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By Dr. Scott Brown, Ph.D.
With a traditional Investment Retirement Account (IRA) you pay taxes when you take the money out at retirement in the future. Make sure that this account is really worth opening in your situation because what you put in the account today may be fully deductible, partially deductible or non deductible, depending upon your income and other retirement coverage. If you contributions are not fully deductible then this account is probably not for you.
The traditional (and Roth IRAs) allow you to save $3,000.00 in 2004 and $4,000.00 in 2005. If you are over 50 years old you can save an additional $500.00 as catch-up. You put the maximum amount in if you (or your spouse) are not covered at any time during the tax year by a retirement plan, including a 401(k) account, at work. If you can’t afford to save the maximum then just do the best that you can.
If you are single or a head-of-household taxpayer with annual adjusted gross income (AGI) between $40,000 and $50,000 and are eligible for a company retirement plan, your deduction will be reduced. Deductions are also limited for married couples filing jointly or qualifying widows or widowers who earn from $60,000 to $70,000 per year.
Even if you don’t have a retirement plan at work, your deduction may be limited if your spouse, with whom you file a joint return, has a company pension plan. In this case, your deduction will be reduced if your joint income is between $150,000 and $160,000. No deduction is allowed if your AGI exceeds $160,000. If you have a non-working spouse, he or she can contribute up to $3,000 ($3,500 if 50 or older) to an IRA also as long as the two of you together make at least as much in annual income as you contribute.
As I said before profits and income from investments are not taxed until you retire and begin withdrawing funds. You can pay capital gains taxes on you stock market profits and then withdraw funds, without penalty, after you reach age 59½. If you take out money before then, you usually will face a 10 percent penalty, plus taxes on the withdrawn amount. Under certain circumstances, you can take penalty-free distributions before age 59½. In the year that you will turn 70½ you can no longer make contributions to your account. In fact, at that age you must start withdrawing money from the traditional IRA or face additional penalties.
This account is ideal for individuals in high tax brackets who cannot open or contribute to a Roth IRA and anticipate facing a lower tax bracket upon retirement. In other words, if you earn a lot of money now, pay a lot of taxes, can open a standard Roth IRA, and take the full deduction when you contribute then this account may be good for you. This is especially true if you anticipate low income in your retirement years such that you will also be in a lower tax bracket.
About the author:
ABOUT THE AUTHOR: Dr. Scott Brown, Ph.D., a.k.a. “The Wallet Doctor”, is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina and a Master in International Management from the prestigious American Graduate School of International Business a.k.a. Thunderbird. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr. Bob Shiller of Yale University. Dr. Shiller is the economist that Alan Greenspan most highly regards who coined the term “Irrational Exuberance.” In 1998 he was shouting out to the world to “get out” of the stock market but now he is shouting to everyone that it is time to “get in!” The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing. He also teaches investing in Spanish and Portuguese. For more information visit Dr. Brown’s site at www.BonanzaBase.comor sign up for his investment tips at www.WalletDoctor.com
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Kamis, 07 Mei 2009
WHAT IS A TRADITIONAL IRA?
DISCOVER THE RETIREMENT BREAKTHROUGH …THE ROTH IRA!
By Dr. Scott Brown, Ph.D.
If you don’t know what a Roth IRA is then stop everything, print this article and read it carefully as this will certainly be the most valuable information you read this year. This next retirement account is to your net worth what light bulb was to electricity. Let me tell you about this wonderful financial invention called a Roth IRA!
The main difference between the Roth and traditional IRA is that with the Roth you pay taxes first and then make the contribution. This is absolutely fantastic if you make a lot of money in the stock market because you NEVER have to pay even a dime on the capital gains! There are a ton of other advantages to the Roth IRA. Unlike the traditional IRA you can be of any age and still contribute. You can also make a contribution to a Roth IRA at any time for a particular calendar year up until the due date of your tax return for that year. This means that if you want to make a Roth IRA contribution for 2005, you could make it anytime between January 1, 2005 and April 15, 2006. Another nice feature of the Roth IRA is that your spouse will also qualify for a contribution.
There is no tax deduction for Roth IRAs. Contributions are made with money that has already been taxed so there is no immediate tax break. Don’t fool yourself into thinking that this isn’t the best thing since the wheel because when Roth money is taken out, it is a tax-free distribution! This type of IRA is ideal for individuals in a lower tax bracket now, but anticipate being in a higher tax bracket at retirement. In other words, if you are in a blue-collar or white-collar middle class family and are learning and practicing good savings and investment habits than this is your retirement life saver!
It gets even better; you may make contributions at any age, even after you reach 70½. You must have your Roth account open for at least five years before you can take a penalty free distribution of earnings. Distributions of earnings without penalty can be taken after age 59½. If you are a first-time home buyer or become disabled, you can take distributions earlier. You can also withdraw the contributions at any time penalty free as long as you don’t withdraw investment earnings. What many people don’t know who even have Roth is that they can withdraw the contribution for the account without penalty at any time as long as you don’t touch any stock profits.
If you exceed the income limits you can neither contribute to nor roll over other IRA money into a Roth account. If you opened a Roth while you were under the income limits but then later earn more, your Roth account still will earn money tax-free that you can take out later without tax implications, but no new contributions are allowed. Another absolutely incredible feature of the Roth IRA is that it is also judgment proof. If you get sued it can be very hard for the lawyers to get it from you!
About the author:
ABOUT THE AUTHOR: Dr. Scott Brown, Ph.D., a.k.a. “The Wallet Doctor”, is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina and a Master in International Management from the prestigious American Graduate School of International Business a.k.a. Thunderbird. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr. Bob Shiller of Yale University. Dr. Shiller is the economist that Alan Greenspan most highly regards who coined the term “Irrational Exuberance.” In 1998 he was shouting out to the world to “get out” of the stock market but now he is shouting to everyone that it is time to “get in!” The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing. He also teaches investing in Spanish and Portuguese. For more information visit Dr. Brown’s site at www.BonanzaBase.comor sign up for his investment tips at www.WalletDoctor.com
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EVEN A NEWBORN BABY CAN OPEN A ROTH IRA!
By Dr. Scott Brown, Ph.D.
The Roth is kind of weird until you get used to it in terms of how much you can put in (contribute) each year depending on how much you earn (compensation). Because of this you really have two limits, one dealing with your compensation and the other dealing with your contribution. Let me explain.
The first contribution limit has to do with compensation, in other words you have to be making some money somewhere. As mentioned, you must have some form of compensation to qualify to make a contribution, but there is also an income limit that says whether or not you can put money in; make a contribution. If your adjusted gross income exceeds these limits, you are no longer eligible to contribute to a Roth IRA. In 2004, the adjusted gross income limits were:
• If your tax filing status is “Married Filing Jointly” - $160,000
• If your tax filing status is “Married Filing Separately” (and you live with your spouse) - $100,000
• If your tax filing status is “Single”, “Head of Household” or “Married Filing Separately” (and you did not live with your spouse during the year) - $110,000
Now, here is a little known totally legal secret that is worth your time reading this article. When I taught investment at the University of South Carolina I gave 10% credit of the course grade for the simple act of opening a Roth IRA. I was amazed when a few students would not open one because their parents had told them it was illegal to if they did not have a job. I told them that they were going nowhere fast if they could not think creatively enough to just go mow a lawn somewhere for ten bucks and put it into the account. I made it clear to them that wealthy people become so by taking action nut just thinking about taking action!
