With the pressure of recession is surmounting in our daily life, smarter budgeting tactics are needed to ace the bad economic weather. The right budgeting methods can help you survive, even prosper today, without the need to live below your mean.
These tips involve nothing related to live below your mean, as it is probably the worst budgeting strategy and financial advice someone can offer you.
1. Clip coupons. A few minutes spent clipping coupons can help you save quite an amount of money everyday.
2. Buy in bulk. Stocking up, although costs you more today, allows you to save a lot in the future. Make sure you buy in bulk for products that carry no or long expiration date.
3. Save your change. Surprisingly, saving your change can add up quickly to your positive cash flow. Many discard their coins without putting much thought - Saving them in a bowl or any other containers can help you a great deal in your daily shopping needs.
4. Put a portion of your paycheck into a saving account on weekly or monthly basis. Whenever possible, deposit 10-20% of your income into a saving account and do whatever you can NOT to take anything from the account, not even a single penny.
5. Avoid impulse shopping. Impulse shopping causes disappointment and remorse. To avoid it, you should plan your shopping and make sure you avoid any additions to the plan, unless of course, they are either necessities or non-budget sensitive purchases.
6. Shop the sale racks. This seems obvious, but not all think that this what they want to do. With today’s recession, sale racks are everywhere and easy to be found in any retail stores or shopping malls - Utilize this help you get bargains (and a considerable saving in your personal finance.)
7. Avoid using high-interest credit cards. Credit cards could “kill” you if you don’t have the right reason to own them. Many uses credit cards to finance their purchases, even business - Although this can help you leveraging your finance, the high interest rate could swallow you if you are not careful.
8. When using a credit card for purchases, prioritize to use one with an introductory APR (some offer 0 APR) and a regularly low interest rate This could end up saving you big bucks every month and also in the future, which is one of the most important rules to personal budgeting.
9. Request free samples. Freebies are live-savers. They can save you a considerable amount of money, especially if you know where to acquire offers for free samples. The best bet is to Google for free samples, and start from the websites in the search result pages.
10. If you find yourself buried deeper in your credit card debt, call the creditor and request for an inclusion in a “hardship program.” The “hardship program” allows you lower interest rate and payment for a certain amount of time (depends on the creditor, it can be several months or until the balance is paid off.)
Thursday, July 30, 2009
Sunday, June 28, 2009
Mortgage Bad Credit Tips And Information
Bad credit creates truly dreadful experiences, particularly within the minds of creditors and lenders and they’re not about to forget in the near future. Access to information regarding your credit standing is simple for those individuals that you require cash from so you understand that if the credit report comes out a bit lower than desired, you might not always receive the loan that you want. All the same the emphasis is on ‘might not’ because even having undesirable credit, it’s still possible to get a mortgage refinance loan - the only catch is the refinance percentage rate.
Mortgage Credit
If you’re trying to obtain a mortgage refinance loan at low rates and you’ve horrible credit, just forget it. Bad credit makes you different from the other customers, specifically the ones who have a better credit track record. The greatest you can expect is a decent (meaning a fairly high) mortgage refinance rate as lenders are extremely cautious about customers with a problematic credit record. They’re giving you money, of course and if you cannot repay it, this spells a loss to their business.
Consider the types of programs available from the lender
It’s not just ever broker can give you loan programs which are beneficial to you, meaning, they likely cannot say with certainly what varieties of loans that you are qualified to receive. While seeking out low cost mortgage refinance rates, attempt to discover what loans your lender has, here are a few you might want to look at:
FHA financing: which don’t have stringent guidelines, plus, you’ll like the fact that you won’t get charged a significant deposit. Conventional mortgages: (Fannie Mae/Freddie Mac), which could offer you decent refinance rates while having bad credit which depends on the sort of property you desire, how much deposit you are able to pay and naturally, your score. Subprime mortgages, a different title for sub par credit mortgages, usually the type of loan you will receive if your score dips to under 600. The rates that you receive would depend on the parameters set by your lender and on your credit standing.
The best thing to do is to discover what your credit score is, even if it’s bad it will help provide your creditors a more useful figure to use as for calculating the refinance rates. You may then speak with your creditor to learn what types of interest rates that you are qualified for, just ensure to get quotes from many lenders to determine what one provides you the greatest bargain. Keep in mind that it is not necessarily just the rate, although additionally the total package being provided for you.
Another option for finding info about mortgage refinance rates which you are qualified for even while having terrible credit is to use online sites. Most creditors provide reckoners as well as other resources on their websites which you may use, simply enter the needed info and the tools will calculate your refinance rate very quickly.
Do not let bad credit stop you from finding the greatest deals which will help save you money. Historically, customers that have taken advantage of mortgage loan refinancing have enjoyed the advantages. Ensure that you obtain all of the data that you need so you’ll have the ability to effect the right decisions in regards to your finances. Keep in mind that a mortgage loan is a thing which you will be dealing with for an extended time.
Mortgage Credit
If you’re trying to obtain a mortgage refinance loan at low rates and you’ve horrible credit, just forget it. Bad credit makes you different from the other customers, specifically the ones who have a better credit track record. The greatest you can expect is a decent (meaning a fairly high) mortgage refinance rate as lenders are extremely cautious about customers with a problematic credit record. They’re giving you money, of course and if you cannot repay it, this spells a loss to their business.
Consider the types of programs available from the lender
It’s not just ever broker can give you loan programs which are beneficial to you, meaning, they likely cannot say with certainly what varieties of loans that you are qualified to receive. While seeking out low cost mortgage refinance rates, attempt to discover what loans your lender has, here are a few you might want to look at:
FHA financing: which don’t have stringent guidelines, plus, you’ll like the fact that you won’t get charged a significant deposit. Conventional mortgages: (Fannie Mae/Freddie Mac), which could offer you decent refinance rates while having bad credit which depends on the sort of property you desire, how much deposit you are able to pay and naturally, your score. Subprime mortgages, a different title for sub par credit mortgages, usually the type of loan you will receive if your score dips to under 600. The rates that you receive would depend on the parameters set by your lender and on your credit standing.
The best thing to do is to discover what your credit score is, even if it’s bad it will help provide your creditors a more useful figure to use as for calculating the refinance rates. You may then speak with your creditor to learn what types of interest rates that you are qualified for, just ensure to get quotes from many lenders to determine what one provides you the greatest bargain. Keep in mind that it is not necessarily just the rate, although additionally the total package being provided for you.
Another option for finding info about mortgage refinance rates which you are qualified for even while having terrible credit is to use online sites. Most creditors provide reckoners as well as other resources on their websites which you may use, simply enter the needed info and the tools will calculate your refinance rate very quickly.
Do not let bad credit stop you from finding the greatest deals which will help save you money. Historically, customers that have taken advantage of mortgage loan refinancing have enjoyed the advantages. Ensure that you obtain all of the data that you need so you’ll have the ability to effect the right decisions in regards to your finances. Keep in mind that a mortgage loan is a thing which you will be dealing with for an extended time.
Saturday, June 20, 2009
Watchdog to end commission based financial advice
It has been reported that the UK’s financial regulator, the Financial Services Authority, is set to put an end to all commission based financial advice, which will ultimately change the way in which financial products in the UK are sold to consumers. This move is part of an overhaul of the financial sector by the regulator.
The plans were outlined in the FSA’s Retail Distribution Review, and the measures are likely to have a huge impact on many financial services providers. This is because it will mean that they can no longer earn commission on a variety of financial products, such as investment funds, life assurance, and pensions. The changes have been provisionally scheduled to take place in 2012.
One official from the FSA said that the measures were being taken in a bid to try and rebuild consumer confidence following the last couple of years, which have been particularly turbulent in the financial sectors. He added that a more sustainable sector needed to be created, and that something needed to be done to help consumers get access to the advice that they needed quickly and effectively. He said that this was now more important than ever before.
At present the proposals over ending commission based financial advice are still open for consultation, and will remain so until later on this year. One of the major issues that the proposal aims to address is the issue of commission based mis-selling, where consumers may end up receiving poor or unsuitable advice by an industry professional that is commission based. This is due to concerns over advisors recommending products based on the amount of commission they will receive rather than on which product is best for the consumer.
At present around 80% of payments to independent advisors comes via commission rather than from a fee from the consumer, and in many cases the consumer does not realise that the advisor is getting commission, and assumes that the advice is simply free. The new regulations will stop financial groups from offering commission to advisors in order to get recommendations.
The plans were outlined in the FSA’s Retail Distribution Review, and the measures are likely to have a huge impact on many financial services providers. This is because it will mean that they can no longer earn commission on a variety of financial products, such as investment funds, life assurance, and pensions. The changes have been provisionally scheduled to take place in 2012.
One official from the FSA said that the measures were being taken in a bid to try and rebuild consumer confidence following the last couple of years, which have been particularly turbulent in the financial sectors. He added that a more sustainable sector needed to be created, and that something needed to be done to help consumers get access to the advice that they needed quickly and effectively. He said that this was now more important than ever before.
At present the proposals over ending commission based financial advice are still open for consultation, and will remain so until later on this year. One of the major issues that the proposal aims to address is the issue of commission based mis-selling, where consumers may end up receiving poor or unsuitable advice by an industry professional that is commission based. This is due to concerns over advisors recommending products based on the amount of commission they will receive rather than on which product is best for the consumer.
At present around 80% of payments to independent advisors comes via commission rather than from a fee from the consumer, and in many cases the consumer does not realise that the advisor is getting commission, and assumes that the advice is simply free. The new regulations will stop financial groups from offering commission to advisors in order to get recommendations.
Wednesday, June 3, 2009
Think About Your Home Loan or Mortgage Refinancing
There’s many benefits to having your mortgage refinanced however, the most pertinent and obvious reason is the lower rate that you’ll enjoy. When applied at the right time as well as chance, having a mortgage refinanced may save you a lot of money down the road. All the same, since timing plays a crucial role with refinancing, it’s important that you comprehend the elements that impact impact how well you can take advantage of it. When may a mortgage be refinanced and should you?
If you’re taking out a home mortgage loan and are considering getting it refinanced later, you will be happy to know that you could likely do this whenever you want. All the same once you have a mortgage and the rates begin behaving in a way which is good for you, you shouldn’t automatically apply for refinancing.
Home Loan
First, the variation for the newer rate of interest and the present rate of interest would be enough to actually give you a few advantages. Second, most lenders will likely encourage you to refinance just after the loan has matured for a minimum of 12 months give or take. Still, it is best to contemplate this only if interest rates have remained the same. If when you’ve taken a mortgage loan the marketplace trend begins tipping to your advantage, you should contemplate refinancing your loan. Keep in mind that rates of interest are fairly volatile and if you wait too long for them to drop even further, you could lose out on a very good opportunity to get a good deal.
Consider the 2 percent formula: Just|Merely|Simply] because the rates of interest have fallen a bit doesn’t automatically warrant your choice to refinance. Think about refinancing just if your new rate is around two percent lower in comparison to the rate that you’re currently paying. A one percent difference in the interest rate is not sufficient reason to make the switch.
Don’t forget that there are costs associated with a new loan: When you consider refinancing for your mortgage, keep in mind that you will have to pay extra for closing fees so an interest rate as low as 1 percent will not cover the expense.
You have no late payments: You may go ahead and refinance your mortgage if you’ve kept up on your monthly payments for the past year. If you’ve never been late on your payment throughout the past year, you might effect the change and get your mortgage refinanced.
You have already built up equity: If you want to refinance a mortgage soon, try to have a look at if you’ve actually accumulated equity. You need to possess at least 5 or 10 percent equity (depending on the lender) before you may think about refinancing as a doable choice.
So is refinancing an option for you? Of course, you could always contemplate refinancing the mortgage whenever you’re most comfortable. The key is to consider the time factor, as well as the sort of chance being presented by the marketplace, since of course, refinancing is actually taking out another loan. Simply be prepared for the procedures and costs that you’ll need to go through once more.
If you’re taking out a home mortgage loan and are considering getting it refinanced later, you will be happy to know that you could likely do this whenever you want. All the same once you have a mortgage and the rates begin behaving in a way which is good for you, you shouldn’t automatically apply for refinancing.
