Friday, January 30, 2009

Monday, January 26, 2009

Get The Right Value On Your Home

Just about a year ago many homeowners in the UK knew just what the value of their houses was, having tracked soaring house prices that had been rocketing for the past decade. However, over the past year there has been a turnaround in the housing markets, with house prices plummeting month on month according to reports, and this has left many homeowner unsure as to what their house is now worth.

There are many reasons for the falling prices of homes for homeowners, mainly being the current credit crunch, which will new property buyers off the market as there are no cheap mortgages available anymore.

Homeowners decide to try and find out the price of their property for one of a range of reasons. Some may simply be curious and want to know what their major asset is now worth; some may be concerned about falling into negative equity and want to check how their home price has been affected. Of course the main reasons why people try to find out the price of the house is either to put the home on the market for sale or because they are thinking about taking out a secured loan against the home and therefore need to find out the equity levels.

It is vital in the current climate to try and get the most accurate valuation on your house so that you know what the home is worth following nearly a year of property price drops. You can get an estate agent to come out and provide you with a valuation on the house. However, there is a risk that you could end up with a valuation that is either too high or too low depending on whether the estate agent is looking to get increased commission on the sale of the property or whether the estate agent wants to try and get your house sold as quickly as possible.

This is why it is a good idea to get a valuation from around three different estate agents in the area. Once you have received the figure from each estate agent you can compare them to see whether the valuations are vastly different from each agent or pretty much the same sort of figure. You should not let on that you have already had a valuation to the second and third estate agents otherwise you may find that they provide a valuation based on the one that you have already received rather than a totally independent valuation.

Many local papers advertise homes for sale, and it is also a good idea to check out the local paper and see what price homes that are similar to yours in your area are being sold for. You can also do this online on one of the house websites, and this will enable you to see whether the price on similar homes is along the same lines as the valuations you have received on your own property.

If you are putting your home up for sale and you find that the price of the home is now far less that you had hoped you need to bear in mind that inflating the asking price in the hope of getting more money could result in your house failing to sell in the current climate.

If your property does not sell at your desired price and you still have equity in your home, then secured loans could help to improve your current home removing the need to move. For more information on property prices and finding out your properties worth read the articles on get a new property with these tips

UK Recession Official

Recession Bites in Britain

Today its official. The UK economy is officially in recession. Confirmation of this widely known fact came today (23rd Jan) from the Office for National Statistics whose figures showed that the economy has shrunk by 1.5% in the final quarter of 2008.

This latest fall follows the previous fall of 0.6% in the third quarter of 2008. This is the most significant fall since 1980 and exceeds the predicted fall of 1.2%. Sterling continued its downward fall, losing another 3 cents against the dollar. The exchange rate was only $1.357 to the pound at 09:30 this morning (23rd Jan).

Economists are saying that this fall in GDP is staggering. Some are saying that complete financial meltdown has been averted but there is an expectation that this latest recession will be deeper than that experienced in the early 1980s.

The current financial crisis is rooted in the 2007 US housing market debacle. Almost every sector of the UK economy is now adversely affected. There is no longer any debate as to whether the UK will enter a recession. Discussion is now focused upon how deep it will be and how long it will last.

Early predictions suggested that the recession would match that experienced in the 1990s but new estimates are saying that this latest recession will be equally as bad as that experienced in the 1980s and likely to be a lot worse. The big difference between then and now is that this economic crisis is worldwide. There is no industry or market sector that is unaffected.

It is anticipated that the recession will push unemployment to levels that have not been seen for decades. Falling demand for products and services is already leading to many employers having to lay off employees, many of whom would have considered their jobs to be safe.

If you're travelling anywhere you will be acutely aware of the current lousy exchange rate. When flying from Gatwick or Luton be sure to book your Gatwick Parking or Luton Airport Parking in advance and you will make some great savings.

Making Sense of Your Credit Report

If you are trying to do the smart thing and take a look at your recent credit report, then you may be wandering what in the world you are looking at. Understanding your credit score can be a confusing chore and may take a while for you to read. There are a lot of numbers and confusing literature that can confuse you if you let it.

