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Self Directed IRA Investment in an LLC

Self Directed IRA Investment in an LLC

Real Estate IRA

A truly self-directed IRA is one where the IRA owner does not have to filter every decision through a self directed IRA custodian. The vast majority of IRAs are not self-directed. Most banks and other, major financial institutions only offer the traditional IRA custodian relationship. This means that your investment actions are limited by their plan documents more than by the actual IRA laws.

A self-directed IRA is governed by a plan document that seeks to comply with the letter of the applicable federal laws while retaining as much freedom as possible. One plan for expanding that freedom is the formation of an LLC within an IRA. This arrangement gives the IRA owner the ability to write checks for investments rather than having to ask the IRA custodian to write checks--and then paying the required fees.  Complete Article


Learn to Invest Money: Why Information Technology has Revolutionized Successful Investment Strategies

Learn to Invest Money: Why Information Technology has Revolutionized Successful Investment Strategies

Wall Street

Do you want to know how to consistently earn double digit and triple digit returns from stocks? The answer lies in information technology. Yes. Information technology.

Most of the stocks I’ve owned that have earned more than 50% returns in less than a year are not even on the radar screens of the analysts of major investment firms. How do I know? Because I’ve worked at two Fortune 500 financial services firms as a Private Banker and Private Wealth Manager and never was able to find any research at these firms on the stocks that interested me the most. Why?

Because the way to make money in investing has changed dramatically and the big investment firms have not kept up. One of the reasons big investment firms have not kept up is because most have ulterior motives as pure marketing machines.  Complete Article


(Stocks) Steal Warren Buffet's Stock Market Lesson Plans? - Investing

(Stocks) Steal Warren Buffet's Stock Market Lesson Plans?

Buffet

First, let me tell you that a trading plan is only useful if you follow it. Following your plan will make you successful, yet many traders circumvent the stock market lesson plans that they have carefully created. They become emotional invested in a trade, to the point where they ignore all warning signs. Remember, when the market corrects itself, which it always does, no position is immune, no matter how strongly your ego may be tied to it.

Many investors have stock market lesson plans that watch as their portfolio values are cut in half or more, yet they will still hold their positions. They may fear being left out of a big gain, or be so deep in loss that they felt they couldn't possibly sell at that point. But even if you believe that all positions will recover from their losses, and the truth is that not all of them will, this is a terrible way to trade. Complete Article


How Best To Use A Credit Card - Pick A Card Interest Rates Fees and Borrowing Money

How Best To Use A Credit Card - Pick A Card Interest Rates Fees and Borrowing Money

Credit Cards

If you are new to the world of credit cards, then you need to know the basics before going ahead and choosing the right credit card. Although all the terms and companies offering cards can seem confusing at first, if you do your homework then learning the basics takes no time at all. Here are some hints and tips regarding the basics of using and finding a credit card:

Borrowing money

Credit cards are probably the most common way of borrowing money. Credit cards are available from so many different sources, both offline and online. There is a wide variety of different types available, and at first glance it can be very confusing. However, what you need to remember with all credit cards is that you are borrowing money, and that the credit is not free. Once you realise this then you will be in a better position to get a card that suits your needs. Complete Article


Living Trusts: Do They Protect Your Assets From Creditors?

Living Trusts: Do They Protect Your Assets From Creditors?

Living Trusts

A surprising number of readers want to know "Can a living trust protect my family's assets from creditors and lawsuits?"  I think there are some promoters out there that use this as a pitch to get people to set up a living trust using their services:

"Transfer your assets to a living trust and hide them from your creditors," are the claims.

Sorry, that's not the law.  Let's have a quick review of a revocable living trust. Basically a trust is "a legal arrangement where property is held for the benefit of someone." In other words, you "entrust" title to your assets to "someone" who is instructed to use and manage those assets per the terms of the trust document.  Complete Article


Three Advantages a Roth IRA May Offer Your Estate Plan

Three Advantages a Roth IRA May Offer Your Estate Plan

Business

Many may not consider the possibilities that a Roth IRA can offer an estate plan. But, there are three advantages that a Roth IRA can offer if your estate value is under the Applicable Exclusion Amount ($1.5 million in 2005, and $2 million in years 2006 & 2007) and if one of your planning goals is to leave as much money as possible to your heirs.

Defining The Roth IRA

Simply stated, the Roth IRA is an IRA that individuals make contributions to on an after tax basis (contributions to a traditional IRA may be made with pre-tax money). When qualified withdrawals are taken1, they are totally free from federal income tax (state income tax treatment may vary depending upon your state of residence). 
Complete Article


History of the Gold Standard and Why it is so Valuable - Coins and Other Precious Metal Investment Stocks Go Typically up in Uncertain Times

History of the Gold Standard and Why it is so Valuable - Coins and Other Precious Metal Investment Stocks Go Typically up in Uncertain Times

Gold Coins

Gold has always been a popular investment for uncertain times.  President Herbert Hoover's said in 1933, "We have gold because we cannot trust governments."  The history goes back 5000 years.  This is the story of how it went from an international currency to an investment we all can own.

In 1821 when England enacted the first gold standard, making their money backed by gold, nearly all international trade imbalances were settled with gold.  This made a strong incentive for governments to stockpile gold for hard-times.  Complete Article


Start Investing in Gold – How to Invest small Amounts with American Eagle Gold Bullion Coins

Start Investing in Gold – How to Invest small Amounts with American Eagle Gold Bullion Coins

American Eagle
Gold Bullion Coin

If you don’t have a lot of money to invest, you might want to consider investing in gold coins.  You can diversify and spread your investment among traditional stocks and bonds as well.  Many investors are currently looking at investing in gold as the US dollar may lose value.

American Gold Bullion Coins are issued by the US Mint and are guaranteed for the gold in them. You could purchase other coins or gold, but you won’t have the guarantee and it could become more difficult to cash in to money when you want to.  Complete Article


Hedge Funds Investing – Description of a Hedge Fund Account

Hedge Funds Investing – Description of a Hedge Fund Account

New York Stock Exchange

A hedge fund got its name from Alfred Winslow Jones in 1949 by developing a way of selling short some stocks at the same time buying another stock.  He was hedging his bets so to say.  Hedge in the financial world means to attempt to offset possible loss on an investment by counterbalancing your financial portfolio to prevent a loss in money.

The hedge fund was intended originally from investing in stocks for both long and short term investing, however the ideas has expanded to investments that are not involving stock trading at all.  Hedge Funds Investing – Description of a Hedge Fund Account


Life Insurance - Term Whole and Mortgage Policies - Compare Rates and Terms of Policy

Life Insurance - Term Whole and Mortgage Policies - Compare Rates and Terms of Policy

Life Insurance Peace

Life insurance is one of those things none of us want to think about.  The time to get life insurance is when you are healthy because insurers do not want insure people who are likely to file a claim. Expect a medical exam for most policies.

