After looking over what the site calls a Roth IRA on Roids (or Roth on Roids? for short) it becomes apparent that almost anyone can use this newly trademarked alternative retirement strategy, regardless of income, to gain all the advantages of a traditional Roth IRA and more. “More?” you say. Yes, more! Not only can you use the Roth IRA on Roids for tax-deferred growth and tax-free income, but with this wealth building tool you will also have an immediate death benefit and if that isn’t enough to get you excited ? your principle is guaranteed. That’s right ? you cannot lose money that you contribute to this plan. No need to complain that, “My retirement savings is down 50 percent. What do I do now?” Some other benefits of the Roth IRA on Roids that surpass the Roth IRA rules include:

No Roth IRA contribution limits. That means you can contribute as much money as you see fit with this plan without having to worry about IRS’s measly $5,000 limit (sorry don’t forget about the liberal “catch-up provision” of an extra $1,000 if you are over 50 ? oh joy!).

No IRA withdrawals rules or forced withdrawals. You are not required to make withdrawals at 70 1/2 as you are with a traditional IRA. In fact, you can decide to start taking money out at any age you wish or not at all.

No IRA Estate Tax for the death benefit. The death benefit of the Roth IRA on Roids can be passed onto the beneficiary income and estate tax free!

So there you have it, just about anyone can have the tax benefits of a Roth IRA with a few extra added benefits. To keep fair and balanced on this subject, one down side to the Roth IRA on Roids is that the contributions are made with after-tax dollars, as opposed to some other retirement plans such as Traditional IRA. I know another dream deferred, but hey, we have to pay for all these bailouts somehow! Okay sorry, that was my ghastly attempt at some humor, but I think you have to remain good-humored when talking about death benefits, IRA retirement planning, and the IRS.

I have simplified the IRS tax code and IRA retirement planning immensely in this article for the sake of an easy and enjoyable read. But the above remains a good starting point for those looking to reap the rewards of a Roth IRA without actually having to qualify for one (the tricky part).

The Northern Utah real estate market has great appeal for both buyers & sellers. One of the reasons is that North of Logan there are many wonderful little communities. They include North Logan, Hyde Park, Smithfield, Richmond, Cove, Lewiston, Cornish, Trenton, Amalga, Clarkston, and Newton. North Logan, Hyde Park, and Smithfield are busy parts of the Logan metropolitan area. There are many business and shopping opportunities in these three communities. North of Smithfield the feeling changes to rural farm towns. This gives the real estate market here a wide variety of options to choose from.

Today real estate investment is among one of the most popular businesses and a large number of buyers and sellers are making investment in the real estate market. Real estate investment requires proper knowledge and concentration to invest at the right place & at the right time. Utah is a beautiful state which offers a wide choice of real estate investment opportunities to interested buyers and sellers. The north end of Cache Valley in Northern Utah has infinite recreational opportunities. There are many small canyons in the mountains in these areas. These canyons are great for hiking, fishing, camping, four wheeling, and hunting.

The only assets that performed poorly in 2009 were cash, with a nil return, and long term US Treasury bonds, down 13.2%. Virtually all of this loss occurred in the first half.

The following chart compares stock and bond market performance for 2009:

The best explanation of the strong capital market performances is a general investor expectation of a recovery in earnings. The best explanation of the poor performance in the risk free Treasury bonds is either a return to normal yield level after the panic in the fourth quarter of 2008 drove the 10 year Treasury bond to an all time low, or an investor expectation of an increase in inflation.

I agree with a recovery in earnings (but not personal incomes) and I disagree with an increase in inflation. The 10 year Treasury bond simply returned to its pre-panic yield level of around 4%. We will examine these in detail, but first let?s look at the winners list.

The ?Walking Wounded? Were the Winners!

In a normal venture capital portfolio of ten investments, there will be two big winners, one or two losers and the rest are ?walking wounded?? not winners and not losers but somewhere in between.

The top 10 S&P 500 Stock Index price performers are weak companies, such as Ford, AMD, Genworth Financial, and Micron Technology. Only one of the top ten pays a dividend. Except for Western Digital, all have either reported losses in the past year or have low or negative net worth. Some, such as AMD and Micron, are consistently unprofitable.