The best application of this concept I ever learned was a real estate investor that wanted to open a Roth for his newborn son. The problem of proving that a newborn makes money in a job is a tough one even for my noodle but this fellow came up with a great idea. He took a photo of the baby and put it on the business card with the words; “Help my dad finance my education by buying a home from him…he is the best dad in the whole world!” Then he paid the baby, get this…modeling fees! He put those fees straight into the account and filed a return for the baby with the IRS. I love that story! Talk about creative that is the kind of person that will go far in business. This is also the only newborn I have heard of with a tax free stock portfolio from earnings off his own job!
The second Roth IRA contribution limit has to do with how much you can contribute to your account. Below outlines the contribution limits established for the next several years:
• 2004 - $3,000 ($3,500 if you are age 50 and above)
• 2005 - $4,000 ($4,500 if you are age 50 and above)
• 2006 - $4,000 ($5,000 if you are age 50 and above)
• 2007 - $4,000 ($5,000 if you are age 50 and above)
• 2008 - $5,000 ($6,000 if you are age 50 and above)
If you need more information about Roth IRAs, you should consult a tax professional such as a Certified Public Accountant or Certified Financial Planner. You can also get more information directly if you take a look at IRS publication 590 - Individual Retirement Arrangements. Using a Roth is the very best trading account to use while investing in the stock market.
About the author:
ABOUT THE AUTHOR: Dr. Scott Brown, Ph.D., a.k.a. “The Wallet Doctor”, is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina and a Master in International Management from the prestigious American Graduate School of International Business a.k.a. Thunderbird. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr. Bob Shiller of Yale University. Dr. Shiller is the economist that Alan Greenspan most highly regards who coined the term “Irrational Exuberance.” In 1998 he was shouting out to the world to “get out” of the stock market but now he is shouting to everyone that it is time to “get in!” The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing. He also teaches investing in Spanish and Portuguese. For more information visit Dr. Brown’s site at www.BonanzaBase.comor sign up for his investment tips at www.WalletDoctor.com
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IRRESPONSIBLE LENDING FROM THE CREDIT INDUSTRY
By Matthew Parkinson
WHY WON’T THE GOVERNMENT STOP IRRESPONSIBLE LENDING FROM THE CREDIT INDUSTRY?
It is not uncommon for credit card companies to offer credit limits of £10,000, £15,000 or even as much as £25,000 – allowing you to effectively walk into a car dealership and buy a brand new car by signing on the dotted line and then driving away!
To whom do they offer these limits?
ü Anyone earning more then £100,000 per year?
ü Company Directors?
ü Solicitors?
ü Members of Parliament?
No.
They are offering these limits to retired widows, low-income families and single parents working 16 hours per week. People who have no ability whatsoever to repay such huge sums of money.
Hard to believe isn’t it? But Payplan, a free debt management company who deals with thousands of individuals with debt problems each week, have come across many unbelievable cases of “irresponsible lending” over the last few years and the problem appears to be getting worse. There are now more than 300 different credit cards on offer in the UK – all competing for your business.
They will use attractive offers to get you to sign up, such as cash back, 0% interest on balance transfers and purchases, loyalty points etc – All designed to make you spend more on your cards so that you then pay them interest out of your hard-earned cash.
These offers are often deliberately confusing and complex in the hope that customers will fall foul and not qualify, resulting in interest being charged.
“Britain's personal debt is increasing by £1 million every four minutes.”
Gone are the days where borrowing money involved making an appointment with your bank manager and turning up in your best Sunday suit to make a good impression then politely explaining why you needed the money.
But it isn’t just the new credit card companies that are doing this – the high street banks are guilty of overloading their customers with credit facilities too.
The former “Big 5 Banks” are probably most guilty of this; once a customer runs up a large overdraft they are quick to offer a consolidation loan, which may also incorporate any credit card debts. While this seems like a good financial move, many customers find that the interest rates charged by the banks are extremely high and the temptation of overdrafts and credit cards still remain.
Should the credit cards, store cards, catalogues and overdrafts start to creep up once again, the banks may intervene a second time and allow a large unsecured personal loan of up to £25,000 to clear some or all of the debts.
This only causes further problems and does not allow the customers a realistic opportunity to resolve the problems – they really need budgeting advice, and LESS credit facilities.
Once these large loans have been taken then it means that all the customers “eggs are in one basket” – this stops the customer from seeking professional help as there is only one creditor to negotiate with and they will require all the monthly surplus.
SO WHY DO THE BANKS LEND SUCH HUGE SUMS WITHOUT ENSURING THAT CUSTOMERS CAN REPAY?
We can only speculate but there could be several reasons:
1. Banks and credit card companies could take insurance against the risk that their customers become insolvent. Credit insurance premiums generally cost between 0.3 - 0.7% of annual turnover – a small price to pay for a guarantee against irresponsible lending!
2. It may be that companies have calculated just how much extra interest can be earned from customers if they provide them with such high credit limits. By overcommiting customers they know that extra interest and charges will be added.
3. In light of recent comments from HSBC and Barclays who have been blaming “bad debtors” for their drop in share price – it could simply be a diversionary tactic!
WHY WON’T THE GOVERNMENT INTERVENE?
The wheels are in motion to make creditors more accountable for irresponsible lending, (Lloyds TSB have been in trouble recently for unsecured lending of up to £100,000!) but there is little rush from Gordon Brown’s Office as the UK’s economy continues to hit growth projections aided by massive consumer spending.
“Household final consumption expenditure is the largest single component of the expenditure measure of GDP, accounting for about 50% of spending.”
In other words, the more money spent by the UK population, the higher the GDP (Gross Domestic Product) and this means more money is pumped into the economy.
If you feel that you have lost control of your credit card and loan repayments or that you have borrowed more than you can pay back, then give Payplan a quick call on 0800 716 239 or visit the website for further details www.payplan.com
Payplan are a free debt advice agency, who are able to provide a personal solution to anyone experiencing debt problems.
About the author:
I have been working as a Debt Advisor in the UK for the last 5 years, assisting families who have been overwhelmed with debt.
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THE TRUTH ABOUT REAL ESTATE INVESTING…IS IT RIGHT FOR YOU?
By Dr. Scott Brown, Ph.D.
You have probably been hearing, seeing and reading that real estate investing is the best thing since sliced bread. There are many late night cable television infomercials spewing out sales pitches for courses that teach you how to buy residential real estate no money down or for next to nothing. Furthermore, polished pitch men on the advertisement emphasize that it is so easy that anybody can do it. They smugly show you that it is simple as they pencil out on the back of a napkin how you will supposedly make a fortune in real estate. Then these real estate investment course promoters show “actual” interviews of people who have reportedly made gobs of money with the course system.
