How to Buy Treasury Bonds Through Treasury Direct

Treasury Direct is the U.S. Government administered website that allows individuals and organizations to purchase bonds directly from the Government at any time. Purchasing bonds through Treasury Direct is a relatively simple process, but does require a little familiarity with the site and its bond products. This article will walk you through the process so it is more familiar to you when you decide to purchase bonds through Treasury Direct. Essentially, the process of buying bonds through Treasury Direct is as follows.

• View Treasury Directs Guided Tour before buying
• Choose a bond type
• Open an account with Treasury Direct
• Purchase the bonds

1. Treasury Directs Guided Tour:

The guided tour at Treasury Direct is a good way to acclimate with the process of purchasing bonds through the website. The tour demonstrates what is needed to open an account such as accounts, and tax payer identification number. The guided tour also illustrates the steps required for opening an account from start to finish.

After an account is created at the site it can take two weeks or longer to receive the Treasury Direct access card needed at the site. Special forms can be used to gain faster access to purchasing at the site. The guided tour allows prospective bond buyers to review the bond buying process without actually having to register for an account so you can have a better idea of whether or not the process appeals to you.

2. Choosing bond type(s):

Series EE and I bonds are different For example, do you want tax deferred income, inflation protection, State and local tax free bonds, or a specific yield? There are many bonds sold by Treasury Direct, a list of which can be found at the treasury direct website. Among the choices of bonds are series EE Savings Bonds, and series I Savings Bonds. All these bonds have different features that are ideally studied carefully so as to match your objectives for the bonds. The specific features of each of these bonds are linked to below:

• EE Savings Bonds: $5000 maximum annual individual purchase, fixed rate interest.

• I Savings Bonds: $5000 maximum annual individual purchase, variable rate interest

3. Purchasing the bonds:

Both U.S. Treasury EE and I Bonds are bought in dollar amounts, at face value, and can also be purchased as gifts using Treasury Directs special Gift Box feature. After opening an account online Treasury Directs tool features may also be helpful in financial planning calculations.

Treasury Direct Electronic Bonds can only be purchased by individuals with 'non-competitive bids'. What this means is the best price an individual can get on a bond is that established through the auction. Bids can placed online through the Treasury Direct site after an account is established.

Qualified organizations seeking to make 'competitive bids' on bonds can do so through a Treasury Automated Auction Processing System (TAAPS) account at Treasury Direct. Trust accounts and businesses can also buy savings bonds through opening and funding a Treasury Direct entity account. Bonds being purchased by organizations can also be purchased through 'Treasury Retail Securities Sites'.

Funding of Treasury Direct Accounts is achieved by electronic transfer from a checking or savings account with a routing number. For bids at specific bond prices, a broker or bank must make the bid(s) for you. For more information on the auction process reading the Treasury Direct 'Auctions In Depth' page may be helpful to you.

Bond prices can fluctuate over time as do yields, so thinking carefully about the purchase is a good idea. For example, yields on I Bonds between May-October 2009 will be 0% according to the a Treasury Direct Press Release. Auctions and reopened bond sales occur on a monthly basis throughout the year.

Bond pricing for non-new issued bonds is based on specific calculations that balance yield, time to maturity, and face value. Examples of this calculation can be viewed on the Treasury Direct Bond pricing page. The pricing is determined through Treasury Direct Auction. For account holders who have bonds that are maturing and want to reinvest, a redemption account within the Treasury Direct Account is used; this is called a Certificate of Indebtedness and is also used for bond redemptions.

In summary, purchasing bonds directly through Treasury Direct bypasses the middlemen i.e. brokers and banks. To buy either EE or I Savings Bonds from Treasury Direct open an account, fund it through a checking or savings account, and purchase via auction. The details of these three steps have been reviewed in this article and through linked to information at the Treasury Direct website.

