A Roth IRA Story With A Lesson

Hello my friends!!  Here is an excerpt from my eBook Common Core Money on the benefits of having a Roth IRA.  I thought I knew a lot about Roth IRAs but I came across a problem I hadn't encountered before.  Find out how it was resolved below.  Thanks for reading, amigos!

I want to tell you about the investing benefits of using a Roth IRA.  First, understand that there are rules you must follow.  Taking full benefit of the Roth IRA means that you will not be able to tap into your account for needed cash until 59½ years of age.  I mentioned above that it’s possible to pull out cash from contributions, but not from earnings.  What this means is that if you plan to use your Roth IRA to invest (buy stocks, real estate, bonds, etc.) then you may produce income from the sale of these assets that you will not be able to pull out tax and penalty free until you’ve met the age requirement.

Let’s review a little bit.  With a tax-deferred 401(k) or a 403(b) you are making contributions with pre-tax money, and once you start pulling this money out, it will be taxed as ordinary income.  In contrast, with a Roth IRA if you wish to pull out cash from the account, you can at any time, provided cash contributions have been your only source of funding.  To me, contributing money each month to a Roth IRA and doing nothing with this cash, letting it sit there, defeats the purpose.  Many people do this because they don’t buy assets.  They get a Roth IRA because they feel that later in their careers they will have jumped up the tax bracket.  To them, having cash they can pull tax-free when they are still working at 60 as a school administrator, for example, makes sense.  This is absurd to me.  You lose out on a wealth building mechanism that Uncle Sam can’t touch!  In the Intro, I shared my one-year Roth IRA performance with you.  It was +34.6% for 2013.  My earnings (realized gains) in my Roth IRA amounted to $11,940.70 for the year.  I made almost 12 thousand in an account that Uncle Sam can’t touch; provided I wait until I’m 59.5 to withdraw this money.  You can’t get this type of deal anywhere else!  Best part yet is that unlike traditional IRAs, with a Roth, there are no required minimum distributions until you die!  (Barring a freak accident, I won’t be waiting until my death)

Seeing 2013 was a year when a monkey clicking a button could’ve made money in stocks, I decided it was time to seek out greener pastures with my Roth IRA money.  Expecting a repeat of 2013, when the S&P 500, the Dow, and the NASDAQ all hit incredible highs, was asking for a miracle of 2014.  I looked into a crowdfunding (more on this later) venture that involved buying shares of a private Real Estate Investment Trust or REIT.  There are risks involved with all types of investments.  Knowing these risks (you can read about them in the investment’s prospectus) allows you to make a more informed decision.  I decided to use $10K of my Wells Roth IRA cash to invest in the shares of this entity.  Banks, like Wells Fargo and Bank of America, require a faxed request before transferring client money.  I couldn’t just walk into the bank and tell the banker, “Please move this 10 thousand here, over there,” so to speak.

Wells Fargo said no to me.  “Why not?” I said to the Wells Trade representative.  “It’s a self-directed Roth IRA,” I exclaimed.  They were unable to hold this asset, these shares of a private company, in my Roth IRA.  And if I weren’t persistent with my investing goals, this would’ve been the end of it.  I couldn’t pass up the 5-7% return on my money, collecting the dividends from this company; not to mention the compounding that would take place with the re-investment of these dividends.  I told the associate of the private REIT, the man I was working with on this transaction, what WF had said.  He went to bat for me.  He found out that regulations prevented WF from doing the deal.  Banks don’t want to get sued by letting the investors on their books run loose directing their own IRAs on what they consider non-traditional investments.  They figure we aren’t sophisticated enough to make good investment decisions.  They limit our risk taking, therefore, to traditional investments like equities.