Although it is true that fortunes can be made in real estate it is actually more likely that it will be the guru owner of the real estate course than you! The reason is that real estate investing is a lot harder than most people realize. When you buy, rent, and sell real estate as opposed to stocks you are dealing directly with people and there is not organized exchange to keep things standardized. Don’t forget that courts see it as their duty to protect the shelter of families even if they are non paying renters who are total deadbeats. Another problem is that many contractors who do odd fix up jobs for real estate rehabbers are drifters with as many personal and financial problems as bad tenants. They damage houses and are down the street as soon as they get a little cash out of the hapless real estate investor.
It also takes many years to learn how to properly assess value in a town or neighborhood and get the required experience in real estate closings to not have the big profits you initially think you see in a deal leak out. The key point is that real estate investing is a business. Like any other business it requires constant dedication and education. If you work full time it means losing your free time to your rentals and rehabs. If a property doesn’t sell or if the tenant doesn’t pay you will have to lose part of your salary to cover the mortgage. You should enjoy your regular full time job because you selected it. If you prefer cookouts and trips to the beach over collecting rent and repairing your residential real estate investment then the stock market is a better place for you. If you are interested in real estate investing I have a list of reliable real estate investing courses as well on my website!
About the author:
ABOUT THE AUTHOR: Dr. Scott Brown, Ph.D., a.k.a. “The Wallet Doctor”, is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina and a Master in International Management from the prestigious American Graduate School of International Business a.k.a. Thunderbird. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr. Bob Shiller of Yale University. Dr. Shiller is the economist that Alan Greenspan most highly regards who coined the term “Irrational Exuberance.” In 1998 he was shouting out to the world to “get out” of the stock market but now he is shouting to everyone that it is time to “get in!” The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing. He also teaches investing in Spanish and Portuguese. For more information visit Dr. Brown’s site at www.BonanzaBase.comor sign up for his investment tips at www.WalletDoctor.com
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DISCOVER THE FOUNDATION OF RETIRING WEALTHY…THE IRA!
By Dr. Scott Brown, Ph.D.
Let me tell you about some legal ways to avoid getting taxed on profits from the stock market. You can make a lot of money now with the stock market as low as it is at this time as I teach you in my home study course. The very best way is to buy and sell your stock through Individual Retirement Accounts (IRAs). IRAs can help you legally avoid taxes and add a fantastic boost to your retirement plans. The IRA was originally developed in 1974 for people not covered by a company pension plan. "The individual retirement account legislation allowed the average person a chance to put money into a tax-advantaged account," according to Bruce Grace, a Chartered Financial Analyst and Assistant Professor of Finance at Morehead State University.
This is a huge benefit to individuals, regardless of whether they have company-established pension plans or not. "The Roth IRA may be an even a better deal for those who think they will be in a higher tax bracket at retirement," Grace added. I personally go a step further and mean it when I tell you that “the Roth Ira is literally the best thing since sliced bread” and I guarantee you is “neater than peanut butter”. It may seem a little confusing because since the original enactment of IRA legislation, several types of IRAs have been developed with a variety of characteristics that can meet your investment and retirement needs.
The most common forms of the IRA are as follows. The traditional IRA gives you a tax deduction on all of your contributions to the account during your working years and taxes what you take out of the account in your retirement. The Roth IRA does not give you a tax deduction during your working years but you pay no taxes on withdrawals while you are retired. The 401(K) is an IRA that your employer may or may not offer instead of a pension where, unfortunately, you are generally restricted to investing in mutual funds. The Roth 401(k) is very new and is much better than the standard 401(k) but the jury is out as to whether corporate insiders will adopt it for their employees. The SIMPLE and SEP IRAs are very nice supplemental tax shelters for small business owners and family businesses. Finally, the Education IRA gives you a way to save for a child’s college studies.
About the author:
ABOUT THE AUTHOR: Dr. Scott Brown, Ph.D., a.k.a. “The Wallet Doctor”, is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina and a Master in International Management from the prestigious American Graduate School of International Business a.k.a. Thunderbird. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr. Bob Shiller of Yale University. Dr. Shiller is the economist that Alan Greenspan most highly regards who coined the term “Irrational Exuberance.” In 1998 he was shouting out to the world to “get out” of the stock market but now he is shouting to everyone that it is time to “get in!” The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing. He also teaches investing in Spanish and Portuguese. For more information visit Dr. Brown’s site at www.BonanzaBase.comor sign up for his investment tips at www.WalletDoctor.com
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How Check 21 affects you
By John Thomson
The Check 21 Law is the new federal law for financial institutions and has taken effect last October 28, 2004.
Before the Check 21 law was enacted, your paper check had to be physically transported from where the check was paid out before it could be deposited to the financial institution. Now, even if it has always been prudent for you to keep money in your account to pay for the checks you’ve issued, this law makes it imperative.
Here are some of the other effects The Check 21 Law will have on you and fellow consumers.
You will no longer receive the original paper checks you issued, as your bank won’t have these.
The probabilities of your checks clearing sooner have increased. If you don’t have funds to cover this amount, your check will bounce. So don’t make out a check when your checking account has insufficient funds, you’ll be severely penalized.
On the minus side is, you will not be able to access the funds you’ve issued a check for, as the new law doesn’t include shorter check hold times.
Because of the shorter time in process the checks, your banks will be able to save money in processing your checks, but they are not required under the law to share these savings with you.
For each kind of copy, your check will have different rights attached with it. For instance, Check 21 has created a new paper copy of an electronic image of a check and is called the "substitute check." This substitute check can be a legal equivalent of the original check, and right attached to this, is that only a substitute check triggers your right to recredit of disputed funds.
The regular copy of a check does not have this same kind of protection. If you ask for a copy of a check, your bank can send you an ordinary copy instead of this special kind of copy which triggers legal rights and protections unless you specifically ask for the substitute check.
A second bank other than your issuing bank can have your original check and under this law, has the right to decide if it will keep or destroy your check. Before enactment of Check 21, your own bank could decide how long they should keep your original checks, if you didn't get these back together with your monthly statements. Under Check 21, the bank of the person you wrote the check to may decide when to destroy your check.
Under the Check 21 law, you can have funds of up to $2,500 recredited to the your account in 10 business days if the check is paid twice, paid for the wrong amount, or otherwise paid in error. However, a gray area exists, does this new right apply when a paper substitute check is used in the processing of the check but is not returned to the consumer? The regulations apply this recredit right only to the consumer who was provided with a substitute check. If the check was electronically processed by all the banks it was routed through, and the consumer was not provided with a substitute check, then the check remains under state check law.
If you want to safeguard your rights, you can request for a return of “substitute checks" you issued together with your monthly checking account statements. One possible difficulty lies in the amount you may pay in getting these checks back, change banks if these are too high!
