithfully until the child turns 18 and then left to simmer until retirement, will hit seven figures without outlandish investment choices.
A newborn has nothing but time -- and that's something this strategy exploits to the fullest. Let's say a 30-year-old manages to save up and then invest a lump sum of $10,000. At an annual return of 8%, by the time she's 65, that $10,000 will have grown to nearly $150,000. Not bad, right?
But then compare it to what a 5-year-old could make from the same $10,000. The extra 25 years of growth would give him over $1 million by age 65. A newborn would need just $6,700, less than the cost of a decent used car.
If you don't happen to have $10,000 handy, not to worry. You can get the same results with a monthly investment, made even smaller if you can persuade your child to keep the contributions up over the long haul.
Take a look at what's possible in the table below. All the examples presume 8% average annual growth, a reasonable return from a diversified mix of stocks, bonds and cash, according to respected financial research company Ibbotson Associates.
To accumulate $1 million by age 65:

Starting at: One-time contribution Monthly contribution until age 18 Monthly contribution until age 65
Birth $6,721 $56 $38
Age 5 $9,875 $98 $57
Age 10 $14,511 $200 $85
Age 15 $21,321 $662 $127

Pretty neat, huh? I've heard from quite a few parents excited about the possibilities. Many believe their own financial futures were stunted by not investing early enough, and want their children to avoid the same mistake.
But there's a downside. While time can help the young grow a fortune, it can also magnify any investing mistakes made along the way. If that 5-year-old's account is traded excessively, charged high fees or invested too conservatively, the nest egg may be dramatically smaller.
If our youngster eked out only a 6% annual return over time, for example, his account would be worth just $330,000 at retirement age.
Furthermore, your kid's wealth accumulation plan could cause havoc with future financial-aid packages, so you'll want to know how to minimize the impact.
Who's a good candidate?
As nifty as the math is, you shouldn't start building your children's fortune until your own financial path is secure. That means all of the following are true:
• You're on track saving for your own retirement. No matter how much you want to secure your child's financial future, you must attend to your own first. (Your kid won't thank you for your largesse if she winds up using it to support you in your dotage.) You can use MSN's Retirement Planning Calculator to check. If you're a grandparent and already retired, you should be confident you have more than enough money to get you through the rest of your life. T. Rowe Price's Retirement Income Calculator can help you decide.
• You have no consumer debt. Again, you want to be on sound financial footing yourself before helping your kids, and that means paying off the credit card balances, unsecured personal loans and any other high-rate debt. (If you've got low rates on your auto loans or student loans, though, you don't necessarily have to pay those off before you invest for your kids.)
Video on MSN Money: Open an IRA for your child

Why not? If the kid has earned income, sock the money in a Roth and the child's on the road to wealth. Click here to play the video.
• You're saving for college. That future $1 million won't mean much if your kid doesn't get a good education or winds up saddled with massive student loan debt.
• You're willing to spend some time educating your children about money. For the million-dollar plan to succeed, your children have to understand the importance of keeping their mitts off the money so it can grow. They need to know that every $1,000 they withdraw at age 21 will cost them nearly $30,000 in future retirement money -- plus any taxes and penalties that may be owed for tapping the money early.
If you've got your financial bases covered, then you can proceed.

What about taxes?
Lots of expensive financial products are sold to people who panic unnecessarily about the effects of taxes on their investments. While it's true that taxes over time can reduce your investment returns, they're easy enough to minimize without paying a small fortune in fees to stockbrokers or insurance companies.
What tends to generate big tax bills is excessive trading, either by professional mutual fund managers who take a so-called "active" approach to investing or by the parent or grandparent managing the account.
There are better ways. One possibility is index funds, which mimic some broad-based market benchmark. Index funds change their lineup of investments only when the underlying benchmark changes, which isn't often.
Another bonus: Index funds are cheap, which means you're saving on fees. Instead of paying 1.4% a year, which is the average expense ratio for actively traded mutual funds, you pay:
• 0.54% for Charles Schwab's Total Stock Market (SWTIX).
• 0.4% for T. Rowe Price's Total Equity Market Index (POMIX).
• 0.19% for Vanguard's Total Stock Market Index (VTSMX).
Also, with a broad-based stock market fund, you're pretty much guaranteed to do at least as well as the overall stock market. Compare that to the two-thirds or so of actively managed funds that fail to beat their indexes over time, and you'll see that index funds are a pretty good choice.
A big drawback: These funds, like most mutual funds, have pretty hefty minimum investment requirements that can be problematic for folks investing small amounts. Schwab and T. Rowe's funds require a $2,500 minimum purchase; Vanguard wants $3,000, although all three knock their minimums down to $1,000 for custodial and retirement accounts (see below). Schwab lets you make subsequent investments of any amount, while T. Rowe's ongoing minimum is $50 and Vanguard's is $500.
Additional account fees may be charged if your balances are below certain amounts.
Other options: buying and holding individual stocks or exchange-traded funds (ETFs). ETFs, like index funds, are bundles of investments meant to mimic a benchmark, but unlike funds -- which are traded once a day -- ETFs trade like stocks throughout the day.
Buying ETFs and stocks through a brokerage can get pretty expensive, though; trading fees will eat up a good chunk of your monthly investment. A cheaper alternative: ShareBuilder.com, which charges $4 a trade and has no investment minimums.
Yet another possibility: buying shares directly from the companies, avoiding commissions. Minimum purchase requirements and fees, though, vary widely by company. DirectInvesting.com can help you get started.


