A.I.M. Users Bulletin Board

[OldAIMGuy]

Hi Hook, Re: Incorporating vs private investing............

Only if you anticipate all your income coming from short term capital gains is incorporation a tax logical idea. Remember that long term cap. gains are only taxed at 15% currently. Any income you take from a corporation will be taxed as regular income. So you might generate long term gains but draw salary at much higher income tax rates.

Generally AIM will generate essentially all Long Term Cap. Gains after the first 12 months. This is about the most tax efficient method of generating income around.

I'll wait for some of our tax consultants to chime in on this. I believe I'm right, but that doesn't make it so!!

Re: your Cash Reserve...............

Money market rates work fine here. They pay far more than most stocks' dividends. You can "ladder" your cash with money market funds, short term bond funds and slightly longer term bond funds, but the overall effect may not be worth the lower "liquidity" of the reserves.

Best regards, Tom
PS: for the last 21 years I've made my entire living expenses from the stock and bond markets. There have been some rough spots along the way (think 1987, 1990, 1993, 1998, 2000 thru 2002) but AIM and reasonable equity selection and proper Equity/Bond balance have kept the income adequate.