Understanding the Score You Receive

A credit score is a mathematical system that consists of numerous numbers that are used to estimate your credit risk. The most commonly used form is the FICO score. This score is used to evaluate your worthiness for credit. You will receive a certain amount of points based on the information contained in your credit report. The highest score that you can receive is an 850 and the lowest is a 300. A score of 650 or higher means that your credit is good, however there is room for improvement.

Do Your Know Your Score?

A good place for your credit score to be is around 700. With that score you will be extended any credit with a good rate of interest, if you were looking for a debt consolidation loan for example. If you can work hard to get our score up to that level and try to keep it there you will put yourself in a good financial situation because you will save a ton of money in interest charges on all credit extended to you. It is important to understand what the numbers on your credit report are before you can work to improve and control them.

How to You Get Your Credit Information?

Everyone can obtain a copy of their credit report by simply requesting it from one or all of the three major agencies reporting credit. Because each agency has different information on you the scores they report will not be exactly the same.

Getting Help With Your Credit Score

If your score is lower than you want it to be, you can get some help with advice about how to improve the score and keep it in good standing. You can look online for free advice or for books and tapes on credit. These tapes can give you good ideas for ways to improve your credit score and how to maintain a good score. There is also credit card counseling services that you can obtain in order to get good advice for fixing your credit score yourself.

Review Your Report on a Regular Basis

Reviewing your credit annually is very important in your efforts to keep your credit rating as high as possible. If there are any errors on your report you will be able to catch them quickly and notify your creditor of needed changes.

Wednesday, January 21, 2009

American Express Black Card known as the Centurion Card

Centurion Card

If you have never heard of the American Express black card or the Centurion card as it is often called maybe it is because this card is exclusively for those who meet the strictest of standards set by American Express. This is an exclusive credit card for those who have an income and credit rating unlike most of the country.

American Express offers direct access to a wide range of exclusive perks, but in order to avail it, a certain criteria should be met. Aside from the necessary requirements, an applicant should pay an initial fee of $5000 plus the annual fee of $2500 for a total of $7500.

As with anything new or different, a sort of urban legend started to circulate about the ‘black credit card‘. The legend said there was a black credit card that allowed celebrities and persons of high rank unlimited credit and the ability to visit very high class stores after business hours. The unconfirmed reports first started being spread in the 1980s. The truth of the matter was it was not a credit card at all but an information card that had American Express Travel numbers as well as hotel assistants services numbers.

The rumor about the Centurion card was about the widest range of benefits and privileges it extends to the cardholder. It emphasizes the freedom to buy anything as much as the cardholder wants it. Although the rumor was widespread in the industry, no one really ever had it or get to use it.

In the year 1999, when the rumor was so controversial, American Express grabbed it and used it in the creation and development of a new card. In addition to their credit cards, they made such card with the exclusive features of high end privileges and benefits like no other cards available worldwide. The card was known as Centurion Card and it was only offered to Platinum cardholders who met the strictest criteria.

American Express sends invitations to qualified cardholders. Once the cardholder is qualified to have met the criteria, he will then be invited to avail the Centurion card. For cardholders located in different countries, they can also be qualified as applicants by the American Express through sending the invitation. The Platinum card will serve as the exclusive “invitation only” Centurion Card that is electronically linked to the American Express.

Because of its expensive charges, from its introductory annual charge of $1000, it has now been raised to $2500, only those who are rich and financially powerful individuals and celebrities are qualified to avail it. Among the first recipients of the Centurion Card was Jerry Seinfeld, a comedian and a former spokesperson of the American Express.

As long as there are urban legends circulating, the ones about the Centurion black credit card will probably persist. The tales of exclusive stores being closed for the whim of one person who wanted them all to himself to shop are only part of the rumors that have been told. Until a new rumor comes along to take the place of the old ones or people tire of the stories surrounding the black credit card, the tales will get more elaborate. Who knows what will be next?

Financial Planning- Helping You See The Big Picture

Do you picture yourself owning a new home, starting a business, or retiring comfortably? These are a few of the financial goals that may be important to you, and each comes with a price tag attached.

