Simply Junior

As large numbers of Baby Boomers reach retirement age and as life spans are increasing, long-term financial security has become a major concern among the U.S. labor market. With the prospect of reduced Social Security benefits, volatile 401K plans, and pension plans becoming non-existent, many workers are searching for other viable income options for retirement.

In the current economic recession, with rising fuel and food prices, it has become increasingly difficult to properly save for those later years. Individuals within ten to fifteen years of retirement often seek investments with higher rates of return, but are fraught with equally high risks. Additionally, in many of cases, the average person does not have the large amounts of cash required to earn the highest interest rates, which the wealthy enjoy.

Long-term retirement clubs have begun to emerge on the Internet, which remove these roadblocks for many entrepreneurs. These programs provide their members the opportunity to realize dividends, which are well beyond the reach of the average investor.

Members’ funds “piggyback” private portfolios of offline investments. Profits are distributed among the members and are spread across various stable long-term projects & ventures, to guarantee the clubs’ stability for the long term. The risks normally associated with these types of programs are diminished by pooling funds and spreading the investments across a diverse range of global opportunities.

Contrary to illegal High Yield Investment Programs (HYIP), which use funds from one investor to pay the next investor’s commission, the long-term retirement clubs are completely legal and clean, as members’ investments are combined with personal and private portfolios, which pay high rates of return. While each country has different views on foreign investments and private investments clubs, most operate in a jurisdiction where it is completely legal to manage private funds internationally.

Certain programs offer substantial referral commissions the term that referred members participate in the various plans. However, financial independence is generally achieved without relying on others to participate.

Since the abrupt end of the property boom last summer the U.K property markets have started to look more unattractive and volatile for would be investors in the U.K looking to profit from property. Property agents in the U.K have seen property investors who used to just focus on the U.K beginning to explore alternative oversea’s market’s. The main reasons for the recent lull in activity in the housing markets have been the tightening of the credit market’s in the U.K and also wider economic factors including previous interest rate hikes and rising inflation.

These factors have also all combined to greatly reduce the confidence in the housing market in the U.K which has been one of the main driving factors of the property market over the past decade.

Oversea’s property agents are beginning to receive more enquiries from U.K investors looking for property markets that are not fuelled by credit ie loans/mortgage’s and also that are also still appreciating in value.

One such area of the world that has attracted a lot of attention that satisfies these criteria is the U.A.E. The area has seen a rapid expansion since 2002 when some of the Emirate’s of the 7 that make up he U.A.E decided to offer freehold ownership of property to foreign national’s. The first of the Emirates to adopt this stance was Dubai, which has been widely documented a property hot-spot for numerous years now. Money can still be made from this Emirate but more property experts are now starting to turn their attention to an Emirate only 12 miles away from the centre of Dubai but with prices less than half of Dubai currently.

Many realtors believe for good reason that this Emirate is likely to be the next Mini Dubai generally due to the amount of investment as well as location of the Emirate.

The Emirate in question is the smallest Emirate in the U.A.E called Ajman.

Concurrent Retirement and Disability Pay (CRDP) is a phased-in reinstatement of the retired pay deducted from military retiree’s accounts due to their receiving of department of veterans Affairs (DVA) compensation, showing on their Retiree Account Statements as the “VA waiver”. The phased-in restoration started January 1, 2004 with the initial payments dated February 2, 1004.

A person is qualified for the Concurrent Retirement and Disability Pay if they have a DVA-rated, service-connected disability of fifty percent or higher, except if they are a disability retiree with less than twenty years of service or a retiree who combined the military time and civil service time to meet the criteria for a civil service retirement. If they have combined the military time and civil service time in order to improve their civil service retirement from OPM, then they are eligible for the Concurrent Retirement and Disability Pay payments, but they will have to replace their retired pay by coordinating with OPM. If one becomes eligible for CRDP, their payments will start automatically.

Payments from the Concurrent Retirement and Disability pay are delivered through direct deposits or mailed-based on their current retired pay information. The payments will reflect as a decrease in the VA waiver deduction on their retiree Account Statement, but they will maintain to be given the same amount from the DVA.

The Concurrent Retirement and Disability Pay payments are taxable according to their current retired pay federal Income tax Withholding (FITW) tax rate and may have an effect on the amount they wish to have deducted for State Income tax Withholding (SITW).

The payments are also subject to collection actions for child support, community property, government debt, alimony, and garnishment. The Concurrent Retirement and Disability Pay payment rates are as follows: (computation begins with the “table rates”)

-If rated unemployable $750.00

-If rated at 100% $750.00

-If rated at 90% $500.00

-If rated at 80% $350.00

-If rated at 70% $250.00

-If rated at 60% $125.00

-If rated at 50% $100.00

The total computed CRDP amounts based on the rates will increase each year until January 2014 when they will be receiving their full retired pay entitlement and their DVA disability compensation with no reduction. Unlike Retired Pay Cost-of-Living Allowances (COLAs), The Concurrent Retirement and Disability Pay increases will be effective on the 1st of January every year, to be paid on the first business day of February. In addition, since retired gross pay, DVA compensation, and consequently VA waiver amounts, increase very year with COLAs, they will not be able to precisely extrapolate CRDP amounts for upcoming years.