Here?s the list:

Top Ten Price Performers

These ?walking wounded? performed, on average, ten times better than the S&P Index. In several cases this impressive performance is still only a partial recovery as the current stock price is still well below its high of the past two years. You will note most of these ?winners? carry a low safety rating from the Value Line service.

Earnings are what drive stock prices? but not in 2009. Perhaps it was the hope of future earnings. In any case, 2009 was as Samuel Johnson?s says, ?the triumph of hope over experience?. Another way to look at this strong price performance is just a recovery of much of what they lost in 2008.

Now let?s look at the giants of the Index. The top ten companies by market capitalization represent approximately 20% of the value of all 500 stocks in the Index.

The following chart compares these top ten companies on the same basis as the top ten price performers.

Top Ten by Market Capitalization

The tech sector had a significant influence on the performance of this list. As you can see the top ten outperformed the Index by a significant margin. But if we remove the four tech stocks (Microsoft, Google, IBM, and Apple) the average performance drops to 3%. These behemoths are financial powerhouses as reflected in the mostly Value Line ranking of 1 for safety.

You will also note these companies are mostly near their highs of the past two years, suggesting they avoided much of the market meltdown in the fall of 2008. I include this list as I think it is important to consider as we look out into 2010. Conservative income-oriented portfolios missed most of this up market.

More Inflation? Not Likely!

The justification for higher inflation expectations is rooted in the massive increases in the money supply engineered by the Federal Reserve over the past 18 months. And yes there has been a huge increase.

Normally, the Federal Reserve Bank expands the money supply, called M1, in times of recession. The following chart shows that relationship for the past two recessions. The money supply expanded rapidly in the recession of 2001-2002 and again in 2008 and 2009.

When the recession is over and economic growth resumes, the Federal Reserve reduces the money supply. We saw that in the prior recession. Although it has not done so yet, there is no reason to believe the Fed will not do the same thing this time. Normally, reducing the money supply is accompanied by higher short term interest rates.

Right now there is a lot of media clamoring about the Federal Reserve Bank?s balance sheet expansion. The Federal Reserve Bank has borrowed $2 trillion in the past 18 months. About $1 trillion was used to bailout various financial institutions and companies.

The banks that received government bailout money, mostly large bank holding companies, did not make loans with it. They put it back on deposit with the Fed. In short this huge amount of created money has not gone into the economy. It remains on deposit with the Fed, and at some point, the deposits will be drawn down to repay all of the bailout loans. So the Fed borrowing is not as excessive as some claim.

If we take the $1 trillion in deposits out of the M1 amount shown in the chart above, the money supply drops to below the GDP (red line) , just like it has been for the past 10 years.

No More Railroad Tracks

This next chart illustrates the close relationship of growth in the economy (Gross Domestic Product or GDP) and growth in the money supply (M1). For a long time GDP and M1 tracked closely, almost like a set of railroad tracks. But the dramatic acceleration of inflation in the 70?s and the slow but steadily increasing involvement of the government in the economy have caused this relationship to be disturbed.

This chart shows the long term relationship between the economy and the supply of money needed to run the economy. The multiple is about 10 to 12 times. That is, the sum of economic activity (GDP) can be adequately financed with a money supply equal to about 10% to 12% of the GDP. This multiple varies from time to time, especially since 1990. The chart above suggests the current money supply is about in line with the long term relationship of GDP to M1.

As you can see, for the past 30 years, the money supply has tended to deviate from the GDP. In times of recession, the Federal Reserve Bank (the Fed) injects more money into the economy in an effort to decrease the severity of any downturn. Some will argue this has been a successful strategy. That may be true but not part of our discussion now. The point is the money supply now regularly diverges from the GDP. It has happened for the past three recessions. The Federal Reserve increases the money supply until the economy recovers. It then withdraws this liquidity from the system as the economy can now grow without as much money.

