Newsletters % - Mar.

Real Estate Investment Trust

Have you wanted to invest in real estate but have never had the money it takes to invest? You may want to look into a real estate investment trust or REIT. A REIT is an organization that pools investors’ money to invest in commercial real estate.

You buy shares in the real estate called units. It’s like the stock market for real estate. You can buy and sell units in a similar way to stocks.

REITs pay no income tax on their earnings. Instead, it has to distribute 95 % of its net income and the distributions are taxed to the unitholders as dividends. Unlike investing in major companies that are taxed twice when they pay dividends. These are a few more obligations that a REIT must follow.

The REIT must have at least 75 percent of its assets invested in real estate, mortgage loans, shares in other REITs, cash, or government securities. The REIT must derive at least 75 percent of its gross income from rents, mortgage interest, or gains from the sale of real property. And at least 95 percent must come from these sources, together with dividends, interest and gains from securities sales.

The REIT must have at least 100 shareholders and must have less than 50 percent of the outstanding shares concentrated in the hands of five or fewer shareholders.

This provides an opportunity for those to invest in commercial real estate without having to commit your life savings.

Budget Boosters

As you can imagine there are plenty of regulations and details that are involved with a REIT and we just do not have the room to publish them all. REITs can be confusing to the beginning investor and should be researched and analyzed before you decide you want to get involved. It is always a good idea to contact a local investment group and come prepared with many good questions. You may live in an area where there is not even many opportunities to invest in a REIT.

So if you have ever dreamed of being a real estate mogul this may be the opportunity you have been looking for. Just make sure you know what you are getting into.

You may buy a membership card and then find out that there are not a lot of items that you care to buy in bulk. It is a good idea to visit the store with a friend who already has a club card. Take notes and look for items that you may purchase in bulk to help you save money.

Penny Pinchers Club

Are you the type of person that comes up with terrific ways to Pinch Pennies? If so please email us and share your ideas.

HERE IS OUR PENNY PINCHER FOR THIS MONTH

Easter is a fun time for our kids but we try not to go overboard with too many store-bought trinkets. We make homemade easter baskets out of the strawberry baskets you get at the store. We hand shred old magazines and newspaper for the grass and spend the night before easter dying eggs and making our own candy.

Lynn K. IA

Counting on Social Security?

There has been a lot of talk about Social Security lately. A lot of it has to do with the fact that the benefits of Social Security are slowly deteriorating and may not be there for the next generation of retirees. There are countless amounts of information about Social Security and it can become confusing trying to sort it all out.

Social Security is a form of retirement and disability benefits that is taken out of your payroll through the Federal Insurance Contributions Act (FICA). This money is invested and then when you choose to retire the government will pay you back. This money will also be used to assist you if you become disabled. Dependents may collect Social Security if the beneficiary has passed away.

There are many political debates that revolve around the state of Social Security and what needs to be done to fix it.

It is important to note that Social Security was never intended to be the sole provider of a person’s retirement funds. Even if there were no problems with Social Security it would be difficult to financially survive on Social Security alone.

You should receive statements that will keep you updated on how much you have accumulated and begin collecting once you turn 62. If you do not receive statements you can request one by contacting the Social Security office.

COBRA Coverage

Insurance Benefits

Health insurance is a great part of any job. If you lose that job for certain reasons you may find yourself un-covered and susceptible to large doctor bills in the event of an accident. COBRA or the Consolidated Omnibus Budget Reconciliation Act of 1985 is an insurance program that may allow you to carry your health insurance coverage after you have left your job.

Cobra allows you and your immediate family members who were previously covered by your health care plan to keep coverage if you have lost coverage due to a “qualifying event.”

Here are a few of the general “Qualifying Events” that will make you eligible for COBRA coverage.

1. The death of the covered employee.

2. Termination or a reduction in hours that causes the worker to lose eligibility for coverage. This includes resignation, discharge, layoff, strike or lockout, medical leave, or slowdown in business operations.

