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| Wednesday, May 30, 2007 |
| My family's story in Chinese stock market. |
Following our blog friend's post on Shanghai volume , I want to share with you my family's stories in China's stock market. My mom has been in the market since I was in the secondary school. She lost half of her capital after more than 10 year's investment. Up to two years ago, she was still struggling. However, since this year, every night when I talk to my mom, she will tell me how much more she could have earned if she had hold the stock longer, or had bought more. She put all our family savings into it now.
And one of our relatives, an 80 year old lady, frugal for her whole life, put all her money in the stock market too. She does not know how to use computer or internet. So she keeps calling my mom to help her excute the trade.
Yes, it is this scary! And I just can not persuade my mom to take the money out of the market. No way she will believe me when she sees the stock price going up so fast every day. Sometimes, I want to make up some emergency stories to ask her for moeny, because that's maybe the only way to ask her to get some of her money out of that market. But I will feel guilty if I lie. Very difficult situation :(Labels: international investment, International Student, Investment |
posted by Jacqui @ 12:48 PM | Add to del.icio.us
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| Monday, May 28, 2007 |
| How to better measure home prices? |
As shown in the previous post, the median price is far from an ideal measure of home prices. In this softened housing market, a change in the types of houses sold may give people a deceiving picture of increasing prices. Here is an article titled The Follies of Measuring Home Prices from Rich Toscano.
In short, the median house is really a moving target, and the "median price" does not account for the difference in these houses and is therefore subject to the following follies:
- Changes in who's doing the buying
. If only the rich are still buying the beachfront properties, we may see the median price increasing sharply in a declining housing market.
- Changes in what buyers are getting for the money
. "During the boom, as buyers reached the upper limit of what they could spend, they compensated for the lack of affordability by lowering their standards and buying less desirable homes. So for a couple of years, there, changes to the median price actually understated the extent to which individual home prices were increasing. Since the boom ended, the opposite has happened. Now, the extent to which buyers have been able to get more and more bang for their homebuying buck has not been entirely reflected in changes to the Median purchase price."
- Home improvements
- Seller concessions
. The above two have been covered well in the Media, which may value tens of thousands of dollars but not included in the median price.
One of the best solutions lies in the Case-Shiller Home Price Index (HPI), which measures market price changes based on repeat sales of individual homes. Here is a graph featuring a comparison between Median Price and Case-Shiller HPI on San Diego's housing market.
Looking at the Median Price (the red bars), you may think that San Diego's Housing market hit the bottom b/w 09/2006 -11/2006 and rebounded back this year. However, CS HPI (the blue bars) shows a consistent decline throughout. Which one is correct? Correlating with sales volumn, we known the latter is the true picture.
For more metro areas and longer periods, you can plot graphs on the http://macromarkets.com.
To get individual home value and neighborhood demographics, I found http://www.cyberhomes.com/ very useful.Labels: Economics, Housing, Investment, personal finance |
| posted by Yannick @ 7:06 AM | Add to del.icio.us
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| Friday, May 18, 2007 |
| Tips on finding a competent real-estate agent |
With a burst of U.S. housing bubble, affordable housing may finally come in a few years. I started to learn some knowledge on real estate investment a while ago. From what I learn, a competent real-estate agent is invaluable. Here is one interesting article from MSN titled Find a superstar real-estate agent.
Besides referral, the article listed eight questions to ask your candidate agents:
- May I see your resume? This is an interesting one. I have been interviewed by many people, and didn't expect that I can interview agents this way. I'll take this advice.
- What's your commission? Only relevance to a seller?
- What makes you special?
- How often will I hear from you?
- What's your plan for marketing my home? Seller only.
- How many transactions did you complete last year?
- What do you know about the neighborhoods where I want to live? I'm surprised that information on crime and school performance are not allowed to be disclosed by real estate agents. Again, asking for information sources such as Sperling's Best Places may come in handy.
- Are you a solo agent or part of a team? This may impact how you evaluate the performance of this agent.
Labels: Housing, How to, Investment, personal finance, Real Estate |
| posted by Yannick @ 7:04 AM | Add to del.icio.us
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| Thursday, April 26, 2007 |
| A whole new market for anti-depressant producers? |
Since there has been so many bad news for pharmaceutical companies for a while, I feel that there stocks may come to some historical low now. I started watching the news from this industry closely to look for a bargain time.