The Fed dramatically increased the money supply in the recession of 1991 (the blue line shoots up). Then from about 1993 until 2001 the money supply was constant (the blue is flat). This means there was no change in the amount of money in the system as the economy grew from 1993 until 2001.

Again in the recession of 2001 ? 2002 the Fed expanded the money supply and then held it constant from 2003 until the middle of 2008. And now it has expanded the money supply again. The Fed will repeat the pattern of past recessions and recoveries. It will withdraw liquidity later this year or in 2011.

Now let?s compare the changes in the money supply with inflation (CPI).The following chart shows this relationship for the past 60 years.

As you can see big changes in the money supply have caused virtually no change in the rate of inflation. The biggest increase in inflation was in the mid to late seventies, which saw almost no change in the money supply. So a dramatic increase in the money supply, like now, does not automatically lead to higher inflation.

There does not seem to be a strong connection here, does there? But the argument for low or no inflation for 2010 is stronger than just the lack of a relationship between M1 and inflation.

Huge Surpluses

In addition, there are vast idle resources available that also argue for little or no inflation. After all, inflation is the result of too much money chasing too few goods. We don?t seem to have too much money and we have lots of idle resources.

We have surplus cash, surplus production capacity, surplus workers, surplus real estate, and surplus energy. Surplus of resources would argue for no inflation, or even deflation. Offsetting this constraints are two factors that boost inflation.

The first is the automatic increases from COLAs (Cost of Living Allowances) and the second is strong pricing power from companies producing products people want, such as iphones and Lipitor.

Surplus resources offset by automatic increases means inflation will be positive this year just like it has been every year for the past 40 years. I estimate it at 2%.

Households Are Holding

According to the Flow of Funds Report issued by the Federal Reserve every quarter America?s households are flush with cash. They collectively have $7.7 trillion in liquid financial assets representing 15% of their net worth. The amount has doubled in the past decade and the percentage is at a 20 year high. Bank deposits and short term CDs pay almost nothing. These funds, at least a portion of them, are available for investment that earns more than nil. Some of this liquidity will be invested in the capital markets this year.

Factories Are Waiting

Last fall our factory utilization rate hit a new low of 68%. This means only two thirds of our factories are working. The remaining third are waiting. Capacity utilization is very volatile and responds rapidly to changing economic conditions. It falls in recessions and increases during economic expansions as the red line in the chart below illustrates. The troubling part is this line is trending down over the past 40 years with lower highs and lower lows.

The blue line is an index of factory capacity. As you can see it grew steadily in the seventies and eighties, accelerated during the Reagan years. For the past almost 10 years capacity has stagnated. In short we are not adding any new factories. This is also troubling.

The fact remains, about one third of our factories are idle and available.

Workers Are Idle

In this past recession we also created a vast surplus of workers. When the recession began America employed 138 million salaried workers. Two years later we employ 131 million. Seven million people who were working and probably want a job are unemployed. The following chart shows this dramatic fall in employment (blue line).

The interesting point in this recession is the average wage continued to increase. This is strange and troubling for the outlook for unemployed workers. In the prior recession the same thing happened. Employers laid off workers and average wages increased as the recession unfolded. The outlook is for employment to continue declining for some time just as it did in the 2001 thru 2003 period.

Because of the ever growing burden of federal taxes and employee benefit costs I expect employers to hire slowly. We should see overtime hours spike significantly before we can expect much more employment. In 2009 overtime plunged to a 30 year low. This is not a good sign. The alternative, of course, is for the government to decrease the cost of hiring.

Houses Are Vacant

We all know what?s happened to real estate. The value of our homes has declined as never before, down 50% in some locations. The real estate boom created 13 million houses that were not homes, and probably never will be. Foreclosures are hitting record levels and mortgages are difficult to get. The housing overhang will exist for some time. We can expect housing related industries to struggle for survival. Please read my piece entitled, ?What Recovery? What Recession?? for a more complete description of the housing bubble.