The associate of this private REIT, let’s call him, Uncle Warren, consulted with his associates and provided a solution to the problem.  The answer seems trivial now but before he figured it out it was like a conundrum.  All I had to do was open another Roth IRA!  Not with a bank of course.  Duh!  He researched a few IRA companies for me and I selected one from among his findings.  The downside to opening a Roth IRA outside of a major bank is that there are more fees associated with maintenance and transactions.  Plus you have to keep a minimum balance (varies by company) in the account.  This is the company I elected to go with: www.iraservices.com.  Once I opened an account, I filled out and submitted a form directing IRA Services Trust Company to request a transfer of funds from Wells Fargo, and presto!  I was back in business.  With IRA Services, I can direct my money to be put to work buying real estate, real estate shares of a private REIT, and lots more.

Here are the lessons I learned from this experience.  One, the IRS doesn’t care how many Roth IRAs you have.  They care that you don’t go over the maximum allowed contribution per year, tracked by your tax identification number.  The rich know this.  I didn’t at the time, but now I do, and this equates to access!  Two, investing in private companies (if possible) run by a few wealthy individuals with more experience than you do gives you access to connections worth far more than the minimum required initial investment.  I mentioned above that I invested $10K in this private REIT.  The minimum amount was $5K.  The investors who manage this company are worth millions!  Five thousand dollars is a drop in the bucket to get these guys’ phone numbers.  Third and last point to make is that you’re not going to achieve your investment/retirement goals by giving up.  There are solutions to every money problem.  If you don’t have the answers readily available, then investigate.  If your investigation is inconclusive then find someone who can help.  It’s so much easier now with social networking.  The opportunities for the small investor have expanded.  We are in a world where alternative investment opportunities come scrolling down your Facebook stream.  Don’t just slide your thumb past these ads!  Ask a question or make a comment.  You never know, you may find yourself speaking to a multi-millionaire.

Note 1:  The private REIT I invested with this year is www.rich-uncles.com based out of Newport Beach, California.  And yes, their ad did come scrolling down my FB stream, like Johnny on the spot!

Rich-Uncles FB page

Note 2: You generally have to start taking withdrawals from a traditional IRA when you reach 70.5 years of age.

The Life of a Network Marketer, Part 1

Three times a week my wife, Jessica, gets herself ready in the morning before the kids are up.  As quickly as she can, she showers, gets dressed, puts on her make-up, and eats breakfast.  Our one-year-old, Ajani, is the first to start making noises this day.  She hears him through the baby monitor, resting on the kitchen table.  She shoves spoonfuls of cereal into her mouth in an effort to beat Ajani to his eventual crib crying.  What she dreads the most about her day is about to begin: the painful journey that is getting out of the house.

People without children take for granted the natural and systematic progression of getting ready for work.  Sure they may be pressed for time, running late, grabbing a snack out of the pantry to substitute the missed opportunity for breakfast at the kitchen table.  But nothing compares to the chaos that parents face every morning, priming their children to be ready for several hours of time outside the house doing whatever needs to get done.  This isn't a blog about the challenges of parenting toddlers, so I'll spare you the details.  Just note that what Jessica and other stay-at-home parents do each morning to simply leave the house is enough to commend, not under appreciate.

It's a must that Jessica leave the house as a Network Marketer for Arbonne International Arbonne Intl. page.  Network Marketing for any company involves one particular task that is the lifeblood of the business: Prospecting.  "Prospecting" means many things to many people.  In general, prospecting is the purposeful task of meeting people and gauging their potential for the business of Network Marketing in the span of a short conversation.  The actual process of prospecting is quite simple.  I learned it shadowing Jessica for one week while I was on vacation from my 7:00 a.m. to 4:00 p.m. "job" as an Assistant Principal at a High School.  (This is my normal, "non duty" workday.  Often times I work even more hours, supervising sporting or other types of evening events)

In this pic, Jessica scans for "prospects" at a local indoor mall, pushing the stroller.

