Roth accounts are tax free retirement benefits.

​1. Tax-Free Growth and Withdrawals
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The most powerful feature is that you never pay taxes on the profit.

​The Math: If you contribute $7,500 a year and it grows to $200,000 by the time you retire, you can withdraw the entire $200,000 tax-free. In a traditional account, you might lose 20–30% of that to federal and state taxes.

​2. No Required Minimum Distributions (RMDs)

​Most retirement accounts force you to start taking money out (and paying taxes on it) once you reach age 73 or 75.  

​Roth IRAs have no RMDs during your lifetime.  

​You can let the money grow for as long as you live, making it one of the best ways to pass wealth to heirs tax-free.

​3. Flexibility with Contributions

​Roth IRAs are more "liquid" than other retirement accounts.

​Because you’ve already paid taxes on the money you put in (your contributions), the IRS allows you to withdraw your original contributions at any time, for any reason, without taxes or penalties.  

​Note: This does not apply to the "earnings" (the profit), only the amount you originally deposited.

When does a Roth make the most sense?

​You’re young: You have decades for that "tax-free growth" to snowball.

​You’re a high earner (or will be): If you expect to be in a higher tax bracket later in life, paying the taxes now at a lower rate is a bargain.  

​You want a "tax-free" bucket: Having a Roth account gives you flexibility in retirement to choose which "bucket" of money to pull from to manage your overall tax bill. 

Top Overall Providers (Self-Directed)

​These are best if you want to pick your own stocks, ETFs, or mutual funds with zero commissions.

​Charles Schwab: Frequently ranked as the best overall choice. It offers no account minimums, a massive selection of no-transaction-fee mutual funds, and excellent 24/7 customer support. Their thinkorswim platform is also a favorite for those who want advanced charting tools.  

​Fidelity Investments: Known for being very beginner-friendly and having a "customer-first" fee structure. They offer "Fidelity Zero" index funds (which have a 0% expense ratio) and allow you to buy fractional shares for as little as $1.  

​Vanguard: The go-to for passive investors who prefer low-cost index funds. While their interface is more utilitarian, they are owned by their fund shareholders, which keeps their interests aligned with long-term investors.  
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Best for Automation (Robo-Advisors)

​If you prefer to "set it and forget it," these platforms use algorithms to build and rebalance a portfolio for you based on your risk tolerance.  

​Betterment: Often cited as the best robo-advisor for beginners due to its ease of use and goal-tracking features. It has a 0.25% annual management fee but no minimum deposit to get started.  

​Wealthfront: Similar to Betterment but includes a robust financial planning tool that can pull in data from all your external accounts to give you a full picture of your path to retirement. It requires a $500 minimum.

​Schwab Intelligent Portfolios: A great "no-fee" robo-advisor option, provided you keep a $5,000 minimum balance.  

​Best for Specific Features

​Robinhood: Unique because they offer a 1% to 3% contribution match on IRA deposits (depending on your subscription tier), which is essentially "free money" added to your retirement account.  

​SoFi: Excellent for younger investors or those who want a "one-stop-shop" for banking, loans, and investing. They offer free access to financial planners even for small accounts.  
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E*TRADE: Highly rated for its educational library and mobile app, making it a strong choice for those who are still learning the ropes.

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Partner Contributions is the amount that a partner contribute cash or assets into a new venture. The line item is reported on the stockholder equity section on the balance sheet. When a partnership is structure between two or more people. It usually need need start up cash to begin operating. This line item help keep track of parties equity that the invested in the new company. Other options that can be creates as partnership with more protections is Limited Liability Company (LLC) or Limited Liability Partnership (LLP).   

To prevent misleading reports to management, investors, and banks by employees and owners of a company. An independent accountant can create internal control to ensure that the financials are accurate. By setting up internal control it help protects assets and ensures that the assets are being used for business operation only. Keeps the business information accurate. Finally to keep employees and management compliant to laws and regulations.

Creating internal controls also helps prevent fraud from employees and management. Documenting everything that related to a transaction is important to keep. You should always have a paper trail to prove that the transition occur when it seem that fraud is occur. It is wise to keep financials report for 7 years before discarding them.
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To set up internal controls for a business you need to control the environment to make it harder to prevent fraud. Have procedures that separate the task of each department so that there is a check a balance. Monitor that the environment and procedures to ensure that there is no flaw that can create the opportunity to commit fraud.

The meaning of quantitative easing is a term use to describe a central bank action to put more money into the money supply of an economy. 

Central bank are able to do this by using monetary policy to produce more money to go into circulation. 

The increase of cash gives commercial banks the liquidity needed to supply money to individual or company as a loan. 

Quantitative easing is a tool used to stimulate the economy when it start to slow down. This help the economy stop it decline in growth so that it does not go into a recession.
 
