Paul Ferraresi

Everyone should have a sideline business. It should be started while you are working, not after you lose your job or quit.

A full time business start up usually takes 5 years to reach breakeven. Obviously, starting a side business part time may take longer than 5 years to get into the black.

Why should you set up a side business? It provides a safety net for you and your family. It can provide additional monies to fund your retirement. Finally, it can provide an avenue of exit if you “hate” your J.O.B.

There are numerous tax benefits in owning your own business. One major benefit is to set up your own small business 401K plan.

Small-business 401(k) plans might provide the opportunity you need. These plans are also known as Solo 401(k), Solo(k), and Individual K. These investment vehicles are mostly used by small-business owners and entrepreneurs. Small-business 401(k) plans are perfectly designed to accommodate rollovers from employer-managed 401(k) plans, and they can be opened with the intent of funding them solely with future annual contributions (though that is rarely done).

The advantages of a small-business 401(k) are significant. They offer greater control of funds than does an employer-managed 401(k) or a SEP-IRA. They offer higher contribution limits than Roth accounts ($15,500 plus $5,000 for age 50 and over). And they are easy to manage and administer.

These plans offer you a broader range of investments to choose from instead of the limited number of options found in traditional plans.

Here is a general overview of the most widely used categories.

Alternative Investments in a Small-Business 401(k)

Small-business 401(k) plans can invest in the following assets, though the most common investments are real estate-related. Investments can include income-producing assets through the use of non-recourse loans. Unlike a self-directed IRA, a small-business 401(K) is not subject to Unrelated Debt Financed Income Tax on income-producing property.

• Start a business or buy a franchise
• Buy part of a business
• Buy a partnership interest or form limited partnerships
• Fund limited liability companies or corporations
• Purchase startup company stock or member shares
• Private placements (private company stock investment or loans)
• Private party mortgages and notes backed by real estate
• Purchase residential rental properties, multi-unit buildings, commercial property, storage facilities, boat slips, marinas, and parking spaces
• Bare land parcels, lots, acreage, timberland, RV parks, mobile home parks, and other income-producing land
• Tenants in common for real estate investments
• Tax lien certificates
• Tax deeds
• Lease options
• Royalty rights
• Franchise rights
• Commodities and futures
• Commercial paper
• Equipment leases
• Joint ventures
• Stocks, bonds, mutual funds, CDs
• Prohibited: Collectibles

Here is a GREAT article by one of my mentors… Chris Widener. I hope you will put it to use…

A Little Equation that Creates Big Results by Chris Widener

“The purpose of man is in action not thought” - Thomas Carlyle

Often people will ask me how I get so much done in my life. They wonder at how I am able to accomplish so many things. The answer is found not in what a great person I am, but in an equation I came up with a few years ago and remind myself of on almost a daily basis. And when I live this equation out, it produces big results. What people don’t seem to grasp is that this equation will work for anybody! Anyone can see results in their life if they will live it out!

This little equation, when it is understood, and acted upon, is perhaps the most powerful equation there is in regard to long-term achievement and accomplishment. Yet, this is not a complex equation. In fact, it is rather simple. So what is it?

Your short-term actions multiplied by time equals your long-term accomplishments.

If you want to see change in your life, see big results, the first thing you must do is change your current actions. Otherwise the old saying becomes a reality: “If you always do what you’ve always done, you’ll always get what you always got!” But if we change our actions, we will see different results!

Most people want to accomplish a lot in their lives. Yet very few actually do. Why is this? It is because what they believe will equal their long-term accomplishments are wrong. Here are some of the things that people believe will create great accomplishments for them:

Beliefs
Vision
Big dreams
Ideas
Ideals
Values
Desire

The truth is that while these things are very important, they are not enough in and of themselves. We need to have the above underlying all that we do, but we need to actually do something! And this is where most people stop. We need to take action on our dreams and beliefs every day.

Here are some examples of how this works.

Who loses weight? The one who knows all about the benefits of exercise or the one who walks 3 miles a day?

Who retires early? The one who dreams of a house on the beach, or the one who invests $300 a month?

Who writes books? The one who desires to become a best-selling author, or the one who gets up early and writes for half an hour a day?

Who has the best marital relationship? The one who knows how much spending time with their spouse can improve their relationship, or the one who sits down and talks with their spouse every night?