That's where financial planning comes in. Financial planning is a process that can help you reach your goals by evaluating your whole financial picture, then outlining strategies that are tailored to your individual needs and available resources.

Why is financial planning important?

A comprehensive financial plan serves as a framework for organizing the pieces of your financial picture. With a financial plan in place, you'll be better able to focus on your goals and understand what it will take to reach them.

One of the main benefits of having a financial plan is that it can help you balance competing financial priorities. A financial plan will clearly show you how your financial goals are related--for example, how saving for your children's college education might impact your ability to save for retirement. Then you can use the information you've gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you'll have the peace of mind that comes from knowing that your financial life is on track.

The financial planning process

Creating and implementing a comprehensive financial plan generally involves working with financial professionals to:

  • Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities, and evaluating your insurance coverage, your investment portfolio, your tax exposure, and your estate plan
  • Establish and prioritize financial goals and time frames for achieving these goals
  • Implement strategies that address your current financial weaknesses and build on your financial strengths
  • Choose specific products and services that are tailored to meet your financial objectives
  • Monitor your plan, making adjustments as your goals, time frames, or circumstances change

Some members of the team

The financial planning process can involve a number of professionals.

Financial planners typically play a central role in the process, focusing on your overall financial plan, and often coordinating the activities of other professionals who have expertise in specific areas.

Accountants or tax attorneys provide advice on federal and state tax issues.

Estate planning attorneys help you plan your estate and give advice on transferring and managing your assets before and after your death.

Insurance professionals evaluate insurance needs and recommend appropriate products and strategies.

Investment advisers provide advice about investment options and asset allocation, and can help you plan a strategy to manage your investment portfolio.

The most important member of the team, however, is you. Your needs and objectives drive the team, and once you've carefully considered any recommendations, all decisions lie in your hands.

Why can't I do it myself?

You can, if you have enough time and knowledge, but developing a comprehensive financial plan may require expertise in several areas. A financial professional can give you objective information and help you weigh your alternatives, saving you time and ensuring that all angles of your financial picture are covered.

Staying on track

The financial planning process doesn't end once your initial plan has been created. Your plan should generally be reviewed at least once a year to make sure that it's up-to-date. It's also possible that you'll need to modify your plan due to changes in your personal circumstances or the economy. Here are some of the events that might trigger a review of your financial plan:

  • Your goals or time horizons change
  • You experience a life-changing event such as marriage, the birth of a child, health problems, or a job loss
  • You have a specific or immediate financial planning need (e.g., drafting a will, managing a distribution from a retirement account, paying long-term care expenses)
  • Your income or expenses substantially increase or decrease
  • Your portfolio hasn't performed as expected

The Great Losses Caused By Credit Card Skimming

Losses of over one billion dollars a year are now being suffered on an international basis because of credit card skimming.This credit card scam is common in Latin America as well as Europe and Asia, and now it is starting to be seen in the United States.

This is an easy credit card scam to run when your card is used during the time of a simple purchase and it is scanned by the store employee at the store’s cash register.That store employee may also be swiping your card with a small machine known as a skimmer as well as using it to pay for your purchase; this skimmer takes your information from your card and stores it in this machine’s system to use fraudulently.The information in this skimmer is used by crooks to produce counterfeit cards from the hundreds of debit and credit cards it has information on.

After your information has been fed into the skimmer, it can be downloaded into a computer and emailed to any worldwide location, as there are skimming rings working all over the world.About ten years ago it was not as easy to accomplish this fraudulent activity as it can be today, because the skimmers were large, bulky machines which had to be hidden under the counter in the store.Due to the great advancements in technology of the past decade, the skimmer is streamlined and the small hand-held machine is easy to hide from the view of the unknowing customer.The skimmers may be purchased much too easily over the internet for around three hundred dollars, but the credit card producing machine is more expensive, coming in at about five thousand to ten thousand dollars.

This type of credit card skimming scam is done in another way; the credit card information is pulled directly out of the card terminals by inserting a skimmer bug and later taking it out with the credit card information on it.The older terminals are the only ones which can be violated in this way, however, the onset of new credit card terminals has alleviated much of this bugging.