In essence, what the Check 21 federal law has done is shorten the gap financial institutions take in processing checks. This new law has enabled financial institutions to scan paper checks and to send images of these same checks for electronic processing. This law is an efficient and faster way to process check payments.
If you need information that is more detailed about your rights on the Check 21 law, access the Federal Reserve Bank website and request for these materials:
Consumer Guide to Check 21 & Substitute Checks and what you should know about your checks.
About the author:
John Thomson is webmaster at http://www.business-personal-checks.comwhere check information is a click away. Easily find the checks for you at http://www.business-personal-checks.com
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Why Buy Travel Insurance?
By Bill Mason
When you choose to travel, you take the risk of lost luggage, flight cancellations, reservation cancellations, theft and many other situations which may cause anxiety. Planning a vacation is stressful enough without having to worry about something going horribly wrong. Purchasing travel insurance will ensure that you are compensated if anything goes wrong on your trip. When trying to determine whether or not to purchase travel insurance, keep in mind the points listed below which may make your decision much easier.
Many forms of travel insurance will cover you in the following areas:
1. Medical Emergencies – Travel insurance will provide you with financial help should you encounter a medical emergency while traveling. If you become ill or are injured while on vacation, your travel insurance will provide you coverage in both situations.
2. Cancellations or Delays – If for any reason (beyond your control) your trip is cancelled or delayed your travel insurance will provide you with financial coverage. This includes coverage if your airline goes bankrupt or out of service. Your travel insurance will either compensate you for the money you lost or provide you with new means of transportation.
3. Theft – If anything belonging to you is stolen while you are on vacation, your travel insurance will provide you with financial assistance to replace the items which were stolen.
4. Damage or Loss of Personal Property – This is likely to happen while on vacation. If your luggage is lost or damaged while on vacation, your travel insurance will definitely cover at least some percentage of the property that is missing. Depending on the insurance plan, it may financially cover all the items that are missing.
5. Lost Passport – If you lose your passport or it is stolen while you are on vacation, travel insurance will provide you with the means to get a temporary one. Your travel insurance company will inform you on how to get in contact with your country embassy so that you can arrange to receive a temporary passport.
Depending on the insurance plan you choose, you may be fully or partially covered in the areas listed above. Choose your policy according to what you think the possibility will be that you will require the assistance on your trip.
For many vacationers, travel insurance eliminates any worry that an unforeseen circumstance may arise in which you do not have the money or means to take care of.
Travel insurance helps you relax and enjoy your trip without agonizing over things that may or may not go wrong. Relaxing and enjoying? Isn’t that why you planned the vacation in the first place?
About the author:
Bill Mason is a retired insurance agent who now writes as a freelance writer for http://www.insuranceguide101.com– a site that offers information on RV insurance, renters insurance, long term care information and more.
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Who should you use, Mortgage Broker or Banker?
By Tara Lyons
Many home buyers assume that “mortgage companies” are banks that lend their own money. In fact, that is not always the case; you may find that the company is a mortgage broker, a lending institution or a bank.
A banker is a direct lender; it lends you its own money or the money of people who have deposited into the bank, although it often sells the loan to the secondary market. If you walk into you local bank and talk to the loans officer or Mortgage Specialist, they’ll be loaning the banks money and working to create a profit from the loan.
A mortgage broker is a middleman; he does the loan shopping and analysis for the borrower and puts the lender and borrower together. Many of the lenders through which the broker finds loans do not deal directly with the public (hence the expression, “wholesale lender”). However, they will also shop the banks as well to find the best rate.
A bank can give you direct loan approval, whereas a broker gives you information second-hand. However, many banks are limited in what they can offer, which is essentially their own product. You’ll also find you need to do the leg work to find the best rate. You will need to apply at multiple banks and be approved by several, bringing offers back and forth to get the best interest and terms. In addition, if you present your loan application in a poor light, you’ve already made a bad impression.
A mortgage broker charges a fee for his service, however they rarely charge you the borrower, it is usually the lender who pays the fees and therefore the service is free to you. Mortgage brokers have access to a wide variety of loan programs. He also may have knowledge of how to present your loan application to different lenders for approval. As a borrower it is wise to have both a mortgage broker and a banker on your team.
Only you can answer what is the best choice for yourself. If you have a good relationship with your bank and the mortgage specialist you may not need the services of a broker. However, if you do not, then using a broker to shop for the best mortgage for you could save you thousands of dollars without cost a cent upfront.
About the author:
This article is written by Tara Lyons at http://www.taralyons.com
You may reproduce this article as long as it remains intact with no changes including the contact information above.
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Credit report basics
By James Mercer
Why should you want to check your credit report rating? How do I get ahold of my credit report? What is shown in your credit report? Now I will take a look at all of this. I encourage everyone to get their hands on their credit report to make sure that it is accurate. In this day and age, your future could be riding on it.
Well...to know the credit worthiness of an individual, lenders often rely on a the credit report. A credit report is a rating made by an authorized credit agency that signifies a person's credit history. A credit report must be checked regularly in order for the individual and his lenders to know his credit rating. It's an important part of the mortgage process, whether it's a personal loan, business loan, refinance or debt consolidation. Anytime you go to a financial institution to get a loan your credit rating will be checked.
Why do you need to check it?
Many things can happen that can effect your credit rating that is incorrect. For example:
1. Utility companies may have reported you as paying late when you didn't. This is something that should be cleared up. It will improve your credit rating. This same kind of thing can happen with anyone that you pay money to on 'credit'. Humans make errors and these errors could be effecting your credit rating.
2. You could have become the victim of identity theft. Right now identity theft is growing rapidly and the bigger the internet gets the easier it gets for someone to steal your identity. If someone steals your identity they can open new accounts in your name, switch card statements and other things that can ruin your credit rating. The credit report will show this.
3. If you have a familiar name, eg John Smith, you could be the victim of mistaken identity. Someone else may have your same name and age. Their credit history may very well be effecting your credit history. Humans do error. If a data processor enters the credit information on the wrong person than you could be shown as having a bad loan in your name. In reality it is a bad loan that someone with your same name hasn't been paying..
4. Seeing what your credit report shows can help boost your confidence. Knowledge is always the key to leverage. With the knowledge of what your credit report says will help you know whether or not you are worthy of the credit you are trying to obtain.
Where to get your credit report
There are three source where you can obtain your credit report:
1. Equifax
2. Experian
3. Trans Union
Each one of these agencies uses their own methods of arriving at receiving credit data and calculating your credit score. Attention should be paid to each one of these companies, as you do not know which company a potential lender is using. If you have checked out two of the companies and company three has errors and the lender is using company three, it could cost you your chance of getting the loan or credit card.
A credit report score can go up to 900, and an increase of 50 points is big. It could enable borrowers to get loans that had previously been denied, and/or getting those loans at much better interest rates. Do you realize a 1% drop in the interest rate can make a big difference in how much you end up paying on a loan. For instance, a $150,000 house may see the monthly payment drop by over $100. This could save the borrower over $35,000 over the life of a 30 year loan.