3. Divorce. If you or your ex-spouse’s benefits were concluded once the divorce was settled you might be eligible.

4. A dependent child reaches the age at which he or she is no longer covered under their parent’s health insurance.

Even though COBRA extends the benefits that were provided to you by your previous employer, you are now responsible to pay the premiums in full. There may also be an additional 2 percent administrative fee. This can obviously be a strain on your finances, especially if you are still unemployed. However, you are taking a real risk by not having any health coverage between employment.

The premium rates may be high but you will be paying group premium rates, which are lower than individual rates.

COBRA coverage begins on the date that your health care coverage would have been canceled due to a qualifying event. Your previous employer must notify insurance administrators of a qualifying event within 30 days if the event is employee death, termination, reduced hours of employment, or privilege to Medicare.

Questions & Answers

Q: Should I get flood insurance?

A: This really depends on where you live. If you like in an area that is more prone to wet seasons then you may want to consider it. Consult your insurance agent for plans and rates. Most homeowners insurance plans do not cover damages caused by flooding. Damage caused by flooding can add up to thousands of dollars in repairs Not only do you have to replace many items you may have to tear out carpets and drywall that has been infected with mold if you do not want to buy flood insurance you should at least make sure that you have a functioning

If you do not have a copy of our FREE “Simplified Guide to Financial Life Skills” workbook, contact us and we will ship one to you at – NO COST! –

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Pioneer is not responsible for any advice given in The Pioneer Pilot. Everyone has a different set of circumstances that would determine if an idea or plan is the best one for them. Information provided should not be intended as legal advice.

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The Millionaire Next Door
by: Thomas J Stanley and Willam D. Danko

The authors debunk the myth that most American millionaires have inherited their wealth. By demonstrating how hard work and smart investing have made millionaires out of average Americans, this book shows us that we too can be among the ranks of the wealthy. An inspirational book that offers some sound advice.

My Financial Journal

It’s been a busy month for me. Got my taxes done and juggled with a car dealership.

Let’s start with taxes. My wife and I went online to do our taxes similar to what we have done the two previous years because we are big fans of them asking you questions and you filling in the answers and numbers.

We had a hunch that this year would be a little more difficult because of the addition of our daughter and the fact that we bought a house. After a few frustrating hours we finally got it finished after going back and forth to fix our errors. My wife and I couldn’t figure out why this apparently intelligent program couldn’t figure out that our daughter was born in August so she did not live with us for more than 6 months.

I guess technically she did, but you would think if it was a really easy program it would figure it out for us. So we felt a little stupid, but finally got it all ok. That is until I received the lovely email the next morning saying that our return was rejected because they couldn’t accurately confirm our identities. Once again we (mostly my wife) figured it out and we were finally approved and don’t have to worry about it for another year.

Beware of Predatory Mortgage Lenders

How many people out there have not heard of Ebay, or Amazon? I would hopefully assume a majority of you have. Internet commerce is as popular today as spending the weekend at the mall, and why not, you can bargain shop for items all across the country without having to fight crowds or sift through unorganized flea markets.

There are plenty of ways to both save and make money on the Internet. The important thing is that you have to do it right while protecting your security.

Buying

There are millions of products that you can buy online and not everyone is a reputable online business. Whenever you give out payment information you are putting yourself at risk.

It is important that you stick with dealers that are more nationally known and have better security protections. A secure website will feature a tiny icon of a padlock in the lower part of the web page.

Many online retailers accept payment with online payment tellers. The most popular one used is PayPal. These companies help ensure that you will be protected against fraud and identity theft.

Some retailers do not accept credit card orders and you will have to send them payment through the mail. You do not want to send a personal check through the mail that contains your routing and checking number, as well as your personal information. It is better to send a cashier’s check or money order. You are still taking a risk by sending money through the mail and you may not get the item that you paid for.

Make sure that you print or keep copies of receipts and confirmation numbers that are given to you for online transactions.

Teen Times

Hey Seniors, start compiling your list of family and friends that you want to include on your graduation announcements.

Your announcements should soon be arriving and it will take a little time to get them all addressed and personalized.

You can start now by getting all of your addresses gathered and your senior pictures signed and ready.

Buy thank you cards now and get them all addressed to save you time after your graduation party. The last thing you want to do during the summer is write thank-you notes. Don’t forget to save a little of that money you get from graduation.

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