Now that we’ve turned over the calendar to 2016, I thought it might be helpful to take a look at current 401(k) and 403(b) trends across the country. The marketplace is continuously changing, and 401(k) and 403(b) sponsors can maintain competitive and low cost plans by keeping current.
Stock markets tend to be pretty good at keeping investors up at night. Peaks, troughs, business cycles, corrections, and crashes are par for the course when investing in stocks. And for many investors this is just a little too much excitement.
For anyone uncomfortable with the risk of investing in stocks, bonds are often the first alternative. They won’t nock knock your socks off with huge returns, but bonds can provide steady income with less risk that your portfolio sours.
But when it comes to buying bonds, investors have a big choice to make: do you buy individual bonds or bond funds.
Unlike stocks, the choice between buying individual securities or a fund that includes individual securities has major implications.
Here’s a quick guide that explains what you need to know.
Investing is kind of like buying new shoes.
There are a thousands of options out there: running shoes, hiking shoes, dress shoes, and flip flops just to name a few. The right pair for you will depend on what you need them for, how big your foot is, and how much you want to spend.
There are thousands of options in the investment world too, from individual stocks and bonds, to mutual funds and ETFs, to managed accounts and automated platforms.
One question I hear a fair amount is, “with all the options out there, how do I know if my portfolio is right for me?”
Much like buying a new pair of shoes, the right portfolio for you matches your needs.
If you need new shoes to take your dog for a walk around the block twice a day, you probably won’t go out and buy ski boots. The same idea applies when investing.
4 Telltale Signs You’re in the Wrong Investments:
Borrowing money is a way of life for most entrepreneurs and business owners. I recently read that 80% of businesses rely credit to finance their ongoing operations.
Entrepreneurs often don’t have many options when it comes to procuring credit. And any time you don’t have collateral to put up against a loan, you’re venturing into the unsecured business loan market.
Many small business experts advise against taking out an unsecured business loan. The rates are high and the terms can be kryptonite to your bottom line.
But for many of us, unsecured business loans are our only option. If you ever find yourself in this situation, this post will cover 5 ways to improve your rate on unsecured business loans.
When someone mentions the word insurance, most of us think of one of three things:
- Aaron Rodgers doing a discount double check
- The GEICO Gecko using his British accent
- The coverage we carry on our cars, our home, our health, or our life
What most of us don’t think of is our long term disability coverage.
Since tangible assets like our cars and homes are easy to visualize, they’re often top of mind when it comes to insurance protection.
But what about the risk that we get sick or injured, and can’t work?
Long term disability insurance is meant to replace our income if this happens. And coincidentally, our ability to earn a living is probably our biggest and most overlooked asset.
Let’s take a moment to think about your ability to earn a living. Just imagine for a moment what your lifetime earnings will look like.
Your lifetime earnings includes every single paycheck you earn throughout your entire career. It counts every single raise, every single promotion, and every single bonus.
When you add them all together you’ll get a massive number. It will be far bigger than the value of your home, your car, and probably your retirement nest egg.
Your ability to go out into the work force and earn this money is your earnings capacity.
Now Imagine It’s Gone
Many people consider the possibility that they die, and the impact that would have on their family. But what if you were hurt or sick and unable to work?
Your family would be left with monthly expenses like a mortgage, utilities, and grocery bills. They’d also be left without your steady paychecks to afford them.
Plus there’s a chance you might need additional help from a caretaker if you’re permanently disabled. The end result? Higher expenses, lower income.
It’s More Likely Than You Think
If you’re thinking “that’ll never happen to me,” the statistics would disagree with you.
The social security administration says that 1 in 4 of today’s 20 year-old’s will become disabled for some period of time before they retire.
And if you’re under 45, the chances that you become disabled are far, far greater than the chances that you die.
Let’s Think About This
- Our earnings capacity is our biggest and most important asset
- Becoming disabled is far more likely than we realize
- Losing our earnings capacity could cause our family severe hardship
For small businesses, two topics are consistently near and dear to our hearts in presidential elections: taxes and health care costs.
There’s been heated debate on the issues during this election (and most for that matter). And while I’m no political expert, I’m confident our new president will push for changes that affect the small business community – both good and bad.
To help sort through negative ads, debate & media circuses, and smear campaigns, I’ve compiled the remaining candidates’ positions on taxes and health care.
I’ve sorted them by where each falls on the political spectrum with regard to their tax policies. We’ll start with most conservative, and work our way toward the most liberal.
Ted Cruz has notably emerged as a proponent for a flat tax. Cruz wants to tax all personal income and wages at 10%, and eliminate the estate tax and alternative minimum tax entirely.
On the theme of a flat tax, Cruz wants to replace the payroll and corporate income taxes with a 16% flat business tax. He also wants to eliminate tax on business profits earned abroad.
Cruz’s position is the most radical of the republican candidates, but the camp still claims that social security and medicare would remain fully funded after implementing his measures.
Interestingly the Tax Foundation, which is a group that supports lower tax rates, claims that Cruz’s plan would increase the federal deficit by up to $3.6 trillion over the next 10 years. With potential economic growth, that number decreases to $768 billion.
Cruz has also been outspoken against the IRS, and wants to relegate tax collection and enforcement to another arm of the treasury. He’s been critical of the IRS since their targeting scandal, and believes they should be made irrelevant through his tax plan.