Mutual Fund Review: Robeco WPG Small Cap Value Fund

The Robeco WPG Small Cap Value Fund (WPGTX) is a European managed, Maryland incorporated, 2 star Morningstar ranked mutual fund with a minimum initial purchase of $100,000.00 and .01 cent per share annual dividend. The share price has ranged in value from $6.00-$30.00 over its 35+ year life time and the fund specializes in small capitalization U.S. investments and has a an asset value in the tens of millions of dollars.

Robeco WPG Small Cap Value Fund: Fund management

The solvency of the Robeco WPG Small Cap Value Fund is stabilized by Robeco Investment Managements subsidiary relationship with Robobank, a credible and established Dutch financial services firm. Robeco Investment Management has 6 offices located in the United States including New York, Boston, Los Angeles, and San Francisco.

The Robeco fund family consists of several other managed mutual funds including a non-diversified climate sustenance fund (SSCIX), 2 Mid Capitalization funds (BPMIX) and (BPMCX), 2 All Cap funds (BPAIX) and (BPAVX) and a few other funds. (biz.yahoo.com)


Robeco WPG Small Cap Value Fund performance

Robeco WPG Small Cap Value Fund has a 5 year return ranking near the 60th percentile of all funds in the category, and as mentioned above a 2 star MorningStar rating meaning the fund is ranked by the organization as no higher than the 32.5th percentile in its mutual fund category. The MorningStar, star ratings specifically refer to investment risk and return of the funds but do not delve quite too deeply into the differences and nuances between similar mutual funds and the affects on performance those differences can have. (quickoverview.com)

Since the WPGTX fund invests primarily in Small Cap. U.S. businesses, i.e. companies with market capitalization under $1 billion U.S., the risk of volatility in the fund's value is unsurprising. This is so as Small Capitalization companies are notorious for their ups and downs, and this is reflected in the WPGTX fund history which has experienced down years approximately 33% of its existence.

Competitive positioning: Robeco WPG Small Cap Value Fund

Advantages of the Robeco WPG Small Cap Value Fund include no load fees and an expense ratio around 1.61% which is above average for the funds competitive grouping (finance.yahoo.com) The fund has been in existence since 1972, and is owned by a financially stable bank possibly making WPGTX insolvency or bankruptcy a lower risk in that sense. The fund also has an above average turnover, meaning it may not take a long-term approach to all its investing activities. This indicates an active management but also a potentially less predictable performance and/or share price forecast. Similar funds in this category include the following:

• American Century Small Cap Value Investor Fund (ASVIX)
• Artisan Small Cap Value Fall (ARTVX)
• Fidelity Small Cap. Value Fund (FCPVX)
• Keely Small Cap. Value Fund (KSCVX)
• Allianz NFJ Small Cap Value D. (PSVIX)

Summary:

The Robeco WPG Small Capitalization Value Fund is an above average risk, low to moderate long-term return fund that invests in smaller capitalized companies within the United States. The fund has demonstrated far better performance in bull markets because of its investment status, and using its performance history as an indicator. The fund is volatile and lower than average in risk and return comparison(s) with similar mutual funds, of which there are hundreds to choose from. 

The fund has good ownership in terms of financial stability and experience in the industry, which may be part of the reason for the long duration of the fund. Investment in this type of fund can be considered aggressive and higher risk therefore might not be the best fund to invest in near retirement unless the investor has ample discretionary funds and/or a low adversity to risk.

Sources:

1. https://www.robeco-usa.com/us/eng/iw/content/ic/value_equities.jsp
2. http://www.rabobank.com/content/
3. http://moneycentral.msn.com/detail/stock_quote?ipage=qd&symbol=WPGTX
4. http://biz.yahoo.com/p/fam/robeco_investment_funds.html
5. http://finance.yahoo.com/q/pm?s=WPGTX
6. http://quicktake.morningstar.com/DataDefs/FundRatingsAndRisk.html
7. http://www.quickoverview.com/overviews/morningstar-ratings-overview.html

Written: 06/14/2009 

Estate Planning Tips for Connecticut Residents

Planning an estate in Connecticut may require careful consideration and diligence to the State's laws because doing otherwise could end up costing more money and time than necessary when the estate transfers ownership. This article will discuss the planning of Connecticut estates in terms of 1) estate deductions, 2) estate relevant taxes, and 3) additional Connecticut estate planning information. It will also provides links throughout as reference, and sources of additional information regarding a particular aspect of estate planning in Connecticut.