Looking at the report
Information included on the credit report:
1. Personal information.
A. Name
B. Current and recent addresses
C. Social Security Number
D. Date of birth
E. Current and previous employers
2. Credit history
Most of your credit report contains the details about credit accounts that were/are opened in you name or list you as an authorized user(such as a spouse's credit card).
The details supplied include:
A. Date the account was opened
B. The credit limit or amount of the loan
C. Payment terms
D. Current balance
E. History, this shows if you have been paying on time or not
Closed or inactive accounts, depending on the manner in which they were paid, stay on your report for up to 11 years from the date of their last activity.
3. Inquiries.
Credit reporting agencies record an inquiry anytime your credit report is shown to another party. Included in list are:
A. Lenders
B. Service providers
C. Landlords
D. Insurers
Inquiries remain on your credit report for up to two years.
4. Public records
Matters of public record obtained from government sources such as courts of law including:
A. Liens
B. Bankruptcies
C. Overdue child support
Most public record information will remain on your credit report for 7 years. Tax liens can remain on your report for up to 15 years, and bankruptcies for up to 10 years.
Things not included on your credit rerort
1. Checking or savings accounts
2. Bankruptcies that are more than 10 years old
3. Charged-off or debts placed for collection that are more than seven years old
4. Gender
5. Ethnicity
6. Religion
7. Political affiliation
8. Medical history
9. Criminal records
10. Your credit score
Your credit score is generated by information on your credit report, but is not part of the report itself.
Who Can Look at Your Credit Report?
Anyone with what is considered a permissible purpose can take a look at your report. These include:
1. Potential lenders
2. Landlords
3. Insurance companies
4. Employers and potential employers (usually only with your written consent)
5. Companies you allow to monitor your account for signs of identity theft
6. Some groups considering your application for a government license or benefit
7. A state or local child support enforcement agency
8. Any government agency (although they may be allowed to view only certain portions)
9. Someone who uses your credit report to provide a product or service you have requested
10. Someone that has your written authorization to obtain your credit report
Go out and get your hands on your report and look through it and make sure everything is correct...Because Money Matters
About the author:
James Mercer posts articles of interest to those wanting to learn more about the financial world the runs their life Monday-Friday at www.becausemoneymatters.blogspot.com
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Why Stock Is More Risky Than Options!
By David Chandler
You probably realize by now that our trading preference is stock options.
But you have probably also been told or read that options are risky. Even worse, that you can lose your shirt trading them!
Well, what is the truth?
Let's take a look at stock ownership. What can happen if you buy stock?
The price can go up.
The price can go down.
The price can go sideways.
In the first case, you can make money. In the second you lose money.
And in the third case you don't directly win or lose but in fact it costs you money in two ways. The direct cost of brokerage and fees. And the indirect cost known as opportunity cost.
This is the cost due to lost opportunities. The fact that you aren't able to be involved in other, potentially profitable trades.
So if you purchase stock you can only make money if the stock price goes up.
Now some of you may be thinking, "But what about shorting?"
Well yes, short selling stock is possible but it is quite a tricky strategy and has almost unlimited risk so it is certainly not an approach we recommend.
You see, when you short a stock, you actually sell a stock that you don't own. And your intention is to then buy the stock back at a lower price. The price difference is your profit per share.
But can you see what the problem is here?
Well what happens if the stock price goes up? Particularly if it goes up a lot?
As you have sold the stock at a lower price you now have to buy it back at a higher price. And so your loss can be substantial.
So, to summarize, when you trade stock you can really only make money if the price increases.
Now there is one other aspect to this that I want to address. And this is that owning stock is expensive!
If you purchase 100 shares of a $50 stock it will cost you $5000. And if you buy it on margin it is still $2500.
That is a lot of money to outlay. And, more importantly it is a lot of money to put at risk. Especially seeing that you only have a one in three chance of the stock moving in the right direction.
Plus as stocks don't trend all that often you not only need to pick the right direction, you also need to be able to pick the right time.
So stock trading is not that easy. And it's expensive.
But options provide a great alternative.
For a start you only have to invest about 2% of what the stock was worth and yet you still control the same 100 shares.
So in the example above, instead of investing $5000, we might only have to outlay $100.
Plus, if you select the right strategy, you can profit no matter whether the stock price goes up; goes down or even goes sideways!
And finally, your risk is limited. The maximum you can lose is the amount you put into the trade. So in the example above - $100.
But the best thing of all is the leverage that options provide.
In the above example, if the stock price goes up by $5, the profit on the stock trade would be 10% or on margin, 20%.
But with this increase in stock price the value of the option might increase by 100%. And so the profit on the trade would be 100% - or ten times that of the straight stock trade.
So don't just accept the common view that owning stock is safe and trading options is dangerous.
If you understand options and learn how to trade them they can be a great investment vehicle.
About the author:
For your Free Stock Market Trading Mini Course "What the Wall Street Hot Shots won't tell you!" go to: http://www.stockmarketgenie.com
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www.cyrosella.com
Your Credit Report, A little Improvement Can Go A Long Way.
By www.creditandyou.com
You may think you have a marvelous credit report, be cautious of the mistake factor. Just as you receive mail with your name and address misspelled, your credit report can have errors just like anything else. Whether it is someone’s typing over site, out of date info or even mistaken identity, errors go on more regularly than we all can imagine.
According to the FTC, both the credit reporting agency and the establishment that provided the information to the credit reporting agency have duties for correcting wrong or incomplete information in your credit report.
While checking your credit report, if you locate incorrect information on your credit report, without hesitation notify the CRA in writing directly:
1. Tell the Credit reporting agency what information you believe is incorrect on your credit file. Send copies, never originals of documents that support your position.
2. Be sure to providing your entire name and address, your letter should clearly describe each entry in your credit report that you question. Tell the facts and why you are challenging the information. Sending a copy of your credit report with the items that are not correct highlighted can be help full.
3. Although you may imagine your grounds for writing is self explanatory, be certain to ask that the over site be fixed.
4. Send off your correspondence by certified mail, return receipt requested so you can document when the credit reporting agency received your letter. Be sure your letter is dated, and never forget to keep copies of everything you send.
Credit reporting agency must look into the item(s) in question, generally within 30 days unless they assume your dispute is trivial. They also must send on all relevant data you send them to the company that gave them the information for your credit report.
After the establishment receives notification of a dispute from the credit Bureau, it must review and go over all relevant information rendered and report the final result back to the credit reporting agency.
If the company finds the disputed information to be wrong, it must advise all nationwide credit reporting agency so that they can change this information in your credit file.
Disputed information that just can’t be affirmed must be erased from your credit file.
Inaccurate information must be fixed by the credit reporting agency.
Incomplete information must be corrected by the credit bureau.
Any item that belong only to another person must be erased by the CRA.
