It is astounding to me to see how many finance articles online speak of Roth 401ks and IRAs as though they are a type of asset that you buy. Instead, it would be more accurate to say that it is a type of account with tax benefits and a few restrictions that you can use to purchase assets on more favorable terms. It is analogous to a contract with the government that gives the investments you make certain benefits so long as you comply with the Roth IRA rules and contribution limits.
Philosophically, all IRA accounts are about making a deal with the government. You are seeking tax benefits that allow you to compound your funds tax-free as long as your money remains in the account. Meanwhile, the government is seeking a guarantee from you that the funds will actually be used during your traditional retirement age so they … Read the rest of this article!
Life insurance companies earn 10% premiums on the policies they sell you. Given their immense sophistication, and the fact that they make the most profit when they don’t have to provide a death benefit to someone, it is strongly in your interest to protect yourself from doing something defective that thwarts your intentions.
Set Up A Separate Bank Account To Automate Your Life Insurance Premium Payments. Guess what, if you miss a payment, your policy will lapse and then terminate. Some state law requires that a notice of lapse be mailed to you before your policy terminates.
But here’s the problem. The moment when you’re least likely to make premium payments also has a tendency to correlate to the time when you’re more senior in age and the Grim Reaper approaches. You do not want to dutifully contribute for years and years and then suffer an extended illness that causes … Read the rest of this article!
I was reading the finances of something called Travelzoo (TZOO) because I usually look to the start-up internet businesses as examples of a stock market gone crazy.
But as I studied to study the actual business model, I was pleasantly surprised by what I found.
Turns out, they have no debt. They have $27 million in cash in the bank. Earnings have grown at a rate of 22% annually since 2005. And best of all, and this is the kicker with internet companies of any kind, Travelzoo has funded its growth organically without having to give up large chunks of the business through equity financing that ends up diluting the pre-existing shareholder base and almost defeating the purpose of the growth.
Back in 2009, Travelzoo had 16.4 million shares outstanding. Now, it has 14.5 million. That’s an 11% share count reduction in seven years. It’s … Read the rest of this article!