Connecticut estate deductions

Familiarizing with estate deductions is important in reducing the value of an estate for tax purposes. For example, if an estate is taxable when it reaches a value of $2 million dollars, lowering its value via deductions to below $2 million dollars would eliminate that particular tax. In Connecticut, estates are valued after the same deductions allowed by the U.S. Internal Revenue Service. These and other deductions are viewable at the following links:

Federal estate deductions:

http://www.irs.gov/businesses/small/article/0,id=108143,00.html#4

State estate deductions:

http://www.finance.cch.com/pops/c50s15d170_CT.asp

As evident in the above link, some examples of these deductions include estate administrative expenses, and property transferred to a spouse after the estate holder's and/or primary trustee's death. However, take note of the sentence stating in some cases property transferred to a spouse may not qualify for deduction.

To avoid complication in deductions such as transfer of property and debt, documents and financial instruments proving ownership of property and debt are of importance. For example, the IRS may require documentation that payable on death bank accounts are legitimate from the financial institution. This assists the tax agency in certifying the type of account, its applicability to an estate or lack thereof, and validation of account owners and/or beneficiaries.

Estate relevant taxes in Connecticut

Connecticut implements a sliding scale on estate taxes meaning the higher the taxable amount of the estate, the greater the tax. This estate tax currently ranges between 8-16% and does not include other taxes. Also included in the Connecticut estate's valuation are real and personal property. Moreover, the State of Connecticut does impose a generation skipping tax. The aforementioned information and other Connecticut estate law can be found at the following link.

Connecticut Estate tax law:

http://search.cga.state.ct.us/dtsearch_pub_statutes.html

Other taxes such as income tax, inheritance tax, and gift tax may apply in the State of Connecticut if the estate's income sources, and assets are not tax protected via financial vehicles and instruments allowing such. For example, income from business within the estate is likely to be taxable either as a corporation or individually depending on the structure of the business.

i) Connecticut inheritance tax:

http://www.ct.gov/DRS/cwp/view.asp?a=1475&q=268962

ii) Connecticut gift tax:

http://www.ct.gov/drs/cwp/view.asp?a=1510&q=266934

However, if that business is registered overseas and owned by a foreign trust with assets within the company remaining abroad, the possibility of that business qualifying for taxation in the United States is reduced dependant on the legal separation of that business and/or its income from the estate's beneficiaries.

Additional Connecticut estate planning information

When an estate transfer takes place, the State of Connecticut requires tax documents be filed with the State's probate court regardless of value according to bankrate.com. These and other forms can be found at the Connecticut Department of Revenue website below and includes estate and gift tax forms, domicile declaration, estate tax returns and insurance statements.

http://www.ct.gov/drs/cwp/view.asp?a=1509&q=393688

Also important to note is that certain financial instruments may not be considered as within the jurisdiction of a trust according to Michael J. Keenan, Esq of Keenan Law, LLc, Specifically, in his estate planning blog, Keenen refers to 401K's, POD accounts, life insurance death distributions and IRA;s are distributed according to listed beneficiaries and not a Will.

http://ctelderlawblog.typepad.com/the_connecticut_estate_pl/

Other estate documentation pertaining to estate planning include living wills, last will and testament, trust(s) and power of attorney should comply with Connecticut's estate law in order to be legally valid for estates within that State. These documents can be found and prepared at a number of locations and may required the assistance of an estate planner skilled, certified and/or licensed in the State of Connecticut.

Tips for Achieving Security In an Uncertain Economy

Achieving financial security in an uncertain economy may involve 1) acknowledging a financial reality, 2) tackling tough financial problems such as debt, spending, budgeting etc. and 3) finding solutions to improve a financial situation. Financial security is multifaceted in the sense it includes financial planning, relationships, physical safety, emotional stability, and personal happiness.