Home Loan
First, the variation for the newer rate of interest and the present rate of interest would be enough to actually give you a few advantages. Second, most lenders will likely encourage you to refinance just after the loan has matured for a minimum of 12 months give or take. Still, it is best to contemplate this only if interest rates have remained the same. If when you’ve taken a mortgage loan the marketplace trend begins tipping to your advantage, you should contemplate refinancing your loan. Keep in mind that rates of interest are fairly volatile and if you wait too long for them to drop even further, you could lose out on a very good opportunity to get a good deal.
Consider the 2 percent formula: Just|Merely|Simply] because the rates of interest have fallen a bit doesn’t automatically warrant your choice to refinance. Think about refinancing just if your new rate is around two percent lower in comparison to the rate that you’re currently paying. A one percent difference in the interest rate is not sufficient reason to make the switch.
Don’t forget that there are costs associated with a new loan: When you consider refinancing for your mortgage, keep in mind that you will have to pay extra for closing fees so an interest rate as low as 1 percent will not cover the expense.
You have no late payments: You may go ahead and refinance your mortgage if you’ve kept up on your monthly payments for the past year. If you’ve never been late on your payment throughout the past year, you might effect the change and get your mortgage refinanced.
You have already built up equity: If you want to refinance a mortgage soon, try to have a look at if you’ve actually accumulated equity. You need to possess at least 5 or 10 percent equity (depending on the lender) before you may think about refinancing as a doable choice.
So is refinancing an option for you? Of course, you could always contemplate refinancing the mortgage whenever you’re most comfortable. The key is to consider the time factor, as well as the sort of chance being presented by the marketplace, since of course, refinancing is actually taking out another loan. Simply be prepared for the procedures and costs that you’ll need to go through once more.
Sunday, May 24, 2009
Fresh low for savings interest rates
Figures that were recently released by the Bank of England have shown that savings rates on many accounts in the UK have now sunk to a fresh low following the series of dramatic base rate cuts that have been applied over recent months. The figures indicated that the rate of interest paid to savers that wanted to have instant access to their cash was only slightly above zero.
Whilst the base rate cuts, which took place between October and March sending the base rate plummeting from 5% to just 0.5%, came as welcome news for many borrowers who saw their repayments drop the news has been bad for savers, many of whom rely on the interest on their savings as a form of income. However, at the end of the February the average rate of interest paid on instant access accounts was just 0.17% according to the figures from the central bank.
The data also does not take into account the latest base rate cut of 0.5%, which came after the March Monetary Policy Committee meeting, so the situation could become increasingly bleak. The average rate of interest paid to those with notice accounts is also very poor, and at the end of February was at just half the level of a month earlier, standing at an average 0.18%.
One industry expert said that savers were being punished for mistakes that had been made by others, and that many were desperately trying to find alternatives for their savings that could help them to enjoy higher returns. He added that this showed just how badly savers were being affected, as under normal circumstances safety and security of savings would be paramount to consumers in the current financial and economic climate.
A number of industry groups are also concerned about the ongoing interest rate cuts, including the Building Societies Association. The BSA has stated on a number of occasions that the low level of the base rate means that savers are now less likely to put their cash into savings accounts due to the low returns, and this in turn reduces lenders’ access to funds for their mortgage lending operations.
Whilst the base rate cuts, which took place between October and March sending the base rate plummeting from 5% to just 0.5%, came as welcome news for many borrowers who saw their repayments drop the news has been bad for savers, many of whom rely on the interest on their savings as a form of income. However, at the end of the February the average rate of interest paid on instant access accounts was just 0.17% according to the figures from the central bank.
The data also does not take into account the latest base rate cut of 0.5%, which came after the March Monetary Policy Committee meeting, so the situation could become increasingly bleak. The average rate of interest paid to those with notice accounts is also very poor, and at the end of February was at just half the level of a month earlier, standing at an average 0.18%.
One industry expert said that savers were being punished for mistakes that had been made by others, and that many were desperately trying to find alternatives for their savings that could help them to enjoy higher returns. He added that this showed just how badly savers were being affected, as under normal circumstances safety and security of savings would be paramount to consumers in the current financial and economic climate.
A number of industry groups are also concerned about the ongoing interest rate cuts, including the Building Societies Association. The BSA has stated on a number of occasions that the low level of the base rate means that savers are now less likely to put their cash into savings accounts due to the low returns, and this in turn reduces lenders’ access to funds for their mortgage lending operations.
Tuesday, May 12, 2009
Credit card and loan defaults causing problems for families
Research that was carried out by the Organisation for Economic Co-operation and Development has shown how families across the UK are being driven to financial ruin as a result of soaring credit card and loan defaults that are said to be making the recession even worse. The OECD has stated that the debt levels of families in the UK have reached the highest level of any major economy, largely as a result of easy access to credit over the past ten years.
Between April and June of this year credit card companies have had to write off around £1 billion worth of credit card debt according to figures from the Bank of England, which are due to be released over the coming weeks. This represents the highest figure in sixteen years, which is when the country was last going through a recession. Worse still the situation is set to get worse over the course of this year, and the figure is a massive sixteen times higher than in 1997, when the Labour Party came into power.
Total bank write offs on Personal loans and mortgages is set to reach an astonishing £2.25 billion according to Capital Economics, and this is a figure that is far higher than the £1.96 billion that was seen during the same period a year ago. It is thought that this high level of household debt could result in the banking crisis getting even worse, with an increasing number of people having to file for bankruptcy.
Forecasts from the Association of Business Recovery Professionals have predicted that over the course of this year around 139,200 individuals will become insolvent, and this will reflect an increase of over 30 percent compared to last year. This could then have a knock on effect on the banking industry, which could end up restricting lending even further, hiking up interest rates, and ultimately deepening the recession.
It is also thought that amongst the reasons for the expected increase in debt defaults is the rising level of unemployment, which is set to force an increasing number of households into financial difficulties to the point where many will be unable to keep up with their debt repayments.
Between April and June of this year credit card companies have had to write off around £1 billion worth of credit card debt according to figures from the Bank of England, which are due to be released over the coming weeks. This represents the highest figure in sixteen years, which is when the country was last going through a recession. Worse still the situation is set to get worse over the course of this year, and the figure is a massive sixteen times higher than in 1997, when the Labour Party came into power.
Total bank write offs on Personal loans and mortgages is set to reach an astonishing £2.25 billion according to Capital Economics, and this is a figure that is far higher than the £1.96 billion that was seen during the same period a year ago. It is thought that this high level of household debt could result in the banking crisis getting even worse, with an increasing number of people having to file for bankruptcy.
Forecasts from the Association of Business Recovery Professionals have predicted that over the course of this year around 139,200 individuals will become insolvent, and this will reflect an increase of over 30 percent compared to last year. This could then have a knock on effect on the banking industry, which could end up restricting lending even further, hiking up interest rates, and ultimately deepening the recession.
It is also thought that amongst the reasons for the expected increase in debt defaults is the rising level of unemployment, which is set to force an increasing number of households into financial difficulties to the point where many will be unable to keep up with their debt repayments.
Monday, May 4, 2009
Cost of renting a home too high
In the current financial climate, and with the restrictions that have been placed on mortgage lending over the past year and a half, a rising number of people have been forced into renting a home rather than buying one. However, officials from one charity have said that many lettings agents across England and Wales are charging those that wish to rent a property excessive fees, and that this is driving up the cost of renting a home.
The Citizen’s Advice Bureau has recently released a report, which claims that many tenants are being hit with ‘unjustified and excessive’ charges from lettings agents across England and Wales, and that these charges could be adding as much as £600 to the cost of renting a property. Amongst the fees that these lettings agents are charging are administrative costs, credit reference check fees, and tenancy renewal costs.
Officials from the CAB have said that many of the charges and fees that the lettings agents are adding to the cost of renting a home actually bear no relation to the cost of the service that they are providing. The figures were partly put together from a survey of tenants that had contacted the charity for assistance, and the report was released just one week after the government announced a shake up of the industry stating that it wants a national register of private landlords in England and wants an independent regulator for lettings agents.
The CAB now wants any new regulations put into place by the government to include a ban on these excessive charges so that renting a home is made more affordable for tenants. The report claimed that many of the charges that were being added to rental costs were actually for services that should be a routine part of letting a property and not for services that were over and above the general work involved in letting a home.
The chief executive of the CAB said that these fees and charges were causing huge problems for people that were on low incomes and could not afford to get a mortgage and buy their own home. He accused some letting agents of just making up charges as they went along, adding that this was causing a huge barrier for many people.
The Citizen’s Advice Bureau has recently released a report, which claims that many tenants are being hit with ‘unjustified and excessive’ charges from lettings agents across England and Wales, and that these charges could be adding as much as £600 to the cost of renting a property. Amongst the fees that these lettings agents are charging are administrative costs, credit reference check fees, and tenancy renewal costs.
Officials from the CAB have said that many of the charges and fees that the lettings agents are adding to the cost of renting a home actually bear no relation to the cost of the service that they are providing. The figures were partly put together from a survey of tenants that had contacted the charity for assistance, and the report was released just one week after the government announced a shake up of the industry stating that it wants a national register of private landlords in England and wants an independent regulator for lettings agents.
The CAB now wants any new regulations put into place by the government to include a ban on these excessive charges so that renting a home is made more affordable for tenants. The report claimed that many of the charges that were being added to rental costs were actually for services that should be a routine part of letting a property and not for services that were over and above the general work involved in letting a home.
The chief executive of the CAB said that these fees and charges were causing huge problems for people that were on low incomes and could not afford to get a mortgage and buy their own home. He accused some letting agents of just making up charges as they went along, adding that this was causing a huge barrier for many people.
Thursday, April 30, 2009
Interest rates on hold but more money to be ploughed into economy
Following today’s Monetary Policy Committee meeting the Bank of England has announced that it is keeping interest rates on hold at 0.5%. Although the interest rate has been left on hold it is still at its lowest level in the history of the Bank of England, which goes back over three hundred years.
The government has already indicated that there is no more room for base rate cuts at present, but has launched a plan to try and assist the economy through quantitative easing. In addition to announcing that the base rate will be kept on hold the central bank also said that a further £50 billion is going to be pumped in to the UK economy as part of this process.
So far the government is though to have ploughed around £54 billion into the economy through quantitative easing, and was set to have pumped £75 billion into the economy by June. However, the figure has now increased to £125 billion, which means an additional £50 billion that will be used to try and ease the stress on the economy.
Industry experts had expected the Bank of England to wait until next week before making any announcement with regards to extending the quantitative easing programme, as it is then that up to date economic forecast figures were expected to be published. However, the central bank has announced its decision today.
The Bank of England has been given the go ahead to spend up to £150 billion in total on quantitative easing by the Treasury, and some officials have expressed surprise that the announcement has only increased the amount of money that will be ploughed into the economy to £125 billion. One economist said that this could be because Bank of England officials were confident that the recovery was going as planned.
In its statement the Bank of England stated that “the world economy remains in deep recession” but also added that “surveys at home and abroad show promising signs that the pace of decline has begun to moderate”.
The government has already indicated that there is no more room for base rate cuts at present, but has launched a plan to try and assist the economy through quantitative easing. In addition to announcing that the base rate will be kept on hold the central bank also said that a further £50 billion is going to be pumped in to the UK economy as part of this process.
So far the government is though to have ploughed around £54 billion into the economy through quantitative easing, and was set to have pumped £75 billion into the economy by June. However, the figure has now increased to £125 billion, which means an additional £50 billion that will be used to try and ease the stress on the economy.
Industry experts had expected the Bank of England to wait until next week before making any announcement with regards to extending the quantitative easing programme, as it is then that up to date economic forecast figures were expected to be published. However, the central bank has announced its decision today.
The Bank of England has been given the go ahead to spend up to £150 billion in total on quantitative easing by the Treasury, and some officials have expressed surprise that the announcement has only increased the amount of money that will be ploughed into the economy to £125 billion. One economist said that this could be because Bank of England officials were confident that the recovery was going as planned.
