Retirement Planning for 2015

Does Tax-Free or Tax-Deferred Monthly Income Interest You?

One New Year’s resolution should be on the top of your list: Invest for retirement in a regular self-directed, tax-deferred IRA account, or a tax-free Roth IRA account. The sooner you begin, the sooner you will reach your goals. The longer you delay starting, the less you will have to enjoy later. Don’t short-change your retirement planning.

Tax- free or tax-deferred investing will maximize your retirement nest egg. Why share your hard-earned savings with Uncle Sam by paying unnecessary taxes? The more you keep, the faster it multiplies, and the sooner a work-free retirement is yours.

What is the Key Principle of Wealth Accumulation?

Not investing or investing foolishly will cost you dearly over the long-run. To avoid this mistake, you must understand one key investing principle; it is the foundation of wealth accumulation; it works consistently for everyone using it. The amazing process I am recommending it called the principle of compound interest. When you understand compound interest, you will realize receiving monthly or quarterly tax-free, or tax deferred income is the basis (the foundation) of successful investing and wealth accumulation.

What is the Rule of 72?

The rule of 72 is a short-cut, simple mathematical concept that calculates the approximate time to double your money when your money is earning various rates of income. To use the Rule of 72 you divide the interest rate into the number 72; the answer you get is the approximate number of years it takes for your money to double-presto!

• Examples: 72/5% = 14.5 years to double; 72/7% = 10.3 years to double; 72/9%

= 8.0 years to double.

• Example: Investing $1,000.00 at 9.0% it doubles to $2,000.00 in eight year; the $2,000.00 is invested for another eight years and it doubles to $4,000.00. The sixteen years of compounding results in the original investment increasing by 400%. This increase happens without you adding a penny to it, and without you doing any work.

The cause of the money continually doubling in value is due to interest being earned on interest. This activity is called “compound interest”. It is having your money work for you rather than you working for your money. Compound interest is how large retirement nest eggs and wealth are created.

What Investment Pays 7.0% to 9.0%?

Typically, popular investments like stocks, mutual funds, or bank Certificates of Deposit do not provide 6.0% to 9.0% yields. Today, they are yielding 1.0% to 2.0%. Some publicly traded bonds will provide higher yields. But, most promissory note investments can be tailored to yield 6% to 10%. Promissory notes and mortgage notes, if properly used and understood, are an excellent investment for the conservative, long-term investor. They are bought for their income yields, not for active buying and selling.

What is a Promissory Note?

A promissory note is a debt agreement, or a promise to pay a debt which an individual or a company uses to raise money; it is a loan instrument. The borrower promises to return the investor’s funds (principal), and to make fixed interest payments to the investor. Promissory notes have set terms, or repayment periods, ranging from a few months to several years; they also have a specified annual interest rate and specified monthly payments; they also specify the collateral security backing-up the promise to repay.

What is a Tax-Free or Tax-Deferred IRA Account?

The US Government has created tax-deferred and tax-free retirement investment accounts to help individuals save for their retirement. They are called Individual Retirement Accounts “IRA Accounts”; one type is a regular account which is tax-deferred, and the second type is a tax-free Roth account.

Self-directed IRA Accounts are shielded from income taxation; you can invest in many types of income producing assets, including promissory notes; you benefit from the tax-free or tax-deferred compounding interest principle. We previously discussed The Rule of 72 that tells you how long it will take your money to double through the compounding of interest.

If you invest your self-directed IRA Account in income-producing assets such as promissory notes, no taxable income is reported yearly. If you take withdrawals from your tax-deferred IRA account, they are taxable. Tax-deferred means that, you don’t pay tax on any of the capital gains or interest income you earn during the years your investment is growing. The taxes are paid when you withdraw the money. A Roth IRA account is tax-free. IRA Accounts should be a key part of your retirement saving plan.


Take advantage of tax-free or tax-deferred retirement saving and benefit from compounding interest. Use regular IRA accounts or Roth IRA accounts. Invest in promissory notes yielding 6.0% to 9.0% and compound your money rapidly. Start now. Enjoy the comfort of monthly income from promissory notes.

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