Achieving financial security in today's economy can be assisted by wise financial decision making, and keeping income above the cost of living so as to facilitate savings and investments. Obtaining financial security demands know how, life agility, toughness, and a belief in oneself.

To believe in one's ability to make the most of all parts of one's life is an important starting point in achieving security. Once one has conviction in one's goals and dreams the next step is to act. The following paragraphs illustrate some of the important ways security may be achieved amidst an economic environment of corporate downsizing, frequent layoffs, changing employer needs and employment competition.

• Develop skills that fill economic needs

Skills that are in demand pay well. Economic trends and rises in the demand of various services and salaries are an indicator of demand. For example, as the baby boomers start retiring the demand for health care workers is expected to rise. There are many different professions within the field of health-care, some of which may be just what one is looking for with good pay to match.

• Improve psychological fortitude

Life and uncertain economic conditions can bombard one with rejection, fear, doubt, struggle and many other negative and unpleasant things. Being able to function normally and happily within such potential conditions requires psychological strength. Such strength can take years to build and minutes to fall apart. Consulting self-help books, thinking about how to approach situations differently and developing trust and reliance through perseverance may be what is necessary to build such psychological strength.

• Utilize time

Time really is money and unfortunately there are only 24 hours in day and 168 hours in a week. Since any time spent not working for pay, is money not earned that time is a financial loss if one values money. The week can be broken down by percentage as follows:

33% is spent sleeping on average, roughly 5% is used up on driving places, another 10-15% or so is spent eating and cooking, 4% in the bathroom, 8% on housekeeping, 2% on errands and 10% on entertainment. That leaves approximately 38-40 hours to make money. One can either optimize those 38-40 hours by maximizing one's income whenever possible, or reduce the amount of time doing other things to make more money.

• Live within financial means

Everyone knows one can't spend what one doesn't have. The difficulty lies not so much with the concept but finding a way to actually stick to a budget and live happily at the same time. Living within one's financial means not only means budgeting in some way it also can mean learning to be happy with what one has. It is possible to be happy without more things it just takes effort.

• Build other sources of security

Not all security is financial whether it be an uncertain economy or not. Security can also mean emotional fulfillment, spiritual peace, strong relationships, good mental and physical health etc. Building every aspect of one's life as much as possible can mean a more secure, fulfilling and happy life. To build other sources of security may be easier than building financial security because it involves different parts of life such as relationships, philosophy, art, exercise etc. All of which can assist one appreciate life more fully.

• Put money away

Saving is important because it builds security and can help finance a future retirement and unforeseen expenses. A penny saved is a penny earned and pennies are a plenty. If one has to start saving with pennies why not. If having a giant jar of pennies makes one feel secure it is a good place to start and train oneself to save daily.

Whenever there are a few extra dollars to spare, save them. In time dollars add up just as pennies do. Cutting back on small expenses that don't seem a lot can also help save money. Making small financial sacrifices for the sake of saving can help bring financial security or at least a sense of financial direction which can be comforting.

To summarize, security is a both an actual condition and a psychological feeling. What's more, money isn't everything, but it is also quite important. This article has illustrated some of the ways by which security can be achieved in any economy, whether it is uncertain or not.

Since security is also a psychological term, there are also psychological aspects to the 'feeling' of security. While one may never be entirely secure, a belief in oneself, conviction in one's values, in addition to pragmatic steps such as time management, skill development and monetary prudence are all useful means by which to improve and attain a greater security.