What bucket to use
Here's an issue that actually is important: minors generally aren't allowed to hold investments in their own names. But each alternative has its cons as well as its pros. For example:
A custodial account. These accounts, usually known as Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA) accounts, are getting less popular as their disadvantages mount. For one thing, you'll get slaughtered at college time, since financial aid formulas consider this the student's asset and penalize you heavily for it. Also, the kiddie tax rules have changed so that if the account earns more than a certain amount annually ($1,700 in 2006), taxes are paid at the parent's rate, rather than the child's, regardless of the child's age.
A joint savings account. These are pretty easy to set up, but may have tax issues. The same kiddie tax rules apply: If the account earns your kid more than a certain amount ($1,700 in 2006), taxes must be paid at your rate. Also, the account is considered jointly owned for college financial aid purposes, so half of it (your kid's half) will count heavily against you.
Holding the assets in your own account. This will benefit you in financial aid calculations, since colleges expect you to contribute a smaller percentage of your own assets than of your children's to pay for college. (If you're a grandparent, your assets aren't counted at all.) But you'll pay taxes at your higher rate and (if you're wealthy) you could create gift-tax issues for yourself when you finally transfer the money to your kid. By "wealthy," I mean you plan to give away more than $1 million to individuals over your lifetime. If you're in that bracket, definitely talk to your estate-planning attorney first before starting any funds for your kids.
Roth IRAs. These are great: Contributions and earnings are entirely tax free in retirement, and Roths, like other retirement funds, aren't counted in financial aid calculations. But kids can have a Roth only if they have earned income at least equal to the amount they (or you) want to contribute. (The maximum contribution these days is $4,000 annually.) Earned income means wages; allowances and gifts from relatives don't count.
Variable annuities. Anyone who's read my columns for awhile knows that I'm not a big fan of variable annuities for most investors (and that's putting it mildly). Most VAs are overpriced, oversold and just generally a bad idea. But they do have some advantages when used for kids. There's no contribution limit or earned income requirement, as with Roths, and they aren't counted in financial aid calculations. Big downsides: Your kids will get clobbered by taxes when they withdraw the money in retirement, since earnings are taxed as income, and withdrawals before retirement are penalized. (If you held the investments directly, outside a variable annuity, you'd qualify for the low capital gains tax rates.) If you are considering an annuity, go for a cheap one, like the ones offered by Vanguard.
Life insurance. Bleah. Kids don't need life insurance, and your money will go a lot farther if you're not paying for insurance you don't need, plus commissions and an insurance company's overhead.
Making sure they don't blow it
What if you're worried about your child raiding the money prematurely? Your control is limited with all but one of these options: holding the investments in your own name. Otherwise, at some point -- certainly by age 25, if not before -- your kid will have access.
If that unnerves you, you can either opt to keep the funds in your own account or spend a substantial wad on elaborate trusts designed to dole the money out over time.
But bear in mind that your children's future fortune will be worth less than $27,000 at age 18. The real growth will come over the following decades. While prematurely raiding their cache might prevent them from achieving the million-dollar kitty you want them to have, it's not like they'd be able to spend seven figures on a car or decorating their dorm rooms.You can warn them about the folly. You can encourage them to see the light. You could even threaten to cut them off financially.
But in this, as in so many other areas of parenting, you may just need to keep your fingers crossed -- and let your kids make their own mistakes.

[Greenstream]

The Basics
4 secret millionaires' road to riches
They're from modest backgrounds, and they've faced plenty of hurdles. But these folks learned how to slowly, steadily build wealth without drawing the least bit of attention.

By Liz Pulliam Weston
You're probably surrounded by them.

They live in modest homes, drive older cars, brown-bag their lunches. They don't look like millionaires. And yet they're worth seven figures.

Almost a decade ago, the book "The Millionaire Next Door" alerted America to these quiet-living folks who accumulate wealth while their neighbors spend themselves into debt.

Every day, more people join the ranks of the secret millionaires. Some of them post on the Your Money message board. I thought you might like to meet a few of them and learn how they did it.

The best revenge
Who: Linda, 52

Where: Houston

Net worth: just passed the $1 million mark, including $150,000 in home equity

Her tips: Get educated for a high-paying job; max out your retirement accounts; take some risk; buy disability insurance

Linda's story sounds a lot like a country song.

She dropped out of her East Texas high school at 16. She got married, divorced and then married again. She was 20 and five months pregnant when her husband was killed in a Christmas Eve auto accident. Seven weeks later, her father dropped dead of a heart attack.

Her mother moved in with her. After years of supporting her mother and son, Linda finally remarried, only to get divorced again after giving birth to another son. Eventually, her younger son decided to live with his father, and Linda ended up paying child support.

Then at 48, she developed a crippling case of lupus that forced her to quit work.

