I heard that there is this type of IRA that is great for real estate purchases and/or investing where you can uses it to buy multiple homes and cash out all the profit with out much taxes.... is that true?
204396
It is true...you can use a self directed IRA to defer your tax obligations until your retirement age. Any money that you place into the IRA and any profit that you make can be kept into the IRA account and your not required to pay taxes until you make with drawls at your retirement age. Of course you always want to consult a CPA professional on the specific requirements of this program. But I believe you have it correct in a generalized format. A lot of hard money lenders use that vehicle or a trust to minimize their tax obligations.
353741
Nope.  That is the risk you take with the market and using brokerage firms to manage your hard earned money.  All of the paperwork and even your quarterly statement indicated that these investments were no guaranteed, insured and could lose value.  It is a hard pill to swallow, but you are not alone.  The great thing is that you get to pay these crooks to lose your money!  Sorry,.
479503
I see some interesting responses on here.  I disagree with the reverse mortgage suggestion.  Up front it sounds great to take out a mortgage and never have to worry about paying it.  Needless to say interest continues to accrue and as this person suggested it will be paid from the estate.  Many times however it requires the estate to sell the home to do so.  I would only suggest a reverse mortgage as a last resort.  \n\nThis situation is a sensitive one as many factors come into play.  Such as what is the value of his 401K, what other sources of income does he have and what other savings vehicles are available to him.  Since he is in his 60's he can withdraw from his 401K without a penalty although he is still subject to taxation on the lump sum distribution.  This is why it is important to know what other sources of income he does have and are those other sources taxable. \n\nIf he his paying a high mortgage rate there is some benefit to paying off his mortgage, but not if this severely depletes his liquid assets.  It is a complicated question and needs a full financial analysis to see if it is beneficial.  \n\nI would however avoid that reverse mortgage option in this situation.
275492
As lovely an idea that it, no it won't avoid any taxes. The only way to avoid the capital gains or ordinary income taxes on ivestments is for you to invest in a tertirement account like an IRA or Roth IRA or employee benfit plan.\n\nIt sounds like you own a business. Speak with your CPA to find out which plan is best for you. SOme examples are\n\nSEP\nSimple SEP\nSimple IRA\nSimple 401k\nRoth IRA\nTraditional IRA\n\nAS you can see, there are alot of choices. Each one has its benefits and srawbacks. Some are tax free and some are just tax deferred until retirement.\n\nIf these plans arent an option for you, look into index funds, they typically have low if not any turnover. \n\nTurnover=capital gains=taxes\n\nGood luck
70616
Yeah, but wouldn't it be counterproductive? Wouldn't your home equity loan's interest rate be more than your annual return on your IRA? Are you going to fund the IRA just to take the money out after tax time and pay back off the loan? \n\nIf you did that, it would seem like you would just face the tax penalties in next year's return. I'm still very new to IRAs and have little experience in the finance area. Investigate it and let us know what you find!
520439
In the lender's eyes, an investment property is much riskier to provide financing for than a second home. However, you cannot just call it whatever you want to try to save a buck.\n\nAs "Mazziatplay" stated, it has to make sense. A second home would typically be in a vacation area, for instance. If it is less than a few hours away, why would you need a second home there? These are the type of questions that the lender will ask. \n\nThere is a reason for the three types of classification of your residence. If you're untruthful on your application, it is fraudulent, no if's, and's, or but's...
585642
If a company is offerring you zero down on a list of foreclosed properties that they have in inventory, they are usually offerring something called "lease purchase option". Which means you pay a non-refunable option fee to lease a property. A portion of your payment gets applied towards your down payment should you decide to buy the place. It's an excellent program for people who have bad credit, but the drawback (and what they are hoping for) is if you ever miss a payment, you no longer will be able to purchase the property. If you ever do something like this, always record your option to protect your interest in the property.\n\nFind out how the program works and e-mail me. I will tell you exactly what they are doing and what to watch out for.  When it comes to creative real estate investing, I hold all the cards.\n\nRegards
16509
I've read most of Kiyosaki's books and found them to be sound advice rooted in reality and not in selling seminars like many of the current crop of real estate gurus. I've bought real estate with no money down long before I read Kiyosaki's books (or even Robert Allen). When I bought my first 3 unit building I was living in my car and working on commission only. Keep in mind, the real estate IS the collateral, along with your good credit. If you have no substantial income, consider finding a partner, or group of partners who do. I used to split real estate purchases with another individual who would qualify on the loan with me. I managed and maintained the property while he just supervised. Kiyosaki's advice is some of the best out there if his objectives truly appeal to you. Remember, Poor Dad was content just being just an employee and I know many people (the majority probably) who prefer that life. For that matter there is no reason you can't do it both ways, especially if you understand Kiyosaki's advice about smart money.
326803
I recommend low-cost mutual funds.  Vanguard has many good ones, and Fidelity has some very low-cost index funds.  Look for tax-managed funds, or tax-exempt bond funds.  Some bond funds are exempt from taxes in a particular state as well. However, tax exempt bond funds give lower returns.  You should talk to a tax advisor to see which way is better for you.  In stock funds, index funds tend to have lower capital gains than actively managed funds, and the returns are often just as good or better.\n\nIf your stock isn't already in a retirement fund, you can't just put it all in there at once.  You're limited to $4000/year in contributions. Do a Roth IRA if you can, but there's an income limit, and the stock sale may put you over that limit.  If you don't qualify for Roth, put what you can in a traditional IRA.  Either way, inside the IRA you can buy some of the mutual funds I mentioned.\n\nIf you can transfer $4000 worth of stock directly into the IRA and then sell it, that may avoid the capital gains tax on that portion.\n\nAny single stock is a high-risk investment, because it can go up or down quickly, so you can reduce your risk a lot by selling and diversifying (into those mutual funds.)  The bad news is that you'll have to pay capital gains taxes on the sale of your stock, especially if you've had it for less than a year.\n\nYou should also talk to a tax professional about the Alternative Minimum Tax, which can hit you if you have a large capital gain like that.\n\nBy the way, real estate has been fantastic recently, but it's showing signs of slowing down.  This may not be a good time to invest heavily in real estate.