The policy, like all insurance policies, is a legal binding contract.  The contract will specify the terms and conditions of the risk assumed.  There are usually special previsions, including a suicide clause, where the policy becomes null if the insured commits suicide within a specified time from the policy date (usually two years).

Any misrepresentations on the policy can cause the policy to become null and void as well.  Most life insurance policies have a contestability period of two years.  If the insured dies within this period, the insurer (i.e. life insurance company) has the legal right to contest the claim and request additional information before deciding to either pay or deny the claim.  Life Insurance - Term Whole and Mortgage Policies - Compare Rates and Terms of Policy


Financial Planners - How To Work At Home As A Financial Advisor

Financial Planners - How To Work At Home As A Financial Advisor

Planning

Many Americans dream of working from home, but aren’t sure what direction they should take or how to get started.  One opportunity that should be considered is a person financial advisor.  The Bureau of Labor Statistics says that 4 out of 10 financial planners are self employed and their median average income is $62,700 (2004).

Typically, financial advisors that are college graduates with good communication’s skills make the most money.  There are many organizations that can aid you in your desire to work for yourself as a financial planner / advisor.  The Certified Financial Planner Board of Standards (CFP Board) is the most prestigious certifier of advisors.

Becoming a Certified Financial Planner (CFP) can add confidence for your clients and will also ensure that you are knowledgeable about investing. They can also help you become certified and help you market your skills.  Financial Planners - How To Work At Home As A Financial Advisor


Financial Planner Courses - Requirements to Become Certified Advisor - Work at Home Even Without A Degree But Certification Will Help

Financial Planner Courses - Requirements to Become Certified Advisor - Work at Home Even Without A Degree But Certification Will Help

Business

Home businesses offer the freedom that very few jobs can offer, and one popular choice is the Certified Financial Planner (CFP).  The pay is not bad either.  According to the Bureau of Labor Statistics, 4 out of 10 CFP are self employed and the median income as of May 2004 was $62,700. 

Not all financial planners are Certified Financial Planners, but being certified may add value to your business and money to your pocketbook.  So what does it take to become certified? 

According to the Certified Financial Planners, Board of Standards, a bachelor’s degree is not required until 2007.  Even after 2006, you will not need a degree before sitting for the exam or fulfilling your work experience, but you will need the degree before becoming certified.  Financial Planner Courses - Requirements to Become Certified Advisor - Work at Home Even Without A Degree But Certification Will Help


Yahoo CEO gets new salary of $1 a year through 2008

Yahoo CEO gets new salary of $1 a year through 2008

Yahoo! website

Terry Semel, CEO and Chairman of Yahoo took a big pay cut.  The last three years his salary was $600,000.  The next three years he will make $1 each year.  He will be able to increase his income by future compensations, stock options and grants.  By doing this his incentive will be to increase performance to increase his income. 

This is not the first company to pay their CEO a $1 salary.  Larry Page and Sergey Brin who are the co-founders of Google have a $1 salary.  Also CEO Eric Schmidt from Google has a $1 salary.  They all gain compensation through stock options and grants.

Semel’s optional bonus would be in the form of stock options of up to 1 million shares per year.  Compensation Depends on the performance of Yahoo and will determine the amount the board will approve for his bonus each year.  Yahoo CEO gets new salary of $1 a year through 2008


Financial Planners Information Online - How to Check Broker and Financial Advisers Background - What to Look For When Choosing One

Financial Planners Information Online - How to Check Broker and Financial Advisers Background - What to Look For When Choosing One

Business

There are Federal and state laws that require both brokers and investment advisers and their firms to be licensed or registered.  This provides important data for those seeking information about specific advisors.  According to the Securities and Exchange Commission (SEC), “The good news is that this information is easy to get, and one phone call or web search may save you from sending your money to a con artist, a bad financial professional, or disreputable firm.”

It is recommended that before you invest or pay for a financial planner, make sure they are licensed.  Also check to see if their firm has had “run-ins” with regulators or other investors.  The SEC warns that if you do business with an unlicensed company that later goes out of business; there may be no way for you to recover your money.  If the firm is licensed and insured you may stand a better chance.  Financial Planners Information Online - How to Check Broker and Financial Advisers Background - What to Look For When Choosing One


Investment Strategies – Why Invest in Gold, Silver, and Platinum?

Investment Strategies – Why Invest in Gold, Silver, and Platinum?

Gold Coins
by US Mint

Gold and silver have been valued by numerous civilizations for over 5,000 years.  It offers investors a way to stabilize their investments.  If you invest solely in the stock market you are wagering all of your savings on a volatile market.  The stock market can sink if the economy goes into a depression.  The stock market relies on business being financially productive in order for the investment to pay off.  Gold, silver and platinum prices vary from the stock market prices which make it a good idea to diversify some of your investments.

What purposes and true value do these precious metals offer?  Why invest in a hunk of metal?  These metals are in demand for certain types of applications.  Besides the glitz of jewelry and decorative items, there are many practical applications for these precious metals.  Investment Strategies – Why Invest in Gold, Silver, and Platinum?


What to Look For in A Financial Planner – How to Choose an Advisor – Certification Education and Experience op Planners

What to Look For in A Financial Planner – How to Choose an Advisor – Certification Education and Experience op Planners

Financial Planning

There are various organizations that Financial Planners may be associated with.  The most prominent association is the Certified Financial Planners (CFP) Board of Standards, which is the premier organization.  They provide rigorous testing of applicants including a background check.

You will want to know about the planner’s experience and qualifications.  The CFP recommends you ask the planner to briefly describe his or her work experience, and how it relates to their current practice.  Although the term “financial planner” is used by many financial professionals, not all will be certified by the CFP.  The Board says you should choose a well rounded planner with “proven experience” in insurance, tax planning, investments, estate planning or retirement planning.  What to Look For in A Financial Planner – How to Choose an Advisor – Certification Education and Experience op Planners


How to Become A Financial Planner - Work At Home Business As A Certified Advisor - Some Certifications Do Not Require College Degree

How to Become A Financial Planner - Work At Home Business As A Certified Advisor - Some Certifications Do Not Require College Degree

Business

There are many options when it comes to a home business and one popular choice is a Certified Financial Planner (CFP).  In fact, according to the Bureau of Labor Statistics, 4 out of 10 CFP are self employed and the median income as of May 2004 was $62,700. 

