Understanding Your Options- Tax Implications of Stock Options

This is an excellent article on the Tax Implications of Stock Options

As with any type of investment, when you realize a gain, it’s considered income. Income is taxed by the government. How much tax you’ll ultimately wind up paying and when you’ll pay these taxes will vary depending on the type of stock options you’re offered and the rules associated with those options.There are two basic types of stock options, plus one under consideration in Congress. An incentive stock option ISO offers preferential tax treatment and must adhere to special conditions set forth by the Internal Revenue Service. This type of stock option allows employees to avoid paying taxes on the stock they own until the shares are sold.

via Understanding Your Options- Tax Implications of Stock Options.

7 Ways to Learn Anything More Easily – CBS News

It’s September, so kids are heading back to school and those of you still in college or business school are preparing to hit the books. But back-to-school time isn’t just of interest to parents and traditional students, young professionals can use the yearly return to study as inspiration to start learning something new for themselves or their careers.

But what if you’ve decided to learn a new language or new technical skill, how can you make the process as productive and pain free as possible? Psychology has evidence-based answers to help you study anything more efficiently, and blog BPS Research Digest rounds up seven of them, which were recently featured in The Psychologist magazine HT to Bob Sutton for the pointer.

Adopt a growth mindset. Students who believe that intelligence and academic ability are fixed tend to stumble at the first hurdle. By contrast, those with a ‘growth mindset’, who see intelligence as malleable, react to adversity by working harder and trying out new strategies.

via 7 Ways to Learn Anything More Easily – CBS News.

Bond ETFs | ETF Trends

There have been a slew of articles already in 2013 warning investors who have piled into fixed-income funds about the dangers of rising interest rates. Yet there are steps ETF investors can take to protect themselves from higher yields and lower bond prices.

For example, some experts are advising fixed-income investors to take shelter in high-yield bonds, bank loans and emerging market debt.

“Wall Street is in the process of turning one of its most plain vanilla investments – and one that average investors have flocked to in recent years because of its perceived safety – into ticking time bombs,” Fortune said in a recent story on bond funds. “Many market gurus say that this may finally be the year that interest rates, which have been at historic lows, march up.”

Bond prices and rates move in opposite directions.

via Bond ETFs | ETF Trends.

Treasury ETFs Fall: ‘Great Rotation’ from Bonds to Stocks? | ETF Trends

Treasury ETFs Fall: ‘Great Rotation’ from Bonds to Stocks?January 25th at 10:40am by John SpenceBond ETFs News: PIMCO Total Return ETF’s Bill Gross: Stimulus ‘Increasingly Ineffective’ Muni Bond ETFs and the Tax-Free Coupon SEC Money Market Fund Reform Drives Interest in Short-Term Bond ETFsThe iShares Barclays 20+ Year Treasury Bond Fund NYSEArca: TLT was down more than 1% on Friday for its third straight day of losses. The fund is being hurt by rising Treasury yields amid talk of a “Great Rotation” from bonds to stocks as the S&P 500 nears its all-time high.Bonds have enjoyed a bull run of more than three decades and yields have been pushed to near record lows in the aftermath of the financial crisis. However, rising interest rates would eat into bond prices and punish investors who have piled into fixed-income funds and ETFs. [Bond ETF Investors Overconfident After 30-Year Rally?]

via Treasury ETFs Fall: ‘Great Rotation’ from Bonds to Stocks? | ETF Trends.

Ignore the “buy gold now” crowd – CBS News

(MoneyWatch) Last July, Merrill Lynch predicted gold would hit $2,000 an ounce by the end of the year. Money manager Peter Schiff has predicted gold will hit $2,300 by next year and within a few years hit $5,000. These kinds of predictions seem to be driving investor interest in gold.

It’s no surprise that so many investors pay attention to such forecasts, despite all the evidence that there are no good forecasters. It’s also no surprise that gold seems to defy one of the basic laws of economics as the investment demand for gold has increased along with its price. Prior to 2003, when gold was under $300 an ounce, I don’t recall any investors asking if they should include an allocation to gold in their investment plan. Yet today, after a more than five-fold increase, it’s one of the most frequent questions I get. In fact, a CNBC survey from last year showed that gold was most often cited by investors as the “best investment,” topping even real estate and stocks.

via Ignore the “buy gold now” crowd – CBS News.

Control of income more important than earning it

Owning a home is part of the American Dream. Financial experts tell us owning a car is better than leasing. And who would think of not owning the clothes you wear? The concept of “that’s mine” runs so deep it’s probably hardwired into our brains. To prove it, just try to take a toy away from a two-year-old.

On the other hand, the control of an asset is often more valuable than ownership. If you could lease a new $25,000 car for one dollar a month for 10 years, do you really care if you don’t own it? Absolutely not.

Or take a middle-aged tenant with a lifetime lease on a property subject to rent controls who pays rent at a tenth of current market rates. Who has the more value from that asset, the tenant or the owner? Clearly, the tenant has a valuable leasehold interest that in some cases could be worth more than the ownership interest.

via Rick Kahler: Control of income more important than earning it | Financial Awakenings.

Fulfilling Frugality

This article has some timeless ideas on leading a more fulfilling life.  It is worth reading.



In March, a couple of weeks after the stock market had plummeted to what would turn out to be its low point for the past decade, financial advisors David Yeske and Elissa Buie felt they needed to counter the mass hysteria by reaching out to clients. So they sent out an e-mail.

The message, however, didn’t have anything to do with the Dow Jones index or the importance of sticking to modern portfolio theory during difficult times. They didn’t talk about investments. They hardly mentioned money.

What they sent was a list of things clients could do that, in fact, didn’t cost much money at all-a manifesto called “Live Big” that explains how to live on a frugal budget. “Live Big is not about the size of your wallet; it’s about the size of your life,” the advisors said in the e-mail. “In these crazy economic times, it can sometimes be difficult to remember the areas in our life where we can Live Big without spending (much, if any) money.”

What followed was a list of about two dozen fulfilling, yet cheap, things that clients could spend their time doing. Walk a dog-even if you have to borrow one. Write someone an “old-fashioned” letter. Watch a thunderstorm. Donate blood. Hug someone.

It could have been viewed as a somewhat risky e-mail. It’s not typical, after all, for a financial advisor to tell his clients to go walk the dog at a time when their life savings are eroding.

via Fulfilling Frugality.