So how in the world did this woman become a millionaire?

Linda traces the start of her journey back to the dark days after her first son was born. The husband who died in the car wreck had failed to change the beneficiary on his life insurance, Linda said, and her in-laws kept the proceeds.

"I was broke, uneducated and had no medical insurance," Linda remembered. "I owed the hospital and doctor for my son's birth and owed for my husband's funeral. My treatment by my in-laws made me furious, so I decided I'd show them!"

Linda started reading the classifieds in the Houston Chronicle and noticed a lot of ads offering high-paying positions for pipe designers, an engineering job in the oil and gas industry.

"I thought, 'How complicated could that be? (A pipe is) a tube with a hole in it,' " Linda said. "I called a community college that was a hundred miles away and asked if they taught pipe design, and they said, 'Sure, but late enrollment ends tomorrow.' "

Video on MSN Money
Video: Retirement planning for baby boomers

What can boomers expect to get from pensions and Social Security, and what can they do to build their nest eggs?

Linda hustled to sign up and sold most of what she owned, including her television and stereo, to help pay for school. After graduating with her two-year degree, she moved her family to Houston and went to work in June 1978 for $4.95 an hour. Over the years, her pay rose to $40 an hour, or more than $80,000 a year -- "not bad for an AA degree," as she put it.

After working for several years, she was offered the opportunity to start investing in a 401(k), and she grabbed it. She initially split her money between a stock fund and a bond fund, but eventually shifted more into stocks to get a higher return.

"I knew if I ever had a hope of retiring, I'd have to be aggressive in my investments," Linda said. "Through bull and bear markets, I've stayed almost 100% in stocks all this time. I've kept it diversified among U.S. and international and a small amount in emerging markets. I am just now beginning to move some assets into less-volatile holdings, but still have about 75% in stock funds."

She made another smart decision: buying long-term-disability insurance through her employer. That policy now pays her $60,000 a year, about two-thirds of the salary she was making when her disability forced her to quit work in 2000.

Four years ago, she remarried. She convinced her husband, who had no retirement savings, to start contributing to his 401(k), but the bulk of their current wealth came from the years when she was making $60,000 or less and supporting her children and mother.

"All in all, I can't believe I've managed to accumulate as much as I have," Linda said. "If I can do this working from the hole I started out in, anyone can. All it takes is discipline."

Linda said they live modestly in an "average middle-class neighborhood." Their cars, a 1998 Camry and a 2004 Corolla, are paid for. Their big indulgence is travel: They've been to Europe several times and enjoyed cruises to Scandinavia, Russia and Alaska.

"Other than that, we live quiet lives and try to help our kids and grandkids as much as we can," Linda said. "I'm sure my neighbors would be shocked to learn we have assets anywhere near what we do. Especially when they see me working in the garden in stained clothes and with no makeup on, it would be hard to believe I wasn't a hired gardener at someone else's house!"

Rags to riches to rags to . . .
Who: Ed, 65

Where: Plano, Texas

Net worth: nearly $2 million, including $350,000 in home equity

His tips: Buy (and hang onto) real estate; invest in your 401(k); watch your spending

Ed is another Texas high school dropout who's had his shares of ups and downs, surviving a harrowing real estate recession and losing $1.5 million in the dot-com bust.

Ed immigrated to the U.S. as a teenager and spent nine years in the military, including a tour in Vietnam. By the time he was discharged, he had his high school equivalency degree plus three years of college study under his belt. He got a job working on computers for a large corporation.

"My wife and I saved diligently and purchased our first house in 1966," Ed said. But the commute to his job was over 100 miles a day, so they decided to buy another home closer to work and rent out the first house.

That was the start of their real estate empire. The couple continued buying rental properties and did well -- right up until the Texas housing market crashed in the mid-1980s, a victim of lower oil prices that cratered the state's economy. People left Texas in droves, and suddenly the couple had vacant rentals as well as a mortgage on a newly purchased, $250,000 home that carried a 16.5% interest rate.

Many other landlords in similar situations let the banks foreclose on their vacant properties. But Ed and his wife hung on, using the savings they had built up to pay their mortgages and doing all maintenance chores themselves. Slowly, the market recovered.

Video on MSN Money
Video: Retirement planning for baby boomers

What can boomers expect to get from pensions and Social Security, and what can they do to build their nest eggs?

Ed retired from his job at age 50. He rolled his retirement accounts, including a 401(k) and a profit-sharing plan, into a self-directed individual retirement account.

"I was very aggressive in the market during the dot-com years," said Ed, whose net worth peaked at $3 million. "On my best day, I made $102,000 . . . and lost $104,000 on my worst day."

Once again, the market turned against him, and he wound up losing half the couple's wealth in the 2000-2001 bear market.

As before, the couple refused to give up. They began selling their investment properties to supplement their income and moved their retirement portfolio into mutual funds, bonds and cash. Today, they are "back on the road to recovery" with a net worth near $2 million and an annual income in retirement of $80,000, Ed said.

But the careful buying habits of a lifetime haven't changed, he said. "My wife still clips coupons and is always on the lookout for sales."