So what does it take to become a financial planner?  As the name entails, in order to become a Certified Financial Planner, you need to become certified.  You will need to take and pass a test.  After 2006, all applicants for a CFP certificate must have a bachelor’s degree.   According to the Certified Financial Planners, Board of Standards, it is not a requirement to be eligible to take the CFP Certification Examination and you do not have to have the degree before sitting for the exam or fulfilling the work experience. The bachelor's degree requirement will be waived for those individuals who have met all certification requirements prior to 2007. How to Become A Financial Planner - Work At Home Business As A Certified Advisor - Some Certifications Do Not Require College Degree


New Franchise Opportunity - Dagwood Sandwich Shop by “Blondie” Cartoonist

New Franchise Opportunity - Dagwood Sandwich Shop by “Blondie” Cartoonist

Dean Young

The famous cartoon “Blondie” is going to have a Dagwood sandwich franchise opening this year.  Founders of this franchise are by cartoonist Dean Young along with co-founder Lamar Berry.

Dean’s father, Chic Young, started the “Blondie” comic strip in 1930.  When Chic died in 1973, Dean took over the comic strip.  Currently there are an estimated 250 million readers of the comic strip worldwide.  Over the years there has been a collection of “Blondie” movies ranging back to the late 1930’s.

Opening a Dagwood sandwich shop has been a long running dream for Dean Young.  He has a collection of over 20 different sandwich recipes that he has collected over the years.  New Franchise Opportunity - Dagwood Sandwich Shop by “Blondie” Cartoonist


Flipping Real Estate Property for a Profit – Is it a Safe Investment?

Flipping Real Estate Property for a Profit – Is it a Safe Investment?

Real Estate

According to ABC’s 20/20 there are a lot of people that investing in real estate to turn around and sell it to make a quick buck.  They discussed a popular “flipping” of real estate which is a real estate term that means to quickly buy and sell a property for a profit.

Flipping real estate for investing is popular among the new home housing tracts.   People line up the night before to get their chance at buying a property for a new housing development.  It is unlikely that they will ever live in the property and they usually don’t even rent the property to keep it in mint condition.  As the property prices go up in value in a short period of time they make a profit on the sale of the property.  Flipping Real Estate Property for a Profit – Is it a Safe Investment?


Stock Options

Stock Options

Business

Exchange traded options have been considered risky investments that only experienced traders would use, but they can be used by other investors as well. They date back to 1973, and according to Barron’s magazine, options are the number one investment that people want to know more about. 

Options may give investors increased cost efficiency, and may be less risky than equities.  They also have the potential to deliver a higher percentage return, while giving the investor a number of strategic alternatives. 

An option is a contract that gives the buyer the right to buy or sell an underlying asset at specific price on or before a certain date.  There is no obligation to do so of course, and like a stock or bond, an option is considered a security.  It is a binding contract with strict terms and properties.  Stock Options


What is Market and Limit Order? – Knowing How to Buy and Sell Stocks Could Save You Money – Also Stop Orders – All or None – Good Till Cancelled and Day Orders

What is Market and Limit Order? – Knowing How to Buy and Sell Stocks Could Save You Money – Also Stop Orders – All or None – Good Till Cancelled and Day Orders

Business

A market order is a order to buy or sell immediately, at the best price at that time.  There is no guarantee of price.  This means that if you are going to buy stock, it will likely be at or near the ask price of the stock.  If you are selling stock you will likely get a price at or near the bid price.

It is important to remember that the last-traded price is not necessarily the price at which the market order will be executed.  Asking and bidding prices may vary.  In a fast moving market, the price at which you actually get your sale or buy executed, may deviate more than a less volatile market (as compared to the last-traded price).

Investors that want to immediately buy or sell a stock, will use a market order to expedite the transaction. Investors that are not in such a big hurry may want to use a limit order.  Here, the maximum or minimum price at which you are willing to buy or sell can be set.  What is Market and Limit Order? – Knowing How to Buy and Sell Stocks Could Save You Money – Also Stop Orders – All or None – Good Till Cancelled and Day Orders


Creative Financing Can Help Homeowners and Home Buyers – Equity Lines of Credit May Help Homeowners to Pay-Off Credit Card Debt

Creative Financing Can Help Homeowners and Home Buyers – Equity Lines of Credit May Help Homeowners to Pay-Off Credit Card Debt

Home Equity Line of Credit

New nontraditional methods of financing have enabled many homebuyers to enter the market that would have had trouble otherwise.  This brings up the chicken or the egg question. Which came first: higher home prices or creative nontraditional financing?  Did the home sellers adjust their prices upward because of more available credit, or did the lenders adjust their tactics to help buyer qualify for homes that have increased in price?

Either way, it appears creative financing is here to stay.  Adjustable rate mortgages (ARMs) with low initial payments have helped lower income buyers qualify for home loans.  Newer Interest Only Loans have allowed even more homebuyers to qualify.  These loans typically have a period of payments consisting of interest only, followed by either a balloon payment (possibly after 10 years) where the entire principal becomes due, or a more traditional loan where principal and interest are paid in monthly installments for the rest of the loan period.  Creative Financing Can Help Homeowners and Home Buyers – Equity Lines of Credit May Help Homeowners to Pay-Off Credit Card Debt


2nd Home Mortgage Loan – Benefits to having a Home Equity Line of Credit

2nd Home Mortgage Loan – Benefits to having a Home Equity Line of Credit

Real Estate

A second mortgage on a home can be beneficial to have.  It usually offers lower interest rates compared to credit cards and you also can have lower monthly payments.

While credit cards companies offer temporary promotional rates of 0% interest rates, you might not be able to pay off these credit cards if the amount is too much and be hit with high interest rates as time goes on.

It is better to set up a second home equity line of credit before you even need it.  If something unexpected happened that was very expensive you would be able to finance it without having to worry about getting approved at the time you need it most.  It can cost $50 a year or more depending on the lender to have a home equity line of credit.  Usually the first year is free.  2nd Home Mortgage Loan – Benefits to having a Home Equity Line of Credit


What to Look for When Choosing a Roth IRA – Compare Traditional IRAs to Roths – How to Save using Individual Retirement Accounts

What to Look for When Choosing a Roth IRA – Compare Traditional IRAs to Roths – How to Save using Individual Retirement Accounts

Where to put your money?

A traditional Individual Retirement Account (IRA) is a tax deferred self funded retirement fund that allows you to contribute a limited yearly sum toward your retirement.  A Roth IRA is also a tax deferred retirement account, but once you turn 59 and a half and have had the Roth IRA at least five years, withdrawals are tax-free.  Neither IRA is subject to required minimum distributions after age 70 and a half.

According to Humberto Cruz, a writer for the Tribune News Services, “For these reasons, many financial advisers recommend that people who have a traditional IRA and are currently in a low tax bracket consider converting all or a portion of it to a Roth IRA. To be eligible, your modified adjusted gross income on any year you convert, not counting the amount converted or IRA required minimum distributions, cannot exceed $100,000.”

