Broker Check



In essence, a bond is an IOU from the government or company to the person who purchases the bond, known as a bondholder. You purchase bonds by means of getting a predetermined amount of money to the government or company, and in return the government or company agrees to pay the amount of the bond, plus interest at a certain point in the future determined by the parameters of the bond. The maturity time for bonds can be anywhere from one to 30 years, depending on the type.


Common stock is one form of equity ownership and is named as such to distinguish it from preferred stock. In the event that a company files for bankruptcy, those who hold preferred stock will receive their funds prior to those who hold common stock. However, in general, over a long period of time common stock performs better than preferred stock.

Generally speaking, common stock is a form of voting share. This means that the holder of common stock can influence the Corporation by voting on things like policy, stock splits, and often the election of members on the board of directors. Common stock returns are uncertain, due to the fact that they do not have a fixed dividend that is paid out to the holder.


If you are interested in building a stock portfolio, the first step is to open a brokerage account. A brokerage account will allow you to purchase stocks, bonds, mutual funds, and any other investment with the help of trained brokers. This can assist individuals who are not very familiar with financial markets investing, because essentially you are paying a broker to do your investing for you. This arrangement often results in better returns for the investor and considerably less stress. New brokerage accounts typically have a minimum investment of between $500 and $1000.


The traditional IRA is an individual retirement account that was established by the Tax Reform Act Of 1986. A traditional IRA is held by a custodian institution, like a bank or brokerage, and it can be invested in anything that the custodian allows. For example, a bank might allow the investor to invest certificates of deposits in their traditional IRA.

Probably the most determining characteristic of a traditional IRA is the fact that contributions to one are considered tax-deductible, depending on eligibility requirements based on availability of other retirement plans, income, or tax-filing status. A traditional IRA is available to anyone who has sufficient income to make the initial contribution to the fund. As of 2010, the initial contribution for those who are under age 49 sits at $5,000, while those who are age 50 and above must pay $6,000.


A Roth IRA is a particular form of individual retirement account that is usually not taxed. This is contingent on certain conditions outlined by the Taxpayer Relief Act of 1987. The difference between a Roth IRA and other forms of IRA is that the tax break on the money is not given when the investor puts money in the account, but rather there is a tax break when the owner of the account withdraws money after retirement.

A Roth IRA account may contain investments in securities, common stocks, or bonds. A Roth IRA has the most flexible tax structure of all the IRAs, and there are fewer restrictions regarding what sorts of investments can be placed in this type of account.


The acronym SEP IRA stands for Simplified Employee Pension Individual Retirement Account. This is the variety of IRA that is adopted by business owners in order to give retirement benefits to both the owners of the business and the employees. (They may also be used by self-employed individuals.) This is the form of IRA account where deductions are made from an employee's paycheck and then routed directly into the IRA. This helps the individual who owns the SEP IRA save money for retirement and also lowers the account holder's income tax liability.


SIMPLE IRA is actually an acronym that stands for Savings Incentive Match Plan for Employees Individual Retirement Account. This is often considered one of the most affordable retirement savings plans and is offered through an employer. In a SIMPLE IRA, the employee makes an investment into the SIMPLE IRA of a certain amount and then the employer will match that investment. SIMPLE IRA is best for small businesses that do not have the resources to offer their employees more complicated retirement benefits.


A variable annuity is a contract available through insurance companies, which provide set payments at specific points. The most common time for payouts for any sort of annuity is retirement. There are many different kinds of annuities, but the most common are fixed and variable. A fixed annuity guarantees a payment for a specified amount of money, while variable annuities have no such guarantee. However, a variable annuity has a higher chance for appreciation than a fixed annuity.

If you are interested in more information or would like to set up an appointment with Lenny, please send us an email. We do periodically offer free seminars on the latest financial information. Please click the 'Contact Us' button to send us your name if you would like to be invited to the next seminar or if you would like to receive our free newsletter!