College

College should be considered a lifetime investment rather than just a four-year expense. It requires financial planning and personal sacrifices. The earlier you start saving and investing, the less money you will have to save and invest later.

Furthermore, the earlier you start saving, the less risk you'll have to take in your investment choices because long-term investing generally carries less risk.

There are many investment alternatives suitable for college savings. Here is a partial list of some such investments:

Investments

Many employers allow their employees to contribute to an annuity program. This becomes an investment option in a salary reduction retirement plan. Under this plan your current taxable salary is reduced and in addition it accumulates tax-deferred earnings. Some companies have added annuities to their retirement list. If you work for a non-profit organization you'll probably be able to choose either a fixed or variable annuity or both. If you have a small business, or work for yourself, you can invest in a qualified annuity by setting up a Simplified Employee Pension (SEP) or a Keogh. Many financial plans are available that you can adopt or you can use a specialist to create a plan for you.

Business

Business owners accept without question the wisdom of insuring the firm against the loss of its property values. We take care to insure the physical assets against fire, tornados and other disasters. Yet, protection from the loss a key executive may be far more important.

Retirement

There is a wide variety of tax-advantaged ways for individuals to save for retirement. Because of their income tax benefits and because IRAs are so easily established, they have become one of the most often used retirement savings vehicles available today. Recent tax laws, however, have created three very unique types of IRAs the Traditional IRA, the Non-Deductible IRA and the newer Roth IRA.

Business

The death of a major shareholder in a closely-held corporation can seriously interrupt continuity and profitability of the business. Surviving shareholders must struggle with how to continue the company as a profitable business with the loss of a key player. Heirs must concern themselves with how to replace the income that the shareholder had earned and how to extract their inherited portion of the company value.

Insurance


If you purchased your home paying less than 20% down, chances are you had to purchase “mortgage insurance” in order to qualify for your loan. A mortgage insurance policy protects the bank in the event they are forced to repossess your house and sell it at a loss. As with most other types of insurance, you pay a monthly premium on top of your monthly mortgage payment for this policy. A mortgage insurance policy provides the means for purchasing a house you may otherwise be unable to afford, due to a limited down payment.

Insurance

Once you have determined that you need life insurance, and calculated how much coverage you require, you will have to choose between several types of life insurance. There are two very different types of life insurance contracts -- term and permanent.

Tax

Under the recently enacted Jobs and Growth Tax Relief Reconciliation Act of 2003, generating long term capital gains or acquiring dividend income could be two of your big opportunities to save on taxes. Be aware that the Act of 2003 created “sunset provisions”, however, meaning that the tax rates on both capital gains and dividends may go up again unless congress acts to extend the rates. The lower rates are currently only legislated through 2010.

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