Cruz warns that there are pitfalls concerning converting a traditional IRA to a Roth IRA.  One of his readers made the conversion, only find out later that he was penalized for not making estimated tax payments.  The rule of thumb is to talk to your tax preparer and financial planner before converting.  What to Look for When Choosing a Roth IRA – Compare Traditional IRAs to Roths – How to Save using Individual Retirement Accounts


What is a 401k and what are the Benefits of this type of Retirement Account

What is a 401k and what are the Benefits of this type of Retirement Account

Coins

Your employer more than likely offers a 401k package.  You know it has something to do with retirement.  The 401k helps an individual save for retirement and usually there are some extra benefits offered by the company you work with.

The government wanted to get people to save for retirement.  In 1978, The Tax Reform Act was passed.  It gave people a way to lower their state and federal taxes and save for retirement at the same time.  The name 401(k) got its name from the Internal Revenue code from the section 401 and paragraph (k).  It wasn’t until 1982 when the 401(k) was offered for the first time with a tax break.  The final regulations for the 401(k) were completed in 1991.

There are other retirement plans available.  That is were some of the confusion is, there are IRA’s SEP’s and money purchase plans along with the 401(k) plans.  These plans are also called a “defined contribution plan”, which means that the dollar amount is previously defined by either the employee or the employer.  What is a 401k and what are the Benefits of this type of Retirement Account


How to Save Money using Coupons when Grocery Shopping for Food

How to Save Money using Coupons when Grocery Shopping for Food

Coupon Organizer

Oprah’s last Debt Diet show on March 24th, discussed how two families are coping with budgeting and learning to eat at home.  One of the families had spent $29,000 last year eating out for all of their meals.  While many of us do find our way in the kitchens more often than that there are things we can do to help keep our grocery food bill low.

One way that most of us know about is using coupons.  Coupon clipping can be an amazing money saving technique.  It takes organization to really save substantially with coupons.  If you are serious about coupon clipping you will learn what Sunday papers have the most coupon inserts.  Usually just before a holiday the coupon section is stocked full of good coupons.  It can really pay to buy multiple newspapers for the coupons if you having savings on your mind.  How to Save Money using Coupons when Grocery Shopping for Food


60 Minutes News Program Highlights Hedge Fund Lawsuit Filed By Biovail – What Is Selling Short and What Does it Mean?

60 Minutes News Program Highlights Hedge Fund Lawsuit Filed By Biovail – What Is Selling Short and What Does it Mean?

Money

The CBS News show 60 Minutes had a segment on hedge funds and specifically a dispute and lawsuit filed by the Canadian Company Biovail against one of the world’s largest hedge funds, SAC.  According to Lesley Stahl, hedge funds have little government oversight and operate in secrecy.

In this specific case the lawsuit alleges SAC influenced the analysis of Biovail stock.  They allege SAC influenced the stock-analysis firm Camelback (The Arizona company has since changed their name to Gradient).  Camelback gave the biotech firm an “F” rating, hinting at accounting irregularities among other things.  This caused Biovail stock to plummet.       

Usually when most people buy stock, they are hoping the price goes up.  One of the strategies hedge funds use, called selling short, is contrary to this philosophy.  Selling short involves the sale of a security that one may not own, but will buy in anticipation of making a profit by paying for it after its price has fallen. 60 Minutes News Program Highlights Hedge Fund Lawsuit Filed By Biovail – What Is Selling Short and What Does it Mean?


Investing - Should you buy your Company's Stock Options?

Investing - Should you buy your Companies Stock Options?

Antique Stock Certificate

Stock options are offered to employees at a company as part of a benefit package.  The stock option offered by the employer is usually available for an employee to buy at a set price for a defined time period.  If the company stock goes up in value the employee is still able to purchase at the lower price.  If the price of the stock plummets to below the stock option pricing than it offers no value to the employee.

Why companies offer stock options is for tax breaks.  The company can deduct the expenses on the taxable income.  The accounting department’s financial statement does not reflect the deduction in their financial statement which makes the company look good on the stock market.  The tax break they gain is also well worth it.  Investing - Should you buy your Company's Stock Options?


What to Look For When Shopping For Loan - What Are Fannie Mae - Freddie Mac - FHA HUD and VA Loans - Government Assistance For First Time Home Buyers

What to Look For When Shopping For Loan - What Are Fannie Mae - Freddie Mac - FHA HUD and VA Loans - Government Assistance For First Time Home Buyers

What to Look For

The good thing about loan programs is that there are so many loans to choose from.  The bad thing about loan programs is that there are so many loans to choose from.  So how do you decide what loan fits you best? 

If you have at least 3% of the loan amount for a down payment, you might consider the most common type of loan, a conventional loan.  These are conforming loans, which are secured by government sponsored entities (GSE) such as Fannie Mae (FNMA), and Freddie Mac (FHLMC).  Jumbo loans (or loans for large amounts of money) must be funded by private investors.  Jumbo loans exceed the amounts set by GSE’s.

Fannie Mae and Freddie Mac are considered secondary market lenders.  Retail lenders will actually receive their funds from a secondary market lender. What to Look For When Shopping For Loan - What Are Fannie Mae - Freddie Mac - FHA HUD and VA Loans - Government Assistance For First Time Home Buyers


Oprah’s “Debt Diet” - Four Steps To Get Out of Debt - How to Pay-Off Your Debt and Save Money - Dieting for Lower Payments and Frugality

Oprah’s “Debt Diet” - Four Steps To Get Out of Debt - How to Pay-Off Your Debt and Save Money - Dieting for Lower Payments and Frugality

Ways to Save Money

Oprah Winfrey is running a very informative series of shows with practical methods for dealing with debt.  I am talking about the Debt Diet programs.  She broke the strategy into 4 steps, the first being determining how much you really owe.

Many people do not even know what they owe.  Jean Chatzky said that even if they do know, their spouse doesn’t.  It is important to pull out your bills and total your expenses and debt.  The experts agreed that it is important to know what you owe before you make a plan for repaying it.

The second step is to keep track of your spending.  Look for areas where you can cut spending.  Use this saving to pay down your debt.  One of Oprah’s guests, David Bach, mentioned the “Latte Factor”.  We need to review our luxury expenses like fancy cups of coffee, cigarettes, bottled water or fast food.  Not spending just $10 per day can put $3600 in your pocket after one year (or to pay your debt).  Oprah’s “Debt Diet” - Four Steps To Get Out of Debt - How to Pay-Off Your Debt and Save Money - Dieting for Lower Payments and Frugality


Compare Adjustable Rate Mortgages (ARMs) with Fixed Rate Mortgages (FRMs) - Interest Only and Pick A Payment Loans - Alternative Financing
 

Compare Adjustable Rate Mortgages (ARMs) with Fixed Rate Mortgages (FRMs) - Interest Only and Pick A Payment Loans - Alternative Financing

Read the details 

There are many choices in the mortgage marketplace, and it is important to choose the right type of loan.  Choosing the right loan could save you thousands over the term of the loan. 