In its statement the Bank of England stated that “the world economy remains in deep recession” but also added that “surveys at home and abroad show promising signs that the pace of decline has begun to moderate”.
Tuesday, April 21, 2009
Top talent being driven abroad due to tax changes
There are concerns that the tax increases that were announced in yesterday’s budget could result in some of the top talent in Britain being driven abroad. This comes after the Chancellor of the Exchequer, Alistair Darling, announced that top earners would face paying the highest tax rates since the 1970s.
Darling announced that around 350,000 people in Britain were earning in excess of £150,000 a year, and these people will be paying the new 50p income tax rate. According to reports when new reductions in allowances and higher national insurance rates come into force part of the income of these high earners will be subject to a tax rate of 61.5%. Also, those earning over £100,000 are likely to lose some if not all of their tax allowance.
The changes are due to come into force earlier than many expected, as they have been scheduled for April 2010. The announcements made by the chancellor in yesterday’s budget were also far grimmer than those that were outlined by the chancellor in his pre-budget report last year. The new 50p tax rate will be amongst the highest in Europe, and some industry experts are warning that this could lead to much of Britain’s talent being driven abroad, which would result in a reduction in the amount of tax collected from higher earners.
One official said that many of Britain’s higher earners would start looking at places such as Switzerland to try and escape this drain on their finances, and that this could mean that people in key industries – people who would play an important role in helping to get Britain out of the ongoing recession – could head off to pastures new, leaving Britain and its extortionate tax rates behind.
Many countries are now experiencing a slowdown in the economy, and in order to boost the economy some are touting for people in certain industries to move abroad in order to help boost the economy. This could look like an increasingly attractive offer for many talented high earners in the face of the new tax announcements from Alistair Darling.
Darling announced that around 350,000 people in Britain were earning in excess of £150,000 a year, and these people will be paying the new 50p income tax rate. According to reports when new reductions in allowances and higher national insurance rates come into force part of the income of these high earners will be subject to a tax rate of 61.5%. Also, those earning over £100,000 are likely to lose some if not all of their tax allowance.
The changes are due to come into force earlier than many expected, as they have been scheduled for April 2010. The announcements made by the chancellor in yesterday’s budget were also far grimmer than those that were outlined by the chancellor in his pre-budget report last year. The new 50p tax rate will be amongst the highest in Europe, and some industry experts are warning that this could lead to much of Britain’s talent being driven abroad, which would result in a reduction in the amount of tax collected from higher earners.
One official said that many of Britain’s higher earners would start looking at places such as Switzerland to try and escape this drain on their finances, and that this could mean that people in key industries – people who would play an important role in helping to get Britain out of the ongoing recession – could head off to pastures new, leaving Britain and its extortionate tax rates behind.
Many countries are now experiencing a slowdown in the economy, and in order to boost the economy some are touting for people in certain industries to move abroad in order to help boost the economy. This could look like an increasingly attractive offer for many talented high earners in the face of the new tax announcements from Alistair Darling.
Thursday, April 9, 2009
Should You Use an Online Checking Account?
Do you have a checking account? How many checks do you write every month? Probably not many. When you do write checks, it is probably just to pay some bills. What if you never had to write checks?
If you didn't have to write checks, you would save a lot of paper and some time. Saving paper is always good for the environment, as is going paperless in any way. I will tell you there is a way to stop writing checks.
Online checking accounts are great. One popular one is Electric Orange from ING Direct. If you ever need to pay a bill or pay someone, you just send it through your account and they send an e-check. If you need to send a physical check to someone, they take care of that for you, too.
If you want to take money out of an ATM with Electric Orange account, you can. You get free ATM withdrawals at over 35,000 ATMs. Most banks charge a fee at any ATM if it's not from your bank. You don't have to worry about this.
Not sure how you're going to get the money into your checking account? It's pretty simple, you just have your money directly deposited into your account. Talk to your employer about setting up direct deposit. This way you don't have to go pick up a check and you don't have to make yet another trip to the bank to cash or deposit it.
With an online bank checking account, you can earn money from your money just as with an online savings account. The online bank doesn't have to pay for the same expenses that a brick and mortar bank has to pay for, and this means you can get a higher interest rate and earn more money.
You don't have anything to lose with this because it's free to join and set up an account. If you don't like it, then just stop using it and go back to your own checking account. You might as well try it to see if there's something you can gain.
If you didn't have to write checks, you would save a lot of paper and some time. Saving paper is always good for the environment, as is going paperless in any way. I will tell you there is a way to stop writing checks.
Online checking accounts are great. One popular one is Electric Orange from ING Direct. If you ever need to pay a bill or pay someone, you just send it through your account and they send an e-check. If you need to send a physical check to someone, they take care of that for you, too.
If you want to take money out of an ATM with Electric Orange account, you can. You get free ATM withdrawals at over 35,000 ATMs. Most banks charge a fee at any ATM if it's not from your bank. You don't have to worry about this.
Not sure how you're going to get the money into your checking account? It's pretty simple, you just have your money directly deposited into your account. Talk to your employer about setting up direct deposit. This way you don't have to go pick up a check and you don't have to make yet another trip to the bank to cash or deposit it.
With an online bank checking account, you can earn money from your money just as with an online savings account. The online bank doesn't have to pay for the same expenses that a brick and mortar bank has to pay for, and this means you can get a higher interest rate and earn more money.
You don't have anything to lose with this because it's free to join and set up an account. If you don't like it, then just stop using it and go back to your own checking account. You might as well try it to see if there's something you can gain.
Wednesday, April 8, 2009
Pets on Your Checks
A dog may be man's best friend, but the fact is that animals of all kinds have been adored and immortalized because of their beauty, companionship, usefulness and even religious significance. In their Eastern religions, for example, the Chinese subscribe to the doctrine of reincarnation, and in that they included cats in that cycle of reemergence, believing them to be reincarnated souls and moving them one step closer towards Nirvana. Cats were also thought to possess godlike powers in the Egyptian religions, which immortalized them as goddesses and appeared in the tomb paintings. Perhaps this respect accorded to the cats was owing to their utility: they could eat rodents in granaries while leaving the grain itself preserved.
Surely one of the greatest and most elegant of animals celebrated for its awesome strength and beauty is the horse. They have won many races in competitions throughout history. The Chinese assembled over 5,000 horses with riders to be at the service of their emperor more than two thousand years ago. Horses have been a part of our mythical and religious folklore as well. The well known Greek beast centaur was made of part human and part horse, and played a powerful role in Greek mythology. There is no doubt that the human race adores and prizes horses as one of the chief of animals. Nonetheless their breed has been on the decline in the past few decades and so breeders have been actively worker to ensure these animals never go out of existence.
Finally we come to that most popular of pets, the modern day dog, which exists in hundreds of breeds and breed mixes. There are countless ways that dogs have earned their rightful trust of humans as indeed being our most cherished companions. They protect us, help us, can assist the disabled by serving as Seeing Eye dogs and even help police by serving as search dogs. Of course, they are the perfect pet as well. It doesn't matter the style or breed or temperament of dog, there is a dog to match every human personality and unique situation. Dogs have been elevated to their own roles in Greek mythology as well, serving as watchdogs to protect the gates of Hades.
Truly the human race has had a long standing love affair with animals, and this collective affection has made them a part of our family and we've ensured that they remain a part of our memorabilia as well. It is for this reason that we've emblazoned pictures of our beloved pets on our T-shirts, hats, mugs, plates and just about every other example of personal paraphernalia you can think of. Artists throughout history have carried on this tradition by including animals of all kinds in pictures and portraits alongside humans, both the great and the humble. One of the most well known and humorous of these is the "Dogs Playing Poker" painted by C.M. Coolidge in 1910. Pets, famously enough, have even been noted as being the beneficiaries of estates upon the benefactor's death so that the pet can continue to enjoy the "good life" when the master is gone!
With such a love affair with dogs, it's no wonder that people want their own portraits of their beloved pets to cherish as keepsakes for the rest of their lives. Some people are even prepared to spend extravagant sums of money to have these masterpieces done, anywhere from $150 to more than $1,000 for quality oil paintings. Some prefer other styles such as charcoal or pastel, or even prefer simply drawn sketch paintings instead. Pets pose their unique challenges for the artist, as some of them, like cats, can rarely sit still long for a painting. In these circumstances the painter can use a photo to base his painting on, or a mixture of a photo and some studio time as the best way create their finished product.
You have a variety of options to choose from if you want to immortalize your pet in this way, whether it's to stamp their image on personal trinkets or to create a full blown portrait. Ask around from professional photography and painting studios to learn about their options. And if you want to stylize your personal checks with images of your beloved dogs, you can't go wrong with Checks-For-Less and their line of dog breed checks. Their checks cost about half of what the banks charge and offer a whole range of design and customization options.
"Dogs Playing Poker" painted by C.M. Coolidge in 1910. Pets, famously enough, have even been noted as being the beneficiaries of estates upon the benefactor's death so that the pet can continue to enjoy the "good life" when the master is gone!
With such a love affair with dogs, it's no wonder that people want their own portraits of their beloved pets to cherish as keepsakes for the rest of their lives. Some people are even prepared to spend extravagant sums of money to have these masterpieces done, anywhere from $150 to more than $1,000 for quality oil paintings. Some prefer other styles such as charcoal or pastel, or even prefer simply drawn sketch paintings instead. Pets pose their unique challenges for the artist, as some of them, like cats, can rarely sit still long for a painting. In these circumstances the painter can use a photo to base his painting on, or a mixture of a photo and some studio time as the best way create their finished product.
You have a variety of options to choose from if you want to immortalize your pet in this way, whether it's to stamp their image on personal trinkets or to create a full blown portrait. Ask around from professional photography and painting studios to learn about their options. And if you want to stylize your personal checks with images of your beloved dogs, you can't go wrong with Checks-For-Less and their line of dog breed checks. Their checks cost about half of what the banks charge and offer a whole range of design and customization options.
Surely one of the greatest and most elegant of animals celebrated for its awesome strength and beauty is the horse. They have won many races in competitions throughout history. The Chinese assembled over 5,000 horses with riders to be at the service of their emperor more than two thousand years ago. Horses have been a part of our mythical and religious folklore as well. The well known Greek beast centaur was made of part human and part horse, and played a powerful role in Greek mythology. There is no doubt that the human race adores and prizes horses as one of the chief of animals. Nonetheless their breed has been on the decline in the past few decades and so breeders have been actively worker to ensure these animals never go out of existence.
Finally we come to that most popular of pets, the modern day dog, which exists in hundreds of breeds and breed mixes. There are countless ways that dogs have earned their rightful trust of humans as indeed being our most cherished companions. They protect us, help us, can assist the disabled by serving as Seeing Eye dogs and even help police by serving as search dogs. Of course, they are the perfect pet as well. It doesn't matter the style or breed or temperament of dog, there is a dog to match every human personality and unique situation. Dogs have been elevated to their own roles in Greek mythology as well, serving as watchdogs to protect the gates of Hades.
Truly the human race has had a long standing love affair with animals, and this collective affection has made them a part of our family and we've ensured that they remain a part of our memorabilia as well. It is for this reason that we've emblazoned pictures of our beloved pets on our T-shirts, hats, mugs, plates and just about every other example of personal paraphernalia you can think of. Artists throughout history have carried on this tradition by including animals of all kinds in pictures and portraits alongside humans, both the great and the humble. One of the most well known and humorous of these is the "Dogs Playing Poker" painted by C.M. Coolidge in 1910. Pets, famously enough, have even been noted as being the beneficiaries of estates upon the benefactor's death so that the pet can continue to enjoy the "good life" when the master is gone!
With such a love affair with dogs, it's no wonder that people want their own portraits of their beloved pets to cherish as keepsakes for the rest of their lives. Some people are even prepared to spend extravagant sums of money to have these masterpieces done, anywhere from $150 to more than $1,000 for quality oil paintings. Some prefer other styles such as charcoal or pastel, or even prefer simply drawn sketch paintings instead. Pets pose their unique challenges for the artist, as some of them, like cats, can rarely sit still long for a painting. In these circumstances the painter can use a photo to base his painting on, or a mixture of a photo and some studio time as the best way create their finished product.