Ed said they have never talked about the peaks and valleys of their wealth with family members or friends, who he says would be shocked that they have such a high net worth. His wife in particular is eager to keep their secret, Ed said: "She is afraid that envy would interfere in her friendships."

House-rich and frugal
Who: Lynn, 46

Where: Bay Area, California

Net worth: about $1.2 million, with $650,000 in home equity

Her tips: Contribute to retirement accounts; have a good-sized emergency fund; drive older cars; watch your spending

Living in an area with a high cost of living, as Lynn does, is a double-edged sword.

Lynn's $90,000 salary as an account manager doesn't go as far as it might in, say, Kansas. But her net worth has benefited mightily from the recent run-up in real estate prices.

Lynn and her husband, who was then a general contractor, bought their current home for $200,000 in 1995 and spent the next decade fixing it up. They did the work as they could afford it, charging the expenses to their Visa card but paying the balance in full every month. (They used the rewards points they earned this way to take their vacations.) The house is now worth more than $850,000.

Along the way, the couple continued funding their retirement accounts, a $35,000 emergency fund and a college plan for their teenage son, which together constitute slightly less than half their net worth.

Lynn is now the sole breadwinner as her husband starts up a new production business. They continue to live as they always have, looking for economies large and small.

"I don't use any magic; I've just always been frugal," Lynn said. "I learned to stretch from my foreign-born mom."

The couple drive older cars, a 1992 sedan and a 1995 van, both maintained regularly so they'll last. Lynn brings her lunch to work every day and makes or bakes gifts for the holidays. Parties are potlucks, and they've so far resisted the urge to upgrade their other entertainment options.

"We don't own a plasma TV or have a game room," Lynn said. "In fact, the TV in the living room cost me $45 at a garage sale, but the screen is 25 inches and the color is great."

Other ways she saves money include:

Buying food at a grocery outlet.
Using half a cup of laundry detergent for each load versus a full cup.
Buying cleaning supplies at a dollar store.
Cooking most meals at home (although they eat out once a week as a family for about $30 a pop.)
Using plastic grocery bags to line small wastebaskets.
Waiting until movies come out on DVD. It's "cheaper and quieter, too," she says.
Buying clothing at Ross and shopping early in the day for the best savings.
Avoiding discount warehouses. "I stopped shopping (at Costco) about nine years ago when I realized I was overspending in a feeble attempt to save money."
Their lives are focused on family, friends and the community, she said. They donate to charity, and she volunteers at two community organizations.

"In our area, we would never be considered 'wealthy,' " Lynn said, "but we try to enjoy our time on this earth."

Her only regret: Starting late
Who: Candace, 45

Where: New York metropolitan area

Net worth: about $1.1 million, with $225,000 in home equity

Her tips: Own a home; stay out of debt (other than a mortgage); contribute to retirement accounts; invest automatically

Candace credits her father with encouraging her to avoid debt and save money. Currently she saves about 40% of her gross income. It helps, she says, that she's single and has no kids.

"Since I only answer to myself, it's easy to limit my spending," Candace said. "My luxury is getting my hair highlighted -- a must because it makes me feel good about my appearance. Expensive hair, cheap clothes work for me. I exercise by running on the boardwalk, so no gym costs, either."

Candace said she built her wealth by contributing to her 401(k) and IRAs and by staying in her job as a civil servant for 18 years, long enough to build up both her pension and her salary.

Video on MSN Money
Video: Retirement planning for baby boomers

A historic transfer of U.S. wealth is coming, but it will not make up for small nest eggs.

"I have found that automatic investing is a great way to save money," she said. "I've learned to live without the cash, and the funds are moved to savings every pay period, so I don't have to remember to do it. With automatic investing, your savings grow quickly."

She invests in index funds, which mimic stock market benchmarks. Her one regret is that she didn't start investing sooner.

"I didn't get into stocks until my late 30s," Candace said. She plans to keep the bulk of her portfolio in stocks, which should help give her the inflation-beating returns she'll need to fund a long retirement. She also hopes to leave an inheritance to her younger relatives.

"My goal is to bequeath a sizable amount of money to each of my nieces and nephews," she said, "so that they can have the seeds to wealth."

Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board.

Published Feb. 19, 2007

[Greenstream]

Sudden Money TM: Managing a Financial Windfall
by Bradley, Susan

[Greenstream]

How to keep your mind sharp: Preventive action

Worried about memory loss? Here are eight tips you can follow now to help prevent memory loss in the future.
From MayoClinic.com