There are a few basic options including an adjustable rate mortgage (ARM) and a fixed rate mortgage (FRM).  The ARM can be a powerful tool, sometimes offering borrowers lower initial payments.  This makes it easier for borrowers to qualify for larger loan sums. 

If the borrower expects interest rates to rise, a FRM may be better.  If qualifying for  a loan is a problem, there are a couple things that can help protect borrowers when choosing a ARM.  For instance, if interest rates do go up, you want to be able to cap your maximum interest rate and also the amount your interest rate can increase per month.  Make sure your ARM includes both types of interest rate caps.  Compare Adjustable Rate Mortgages (ARMs) with Fixed Rate Mortgages (FRMs) - Interest Only and Pick A Payment Loans - Alternative Financing 


Home Equity Loans Pros and Cons - Warnings From The FTC and What to Look For When Shopping For a Home Loan - Bad Credit Refinancing

Home Equity Loans Pros and Cons - Warnings From The FTC and What to Look For When Shopping For a Home Loan - Bad Credit Refinancing

Home Equity Loans

Prospective borrowers should be aware of scams and other problems associated with some lenders, especially if the borrower has bad credit.  The Federal Trade Commission (FTC) urges you to be aware of these loan practices to avoid losing your home. 

Some lenders may actually want to “steal” your equity by asking you to pad your income in order to qualify for a loan.  When you are unable make your payments the lender will foreclose your home and “strip” you of your equity.  There may be hidden costs associated with the foreclosure or you may be forced to pay exorbitant prepayment penalties.  The FTC recommends all barrowers not pad their income and read the fine print to avoid these penalties.

Some lenders may offer lower payments but then include a balloon payment in the loan.  This is more common with interest only loans.  According to the FTC, these loans are usually targeted at homeowners in foreclosure.  Home Equity Loans Pros and Cons - Warnings From The FTC and What to Look For When Shopping For a Home Loan - Bad Credit Refinancing


Types of Reverse Mortgages - How to Qualify and Things to Look Out For When Shopping for a Reverse Mortgage

Types of Reverse Mortgages - How to Qualify and Things to Look Out For When Shopping for a Reverse Mortgage

Cash Poor & Equity Rich

Many older Americans over the age of 62 may find themselves in a position of cash-poor while sitting on a large sum of equity.  Reverse Mortgages are one option for paying off medical bills, supplementing income, or a method of making retirement more enjoyable with travel.  Whatever the reason for considering a reverse mortgage, we have learned that there are a few things to consider before signing on the dotted line.

There are three types of reverse mortgages.  The first is a single-purpose reverse mortgage which may be offered by some state and local government agencies and nonprofit organizations.   The loans usually have a very low cost, but they are not available everywhere.  The barrower may need to be low to moderate income and have a specific use intended for the funds such as home improvement, property taxes, or health expenses.  Types of Reverse Mortgages - How to Qualify and Things to Look Out For When Shopping for a Reverse Mortgage


Who Should Get a Interest Only Loan?  Compare IO Loans to Fixed Rate Mortgages (FRMs) and Adjustable Rate Mortgages (ARMs) Before Deciding

Who Should Get a Interest Only Loan?  Compare IO Loans to Fixed Rate Mortgages (FRMs) and Adjustable Rate Mortgages (ARMs) Before Deciding

Interest Only Home Loans

Interest Only (IO) Loans may be practical if you are planning on selling the home within the next 10 years or less.  The payments will typically be lower than fixed rate mortgage (FRM), but the loans may include a balloon payment at the end of the term.  In other words, if you take a loan out for $40,000, you may pay interest only for ten years, but after ten years the loan may be due in full.

Some lenders will offer IO loans, where after the specified interest only period, the loan principal can still be paid off in installments.  This may sound better, especially if you are planning to sell your home.  You will have access to the equity at a relatively low monthly cost. 

You may want to consider the difference in cost between a IO loan and FRM before deciding, assuming there is no balloon payment.  This can be done by adding up all of your payments over the term of the loan.  Typically, the total cost of a FRM will be lower than the IO because the loan is considered less risky.  Who Should Get a Interest Only Loan?  Compare IO Loans to Fixed Rate Mortgages (FRMs) and Adjustable Rate Mortgages (ARMs) Before Deciding


Financial Planning – Get a Savings Account started even when Your in Debt

Financial Planning – Get a Savings Account started even when Your in Debt

Saving Money takes effort

In the United States this past year people on average had a negative savings account of .5 percent.  This statistic was only reached on time before during the Great Depression.  What has happened is that Americans are spending more money than their after-tax income.  Americans were not saving money but going into debt on average. 

The reality is that at some point financial issues need to be addressed.  Costs of living have gone up considerably as gas and heating cost have been on the rise.  There is also a general increase of goods across the line because of underlying fuel prices.  Shipping cost and transportation cost increase the costs of goods sold.  Health insurance rates continually go up in price and employers are giving more of the cost to the employee.  Financial Planning – Get a Savings Account started even when Your in Debt


How to Keep Credit Card Bills Low and Save Your Credit – Advantages to Refinancing Your Home or Taking Out A Second Home Loan On Your House

How to Keep Credit Card Bills Low and Save Your Credit – Advantages to Refinancing Your Home or Taking Out A Second Home Loan On Your House

Credit Card Solutions

Some credit card holders pay their bill off every month, and basically use the cards for convenience.  Others may find themselves in a bind due to hospital bills or expenses due to operating a business.  What ever the reason for the revolving credit card balances, there are things you can do to keep your bills lower.

Of course the first thing to do is pay the bills on time.  If you are late, and it is your first time, the late fee could be waived.  You will need to call your credit card company and ask though.  If you are late, make every effort to pay it as soon as possible.  Every negative entry on your credit could cost you.

Some credit card companies might raise your interest rate on your card even if you were not late paying them.  In other words, being late on one card could affect the interest rates on all of your other cards.  Credit card rates are adjustable, and a late fee may cost more than the $50 you pay that card company.  How to Keep Credit Card Bills Low and Save Your Credit – Advantages to Refinancing Your Home or Taking Out A Second Home Loan On Your House


Investment Strategies for Retirement - How to Buy Mutual Funds including Equity, Index, Money Market and Bond Funds - Load Versus No-Load Funds

Investment Strategies for Retirement - How to Buy Mutual Funds including Equity, Index, Money Market and Bond Funds - Load Versus No-Load Funds

New York Stock Exchange

Planning for retirement can be challenging, especially when you are trying to figure out the best strategy to make sure all your future needs are met.  The first step is determining what your retirement is going to cost. 

You will need to total your annual expenses in retirement.  This total may range anywhere from 70% to 90% of your current income. If you plan it right, your home will be paid off or you may want to move into a smaller house.  Some of the complicated estimates include determining future health care costs or insurance premiums.  It can be difficult to predict the future inflation and other factors.