Energy Is Abundant

America imports about half of the petroleum it uses. Not only does this hurt our trade balance, it is not necessary. According to the Congressional Research Service, a part of U.S. Congress, we have more reserves of fossil fuel than any country on earth. The report is titled ?U.S Fossil Fuel Resources: Terminology, Reporting, and Summary? and was released October 28, 2009. Go to www.opencrs.com to download this report.

It is simply a political decision not to access our own resources.

Lots of cash, empty houses and factories, idle workers, and ample energy resources argue for little or no inflation.

What About Earnings?

Valuations have become extremely extended. The S&P 500 Index has a price earnings ratio of 91 times and a dividend yield of 1.9%. Other indexes are not so extreme. The Value Line Index is 17 times earnings and a yield of 2.1%. The Dow Jones Industrial Index has a P/E of 18 times and a dividend yield of 2.6%. Price Earnings ratios are high and dividend yields are low by historical standards.

The following chart was prepared from information available at Standard & Poor?s website. The first two columns show the year end price of the Index and the percentage change for the year.

The next two columns are the actual operating earnings each year and S&P?s forecast for 2009 and 2010. I have used operating earnings, which is very different than net earnings. Operating earnings are a better indication of how a company is performing.

Net earnings can include many one time charges that greatly affect a company?s earnings. In short, net earnings are much more volatile than operating earnings. The last column is the price earnings ratio.

S&P 500 Index Historical Data and Forecast

I have used my forecast for the S&P 500 Index performance for 2010, up 10%. All other data is produced by S&P.

Recessions affect earnings and stock prices. In the recession of 2001-2003 stock prices fell 60% and earnings declined 30%, resulting in a big drop in the P/E ratio to 19 times. For the next several years earnings expanded faster than the index price, further reducing the P/E to 16 times. In the recession of 2008-2009 earnings dropped before prices, but both dropped by similar amounts.

S&P?s forecast of $56 in operating for 2009 seems reasonable to me and consistent with year to date information. The Index has run ahead of earnings, increasing the P/E back up to 20 times. S&P?s forecast of a 35% increase in earnings for 2010 ($75.27) seems very aggressive and unlikely. If it happens it will be the best earnings growth rate in more than a decade. While some companies may be able to achieve that level of growth, I doubt the market will.

Who?s Going To Grow?

Earnings always matter as they are what drive stock prices. However, there will be big divergences this year, with some companies hitting new earning highs and other companies struggling. Comparisons will get easier as we come out of the earning trough created by the massive panic stops in out supply system last fall. But that is not enough.

We will look for sustainability of both sales and earnings. Not just temporary pickups.

The areas of interest include:

-Selected healthcare companies

-Existing Infrastructure companies

-Multinationals serving BRIC markets

There are others, of course, that will surface as the year unfolds, but these are just several that have obvious promise.

There are numerous websites that promote work at home businesses, offer advice, links or even training and education to start such businesses. However there are two kinds of websites. One of the types are those which are solely focused towards generating money out of the registration fees which they charge from their readers giving them hope of making money after reading their secrets that are accessible only after the payment. The other type of websites for work at home businesses are those which are genuinely meant to open doors for hard working individuals who want to earn sitting at home. These websites give links to such employers, organizations and webmasters who need offshore employees or business partners.

Work at home businesses can mean that you work as a freelancer by your own free will and be your own boss. You take up projects from clients who you think suit you in terms of their timings or pay rates and outsource the work or do it yourself. Or it can also mean that you don’t even take up any clients and in fact offer your products to customers who search for such products or services. A few examples for work at home businesses may be something like offering your hand painted fabrics and clothing line on the internet, or having your own online fashion or sports magazine.

The list of work at home businesses is never ending. The most important aspect you must evaluate prior to planning on starting one is to see whether you are ready for it or not. For this you need to define your potential, your strongest set of skills, your available finances that you may need as a basic investment and your current knowledge about the field.

Once you think you have prepared your grounds you may connect to these websites that offer training for work at home businesses. These websites can offer specialized training, courses and tips on how to make work at home businesses successful. With proper training you can polish and improve your skills. You can see what opportunities exist and which ones will suit you best. At times you may even land up with ideas that require only one kind of investment from your end and that is “time”.