Today I got this news sent to my email: Lilly Receives FDA Approval For Antidepressant For Dogs.
My glasses literally fell down off my nose. I know that dogs get sick too, I know that dogs sometimes look sad too, but I do not know that they are "depressed" too. How do they diagnose a dog to be "depressed"? I guess some dogs become "suicidal" too? Where do dogs get prescription? From a psychiatrist, or from a veterinarian?
This is a great new market for anti-depressant producers. If dogs can be depressed, so can cats, birds... any pets. How many pets do we have in this country?
Maybe time to buy these stocks?Labels: industry, Investment, pharmaceutical |
| posted by Jacqui @ 7:11 PM | Add to del.icio.us
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| Sunday, April 15, 2007 |
| How much premium are you willing to pay for top university education? |
Since our last discussion about PhD's career choice, I came across an interesting discussion about paying for education in a forum.
"Case study: please see quick summary for more details.
A 17 yr old got into one of the top 5 schools (the $48k a yr type) and her parents make about $250k so she cannot get fin aid. She can get a free ride to a state school that actually has a lot of national merit scholarship finalists going there, so it's not a dump.
I turned the problem around countless times (mostly at around 3 am).
What would you wise fatwallers do? Right now I try to convince her that free undergrad is better than $200k top school, especially if she wants to go to grad school right after undergrad. Am I wrong to ask her that?
Personal experiences and/or any other advice are greatly appreciated.
Thanks a lot!
Edit: MIT vs. Ariz State honors college; her goal is med school.
Ok guys, thanks. More replies than I expected. I really appreciate this. Her parents are old friends of mine and they asked me for input.
I am glad to see that my main thinking gets somehow confirmed:
-want to go into engineering and work directly after undergrad: MIT no-brainer
-want to go to med school: ASU might not be a bad choice
Her parents are in their low 40s but they'd really like to semi-retire early (before 50). They have about $400k in assets. They came here I believe about 8 or 9 yrs ago and they started earning in the $200k range 2 yrs ago. They live frugally, no bmw, lexus, etc. Perhaps their only extravagance is some international travel. However, their thinking is that they can pay for med school, no questions asked. They also are afraid that her going to MIT might entice her to stop after undergrad and scrap the medical school plans. I also believe that the MD job security is better than life in a cube, even at GS or GOOG.
Right now she is depressed, she thinks that her dreams are being shattered by not going to a top school."
Many people joined the discussion, including graudates from state colleges, graudates from MIT, Princeton, Stanford, Johns Hopkins, and recruiting faculty at graduate schools or medical school. Many people faced similar difficult choice.
The thread originator concluded
"I am glad to see that my main thinking gets somehow confirmed:
-want to go into engineering and work directly after undergrad: MIT no-brainer
-want to go to med school: ASU might not be a bad choice"
I disagree, not just on his/her main thinking, but also on his/her summarization of the discussion. As I read through all the replies, I feel that the majority of the people do not regret what they chose--Ivy League or state college. Those who chose to go to top universities do not regret being in a school with "unusual culture where hacking and tinkering with things and figuring out how much bend there is in the rules are all valued" even though they came out of school with $10K debt, Those who chose state college felt happy that they left college without any debt, and went to good graduate school afterwards. These people emphasize that only the rank of the graduate school counts.
Yannick and I discussed this during the dinner time. We came for PhD program, which normally offers full fellowship or assistantship, so going to a top university was a no-brainer for us. If our kids someday face this choice, what shall we do?
At first, I was inclined to recommend the 17 year old girl to attend a state university. I was a TA for a class with more than 900 students in an Ivy League University. We had to divide the class into small TA review sessions. I was TAing two honor sessions, each with about 22 students. While I did see some very smart and hard-working students, I do not think that they got much attention from the professor. Some later came to me for recommendation letters, because the professor is not very accessible. Those famous professors in top universities are famous because they do research, they publish papers. They get recognition only by the number of papers they publish, or the level of the journal their papers get published. To publish papers, they had to squeeze their teaching effort. Pretty much every professor I know consider teachinga a burden. What's the point of paying $200K to a school where the professors never see you anyway, and do not pay much attention to teaching?
However, after the discussion with Yannick, I started to change my mind. I transferred from an Ivy League university to another top private university, so I do not really know much about public schools. I started TAing graduate course after my transfer, so I really do not know the undergraduate life well either. Yannick has been to both public and private universities, and his experience tells him that the course qualities at the private school are better than the public school he stayed even when they are ranked similarly ( I guess public school professors pay even less attention to teaching?) And more importantly, you see many more smart people in a top university, and you will learn and benefit from them.