Keeping memory loss at bay as you age isn't just about keeping your mind in shape, though that's a major component. You can maintain your sharp mind as you get older by making healthy choices that keep the rest of your body in top form. Follow these tips now to prevent memory loss later.
Exercise your mind
Just as physical activity keeps your body strong, mental activity keeps your mind sharp and agile. One way to do this is to continually challenge yourself by learning new skills. If you continue to learn and challenge yourself, your brain continues to grow, literally. An active brain produces new connections between nerve cells that allow cells to communicate with one another. This helps your brain store and retrieve information more easily, no matter what your age.
How can you challenge yourself? Try:
• Learning to play a musical instrument
• Playing Scrabble or doing crossword puzzles
• Interacting with others
• Switching careers or starting a new one
• Starting a new hobby, such as crafts, painting, biking or bird-watching
• Learning a foreign language
• Volunteering
• Staying informed about what's going on in the world
• Reading
A mentally stimulating job, taking classes that interest you or even just reading more can help you maintain your memory longer as you age.
Stay physically active
Research links physical activity with slower mental decline. Exercise increases blood flow to all parts of your body, including your brain, and might promote cell growth there. Exercise also makes you feel more energetic and alert. The best part is that you can make it fun. Pick an activity you enjoy, whether it's doing yardwork or walking your dog. Exercise for at least 30 minutes most days of the week.
Start by simply increasing your physical activity level. Park your car farther away and walk the extra distance. Take the stairs instead of an elevator. When watching TV, ride a stationary bike. Just get moving. Regular physical activity can help you think clearer, feel better and lower your risk of many diseases.
Develop healthy eating habits
Eat a diet rich in fruits and vegetables. Many of these contain antioxidants — substances that protect and nourish brain cells. And antioxidants may help prevent cholesterol from damaging the lining of your arteries and slowing blood flow to your brain. Foods high in antioxidants include colorful fruits and vegetables, such as oranges, berries, broccoli, spinach, carrots, sweet potatoes and tomatoes. In most cases, you're far more likely to gain health benefits from eating whole foods than by taking supplements, in pill, capsule or other forms.
Drink alcohol in moderation, if at all
People who drink heavily for years can experience permanent brain damage due to poor nutrition, and they're at higher risk of developing memory problems and dementia. Drink alcohol moderately, if at all. For women and anyone 65 or older, that means no more than one drink daily. For men under 65, drink no more than two drinks daily.
Evidence shows that moderate alcohol consumption may prevent memory loss, though it isn't clear how. But don't use this as a reason to start drinking if you don't already drink.
Manage your stress
Keep your stress to a minimum. When you're stressed, your brain releases hormones that can damage your brain if you're exposed to them for days at a time. And chronic stress can make you feel depressed or anxious — feelings that can interfere with the way your brain processes memories.
Take a break. Even if you have only a few minutes to yourself, use it to breathe deeply and relax. Then look for long-term stress solutions, such as simplifying your life, getting some exercise or cutting out some activities.
Protect your head when exercising
Head trauma can increase your risk of developing Alzheimer's disease. People who participate in sports such as running and swimming, which have a reduced risk of head trauma, have lower rates of memory loss. Take precautions to protect your head; for example, wear a helmet when riding your bike.
Stop smoking
You can add memory loss to the long list of health problems that come from smoking. Smokers may have twice the risk of getting Alzheimer's disease as do people who have never smoked. Stop now — it's never too late. If you quit smoking now, you can still reduce your risk of memory loss later in life.
Talk to your doctor
Discuss your concerns about memory loss with your doctor. He or she can look at your overall health and come up with other strategies for preventing memory loss as you age. For instance, if you have a family history of Alzheimer's disease, other strategies for preventing that disease might prove helpful to you.
Seeing your doctor regularly also means you'll have routine medical exams to monitor your blood pressure, cholesterol level and blood sugar level. Also make sure your thyroid gland is functioning normally. These are relatively easy to check and are good indicators of what's going on inside your body.

[Greenstream]

10 tips to a prosperous retirement
By Mark Terry • Bankrate.com


Keep in mind these two hard-and-true facts when planning for your retirement:

1. You want to have enough money to enjoy a comfortable lifestyle, and
2. You don't want to run out of money.

But how can you guarantee both? Morningstar and T. Rowe Price recently presented a webinar that addresses retirement planning. (Registration is required, but the session is free.)

Below are some tips from the webcast offered by Christine Fahlund, certified financial planner at T. Rowe Price.

1. Try to save approximately 15 percent of your salary each year toward retirement.

This is a rough estimate suggested by Fahlund and should include money your employer might match toward your contributions, plus money you invest or contribute to IRAs or other investments. She says that this 15-percent savings rate will result in assets that will produce about 50 percent of your current salary.

2. When calculating your potential retirement income, take into account your investments, Social Security, pensions, part-time employment and possible income sources such as rental property.

3. If you're lagging behind where you think you should be, try to increase your annual contributions above 15 percent and consider putting annual raises, bonuses, cash gifts or inheritance money into retirement investments rather than spending these windfalls.

4. You can avoid or defer taxes by contributing to IRAs or investing in tax-deferred annuities. Talk to a financial planner for assistance.

5. If you're not completely happy with the size of your retirement nest egg when you approach age 65, consider delaying retirement for a few years.

6. If you work for an employer offering a retirement plan such as a 401(k), 403(b), 457, SEP-IRA or ESOP, maximize your employer's matching funds.

7. If you change jobs, do not cash out of your retirement plan.

Roll the proceeds over into the new company's retirement plan or into a rollover IRA. If you're approaching age 55 and wish to retire early and begin taking withdrawals, then leave it where it is. You can tap a company retirement plan at that age, but would have to wait until age 59 ½ to withdraw penalty-free from an IRA.

