Monday, November 18, 2013

Traditional IRA or Roth IRA?

Even though individuals have until the tax filing deadline next April to make all of their contributions to a Traditional or Roth IRA, really it would be wiser to start thinking about that stuff now, before the holiday spending begins. Which one is best for you--Traditional IRA or Roth IRA?
Do you make a decent six-figure income? If so, the Roth is not an option. If not, however, the Roth IRA is a great option for people who want to put away some money now that will come out tax-free in retirement. So, basically, if you have a job and are making less than $100,000 your tax planner will likely concur that you can make your maximum contribution to a Roth IRA--at least $5,500 currently.
Are you covered by a retirement plan at work? If not, you could instead fund a Traditional IRA, and it doesn't even matter how much money you make. Seriously. If you work for a n employer with no retirement plan, you can almost certainly maximize and deduct your contribution to a Traditional IRA. As always, check with a CPA first.
Just yesterday I was talking to a woman who is 59 and has very little saved up for retirement. After an extended set-back after losing a job and then taking a new one that paid about 1/2 of what she used to make, she is about to get re-hired by a good company with a 401(k) plan. In order to catch up, she needs to maximize her 401(k) option, which would let her put aside up to around $20,000 between her and her employer's contributions. Since she'll never earn $100,000, she can also take advantage of a Roth IRA. The Traditional IRA for her is not attractive, as her 401(k) participation plus her income level (around $70,000) will remove her ability to deduct a contribution to a Traditional IRA.  She could  put an after-tax contribution into a Traditional IRA, but I see no reason to do that, not when her income is well south of the cut-off for Roth contributions. Need help with your Series 7

Wednesday, October 9, 2013

But, How Do I Take the Series 7 Exam Itself?

Any textbook worth its salt lists the terminology tested on your exam. Most explain most of the main concepts reasonably well, depending on how much time you have for re-reading and highlighting.

Regardless, what few vendors do is show you how to take the series 7 exam itself--how to deal with the challenging questions. How do you take all those words and numbers you memorized and apply them to questions that are often trying to mislead you?

If you need help working practice and exam questions for the Series 7, you simply have to get our $49 access to test-taking skills lessons. For just $49, you get access to over 25 recording sessions that break down 10 unique practice questions step-by-step. Hit PAUSE to do the question. Hit PLAY to watch us break it down for you.

Need Help with Series 7 Exam Questions?

Tuesday, August 27, 2013

Series 7 Online Classes Starting Soon

It has come to my attention that most people studying for the Series 7 could use a little help from a structured class. They need a schedule to stick to. They need a time and a place they have to be, or else. That's why we've set up a seven-week online class schedule launching September 10th allowing you to take in key Series 7 information in small, digestible bites. With the ability to watch the material again if you need, and--best of all--to participate in live Q & A sessions with the author of Pass the 7, me.

Classes will run two or three times a week at 12 noon Central for about 90 minutes. The final 30 minutes will be the live Q & A with the author, me, R Walker. To see the schedule and get on the bus, please click this link:

Examzone and are one-in-the-same, by the way. Examzone focuses more on corporate accounts while focuses on the end-user. Either way, hope to see you online, soon.

Sign Up Now--seating limitied.

Monday, May 6, 2013

FINRA Rules on Communications

FINRA is forever tweaking the definitions used for the communications put out by a member firm. A few years ago, I had to put serious effort into explaining how sales literature differed from advertising, and all the special rules on public appearances and independently prepared reprints. Going forward, FINRA only wants to work with three specific categories of communications: correspondence, retail communications, and institutional communications. Of these, only retail communications are subject to prior principal approval and filing copies with FINRA. Correspondence and institutional communications have to be monitored, and principals need to make sure that these communications are not misleading. They just are not subject to the heightened supervision of communications going out to > 25 retail investors. It is a little strange to see FINRA rely so heavily on this arbitrary number 25, but they do. The exact same thing--a seminar handout, for example--is correspondence if delivered to 25 or fewer retail investors but becomes a retail communication if delivered to more than 25. What we used to call advertising and sales literature is now either correspondence or retail communications depending on how large the audience is. FINRA also no longer cares whether the communication goes to an existing customer or a prospect--again, the number 25 is suddenly the determining factor. Pass Your Series 7 Exam