The Prospecting process described by a non network marketer, i.e., me: 

1. Scan.  You scan the place you're at for "confident" looking people.  Observe a person's body language for signs.  Is the prospect standing tall?  Are his shoulders squared to the world?  Does she walk with confidence?  If you by chance should pass by her and smile, does she smile back?  Is she dressed decently?  The latter has to do with how someone takes care of themselves.  If she shows up to a place looking like she just got out of bed, chances are she's not the person you want on your team.  (She may not take herself seriously)
2. Engage.   This is one of my favorite parts of the process, simply because I enjoy talking with people.  Once the network marketer determines someone looks "interesting," it is time to engage!  This is where many network marketers get flustered with their own self-doubt.  They think too deeply of the encounter:  Maybe the prospect will be rude, a snob, self-absorbed, etc.  They psycho analyze the situation to death: What should I say to break the ice?  What if she has to leave before I get to ask her my key questions, etc.?  Their fears prevent them from acting and their business subsequently suffers.  I was proud of Jessica during my time shadowing her, she engaged many individuals, and some (but not all, of course) of these people turned out to be great prospects!  Goes to show that unless you engage, you'll never know what can turn out.
3. The Conversation.   During the conversation, the network marketer builds rapport and trust with the prospect.  He is genuinely interested in the person in front of him.  And why shouldn't he be?  After all, there are many interesting people in this world.  Some of these people have unique talents they've yet not unleashed because of their stifling and mentally numbing careers.  The network marketer converses with purpose, to ascertain if the person in front of him has what it takes to be a leader of their own network marketing business, a leader of other people.  The network marketer attempts to arrive at a conclusion: this person before me wants with great urgency, an alternative to their mundane and hectic lifestyle; this person wants out of the "rat race" badly, to spend more time with their kids, or spouse, or sick father, etc.  The key question the network marketer asks to finalize the conversation:  If I could show you a way to dramatically increase your income and have complete control over your time, are YOU the kind of person that would sit down with me for 30 minutes over coffee and explore the possibilities?  How would you respond if asked this question?
4. The Exchange.  If both the network marketer and prospect agree that an additional conversation over coffee/tea should take place in the near future, phone numbers are exchanged.  The network marketer gives the prospect a business card and also makes sure to take down the prospect's full name and telephone number.  A day later, the network marketer calls the prospect and sets-up a One on One meeting where the business will be thoroughly explained to the prospect.  Just like the prospecting process, One on One meetings are very decisive and indicative of the prospect's potential, but this is for a later post.   

In this pic, Jessica has engaged a prospect and is in the middle of her conversation.  My daughter, Rehani, is directly in front of her.  I'm with my son several feet away impressed with my wife, seeing her in action.

Take the time to view this video by Robert T. Kiyosaki:

The business of the 21st Century

Credit for pic

In my previous post on Multiple Stream of Income, I briefly described network marketing and gave links to additional information.  Network marketing is not for people with fixed mindsets.  This is a business where no matter your background, level of formal education, or current career, everyone can have the same level of success.  Being consistent, following the steps you're given, listening to your up-line, participating in ongoing training, and most importantly, NOT GIVING UP WHEN YOU FAIL will make the difference in you and your business.  It is not easy.  On the contrary it can be very difficult, but if you are willing to take the leap forward, then commit, and DO NOT LOOK BACK, no matter who or what stands in your way!

    In this pic, Rehani is pushing off the cushion, committed to a forward leap.  Ajani sees dad with his phone out and soon comes after it. 



Would you like more information about starting your own Network Marketing business with Arbonne?  Or are you interested in getting more information about Arbonne's pure, safe, and beneficial products?  Email: star.boundinc@yahoo.com

Multiple Streams of Income: The way to financial independence

Good Wednesday Morning!  I bring to you today another excerpt from my ebook: Common Core Money.  I am still devising ways of creating passive or residual income for myself.  In all honesty, it is the way of the future and if you're not taking aim at this, you're falling behind.  The world is becoming an automated, robotic, malleable place to live.  The 21st century is already one of the most innovative in the annals of human history.  Are you resting on the perceived comfort of your 9-5 job?  I give you the following to help get you thinking about improving your income potential.