Since most people don’t have time to keep track and research stocks to figure out which is best (or maybe they find better things to do with their time), many investors turn to mutual funds.  Mutual fund companies invest their money in stocks, bonds and other securities.  Each investor owns shares, which represents a portion of the funds holdings.  Investment Strategies for Retirement - How to Buy Mutual Funds including Equity, Index, Money Market and Bond Funds - Load Versus No-Load Funds


Zestimate Offers Free Instant Online Appraisals – Zillow.com Helps Determine What Home is Worth – Appraisers and Broker Agent Business

Zestimate Offers Free Instant Online Appraisals – Zillow.com Helps Determine What Home is Worth – Appraisers and Broker Agent Business

Zestimate Map

There is a new website that may make appraisal fees a thing of the past.  At least that is what some have speculated about Zillow.com (otherwise known as Zestimate).  Rich Barton, Zillow chairman and CEO said “Until now, finding out a current market value of any home -- whether it's yours or one you want to bid on -- has been quite difficult.” 

Banks pay appraisers $300 or more for appraisals, depending on the difficulty of the valuation.  Most of the time appraisers can look at the property, take some pictures and compare the subject property to comparables.  This is a relatively simple process for track homes, but can become more difficult for older homes or non-conforming houses. 

Some appraisals can be difficult to calculate.  Sometimes the appraiser will need to find the worth by determining the value of the land by comparison, and then by adding the cost of construction of the house.  The appraiser may subtract depreciation, due to the age of the improvement (i.e. the building). The appraiser will always document the final valuation process.  Zestimate Offers Free Instant Online Appraisals – Zillow.com Helps Determine What Home is Worth – Appraisers and Broker Agent Business


Do you really need Life Insurance - Who should have Life Insurance and What Kind of Policy

Do you really need Life Insurance - Who should have Life Insurance and What Kind of Policy

Life Insurance Certificate from the 1920's

Life Insurance doesn’t benefit the person that dies; it benefits the family that is left behind.  Not everyone should have life insurance.  But there are prime areas in your life that make it a valuable investment.

Life insurance could be for anyone at any age.  But the reality is that the most helpful life insurance policy is for a family income earner that is currently raising a family.  If there are young children that are not able to support themselves you should have a life insurance policy.  Today, it is more common for both parents to work to earn enough to survive.  If you can’t make it on one income you definitely need to have a life insurance policy.  If you both are income earners then both should have a life insurance policy.  Do you really need Life Insurance - Who should have Life Insurance and What Kind of Policy


Oprah’s “Debt Diet” - Financial Trouble can be related to our Thoughts and Attitudes

Oprah’s “Debt Diet” - Financial Trouble can be related to our Thoughts and Attitudes

Piggy Bank

Today Oprah had her third show in the “Debt Diet” series.  It was a very difficult show to watch as a psychotherapist Dr. Robin digs below the surface of two of the families that are struggling with their financial situation.

At times it was difficult to watch, you know that these people were so humiliated by their financial situation and you know they didn’t want to cry on national TV.  But it took a lot of courage to confront their financial problems in a big way.

The first family told their immediate family and friends of the financial troubles they were having.  It is a step to acknowledge that you have a problem.  The problem with debt is that it is something that people don’t share or want to acknowledge.  Debt is embarrassing and humiliating for most people.  Oprah’s “Debt Diet” - Financial Trouble can be related to our Thoughts and Attitudes


Lower Monthly Credit Card Payments By Refinancing or Taking out a Second Loan - Consolidate Credit Cards into an Equity Line Of Credit

Lower Monthly Credit Card Payments By Refinancing or Taking out a Second Loan - Consolidate Credit Cards into an Equity Line Of Credit

Cash When you Need It

Now that credit card companies are forced to double their minimum payments, many who relied on the funds for medical emergencies or business may find themselves in a financial bind.  New bankruptcy laws may make it more difficult to shake this debt as well.  Taking a second on your house or refinancing may become more appealing.

Many financial gurus say this is a bad idea because you are taking unsecured loans and turning them into secured loans with your house as collateral.  But if you truly intend on paying off the loans, it might make since, especially if interest rates go higher.  In fact it might be the right time to consider consolidating your debt or taking out a line of credit, whether you use it or not.  Lower Monthly Credit Card Payments By Refinancing or Taking out a Second Loan - Consolidate Credit Cards into an Equity Line Of Credit


Consolidate Credit Card Debt with a 2nd Mortgage – Lower Monthly Payments

Consolidate Credit Card Debt with a 2nd Mortgage – Lower Monthly Payments

Real Estate

You face the day when you have multiple credit card payments due each month and you either can’t make the minimum payments or you are barely making the minimum payments.  This scenario may have just sneaked in life recently due to the double minimum payment rules that the government imposed on credit card companies.  Another law makes filing bankruptcy more difficult to be excused from the debt that you have created.

It is always better to have a plan of action financially before you get stuck in a corner.  Lenders like to extend credit when you don’t really need it.  They are hoping in a way that you will use it and pay minimum payments until the very last payment.  This ensures the profit can be maximized.  They are in the business of making money.  They make money when you first use the cards and make more money when you pay interest and fees.  Consolidate Credit Card Debt with a 2nd Mortgage – Lower Monthly Payments


Credit cards that offer No Late Fees may have Hidden Costs

Credit cards that offer No Late Fees may have Hidden Costs

Hidden Fees

Citibank has the most humorous ads on television promoting there no hassle no late fee credit card; however there are things to be aware of with any credit card, the fine print.

There is a shorter grace period than there used to be, so when the bill comes in it often needs to be paid within a couple of days in order for it not to be counted late.  Late fees are added to your account on most credit cards and can range from $45 - $50 on average.

While it is nice to not get a late fee, you should still make every effort you would any card to pay it in a timely matter.  The penalties for not paying on time with any late fee cards are costly.  If you are late for a couple of times your interest rate could go up to more than 30 percent.  In addition this penalty, you also will get a lower credit rating.  They will report anyone that is over 30 days late in paying there bill.  This can wreck your credit rating.  So it is important to make sure that you pay every month on your credit card bills at least the minimum amount that is due.  Credit cards that offer No Late Fees may have Hidden Costs


Family Debt increased and more may be forced into Bankruptcy

Family Debt increased and more may be forced into Bankruptcy

Bankruptcy Court

Debt in the United States has increased dramatically from 1994 through 2004.  More families have more credit card debt and owe more money for their mortgages.

According to a CBS News Sunday report there is a 2.1 trillion dollars of debt in the United States, not including mortgages.  The average American has went into debt more, in 1994 there was and average credit card debt of $4,301 compared to $9,312 in 2004.  Family Debt increased and more may be forced into Bankruptcy

 


Oprah’s “The Debt Diet” series offers good Financial Help to Get out of Debt

Oprah’s “The Debt Diet” series offers good Financial Help to Get out of Debt

$100 Bill

Oprah has just aired part 2 of the 3 show special called “The Debt Diet”.  This show offered advice on how families are struggling with debt because of poor management on spending.  The 3rd in the series will air on ABC on March 10th.

