TYPES OF INVESTMENTS ACCOUNTS

Types of Investments Accounts

Types of Investments Accounts

So, maybe you have done some research on different types of investments, but you don't know where to purchase these investments. Typically, in order to purchase different types of investments, you will need to open up an investment account with your bank or an investment brokerage firm. Here are the typical accounts that you can open:

Individual investment account. This type of account will allow you to buy and sell (on your own or with the help of an advisor) without restrictions; however, there are no tax advantages.

Individual Retirement Account (IRA). This is a great account to invest money for retirement because it provides tax advantages. The money placed in an IRA is considered pre-tax and you pay no taxes on returns until you take the money out. Because you do not have to pay taxes on your money it will grow larger. You can contribute $4,000 per year tax free. Individuals aged 50 and older can contribute up to 100% of earned income or $5,000 whichever is less. However, if you pull out your money before you reach 59 ½, you will have to pay taxes PLUS you may have to pay an additional penalty.

Roth IRA. A Roth IRA is similar to a regular IRA, except that it is after-tax money. Therefore, you do not get an additional tax deduction for this type of account. However, after the age of 59 ½, you can pull your money out tax free.

The investment decision (also known as capital budgeting) is one of the fundamental decisions of business management: Managers determine the investment value of the assets that a business enterprise has within its control or possession. These assets may be physical (such as buildings or machinery), intangible (such as patents, software, goodwill), or financial (see below). Assets are used to produce streams of revenue that often are associated with particular costs or outflows. All together, the manager must determine whether the net present value of the investment to the enterprise is positive using the marginal cost of capital that is associated with the particular area of business. In terms of financial assets, these are often marketable securities such as a company stock (an equity investment) or bonds (a debt investment). At times, the goal of the investment is to produce future cash flows, while at others it may be for the purpose of gaining access to more assets by establishing control or influence over the operation of a second company (the investee).

Business firms or organisations raise funds from investors in the form of equites and debts (collectively known as the capital structure) and further reinvest it into various investment schemes by carefully analysing the returns in order to meet out their obligations relating to purchase of assets which provides them long term benefits.

Individuals

One individual holds property under an “unmarried” status to attest that there is no community property interest, or under a “married” status with the accountholder declaring the assets as sole and separate ...