“Multiple streams of income” is the idea that individuals should have more than one way of making money.  You shouldn’t depend on a single source.  There are inherent risks associated with reliance on a single way of making income.  The obvious one is the threat of losing your job.  Think about this: How would you support yourself or a family if you were to become unemployed today?  Scary, isn’t it?  This is why I consistently preach to my colleagues and friends to create multiple streams of income.  When you establish another source of income, so that money is received on a regular basis with little effort on your part, you’ve generated what is called, “passive or residual income.”  I talked about real estate in this book and mentioned cash flow from rents.  Cash flow from rents is money you have left over once you’ve covered all other obligations.  By having rentals with cash flow, I’ve created another source of passive income.  Sure, there’s work related to being a landlord, but that’s why I have a property management company.  I can’t get on a plane and fly to Memphis every time my tenants complain the hot water isn’t working.  I’ve authorized my property management company to take care of the little stuff, and only bother me when it’s something major.  At the end of the year, I send the invoices and receipts that are mailed to me by my property management company to my Enrolled Agent for tax purposes.  This takes little time and effort.

           

Real estate is not the only game in town that produces passive or residual income.  There are plenty more.  The table below presents two additional ideas for generating a more robust income stream.

Multiple Streams of Passive Income-Possibilities

Type	Description
Network Marketing	Network Marketing businesses have gotten a bad rap.  The public often labels them as “pyramid schemes” or associates them with Ponzi set-ups.  Nothing could be further from the truth!  With network marketing, you build a network of clients and consultants who consume and share a product they love.  Consultants can earn as much or even more than their sponsor.  Everyone starts at the same level and through their personal efforts can create a lucrative residual income.  See, not a pyramid!  My wife, Jessica, is our household’s expert on network marketing.  She states that a great network marketing company sells a consumable product with timing for trends (health and wellness is big right now in the world).  There is market-place demand, meaning you aren’t selling a trinket or product only a few people would want to buy.  Sell to the masses.  You also have to love the product and feel passionate about the company.  Before signing-up, you should check the compensation plan because they’re all different.  There are costs to get started and these vary by business.  To read about network marketing, go here: Entrepreneur.com.  A big shout-out to the beautiful ladies (and the handsome men) of Arbonne International!
Write a Book	Although there’s considerable time and effort that goes into writing a book, and a possibility that it will never be published, the benefits are worth the trouble.  With a published book, you get royalty checks or payments deposited to your checking account, every month.  The royalties are based on the contract you sign with the publisher.  They start out low, say 8%, and can increase after meeting a certain sales threshold.  E-books are the new disruptor to the industry.  You can cut out the publishers and self-publish your own book.  I put my fiction writing skills to work and self-published a collection of stories for Amazon Kindle: Immigrant Me & Other Short Stories.  Amazon sends me my royalties every month.  The process to self-publish a book for Kindle is easy.  I purchased a beautiful, royalty free stock photo for my cover image from www.dreamstime.com for ten bucks.  Donna Tlachac, a teacher colleague (Donna@Tlachac.com), helped me position text onto the stock image with her computer skills and software.  Because self-publishing places the burden of marketing on your shoulders, you should have a strategy.  Prior to the release of my e-books, I build momentum and hype on Facebook, Twitter, and LinkedIn.  I also use online sites for free e-book marketing.  You can also spend money on an e-book ad campaign; just don’t go crazy.  All of your expenses will be tax deductible.  This will be your new business!

            Let me introduce an expert on passive income streams, Mr. Chris C. Ducker.  His video describes other types of sources for passive income.  Watch here: Passive Income STreams

The Impact of Social Networking Sites on the Creation of Passive Income

            This is a passionate topic for me.  Networking on LinkedIn, Facebook, and Twitter has been more than a pastime for me.  The sad truth is that the masses aren’t taking full advantage of 21^st century technology.  Most people use Facebook for entertainment purposes, to catch up with friends and family, or to post pictures of themselves (selfies) or others.  They “like” or “comment” on threads, sometimes not watching what they say.  They “share” memes or other posts.  They follow celebrities by liking their page.

