Retirement Plans and diversification

Diversify. We hear it all the time. My understanding was just to put money into different industries in the stock market to be diversified. Now I understand that Any platform where you put money in and take out a different amount is investing. The possibilities are limitless, but here are a few of the most infamous arrangements.

• Real estate
• Rent is an ugly word, if you have the down payment, invest today.
• Equity (Market value of your property minus what you owe) is easy to borrow against.
• Things to know:
• What is interest % on the mortgage
• What is your down payment, and can you truly afford it?
• Homeowners insurance for uncontrollable perils (basic is fire, lightning, etc.)
• Who will rent your place? Is it rentable? Will you live-in?
• Who to buy with (I like the Z-Group for High end, great reputation)
• Is everything up to code? Building regulations are always being updated
• *note that interest on mortgages and points to get the mortgage loan are deductible
• Taxes
• Anyone getting a 1099 can deduct many many items that aren't reimbursed by the contractor (Above the line):
• costs to earn business, or any otherwise business expenses, retirement savings
•  Itemized (below the line) ddt's: Gas, uniforms and clothing, dues to clubs and any entertaining of clients is deductible
• Stocks and Bonds
• Know the industries and read the news, my strategy is long-term
• Understand how companies make money and is the price good in comparison to the financial position of the companies
• Scottrade is a fabulous platform, very user friendly
• Stop Losses to sell at any price is useful, thanks Vito Russo
• Venture capitalism
• Never be emotionally invested because even if you think they are your friends, owners often force you to work more for less money and might waste your money in vain
• Research competitors
• Know what the vision and aim are
• Know what the financial position is for the first year (balance sheet)
• Retirement accounts (intuitively all of investing should be retirement oriented)
• Roth IRA (taxed as deposited can withdraw at 60 y.o.)
• Withdraw before 59.5 y.o. incurs a 10% penalty subject to exceptions
• The earnings the IRA itself accrues are taxable when distributed (aka taken out)
• Non-qualified distributions are made before age 59.5
• Exceptions: you become disabled (with constraints), are equal payments over the holder's lifespan, are for medical expenses out of pocket over 7.5% of AGI, payment of med insurance after 12 weeks unemployment, are used for a $10K first time home purchase, for qualified higher education expenses, or are used to satisfy a tax levy.
• For funds converted from Traditional to Roth, the penalty does not apply if the conversion was more than 5 TAX years prior to the extent they are includable as AGI
• Withdrawal from traditional IRA is taxable and subject to penalty only on earnings from the principal, where the proportion of non-deductible contribution to earnings is used to determine that of the withdraw. (i.e. 60% of total IRA is earnings so 60% of withdrawal is taxable and penalty)
• So, if you are 50 or younger and see the need to have money without the 10% penalty, convert the traditional IRA to Roth because after 5 tax years, the money is penalty free.
• If $15K is converted to Roth in 2012 and $10K in 2015, $15K has no penalty in 2018, and the sum of both have no penalty in 2021. 
• Traditional IRA benefits a holder because the amount is taxed at the time of distribution (which means that the principal is tax deferred and gains more on the same rates since the principal is greater). If $5K is put into both accounts at a 30% tax bracket, $1500 is taken immediately from the Roth so only $3500 can appreciate in the IRA, where the traditional makes exponential gains on the full $5K.
• Traditional IRA (taxed as withdrawn can withdraw at 60 y.o.)
• 401 K 
• pension or a steady pay when you stop working for retirement
• often matched
• Cafeteria Plan