You have a variety of options to choose from if you want to immortalize your pet in this way, whether it's to stamp their image on personal trinkets or to create a full blown portrait. Ask around from professional photography and painting studios to learn about their options. And if you want to stylize your personal checks with images of your beloved dogs, you can't go wrong with Checks-For-Less and their line of dog breed checks. Their checks cost about half of what the banks charge and offer a whole range of design and customization options.
"Dogs Playing Poker" painted by C.M. Coolidge in 1910. Pets, famously enough, have even been noted as being the beneficiaries of estates upon the benefactor's death so that the pet can continue to enjoy the "good life" when the master is gone!
With such a love affair with dogs, it's no wonder that people want their own portraits of their beloved pets to cherish as keepsakes for the rest of their lives. Some people are even prepared to spend extravagant sums of money to have these masterpieces done, anywhere from $150 to more than $1,000 for quality oil paintings. Some prefer other styles such as charcoal or pastel, or even prefer simply drawn sketch paintings instead. Pets pose their unique challenges for the artist, as some of them, like cats, can rarely sit still long for a painting. In these circumstances the painter can use a photo to base his painting on, or a mixture of a photo and some studio time as the best way create their finished product.
You have a variety of options to choose from if you want to immortalize your pet in this way, whether it's to stamp their image on personal trinkets or to create a full blown portrait. Ask around from professional photography and painting studios to learn about their options. And if you want to stylize your personal checks with images of your beloved dogs, you can't go wrong with Checks-For-Less and their line of dog breed checks. Their checks cost about half of what the banks charge and offer a whole range of design and customization options.
Thursday, April 2, 2009
Dealing With Children During Financial Difficulties
If you are in financial difficulties, its always good to have some time with your children and let them understand your financial problems and also explain to them what you are going through. In case the children are young, just tell them that everything is not okay. Sometimes you will be forced to turn a deaf year to what your children are asking you to buy them.
If in any case you normally give your children money for lunch, prepare them enough packed lunch to cut the cost on food. Let them understand why everything has changed suddenly and assure them that life will be back to normal soon. If you have phones for your children, do not load airtime in them, instead use the money to pay off your bills. Let the children use the school bus especially if your working place is quite far from school.
Its good to buy nice clothes that are in fashion for the children but, if they they really have enough clothing, tell them to wait until you have cleared all your debts. Whenever you go shopping with the kids, make sure you stick to the budget to save as much money as you can. This will be very hard for the children but, keep on encouraging them and if possible take them for dinner at least once or twice a month to let them know that you are still concerned.
Sit down with your kids and discuss about credit cards if they have to use them. Accompany them when going shopping to avoid buying things you had not budgeted. However, sometimes its good to let them have the credit cards on their own to know how much responsible they can be.
If in any case you normally give your children money for lunch, prepare them enough packed lunch to cut the cost on food. Let them understand why everything has changed suddenly and assure them that life will be back to normal soon. If you have phones for your children, do not load airtime in them, instead use the money to pay off your bills. Let the children use the school bus especially if your working place is quite far from school.
Its good to buy nice clothes that are in fashion for the children but, if they they really have enough clothing, tell them to wait until you have cleared all your debts. Whenever you go shopping with the kids, make sure you stick to the budget to save as much money as you can. This will be very hard for the children but, keep on encouraging them and if possible take them for dinner at least once or twice a month to let them know that you are still concerned.
Sit down with your kids and discuss about credit cards if they have to use them. Accompany them when going shopping to avoid buying things you had not budgeted. However, sometimes its good to let them have the credit cards on their own to know how much responsible they can be.
Saturday, March 28, 2009
Financial Planning to Combat the Current Financial Crisis
The final quarter of the last year witnessed a universal global meltdown, from which world economies are yet to recover fully. The crisis is indeed grave, as highlighted by the performance of the economy of the United States. In fact, during the third quarter of 2008, the financial markets of the US experienced a negative growth, a feature indicative of the acute financial economic crisis affecting the finance fields. Experts are of the opinion that the current financial situation is one of the worst to hit the world economy since the Great Depression of the 1930s. In the rather bleak current scenario, proper financial planning is extremely important to tide over the economic crises effectively.
This kind of situation is invariably marked by an increase in the debt burden of individuals. Consequently, the number of creditors of a person also goes up. A short-term, quick-fix solution might be the sale of most existing assets held by a person. The sale proceeds can then be used to pay off the dues of his/her creditors. However, this is not the ideal way to combat a scenario like this. Instead of panicking, a person needs to alter his financial aims and targets according to the situation. In case (s)he has already hired the services of an expert planner, the latter too can help him/her take such decisions that would suit the need of the hour.
During a period of crisis (like the current one), individuals need to adopt a more conservative and cautious approach than usual. The target rates of return from financial investments as well as one's overall financial goals have to be scaled down according to the situation. Risky investment ventures should not be taken up, and too much money should not be spent on buying up additional assets at these times. Individuals also need to be aware of the legal aspects of his/her financial actions. Equifax, one of the three major credit bureaus of America, recommends that investors should seek help and advice from the Consumer Credit Counseling Service (CCCS). If a person is able to take prudent and informed investment decisions that are not too aggressive in nature, (s)he can continue to earn a steady flow of income, even during a period of financial crisis.
Finance and strategy-making assumes crucial importance at a time of financial economic crisis. Such plans keep in consideration the exact requirements of investors, and are dynamic enough to help people change their finance-related actions according to the overall financial scenario. With the help of proper planning, and the adoption of toned-down financial actions (with revised investment targets), individuals can indeed effectively combat the current financial crisis situation.
This kind of situation is invariably marked by an increase in the debt burden of individuals. Consequently, the number of creditors of a person also goes up. A short-term, quick-fix solution might be the sale of most existing assets held by a person. The sale proceeds can then be used to pay off the dues of his/her creditors. However, this is not the ideal way to combat a scenario like this. Instead of panicking, a person needs to alter his financial aims and targets according to the situation. In case (s)he has already hired the services of an expert planner, the latter too can help him/her take such decisions that would suit the need of the hour.
During a period of crisis (like the current one), individuals need to adopt a more conservative and cautious approach than usual. The target rates of return from financial investments as well as one's overall financial goals have to be scaled down according to the situation. Risky investment ventures should not be taken up, and too much money should not be spent on buying up additional assets at these times. Individuals also need to be aware of the legal aspects of his/her financial actions. Equifax, one of the three major credit bureaus of America, recommends that investors should seek help and advice from the Consumer Credit Counseling Service (CCCS). If a person is able to take prudent and informed investment decisions that are not too aggressive in nature, (s)he can continue to earn a steady flow of income, even during a period of financial crisis.
Finance and strategy-making assumes crucial importance at a time of financial economic crisis. Such plans keep in consideration the exact requirements of investors, and are dynamic enough to help people change their finance-related actions according to the overall financial scenario. With the help of proper planning, and the adoption of toned-down financial actions (with revised investment targets), individuals can indeed effectively combat the current financial crisis situation.
Wednesday, March 25, 2009
How to Garner Tax Benefits From Your Education Spending
Everybody has to file their income tax returns. Some turn to a professional accountant to do their taxes. Others take the do-it-yourself approach and use software specifically designed for tax preparation. Finally, there are those who fill out the correct form that the government provides. Though there are several different methods of filling out tax forms, one thing remains important: knowledge about tax deductions. You must be aware of what deductions are legally available to you in order to save your hard earned income.
The majority of those filing tax returns will claim exemptions, which the IRS states amounted to more than $842 billion in 2005, the highest amount on record. Yet, a number of legal tax credits are often missed or neglected by filers who could have benefitted from them.
Get Smart
It may be possible, if your income falls within certain stated guidelines, to use education-related expenses as a credit against your tax liability. Available options include the Lifetime Learning credit, which permits you to receive a tax credit for the amount of your tuition, and the Hope credit. You can make your education more affordable if you'll devote some study time to possible tax alternatives.
Considering the amount of people who were qualified for the Hope or Lifetime Learning subsidy as much as 25% did not take the benefit of it; based on a Government report that came out in 2005 which consisted of information from approximately 1.4 million tax returns. On a separate basis this was just about $160 for each person, but several of those exact people paid an estimate of $500 in extra taxes.
Depending on your level of income, the Hope credit may be able to secure funds to pay for all or part of your college tuition. You are able to get up to $1,650 for tuition or tuition related expenses, excluding books, other supplies or housing. If your college is on the list of approved colleges, Lifetime Learning may assist you with up to $2,000 towards the cost of going to school. Again, this is dependent on your income. If you make more than a certain amount, you will not qualify, but the limits are generous and based on your adjusted, modified gross income. If you are single and earning more than $47,000 or married (filing jointly) and your combined income is $94,000 or more, you may still be able to secure some funds, but not the full amount. You will not receive any funding if you are single and earning $57,000 or married and earning $114,000 or more.
You do not have to itemize to take advantage of the deduction for tuition and education related fees which can be worth as much as $4000 to you. Your MAGI, if you are single, $65,000 or less (married-filing-jointly is double that or $130,000). You can still take advantage of as much as a $2000 in tax deductions if you income, as a single person, is between $65,000 and not more than $80,000 (again it will be twice those amounts if you are married-filing-jointly). If your income is any higher than these figures you are not going to be eligible for college tax deductions.
There isn't anything that is easy about credits and deductions and this is not different from the average rule. You can't have both benefits of the credit and deduct the cost of tuition at the same time. It will be worth the effort to investigate to find out which one will give you more money, but credits will usually give you more back than deductions will. Make sure you search since there are choices such as phase-outs that can apply to you.
The majority of those filing tax returns will claim exemptions, which the IRS states amounted to more than $842 billion in 2005, the highest amount on record. Yet, a number of legal tax credits are often missed or neglected by filers who could have benefitted from them.
Get Smart
It may be possible, if your income falls within certain stated guidelines, to use education-related expenses as a credit against your tax liability. Available options include the Lifetime Learning credit, which permits you to receive a tax credit for the amount of your tuition, and the Hope credit. You can make your education more affordable if you'll devote some study time to possible tax alternatives.
Considering the amount of people who were qualified for the Hope or Lifetime Learning subsidy as much as 25% did not take the benefit of it; based on a Government report that came out in 2005 which consisted of information from approximately 1.4 million tax returns. On a separate basis this was just about $160 for each person, but several of those exact people paid an estimate of $500 in extra taxes.
Depending on your level of income, the Hope credit may be able to secure funds to pay for all or part of your college tuition. You are able to get up to $1,650 for tuition or tuition related expenses, excluding books, other supplies or housing. If your college is on the list of approved colleges, Lifetime Learning may assist you with up to $2,000 towards the cost of going to school. Again, this is dependent on your income. If you make more than a certain amount, you will not qualify, but the limits are generous and based on your adjusted, modified gross income. If you are single and earning more than $47,000 or married (filing jointly) and your combined income is $94,000 or more, you may still be able to secure some funds, but not the full amount. You will not receive any funding if you are single and earning $57,000 or married and earning $114,000 or more.
You do not have to itemize to take advantage of the deduction for tuition and education related fees which can be worth as much as $4000 to you. Your MAGI, if you are single, $65,000 or less (married-filing-jointly is double that or $130,000). You can still take advantage of as much as a $2000 in tax deductions if you income, as a single person, is between $65,000 and not more than $80,000 (again it will be twice those amounts if you are married-filing-jointly). If your income is any higher than these figures you are not going to be eligible for college tax deductions.
There isn't anything that is easy about credits and deductions and this is not different from the average rule. You can't have both benefits of the credit and deduct the cost of tuition at the same time. It will be worth the effort to investigate to find out which one will give you more money, but credits will usually give you more back than deductions will. Make sure you search since there are choices such as phase-outs that can apply to you.
Friday, March 20, 2009
What is Income Tax Relief?