Thursday, March 14, 2013


The CBOE is rolling out some new "mini-options" allowing investors to buy contracts that cover just TEN shares . . . for the really high-per-share-priced stocks including AMZN, APPL, GOOG, SPDR Gold Trust, and the good ole SPDR S&P 500. Ordinary options use a multiplier of 100, of course, but these mini-options use a multiplier of ’10.' The #7 at the end of each stock symbol denotes ‘Mini,' so, the mini-option might look like this: AMZN7 or APPL7. A customer who owns just 40 shares of APPL could now hedge by writing 4 APPL7 mini-options (4 X 10 = 40 shares). Always innovating, this industry. Series 7 Tutoring Available Here

Thursday, February 14, 2013

Series 7 Exam Sample Question: Mutual Funds

Don't forget that while the Series 7 exam asks many questions about options and debt securities, it also asks many questions about other topics. And, often these other topics can yield some pretty challenging and tough series 7 exam questions. Like this one:

A summary prospectus for a mutual fund states that the public offering price (POP) is $10.50 with the net asset value (NAV) at $10.00. The document also states that the sales charge is less than 5%. Which of the following could explain this?
a.Sales charges are expressed as a percentage of the net amount invested.
b.The summary prospectus is unaudited and frequently includes estimated figures.
c.Sales charges are expressed as a percentage of the gross amount invested.
d.Some investors may have purchased shares at lower sales loads through quantity discounts.

Explanation: the exam is expert at asking questions in ways you weren't quite expecting. Maybe you've done dozens of questions that simply asked you what the formula for calculating the sales charge percentage is, or maybe you've been running the calculations so many times you forgot to learn what it was you were calculating and why. As always, ask yourself what the question is telling you that allows you to eliminate at least one of the four answer choices. Unfortunately, this question gives you nothing that is obviously wrong at first glance. Maybe the document IS unaudited? Investors DO often purchase shares at a lower sales charge through breakpoints/quantity discounts. And, if you've never encountered the phrase "expressed as a percentage of the net/gross amount invested," you can easily panic and convince yourself there is just NO WAY TO GET A QUESTION LIKE THIS RIGHT.
Sure there is. Look at each answer choice more closely. The fact that SOME investors might have bought at lower sales charge percentages would hardly be a good reason for the mutual fund to quote their a-typical experience, right? Shouldn't this document use the maximum sales charge? Yes, and, even if we thought this might be the explanation, we have to keep thinking until we recall that some investors have all sales charges waived--usually at about $1 million--so Choice D wouldn't work even if we went down that path. Choice B bugs me, too--how about you? I mean, the American Balanced Fund, for example, had assets of around $50 billion last time they reported--would it be so hard for a fund that size to break out a calculator and tell us exactly what the sales charge is? Estimated figures? I think you can eliminate that one. Now, if you're not comfortable with the language used in Choice A and Choice C, you just have to interpret--the gross amount is the total amount one pays--the net amount is what's left after the distributors take out the sales charge. So, even if you weren't sure before the question, you can crunch a few numbers and prove what the answer is. If we take 50 cents divided by the net amount invested, the NAV, the % would be 5%. But, if we--properly--divided the 50 cents by the gross amount invested, the POP, we would get a figure of under 5%. Making Choice ______ the correct answer.

Answer: c  Need Help with your Series 7?

Friday, February 1, 2013

Updated Series 7 Exam Material

Just a quick word on how we make sure we keep our series 7 exam prep material updated:

  1. Pass the 7 ExamCram Online Test Prep questions are updated/improved throughout the year
  2. Pass the 7 textbook is updated each year.
  3. Pass the 7 DVD set is updated either each year or as-needed.
  4. Pass the 7 Audio CD lectures were just updated for 2013
How important is it that you have the most "up to date"  Series 7 material?
Nowhere near as much as most people think, since the exam tends to ask the same old questions for decades--yes, a few details change each year in the industry, but, by and large, the Series 7 does not need to change its questions to any great extent. Covered calls have worked the same way since I've been teaching this stuff--same for bond yields, sell-stops, margin accounts, and probably 96% of what anybody needs to know for the test. Still, folks want to feel they have the most updated materials, so we do what we can, as listed above. Pass Your Series 7