In this report I decided to take advantage of an opportunity to get information on how best to invest money for my daughter s college fund. The choices are between Mutual funds or an IRA. Thanks to the research I did for this I have made up my mind how best to invest my money. My main research I did on the IRA is on the Internet through AOL.
Through them I found out in a Traditional IRA s you can contribute up to $2, 000 per person per year tax free. In other words the $2, 000 invested is deducted off your total income for that year. Yet when you retire and receive the money it is then taxed. Also in a Traditional IRA you cannot remove the money prior to retirement without being heavily penalized. In a Roth IRA you pay taxes on it the year that you invest the money. Though the Roth IRA does bring some benefits such as you can retrieve your money without being penalized as long as you opened your account over five years prior to withdrawal and your are at least 59.
5 years old at time of withdrawal. Some exceptions are death, disability or first time purchase of a home. There is also an Educational IRA which you can contribute a maximum of $500 per year per child. This obviously is only good enough for a college education if you plan to invest in other places. On the AOL site I used it had a page where you enter in your date of birth and how much money you wish to contribute.
The Essay on Money School Years People
The American Dream Is Based on Success, Happiness, and Money believe that the American Dream today is based on success, happiness, and money. The reason i think this is because the reason people go through all those years of schooling is to become, in return for being successful you make money, and because of money you can get and do the things you want, which in return makes you happy. Happiness ...
I entered in both DOB-7/9/79 (approximately 46 years until retirement) and that I wish to contribute $2, 000 a year. It then stated that with a Roth IRA I would have $1, 058, 685 and with a Traditional IRA I would have $1, 036, 239 (which I would have to still pay taxes on).
Out of the two the obvious choice is the Roth IRA you pay taxes when you are working and have the extra money and it also has a higher turn over rate. I then researched mutual funds. Mutual funds are a group of stocks together. It tends to be mor stable then stocks since there is only one stock if it falls you re out money, with a Mutual fund if one drops then the others generally tend to balance the loss out so you still tend to make money.
My only research on Mutual funds comes from the Consumers Report, Issue March 1999. To start off the average Mutual Fund raised 27% in 1998. Long term you re pretty much guaranteed a earning higher then any other investment could achieve. Now there are 2, 820 Domestic funds to choose from alone. Yet only 1/5 of them has been around since 1987.
So it is hard on some them to find out how they ve done over the last 20 years. I also found out that there were 150 new funds last year alone! That just goes to show you how fast times change. In 1980 my parents were offered a chance to buy stock in Nutra-sweet they choose not too. They both wish they would have now. I have noticed over the years new technologies that start real low are the best to get in. Especially when it is something that will effect a lot of people.
I learned the different types of funds. Most have a minimum initial purchase generally $500-$5, 000. The main categories of these funds are Large-cap, Midcap, and Small-cap. These three categories are then each subdivided by “style.” The “style” categories are Growth, Value, Blend, International and Socially Conscious.
Large-cap funds are the 250 largest corporations who s corporation value exceeds $8. 3 billion. These are the biggest of the big. These ones tend to charge less as far as fees with their average being at 1. 15% of assets.
They perform better then 80% of all domestic funds. Midcap funds are the next 750 largest corpo-rations who s corporation value is between $1. 2-8. 3 billion. These ones are the big companies. Small-cap funds are the remaining 4, 000 firms.
The Business plan on Indian Mutual Fund Industry
... Funds Mid-Cap Funds Sector Specific Funds Tax Savings Funds (ELSS) Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-return ... prices. 1.5.2 Overview of existing schemes in mutual fund category: By Nature Equity fund: These funds invest a maximum part of their corpus into ...
Their corporation value is under $1. 2 billion. They are the smaller companies. These tend to charge the most for fees.
The “style” category Growth is when they look for companies with rapidly rising sales and earnings. The ones who have tendency to pull in the most money. The highest fund return in 1998 in this category under the Large-cap funds is Janus Twenty (which is very high risk) with a 73. 4% return.
It also has the highest 10 year return total. In the Midcap fund highest return in 1998 is Fidelity Emerging Growth (high risk) with a 43. 3% return. In Small-cap fund highest return in 1998 is Value Line Special Situations (high risk) with a 29. 9% return. The sub-category Value funds is when they look for companies that are undervalued by the stock-market, yet they must have good prospects and a good reason to feel they will rise over time.
The highest fund return in 1998 in this category under the Large-cap funds is American Century Income & Growth (mid range risk) with a 27. 7% return. In the Midcap fund highest return in 1998 is American Century Equity Income (very little risk) with 13. 0% return.
In Small-cap fund highest return in 1998 is Royce Premier (very little risk) with 6. 7% return. The sub-category Blend funds is when they look for companies who have both good prospective, rapidly rising sales and earnings. The highest fund return in 1998 in this category under the Large-cap funds is Fidelity Dividend Growth (mid range risk) with 35. 9% return. In the Midcap fund highest return in 1998 is Johnson Opportunity (mid range risk) with a 20.
2% return. In Small-cap fund highest return in 1998 is Dreyfus Emerging Leaders (high risk) with a 8. 6% return. The sub-category International funds is when they look for companies who deal with many companies in many countries to give a wide variety so if economy falls in one country they have the others to balance it out. The sub-category Socially Conscious funds is when they look for companies who don t harm workers, consumers health, or the environment. In my research I also found that there are some things you should watch very closely.
The Essay on Corrections: Prison and Higher Risk Offenders
The correction system was basically functioned through principles that were commonly used in England in the early 1700s. Prisons were virtually nonexistent before the 1700s; prison was not considered a serious punishment for crime, and was seldom used. Instead, governments imprisoned people who were awaiting trial or punishment whereupon they would receive the more common capital or corporal types ...
They are Front-end Load fees, Back-end Load fees, 12 b-1 fees, and Accessibility. Front-end Load fees are fees the company charges for a new account. Back-end fees are fees the company charges to sell or trade shares. 12 b-1 fees are the fees a company may charge you annually.
They do this to keep their marketing and advertising costs down. Accessibility is also very important because you need to be able to access a wide variety of funds (i. e. medical, agriculture, etc. ) so if one market drops hopefully the others balances it out. My father feels very differently though.
He feels I should invest in a Roth IRA because it is tax deductible to invest yet I would penalized if I removed my account before retirement. Which makes no sense to me to invest in it for anything but retirement. He feels that it s more stable and better to invest in even though the returns are only approximately 8%. He feels the higher risk of a Mutual fund isn t worth the chance. My opinion is to invest in a Growth Large-cap fund.
Because it will bring back the most money in the more likely to get high dividends group (high risk) there is risk but me myself I am willing to take that risk… The web page figured out that I would receive $1, 058, 685 for a Roth IRA. I figured out what I would make on an average 28. 5% return with a Mutual fund. Say I invest $5, 000 and I let it ride and it s returns ride. By the time I am 44 years old (25 years after initial investment) I will approximately receive $1, 233, 972.
That is $175, 287 higher in 21 years less time. That convinced me that Mutual Funds is where I should invest money for my daughter s education. My next project is to figure out exactly which mutual funds I should invest in.