Moreover, as I read through the discussion, I saw surviving bias in the replies from those state college graduates. It looks like that everyone is happy with their decision. However, most of the state college graduates who do not regret are people that survived well in the public schools. Most of them got admission to the medical school, or went to top universities for PhD programs later. I do not see many replies from people who chose public state universities and went to work afterwards. Where are they? Does that mean that anyone who face this choice will survive well out of the public school? I doubt it.
My hypothesis is: given a group of people who faced similar choice as described and who chose to go to public school, those survived well out of public schools tend to reply to the thread more than those who did not. 17 is a very young age, anything can happen. What if she decides not to go to graduate school? What if she gets to know people whom she should not know?
Only satisfied people responded. So we have to take some discount on these replies. There are people who dropped out from top universities, like Bill Gates, we can be sure that he does not regret. There must be a lot people who dropped out from public schools too, but we do not see them very often in the news.
Yannick and I do not belittle public schools. But I am very risk-averse. If our kids face the same decision, I think that we will let them choose MIT. After all, I know that they have a much higher probability of making good friends at MIT than at ASU, and with that, I will have some peace in mind. And if we have a daughter, I will sent her to MIT or Stanford, no question asked! She can bring back a very good husband, maybe better than Yannick (I have not found one yet, and will not :). $200K is a lot of money, but our peace of mind and our children's happiness are worth more than $200K, right?
Better start saving for our children now, and prepared to rent for a long, long time. I believe that the investment in education will give higher return than investment in real estate or stock market.Labels: Career, education, Investment, PhD |
| posted by Jacqui @ 8:50 PM | Add to del.icio.us
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| Wednesday, April 11, 2007 |
| Emergency fund comes before investment?! |
I shared my view on emergency fund in general earlier. At the end that post, I said that EF was a necessary step to start retirement savings and investments, without explaining it. This may seem to be a naïve question. However, I struggled with it when I got started and would like to share my experience here.
Emergency fund gives you a peace of mind which enables you to make better investment decisions. When I started to invest, I got several individual stocks, whose prices vary a lot. I intended to buy-and-hold, which was only possible when you are able to leave the money untouched even in emergency. It was quite tempting to use the emergency fund to buy more stocks. However, without an emergency fund, I realized that I might be forced to sell the stocks at the wrong time. So I need my emergency fund to take that risky investing strategy with individual stocks.
It became clear to me that it’s very important to separate your long-term investment and your cash reserve. When I first worked on my investment strategy, I had so many things in my mind, emergency cash, down-payment for the first house, regular investment, and retirement reinvestment. All these goals have different timeline, thus have different risk tolerance. Without separating them explicitly, I was really making the task much more difficult and even intractable. The good thing was that I was not paralyzed by the complexity, I started anyway; the bad thing was that I got a messy strategy which was not optimal and I had trouble sticking to it. In the end, I ended up selling all my holdings and reshuffled my portfolio in less than two years. I was lucky that I was a graduate student, thus, was not hurt that much in tax.Labels: Investment, personal finance |
| posted by Yannick @ 10:55 AM | Add to del.icio.us
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| Tuesday, April 10, 2007 |
| Lower tax with Qualified Dividends and Capital Gain Worksheet |
Today I was about to mail out my state tax return and saw a blank space in my schedule D line 22. It asked if I had any qualified dividend, which we did have. I was surprised Taxcut didn’t fill in this blank for me. So I decided to follow the instruction and take a look at the worksheet myself.
Dividends are usually taxed at the marginal tax rate of your ordinary income. However, take a look at the form 1099-DIV and you may find some of them are qualified dividends, which are taxed at the tax rate of long-term capital gain (15%).
Now the good news is that some people may qualify for an even lower tax rate at 5%. Please take a look at the following to see if you qualify:
1. If you have qualified dividends or long-term capital gains;
AND
2. If your adjusted gross income (AGI) is
less than $30,650 if single or married filing separately;
or less than$61,300 if married filing jointly or qualifying widow(er);
or less than $41,050 if head of household
Then you could lower your tax with the Qualified Dividends and Capital Gain Worksheet (Page 38 of 1040 instructions) on line 44 of Federal tax form 1040.
