So which is Best?... INCOME OR GROWTH?

Actually, what's most important, and many people lose sight of this, is the total return that an investment produces over a period of time: The net return after taxes.

If you can't afford to have your money tied up without generating much of an income, you'll want to lean towards high income returns. On the other hand, if you can afford to invest for the long term without taking income today, you might earn more after-tax money by keeping a larger percentage of your nest-egg in tax-favored accounts.

As John D. Rockefeller said almost a hundred years ago “Don't pay taxes on income you don't need now.

Of course, you also have to consider the "bird-in-hand" principle. Your income accounts are cold hard currency rustling in your pocket. No current income tax on the reinvested accounts, but you lose the right to spend the interest immediately!

The most important consideration is this: Do you want or need a regular income to cover your living expenses?

Tax-favored reinvestment plans compound your interest and principal. If you don't need the income today tax-favored reinvestment plans are worth considering.

The one thing that matters most:

Yours (not your neighbors or beneficiaries but your) income and tax needs. We now need to consider what a high and low interest rate. Is 5 percent a good rate? How about 10 percent? And what about inflation?

There's no way of knowing what rates will be when you renew. It depends on the economy and the federal reserve. We need some kind of yardstick to measure today's rates by. In other words, are today's 6.7 to 8.87 rates high in relation to today's unpredictable and variable growth accounts?

My answer is this: “A bird in the hand is worth more than two in the bush”.

The Dow Jones Industrial Average closed at 17,055 near the all time highs. It might go higher but it is not cheap in relation to history...These heights make me feel queasy.

Rates will vary according to the length of time you sign up for. But, while one maturity might be higher than another you deserve the most generous rates I can find. Is the desire for generous rates inside you too?

For now, we can say that the rates you are receiving are quite good and should continue. They are in fact linked to the one thing that matters most – A bird in the hand is worth more than two in the bush.

When you are ready to add to your income accounts, just let me know. I will find you the most generous rates available. It's a promise...Yours Truly...Steve

PS. We like to reward you when you refer your friends and relatives. So send them an invite to the blog. Afterall they may want to make more money and pay less taxes...simply email swoodard77@gmail.com