Introduction to budgeting with Microsoft Money

Microsoft Money is great software that assists in creating a budget. The software is user friendly and helpful in organizing finances. Microsoft Money, which comes in the traditional, essential, deluxe, premium and home and business versions, allows the software's user to speedily gain control of budgeting through its specialized software tools. These tools can help a software user create an existing budget in addition to potentially improved budgets. Microsoft Money's budget features include the listed items below:

• Software created average spending amounts
• Expense categorization
• Spending tracker
• Budget timing
• Graphical and spreadsheet output displays
• Financial record keeping

Prior to utilizing Microsoft Money's budgeting tool, it is important to know what one's total income and expenses are so they may be inputted into the software. In other words, organizing income statements and expense bills to accurately enter financial information into the software helps ensure the quality and utility of the budget. Setting up a budget using Microsoft Money is fairly simple using the following steps.

1-Click budget
2-Simple or advanced budget options
3-Listing income source(s)
4-Entering budget items ex-gas, utilities
5-Enter all dollar amounts

Keeping up to date with inputting numbers, accounts and expenses not only helps build greater attention to one's budget, but can also help with budget improvements. Microsoft Money's output budget display includes a budget summary of total income and expenses in addition to graphical illustration of where money is spent, how much money is being spent on various types of expenses, how much money is not spent and where that money is coming from.

Looking up transactions and money allocations is a cinch for Microsoft Money after the information is entered in to the program. The hardest part of budgeting with Microsoft Money is entering all the pertinent financial information and keeping up to date with it. The budgeting benefits of Microsoft Money include a greater awareness of one's finances, how to organize them, how to keep track of them, and how to interpret financial scenarios that might not be so easily recognized had Microsoft Money not been used.

The budgeting benefits of Microsoft Money don't stop with its budget creator. In fact, Microsoft Money has many helpful features that can assist with enhancing a budget. For example, Microsoft Money organizes finances by setting bill reminders, balancing the digital checkbook, and by reviewing spending patterns. Microsoft Money's software quiet simply, helps its users gain more control of budgeting.

Sources:

1. http://www.microsoft.com/money/default.mspx
2. http://www.microsoft.com/money/support/support_manual.mspx
3. http://tinyurl.com/64l7jwf

Guide to personal finance: Money mangement tips

Personal finance is the managing of individual and/or household monetary circumstances and goals through use of financial instruments, methods and rules. Personal finance can be divided into a number of categories that form a comprehensive financial model that utilizes income, debt management, investment, and financial planning to achieve a more efficient, cost effective and optimal use of personal finances.

Since everybody's financial situation and aims tend to be different, personal finance applies conventional and unconventional money management methods with lifestyle objectives, short-term and long-term plans. Some of the areas of personal finance include the following:

• Budgeting
• Tax planning
• Investing
• Retirement planning
• Financial recordkeeping
• Cost management
• Estate planning

Budgeting

Budgeting is an important part of personal finance because it allocates income and "liquid" financial assets into allocations that allow an individual or family to meet multiple financial needs. For example, a typical household will have expenses, limited income, savings, insurance needs and retirement plans. To properly accomplish and attend to these financial tasks, a budget can be made use of.

A budget is a time-coordinated application of money to various uses with limitations. In other words, through a budget, money is pre-allocated to various monetary ends for the purpose of better applying that money. Preparing a budget can help reduce debt, build savings, maintain credit ratings and financial order to one's life. Budgets can be weekly, bi-weekly, monthly, annual or a combination of times where finances are accounted for and utilized in different ways.

Tax planning

Tax planning is an important part of personal finance because when properly done, tax savings and retained income can be maximized. For example, contributing to an IRA lowers total taxable income and defers taxes until retirement when total income may be lower for a net gain in tax savings. There are many tax savings techniques and methods that can be applied through deductions, tax filing status, exemptions and knowledge of tax rules, mechanisms and code.

Tax preparers and/or accountants can be helpful in proper tax planning and may be worth consulting before major financial decisions are made that are likely to impact one's income, inheritance, property, capital gains or other tax. Adequate application of tax methods may be useful in growing tax free income, and wealth building whether it be individual or family wealth.

Investing

Another key area of personal finance is investing. When done correctly, investing can not only be done tax free, but grow one's wealth through allocation of money into financial instruments. There are many ways to invest and these methods depend on personal financial goals, risk tolerance, age, available investment products, investment plans and services. Investing takes capital, research, time and patience and possibly the advice of a financial planner and services of a broker.