Some online businesses need no finances and just demand consistency, hard work and attention to detail. You have to get in touch with people who are already in the business and agree to promote your business while you put up links to their business. This is a kind of two ways link building. You advertise for them and they do the same for you. So you don’t end up paying heavy amounts to people just for advertising.

Work at home jobs are ideal opportunities for work at home moms and men who need a part time earning. You just need to know how to move wisely to win a market share that generates leads and how to fight competition.

If you choose to open a bank account, you should know how to go about it before you arrive, as you might choose to send money to China before you move for ultimate convenience. Some banks you might be familiar with, such as HSBC, do have branches in China, but most banks exist only locally. Some of the more popular ones include Bank of China, CITIC Industrial Bank, and Standard Chartered. Additionally, unlike some countries, debit cards are issued right when you open an account. ATMs can be found nearly everywhere, especially in larger cities like Shanghai, Beijing, and Hong Kong.

Unlike cash, credit cards and checks are not used very often in China. If you still have a U.S. bank account, your foreign check will likely not be accepted anywhere. In fact, once you move, if your friends or relatives try to send money to China to help you via check, it can take up to a month to clear. For this reason, checks are discouraged as ways to get money to China.

You can send money to China through a money transfer company, but fees are often high. Instead, you could keep your U.S. bank account open and simply withdraw funds from that in China using a debit card. Be aware of the exchange rate if you do this. Currently $1 USD equals about 6.83013 Yuan, though the rate changes often. Additionally, ATMs charge a fee when you withdraw money from a different bank.

Another popular method is to send a prepaid debit card to your current address, and then add money to it whenever you need it. This is one reason many people keep their U.S. bank account open when they move, as they can send money to China easier this way. The fee is $5 per transfer, and you can send as much as you want at once. This also means you can have money the minute you get to China so you do not have to open a bank account the day you arrive.

Choose the method that is most convenient for you. Keeping fees and transfer times in mind is also wise. But overall, knowing the basics behind the banking system in China can help ease your transition.

Stocks and mutual funds aren’t just terms for Wall Street brokers anymore. They’re assets to anyone with a desire for more money. Why not benefit as the economy benefits and share in the wealth? That’s what “capitalism” is all about.

A stock is a share in the ownership of a company. For the company, a stock is a fundraising loan that they needn’t repay, but will typically yield greater income for both the company and its shareholders in the end. As an owner, you are entitled to your share of the company’s wealth.

You won’t be able to control how the company is run per say, but the good news is that you will have a claim to assets and limited liability (meaning that you’re not personally responsible if the company can’t repay its debts).

Stocks can be daunting since there’s always the risk that the company won’t be profitable and you’ll lose your investment. When retirement planning, the AARP recommends investing for the long haul in companies that are likely to succeed (instead of trying to “time” the market) and invest small in many different stocks to minimize risk and maximize returns.

A mutual fund is a lower-risk investment. Investors pool their money and allow professionals to select stocks for them. While stocks may generate a larger return, mutual funds are better for retirement planning because of their low risk and maintenance.

Mutual funds spread your investment dollars around and gives you the expertise of a money manager to ensure the success of at least some of your investments.

Mutual funds are constantly being bought and sold, so you can easily sell your shares for money. Many people choose the automatic investment option, which takes a certain amount of money out of each paycheck to invest. When the market’s down, more shares are bought to increase your ownership and when the market’s up, less shares are bought at the higher price.

So how will you make money off your stocks and mutual funds? One way is through appreciation, meaning that the fund will be worth more than what you paid for it as the market changes and you’ll be able to resell, making a small profit.

Another way is through dividends, which works like interest that is distributed among shareholders annually or sometimes quarterly. A third way is through capital gain distributions, which is the portion of the shared company profit that you can receive annually or monthly.

Retirement planning investments shouldn’t be touched until retirement however, since this money will be included in your taxable income.

You may be wondering, “Where can I get started on investing in my retirement plan?” For information, check the US Securities and Exchange Commission website to find what questions to ask before you get started with your retirement planning investments.