NOTE: Credit repair can be long and unexciting, the significance of being well-informed of your rights can’t be emphasized enough so be sure you take time to digest this information.
About the author:
To find more convenient steps everybody can take to fix there credit file and what to do after the investigation visit http://www.creditandyou.comit’s a free information website!
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Military loans – serving financial need of those who serve the country
By Amanda Thompson
Military loans are overcoming financial difficulties for army personnel who have served the country with a dedication which can’t be put in words. Military loans are offered to both serving army persons and those who have retired from the service. Military loans are an exclusive and resourceful way of providing army personnel with loans to make their home improvement, or getting higher education or vacation or car buying or any other personal use.
Military loans are offered at lower interest rate as compared to the loans offered to other people. Military loans are flexible and have special offers with easy approval. Many private online services offer military loans to active duty and career retired men and women of armed forces.
Applying for military loans would require you to show the details about your military identification along with your personal information. Your application will be analyzed keeping in mind your level of duty, credit history and financial needs. There are innumerable military loan plans to compliment your rank and financial situation.
Most military loans do not require any collateral to be place, so you don’t have to pledge any of your valuable assets like your property or home. Military loans for army personnel are typically unsecured loans. However, unlike unsecured loans the interest rates are low and can be paid early without any penalties, fees or penalties.
A good credit history is integral to finding a good military loan. You won’t find a better military loan product in case you have an awful credit history. Past credit history can do all the work for you, if you are trying to find a good loan rate. There are discounts and offers for military personnel but nothing can compensate for a truly upright credit history. But it does not mean under any circumstances that you cannot get a military loan with bad credit. However, it is still good to keep out of debts and keeping credit history clean.
Military loans are provided to all ranks and enable you to borrow loan amount ranging from £500 to £10,000. Military loans for army personnel can be either beneficial or disadvantageous. They can have the effect of solving emergency or other financial needs. There have been cases of overcharge and deception with military loans. Therefore, caution is advised while loan borrowing. Some loan lenders are charging outstanding fee for military loans. There are chances of deception on internet also. Falling prey to them will lead to heavy financial loses when you can easily get low interest military loans. Try approaching a site that is completely dedicated to the cause of helping military personnel their families, and their spouses. Approach a site which charges fair rates and has a good standing with the military community.
Military personal can find loans of their kind auto loans, va loans, payday loans, personal loans, home loans, computer financing. Military personnel and retirees should do research about military loans before they settle on a particular loan. Do not settle for the first loan, you qualify for. You can find loan lenders on the internet who tell whether you qualify within five minutes. Otherwise the process might take about 24 hours. A simple online form would start the process for military loans. The information that you provide will remain confidential and secure with the loan lender.
Military loans like all the loan types are meant to be paid back. So, planning repayment makes sense. Special advantages of military loans make it easier for you to repay it. You can have access to military loans anywhere and they can even be mailed.
Military loans are exclusive service for those who serve in the military. Fighting each day for the freedom of your country with your life at stake is difficult. Finding a military loan for your situation should not be the same. Military loans for army personnel are a tribute to these men and women so that they can meet their financial needs online.
About the author:
Amanda Thompson holds a Bachelor’s degree in Commerce from CPIT and has completed her master’s in Business Administration from IGNOU. She is as cautious about her finances as any person reading this is. She is working as financial consultant for chanceforloans .To find a Personal loans,bad credit loans,Debt consolidation,home equity loans at cheap rates that best suits your needs visit http://www.chanceforloans.co.uk
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Bad Credit Home Loan - How To Get A Good One?
By Bill Smith
Getting a home loan with a bad credit has never been easier. Here are some of the tips recommended by experts to improve your chances of getting a home loan:
Find a good deal on your home:
If you can snap up a home as cheaper rates compared to the local market, you may have an easier time getting financing on that property. To the lender or financial institution, it is as good as having a down payment on your home. There are some lenders who consider loan to value ratio before approving a home loan. Ask your mortgage lender if this factor can help you get qualified for your home loan.
Creative financing:
If the seller is motivated, ask if they are willing to carry back a second mortgage on the home. On approval, you can set up a contract or agreement with the seller that you agree to pay monthly payments on the property, as a second mortgage. To make it easy on the seller, it is best recommended to have an end date by which you intend to pay back the amount owed. On an average, 2 years are enough for you to refinance the second mortgage and the seller does not feel permanently locked into the agreement.
Make a downpayment:
You may be able to qualify for a 100inancing even with a bad credit. However, if you pay a 5-10 own, your interest payments will be much lower. Try to save as much as you can for your down payment. At times, it is best advised to wait for a few months to be able to make a down payment. If you cannot afford to have a down payment, you may always refinance your loan later for a lower interest rate.
Comparison shopping does help:
It is important to do a comparison shopping and get loan quotes from multiple lenders. If you have a bad credit, you will be surprised how much the interest rate varies. Let the loan lender know that you are getting multiple offers and you are considering the lowest rates. Lenders will squeeze their margins to win your business.
Work on improving your credit score:
Request a free credit report from any of the credit bureaus. If you were denied credit recently, you can get a free report. Report any inaccuracies as soon as possible. Now it is easier to report inaccuracies on the websites for each of the three credit bureaus. Too many credit cards can negatively affect your credit score. Close the accounts that you no longer need.
Don’t let bad credit stop you from owning a home. There are plenty of lenders out there to get a piece of your business. Apply with multiple lenders and compare their offers.
About the author:
@Copyrights - Bill A Smith is a credit counselor for Ameri credit counseling and credit management agency. Visit us at http://www.americreditservices.com/for credit counseling.
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Term Life And Whole Life Insurance
By Ivon T. Hughes
Which type of policy is best for you, term or whole life? The answer depends on several factors, including:
Your Needs. If you need coverage only until your children graduate from college, for example, you might be better off with a term life policy.
Cash-value insurance is better suited for long term needs, such as planning estate taxes and providing lifetime security for your spouse. Some term policies cannot be renewed past age 70 or 80 and can become costly to renew as you approach that age.
The Cost. If term life insurance is more suited to your budget and you want life time coverage, consider a term life policy which can be converted into a whole life policy. Then you can convert the policy whenever your cash flow or needs dictate. You can also purchase a combination of term life and whole life insurance and gradually shift into whole life insurance over time.
Your Savings and Investment Goals. Whole life insurance can be a good long term investment vehicle, especially because the cash value has the potential to grow tax-deferred. Should you no longer need the insurance but want some extra cash, you may surrender the policy and collect the accumulated cash value. Be sure to discuss the tax consequences with your tax advisor first.
As an alternative, you could purchase term life insurance and invest what you save on premiums on your own. Compare the returns you can expect, and remember to take taxes into consideration if you plan to select taxable investments.
So, Should I Buy Term Life or Whole Life Insurance? Term life and whole life insurance both have advantages including immediate family protection. Deciding which type of policy and which features are right for you takes careful consideration and, most times, a comprehensible look at your financial plan. To discuss your life insurance needs and financial requirements, contact your financial professional.