CRDP amounts will automatically decrease or increase based on the percentage of disability accounted to the Defense Finance and Accounting Service (DFAS) by the DVA. Just remember that the monthly CRDP amounts cannot go beyond the lesser of your monthly gross related pay or VA waiver amount.

So you have had it with the 9 to 5, your sick of your boss always looking over your shoulder, and the idea of you doing all the work so the executives can reap all the benefits makes you sick to your stomach. So you have decided to go out on your own and start a new business. That is a great idea and I am here to help you with some of the tougher questions that may come to mind.

What’s next? Well you need to decide how you will structure your business for tax and liability purposes. If you do nothing, and start the business alone, you are considered a sole proprietor. If you do nothing and start the business with someone else, that business will be considered a partnership. You can also form a corporation or limited liability company (LLC). The last two options are a bit harder to set up, but the liability is passed on to the business and not yourself or your partners. You should seek the advice of an accounting expert before making this decision; once the decision is made it is difficult to change the company type and it’s an accounting nightmare.

Sole proprietorship and partnerships are taxed on your normal 1040. You figure out how much money the business brought in and how much was spent on the business. This is the number you add to your 1040. This option is very easy for taxes very easy to run. The main problem with sole proprietors and partnerships is you can become personally responsible for all debt and damages. For example, if you run into credit problems with your suppliers they can come after you and your partners for payment. Also, any damage that your company may cause and is unable to make restitution for could become your personal financial obligation. This includes liens on personal property.

To distance yourself from personal liability you need to form a corporation (INC, C, or Corp) or a limited liability company (LLC). Both of these allow the business to become a separate entity for tax purposes and liability. The downside to these types of businesses is the extra paperwork needed to stay compliant and start up costs. You can search the internet for companies that will form your corporation or LLC, but you need to make sure they are reputable and not online scams.

If you start a corporation or LLC you will need a tax expert that specializes in small business and good accounting software. The government will send you an Employer Identification Number. This is the company’s unique id number, think of it like your social security number. This number needs to be used on all documents pertaining to the company, as well as all tax forms.

All parts of the business must to be kept separate from your personal life. You need different bank accounts, different phone numbers, and different credit cards. Next to making a profit this will be your biggest and most important challenge. If you mix funds or you are sloppy with book keeping, the corporate veil can be pierced and that means you can become personally liable for the company and its actions.

I recommend a good CPA and a lawyer. These can be found online within your area and are well worth the upfront money. After you are set up it is possible to do all the taxes and accounting yourself with powerful accounting software, but this is time consuming and may not be worth it to some. Remember starting a new business can be fun and rewarding; just stick to the rules and laws.

Price-to-rent ratios represent the cost of a dwelling unit relative to the cost of a comparable dwelling unit. This ratio is also subject to the same variability exhibited by the price-to-income ratio. This is not surprising considering rent is generally paid out of current income, so incomes and rents tend to track one another fairly closely.

The ratio of rent to income has stayed within a range from 13.6% to 16.5% from 1988 to 2006. This demonstrates renters have been putting roughly the same percentage of their incomes toward housing for the 18 years period of data examined. The evidence from the sudden and dramatic changes in the price-to-income ratio and the price-to-rent ratio points to a housing bubble. If these two measures of value had been supported by a rise in the rent-to-income ratio, the increase in prices might have been explainable by a shortage in dwelling units causing all consumers of housing to see an increase in the percentage of their income going toward housing. Evidence from the rent-to-income ratio is to the contrary.

Buyers were never forced to buy; it was always a choice. During the market rally, greedy buyers motivated by rising prices and fueled by loose lending standards were able to bid prices up to ridiculous levels. The exotic financing was not a result of high prices; it was the cause of high prices. Lenders were keen to offer these products because they were not taking the risk, and it allowed them to keep transaction volumes high which is how they were making money.

By late 2007, the market balance had shifted from favoring sellers to favoring buyers. The once greedy buyers were becoming desperate sellers: their dreams of riches from perpetual appreciation were in tatters. Many were forced to sell due to their inability to make their mortgage payments. Those that hung on were homeowners with 50% or more of their income going toward paying off an asset which was declining in value. It was not a set of circumstances to be envied. The crushing debt service burdens when combined with falling prices prompted many of these borrowers to voluntarily default. This predatory borrowing exacerbated lender losses as the bubble deflated.

The Great Housing Bubble saw an unprecedented rise in the price-to-rent ratio. This was strong evidence of the housing bubble. When the bubble began to deflate this ratio dropped down to near its historic norm.