Income tax relief is a program created by the Internal Revenue Service (IRS) to assist willing tax payers in lowering the amount they owe in taxes, often times waiving or eliminating altogether their total owed to the government. This relief act is not a widely advertised program. The main reason, of course, is the fact that the IRS does not want people abusing this privilege, claiming hardship and inability to pay only because there is an option available that allows them to. Each person is reviewed on a case by case basis and is either confirmed or denied based on a number of factors including their net salary, their assets as well as other personal questions.
Meeting with a tax attorney or a tax accountant is a good place to start with your tax needs. These highly trained counselors are available to offer assistance and guidance concerning your income tax relief. Most online tax services offer many options, not just relief from taxes. The norm for what these online tax relief companies provide is IRS wage garnishing advice, penalty abatement, innocent spouse and audit defense. Penalty abatement is a tax debt resolution process in which a tax debtor challenges interest and penalties for a designated length of time. The taxpayers may request penalty abatement on the basis of with an administrative waiver, such as bad advice from a tax practitioner, reasonable cause like a death in the family or an error on the part of the Internal Revenue Service. Wage garnishing is a process what is granted by an order of the court or by the government by which the Internal Revenue Service obtains part of the salary of the tax payer directly from an employer who is behind in payments to the government.
Income tax relief is a way for you get a small break during the stressful tax time. It is a way to encourage tax payers to not be negligent on the taxes that they owe by giving them a little break on the entire amount. The IRS appreciates people taking the initiative to contact them and inquire about the offered relief. You are approved or denied on a case by case basis. You may have a large portion of what you owe waived, or just a small amount depending on your current financial situation. Any way you look at it, when it concerns your taxes, any relief is a good relief!
Meeting with a tax attorney or a tax accountant is a good place to start with your tax needs. These highly trained counselors are available to offer assistance and guidance concerning your income tax relief. Most online tax services offer many options, not just relief from taxes. The norm for what these online tax relief companies provide is IRS wage garnishing advice, penalty abatement, innocent spouse and audit defense. Penalty abatement is a tax debt resolution process in which a tax debtor challenges interest and penalties for a designated length of time. The taxpayers may request penalty abatement on the basis of with an administrative waiver, such as bad advice from a tax practitioner, reasonable cause like a death in the family or an error on the part of the Internal Revenue Service. Wage garnishing is a process what is granted by an order of the court or by the government by which the Internal Revenue Service obtains part of the salary of the tax payer directly from an employer who is behind in payments to the government.
Income tax relief is a way for you get a small break during the stressful tax time. It is a way to encourage tax payers to not be negligent on the taxes that they owe by giving them a little break on the entire amount. The IRS appreciates people taking the initiative to contact them and inquire about the offered relief. You are approved or denied on a case by case basis. You may have a large portion of what you owe waived, or just a small amount depending on your current financial situation. Any way you look at it, when it concerns your taxes, any relief is a good relief!
Tuesday, March 17, 2009
Investing During the Financial Crisis
One of the things that said most often about investment during troubling economic times is that investors need to take things slowly. This is easier said than done, as a growing number of investors have taken a major hit even with investments that were once considered low-risk and conservative. But the answer to making back those losses is not to make any rash moves with high risk investments. You’re just as likely to take a deeper hit.
So the name of the game right now is to take it slowly and not to panic. You can rest assured knowing that the economy is more than likely going to head in the opposite direction. I’m not going to say anything as hackneyed as, “These things are cyclical.” But there’s no reason to think that the financial crisis is going to last at full capacity for the next ten years. Yes, things are dire, but things will improve.
What this means is that you can wait for certain investments to grow again. Even though you may be looking to make significant gains in the short term, to offset recent losses, your real aim should be long term – three years or more. This should give current investments enough time to rebound. It also gives you time to diversify and possibly invest in certain stocks that have hit a low but will head in the opposite direction. There are as many opportunities as pitfalls right now, so long as you can be patient and wait for those stocks to turn around, as well as the economy on the whole.
Your investment strategy should not change dramatically: diversify and don’t make rash choices if a stock takes a fall. In this climate, that is more inevitable and it doesn’t mean it won’t rebound.
Investing During a Depression
It’s too soon to call this a depression, but that almost doesn’t matter. Just the idea that it could be a depression, or even a recession, is enough to send the economy tanking further. It’s like a self-fulfilling prophecy. Some knowledge can be gained by looking at how investing functioned during the Great Depression. In the 30’s, some stocks still remained strong, such as electronics stocks. Radio was the wave of the future and those stocks still had viability.
This should tell you that even now there is a good potential for investment. Tech stocks are normally the most volatile, but they’re also the future of investing. The same goes for green technology: something talked about by tree huggers not so long ago but now is mainstream. There is going to be a high demand in recent years. Of course, a green start-up can be a high-risk venture – especially if the company is not diversified into other industries – but there is a huge upside as well. Again, this boils down to patience. Because people are tightening their belts, no new green company (a green green company, as it were) will be making enormous profits short-term. But as a long-term strategy, green investments are a positive opportunity, similar to radio in the 30’s.
Stayed tuned for more investment advice in future posts, including Forex investing, Alpha mutual funds, the Alternative Investment Market, and other strategies.
Wednesday, March 11, 2009
Using Credit Cards During the Financial Crisis
The thought about the credit card industry was that it would survive the subprime mortgage collapse. Keeping aside for the moment that financial institutions have their hands in both the mortgage and credit industry, the thought was that credit card issuers could weather defaults on credit cards. For these reasons:
1. The foreclosure on a house could amount to $100,000 in lost payments for a lender. It’s a rare credit cardholder who’s got $100,000 in debt. For credit card debt, $30,000 is high, but that’s relatively small for a mortgage.
2. Interest rates are obscene for credit cards, as compared to other types of loans. The median APR for credit cards is 20%, which is a ridiculous figure for other types of loans. So credit card companies were once making a killing in interest rates.
The amount of interest on credit cards + the relatively low amount of debt was thought to protect the credit industry. Only that’s not the case anymore: because the credit card industry did something very stupid – in a long line of stupid things leading up to the financial collapse. Even after the subprime meltdown of 2007, the credit card industry packaged together credit card debt and sold it off to investors. This was the same system of packaging bad credit mortgages that led to the mortgage crisis. Not learning from this mistake, and eager for quick money with no long-term viability, the credit card industry did the same. And now they’re finding that no one wants these investments with defaults on the rise.
American Express, for one, has lost 61 percent of its value this year due to defaults. The default rate is on the rise monthly. There was some thought that due to unemployment and less cash on hand that more people would be using credit. This was the theory behind people getting flooded with credit card offers. Credit card companies wanted people to get into debt – and even to default. A default would lead to an even higher interest rate – as much as 32%. But with so many people defaulting, interest payments aren’t making up the difference.
What This Means for People with Credit Cards
What this all means is that you are apt to pay more for your credit card now, even if you have a spotless record paying off your credit card. Most every credit card’s terms and conditions state that the issuer can change the interest rate and fees “at their own discretion.” Translation: they can do it whenever, for whatever reason. And because they’re losing money, they’re more likely to do it to your credit card.
Amex, for example, has recently raised fees for cash advances, late payments, and defaults. You could also see your credit limit suddenly go down – without notification. This could lead to over-the-limit fees if you’re not careful. And if your limit went down, it’s quite possible your over-the-limit fee went up as well.
Also, this could also mean that your rewards program could change right out from under you. The Chase Freedom Card is one such example. It was one of the more generous rewards cards around: 3% cash back where you shopped most often. The rewards program has recently been downgraded to a point-per-dollar system, which is on the bare-bones, low-end of rewards programs.
What this all means is that you should check your credit card’s terms and conditions to make sure that they haven’t changed. If the APR’s gone up, this means using that card less or transferring the card to a card with a long-term low introductory balance transfer rate. All told, this means that during this crisis, interest rates are going to go up for all types of loans. Credit cards are kind of the canary in the coalmine showing just how unhealthy things have gotten.
Monday, March 9, 2009
Is it time to nationalize Citibank?
The recently released Global Finance Magzine rankings of the world’s safest banks is out, and the #1 choice says it all: kfW in Germany took the honours, and they’ve been owned by the German government since inception in 1948. Now I’m not advocating a complete change in the private sector nature of finance and capital, but Citibank (C:NYSE) is a unique case, and it’s balance sheet is just too big to fix.
The U.S. government might do it via the backdoor, with an increasing equity stake with each follow-on equity round. But as with AIG, they’ve proven they’ll do what it takes. Unless the U.S. government knows something about the health of Citi’s balance sheet that isn’t implied in the $1 share price, now is the time to step into the breech and nationalize Citibank.
When Goldman boss Blankfein spoke out against the concept (see prior post “Recession to be longest since WWII” March 9-09), is he also saying that “no one is too big to fail”? He didn’t go that far, as he has spoken in favour of government bailouts when there was no alternative. Does GS benefit if Citi continues to be Dead Bank Walking? Perhaps. But I don’t think that is driving his perspective; it’s likely just the classic “a free market is the only market worth living in” mentality.
But these aren’t times to live by a bumper sticker.
Why does saving Citibank a year from now make more sense than doing it today? The drip-drip-drip of the negative headlines and writedowns and so forth will continue to have a huge negative impact on the more healthy names, such as Wells Fargo (WFC:NYSE) and JPMorgan (JPM:NYSE).
It’s as though the powers that be will try leeches before resorting to the ultimate cure-all. Just get it over with. The slow motion train wreck won’t have a chance of ending until you do.
When the world returns to normal (at least a “new normal”), Citibank should be fixed and there might even be a willing IPO market. The U.S. Fed could be the new King of Private Equity at that point and just take Citi public again.
General Patton wouldn’t use incrementalism to win a battle, and this challenge certainly stacks up against the Battle of the Bulge. This time, however, it is the Germans who have the staying power, whether they be state-owned or publicly-held.
The U.S. government might do it via the backdoor, with an increasing equity stake with each follow-on equity round. But as with AIG, they’ve proven they’ll do what it takes. Unless the U.S. government knows something about the health of Citi’s balance sheet that isn’t implied in the $1 share price, now is the time to step into the breech and nationalize Citibank.
When Goldman boss Blankfein spoke out against the concept (see prior post “Recession to be longest since WWII” March 9-09), is he also saying that “no one is too big to fail”? He didn’t go that far, as he has spoken in favour of government bailouts when there was no alternative. Does GS benefit if Citi continues to be Dead Bank Walking? Perhaps. But I don’t think that is driving his perspective; it’s likely just the classic “a free market is the only market worth living in” mentality.
But these aren’t times to live by a bumper sticker.
Why does saving Citibank a year from now make more sense than doing it today? The drip-drip-drip of the negative headlines and writedowns and so forth will continue to have a huge negative impact on the more healthy names, such as Wells Fargo (WFC:NYSE) and JPMorgan (JPM:NYSE).
It’s as though the powers that be will try leeches before resorting to the ultimate cure-all. Just get it over with. The slow motion train wreck won’t have a chance of ending until you do.
When the world returns to normal (at least a “new normal”), Citibank should be fixed and there might even be a willing IPO market. The U.S. Fed could be the new King of Private Equity at that point and just take Citi public again.
General Patton wouldn’t use incrementalism to win a battle, and this challenge certainly stacks up against the Battle of the Bulge. This time, however, it is the Germans who have the staying power, whether they be state-owned or publicly-held.
Monday, March 2, 2009
Find Government Grants
Free Government Grants can help you get your bills paid and get back on the road to a better life.
Like so many people now a days there is a increase in the amount of debt that we are getting ourselves into and we need a solution that will allow us to pay off our bills and have an easier life. Most people are unaware that there is grant money that you can apply for that will give you the money you need to pay off you credit cards and have no bills. Think about how nice it would be if you did not have the stress of trying to pay all of your credit card bills each and every month.
It is crucial that you try to have less stress in your life and one way to do this is to get out of debt. You can take the free grant money you get and pay off all of your bills so you do not have to worry about being in debt. There is a lot of grant money that goes unused each year because so many people do not apply or are unaware they can qualify for it. Make sure you take advantage of this money and get approved for free grant money now.