8. Diversify your portfolio among many asset classes. This helps you maximize your return on investment while decreasing volatility.

9. This is tricky, but try to determine what percentage of your current income you want to live on.

Although 70 percent is sometimes given as a rule of thumb, there is no set amount, and it will vary from individual to individual. Keep in mind that you may be able to decrease certain expenses such as mortgage payments and car payments, but medical bills (or even better, travel expenses) may be higher. It's worthwhile to keep in mind that if you retire at the age of 65, you should plan -- or at least hope -- to live another 30 years.

10. Finally, when you do retire, plan on withdrawing only about 4 percent of your savings during the first year.

Then give yourself a cost-of-living raise each year by increasing the amount withdrawn in the first year by 3 percent. This low withdrawal rate will increase the probability that your assets will last for 30 years.

[Greenstream]

fee-only financial planners

More to come. Feel free to add.

[Greenstream]

What Color Is Your Parachute?: A Practical Manual for Job-Hunters and Career-Changers...
by Bolles, Richard Nelson

[Greenstream]

Dividends and Capital Gains Planning After the 2003 Tax Act

By Kathy Krawczyk and Lorraine Wright

One goal of the Jobs and Growth Tax Relief Reconciliation Act of 2003 was to jump-start the economy and generate investment in the stock of American companies. As a result, the 2003 Tax Act included changes in dividend tax rates and capital gains rates applicable to individuals as taxpayers. The changes require both individuals and corporations to consider new tax planning strategies.
Capital Gains

Capital gains arise from the sale of capital assets, such as stocks, bonds, and land, at a price higher than the asset’s cost or basis. If a capital asset has been held longer than one year, the gain is considered a long-term capital gain. If the capital asset has been held for a year or less, the gain is considered a short-term capital gain. Short-term capital gains are taxed at the taxpayer’s regular tax rates. Before the 2003 Tax Act, long-term capital gains were taxed at 20% for taxpayers in the 25% or higher tax bracket (10% for individuals in the 10% and 15% marginal tax brackets).

Special rules applied to the gain on the sale of capital assets held more than five years where the holding period began after December 31, 2000. These gains were taxed at a maximum rate of 18% (8% for individuals in the 10% and 15% marginal tax brackets). Individuals in a tax bracket higher than 15% had the opportunity to make a special “deemed sale election” on their 2001 tax returns, which allowed them to pay the applicable capital gains tax on the asset as though it was sold on January 1, 2001, and then begin the holding period anew on that date. This was to be an irrevocable election.

The 2003 Tax Act’s provisions lowered the rates on long-term capital gains to 15% for taxpayers in the 25% bracket or higher and lowered the 10% rate to 5% for individuals in the 10% and 15% tax brackets, effective May 6, 2003, through December 31, 2008. This provision eliminated the five-year holding period rates of 18% and 8%. In 2008, the new 15% rate remains the same but the 5% rate drops to 0%. In 2009, the capital gain rates will return to the old 20% and 10% rates, and the five-year holding period rules and rates return. The act did not change the capital gain rates for collectibles (28%) and unrecaptured section 1250 gains (25%). The new capital gain tax rates apply to both the regular tax and the alternative minimum tax (AMT) calculations.

Economic effects. Past capital gain tax rate cuts have increased revenue to the federal government in the first two calendar years after the cuts, yet lost revenue thereafter. Some observers speculate that the increase in revenue arises from the unlocking effect of taxpayers who wished to sell their assets and invest in an alternative financial vehicle that might yield a greater return. The responsiveness to lower capital gain tax rates declines as taxpayers’ marginal tax rates decline. In addition, according to Congressional Research Service Report of Congress—Economic and Revenue Effects of Permanent and Temporary Capital Gains Tax Cuts, Updated January 29, 2003 (issued February 26, 2003), the amount of tax revenue decreases as the capital gains are taxed at lower rates. Finally, a capital gains tax cut induces stock sales, which causes downward pressure on stock prices in the market.

One reason Congress gave for reducing the capital gain tax rates was to stimulate consumer spending. The House Ways and Means Committee noted, however, that savings from the capital gains tax cut would be concentrated among higher-income individuals, and as a result the savings were less likely to be spent and would produce only a small economic stimulus.

According to the House Ways and Means Committee Report on Jobs and Growth Reconciliation Tax Act of 2003, HR2 (issued May 16, 2003), “In tax year 2003, the capital-gains tax cut which only covers eight months of the year is worth $30,700 to millionaires, but only $42 to households with incomes between $40,000 and $50,000. Sixty-one percent of the benefits from the capital-gains dividend tax cut go to only 2% of households with incomes over $200,000. IRS data for 2000 show that those with incomes over $500,000 accounted for 57% of all capital gains and dividends, but comprised only 0.5% of taxpayers and accounted for only 17% of income from all sources.”

In contrast, according to the aforementioned Congressional Research Report, the capital gains tax accounts for less than 1% of income taxes for the bottom 70% of taxpayers.