About the author:
Hughes Trustco offers you free E-books & Brochures to help you in buying life and health insurance. For the cheapest and best life insurance quotes, visit http://www.hughestrustco.com
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How to buy a plasma television set
By Tom Ace
Most people think that all you have to do to purchase a new plasma television set is to walk into a shop, look around, and purchase the first set that catches your attention. This is how you're supposed to do it, right? Wrong! Buying a television, whether it has a plasma monitor or a LCD monitor, takes careful planning.
The first step in finding your dream plasma television set is to measure the space where you plan to put it. This will help you to decide which size set to buy and will also help to guide your budget. Remember to measure your car, too- there's nothing more frustrating than picking out and purchasing that perfect plasma television set, if you can't fit it into the car to get it home!
If you're going to splash out and completely redecorate your home entertainment room, you should think about contacting a home installer, to get some tips and ideas before contracting the work. Remember to take into consideration things which might affect your view of the TV, such as lighting, windows, and other parts of the room which could possibly cause a reflection or obstruction of the display.
Once you've thought about where you're going to put your new plasma television set- and how you're going to get it home- you now need to think about what sort accessories you'll need. Will you be using it in conjunction with your camcorder? Will you need to purchase a set of external speakers, or will you be hooking the television set up to your stereo? If so, remember to check that the monitor or set has an AV-hook up. Having the hook up in the front of the TV will make it more convenient to attach your camcorder or gaming system.
Finally, you should consider the television set's overall picture quality and ease of use. Take the time to sit and watch the set in the store, to get an idea of how you'll feel watching it at home.
With a little preparation, you'll find the plasma TV set that is just right for you and your home.
About the author:
Tom Ace is the founder of Plasma tv Resources a website providing information on plasma televisions
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Credit repair basics
By James Mercer
Have you ordered your credit report? Remember by September 1, 2005 every state will be required to allow you to one free credit report each year. If you are denied credit for any reason you are entitled a free credit report. Under any other circumstances you will have to order one.
If you have ordered your free report, have you looked through to make sure everything is correct? If it isn't then this is the article you need to read.
How to report a credit error:
Each credit bureau needs to be contacted. One bureau may have the correct information while the other two are wrong. By contacting each credit bureau you eliminate the hassle of having to do the process again when you find out that you didn't do it right the first time.
When writing to the credit bureaus, address one mistake at a time. If you report more than one mistake the credit bureaus can, legally, say you are filing a frivilous report and do nothing about it. Keep your letters down to one mistake and one mistake only. Yes, this may take some time to get through all the mistakes, but it is time well spent.
Each of the credit bureaus have PO boxes specifically set up for complaints. They change their PO box addresses often to make it harder for customes to find and complain.
The credit agency must get in contact with the creditor that is reporting the late payment/incorrect data within 30 days and either change the data, if it is incorrect, or delete the data altogether. If they don't get a response from a creditor within the 30 day period they have to delete the data. This puts trying to correct mistakes to your advantage.
Trying to straighten out your credit can be a time consuming process and you may wish to use a credit agency to help you get everything correct. As always though, let the buyer beware. Credit repair scams are everywhere and if you don't watch out you can become a victim.
Persistency pays off by getting you a better credit rating and credit score. By repairing your credit you should be able to get a credit card, home loan, auto loan, refinance, etc., that you have been looking to get and be able to get it at better interest rates. This is all good for you...Because Money Matters
About the author:
James Mercer posts articles of interest to those wanting to learn more about the financial world the runs their life Monday-Friday at www.becausemoneymatters.blogspot.com
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Credit score – for scoring the right loan
By Natasha Anderson
Somebody once said, “There is always a way of knowing your limitations and going beyond it.” It is fundamentally true with respect of credit score. There can be nothing more rewarding during loan borrowing than knowing your credit score. There are many people who are practically unaware of what their credit score is; in fact they don’t even know what it means. This credit scoring system has been used since many years to decide whether a borrower is a credit risk or not. Your credit score is immensely decisive in the acceptance and rejection of your loan application.
What is a credit score?
Credit score is a statistical method to assess the credit worthiness of a prospective borrower. Credit score has all the in depth information about your credit experiences. All information about bill paying history, the accounts you have, and the age of these accounts, late payments, outstanding debts. A statistical method is used to compare credit profiles with borrowers with similar profile. Points are awarded for every factor that promises debt repayment. The total number of points tell how likely it is that you will pay the debt when the payments are due. These points are your credit score which is a three digit number.
Understanding a credit score leads you to the question of how do you get a credit score. Every time you have borrowed credit or used it, you get a score which exhibits how you have managed that credit in the past. The loan lenders rely on a credit scoring system which gives grades. Grades A to D are provided to scores which range from 500 to 620 or above in figures. If your credit grading is either C or D or your credit score ranges from 500 to 535, you are heading in for bad credit loans.
If you have suffered from any previous delayed payments or charge offs – the chances are that your credit report would have its account well embedded in it. Many loan lending companies and banks are wary of people with bad credit score. However, more and more loan lenders have overcome their inhibitions and are offering loans for bad credit score.
Don’t worry, if one day you find that your credit score is bad. Today one-third of the people applying for loans have some kind of credit imperfection in their credit report. Bad credit score is so easy to catch that people get blemished credit score for a reason like not having a permanent residence. Credit score has received new threats like unpaid parking ticket, an ignored traffic fine or even a forgotten library book. This definitely effects the credit reliability of an otherwise good borrower, but it also effects creditor for he might be rejecting a trustworthy borrower.
Credit report is integral to credit score. Submit accurate credit report with your loan application. You can get copies of your credit score through any of the three major credit reporting agencies.
• Equifax
• Experian
• Trans union
Your credit report would have four sections –
• Identifying information
• Personal history
• Public records
• Inquiries
There will general information like your current and previous addresses, your date of birth, telephone numbers, driver's license numbers, your employer and your spouse's name. Credit history will have information about your personal accounts. The public records account is better off blank, for a public record implies you have had a problem. It records financial data like bankruptcy, county court judgments, charge offs, defaults. The last section called inquiries includes a list of everyone who has asked for your credit report.
Now, if you have a bad credit score there are way to overcome this situation. The first basic way to start is paying your bills on time. You can ask your lender to move your payment date if you can’t pay on time. Closing accounts won’t help your credit score. However, closing unused accounts would be beneficial because they are seen by creditors as credit risks. Don’t stretch beyond your credit limit; rather try to keep the balance at 50% of the credit limit.
Credit score requires continuous hard work. With bad credit score it is never too late to start. And with a good credit score you have to give in a lot of hard work. Being educated about your credit score is like a boon. Having a good credit score strengthens your position and you can ask for better rates which is your right. Any information is good information. Therefore, knowing your credit score, would lead to where you should go – towards the right loan.
