How to Avoid the Biggest Mistakes 256 Answer:Standard & Poor's or Moody's rate bonds according to the bond issuer's ability to repay the principal invested and the interest. Bonds are rated from AAA (the highest rating) to C (the lowest rating). Look in the reference section of most libraries, or visit them on the Web: Standard & Poor's ( and Moody's ( Investing Question #17:What does buying " on margin " mean? Answer:Buying "on margin" means that you don't invest the actual amount the particular investment product cost. You are actually borrowing the money from your brokerage firm. Regulations permit buying up to 50 percent "on margin," meaning that an investor can borrow up to half the purchase price of an investment. If the individual stock you purchased or the stock market should tank, you could be forced to sell at a loss and then would have to come up with the dollars to repay the brokerage firm. Investing Question #18:Why aren't IRA contributions tax-deductible for everyone? Answer:During the 1970s and most of the 1980s, all individuals at all income levels could contribute up to IRA maximums on a tax-deductible basis. That was a lot of money being saved without any taxes deducted--in fact, more than $130 billion since 1974. Basically, the fellows in Washington felt they were losing a lot of tax revenue. In addition, they felt that IRA rules favored individuals with other retirement plans and with higher incomes. Therefore, the rules that changed really only af- fected these individuals. IRA contributions' tax deductibility for those at certain lower incomes and for those without other employer-sponsored retirement plans are essentially unaffected. (See Chapters 9 and 21 for income levels.) Investing Question #19:How much do you have to make before it's worth contacting a professional for investment advice? Answer:It used to be that investment professionals (stockbrokers, investment advisors, and finan-