Romney Has Investments Funds In Cayman Islands

Romney Has Big Stash in Cayman Islands

It might not be immediately obvious, but Mitt Romney has millions of his fortune in investments funds in the Cayman islands, an infamous tax refuge.

A representative for Romney says he obeys the law, and that he pays the normal taxes despite where his money is.

As Republican nominations get closer, Romney is finding it harder to keep the secrets about his wealth under wraps.

Jack Blum, a lawyer from Washington thinks Romeny’s financial situation is a disgrace to the United States tax system.

Romney recently let out that he has been paying only 15% in taxes, much less than most of us. He stated privacy as the reason for wanting to keep this information separate, but all potential presidential candidates have to expect people to look into their financial affairs.

Romney is not hurting for money. His fortune is estimated at 250 million, and he pays lower income taxes on his investments in the Cayman Islands.

Blum says channeling money through offshore accounts lets investors avoid many small fees and traps that they would pay if the same money was on US soil. The primary reason for having funds in that location is avoiding taxes.

It may not be illegal, but it looks bad to some people, and the tax havens like the Cayman Islands cause the US government to lose out on $100 billion in revenue every year. Considering his timing, Romney may be wishing his investment funds were somewhere else less suspicious right now.

When is borrowing from your 401K account a good idea?

Your 401K retirement account is something that is very important to your future retirement. However, like many other people you may be considering borrowing money from your 401K account to fund something that is important to you such as starting up a business. It goes without saying that you should never make a rash decision with regards to borrowing from your 401K account, as you could potentially be risking a comfortable retirement by doing this. However, there is sometimes occasions when it can be fine or even advisable to borrow from your 401K account as opposed to looking at other options.

Of course, it is important to always consider what other options are available to you when you are in need of funds, as you may find that there is something that is more suited to your needs and financially viable than using your 401K account. You should bear in mind that, other than under certain circumstances, you may end up paying hefty withdrawal fees/penalties for taking money from your 401K fund early. However, if you repay what you borrow within sixty days you can avoid these charges.

With this is mind, borrowing from your 401K retirement account on a temporary short term basis is often a good idea, as you will not be hit with the penalty fees. This is an ideal solution if you have a short term cash flow problem and know that you can repay the money within sixty days.

If you have a lot of high interest debt that is financially crippling you then you may also find that tapping into your 401K for a loan could be a good idea, as you can ease the financial strain. You will also find that borrowing from your 401K at a really low interest rate to repay a debt such as a credit card debt with a really high interest rate makes financial sense. However, you need to make sure that you do not get carried away and borrow only the amount that you actually need rather than being tempted to take a little extra – after all, it is your retirement money that you will be taking!

Essentially, borrowing from your 401K is something that would be considered ok if it is for a necessity such as medical expenses or something that is going to ultimately save you or make you more money, such as paying off high interest debt or investing in your own business. What you should never do is risk your future by taking money from your 401K simply to splash out on luxuries such as holidays.

Andrew writes frequently about personal finance as well as issues effecting both consumers and small businesses, covering everything from savings to mortgages to
business insurance cover.