Depending on the investment goals, investment know how, and types of financial instruments invested in, financial services may or may not be necessary. Investment income is ideally not needed until a future point in time so that it may fluctuate in value without obstruction to the long term financial goals. In the case of low-risk and/or short term investing, money should also be allocated for these purposes and not needed.

Retirement planning

Eventually most people need to retire, and this can be facilitated by a retirement plan. Most financial advisors will say the earlier one develops and implements a financial plan, the better. The reason this is so is because more time allows an individual to save less each month to attain a long term retirement goal assuming the same yield on savings for two separate time horizons.

Examples of retirement planning include, 401(K), 403(B), IRA, Pension plans, property investments, trust savings, life insurance policies with cash value etc. Government social security may be part of a retirement plan but due to uncertainty regarding availability of social security due to an aging population, the security of these finances may be somewhat questionable in some countries. For this reason, having a self-guided, employer or other type supplemental retirement plan may improve one's financial retirement prospects.

Financial record-keeping

When budgeting, tax-planning, investing etc. good record keeping can not only help one know how and where money is going, but assists in facilitating these objectives more expediently, and can help with making adjustments to one's financial planning and personal finances when necessary.

Good financial record keeping can also help when applying for loans, filing for taxes, and accounting for cash flow or disputing charges. Strong financial recordkeeping is a tool of financial planning that spans across several areas of personal finance and organizes monetary management potentially saving time and lowering money related complications. Financial recordkeeping can be accomplished through financial software, or an individually customized financial records system.

Cost management

Cost management includes loans, credit cards, living expenses, bills, and any debt an individual and/or household incurs during a given time. Effectively managing costs of living includes debt management and is essential to keeping control of spending and staying within a budget. Costs are the single biggest way to render a complete financial plan ineffective as they can eat up and eliminate income and savings and potentially hamper or greatly reduce non-cost elements of a financial plan.

Cost management can be developed through mindful spending, adherence to a budget, lowering of expenses and reducing of debt and debt interest levels. Keeping debt under control, eliminating debt and/or reducing debt/income ratio are ways to manage costs. A quality cost management strategy can greatly improve a financial plan and one's personal finances in the short-run and long-run scenarios of managing money. Many tips, services and techniques exist to assist in cost management and becoming familiar with these methods may involve research and/or the use of financial services.

Estate planning

For the wealthiest of individuals with net worth in the millions of dollars, estate planning can be quite useful. Successful estate planning can lower taxes, grow income and assets, and legally protect money from lawsuits, estate taxation and inheritance tax through the use of financial instruments such as trusts, insurance policies, and retirement vehicles in addition to legal tools such as wills, family corporations and living trusts. Enlisting the assistance of accountants, attorneys and/or financial planners may be worthwhile especially when large amounts of money are involved as in the case of some estates.

Effective estate planning can help maintain fiscal privacy, protect finances, and legally avoid taxation. Estate planning may also incorporate retirement funds, health management savings, investments and insurance policies and may consist of a combination of financial strategies, financial instruments, tax techniques and legal mechanisms. For these reasons, estate planning has the potential to be complex and/or elaborate but may also end up improving one's personal finances significantly

To summarize, personal finance is the conjunction of personal goals, financial regulations, legal and tax environment with financial instruments, mechanisms and techniques. The objective of personal finance is to manage money effectively and this may include growing money, preparing for retirement, saving, managing costs, achieving lifestyle objectives, and protecting one's money and self through financial means.

Personal finance is a cornerstone of life management and quality of life because it helps facilitate life objectives and quality of life through the effective management of money and aspects of life affected by money. There are many sources of information, services and tools available to persons seeking to improve their personal finances, and these tools include online literature, financial services, financial plans, software and equipment.

The practice of personal finance may change over time as one's financial aims and/or the nature of the economic, financial and legal environment changes. Consequently, personal finance is not always a static practice and involves continual awareness and diligence to financial means and goals.