Anthony Limon, HB Editor

Welcome to Hispanic Business LiveChat. We would like to welcome our guest, Samuel A. Ramirez Jr. of Samuel A. Ramirez and co., taking your questions on investment.

I have a Roth IRA that I countribute $100 monthly,but I have a retirement plan at work and they match. Should I stop contributing to this Roth IRA and contribute the $100 to my Retirement plan at work? Thanks

Samuel Ramirez Jr.

You should contribute the maximum amount possible to the retirement plan at work. This money goes in to the account pre-tax, which lowers your taxable income. The excess savings should be invested and a roth ira is a good account to contribute to because of the tax deffered nature of the account.

What kind of retirement plans are available for a sole proprietor/self-employed person? And, what is the maximum amount of contributions per year can I make as a self-employed person to that type of account? Thank you!

Samuel Ramirez Jr.

Individual 401k or the SEP- Simplified Employee Pension- plan.

The Individual 401k allows 100% of pay up to $13,000 or $16,000 if over the age of 50.

SEP plan allows a contribution of the lesser of $42,000 or 25% of participants compensation.

One must study the requirements to set up such plans and choose the one that best fits the type and size of business.

What is the average CAGR (compound annual growth rate) of the hispanic business in the USA? What is your firm projecting for CAGR in the next 3 a 5 years? Besides Banks and Media, What other sectors do you think the next wave will be on?

Samuel Ramirez Jr.

We are expecting a CAGR of 15%-25%, depending on the industry. The next wave will be in Consumer Goods- Food and Beverage and Retail.

Is there an way to change an IRA to a Ross with out costing me an arm and a leg? It was a 401K account than I transferred it to a IRA. I want to start contributing to it as a Ross. I am five years from retirement. Once I retire, can I transfer my 401K money to a ROSS account? Is a Ross still available to individuals in retirement?

Samuel Ramirez Jr.

You can covert your IRA to a roth, however, it will be considered as a distribution and a taxable event or an arm and a leg! 401ks can only be convert into IRAs. The roth ira is available on a individual basis.

We hear a lot about investing your money in the stock market to increase your capital inspite of the risks, however, what can a person with not many funds do to participate? Besides the standard Mutual Funds, what can a person interested in investments do to learn the ins and outs of starting? Should a person consider investing as a group? What are the tax consequences of investing?

Samuel Ramirez Jr.

We would be happy to help you learn the markets as a beginning investor. It is best to seek help with a professional investment advisor. The Wall Street Journal has a good book on the basics of investing, "WSJ guide to understanding money and investing."

Investing as a group or an investment club can be done to pool and grow assets, however, we do not reccomend this based on differnet objectives and styles.

The tax consequences basically come down to long term or short term capital gains. ST Cap gains are taxed at your personal tax rate, LT Cap gains are taxed at a 15% rate.

My wife and I have combined income of $190,000.00 per year. We have a fair amount going towards investments. My questions is: I have a business plan that I would like to invest in. Should I go ahead and withdraw from my current investment portfolio to bring my new niche idea to life?

Samuel Ramirez Jr.

New business ventures can be very risky and one should weight the pros and cons of such a venture. I would reccommend having many experienced people review your business plan and to allocate a resonable amount of money to the venture.

At this time I am considering a home equity loan vs refi on my home since I understand that these loans are now tax deductiable. Would this be a smart way to use the equity in our house to purchase rental property?

Samuel Ramirez Jr.

One should avoid becoming too over leveraged. In decided between a refi or a home equity line of credit one should compare the rates and the costs involved. They are both tax deductible. Buying the rental property is a question that you will have to answer based on the amount of leverage you are confortable with, the amount you are able to earn in rent and the strength of the rental candidates available. The real estate market has had a good run, one should be careful if the market hits a rough spot.

Life insurance? Whole life or term and why?

Samuel Ramirez Jr.

We would be happy to look at your situation and help you determine which is right for you. Your age, health, hobbies, job and family situation will determine how much insurance will cost. Your long term goals and the amount of money you have to allocate will determine which one you choose. Term is a less expense, however, not a permanent solution. Whole life is a more expensive, but permanent solution, with a possible cash value that can biuld up.

I'm a 54 year old widow and I'm way behind on savings for my retirement. I have a $20,000 SEP IRA, a $5,000 Roth. $6,500 annuity a 10K fund and about 65k sitting in the bank and earning a low interest. I would like to buy some bonds and stocks. However, is this a good time to buy bonds? interest are on the rise. I'm very conservative when it comes to investing. I lost a 20K with an investing advisor. Do you have any suggestions? Thank you

Samuel Ramirez Jr.

Interest rate seem to be on the rise. We are reccommending investors remain in the 5-10 year range, until there is more clarity on the direction of interest rates. We would have to look at your portfolio as a whole to determine what type of investments and asset allocation is best for you. We would need to know what your goals are, when you plan to retire, your tax bracket and your risk tolerance. Based on your past experience, we would err on the cautious side. Recommending fairly conservative bonds and equity holdings. Diversity is important.

Samuel Ramirez Jr.

I will continue to answer a few more questions. I appreciate the interest and will be happy to help on an individual basis. Our website is www.Ramirezco.com and I can be reached at 1-800-888-4086 ext 531.
Much Thanks.

How do you think investors can participate in China's economic growth?

Samuel Ramirez Jr.

A percentage of your assets in one of the many mutual funds or index funds investing in China, would be a place to start.

Is it best to buy US Savings Bonds for my new born or should i invest in a 529 B or both?

Samuel Ramirez Jr.

One of the better investments to start with is the 529 college savings plan. There are many to choose from. Zero coupon bonds are usually a better investment than US Savings bonds.

Anthony Limon, HB Editor

A big thanks to Samuel A. Ramirez Jr. of Samuel A. Ramirez and co. For more information please visit www.Ramirezco.com or contact Samuel Ramirez Jr. at 1-800-888-4086 extension 531.