Little Rishi

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Sunday, May 30, 2010
Weekend Quote - Unemployed People
Cheap shirts and sweaters are cold comfort for unemployed people who are sitting at home in their pajamas

- Peter Coy, with Cotten Timberlake
Source: Funny, It Doesn't Feel Like a Recovery, Bloomberg Businessweek, May31-June 6, 2010


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posted by Little Rishi @ Sunday, May 30, 2010   0 comments

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Saturday, May 29, 2010
Weekend Quote from a Book - The Five Laws Of Gold
The Five Laws Of Gold

1. Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.

2. Gold labored diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.

3. Gold clines to the protection of the cautious owner who invests it under the advice of wise men in its handling.

4. Gold slipped away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keeping.

5. Gold flees the man who would force it to impossible earnings or who followeth the advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.


Source: The Richest Man in Babylon

by George S. Clason


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posted by Little Rishi @ Saturday, May 29, 2010   0 comments

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Friday, May 28, 2010
Book Review - The Gospel of Roth
The Roth Bible or Everything You Want to Know About Roth - these can be two other appropriate titles for The Gospel of Roth: The Good News About Roth IRA Conversions and How They Can Make You Money by Roth by John D. Bledsoe. The Gospel of Roth is an excellent book on Roth IRA conversions. Virtually all the questions you can think of regarding Roth IRA conversions, are answered in this book.

About the Author

The book is written by John D. Bledsoe who is a financial advisor and estate planner with over 20 years of experience. He is also the owner of John Bledsoe Associates, which is a life insurance brokerage specializing in estate planning. He has written over 1,000 financial articles and has authored three additional books, Rock Solid Estate Planning, Texas Living Trust, and Roth to Riches. He is currently working on his fifth book, One Turn Away.

About the Book

The Gospel of Roth consists of 244 pages and the following ten chapters:

Chapter 1 - The Roth Conversion Option
Chapter 2 - In the Beginning Congress Created the IRA
Chapter 3 - The Advent of the Roth IRA
Chapter 4 - Roth IRA Math
Chapter 5 - Our Income Tax Structure
Chapter 6 - The Stretch IRA Hoax
Chapter 7 - Estate Planning and the IRA
Chapter 8 - What Could Go Wrong?
Chapter 9 - Tips and Tricks: The Reason to Roth
Chapter 10 - Questions and Answers

In addition, the book contains many appendices related to Roth IRA conversion mistakes and other topics.

The central idea of this book is that you should convert your traditional IRA and retirement plans to Roth IRA as soon as possible. Starting January 4, 2010, anyone can convert to Roth regardless of their income levels. According to the author, the conversion could increase your retirement spendable assets by over 40 percent! The author believes that most people are wasting time going through calculators and other computations in deciding whether to do the conversion or not. Instead, he recommends the "Ready, Fire and Aim" approach - do the conversion as early as possible during 2010 and then decide later whether you will come out ahead or not. Why? Because you can always undo the process by recharacterizing your conversion. He calls this the "Roth Conversion Option" (RCO) - do the conversion first and then run the numbers.

For the 2010 conversion, the recharacterization deadline is October 17, 2011. By that time, you will be able to know the tax rates for 2011, the performance of your converted Roth IRA accounts, and other important information which will help you make an informed decision on whether to stick with the conversion or undo it using recharacterization. Good thing about conversions in 2010 (only) is that you can choose to defer income taxes to 2011 and 2012 by recognizing half the income from the 2010 conversion in 2011 and the other half in 2012. Of course, if the tax rates increase in 2011, you can always choose to pay taxes in 2010 itself. Again, according to the author, you have until October 17, 2011 to commit to which year(s) you elect for paying taxes for the 2010 Roth conversions.

When doing the conversion, the author recommends that you follow certain strategies to make the recharacterization easier. For example, he recommends that:

1. Convert all traditional IRAs and retirement plans into separate new Roth IRAs divided by asset class. Do not combine the newly converted money with older Roth IRA accounts.
2. Have separate Roth IRA account for each retirement plan, with no single accounting exceeding 20% of the total. If the 20% limit will be exceeded, divide it into two or more Roth IRA accounts.
3. You don't need to convert all your traditional IRAs and retirement plans in the same year. It may be more efficient to convert over a few years to maximize the use of lower brackets.
4. Convert as early as possible in 2010 - the earliest date is January 4, 2010. Then around December 3, 2010, recharacterize or unconvert any Roth accounts that have lost substantial value since Jan 2010 conversion, and convert again to Roth on Jan 3, 2011 to start the RCO on them for 2011. You pay balance of 2010 tax by April 15, 2011 and add payment for 2010 for the 2010 Roth conversion to preserve penalty-free option for 2010 rates till October 17, 2011. You then analyze your situation over the Sept - October 15, 2011 period and unconvert/recharacterize any 2010 Roth IRA accounts that need to be unconverted to regular IRAs.

The book is filled with many of the benefits of Roth IRA, including protection from future tax increases as well as being better from the estate tax perspective. The book also provides many things that can go wrong with the Roth conversion such as forgetting to unconvert, ignoring state income taxes, not converting into separate new Roth accounts, Congress imposing tax on Roth IRAs in future, and so forth.

What I like about the book?

This is a great book which recommends an unconventional but more practical (although requiring a bit more work), business approach to deciding whether to stick with Roth conversion. The author debunks many of the myths that we come across in the media and provides his unique take on the conversion process. The book is an easy read and is filled with tons of questions and answers, making this book a valuable resource on Roth IRA conversions.

What I dislike about the book?

I don't have much to say in terms of not liking the book. The book is focused on a niche topic and covers it in extensive detail. At times, this makes the book a bit repetitive. However, I liked the repetition as it kept reinforcing the importance of doing the reconversion and the steps involved in maximizing the benefits of conversion.