22313
You're forgetting that interest is often tax-deductible. If you can take advantage of that, you aren't paying as much. And yes, some houses can double or triple in value in a relatively short amount of time. It all depends on where you buy.
608544
An individual is allowed to own a second house and still claim all the interest and property taxes on his return.  There are dollar limitations to the interest deductions however.  He should not claim it as a rental property, as that would create adverse tax effects when sold.\nIf your friend is wealthy enough to handle the additional house payment, I would suggest he spend a few extra bucks and consult with a competent tax professional.
432870
money market:  It is basically a mutual fund that invests in very short term debt instruments.  Normally it pays interest rates that are about currently 4% to 5% annually.\n\nMutual funds: these are managed pools of investment money. There are quite literally thousands to choose from.  Some are good buy many are not so good.  For a beginning investor, mutual funds offer a good option for long term investment.  Look to these companies for a wide variety of funds.  Fidelity, Vanguard, T. Rowe Price.  Look to this company for a selection of funds that invests in small cap stocks: Royce Funds.  Look to closed end funds to find funds that sell at a discount to net assets, a big plus.  GAM is one.  SWZ is another.  Both have excellent records.   IRAs.  There are two different kinds.  Roth IRAs and Traditional IRAs.  Roth IRAs in general offer investors the advantage that money earned in a Roth IRA is tax free, a very big advantage.  You can deposit up to $4000 annually into a Roth IRA with certain income limits which most people do not have trouble meeting.  After tax dollars are what are deposited into a Roth IRA.  Traditional IRAs are different.  Money deposited into a traditional IRA is not taxed until it is taken out.  But all money earned by a traditional IRA is taxed at the regular tax rate.  So investments made in a traditional IRA are best made in such things that would be taxed at the full rate anyway such as stripped U S bonds for example.  Variable annuities:  These are sold by basically insurance companies.  The insurance company then invests the funds into mutual funds that invest in the stock market.  The money earned in a variable annuity is taxed deferred until the annuity comes due.  I am not too familiar with the due date ramifications.  Something like 5 years or longer.\n\nIn my opinion Roth IRAs are a great deal.  \n\nOne thing I did not mention.  There is a penalty for withdrawing IRA funds prior to age 59 1/2.
27859
Yes you can.  And I recommend it.  ETrade IRAs give you more control and may be less costly.  I have been a customer of ETrade for over 5 years and the company has only gotten better as time goes on.  Their online instructions are easy to follow and there is always a live person to talk to (although try not to call during the peak time of day because you may have to wait more than 30 minutes to talk to someone live.)
672849
No, you cannot withdrawl it without a 10% penalty plus ordinary income taxes (probably around 28%). My opinion....you would be beter off rolling that money over into an IRA and just save for a while to raise money for home improvement projects.
330331
The best option for you to invest in Real Estate because the price is appreciating very fast throughout the country.\n     Remember , If ou keep the money in FDR or Bond in India, it will be taxable because it is deemed received in India. So whatever you want to save, you should consult with your bank to invest under Non Resident account only to make the income tax free in India.\n    You may also consider the option of keeping money in Banks  abroad where  interest is higher. But still I think best option is REAL Estate in India . \n    There are lots of tax deduction on the capital gain earned on sale of the flat or land.
311525
Hire an accountant who practices before the IRS.  If you have all the docs required, great.  If not, get them from your broker where you cashed in the IRA.  This one is a breeze
323069
First, it is not always optimal for you to pay off your mortgage. It is one of the few non-recourse loans available to you, and that lets you keep the upside while giving the bank the downside (they get the house, but nothing else if things go bad). \n\nAlthough I do not recommend negative amortizing loans, I would recommend that you change your goal of "paying off your mortgage before retiring" to "maximize my after tax wealth." Depending on your real estate market, and the interest rate on your loan (after tax interest rate of course), etc, it may be optimal to take the equity out, invest it in a way such that you can still draw from it to pay the increased mortgage payments... (i.e. do not use the extracted equity to buy a new Porsche).\n\nAdditionally, make sure that BEFORE you do teh 403b (unless they match in which case do the minimum required to get the match asap!), take advantage of the ROTH IRA. It has many advantages over a traditional IRA (untaxed at retirement, no required distributions at retirement), and the only disadvantage I can think of is the fact that you don't get the tax deduction today (although even this one is not entirely true depending on your income level). However, if you assume that tax rates will be higher at retirement (we all want to retire rich, right?) then the ROTH dominates teh traditional. Also, income tax rates are at historically low levels today, I'm assuming that our trade deficits and national debt levels will require increased taxes in the future... the ROTH is indifferent and protects you from such a development :)\n\nForget Universal Life. Start with Term, if you have a reason for life insurance at all. The rule of thumb would say that disability insurance makes more sense for younger workers than life insurance... Another rule of thumb: trust very few insurance salesmen, and those that you do trust almost always tell you that you need more than actual.\n\nBest of luck, hopefully this bit on personal finance helps.\nAs they say, it's just my $0.02!