Remember that getting out of debt is going to take some effort on your part but with the right tools you can get a government grant to pay off your debt and then you will not have to worry each month how you are going to pay your bills. Make sure that you get the money you need to get out of debt today. So many people have stress related issues because of debt and getting your paid off can make all the difference to keeping your health issues under control as well.
You Should never be ashamed about getting into debt because we have all been there before. You have the opportunity to take advantage of getting your paid of with Free Grant Money, so make sure that you make the best of it.
Like so many people now a days there is a increase in the amount of debt that we are getting ourselves into and we need a solution that will allow us to pay off our bills and have an easier life. Most people are unaware that there is grant money that you can apply for that will give you the money you need to pay off you credit cards and have no bills. Think about how nice it would be if you did not have the stress of trying to pay all of your credit card bills each and every month.
It is crucial that you try to have less stress in your life and one way to do this is to get out of debt. You can take the free grant money you get and pay off all of your bills so you do not have to worry about being in debt. There is a lot of grant money that goes unused each year because so many people do not apply or are unaware they can qualify for it. Make sure you take advantage of this money and get approved for free grant money now.
Remember that getting out of debt is going to take some effort on your part but with the right tools you can get a government grant to pay off your debt and then you will not have to worry each month how you are going to pay your bills. Make sure that you get the money you need to get out of debt today. So many people have stress related issues because of debt and getting your paid off can make all the difference to keeping your health issues under control as well.
You Should never be ashamed about getting into debt because we have all been there before. You have the opportunity to take advantage of getting your paid of with Free Grant Money, so make sure that you make the best of it.
Sunday, March 1, 2009
Are we stupid?
Calculated Risk looks at the latest plan floated by the Treasury — to make low-interest, non-recourse loans to private investors who buy bad assets — and immediately gets it: this is a plan to drive up the prices of toxic assets by creating a lot of moral hazard.
By offering low interest non-recourse loans, these public-private entities can pay a higher than market price for the toxic assets (since there is no downside risk). This amounts to a direct subsidy from the taxpayers to the banks. It is amazing how many different ways they’ve tried to recycle the same bad idea.
Indeed. Every plan we’ve heard from Treasury amounts to the same thing — an attempt to socialize the losses while privatizing the gains. We’re going to buy up all the bad assets at premium prices; no, we’re going to offer the banks guarantees against losses; no, we’re going to let private investors buy the stuff, but offer them de facto guarantees against losses in the form of non-recourse loans.
Underlying all this, apparently, is the theory Tim Duy sums up so aptly:
Policymakers are assuming that restoring proper functioning in credit markets - and confidence in general - is equivalent to a housing price rebound. They seem incapable of envisioning a world in which this is not the case. This tunnel vision prevents policymakers of trying to devise policy which assumes that the many of the assets in the banking system are simply “bad.” For Bernanke and Geithner, there are no bad assets. Only misunderstood assets.
And the insistence on offering the same plan over and over again, with only cosmetic changes, is itself deeply disturbing. Does Treasury not realize that all these proposals amount to the same thing? Or does it realize that, but hope that the rest of us won’t notice? That is, are they stupid, or do they think we’re stupid?
I don’t know which possibility is worse.
By offering low interest non-recourse loans, these public-private entities can pay a higher than market price for the toxic assets (since there is no downside risk). This amounts to a direct subsidy from the taxpayers to the banks. It is amazing how many different ways they’ve tried to recycle the same bad idea.
Indeed. Every plan we’ve heard from Treasury amounts to the same thing — an attempt to socialize the losses while privatizing the gains. We’re going to buy up all the bad assets at premium prices; no, we’re going to offer the banks guarantees against losses; no, we’re going to let private investors buy the stuff, but offer them de facto guarantees against losses in the form of non-recourse loans.
Underlying all this, apparently, is the theory Tim Duy sums up so aptly:
Policymakers are assuming that restoring proper functioning in credit markets - and confidence in general - is equivalent to a housing price rebound. They seem incapable of envisioning a world in which this is not the case. This tunnel vision prevents policymakers of trying to devise policy which assumes that the many of the assets in the banking system are simply “bad.” For Bernanke and Geithner, there are no bad assets. Only misunderstood assets.
And the insistence on offering the same plan over and over again, with only cosmetic changes, is itself deeply disturbing. Does Treasury not realize that all these proposals amount to the same thing? Or does it realize that, but hope that the rest of us won’t notice? That is, are they stupid, or do they think we’re stupid?
I don’t know which possibility is worse.
Saturday, February 21, 2009
The Mother Of All CDOs
Remember CDOs? Of course, you do...although no one is trading these monsters anymore they continue to wreak havoc to the global economy.
We still teach about them on the CQF. Why? Maybe they'll come back one day, maybe with a different acronym, or if they don't then they are at least a fantastic teaching aid for showing how not to model and how not to risk manage.
Hang on a second. Have they really disappeared? I'm not so sure they have. What's that recent deal that the UK Treasury has just done with RBS? It looks scarily familiar...something to do with $325 billion of toxic assets (no doubt including a few CDOs and CDO^2s) and divvying up different levels of risk?
The balance sheet of RBS is £2.3 trillion. In return for £6.5 billion in some dodgy non-voting shares the UK Treasury is going to be insuring some of that £2.3 trillion. The first £19.5 billion is RBS's responsibility, after that the taxpayer takes care of 90% of the rest of the $325 billion.
Sound familiar? Yes, the UK Treasury has just got itself the mezzanine tranche of a CDO!
Observations:
1. This "Mother Of All CDOs" that the Treasury owns is mezzanine tranche, the hardest tranche to value and risk manage.
2. Assuming there are CDO^2s in the portfolio this is now officially a CDO^3.
3. Worst of all, the premium paid to the UK Taxpayer is £6.5 billion in RBS shares. Of course, if things go wrong, as they probably will, then that premium will plummet as the RBS share price plummets. Note to Lord Myners, Alistair Darling and Gordon Brown: When you buy insurance on company X, buy it from company Y, not company X itself.
4. A fall of a mere 8.2% in the value of the toxic assets will wipe out the £6.5 billion. And that's best-case scenario in which the RBS share price doesn't fall!
5. Finally, the shares are non voting so as to give the impression, albeit rather feebly, that RBS has not been nationalized. Look, the Taxpayer owns 90% of RBS, and can vote on 75% of the shares. Why keep up the charade? Nationalize all dangerous banks, across the globe, immediately. Guarantee the deposits of the man in the street. And clean up the mess in an atmosphere of relative stability.
The UK Treasury is being advised by a bunch of dodgy Sirs and Lords, none of whom have a clue about what is going on or what to do, none of whom have any qualifications in risk control. But I'm sure all of them are jolly good chaps to have a glass of port with in the clubs of St James's.
We still teach about them on the CQF. Why? Maybe they'll come back one day, maybe with a different acronym, or if they don't then they are at least a fantastic teaching aid for showing how not to model and how not to risk manage.
Hang on a second. Have they really disappeared? I'm not so sure they have. What's that recent deal that the UK Treasury has just done with RBS? It looks scarily familiar...something to do with $325 billion of toxic assets (no doubt including a few CDOs and CDO^2s) and divvying up different levels of risk?
The balance sheet of RBS is £2.3 trillion. In return for £6.5 billion in some dodgy non-voting shares the UK Treasury is going to be insuring some of that £2.3 trillion. The first £19.5 billion is RBS's responsibility, after that the taxpayer takes care of 90% of the rest of the $325 billion.
Sound familiar? Yes, the UK Treasury has just got itself the mezzanine tranche of a CDO!
Observations:
1. This "Mother Of All CDOs" that the Treasury owns is mezzanine tranche, the hardest tranche to value and risk manage.
2. Assuming there are CDO^2s in the portfolio this is now officially a CDO^3.
3. Worst of all, the premium paid to the UK Taxpayer is £6.5 billion in RBS shares. Of course, if things go wrong, as they probably will, then that premium will plummet as the RBS share price plummets. Note to Lord Myners, Alistair Darling and Gordon Brown: When you buy insurance on company X, buy it from company Y, not company X itself.
4. A fall of a mere 8.2% in the value of the toxic assets will wipe out the £6.5 billion. And that's best-case scenario in which the RBS share price doesn't fall!
5. Finally, the shares are non voting so as to give the impression, albeit rather feebly, that RBS has not been nationalized. Look, the Taxpayer owns 90% of RBS, and can vote on 75% of the shares. Why keep up the charade? Nationalize all dangerous banks, across the globe, immediately. Guarantee the deposits of the man in the street. And clean up the mess in an atmosphere of relative stability.
The UK Treasury is being advised by a bunch of dodgy Sirs and Lords, none of whom have a clue about what is going on or what to do, none of whom have any qualifications in risk control. But I'm sure all of them are jolly good chaps to have a glass of port with in the clubs of St James's.
Thursday, February 12, 2009
12 Steps to Financial Health
With all of the recent doom and gloom in the financial markets, it’s easy to get discouraged about your own financial situation. But here’s some good news for a change. While personal finance may seem complicated, it really boils down to 4 good habits that can make the difference between going broke or building up your net worth each month.
1. Save money
2. Avoid debt
3. Invest
4. Don’t lose it
Just as with achieving a balanced diet or maintaining a regular exercise regimen, getting your financial house in order is easier said than done. What’s that they say about the best laid plans? A 12 step program can get you on the road to financial recovery.
Save money
1. Know what you spend
The first step to growing your money is knowing your money. Just by seeing that you spent $432 one month dining out with your friends, or that you went to Starbucks 37 times, you’ll change your spending habits for the better.
2. Stick to a budget
Most of us really only have 1-2 “problem” areas. Maybe it’s shopping, maybe its electronics. Once you know how much you typically spend, set a budget 15-25% lower. If you try to cut too hard too fast, you’ll never be able to stick to it.
3. Find a checking account that pays interest
“Free” checking isn’t exactly free. Sure you get free checks and no account fees, but most checking accounts pay no interest - zero, nothing. Meanwhile, the banks are loaning your money out in the form of mortgages or business loans at 7-8% interest. That’s how banks work. If you don’t have a checking account that pays interest, you’re being ripped off. Consider switching your account to one of the many that allow your money to work for you such as an E*Trade Max-Rate Checking Account (2.9% APY on accounts over $5K) or an HSBC Online Payment Account (2.25% APY, open an account with as little as $1).
4. Find a savings account that pays 3%+ interest
The average US savings account only pays about 0.5% interest. With inflation at 2-3%, you’re actually losing purchasing power each year. Find a high-yield savings account, money market fund, or CD that pays more such as E*Trade Max-Rate Savings (3.3% APY, open with as little as $1).
Avoid debt
5. Know your credit score and correct your credit report
Your credit score determines the interest rate lenders will charge on your credit cards, mortgage, student loan, or car loan. That means any mistakes in your credit report can cost you tens of thousands of dollars over your lifetime. Unfortunately, 79% of all credit reports have an error, and 25% have an error serious enough to deny you access to credit. Take charge of your credit score at FreeCreditReport ($12.95/month for credit score and monitoring) or myFico (all three FICO scores and credit reports).
6. Eliminate late fees
About 35% of your credit score is determined by on-time payment. If you’re late on a credit card payment, it could cost you much, much more than the $29 late fee - if you let it go more than 60 days, it can affect your credit score and cost you thousands.
7. Don’t pay credit card finance charges
The average American carries $8,500 in credit card debt. At a minimum payment of $100 a month, it takes 6.7 years, and $4,257 in extra finance charges before you’re in the clear. If you carry a balance, one way to get some temporary relief is through a balance transfer. The best way out of this quagmire is to pay down your highest interest card first, or look for a balance transfer card such as the Citi® Diamond Preferred® Card (0% Balance Transfer APR for up to 12 months, no annual fee, 3% transfer fee) or the Chase Platinum Visa® Card (0% Balance Transfer APR for up to 12 months, no annual fee, 3% transfer fee but no more than $99).
8. Get a credit card that pays you
Visa and MasterCard typically charge retailers 2-3% of each purchase you make. As a consumer, you can get a cut of those fees in the form of cash back rewards. Don’t settle for a card that pays less than 1%. A typical household can get as much as $300 a year back just for buying what it was going to buy anyway. Examples of cash back cards include the Chase Freedom℠ Visa Signature® Card (3% cash back on gas and groceries) and Blue Cash® from American Express (up to 5% on gas, restaurants, and drugstores).