Central Banks usually use quantitative easing as a last resort when the change of interest fail to stimulate the economy.
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One of the risk of using quantitative easing is that it can cause inflation. Since there is so much money in circulation. The value of the dollar can decrease, which, will decrease your purchasing power for items you want to buy. 

Structuring is a method used to deposit large amount of cash into a bank account over time. Banks are required to notify the IRS when cash deposit is over $10,000.00.

 It’s only illegal if you made the intent to deposit cash under $10,000.00 over a period of time to not get notice to be review for making large amount of cash deposit. 

The purpose of this law is to stop illegal activities that make money and try to launder the money under companies that operate on a cash basis.

Example of companies that are cash basis instead of accrual are convenient stores, laundromats, or companies that decided to only handle cash transaction.  

If your company get paid over $10,000.00 with one single payment. You will need to file for form 8300 to the IRS.

It is suggested to file form 8300 within 24 hours to the IRS to not get into a dispute of accusation for structuring. 
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The IRS can seize your money without arresting you, charging you, and being found not guiltily. Getting your money will be hard to get especially as a small business owner. 
 

A shell company is structure as a legally business on paper to be seen legitimate even though there is no workers or job sites were business is conducted.

A shell company usually holds banking accounts or assets like investments and tangible assets. Most of the time a shell company is used to hold funds for anonymous entity.

The only reason a person would want to start a shell company is for startup that are raising funds before operation are implemented.
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Shell Company are sometimes used to avoid taxes or hid assets from it true owners from the public, which, is illegal to do in some cases. It can also be used for money laundry for illegal schemes. 

Bases Point is the amount of change in the hundredth of a number that has moving during a period of time.

For example, let’s say a stock started at 1.00% for the day and at the end of the day when the stock market close. The stock ended at 1.50%.

Someone could say that the stock move up 50 bases point for the day reference that it’s the hundredth of the number that change.
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This term is usually used when talking about interest rate and financial lingo.

When your company has future operation that require purchases before the plan of operation is executed on the date that occurs in the month.

Putting in the prepaid expense on the balance sheet is the account you want to choose so it does not occurring in the month you purchase on the profit and lost statement.
 
Examples of transaction that would go into prepaid expense is:

• Insurance since you get the total amount of the bill when you finalize the policy you wanted for your company and need to account the cost each month accurately.
  1. How to do it is enter the bill in your accounting system under prepaid expense. This will increase the prepaid account and also increase accounts payable.
  2. If you have the money to pay the bill upfront than is will decrease accounts payable and cash account.
  3. Then each month when you are closing the financial. You will make a journal entry to account for the insurance cost by dividing X amount of dollar you paid for your insurance divided the months of your insurance policy (usually by the month). 
• Events is also a good example of using prepaid insurance since most purchase are made before the event occurring. Some of purchases that would go into prepaid insurance is deposit for the venue, permits, material and supplies, caterers, consultants, etc.

1.  You would want to make the journal entries for the purchase on the month that the event occurs to have an accurate profit and lost statement to show if the events was a success.

When someone say that the number are in the black. It means that they have made a net profit in their income statement. This is what owner, managers, and investor would like to hear when they are talking about a company performance.

When someone say that the number are in the red. It means that they have made a net loss in their income statement. This is the opposite of black and is awful to hear when reports come out. This can be an issue that need to be address with spending and revenue.

​Goodwill account is found on the balance sheet of a company because goodwill is considered an intangible asset. This means that money was spent to build a company reputation or its brand popularity. This happen when a company buys another company that is higher than the fair market value. The process usually happen when there is a merger and acquisitions between two companies.

​FIFO stand for First In; First Out for and LIFO stand for Last in, FIrst Out.

The two are inventory process for handling material in storage before being sold.  

For FIFO the material that is bought first for inventory is the first to be used or sold.

For LIFO the last material kept in inventory will be used or sold before material recently bought for inventory.

​Direct Cash Flow statement uses the operating activities to project how much money a company will have at the end of certain period. Most cash flow statement are projected monthly, but can also be used on weekly or quarterly basis. 

How direct cash flow statement work start with the beginning balance in the bank account. You record the money you received during the period in the cash in section. After you input your expenses in the cash paid out section.

The cash in and cash paid out is placed in the cash flow summary to show the forecast for how much money you will have later in the year. 

This help to know if you will have money to keep running your business. The forecast show if your able to pay bills and meet payroll. 

If you cash flow show it going negative in the ending balance. This is your sign that you won’t be able to pay bill and meet payroll. You need to bring in more money or cut cost to get yourself out of the negative in the ending balance section.

The numbers you use to forecast the money that is coming in and out later in the year comes from your budget that you set for the fiscal year. When your books are closed for the month. You will put in those numbers in current month to update the cash flow statement.

IRA stands for Investment Retirement Account that you can use to save money for your retirement.

IRA are saving account like a 401k investment that you use from your saving to invest in the stock market to get gain capital on your money.

They are tax free until you cashed out after the age of 59 and half. If your take your money out before the requirement age. You will be penalize by 10% for the early withdraw.

