Investments & Financial Planning

Yes, and the difference gets bigger and grows faster with time. The rule of 72 is a method that quickly calculates how long money takes to double. You take 72 and divide it by the rate of return and the answer is the number of years it takes money to double in value. Thus 72 divided by 8 is 9 years, whereas 72 divided by 10 is 7.2 years. The money earning 8% will double again in 9 years for a total of 18 years to quadruple, whereas the money earning 10% will quadruple in 14.4 years, a much shorter time frame. Of course, you need to assess the extra risk which might be associated with the higher return.

The most common sources are low-cost credit union loans, home equity loans, cash values of life insurance policies and borrowing from profit-sharing funds. Also, you can borrow against certain securities with a margin loan.

You probably bought the fund before its capital gain distribution. When you buy a fund before its capital gain distribution, you can end up owing money on your own money. Always buy after the distribution. Please contact a CPA in your community to avoid making these costly mistakes again.

These are mutual funds which try to minimize the capital gain distributions to its shareholders. Capital gains are realized when securites in the fund are sold by the fund manager at a profit.

No. Capital gain distributions will have no effect on IRA accounts or other tax deferred accounts.

A non-callable feature protects the owner against the bond being prepaid when interest rates fall. When a bond is callable because of fallen interest rates, the issuer can "call" the bond, paying off the balance of the bond before maturity. If you own the bond, you would then need to reinvest the funds into another investment and thus earn less interest income. If you want to lock in the interest rate and be protected against your bond being called, you should opt for non-callable bonds even though the interest rate is slightly lower.

No. The cost of an investment seminar or financial planning seminar is not deductible. Convention expenses are only deductible if related to a business activity not an investment activity.