Invest
9. Contribute to an IRA or 401k
Invest $100 a month in a tax-deferred account like an IRA or 401k, and at a growth rate of 10%, in 30 years you’d have $380k. In a regular taxable account (assuming 20% annual taxes), you’d only have $229k. That’s a $151k difference. Companies such as Fidelity and E*Trade offer such accounts.
10. Start investing and keep investing
Two simple steps can put you ahead of 99% of your peers. First, have your employer automatically deduct $200-$300 a month from your paycheck to a brokerage or mutual fund account. Second, grow that money in an index fund like the S&P 500. By having the money automatically deducted, you won’t be as tempted to spend it. If $200 a month in the S&P behaves as it has in the past 20 years, two decades from now you would have around $170k in savings. Open a Scottrade Brokerage Account ($7.00 stock trades, $500 minimum deposit) or an E*Trade Financial Brokerage Account ($12.99 stock trades, $1,000 minimum deposit).
Don’t lose it
11. Create an Emergency Fund
An emergency fund helps protect you against all of life’s ups and downs, whether they be car repairs, job loss, or a leaky roof. If you’re young, single and have no mortgage, strive for about 3 months expenses, or ballpark around $10,000. If you have a house, kids, or both, strive for 6 months expenses, or around $20,000 - $30,000 for the average family. Be sure to keep your emergency fund in a high-yield savings account so that it continues to grow.
12. Protect yourself with insurance
The right insurance depends greatly on your age and whether you have a family. If you’re in your 20’s, you need renter’s insurance - it’s typically around $150 a year and covers theft and fire. If you have a family, you need life insurance, health insurance, and disability insurance.
1. Save money
2. Avoid debt
3. Invest
4. Don’t lose it
Just as with achieving a balanced diet or maintaining a regular exercise regimen, getting your financial house in order is easier said than done. What’s that they say about the best laid plans? A 12 step program can get you on the road to financial recovery.
Save money
1. Know what you spend
The first step to growing your money is knowing your money. Just by seeing that you spent $432 one month dining out with your friends, or that you went to Starbucks 37 times, you’ll change your spending habits for the better.
2. Stick to a budget
Most of us really only have 1-2 “problem” areas. Maybe it’s shopping, maybe its electronics. Once you know how much you typically spend, set a budget 15-25% lower. If you try to cut too hard too fast, you’ll never be able to stick to it.
3. Find a checking account that pays interest
“Free” checking isn’t exactly free. Sure you get free checks and no account fees, but most checking accounts pay no interest - zero, nothing. Meanwhile, the banks are loaning your money out in the form of mortgages or business loans at 7-8% interest. That’s how banks work. If you don’t have a checking account that pays interest, you’re being ripped off. Consider switching your account to one of the many that allow your money to work for you such as an E*Trade Max-Rate Checking Account (2.9% APY on accounts over $5K) or an HSBC Online Payment Account (2.25% APY, open an account with as little as $1).
4. Find a savings account that pays 3%+ interest
The average US savings account only pays about 0.5% interest. With inflation at 2-3%, you’re actually losing purchasing power each year. Find a high-yield savings account, money market fund, or CD that pays more such as E*Trade Max-Rate Savings (3.3% APY, open with as little as $1).
Avoid debt
5. Know your credit score and correct your credit report
Your credit score determines the interest rate lenders will charge on your credit cards, mortgage, student loan, or car loan. That means any mistakes in your credit report can cost you tens of thousands of dollars over your lifetime. Unfortunately, 79% of all credit reports have an error, and 25% have an error serious enough to deny you access to credit. Take charge of your credit score at FreeCreditReport ($12.95/month for credit score and monitoring) or myFico (all three FICO scores and credit reports).
6. Eliminate late fees
About 35% of your credit score is determined by on-time payment. If you’re late on a credit card payment, it could cost you much, much more than the $29 late fee - if you let it go more than 60 days, it can affect your credit score and cost you thousands.
7. Don’t pay credit card finance charges
The average American carries $8,500 in credit card debt. At a minimum payment of $100 a month, it takes 6.7 years, and $4,257 in extra finance charges before you’re in the clear. If you carry a balance, one way to get some temporary relief is through a balance transfer. The best way out of this quagmire is to pay down your highest interest card first, or look for a balance transfer card such as the Citi® Diamond Preferred® Card (0% Balance Transfer APR for up to 12 months, no annual fee, 3% transfer fee) or the Chase Platinum Visa® Card (0% Balance Transfer APR for up to 12 months, no annual fee, 3% transfer fee but no more than $99).
8. Get a credit card that pays you
Visa and MasterCard typically charge retailers 2-3% of each purchase you make. As a consumer, you can get a cut of those fees in the form of cash back rewards. Don’t settle for a card that pays less than 1%. A typical household can get as much as $300 a year back just for buying what it was going to buy anyway. Examples of cash back cards include the Chase Freedom℠ Visa Signature® Card (3% cash back on gas and groceries) and Blue Cash® from American Express (up to 5% on gas, restaurants, and drugstores).
Invest
9. Contribute to an IRA or 401k
Invest $100 a month in a tax-deferred account like an IRA or 401k, and at a growth rate of 10%, in 30 years you’d have $380k. In a regular taxable account (assuming 20% annual taxes), you’d only have $229k. That’s a $151k difference. Companies such as Fidelity and E*Trade offer such accounts.
10. Start investing and keep investing
Two simple steps can put you ahead of 99% of your peers. First, have your employer automatically deduct $200-$300 a month from your paycheck to a brokerage or mutual fund account. Second, grow that money in an index fund like the S&P 500. By having the money automatically deducted, you won’t be as tempted to spend it. If $200 a month in the S&P behaves as it has in the past 20 years, two decades from now you would have around $170k in savings. Open a Scottrade Brokerage Account ($7.00 stock trades, $500 minimum deposit) or an E*Trade Financial Brokerage Account ($12.99 stock trades, $1,000 minimum deposit).
Don’t lose it
11. Create an Emergency Fund
An emergency fund helps protect you against all of life’s ups and downs, whether they be car repairs, job loss, or a leaky roof. If you’re young, single and have no mortgage, strive for about 3 months expenses, or ballpark around $10,000. If you have a house, kids, or both, strive for 6 months expenses, or around $20,000 - $30,000 for the average family. Be sure to keep your emergency fund in a high-yield savings account so that it continues to grow.
12. Protect yourself with insurance
The right insurance depends greatly on your age and whether you have a family. If you’re in your 20’s, you need renter’s insurance - it’s typically around $150 a year and covers theft and fire. If you have a family, you need life insurance, health insurance, and disability insurance.
Tuesday, February 3, 2009
The Evaluation Procedures Before Buying Gold Coins
As recently as the early twentieth century, the primary form of currency in circulation around the world were gold coins.
There are various reasons why an individual would select to start purchasing gold coins. Some may acquire it because it is a good investment while others see the potential for their profits to increase as gold value increases. Even today coin collectors have high demand for hard to find coins.
People who chose to buy gold coins know that doing so is one of the safest ways to invest their money. Plainly because they know over time these coins are unlikely to lose any value rather they are in reality going to be gain in worth.
Before acquiring any coins you need to find a honest dealer. If you are able, engage one who is a member of the Professional Coin Grading Service PCGS), or the Numismatic Guaranty Corporation. A coin dealer who is not a member of these associations will often sell you bogus coins.
After finding your dealer you will then need to decide just how much gold it is you want to purchase. Knowing the price of gold, which fluctuates constantly, will help you to buy at the best cost.
Not only do you must to know how much you plan to invest in gold coins but you also need to determine what is available and which coins make the best investments. Presently gold coins fall into three assorted categories. Some that are considered uncommon, are looked upon as collectible, and there are ones that are graded as regular gold bullion.
Gold bullion coins are dealt only for the quantity of gold contained within them. The worth of scarce and collectible coins changes quite often, so when placing a value on them, several factors need to be taken into consideration. Gold content is not the only essential factor in determining price - the age and rarity can also affect it.
Also , when you are going to be buying gold coins it is important that you understand a little bit about the ranking and evaluation procedure. Understanding the uncommon coin market is a crucial skill in helping to spot a possible bargain.
There are various reasons why an individual would select to start purchasing gold coins. Some may acquire it because it is a good investment while others see the potential for their profits to increase as gold value increases. Even today coin collectors have high demand for hard to find coins.
People who chose to buy gold coins know that doing so is one of the safest ways to invest their money. Plainly because they know over time these coins are unlikely to lose any value rather they are in reality going to be gain in worth.
Before acquiring any coins you need to find a honest dealer. If you are able, engage one who is a member of the Professional Coin Grading Service PCGS), or the Numismatic Guaranty Corporation. A coin dealer who is not a member of these associations will often sell you bogus coins.
After finding your dealer you will then need to decide just how much gold it is you want to purchase. Knowing the price of gold, which fluctuates constantly, will help you to buy at the best cost.
Not only do you must to know how much you plan to invest in gold coins but you also need to determine what is available and which coins make the best investments. Presently gold coins fall into three assorted categories. Some that are considered uncommon, are looked upon as collectible, and there are ones that are graded as regular gold bullion.
Gold bullion coins are dealt only for the quantity of gold contained within them. The worth of scarce and collectible coins changes quite often, so when placing a value on them, several factors need to be taken into consideration. Gold content is not the only essential factor in determining price - the age and rarity can also affect it.
Also , when you are going to be buying gold coins it is important that you understand a little bit about the ranking and evaluation procedure. Understanding the uncommon coin market is a crucial skill in helping to spot a possible bargain.
Tuesday, January 27, 2009
Going from a manageable recession into a state of disorder
Disasters are usually marked by a number of incidents adding up and leading to the potentially worst outcome.
In this context, we just need to look what happens in the economy. We had a third bailout and unbelievable losses in the case of AIG, last week. This week Citigroup became a penny stock. GM is most likely nearing bankruptcy next week and already today its German subsidiary Opel is declared dead by the press. Then there is GE which might become the next victim. “It´s time for a break”, might be what distressed investors might think. The trend has becomes manifested over the last weeks, we are changing from bad times to worse.
Within the next six months we will be most likely to observe dramatic economic implosions and bankruptcies. The ticking economic time-bomb hidden in Credit Default Swaps might lead to bully-up companies and even countries. I confirm my earlier predictions that the events will turn out bad in Q2, and I had predicted this trend leading to a depression, back in 2007.
However, there are still some individuals who believe in recovery. Some Forex traders told me that I might be wrong and the recovery is in sight. I do not share their hope. The situation is too bleak. We have most likely passed the period of efficient preparation. Now, time runs out.
We are on our way to leave what I call phase-I. Phase-I allows us to prepare for what will happen in the crisis. It allows us to get some accessories, a survival kit, a swimming west and get into a boat. By April, the rescue boats will become scarce, and in case you have not managed to get one than most likely you will sink with the Titanic.
When this happens, governments will attempt to accesses your capital rights. This will happen in parallel to other distortions in the markets. While any kind of investment in the “economy” will be depleted, one will have to start worrying about governments actions. The rate of depletion has taken fascinating speed over the last weeks and is sheer impossible to keep up with the news, but I recommend you watch for signs of accessing your capital rights.
Let me give you some examples:
One of these things is nationalization, which we have seen now in many countries. They drive shareholders directly into losses. AIG´s former CEO Maurice Greenberg is a great example of someone losing a major amount of money. Another example for accessing your capital right is inflation. And inflation is building up. It is like a Tsunami. What you notice at this point of time is that the water pulls back, but you might want to watch out for the wave of freshly printed money. The next way is to tax you out by implementing new taxes. Last but not least there is something called quantitative easing and in my eyes it is the most advanced method of accessing the capital rights of people. By buying government debt or corporate bonds a central bank usually can control the monetary exchange rates. It is a monetary policy tool. Therefore it should not be used as a political tool to stimulate the economy at all. If someone decides to do so, he takes severe market distortions into account. At discretion bond and equity prices will move in one or the other direction. In a situation like this where market participants distrust it is like adding oil to the fire. It increases the level of uncertainty and cause even higher volatility. It´s economic suicide.