It was good to watch the process that the professional money managers used to approach the debt consolidation.  What each family did was determine there monthly bills and expenses.  When looking at the totals for their expenses they found that there were a lot of hidden expenses.  

One family over spent on TV and cable bills.  They also wanted the best for their children and had a nicer upright piano.  The financial planner wanted it gone.  They settled for a smaller upright. The big screen TV went back.  They couldn’t give up their cable but they downsized to a cheaper plan.  Oprah’s “The Debt Diet” series offers good Financial Help to Get out of Debt


Value Investing Fundamentals - Warren Buffett Learned the Investment Strategy from Benjamin Graham

Value Investing Fundamentals - Warren Buffett Learned the Investment Strategy from Benjamin Graham

Warren Buffett

Most investors know who Warren Buffett is.  He is the billionaire investor from Omaha Nebraska that sits down with a pen and paper to fill out his IRS tax forms by hand.  He likes to invest in companies he understands.  He expects to hold on to his investments for a long period of time. 

Buffett is considered a “value investor”, and was influenced heavily by his Columbia University professor Benjamin Graham (1894 – 1976).  Buffett credits Graham with giving him his grounding and a sound intellectual framework for investing. 

Value investors look for stocks that are unjustifiably under-priced.  This is done by analyzing the fundamentals to find out what the “intrinsic worth” of the company is.  This value is often overlooked by investors.  Value Investing Fundamentals - Warren Buffett Learned the Investment Strategy from Benjamin Graham


Student Loan Rate Increase coming July 1st - Consolidate your debt to save on Interest and lower Payments

Student Loan Rate Increase coming July 1st - Consolidate your debt to save on Interest and lower Payments

Graduation Day

The Stafford loans and Plus loans are set to increase considerably come July 1st.  The Stafford loan will increase from 5.3% up to 6.8%.  The Plus loan will increase from 6.1% up to 8.5%.  There is an increase in borrowing limits for undergrads for their first and second year in school. Graduate students also have an increase in borrowing limits.  It is possible that the reasons that the government had to increase interest rates are due to the Hurricane Katrina relief efforts and also an effort to lower the federal deficit.

Stafford loans are for those that have the most financial need. The Plus loans are made available for all parents regardless of financial need for the undergraduate student.  Graduate students also can qualify for a Plus loan.  Plus loans have interest from the time the loan is made, payments start as soon as the last disbursement for funds is finished.  It is important for the soon to be graduate to check to see if the interest rate changes will affect their loan.  Student Loan Rate Increase coming July 1st - Consolidate your debt to save on Interest and lower Payments


Investing - Working with Transfer Agents Before you Send out RFP Request For Proposals

Investing - Working with Transfer Agents Before you Send out RFP Request For Proposals

Transfer Agents

A transfer agent is the lifeline between your company and its investors, but what happens when you are not happy with the services being provided by your transfer agent or you run into unexpected problems?

Rather than sending out RFPs (Request For Proposals) and seeking out another transfer agent, it is a much better idea to try and work things out with your current agent. This is the preferable route to take for most businesses, as it is much easier than the alternatives and should be chosen if at all possible. Seeking out another transfer agent and trying to make the switch might not be worth your while if you can remedy the situation with your current transfer agent.

To fix the situation, you will need to open discussions with your transfer agent. Before beginning the process, make a list of items that you would like your transfer agent to improve upon and specify what level of service you expect them to provide. Place these points in order of importance - what improvements are most important to you, your company and top management?  Investing - Working with Transfer Agents Before you Send out RFP Request For Proposals


Shorten the time for Paying off Credit Card Debt and Save Money

Shorten the time for Paying off Credit Card Debt and Save Money

Calculator

Have you ever thought what if I would pay just $10 more each month would it really pay off my debt that much faster?  What you will find is that every dollar does count.  The sooner you pay off your credit card debt the sooner you stop losing money on the interest you are paying on the credit card.

If you are faced with credit card debt, it is not an easy thing to even want to address.  However, once you do start to address the problem and see the results, the better off you will be in the future.  Every time you don’t pay off your credit card debt you are increasing the amount of interest that you will have to pay off.

It may be extremely difficult to make the minimum payments and in previous articles I talked about how you can budget to stretch a couple extra dollars to help pay off the credit card debt.  I also have talked about transfer deals and how to lower your credit card interest rates.  These are two strategies that you should use to get you to the ultimate goal of paying off the debt as soon as possible.  Shorten the time for Paying off Credit Card Debt and Save Money


Zillow Website will calculate what a Home is Worth – Offer’s Free Home Appraisals called a Zestimate

February 8th, 2006

Zillow Website will calculate what a Home is Worth – Offer’s Free Home Appraisals called a Zestimate

Zillow.com offers Zestimates

Every wonder what your house is worth?  Need to refinance your home or thinking of selling or buying?  The newly launched website Zillow.com, gives complete data on your home value much like an appraisal service will do.  It compares other homes in your area, offers satellite photos of a specified street.  It also compares daily interest rates and housing prices in general.

The Zillow website calls there appraisals a “Zestimate” and offers daily tracking of your housing price much like a stock market analysis.  Zillow has a database of over 60 million home prices.  The majority of the prices are for the West Coast, and they are working on expanding the data to reach across the country.  They have East Coast locations that cover Boston and many home prices in Florida.  If you are on the East Coast, their data will reach your neighborhood soon.  Zillow Website will calculate what a Home is Worth – Offer’s Free Home Appraisals called a Zestimate


How to Budget – Income Management through Budgeting can help pay off Debt

How to Budget – Income Management through Budgeting can help pay off Debt

Every little bit counts

There are two ways to get more money to pay off debt, one way is to stop spending as much and the other is to make more money.  The reality of what got a person into debt in the first place was likely due to a lack of budgeting each month.  Even if a person did make more money it still does not guarantee that they will live within there pay check.  Sometimes unfortunate events like medical bills can creep in,  but with budgeting in place it can help to prevent you from coming up short for these unexpected events.  How to Budget – Income Management through Budgeting can help pay off Debt


Advantages in Consolidating Credit Card Debt into a Home Loan

Advantages in Consolidating Credit Card Debt into a Home Loan

Equity in your Home

There are some things you need to consider before consolidating credit card debt into a home loan.  Some home owners may not want to take unsecured credit card debt and convert them into a secured loan using the house as collateral.  But now that the bankruptcy laws have changed, this option may get more serious consideration.

Last year minimum credit card payments doubled as well.  Some people may have been forced to pay emergency medical bills off using their credit cards.  At the time they did that their income may have been enough to make those minimum payments.  Other people that started their own business may be feeling the crunch as well.  They may have had just enough to pay the minimum.