When the credit card information thieves have gained all the pertinent facts on you they will begin shopping for the things they want and charge it to your credit card number.Over half of credit card fraud is committed over the internet, as shopping by this method is becoming more and more popular, card fraud on the internet has also increased. The thieves will use the internet to verify whether the card information is valid by making purchases of many low-ticket items through various websites in order to check to see if the card is active.

The merchant who had the employee who did the skimming may be the real victim of this crime, but the cardholders are also victimized by the skimmers by being held responsible for up to fifty dollars on the total amount charged on their card.The merchant is at risk for the loss of his merchandise and is one hundred percent responsible for the skimmer’s activities and the fees charged for the investigation.The investigation fees paid to the credit card companies by consumers and businesses is what is used to offset the costs of investigating charge-back claims by their customers.

Those who do this type of skimming scam operation know that a purchase of at least $2000 must be made before a criminal investigation can begin.

Visit for more information on credit cards and various credit card articles on how to protect your credit cards from fraud.

Fixed Mortgage Rate

Mortgage Loan Video

Many people who are looking to buy a home consider whether a 30 year or 15 year fixed mortgage rate is best for their monthly payments. No-one wants a mortgage hanging around their neck forever but with home buyers entering the market later, an early repayment of this loan is important. However, before you rush in and sign any papers, there are points to contemplate. Probably the most important point is a guarantee of a constant interest rate for the duration of the loan.

It is not uncommon to see lenders offering deals that are too good to be true. A 15 year fixed rate mortgage means the interest rate remains stable for the life of the loan. This is of great benefit for anyone that does not like surprises. When my wife and I were looking at homes for sale we decided to check out the various loans available with 15 year fixed mortgage rates.

Having a realistic, sustainable monthly payment on our mortgage was important even though we wanted to pay off our debt as soon as possible. So in consideration of this point we also looked at longer, 30 year fixed rate mortgages as well. Still, having a mortgage close to retirement wasn't what we were looking for, so we decided to try for a loan with a 15 year fixed mortgage. We were worried about the emphasis placed on early completion of the mortgage.

We thought about it long and hard and despite the pressure we decided to go with the 30 year loan plan. Many factors were taken into account when reaching this decision. The most important point was the fact I discovered my wife was having a baby. As she intended to raise our child at home we couldn't rely on her financial income to the monthly expenditure. The problem we could see was the increased financial commitment on a monthly basis if we had opted for the 15 year fixed mortgage rate. All things considered, we just didn't want to bite off more than we could chew. The 30 year loan repayments were considerably lower than the 15 year figures.

Making a few additional lump sum payments during the year helps bring down the amount owed. It is possible to take years off your loan if you can make a few extra payments during each year. This is well worth it in the long term but it does require some discipline. Although we would have much preferred a loan with a 15 year fixed mortgage rate we had to take our needs and abilities into consideration. Things worked out well anyway, even though we were unsure about it to start with.

Get more info on debt relief and loans go to Unsecured Debt Relief Tips or visit Debt Relief Options

How to Rebuild Your Retirement Nest Egg in 2009

2008 proved to be a tremendous bear market for Wall Street.  With investor confidence at an eight year low and stocks continuing to see loss in value, some 401(k) and IRA accounts have lost upwards of 20% or more of their pre-2008 value.  With these types of losses felt across the board, how can you learn from this experience and work to rebuild your nest egg beginning in 2009?


Don’t Cash Out


Many people who still had 401(k) accounts from an old employer promptly withdrew funds when they saw the continually falling stock market prices.  Unfortunately, choosing to cash out your 401(k) can have a tremendous financial impact on your future retirement income. 


First, withdrawing funds before the agreed retirement age will result in hefty early withdrawal penalties.  Don’t forget that you will owe federal and state taxes at your current tax rate on any increase in value of your fund over the amount you contributed.


Secondly, when one considers the powerful investment vehicle of a 401(k) and the final value of the account at retirement age, it is foolish to pass up the chance to build that wealth.  Even a small $5,000 retirement account can grow to near $75,000 in 40 years.