In this context, we just need to look what happens in the economy. We had a third bailout and unbelievable losses in the case of AIG, last week. This week Citigroup became a penny stock. GM is most likely nearing bankruptcy next week and already today its German subsidiary Opel is declared dead by the press. Then there is GE which might become the next victim. “It´s time for a break”, might be what distressed investors might think. The trend has becomes manifested over the last weeks, we are changing from bad times to worse.
Within the next six months we will be most likely to observe dramatic economic implosions and bankruptcies. The ticking economic time-bomb hidden in Credit Default Swaps might lead to bully-up companies and even countries. I confirm my earlier predictions that the events will turn out bad in Q2, and I had predicted this trend leading to a depression, back in 2007.
However, there are still some individuals who believe in recovery. Some Forex traders told me that I might be wrong and the recovery is in sight. I do not share their hope. The situation is too bleak. We have most likely passed the period of efficient preparation. Now, time runs out.
We are on our way to leave what I call phase-I. Phase-I allows us to prepare for what will happen in the crisis. It allows us to get some accessories, a survival kit, a swimming west and get into a boat. By April, the rescue boats will become scarce, and in case you have not managed to get one than most likely you will sink with the Titanic.
When this happens, governments will attempt to accesses your capital rights. This will happen in parallel to other distortions in the markets. While any kind of investment in the “economy” will be depleted, one will have to start worrying about governments actions. The rate of depletion has taken fascinating speed over the last weeks and is sheer impossible to keep up with the news, but I recommend you watch for signs of accessing your capital rights.
Let me give you some examples:
One of these things is nationalization, which we have seen now in many countries. They drive shareholders directly into losses. AIG´s former CEO Maurice Greenberg is a great example of someone losing a major amount of money. Another example for accessing your capital right is inflation. And inflation is building up. It is like a Tsunami. What you notice at this point of time is that the water pulls back, but you might want to watch out for the wave of freshly printed money. The next way is to tax you out by implementing new taxes. Last but not least there is something called quantitative easing and in my eyes it is the most advanced method of accessing the capital rights of people. By buying government debt or corporate bonds a central bank usually can control the monetary exchange rates. It is a monetary policy tool. Therefore it should not be used as a political tool to stimulate the economy at all. If someone decides to do so, he takes severe market distortions into account. At discretion bond and equity prices will move in one or the other direction. In a situation like this where market participants distrust it is like adding oil to the fire. It increases the level of uncertainty and cause even higher volatility. It´s economic suicide.
Tuesday, January 13, 2009
Endowment Turmoil
While employment by university endowments (and other nonprofit endowments) can be an attractive financial career option, jobs may be disappearing as universities are forced to retrench in the face of brutal investment losses over the past year or so. Undoubtedly you've received one or more communications from the presidents or deans of the institutions you attended, discussing their money crunches and trying (lots of luck!) to prise more donations out of alumni like you who themselves have been battered by the market crash.
The March 16 issue of Forbes magazine offers a case study in what went wrong at the biggest endowment of them all, that of Harvard University. After a lengthy run of impressive market-beating results, Harvard's portfolio has taken a nosedive recently. Various strategies that did well in up markets have now blown up. Perhaps most worrisome of all, one of these strategies was pushed by Lawrence Summers during his recent tenure as president of the university. Summers is, of course, a former Secretary of the Treasury under Bill Clinton, and now head of Barack Obama's National Economic Council. Hopefully, he'll give better advice to the President and the nation.
According to Forbes, Harvard has laid off 25% of the staff at its endowment (called the Harvard Management Company). Moreover, there is a game of musical chairs surrounding the top spot: five heads in the last four years. As Harvard goes, so probably do other institutions.
The March 16 issue of Forbes magazine offers a case study in what went wrong at the biggest endowment of them all, that of Harvard University. After a lengthy run of impressive market-beating results, Harvard's portfolio has taken a nosedive recently. Various strategies that did well in up markets have now blown up. Perhaps most worrisome of all, one of these strategies was pushed by Lawrence Summers during his recent tenure as president of the university. Summers is, of course, a former Secretary of the Treasury under Bill Clinton, and now head of Barack Obama's National Economic Council. Hopefully, he'll give better advice to the President and the nation.
According to Forbes, Harvard has laid off 25% of the staff at its endowment (called the Harvard Management Company). Moreover, there is a game of musical chairs surrounding the top spot: five heads in the last four years. As Harvard goes, so probably do other institutions.
Sunday, January 4, 2009
Buying Checks Online?
Many thanks to everyone who shared their thoughts on the best places to buy checks online , sounds like I was right to think that $20 for 50 checks was absurd! It appears that there are plenty of affordable options for buying checks and none of them come close to the 40 cents per check that Bank of America’s printers were asking for.
Buying Checks Online
Despite the votes of confidence for Checks Unlimited, the check printing company that is included in the ValuPak mailings, I wouldn’t order checks through the mail because the post office is not 100% secure. We can lock our mail boxes but I believe we are the exception to the rule; it’s simply too easy for a thief to drive by your mailbox and steal your mail when you’re at work. I avoid using the postal mail system for sensitive transactions for this very reason.
Do not order checks from a site that does not encrypt your sensitive information. You can see that a site is encrypted when you see https in the URL and a padlock somewhere on the browser’s status bar. You can click on the lock to find out who is certifying it. Costco, Wal-Mart, and 4checks are secured and verified by VeriSign, ChecksUnlimited is secured and verified by GlobalSign, always confirm that the Certification Authority is one that you trust.
Get the checks shipped to a secure location. Many of you lamented the fact that the post office just dropped the package of personal checks at your front door, where a thief could easily swipe it. If you can, get the checks shipped to you at work. If it’s possible, request a signature guarantee on the package (this may cost extra) so that the package will never be left unattended. If you don’t want to pay the difference or it’s not available, try to talk to your mail carrier beforehand and have him or her hide the package somewhere.
Enter a check number start other than 1. One of the most rudimentary check security features is the check number. Companies used to use the check number as a way of detecting fraud, especially in cases where the company was writing a lot of checks. If the bank knew to expect checks in a certain range, they could detect fraud if strange numbers started appearing. If you wonder why a brand new account starts with checks at 101 or 1001, rather than 1, this is why. I don’t know how important this is anymore but try to continue the check numbers from the last book you had, or start higher.
Double check the data you enter. Many check printers don’t validate the data you enter so make sure you get it right the first time! They are not responsible if you key in your account data incorrectly.
Best Check Vendor Options
The best options appear to be:
* Use Online Billpay: As long as there’s an address and no immediate need for a check, you can always send a check through online billpay. We pay several of our utility bills this way. With online billpay, the bank mails a check to the payee on your behalf, saving you a check and the postage stamp.
* Costco Check Printing - Costco also has a minimum order of 2 boxes. A box of singles has 200 checks, duplicates have 150 checks. Two boxes of singles cost $10.59, $8.47 if you’re an executive member, and duplicates cost $11.59, $9.27 for executives. Standard shipping is 7-14 days and is included in the price!
* Wal-Mart Checks - Wal-Mart’s Classic Blue Secure checks cost $5.96 for a box of singles, $150 checks, plus $2.85 for Standard (10-12 day) shipping. A box of duplicates is only $6.96. If you want one of their Disney designs, the price of singles is only $6.96 and duplicates are $7.96.
* Checks Unlimited - Checks Unlimited, the company that advertises in those blue Valupak mailings, is one of the biggest check printing companies out there. Their minimum order is for 2 boxes with singles costing $21.90 and duplicates costing $31.90, with a Standard (7-14 days) shipping charge of $5.50. The appeal of Checks Unlimited is in their introductory offers and the multitude of check designs.
* DIY - Several of you mentioned printing your own checks using check printing software, such as Versacheck. The prices seemed competitive but I don’t know how much I trust printing my own checks.
Final Thoughts
If you’re like me and you use checks infrequently, Wal-Mart is probably the best bet at $5.96+$2.85 S&H for a box of singles. At 150 checks, that’s a personal check about every two days. I go months without writing a check! If you can handle the two-box minimum or you want special designs, then it doesn’t really matter which of the three vendors you choose because they start getting to be about the same. The only downside of Costco is that you’ll need a membership to order checks (they ask you for your membership number as part of the checkout process), which you can get around by finding a friend who has a membership.
Did I miss a better option out there?
Buying Checks Online
Despite the votes of confidence for Checks Unlimited, the check printing company that is included in the ValuPak mailings, I wouldn’t order checks through the mail because the post office is not 100% secure. We can lock our mail boxes but I believe we are the exception to the rule; it’s simply too easy for a thief to drive by your mailbox and steal your mail when you’re at work. I avoid using the postal mail system for sensitive transactions for this very reason.
Do not order checks from a site that does not encrypt your sensitive information. You can see that a site is encrypted when you see https in the URL and a padlock somewhere on the browser’s status bar. You can click on the lock to find out who is certifying it. Costco, Wal-Mart, and 4checks are secured and verified by VeriSign, ChecksUnlimited is secured and verified by GlobalSign, always confirm that the Certification Authority is one that you trust.
Get the checks shipped to a secure location. Many of you lamented the fact that the post office just dropped the package of personal checks at your front door, where a thief could easily swipe it. If you can, get the checks shipped to you at work. If it’s possible, request a signature guarantee on the package (this may cost extra) so that the package will never be left unattended. If you don’t want to pay the difference or it’s not available, try to talk to your mail carrier beforehand and have him or her hide the package somewhere.
Enter a check number start other than 1. One of the most rudimentary check security features is the check number. Companies used to use the check number as a way of detecting fraud, especially in cases where the company was writing a lot of checks. If the bank knew to expect checks in a certain range, they could detect fraud if strange numbers started appearing. If you wonder why a brand new account starts with checks at 101 or 1001, rather than 1, this is why. I don’t know how important this is anymore but try to continue the check numbers from the last book you had, or start higher.
Double check the data you enter. Many check printers don’t validate the data you enter so make sure you get it right the first time! They are not responsible if you key in your account data incorrectly.
Best Check Vendor Options
The best options appear to be:
* Use Online Billpay: As long as there’s an address and no immediate need for a check, you can always send a check through online billpay. We pay several of our utility bills this way. With online billpay, the bank mails a check to the payee on your behalf, saving you a check and the postage stamp.
* Costco Check Printing - Costco also has a minimum order of 2 boxes. A box of singles has 200 checks, duplicates have 150 checks. Two boxes of singles cost $10.59, $8.47 if you’re an executive member, and duplicates cost $11.59, $9.27 for executives. Standard shipping is 7-14 days and is included in the price!
* Wal-Mart Checks - Wal-Mart’s Classic Blue Secure checks cost $5.96 for a box of singles, $150 checks, plus $2.85 for Standard (10-12 day) shipping. A box of duplicates is only $6.96. If you want one of their Disney designs, the price of singles is only $6.96 and duplicates are $7.96.
* Checks Unlimited - Checks Unlimited, the company that advertises in those blue Valupak mailings, is one of the biggest check printing companies out there. Their minimum order is for 2 boxes with singles costing $21.90 and duplicates costing $31.90, with a Standard (7-14 days) shipping charge of $5.50. The appeal of Checks Unlimited is in their introductory offers and the multitude of check designs.
* DIY - Several of you mentioned printing your own checks using check printing software, such as Versacheck. The prices seemed competitive but I don’t know how much I trust printing my own checks.
Final Thoughts
If you’re like me and you use checks infrequently, Wal-Mart is probably the best bet at $5.96+$2.85 S&H for a box of singles. At 150 checks, that’s a personal check about every two days. I go months without writing a check! If you can handle the two-box minimum or you want special designs, then it doesn’t really matter which of the three vendors you choose because they start getting to be about the same. The only downside of Costco is that you’ll need a membership to order checks (they ask you for your membership number as part of the checkout process), which you can get around by finding a friend who has a membership.
Did I miss a better option out there?
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