Who makes the most sales? The one who believes they can become a great salesperson, or the one who makes 10 sales calls a day?

I think you get the point. When it all comes down to it, we must act upon our vision, beliefs, and ideals or we won’t see them come to fruition. I see too many people who know what is right, but don’t ever do anything about it. Imagine what a difference we could make in our own lives and the lives of others if we would simply begin to act upon on our beliefs!

When I get to the end of my life, I want to know that I have done all that I can to make this world a better place and to enhance the lives of those around me. I want to know that I gave it my best shot. And I am sure that you do to. I remember reading an interview with an author who has written numerous books that have sold in the tens of millions. They asked him how he did it. His answer was that he got up every morning before anyone else in his family and wrote, long hand, with a pencil, for an hour. Then he quit and went about his day. But his short-term actions piled up. 7 hours a week. 30 hours a month. 365 hours a year. After a while, he had lots of books!

Some questions as we leave:

What long-term accomplishments do you want to see come to pass?
What short-term actions will you need to do over time to see them come to pass?
What will you do today to begin seeing your dreams come true?
What will you do this week to see them come true?

You can have an awesome future, filled with great achievements and results if you begin today to take action and make it a reality!

One more time, so you can plug it in, memorize it, and live it.

Your short-term actions multiplied by time equals your long-term accomplishments.

A client, and good friend, S. Fish sent this link to me. The presentation is long, but, it is Really worth watching. No… there aren’t any jokes or “canned” laughter in the program! It is information to add knowledge to you on why oil prices are high. Make the “investment” of your time, digest it, and, gather more information to help you build your opinion. Weed through the promotion, marketing and agenda. You will find knowledge. Seek out professionals in this area and confirm or deny the hypothesis.

http://video.google.com/videoplay?docid=3340274697167011147

A new report by the Vanguard Group has found that Americans aged 40 to 69 expect to gradually ease into retirement, with work playing an important role in their early years of retirement.

“Six Paths to Retirement” details a variety of ways Americans approach retirement, including “downshifting” into retirement by reducing their work hours or taking on part-time work or a less stressful job. Nearly two in three respondents aged 55 to 69, the study found, “have downshifted already or plan to do so in the future.”

The Vanguard study found that retirees take six distinct paths to retirement. The “still working” crowd, the largest group of respondents (35%), stopped working fulltime in their 60s, yet, for financial reasons, continued with some type of part-time work or self-employment. The early retirees, which made up about 30% of survey respondents, stopped working in their 50s and never started working again. Vanguard says while these folks retired earlier than usual, this group “fit the conventional view of retirement,” and had adequate financial resources to support an early retirement. About 12% of the respondents were dubbed semi-retirees because while they retired from full-time work in their 50s, they “took on high levels of part-time work or self-employment,” to stay active, enjoy themselves, or to earn discretionary income, the study found.

One-quarter of Americans, the study reports, follow three other paths. There are those who will never retire – 10% of respondents – as well as what Vanguard dubs “returnees,” (5%), who retired early but then returned to work for financial and psychological reasons. The third route is the “spouse’s retirement” path (9% of respondents), which Vanguard says “represents individuals who had lower participation in full-time work in their 40s and 50s and pegged their retirement to that of their spouses.”

Hi all you bloggers out there, here is a little update on Long Term Care from Jenna Kozel with Edelman.

The new survey data shows that:

One in four Baby Boomers erroneously believe that they have coverage for long-term care expenses. According to the National Association of Insurance Commissioners, only about 5.2 million Americans have long-term care insurance - at most about 5 percent of Baby Boomers.

54 percent of Baby Boomers think Medicare will pay for long-term care services. Forty-four percent believe “other health insurance” will pay. Even half of those who say they have long-term care insurance believe Medicare will pay for the care. Medicare does not, in fact, cover long-term care indefinitely. Medicaid will cover these services, but only after requiring individuals to spend down nearly all of their assets to qualify for assistance.

Even among Baby Boomers nearing or at the age of 60 - when concerns about the potential impact of long-term care on retirement savings might be most prominent in their minds - only one in four say they are “very familiar” with long-term care insurance. In addition, 41 percent say they have not had any discussion about long-term care in the past twelve months.

Full survey data can be found here: http://www.ahip.org/content/default.aspx?docid=21352

ANB updated