The investor or business owner realizes that Facebook is much more powerful.  They can place ads.  They can also connect others to their products or services.  In essence, they learn to create a virtual monetizing machine with their profile.  I had an epiphany two years ago.  I was working on my first e-book at the time.  I realized that I needed to market myself in order to promote my book.  I had the fortune of being written about in a newspaper article: UT San Diego.  This went on my Facebook.  Each time one of my short stories was published, I updated my status.  Pretty soon I had people I didn’t know requesting to be my friend.  And I added them.  Duh!  If you request to be my friend on FB today, I’ll add you too!  People endear themselves to other people on FB, even when they’ve never actually met.  That’s because Mark Z. and his team have done a fantastic job of setting up a platform that makes individuals from far off places come together in one big community.  He truly is connecting the world.  How did I meet my rich uncle, Warren?  On Facebook!  How did I get the privilege of having a lengthy conversation on investing with Mr. Andrew Hallam, author of Millionaire Teacher, I messaged him on FB (and he actually replied), no lie.

After FB, I repeat the process of self-marketing on LinkedIn and Twitter, directing others to my monetized platforms, my e-books, via my profiles and occasionally with a plug.  I have ideas for YouTube not yet put to work.  You can see YouTube is one way (video making) Mr. Chris C. Ducker expands and promotes his personal brand.  Your profile then, becomes both a business and a brand.  Well, if that’s the case, then what’s your service or product?  It’s you!  It’s the feeling people get when you provide reliable, useful, and beneficial information to your followers.  In order to help yourself economically, you need to help others first.  Only then will you clone yourself like Calvin’s duplicator box.  Only then will you be on people’s minds and in their hearts.    

How House Flipping Can Increase Your Income

Yesterday evening my wife and I decided to do something out of the ordinary: go out on a Tuesday night.  It's not easy to go out any night when you have a one-year-old and a two-year-old.  We had to get our babysitter to do a double shift, go from her day job as a nanny and come watch our two children.  Jessica and I do our best to have date nights, but what a couple chooses to do during their time away from their kids is really up to them.  We mostly go out to dinner or to a movie, or if we have the time, do both.  Not yesterday evening, however.  We did something entirely new: spend four hours at the El Camino Country Club in Oceanside, CA networking with other investors and listening to speakers.

Both Jessica and I are social.  We like chatting it up with people we just met.  This is how the evening got underway at the monthly, North San Diego Real Estate Investors association: NSDREI Home
We are not members (though we should be), so how I came across this wonderful group was how most people come across things these days, Googling.  I'd known this association existed for at least two years, but never once considered attending.  And this is where most of us go wrong.  We don't do enough learning!  We don't do enough investing in our financial literacy by virtue of learning from others!  Most of what I've learned has been from experience and reading.  But let me tell you, your knowledge base grows exponentially by talking with others.  So get out of your shell, and go meet like minded people.  Go network, build connections, meet potential partners, and flip your mindset.  Did you know...the fees associated with yearly membership dues are tax deductible if they are part of your business?

After the initial time they gave us to meet with people, the meeting got underway.  We heard some valuable economic information (both local and nationwide) that would be positive and negative for the real estate industry, provided by hard money lender: Jerry Ryan of Crescent R. Financial, Inc.  Things like amount of inventory available in the San Diego area charted as a month-to-moth graphic were displayed.  We also learned about the impact of unemployment and the nebulous interest rate environment we are in currently as a nation.  Jerry's commentary was a summary of the information that is out there for all of us, but that very few of us do not care to seek.  That is the awful truth.  If only more people paid attention to what Janet Yellen is doing, or what Bernanke did before her.  Some of you may be saying, who?  And that's my point...not knowing lost you five years of opportunity to purchase assets (like real estate).  See my post: How you were screwed!

Look at us...we were smiling!  Life is great!