I believe many graduate students and young fellows with lower income qualify for this. I used to be quite skeptical about usefulness of all kinds of the worksheets in 1040. This time, it really saved us hundreds of dollars in tax!Labels: 1040, federal tax, income tax, Investment, personal finance |
| posted by Yannick @ 5:26 PM | Add to del.icio.us
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| Gone are the good days for credit card balance transfer arbitrage? |
Although I have known credit card arbitrage for quite a while, I did not really engage in it actively till last year. In my eyes, the gain of several hundred dollars a year is not enough to compensate for the potential damage to my credit score. So, I am not a big fan of this AOR thing either.
However, last month, I got a credit card invitation that I can not resist--it was from the alumni association of the second university I studied in. I have a card from my first university. I do not use it, but keep it as a souvenir. I want to have one for the second university too.
So I got the card, issued by Bank of America, MBNA card. It came with 0% APR till 03/2008. Given that I am not using it for purchases, I am tempted to do the credit card balance transfer arbitrage.
Lucky for me, I found this website. My return will be a mere $159 due to the BT fees, and minus the taxes, it will be tiny...
Definitely not worth it. And for anyone who is still looking for credit card arbitrage opportunities, please be careful with the BOA world points cards. IMO, it is not worth it.
The best credit card deal I got was in 2003. I applied for a AT&T universal card, with 300 cash back points. And at that time, I-bond could be purchased using credit cards. So I bought $30K I-bond with 1.6% fixed rate and got $300 cash back in 3 month. In fact, at that time, I was not that financially "savvy" -- I purchased the I-bonds only to get the $300 cash back. I did not do any research to find out whether I-bond was a good investment or not. I was thinking of redeeming them after the 6 month limit and put them back to savings account.
Last year, I got some free time and started to review my portfolio. If I recall correctly, the APY for the I-bond was around 7% for 6 month last year. Plus the initial $300 cash back, it was a decent, low-risk investment for 3 years!
I cashed all my I-bonds once the rates went back to something around 2.5%. I was thinking of getting new ones since the fixed rate got a little up. But now, we can not buy I-bond with credit cards, and the BT fees are not capped any more, the overall return is decreased dramatically. I guess that the good days for credit card BT arbitrage are gone... Dear PF bloggers, we need some "financial innovation"!Labels: Arbitrage, Balance Transfer, Credit Card, Investment, personal finance |
| posted by Jacqui @ 2:40 PM | Add to del.icio.us
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| Thursday, March 29, 2007 |
| Emergency fund? How much? |
Moom started his Asset Allocation Series. So I guess it is not surprising for him to write about Emergency Fund (EF), and introduced us to English Major Money's (EMM) post. This was also our first time to participate in Carnival with a post on getting more tax returns for international students. I happened to find a controversial post by "Broke Now, Rick Later" (BNRL) in the Carnival. So I will share my thoughts here.
First, no emergency fund needed? I have to say that I admire BNRL's courage. For a single-income household with 2 kids and a mortgage to pay, he has extremely low liquidity of $282. And he was advocating NO emergency fund needed. Make no mistake, he is stacking away 20% of his income in retirement savings, which is unlikely to be ready available for emergency. So he is trading his emergency fund as extra investments in retirement account. Before reading his post, I thought there were few people as described in moom's comment. Now I think that there might be quite a few.
BNRL has 50% income to cover monthly necessities and 20% for retirement account. Considering tax withholdings and other expenses, the remaining 30% is unlikely to have any significant portion left. BNRL argued that you can always count on 0% APR installment payment combined with a delay in payment to pull the cash you need from either your salary or disability income. However, he maybe forgot that sometimes, "when it rains, it pours". What if there were two or three unexpected on his list on going at the same time?
Second, how much emergency fund do you need? I stand by the standard recommendation of 3-6 month expense and suggest everyone to look at his/her own situation like EMM did. The amount will depend on both your needs and your risk attitude.
Needs (expenses): take a look at the monthly necessary expense. For renters like Jacqui and I, ours is less than 20% of our gross income. Two months' salary gets us covered for a year.
Risk attitude (or personal preference): remember, everyone get unlucky some day in life. That's why we're paying for health and car insurance. I am very conservative, thus, may want to insure for situations of very small probability, say three or four unfortunate incidents happening at the same time; you may be more optimistic and want to just insure up to two. However, you really do not want to have no or poor preparations for them as they do happen.
