Robert A. Bonavito, CPA PC

RABCPA PC Blog

4. Investing in Franchises

Most people at some point have a dream of owning their own business and being their own boss. They naturally assumed that owning a franchise is the easiest way to freedom and controlling their destiny. However, the truth is most franchises are not very successful, when you consider all of the costs, like hours worked, startup fees, ongoing franchise charges, forgone salary and benefits. The main problem with the franchise is that you have two partners, one is the government and one is the franchisor. When you adjust for the actual costs you are usually left with little or no profit, so think about it carefully before you invest in a franchise.  

Posted July 15, 2017 by Robert A Bonavito in Educational Videos

6. Mutual Fund Expenses

Some of you think that when you invest in a mutual fund there are no cost. But as most of us realize there’s no such thing as a free lunch. I think we have to realize that it does take money to manage a mutual fund, so there needs to be some type of cost. Hidden cost of mutual funds can range from .3% to over 3%. As you can see this is a very large fluctuation, and this can have extreme effects on your earnings. I try to tell my clients to carefully analyze all expenses of mutual funds and try to get as close to or under .5%.

Posted June 24, 2017 by Robert A Bonavito in Educational Videos

The Power of a Roth IRA

What is the best way to accumulate wealth? I would say open a Roth IRA. The Roth IRA is a unique vehicle in that it lets you contribute with after-tax dollars into a Roth IRA and grow tax-free. At any point in time the principal amount can be taken out without tax consequences and once you reach retirement age you can take out as much as you want tax-free. In fact, if a 20-year-old put just $5,000 in a Roth IRA for 11 consecutive years and stopped, by the time they retire they would have well over $5 million; remember its tax free.  

Posted June 17, 2017 by Robert A Bonavito in Educational Videos