The local library will also have many resources for eager investors. To jump right in, make an appointment with your local bank.

Mortgage pools are securities that are required by state and federal agencies to provide complete and full disclosure through an offering memorandum. A mortgage pool is a collection of capital contributions from many investors and is usually in the form of a limited liability company that sells shares. The investment pool of capital is then used to purchase a number of different loans, which are commonly called mortgages or trust deeds, and secured by real estate.

There are basically three ways to invest in mortgages, and regardless of a person’s real estate or investment acumen, there is a mortgage investment option available today that fits their investment portfolio. The three ways are: funding a mortgage directly, participating in a multi-lender or syndicated specific mortgage, or by investing in a mortgage pool.

The purpose of a mortgage pool is to create a long-term investment vehicle that provides for the fund’s management and a favorable rate of return to investors, while providing them with a diversification of risk and stability. Also, mortgage pools are redeemable on relatively short notice so they offer more liquidity than a direct mortgage or syndication.

For investors who don’t have the real estate expertise and don’t want to commit the time and energy to learn, the best route is to find a company that offers mortgage pools, like The Grace Fund LLC. These companies employ the services of a manager and administrator of the mortgage pool on the investor’s behalf who furnishes the investor with a monthly statement to keep them informed of their account balance, current yield and other details. The mortgage fund manager is paid a modest fee to research the proposal, make the lending decisions and handle all of the payments and administration. Fees earned by the manager are not paid by the investor, but rather a percentage of the income earned on the mortgages and servicing fees charged to the borrower.

These mortgage pools work through a four-step process: 1) investors purchase shares of a company; 2) the company purchases a number of qualified trust deed investments or mortgages; 3) the trust deeds and mortgages provide a return to the company and; 4) the company distributes a return to the investors from monthly cash flow, or growth through a Distribution Reinvestment Plan instead of taking a monthly payment.

Investing in the mortgage market can be a solid option for investors who want to benefit from the commercial real estate market without actually buying real property. In the past couple of years, returns of 10% to 12% or more in mortgage pools – compared to 3-4% for more mainstream investments – have been common. The pool is continuously managed with a primary objective of securing new mortgages to replace mortgages that mature, thus insuring investors a steady stream of passive income.

Monthly income from most mortgage pools usually varies as interest rates change or when mortgages are paid off. The returns to investors from the mortgage pool would follow market interest rate increases or decreases. The investor in a mortgage pool earns a blended rate of return on investment based on the interest earned from each respective mortgage. However, in the case of an investment in The Grace Fund, monthly distributions of 1.25% (15% annualized) are made to investors. To achieve the higher return, the Grace Fund mortgages are fixed at 15.5% annual interest to the borrower, an affiliate of Grace Realty Group. The higher rate reflects a premium to distinguish The Grace Fund from the many competitors vying for investor dollars in the marketplace.

I believe the most convenient, effortless and safest method for the average investor to invest in a debt instrument is through a mortgage pool. They pool their money by buying shares in the fund, and the interest earned from the mortgage payments received from the borrowers becomes income for the fund. All income earned is distributed to shareholders according to their proportional interest. Simple.

Similar to a mutual fund, a mortgage pool provides a vehicle to diversify a portfolio of investments – in this case, mortgages instead of stocks or bonds. Investing $50,000 in a mortgage pool consisting of 25 loans valued at $15 million provides better security through diversification than a $50,000 investment in a single loan secured by a single property.

Unlike a mutual fund, mortgage funds are secured by real estate and not subject to the same volatility as the stock market. Most mortgage pools are backed by well-underwritten and well-secured real estate loans. This is particularly true when the mortgages are secured by property that is financed at a very low loan-to-value ratio. To further mitigate risk, additional security is realized when the borrower purchases properties at a price far below their replacement cost with considerable value-added possibilities (buy low, fix up and sell strategy).

Another advantage to mortgage pools is that they are very suitable for most tax-deferred savings accounts including IRAs and 401ks, making them a good fit for future retirees or anybody else on a fixed income. An investment in a mortgage pool should be considered for inclusion in every serious investor’s portfolio.