Calls-for-hire Firm: Financial planning has become a major concern, especially now that it’s more difficult than ever to figure out where your money is going since the economy has taken such a downturn. You want to be sure you are putting your money into investments that will save you money in the long run, not only now, but also in the future. You also want to be sure you are making the right decisions. If you aren’t sure what the best decisions would be, you can hire a professional for the job. But there is an alternative. You can hire a calls-for-hire firm to do the work for you.
A calls-for-hire firm is basically an agency that will do the work on your behalf, but you retain control. This means, you determine exactly what happens to your money and where it goes. Basically, you will manage your investments, your savings and the rest of your money. You will have to co-mingle your funds and you will have to pay taxes on these funds. But the most important thing you can control is where your money goes.
There can be a reason everyone should be doing this. You might have correctly arrived at the conclusion that your retirement plan shouldn’t be investing in things like CD’s that gain no interest and that’s all you have, Starbucks morning coffee and gas. You may have decided enough is enough and that your children and your grandchildren must be given a better, more secure life too.
If that’s the case, you may have already decided that you would like to be reassurance that your children will have a better life too and that your grandchildren will be better off than they are right now and the money you save doesn’t go to waste. If that’s the case, you can recall how your parents felt about their life insurance policy and how they hoped they would be able to use it on a the first of their birthdays.
You can remember how your parents felt and how they wanted their money to be invested, safe in their accounts and safe. You can remember how you felt when you were seven years old and you made the biggest mistake of your life to buy the biggest, red luxurious sports car in your county and learned firsthand the danger of the high price of ease.
If your grandparents ever told you a stock tip, this is it, this is where you want to be today.
“Stockholders don’t own businesses, they own the shares of the companies.”
“government doesn’t own stock, they just tell you to buy it.”
“the day you can buy into a stock, it’s your lucky day.”
These little Statements stick in our head when we want to make a bad stock purchase, or just before we buy the stock we think we should have bought…and then “if it can happen to the blue eyeballs of a 7 year old, it can happen to the redheads about 9 years old.”
In reality, if you lose your entire retirement fund, you are lucky.
But what if you don’t lose your retirement funds? What if the company you work for goes out of business? What if you work hard all of your life and something happens to your spouse, or your child? They can’t control bank failure, bank diversification, bank insolvency or the failure of the newspaper in which we keep our newspaper?
Obviously most people don’t have in their home a stock portfolio with stocks going into liquidation or bankruptcy. Most people do have an IRA and that has been providing a nice nest egg for our parents and grandparents.
The IRA is the best savings account in the world for saving for retirement. If you don’t have one, start one now and make sure you don’t touch it till you have your finances under control. The average 401(k) plan yields about 4.5% (Source: Investment Company Institute). A SEP (self-employed individual Everywhere) plan would probably give you a return of 4.5% on investments.
So, here’s the scenario, you save $200,000. You are at a safe 4.5% risk, but still get 4.5% tax break on your investment income. Your investments add $1,000/month in income to your household’s $200,000 budget every month. Your investments take $1,000 approved away from you monthly. Your investments are reducing your taxes and your savings are increasing your wealth without you even having to think about it!
Now, you will probably say, “Hey Bob that’s not the way it’s supposed to work!” and here’s the “what’s the worst that can happen?” scenario. When you lose $200,000 on ira you lose $2,000 a year in taxes, and you can also claim a $1000 tax credit for that.