Wait for the Rebound


If you have retirement income vested in the stock market, it is important to remember that the market always recovers, and in fact, it has demonstrated consistent average growth since 1930.  However, you do need to ask yourself a question about when you plan to retire.  Will it be in 5 years?  20 years?  If have 20 or more years until your retirement age, your 401(k) or IRA will still see the best growth with stock market funds.  However, if you are looking at retirement soon, you may want to consider checking your diversity of investments.


Check Your Diversity


Your retirement accounts for your future retirement income should be invested in diverse areas, such as stocks, mutual funds, bonds, and no-risk investments, such as money market accounts, and CDs.  Never should an individual put all their proverbial eggs in one basket.  For instance, a younger worker, who is 31 years old, may view retirement as a lifetime away and decide to concentrate his IRA or 401(k) funds into aggressive growth stocks, or more specifically, their own company stock.  However, if a tough economic time arrives, like it did in 2008, that 31 year old may see almost his entire fund deflate.


To avoid such massive losses, check to make sure your retirement account has properly diversified investments.  Consult with an asset management company such as and retirement advice as found on Be sure to review your retirement accounts at least once a year and make any necessary changes in order to stay diversified.


Don’t Stop Saving


And finally, don’t stop saving.  Your 401(k) account is the solid foundation of your retirement plan.  Despite the ups and downs of the market, you should not stop your regular contributions for two reasons.  One, your contributions are pre-tax, and therefore, it lowers the actual income tax you pay now.  And two, if you have an employer with a company 401(k) match, take advantage of that free money.  Every penny you withhold for your 401(k) up to about 3% of your earnings can be matched and donated into your account by your employer.   This is essentially “free” money for your retirement account. 


The stock market news can be daunting.  However, remember that the survivors and winners in the long run are those who are mindful and stay in the investment game. 


Authored by Kenneth Himmler, Sr.

Real Estate Investment: A Strong Foundation For Your Retirement Savings

Given the current state of the economy, you might be surprised to learn that real estate investment is still a viable financial option for retirement, especially as the housing market continually dips to new dramatic lows. However, if you’re smart about your investment research – and are far away enough from retirement to wait long-term for your investment to appreciate – then property investment is still a smart retirement move to make.

Real estate investment can help you to build equity and increase your net worth; additionally, real estate can also be let to individuals and families in order to build a secondary revenue stream. Since all real estate eventually appreciates over time – it’s important to remember this, even in the midst of an economic recession – you’ll be able to borrow against this equity to fund additional investment options, including shares, stocks and other property investments.

However, don’t just wait for your real estate to gain in value; take advantage of your property by renting it out to trustworthy tenants. It’s a great way to gain another significant income stream, which can then be used to fund your Roth IRA or other retirement options. Be sure to charge enough monthly rent to cover any mortgage fees, maintenance costs and additional expenses that usually arise as a landlord.

Additionally, you can also opt to flip houses for a profit. If you have a good credit score and can afford a fairly large down payment, take advantage of the plunging housing market by buying properties that look to rebound in the future. You’ll walk away with a nice pocket full of cash, which can then be used to make your retirement more comfortable.

Before you dabble in real estate investment, however, make sure you take the time to research the local market and get advice from a professional. These steps will guarantee that your investments turn into viable profits for your retirement fund. Visit for more retirement advice.

Authored by Kenneth Himmler, Sr.

Retirement Calculators: A Baby Boomer’s Best Friend

Retirement is one of those life stages that most people look forward to with much anticipation; however, if you haven’t adequately prepared for your own retirement, it might seem like a time of much financial uncertainty. After all, with the typical baby boomer retirement looking to last up to 26 years, how can you be sure that you’ve saved enough to see you through a long and happy retirement?

Take the guesswork out of retirement planning by utilizing a great financial resource: the retirement calculator. This handy tool should provide you with a definitive plan regarding what you’ll need to save based on specific circumstances in your life. To use the retirement calculator, simply plug in your age, the desired age of your retirement, how much you have saved so far and your estimated expenditures per year – remember, this figure should allow for not only bills, but leisure activities and investments as well.