Because the 2003 act’s capital gain rate reductions are temporary, they may raise revenue initially but lose a larger amount of revenue in the long run. By appropriately timing the sale of capital gain assets, a taxpayer is able to choose among different tax rates and rates of return. According to a 2003 report by the Congressional Research Service, a similar event occurred as a result of the 1986 Tax Act. When capital gain tax rates rose from 20% to 28%, there was a rise in capital gains taxes collected, from 4.22% of GDP in 1985 to 7.6% in 1986 (before the rate increase was effective); it then fell to 3.2% of GDP in 1987.

Effects on individual taxpayers. The lower capital gain tax rates enacted by the 2003 Tax Act effectively eliminated the five-year holding period election until 2009. Taxpayers that previously made this election and recognized some capital gain on their 2001 tax returns might consider filing an amended 2001 return if Congress permits revocation of the deemed sale election in subsequent legislation.

An additional problem arises for a taxpayer who sells assets that are being held long term in order to take advantage of the five-year holding period rules. If these assets are sold in order to take advantage of the current lower rates, the replacement assets must be held another five years in order to take advantage of the special five-year rates in the future. The taxpayer must also be sure the like-kind exchange rules do not apply to the transactions.

Planning opportunities and consequences. Taxpayers can currently give up to $11,000 in assets per year to family members without incurring a gift tax. The new capital gain tax rates thus present a good tax planning opportunity. Taxpayers can gift appreciated capital assets to children over age 13 (to avoid “kiddie tax” rules). The children could then sell the assets now and pay a 5% capital gain tax rate, or wait until 2008 and pay a 0% capital gain tax rate (assuming their other income is low enough). The children can then use the money to fund college expenses or start a business, or give it back to their parents or grandparents.

One negative side effect of the reduction in the capital gain tax rates may be a reduction in charitable contributions of appreciated capital assets. Taxpayers may be tempted to sell appreciated capital assets themselves rather than contributing those same assets to charity.

Dividends

Before the 2003 Tax Act, dividend income was taxed to individuals as ordinary income at their regular marginal tax rates. The act changed the tax rates applicable to dividends in an indirect manner. First, it increased net capital gains by qualified dividend income for purposes of applying the maximum capital gains rate. At the same time, the act reduced the maximum capital gain tax rates for individuals, as previously discussed. As a result, it effectively lowered the tax on individuals receiving qualified dividends to 15% (5% if they are in the 10% or 15% regular tax bracket). It does not change the character of dividend income: Dividends are still considered ordinary income and cannot be offset against net capital losses.

Under the 2003 Tax Act, qualified dividend income is defined as dividends received during the year from domestic corporations (both publicly traded and private) and qualified foreign corporations. Dividends that are excluded from the definition of qualified dividend income include the following:

Dividends from tax-exempt organizations;
Dividends from certain mutual savings banks;
Dividends deductible under section 404(k) paid on employer securities;
Dividends received to the extent the taxpayer is under an obligation to make related payments for similar positions;
Dividends from real estate investment trusts (REIT) or regulated investment companies (RIC), unless they come from qualifying dividends that the REIT/RIC received; and
Dividends on stock not held more that 60 days out of the 120-day period beginning 60 days before the stock’s ex-dividend date (90 and 180 days if preferred stock).
As noted, dividends from REITs are excluded from qualified dividend income and are ineligible for the 15% rate. REITs by definition must pay out at least 90% of their taxable income to shareholders, and receive a dividend paid deduction for this amount. This combined effect allows a REIT to bypass the corporate tax. The 15% rate will, however, apply to capital gains on the sale of REIT stock, REIT capital gain distributions, REIT dividends attributable to dividends received by REITs from non-REIT corporations, and REIT dividends to the extent they are attributable to income subject to tax by the REIT at the corporate level (built-in gains).

A qualified foreign corporation is defined as a foreign corporation incorporated in a U.S. possession or eligible for benefits of a treaty with the United States that includes an exchange of information program. It also includes nonqualified foreign corporations if their stock with respect to which the dividend is paid is readily traded on a U.S. securities market. The 2003 Tax Act specifically excludes from the definition of qualified foreign corporations any foreign personal holding company, foreign investment company, or passive foreign investment company.

Like the capital gain rate changes, the reduced dividend tax rates are effective for taxable years beginning after December 31, 2002, through 2008, after which the tax rates in effect before the 2003 Tax Act return. During 2008, the 5% tax rate for dividends and capital gains received by low-income bracket taxpayers is eliminated. There is one important difference in timing between the new capital gain tax rates and the new dividend tax rates: The new 15% rate applies to dividends received after December 31, 2002, but does not apply to long-term capital gains until May 6, 2003.

To accommodate the reporting requirements associated with dividends, the IRS has modified Form 1099-DIV to separately report qualifying dividends and net capital gains (both pre– and post–May 6, 2003). Form 1040 Schedule D has also been revised to add dividends to capital gains for purposes of the special tax calculation for lower capital gain tax rates. No guidance from the IRS currently exists related to estimating qualified dividends for purposes of estimated tax payments.

Interaction with Other Taxes

The 2003 Tax Act changes in tax rates on capital gains and dividends affect other areas of the tax law as well. It specifically lowers the accumulated earnings tax and personal holding company tax rates to 15% percent, and provides that the lower capital gain and dividend rates apply to the AMT calculation in addition to the regular tax calculation. In addition, the dividend rate differential affects the calculation of the foreign tax credit limitation when an investor receives dividends from a foreign corporation.