The risk with an IRA account for the long term is that the percent of tax may be higher when withdrawing money. The opportunities may be that it also can be lower, but that depends on the interest rate set during the period of time set.

Some of the option you look to open investment account for an IRA account is:
• TD Ameritrade
• Charles Schwab
• Vanguard

You should always do your own independent research before decided which companies you want to open IRA account. They are others firm that also provide IRA accounts in the market.

A money market account is a bank account that you can store your money like a saving accounts. 

The difference between money market account and saving is that bank used money market account for short term loan.

Since the bank is using the money to give out short term loan. You get a higher interest rate than you do with a saving account.

You can always access your money like you do with a saving account.

Money market are not money market funds, which, can lose you money.
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They are FDIC insured so there is protection of your money in case of economic crisis.

When human emotion come into play with budgeting for a new year. We can cause ourselves to make the budget to tight or loose. Also can create objectives that conflict with your goals that you are trying to achieve in the future.

When budget are set too tight. The goals are viewed unrealistic and unachievable, which, may cause discouragement. Setting a high goals is productive, but you don’t want to set it up to where you fail when setting a budget. Budget are meant to keep you in control of your future plans and strive to accomplish with the resources you have for the moment.

When budget are set too loose. The goals is attain easily creating the feeling of undesirable time wasted because it was not challenging and not satisfy with the time put in. 
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When goals conflict with you budget. It can become counter intuitive since your trying to achieve a goal in a different approach with your limited resources. For example, you decided to cut your car expense by using public transportation. Doing this will save you money on gas, insurance, and maintenance cost. The trade-off is that you have to be dependent on others for your transportation. It might take up more of your time to get the bus or train since you have to wake up earlier. There might be delays. Also you might need to attend meeting and other activities that are unplanned and might not make on time because of the schedule buses and trains have. If the results you are not getting for the change then you ​might to take another approach that will help achieve your goals from the budget you set up for yourself.

REITs are Real Estate Investment Trust that you can invest in to make capital gains.

They are companies that operate in the real estate business to make a profit. 
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Companies in REITs own commercial real estate like office buildings, apartments, and shopping center, etc.

REITs are traded on major stock exchange as ETF and function as a mutual.
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Investing in these companies puts you in the real estate business without being a realtor and another way diversify your portfolio.

When a company losses its assets due to natural causes like firm storms in California, Hurricane Michael in Florida, and tornadoes that rip through the south and Midwest of the United States.

Any unexpected or accidental force generally can be deductible regardless if it’s a business or personal asset.

Having insurance for assets can help recoup the losses, but if insurance doesn’t cover your losses. You can deduct them on your taxes.
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Also any other accidental losses that cannot be predicted can be written off. For example, Carpenter v. Commissioner Case or Revenue Ruling 79-174.

​A dividend is money paid on a schedule basis by the company to its shareholder out of its earning made.

How to get a dividend is to have shares of stock of the company.

The process of how dividends get distribute start with the Board of Director deciding to issue dividends to its stockholder.

1. First Board of Director declare a date that they intend to issue the dividend.
2. After they record the amount of current shareholders will get a dividend.
3. Finally they have a payment date to issue dividends.

A reason why a company might issue a dividend is because they have excess cash that does not need to be reinvested into the company for operation expansion or to start a new project

Insolvency is when a person or company can't meet their financial obligation to pay their bills on time.

When debt gets behind for the person or company; they would have likely had unforeseen expense,  not handle cash properly, and made a mistake on cash flow projection.

When the person or company realize that bills will be past due. They have now became insolvent. 

When this occur the best option to be upfront with your lenders and vendors of the situation.

It is better to be transparent with the people you do business with to keep goodwill in the relationship. 

They can arrange a better way to adjust the debt to make it less of burden for you to pay off quickly in the long run. Short run they will have to wait to get paid.

Most people in business understand that hardship in finance happen. If you been paying bill consistently in the past. They will give you the time for you to turn your situation around to make payment on the debt.

Some might be reluctant, but will have to accept that cash will not be received any time soon. 

Insolvency doesn't mean bankruptcy, but usually that is the path a person or company goes if the debt can't be paid off.

The operating cycle begins with spending cash and it ends with receiving cash from customers. 

The following steps are:
1. Purchasing activity: buying product usually at a wholesale price and selling at retail price.
2. Receiving product and taking in inventory to put in the market.
3. Sales Activity: selling products to customers that are seeking products.
4. Recording the sale of the product and collecting cash. 

The step are than repeated for the operating cycle of a merchandising business. 

The operating cycling for retailers are usually shorter than manufactures because retailers product are ready to sale to customer.

Retailers have to better management of inventory so that they don't run out product. Making customers leave their business and go to another that sell the same thing. They don't want to hold a bunch of inventory, because it takes up space, which cost money, and restricting cash flow because product are being held on shelf; not producing income.