The final number that the retirement calculator produces is what you’ll need to reach in order to meet your retirement needs. If it looks as though you haven’t saved enough to meet your goals, don’t panic: a retirement planner or an investment advisor can sit down with you and tell you exactly what savings and investment options you’ll need in order to give your retirement savings a healthy boost.

A simple retirement calculator can be found either online or at your local bank or financial advisor’s branch. It’s a great tool to utilize when you’re not exactly sure how much you’ll need to save, as well as a smart method for creating a definitive retirement goal. So use the retirement calculator, plan ahead and save your anxiety for where it’s needed most –your retirement speech!

For more information on smart retirement planning, visit or, the IRA and 401K experts!

Authored by Kenneth Himmler, Sr.

Thursday, January 15, 2009

RE/MAX Ranked Top Real Estate Franchise

RE/MAX International Inc., is the nation's number one real estate franchise - an honor the company has held for the past nine out of ten years - according to Entrepreneur Magazine's 30th Annual "Franchise 500 Survey." RE/MAX is also the top real estate franchise in two other survey categories, Best Low-Cost Franchise and Top Global Franchise.

"We have so much to offer our franchise owners, from a fundamentally sound business model with excellent education resources, to global brand recognition. So, we're honored, but not surprised to find ourselves on the top of this list each year," said Margaret Kelly, CEO of RE/MAX International. "We've enjoyed decades of growth and success and this ranking is recognition of the viability of the RE/MAX Network."

RE/MAX sold over 700 franchises worldwide in 2008 and now has nearly 7,000 offices in more than 70 countries and territories, an international presence greater than any of its competitors.

The 30th annual "Franchise 500 Survey" appears in this month's edition of Entrepreneur Magazine. All companies in the rankings are evaluated by financial strength and stability, size, growth rate, startup costs and financing options. These and other factors are entered into the Franchise 500 formula, with each eligible company receiving a cumulative score.

Entrepreneur Magazine's The initial survey was conducted in 1980, and it was the first ever franchise ranking. Over the years, the ranking procedure has been refined to provide the most accurate formula for identifying today's top franchises.

In 2008, RE/MAX was the only real estate franchisor to be ranked among the country's "50 Top Franchises for Minorities," by the National Minority Franchising Initiative. RE/MAX was also recognized as one of the "Top 25 Franchise Opportunities" by Hispanic Enterprise, and the Denver-based real estate franchisor was also ranked on the list of America's "Top 10 Military Spouse-Friendly Employers," according to Military Spouse Magazine.

About RE/MAX International, Inc. RE/MAX was co-founded by Dave and Gail Liniger in 1973. From a single office in Denver, Colorado, RE/MAX has grown to be a global network of nearly 100,000 Sales Associates in more than 70 countries. No one in the world sells more real estate than RE/MAX. Today, all U.S. home listings in thousands of cities and towns can be found at , the most visited web site of any real estate brokerage brand. RE/MAX is proud of its Premier Community Citizenship, which has raised tens of millions of dollars for deserving organizations like Susan G. Komen for the Cure, Children's Miracle Network and The Sentinels of Freedom Foundation.

RE/MAX International,
INCCory Vasquez,
Manager Public Relations

News & Free Press Release

Tuesday, January 13, 2009

As per Toronto Sun Article Dated January 11th, 2009:

In the wacky world of property value assessment taxation, there are winners and losers.

In Toronto, there's mostly losers, which include astute, but not necessarily rich real estate investors who picked a good neighbourhood to live in, apartment building tenants whose rents could skyrocket, seniors living on a fixed income, and affordable waterfront clubs operating on polluted land.

The only real winners, such as they are, are people whose properties' value began falling before last year or whose property is perpetually worthless.

In Toronto, the average assessment increase is 22%, but phased in over four years, it's 5.4%.