To eliminate a double benefit, dividends that qualify for the lower tax rates are not included in investment income for determining the investment income limitation for interest expense. In addition, extraordinary dividends will create a long-term capital loss upon the sale to the extent of the extraordinary dividend. Finally, amounts treated as ordinary income from the disposition of section 306 stock will qualify for the reduced dividend tax rates.

Effect of the dividend rate changes on the economy. According to the Federal Reserve Board’s survey of consumer finances, 17% of U.S. families received dividends in 2000. The receipt of dividends is related to income. According to Leonard E. Burman and David L. Gunter (“17 Percent of Families Have Stock Dividends,” Tax Notes, May 26, 2003), less that 4% of families with income under $200,000 received dividend income, while 58% of those with income greater than $200,000 received dividends.

The Congressional Budget Office’s “Cost Estimate for H.R. 2” estimated the reduction in revenue due to reductions in taxes on dividends and capital gains (combined) as $149 billion over the eight-year period it forecast. Specifically, the decrease in government revenues for each year 2003 through 2010 was predicted as follows (amounts in millions):

2003 -- $ 4,312 2007 -- $25,717
2004 -- $18,434 2008 -- $26,747
2005 -- $20,550 2009 -- $19,180
2006 -- $23,123 2010 -- $10,025

Planning for the effect of the dividend rate changes on individual taxpayers. The reduced tax rates for capital gains and dividends increase the attractiveness of corporate stock as compared to debt instruments. As a result, corporate and Treasury bonds, and other fixed income securities like certificates of deposit and money markets, have become less appealing to individual taxpayers, although U.S. corporations still get tax benefits from issuing debt financing, in the form of deductions for interest expense, that they do not get from issuing stock. The trade-off between the dividend tax rate benefits to individual shareholders and the interest expense tax benefits to corporations will differ between corporations and may not increase the availability of qualified stock investments.

Some speculate that U.S. markets may instead see an increase in preferred stock or other hybrid securities that are treated as stock for tax purposes but have some of the nontax benefits of debt. Investors must ensure that an investment in preferred stock generates dividends qualifying for the reduced rate. A BusinessWeek.com special report (“What the Cuts Mean to You,” by Mike McNamee, with Susan Scherreik) notes that “two-thirds of the $208 billion market in preferred shares won’t qualify for the tax break on dividends, because their payout is more akin to interest than to corporate dividends,” and predicts that investment in preferred-stock mutual funds may increase to ensure that the dividends qualify for the reduced tax rate.

Corporate and Treasury bonds, and other fixed income securities like CDs and money-market accounts, may make better investments for pension plans, IRAs, and other tax-deferred accounts. Taxpayers will not have to pay taxes on income from these investments until they receive distributions from the accounts. Although these investments do not qualify for the reduced dividend and capital gain tax rates, there are many nontax reasons for using a retirement account. The appeal of other tax-deferred investments, such as variable annuities, may be diminishing, however. Investors may find it cheaper to pay taxes each year on dividends and capital gains at the low 15% rate (especially if they are in the top brackets) rather than defer income but pay ordinary tax rates when the income is received.

The 2003 Tax Act provisions equating the tax rate for both dividends and capital gains may also reduce the importance of tax planning related to structuring transactions to ensure that any gain recognized by individual shareholders is classified as capital gains rather than as dividends. Consider stock redemptions as an example. If a corporation redeems its stock, the redemption proceeds are treated as dividend income to the individual taxpayers unless the redemption can be treated as an exchange and accorded capital gain treatment under IRC section 302. Prior to the 2003 Tax Act, individuals preferred exchange treatment as opposed to dividend treatment, because capital gains were subject to the beneficial lower capital gains tax rates while dividends were subject to ordinary income tax rates. Now, both types of income are subject to the same tax rates.

The reduction in the dividend tax rate also narrows the tax difference businesses have to consider when debating between operating as a C corporation or as a pass-through entity such as a partnership. Although operating as a C corporation will still mean a higher tax cost due to double taxation of income, that gap has narrowed. Other nontax factors may become more influential in the decision of which entity to use.

Most tax law revisions benefit industry sectors differently. The reduced dividend tax rate would seem to benefit established companies, such as manufacturers and banks, which have a history of paying dividends. Conversely, the technology sector would not benefit, because such companies typically reinvest earnings into additional research and development rather than paying dividends. Microsoft’s recently announced dividend policy, however, may mark the start of a different trend.

One last planning consideration would be the frequent practice of borrowing funds to purchase dividend-paying stocks. Assuming the interest is deductible as investment interest, this will generate a tax savings at regular tax rates, while the resulting dividend income is taxed at the preferential 15% rate. This can create positive after-tax cash flows for individual investors. The big limitation to this approach is the investment interest limit. Dividends cannot be considered investment income and also be subject to the 15% tax rate, so investors need other sources of investment income in order to fully deduct the investment interest expense.

http://www.nysscpa.org/printversions/cpaj/2004/1004/p36.htm