- Budgeting
- Cash Management
- Consumer and Mortgage Loans
- Debt and Debt Reduction
- Time Value of Money 1: Present and Future Value
- Time Value of Money 2: Inflation, Real Returns, Annuities, and Amortized Loans
- Insurance 1: Basics
- Insurance 2: Life Insurance
- Insurance 3: Health, Long-term Care, and Disability Insurance
- Insurance 4: Auto, Homeowners, and Liability Insurance
- The Home Decision
- The Auto Decision
- Family 1: Money and Marriage
- Family 2: Teaching Children Financial Responsibility
- Family 3: Financing Children’s Education and Missions
- Introduction
- Decide How Education Relates to Your Financial Goals
- Understand the Principles of Financing Education and Missions
- Understand the Priority of Money for Financing Education
- Recognize How to Save for Your Children’s Education
- Recognize How to Save for Your Children’s Missions
- Know How to Reduce the Cost of Education and Apply for Aid
- Summary
- Assignments
- Investments A: Key Lessons of Investing
- Investments B: Key Lessons of Investing
4. Replace interest income with stock dividend income
Because of changes in the tax law in 2004, taxes on dividends from individual company stocks or stock mutual funds were reduced to 15 percent. However, interest earned on bonds or bond mutual funds is taxed at your ordinary income rate, which can be as high as 35 percent. If you put more emphasis on stock dividend income than interest income, you will potentially increase your portfolio’s return and pay less in taxes as well. These steps should only be taken if they are appropriate for your risk-tolerance level.