The Feds just recently raised interest rates.  Hopefully we never go back to double digit inflation and extremely high interest rates, but this may be another consideration in refinancing.  If you plan on living in your home for more than five years, refinancing may be worth it.  Talk to your financial planner or accountant first.  Advantages in Consolidating Credit Card Debt into a Home Loan


What you Need to Know about Treasury Notes - How to Buy Sell these Securities

What you Need to Know about Treasury Notes - How to Buy Sell these Securities

Early Note

The United States Government offers several methods of investing.  Investors can buy Treasury Bills, Treasury Notes and Bonds.  This article will focus on Treasury Notes.  These Notes earn a fixed rate of interest every six months until maturity.

Treasury Notes are issued for 2, 3, 5 and 10 year terms. Notes can be purchased from the U.S. government through their TreasuryDirect and Legacy Treasury Direct programs.  Treasury Notes can also be purchased through banks and brokers.

Only individuals are allowed to hold TreasuryDirect accounts.  Notes can be held until maturity or can be sold before that point.  You can buy these through either the competitive or noncompetitive bidding process.  What you Need to Know about Treasury Notes - How to Buy Sell these Securities


Refinancing your Home Loan to Consolidate Debt

Refinancing your Home Loan to Consolidate Debt

Money

With the hints of higher interest rates, it may be time to lock in all your credit card debt by refinancing your Home Loan.  Not only are higher interest rates looming, you also have to worry about new laws that have doubled the credit cards minimum payments.

If you only have $10,000 in credit card debt you are probably better off paying the debt or getting a second on your home.  The reason for this is because the cost to refinance a home loan is usually not a free service.  If you shop around you should be able to avoid some loan fees.  Refinancing your Home Loan to Consolidate Debt


How to buy Treasury Bills for Short Term Investing

How to buy Treasury Bills for Short Term Investing

US Treasury Building

With the rising interest rates it might be a good time to look at Treasury Bills.  Currently the Treasury is paying approximately 4.3 – 4.5 percent interest rate.  Treasuries Bills are a short term government backed securities and are considered one of the safest investments.  You bid on Treasury Bills at a lower price and in a short time period the government will pay the fixed amount when it is due.

The minimum investment is $1,000 with increments of up to $1 million at a time.  You set up an account either through your bank or directly with the US Treasury.  Generally speaking, the shorter the term of the Treasury Bills the safer the investment tends to be.  If you are looking for a longer term investments the Treasury offers other products such as bonds.  How to buy Treasury Bills for Short Term Investing


Stock and Mutual Fund Investing Strategies for Beginners

Stock and Mutual Fund Investing Strategies for Beginners

Follow the numbers

I remember my uncle once told me he relied on some “pros” to handle his investments.  At that time I thought it was a mistake but I was too young to understand why.  Almost all of he experts I listen to today say this is mistake. 

This is the primary reason why most investors fail.  This includes nearly all full-service brokers who charge commissions.  Even the ones that handle actively managed mutual funds should be avoided.  There could be a conflict of interest between the managers who run the funds and the shareholders who own them.

The primary purpose of “financial services” is to pull your money from your wallet.  There is heavy emphasis on marketing and the cost structure benefits the managers, not you.  Stock and Mutual Fund Investing Strategies for Beginners


Is Buying Stocks and Investing Online better than a Broker

Is Buying Stocks and Investing Online better than a Broker

Stock Ticker

Have you ever thought about buying your own stocks?  Buying stocks online can be less expensive in the buying and selling, however a traditional stock broker can advise you on what stocks to purchase.  You could have both services, as the stock broker may have a already done a lot of research for you.

If you have never purchased stock before you should consider a mutual fund to be your first stock investment.  A mutual fund is a collection of stocks and bonds.  There are many combinations of mutual funds, and they still are not fool proof and you can still lose money.  However, you have a better chance at making money with mutual funds because of diversity.  With diversity you have a better chance at making growth on your investment.  To invest in just one stock is risky business.  Is Buying Stocks and Investing Online better than a Broker


Start a Roth IRA Savings Account for Retirement

Start a Roth IRA savings account for Retirement

Interest Savings add up

A Roth IRA is a retirement savings account that you pay taxes on the money before you put it in the savings account.  When you are ready to take out the money at retirement (starting at age 59 ½) all the money is tax free, including the interest earned money. 

A teenager would benefit from starting a Roth IRA when they start working because they can invest up to $4,000 each year in an Individual Retirement Account (IRA).  If you pay taxes first it means that all the interest acquired during all the years are tax free.  This could save the teenager a large sum of money in taxes when they retire.  If you child was able to put away $4,000 each year for the next 4 years it could, at an 8 percent interest rate, equal $750,000 at age 65.  Turning just $16,000 into $750,000 is a great way resolve a retirement plan early on.  Many people wait until later in life to start and would not ever see this kind of return on investment.  Start a Roth IRA Savings Account for Retirement


Treasury Bills and Notes – Investing Basics for these Financial Instruments

Treasury Bills and Notes – Investing Basics for these Financial Instruments

1837 Treasury Note

Now that interest rates are on the rise, interest in Treasury Bills (T-bills) may increase.  These are auctioned off by the Federal Reserve Bank.  When a T-Bill is auctioned, an investor may submit either a competitive or non-competitive Bid. 

A non-competitive bid allows the investor to buy bills at the average accepted bid for that auction.  Usually an investor buying large quantities of bills makes a competitive bid. He (or she) is bidding for a specific yield expressed in percentage points.   

Once the Fed receives all of the bids, they allocate the supply of bills among those bidders who offered to pay the highest prices.  This means the bidders that are accepting the lowest yield.  This yield will likely remain constant over time, but may change in the general level of interest rates.  Treasury Bills and Notes – Investing Basics for these Financial Instruments


Financial Considerations when Refinancing and Consolidating Home Loans and Credit Card Debt

Financial Considerations when Refinancing and Consolidating Home Loans and Credit Card Debt

Credit Considerations

There are some things you should consider before making a decision about refinancing your house. Interest rates may be on the rise so now may be a good time to think about your financial situation and plan a course of action.  If interest rates do go up, they will likely go up on credit cards as well.

Since the new bankruptcy laws have taken effect, it is harder to avoid defaulting on unsecured debt like credit card loans.  It becomes more appealing for some to place the credit card debt into a refinanced home loan package.

In 1981 the Prime Interest Rate was over 18%.  Right now the prime interest rate is a little less than 8%, but that is almost double what it was in 2004.  Interest rates go up and down.  If you have an adjustable rate home loan and interest rates go up you could be paying more each month. Credit card rate are always well above the Prime interest rate.  Financial Considerations when Refinancing and Consolidating Home Loans and Credit Card Debt

 

 

 
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