Last, I think having an EF is one necessary step for anyone to get started on investment and retirement savings. I will share my experience later.Labels: insurance, Investment, personal finance, Retirement |
| posted by Yannick @ 2:45 PM | Add to del.icio.us
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| Sunday, March 25, 2007 |
| What investments to hold in your IRA? |
I wrote a post to recommend Roth IRA earlier. Another article The Best Investments for Your IRA let me recall a class I took.
I took a PhD level tax class cross-listed in the finance department two years ago. I've forgotten most things learned in the class, since it's pretty theoretical. However, sometimes the professor discussed some very practical questions at the request of the students. Think finance or economics PhD students are all financially savvy? Some students didn't know what IRA was and asked this question to the professor.
There is no absolute answer. The common wisdom is to hold bonds and CDs in tax sheltered account since dividends and interests are usually not deferrable and taxed as ordinary income's higher marginal rate. On the other hand, a buy-and-hold strategy for stock investments could defer the capital gain from price appreciation almost forever, which is much more tax efficient (same effect as a 401K type of tax deferment without employer matching). As a famous example, Warren Buffet argues that dividend is much worse to a shareholder than stock price appreciation, thus Berkshire Hathaway does not distribute any dividends despite being one the most profitable companies in the world.
However, some people argue that stocks should be kept in tax sheltered account because the expected annualized return for stocks is much higher than savings and bonds over the long term (>20 years). Given same contributions, stocks grow much faster. Therefore, this strategy gives more assets the tax benefit. This strategy makes even better sense for Roth IRA, since its future earning is tax-free, not tax deferred.
Assuming you have a portfolio of $10,000 bonds and $10,000 stocks, with a marginal tax bracket of 33% (including both Federal and state income tax). The long term annualized return of bonds and stocks are 6% and 9% respectively. Compare strategy 1 of holding bonds in Roth, and stocks in regular account, and strategy 2 the opposite, what's the outcome in 30 years? To simplify, let's assume a passive stock investment using a highly tax-efficient ETF on market index, with 0.5% taxed on capital gain and dividends annually. Capital gains and dividends are reinvested.
Strategy 1 = 10000*1.06^30+10000*((1.085^30-1)*0.67+1) = 57.4K+80.7K=138.1K
Strategy 2 = 10000*1.09^30+10000*1.04^30 = 132.6K+32.4K = 165.1K
So keeping stocks in Roth IRA will win (Strategy 2). There are a few caveats on this conclusion:
This conclusion relies upon the 3% difference in annualized return between stocks and bonds. If as some authors have argued in their books that the future rates of return of stocks and bonds are about the same at 6-7%, you should hold bonds in Roth, and use a buy-and-hold strategy to defer taxes on capital gains from stock price appreciations.
The stock investment strategy is also critical. If we assume that the difference in the rates of return of the two are not that large, however, if you really trade your stocks frequently, then it's still advantageous to keep your stocks in Roth.
I also learned both in class and from my experience how tax policy exerted distortion in your trading decision. I had hold stocks just to get the long-term capital-gain tax rate even though the market condition for that stock had turned south. If you want pure undistorted trading decision for yourself, hold stocks in Roth. On the other hand, you lose the leverage on claiming loss on your trades as well.
I hold stocks in my Roth and have done some trading. I really love the tax-free capital gains. Roth IRA is really a very powerful tool for us to catch up.
I only discussed bonds versus stocks. People have used IRA holding to buy futures, options, land contracts etc., which enable them to have larger leverage and gain larger tax-free earnings. However, if you are old enough to believe no free lunch, you will probably want to think about the risk carefully before shooting for the "big gain"?.
Any questions and comments?Labels: Asset Allocation, Investment, IRA, personal finance, Portfolio, Retirement, Tax |
| posted by Yannick @ 4:31 PM | Add to del.icio.us
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| Wednesday, March 21, 2007 |
| Do we want to play Liar's Poker? Notes 1 |
I found two books listed most frequently as favorite books among PF bloggers -- Liar's Poker: Rising Through the Wreckage on Wall Street and A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition . I felt a bit embarrassed that I did not know these two books, though I had thought about getting a job in Wall Street. I decided to make up my ignorance.
I finally got the two books one month after I placed holds on them. By then Yannick and I got very busy with our work. So we decided to optimize our times -- each read one and exchange reviews.