Final Word

This is an excellent book on Roth IRA conversions. If you have money in traditional IRAs and retirement plans and want to learn the benefits of doing the Roth conversion, you will find this book to be an excellent resource. Many of the recommendations that the author makes may not even be familiar to many financial planners and CPAs.


I have received complimentary copy of the book. Please also see Disclosures and Disclaimer

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posted by Little Rishi @ Friday, May 28, 2010   1 comments

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Sunday, May 23, 2010
Weekend Quote - Thrifty
Those who spend too much will eventually be owned by those who are thrifty.

- Sir John Templeton


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posted by Little Rishi @ Sunday, May 23, 2010   0 comments

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Saturday, May 22, 2010
Weekend Quote from a Book - Linear versus Residual Income
Linear income usually comes in the form of a salary-working for someone else. You rent yourself out to some employer, usually on an hourly basis. One unit of your time yields one unit of money—X number of dollars per hour. We call this type of money linear income because you only get paid once for every hour you work. If you want some more linear income, you need to put in another hour of work. If you stop working, the stream of money also stops.

Residual income usually comes in the form of profits—earned when your money is invested wisely. Instead of renting yourself out to some employer, the goal is for you to rent out your money to do the work for you.

The power of residual income is that you get paid multiple times for every hour you work.

Source: Cash in a Flash: Fast Money in Slow Times

by Mark V. Hansen and Robert G. Allen


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posted by Little Rishi @ Saturday, May 22, 2010   0 comments

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Sunday, May 16, 2010
Weekend Quote - 8-year boy who survived air crash
It's something from God, that he wanted him to live longer.

- Sadig Bendala, Orthopedic Specialist

Source: Associated Press/Yahoo.com: Dutch boy told family died in Libya plane crash


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posted by Little Rishi @ Sunday, May 16, 2010   0 comments

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Saturday, May 15, 2010
Weekend Quote from a Book -

Let's say your child gets a scholarship. If you've got a 529 plan, you don't need it anymore because of your child's scholarship, but there are restrictions against using the money for anything but education. Or if Shelby doesn't go to college, with her being an only child, my wife and I would have to go take some college classes with the money in a 529 plan, or wait until we're fifty-nine and a half to avoid paying penalties.

otherwise we'll have to pay taxes on teh gains as well as penalties to use that money.

- Source: Bank on Yourself: The Life-Changing Secret to Growing and Protecting Your Financial Future

by Pamela Yellen


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posted by Little Rishi @ Saturday, May 15, 2010   0 comments

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Sunday, May 9, 2010
Weekend Quote - Getting Work Done Well
If you want work well done, select a busy man - the other kind has no time.

- Elbert Hubbard


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posted by Little Rishi @ Sunday, May 09, 2010   0 comments

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Saturday, May 8, 2010
Weekend Quote from a Book - Working for a Large Company
One of the disconcerting parts of working in a large company is that you often get caught up in a frenzy of activity doing things that don’t have a direct bearing on the real world.

The epitome of meaningless corporate work is the 1999 movie comedy Office Space. The main character Peter is increasingly frustrated, and eventually pushed to the brink of sanity, by the amount of time and management effort used to ensure he uses a certain cover sheet on his “TPS Report.”

The larger organizations get, the greater their capacity for doing work that is not directly related to anything in the real world. Or, in an equally frustrating outcome, months of work are scrapped as a new company is acquired, or changes vendors, or gets a new CEO with a diff erent vision from his predecessor.

- Source: Escape from Cubicle Nation: From Corporate Prisoner to Thriving Entrepreneur

by Pamela Slim


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posted by Little Rishi @ Saturday, May 08, 2010   0 comments

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Wednesday, May 5, 2010
Free magazine - Sailing World
For a limited time, Mercury Magazines is offering a free subscription - 6 issues of Sailing World.

For details, check out:

MercuryMagazines.com: Sailing World magazine


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posted by Little Rishi @ Wednesday, May 05, 2010   0 comments

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Monday, May 3, 2010
Free $5 CVS eGift Card on $25 CVS Gift Card purchase
For a limited time, you can get a $5 CVS eGift card for every $25 in eGift Cards that you order from CVS.com. Maximum rewards that can be earned in a single transaction is $30; so you can purchase up to $150 in GC which will earn you the max $30 bonus eGift cards in a single transaction. You can print out these eGift Cards and use them at CVS store as well.

For complete details, see:

CVS.com: CVS/pharmacy Gift Card by Email


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posted by Little Rishi @ Monday, May 03, 2010   0 comments

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Sunday, May 2, 2010
Weekend Quote - Being Your Best
Whatever you are be a good one.

- Abraham Lincoln


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posted by Little Rishi @ Sunday, May 02, 2010   0 comments

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Saturday, May 1, 2010
Weekend Quote from a Book - Utility Stock Prices and Interest Rates
There are several reasons for the interdependence between utility stock prices and interest rates. First, owing to their customarily high dividend yield, utility stocks are often treated as substitute for bonds, whose price fluctuations are almost totally dependent on interest rate changes. Second, most utilities have large amounts of debt in their capital structure, on which they must pay interest. The amounts of such payments are critical to their profitability. Third, the utilities are dependent on easy availability of funds in the capital markets to finance the expansion on which theyir long term profitability depends. Given this dependence of all stock valuation on interest rates, it is not surprising that utility stocks frequently change trend ahead of the general market.

Source: Stock Market Logic

by Norman G. Fosback


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posted by Little Rishi @ Saturday, May 01, 2010   0 comments

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Favorite Quote
"Work is worship".
                - Author Unknown
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