The Keynote speaker for the night was A & E reality TV Star and Real Estate Flipping expert, Chris Bedgood.  You may have seen his show on A & E:  Chris is on the right below:

Chris shared an incredible amount of information in two hours.  He shared a little of his life's story with us, making himself vulnerable in front of the audience.  This took guts.  But doing so allowed him to gain trust from his audience.  He also shared some of what he termed: "Bedgoodisms."  These are the principles he lives by.  Below are a few that resonated with me: (do not follow his order).

1) Make your own luck, i.e., create opportunities.
2) Network and have "Face Time" with people...since this business is really all about people.
3) Perfection can be your enemy.
4) Know your risk tolerance
5) Be a pessimist optimist...in other words, be leery of things and try to anticipate what can go wrong
6) Hold yourself accountable
7) Learn to say No...especially on bad deals
8) Find a way around (be solutions oriented)
9) Share the wealth (give to others and thank your people with a little more $ for their hard work for you)

Chris also went on to describe the various real estate strategies that are out there: Prospecting or Bird Dog (finding leads and passing them on to RE investors with $ for a commission on your potential discovery), Wholesaling (Flipping the contract, not the actual property), and of course, Rehabbing or Flipping (and intricate process of re-doing a home you purchase at a low price and selling it at market value for a profit).  In 2006, I spent about $2000 on a two-day training to learn these techniques.  Chris' overview reinforced what I learned several years ago.

The benefit of attending this meeting at just $20 a pop per person was well worth it.  And as your financial literacy teacher, I strongly suggest that you do a meet-up search around your neck of the woods for an investor group.  Don't just network with people in your industry if you are an employee.  This is a sure way of reinforcing your "employee" mindset, instead of your "investor" mindset.  If you have been keeping up with my posts, the thought of escaping the rat race may have entered your mind, and this is good.  Cultivate it!  Stop making your boss rich or your company rich, putting ridiculous time and effort on something that will keep you enslaved.  Until next time, friend.

Retirement Planning Self-Assessment for Educators

Excerpt from my ebook: Common Core Money: Financial Literacy for Educators & Other Professionals, available at Amazon.  Common Core Money

The purpose of this section is for you to take a moment to assess where you are when it comes to planning your retirement.  Working for the next thirty-five years and letting your service credit, along with your state teachers’ defined pension plan, build, is not my idea of a sound plan.  It can be, if you enjoy working and expect to stay employed into your seventies.  Many of our former teacher colleagues end up continuing to come to school, becoming district substitutes; they love the company of kids and other teachers.  Still others retire and find part-time jobs to avoid running out of money.  There are plenty of former teachers greeting us at Walmart.  I’m not trying to push an agenda on what to do with your spare time once you retire.  However, I want to help so that working after retiring from education is a choice, not a survival necessity.  See the rubric below.  What grade would you give yourself?