Yannick likes numbers, so he got the "Random Walk". I am more fiction or biographic type, so I picked "Liar's Poker".
The first thing that struck me was the author's comments on "economics". He noted that, although most arrivals on Wall Street studied economics, the knowledge was never used - actually, any academic knowledge was frowned on by traders. Economics is not really a science, but rather a means by which investment bankers find potential candidates to hire.
This sounds like Michael Spence's model of job market signaling. I always considere it a drawback in signaling game -- Education is useless other than being a signal to the potential employer. Now Liar's Poker confirmed this assumption with a real life example. I guess that this was one of the very few cases where the assumptions of an economics model hold true in reality. Unfortunately, instead of increasing my confidence in my economics education, it makes me even more disillusioned with the economics knowledge I got from PhD classes.
On the other hand, the book gave us a relief. As the book says, most millionaire traders started their trading business in their early 20's. We had some sort of regret that we missed the opportunity to be there. Given that I have so many friends working in investment banking, I can't (or do not want to) believe that the life in Wall Street is like the "jungle"? the book described. However, I doubt that the way the IB sales traders and people make money has changed much. They consider it a success by deceiving the less-informed public and ripping off their clients. I do not think that Yannick will ever be able to do this. So this may not be the road for us anyway.
The book also talked about Michael Milken's junk bond empire. It is interesting to see a different view on Michael Milken from Den of Thieves Labels: Career, Economics, Investment, Reading |
| posted by Jacqui @ 2:36 PM | Add to del.icio.us
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| Monday, March 19, 2007 |
| Roth IRA, a must-have tax benefit for graduate students and young professionals! |
One common enemy on wealth accumulation for busy young fellows is not to start now. A few years ago, I started to work on my financial plan. The first thing I realized was how much I had missed by not using Roth IRA.
IRA is the abbreviation for individual retirement account. There are two types of IRA, traditional IRA and Roth IRA, sharing the same annual quota ($4000 for 2006) set by the Congress. For a traditional IRA account, you take a tax deduction up front for the money you put into the account, the contributions and earnings are not taxed until its distribution after retirement, which is called tax deferment. For a Roth IRA account, you put in after-tax money as contributions, your contributions and earnings grow tax-free even when it is distributed after your retirement.
For young professionals and poor graduate students, Roth IRA is better for the following reasons:
1. You will be likely in a higher tax bracket at your retirement compared to your tax brackets now. Most graduate students on a stipend are in the tax bracket of 15%. Compared to a 25% plus tax bracket with a real salary, Roth IRA is a big saving. Also, if you are an optimist believing in brighter future and higher earnings down the road, or if you are a pessimist believing in increasing Federal tax rates, you should contribute to Roth IRA instead of traditional IRA. Of course, if you are extremely pessimistic and worried about the Congress removing the tax benefits of existing Roth IRA in the future, you probably should store up gold and avoid investing.
2. It is more flexible. You can have early withdraws any time up to the total contributions without penalty. Of course, you won't be able to put them back in later. So it's NOT recommended. However, it was really attractive to me when I started as I was considering graduation and buying a house after getting a job.
3. No mandatory age-based distribution schedule like other tax-deferred retirement accounts. This allows you to manage your income stream after retirement, and enable you to pass all the dough to your descendants even.
4. You contribute more with Roth. Because the quota is applied on your after-tax contributions, $4000 in a Roth IRA is really worth more than the pre-tax $4000 in a traditional IRA. Therefore, it's very attractive to a late-starter who is trying to catch up with the retirement contributions.
Now let's see how much you can accumulate with Roth IRA only. Assuming an annual contribution of $4,000.00 in 2006 and 2007, and $5000 afterwards (the limit will be increased to $5000 in 2008), you will see $1,049,385 in 2041 if the annualized rate of return is 9%. Assuming you start at the age of 30, more than 1 million dollars will be there for you at the age of 65 tax-free. After considering an annual inflation rate of 3%, it's still worth $544,822 of current dollars. Half a million in today's dollar is probably worth more than most people's equity in their house after they have paid off a thirty-year mortgage. Find a soul-mate and do it together? That will be even sweeter!
So if you haven't taken advantage of the Roth IRA, I highly recommend you to do it. The deadline for 2006 contributions is 04/16/2007. You've still got time!Labels: Investment, IRA, Planning, Retirement, Roth, Tax |
| posted by Yannick @ 3:07 PM | Add to del.icio.us
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