DEVELOPING A FINANCIAL PLAN

 What should my long-term financial goals be?

The first step is to figure out a realistic financial goal for yourself and your family...

 Are there simple guidelines to follow towards a comfortable retirement?

Someone starting their savings in their early 20s can save 10% of their income and have a sufficient nest egg...

 What should I take into account when I start investing?

Risk vs. Return, Asset Allocation, Diversifying, Monitoring Progress...

 What risks will I be exposing myself to by investing?

There are definite risks to investing, but educating yourself can drastically limit your exposure to these risks...

 How can I avoid taking unnecessary risks?

Always trade through your brokerage firm...

 What investment pitfalls should I be on the lookout for?

Don't invest emotionally, don't trust tips, pay attention to your investments, reevaluate...

 How should I allocate my IRA investments?

IRAs are just like any other investment...

 What are the biggest mistakes investors make?

Starting too late, paying high fees, investing emotionally...

 What is the difference between Cumulative vs. Annualized Return?

Annualized return is the return on investment received that year...

 What is the Rule of 72?

The rule of 72 is a quick way to calculate how long it will take your investments to double at different interest rates.

Take the rate of yearly return on your investment and divide 72 by that number. The result is the number of years it will take for you to double your investment.

 What is significance of total return?

The total return is the amount of money that a fund makes after reinvesting and receiving dividends. This will deliver the most benefit from the compounding interest. The total return is a way to accurately gauge the real return on investment that you will get with a mutual fund.

 What is a yield?

The yield is the amount paid annually by an investment...

 What is an annuity?

An annuity is an insurance contract...

 What do I need to beware of when investing in an annuity?

You will not be able to withdraw any of the money in an annuity during its tax deferred growth period without incurring large fees...

 What types of annuity are available?

Single-Premium, Flexible-Premium, Immediate, Deferred, Fixed, Variable...

 How and when do I collect my annuity?

There are a few choices that you have when choosing to collect your annuity...

 How are the annuity payments taxed?

The tax rates will differ for qualified and non-qualified plans...

 What taxes will my annuity be subject to after death?

Annuity payments are subject to the same taxes that would have been collected from you.

 What should I take into consideration when shopping for annuities?

Commissions, the company, compare and contrast...

 What hidden costs may be associated with the annuity?

Commissions, penalties...

 What about other fees?

  • Maintenance Fees
  • Mortality Fees
  • Investment Advisory Fees


These fees should be stated plainly in the prospectus.


                                                                                                                   

                                                                                                              MUTUAL FUNDS

 How are mutual funds taxed?

All mutual funds distributions should be reported as income, whether you reinvest or not...

 Can I avoid tax by reinvesting mutual fund dividends?

Funds will generally give you the opportunity to automatically reinvest in the fund...

 What taxes apply to my return-of-capital distributions?

Mutual funds sometimes will distribute back to shareholders monies that haven't been attributed to the funds earnings...
                                                                                     




                                                                                                                           STOCKS


 How does stock trading work?

Stocks are traded in quantities of 100 shares, called round lots. Any quantity of stock under 100 shares will be considered an odd lot.

 What is the difference between Preferred and Common Stock?

Most stocks are common stocks. However, there is another type (known as preferred) which gives certain advantages regarding dividends. Generally, preferred stock holders do not have the same voting rights that the holders of common shares do. Common stocks are based on company performance, while preferred stocks will usually have a stated dividend.


 How can I invest in foreign stocks?

It is fairly easy to invest in foreign corporations, because these corporations need to register these securities with the SEC. These companies are subjected to the same rules as U.S. companies.



​* Please consult with your tax adviser before making a final decision as some information may have changed due to IRS rulings.

YOUR TRUSTED ADVISOR

Nicholas G. Vardalos & Company is a full service accounting firm serving clients throughout the Chicago metropolitan area, northwest Indiana and southwest Michigan.

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