Retirement Planning Rubric

D	My retirement nest egg is my monthly withdrawn contribution to State Teachers’ Retirement automatically every month.  I only read about my account/service credit at the end of the year when I’m sent a communication from the state.  I plan to work as an educator until I become senile or I can’t hold my pee longer than five minutes. I have a checking and a savings account with a credit union or bank and live month to month because of my many expenses.  Retirement savings…ha! I rent. What’s a Section 125?  Is that some sort of housing for the homeless?
C	My retirement nest egg is my monthly contribution to State Teachers’ Retirement withdrawn automatically every month.  I read all the information that is mailed to me by the state on retirement and I know exactly how much service credit I have each year.  I plan on working as an educator until the math (State Teachers’ Retirement) makes sense i.e. there are no additional benefits for me to continue an extra year teaching or working for the, “Dark Side.”  In fact, staying an extra year would cost me more! I have a checking and savings account.  Sometimes I manage to have money left over at the end of the month because I have a budget, and occasionally I transfer it to my savings account for a rainy day. I rent. I heard of Section 125…doesn’t it have to do with your taxes?  They were telling us about this at a staff meeting one time.  A rep shows up every year, but I don’t make an appointment to see them.
B	SAME AS “C” except… I have a checking account, a savings account that has just enough to cover over-drafting, and I have a Money Market Account with my credit union/bank.  At the end of each month, I transfer any kept cash to this account.  This is my emergency fund!  I’m hoping to fund it so that it’s 6 months’ worth of expense reserves.  If I don’t have an emergency, this becomes extra money for my retirement.  Cha-ching! I have a mortgage.  Section 125 allows me to save on taxes by reducing my taxable income every month or by allowing me to pre-tax some medical, dental, vision, and dependent daycare costs.  I’m enrolled each year.  I have X amount withdrawn from my gross pay monthly to later claim and get reimbursed for any qualified expense.  Woo-hoo!  Oh, and if I could spare it, I’d contribute to a 403(b).
A	SAME AS “C” except… I’m really thinking hard about how to retire as early as economically possible.  If I only knew more. I have a checking account, a savings account that has just enough to cover over-drafting, and I have an investment Brokerage account with my bank or a discount broker (TD Ameritrade/Scott Trade, e.g.).  I keep cash available on hand to transfer to my checking account (called being “liquid”) in my brokerage account, and what I don’t need immediately, I use to invest in equities (stocks/mutual funds/ETFs) and debt (bonds).  I’m not a sophisticated investor, so I do monthly or periodic contributions to an Index or Target Date mutual fund, or an ETF that tracks the market and let it ride until I retire and need the money.  I go online and check my portfolio occasionally, but it’s pretty much on automatic pilot. I have a mortgage.  Section 125? Of course!  I also use $X of pre-tax pay to build my 403(b) annuity.  Since I already use my Brokerage account to invest in equities, I select the fixed-interest choice of 3% for my 403(b) annuity. Why take more risk by letting my custodian do market investing with my hard-earned money.  OR…You know what, I don’t care that I already do my own investing; I’m in it to win it!  Bring on the risk baby!  So, my 403(b) is tied to the market and I’m confident my custodian can minimally keep up with the market.  I don’t like their fees though!
NM (No Mark)	I only care enough about my State Teachers’ Retirement to do the minimum number of service credit years to retire.  I’m endeavoring to retire ASAP!  I love what I do, don’t take me wrong, but life is too short.  I’m up to speed on all information regarding my defined benefit pension plan with my State, including how to maximize my retirement benefits. Same as “A,” but I also do my own stock picking.  I hold a basket of ten stocks in my portfolio, and do the necessary homework to stay on top of the companies I invest in.  I have my own approach/strategy to investing in equities.  I understand the features of other equities (mutual funds, exchange traded funds, and bonds).  I understand, and put to use modern portfolio theory: security valuation, asset allocation, portfolio optimization, and performance measurement.  I also look at alternative investments (private equity, mortgage backed securities, art, antiques, and basically anything of value not a stock, bond, or cash) if they make themselves available to me.  I’m pretty good at this! I have a mortgage.  I have 1-3 rental properties in my real estate portfolio. Section 125?  Same as “A”
I (Incomplete or Insane)	I only care enough about my State Teachers’ Retirement to do the minimum number of service credit years to retire.  I’m endeavoring to retire ASAP!  I love what I do, don’t take me wrong, but life is too short.  I’m up to speed on all information regarding my defined benefit pension plan with my State, including how to maximize my retirement benefits. Same as “NM,” however, I also invest in commodities, precious metals, and currencies.  I have a margin account.  I short stocks all the time.  I use puts and calls to hedge.  I’m a professional day trader on the side and trade when the kids are doing their test or working in groups.  If the Principal comes in my room, I pretend to look busy at my desk and quickly minimize the screen.  I’m a freakin’ genius! Same as “NM” Section 125?  Same as “A”

Note: No educator gets an F in my book.  “NM” is given to the professional investor.  They will undoubtedly experience many highs and lows in their career, trying to beat the market by stock picking (they won’t over the long haul), and may control several rental properties, but with no guarantee each of these cash flows.  I give myself a NM and praise God daily!  The “I” grade is extremely high risk investing, leave this to the best money managers this nation holds.