Stock option trading – Your net cost will be your premiums, plus interest on the loan, minus loan amounts, also minus dividends, if any.

This cost will be similar to that obtainable with much less fuss on a term policy with equal death value, reduced each year. But here is the clincher: in the present Federal income-tax rules, the interest you pay on loans is deductible from your taxable income, so that after paying the tax, your net cost on this borrowing plan may be lower than on a term policy. The higher your income tax rate, the more this scheme can save you. Short-Term Policies In the previous chapter we said that paying life-insurance premiums is an unsatisfactory and temporary expedient, to be replaced as soon as possible by an investor's own accumulated capital. With this plan, the long-lasting level premium has little meaning. An investor had better select a policy with a low-cost rate in the early years.

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