About the author:
After having herself gone through the ordeal of loan borrowing, Natasha Anderson understands the need for good quality loan advice. Her articles endeavor to provide you the wise counsel in the most elementary way for the benefit of the readers. She hopes that this will help them to locate the loan that beseems their expectations. She works for the UK debt consolidation web site uk debt consolidations.To find a debt consolidation loans,debt management,debt advicec that best suits your needs visit http://www.ukdebtconsolidations.co.uk
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The perils of the property ladder: has anyone noticed the silence?
By Rachel Lane
As you ascend the dizzy heights of property investment, don’t lose your head and ignore mortgage research and advice.
There was a time when every conversation was focussed on property and every other TV programme was about property makeovers. Everybody wanted to get into property and those already on the ladder seemed fixated on becoming wealthy overnight. Remember those media-nominated millionaires who bought property for thousands and sold it for a million? How excited we all were, rich - with hardly any effort.
But recently it’s been rather quiet. Those who have yet to buy their first home have become sceptical, if not bored by chasing impossibly affordable homes and those who have bought property have become nervous, if not by the commentary that house prices are falling, but by the fact that they have bought property on top of other debts and the realisation that repayments are becoming more difficult.
According to the Department of Trade and Industry, bankruptcies are still on the increase, up almost a third on the previous year. In the latest debt statistics by Credit Action, UK economist Vicky Redwood from Capital Economics states that the level of personal debt is at breaking point:
“It is unlikely that the numbers have peaked but we estimate that households must be feeling the pain of borrowing too much. People are paying the equivalent of about 20 per cent of their disposable income on interest and debt repayments – the highest since 1990.”
In a survey by the Citizens’ Advice Bureau (CAB), the three most common reasons for debt problems were quoted as:
“ * Sudden change in personal circumstances – resulting typically from job loss, relationship breakdown or illness;
* Low income – the consequences of living for a long time on a low level of income; and
* Over-commitment – in some cases related to money mismanagement.”
It is the third reason that is often highlighted in the context of mortgage borrowing. In a press release regarding the Chancellor’s proposals to introduce cheaper mortgages, Keith Tondeur, Director of Credit Action warned that:
“At first glance the offer of help to first time buyers sounds useful. However this scheme comes at a time when after several years of steep rises the market is cooling. One question that we should be asking is whether this is being done to keep the housing market buoyant so that people feel confident and therefore keep on spending”.
“House prices are undoubtedly too high for many people to afford which explains why numbers of first time buyers have been falling, with the average age of a first time buyer rising sharply. This scheme could therefore, if care is not taken, create a false market and lead to first time buyers taking on a large amount of long term debt that they could well struggle to repay."
The seduction of the property market may cause a vicious circle of debt: if people borrow more than they can afford, they may damage their credit record if repayments cannot be met. An adverse credit record will brand the borrower “sub-prime”, and is likely to prompt less favourable credit options later in life. It is true that products such non-standard mortgages, adverse loans and adverse credit cards serve a purpose, but their rates will always be less favourable than standard products.
In addition to self-inflicted debt, it is also possible for your credit record to be manipulated by other parties. In June earlier this year, Callcredit issued a warning to guard against identity fraud when moving house.
“Homeowners who fail to check their credit file before they move and register themselves on the Electoral Roll once they have moved are at risk from:
* Identity fraud – a fraudster could obtain enough financial information about you from your rubbish to run up debts at your old address without your knowledge. People who just cut up cards and don't tell their lender are particularly at risk from this type of fraud.
* Credit refusal – a person's credit history has to add up to the lender when you apply for credit, if you don't appear on the Electoral Roll at your current address it will make it more difficult to get credit.”
If you’re thinking about buying a house, try the following sites for starting your own detective work in finding a good mortgage:
* Make sure your credit record is in good shape:
* * http://www.callcredit.plc.uk/
* * http://www.checkmyfile.com/
* * http://www.experian.co.uk/
* Don’t be lazy, shop around for the best mortgage:
* * http://www.moneynet.co.uk/ (compare mortgages)
* * http://www.cml.org.uk/servlet/dycon/zt-cml/cml/live/en/cml/pub_info (superb range of consumer information.)
* * http://www.moneysavingexpert.com/mortgages (Martin Lewis has some money saving recommendations)
Make sure you keep your finances flexible; ensure you know what you can afford and for how long you can afford it. What was the best mortgage, current account, ISA account five years ago, may not be performing as effectively now.
* * * * * * * * * * * * * *
About the author:
About Rachel:
Rachel writes for the personal finance blog Cashzilla: http://www.cashzilla.co.uk
Cashzilla is a personalfinanosaurus.
“Rachel” means sheep in Hebrew: “little lamb” or “one with purity”.
Cashzilla means financially savvy with great fiery ferocity.
* * * * * * * * * * * *
Contact details:
Rachel Lane
http://www.cashzilla.co.uk
rachel@positiveinterest.com
0131 561 2251
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3 Tips to Help You Sell Your Timeshare - For More
By John McIver
The values of timeshares are constantly changing. There are numerous timeshare-selling companies arriving every day. Timeshares are big business, and when one wants to sell a timeshare, the object is to gain more money than what he or she paid for. Here are several tips that can help anyone seeking to sell his or her timeshare make a profit.
1. Choose the right company. There are many timeshare sellers out there, and unfortunately, some are scams. It is important to do research on any company before advertising your timeshare with them. Watch out for companies offering to sell a timeshare within a certain timeframe, or for a certain amount of gain. Some say that reputable companies will not charge more than $50 for an ad. This is not true. Some of the best companies have ads that are more than $200. It is important to understand what the company will do for you. If you believe that the company will help you make a profit on your timeshare, or at least help you break even, then it is worth a large investment.
2. Set aggressive prices. Once you find a company to advise you, they will likely suggest a selling price that is significantly lower than what you paid. This is good advice. Some sellers attempt to sell their timeshares for more than they are worth, and end up being forced to lower the price, and possibly losing large amounts of money. The longer a timeshare stays on the market, the less likely it is to have a high yield. Depending on the company and the market, timeshares may be sold at least 20-30% what the resort is currently selling. The best prices will naturally attract buyers.
3. Get exposure. Choose a company that will expose your timeshare to the most potential buyers. Quite simply, a timeshare that is for sale will not sale if no one knows about it. Some companies claim that they have high exposure, but always check the facts. A company may claim to be number one in a search engine, but you should never be afraid to investigate further. A good way to test a company's claims is to search for timeshare-related keywords in Google. Observe the companies’ rankings on specific keywords, and you can attain a good idea of their exposure to a potential buying audience. Many customers selling timeshares fail to check the facts and lose money as a result. In order to make money, you must get exposure.
It is important to understand the market in which you are selling your timeshare. Most timeshares decrease in value and it is important to understand and accept this fact. With the proper advice and the proper approach to selling, a timeshare can make a seller large profits. Always have an aggressive price for your timeshare and choose the company that is best for you. Finally, gain the most exposure for your timeshare sale as possible. Following these rules will help make your timeshare sale experience a success.
About the author:
John McIver enjoys writing about timeshares. Learn more at http://www.sellmytimesharenow.com.
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