More Information Here

Friday, January 9, 2009

Deciding When to Retire: When Timing Becomes Critical

Deciding when to retire may not be one decision but a series of decisions and calculations. For example, you'll need to estimate not only your anticipated expenses, but also what sources of retirement income you'll have and how long you'll need your retirement savings to last. You'll need to take into account your life expectancy and health as well as when you want to start receiving Social Security or pension benefits, and when you'll start to tap your retirement savings. Each of these factors may affect the others as part of an overall retirement income plan.

Thinking about early retirement?

Retiring early means fewer earning years and less accumulated savings. Also, the earlier you retire, the more years you'll need your retirement savings to produce income. And your retirement could last quite a while. According to a National Vital Statistics Report, people today can expect to live more than 30 years longer than they did a century ago.

Not only will you need your retirement savings to last longer, but inflation will have more time to eat away at your purchasing power. If inflation is 3% a year--its historical average--it will cut the purchasing power of a fixed annual income in half in roughly 23 years. Factoring inflation into the retirement equation, you'll probably need your retirement income to increase each year just to cover the same expenses. Be sure to take this into account when considering how long you expect (or can afford) to be in retirement.

Current Life Expectancy Estimates



At birth



At age 65



Source: National Vital Statistics Report, Vol. 56, No. 10

There are other considerations as well. For example, if you expect to receive pension payments, early retirement may adversely affect them. Why? Because the greatest accrual of benefits generally occurs during your final years of employment, when your earning power is presumably highest. Early retirement could reduce your monthly benefits. It will affect your Social Security benefits too.

Also, don't forget that if you hope to retire before you turn 59½ and plan to start using your 401(k) or IRA savings right away, you'll generally pay a 10% early withdrawal penalty plus any regular income tax due (with some exceptions, including disability payments and distributions from employer plans such as 401(k)s after age 55).

Finally, you're not eligible for Medicare until you turn 65. Unless you'll be eligible for retiree health benefits through your employer or take a job that offers health insurance, you'll need to calculate the cost of paying for insurance or health care out-of-pocket, at least until you can receive Medicare coverage.

Delaying retirement

Postponing retirement lets you continue to add to your retirement savings. That's especially advantageous if you're saving in tax-deferred accounts, and if you're receiving employer contributions. For example, if you retire at age 65 instead of age 55, and manage to save an additional $20,000 per year at an 8% rate of return during that time, you can add an extra $312,909 to your retirement fund. (This is a hypothetical example and is not intended to reflect the actual performance of any specific investment.)

Even if you're no longer adding to your retirement savings, delaying retirement postpones the date that you'll need to start withdrawing from them. That could enhance your nest egg's ability to last throughout your lifetime.

Postponing full retirement also gives you more transition time. If you hope to trade a full-time job for running your own small business or launching a new career after you "retire," you might be able to lay the groundwork for a new life by taking classes at night or trying out your new role part-time. Testing your plans while you're still employed can help you anticipate the challenges of your post-retirement role. Doing a reality check before relying on a new endeavor for retirement income can help you see how much income you can realistically expect from it. Also, you'll learn whether it's something you really want to do before you spend what might be a significant portion of your retirement savings on it.

Phased retirement: the best of both worlds

Some employers have begun to offer phased retirement programs, which allow you to receive all or part of your pension benefit once you've reached retirement age, while you continue to work part-time for the same employer.

Phased retirement programs are getting more attention as the baby boomer generation ages. According to the Bureau of Labor Statistics, by 2012 workers age 55+ will represent almost 20% of the U.S. workforce and many employers are forecasting an eventual shortage of skilled workers. In the past, pension law for private sector employers compounded the problem by actually encouraging workers to retire early. Traditional pension plans generally weren't allowed to pay benefits until an employee either stopped working completely or reached the plan's normal retirement age (typically age 65). This frequently encouraged employees who wanted a reduced workload but hadn't yet reached normal retirement age to take early retirement and go to work elsewhere (often for a competitor), allowing them to collect both a pension from the prior employer and a salary from the new employer.

However, pension plans now are allowed to pay benefits when an employee reaches age 62, even if the employee is still working and hasn't yet reached the plan's normal retirement age. Phased retirement can benefit both prospective retirees, who can enjoy a more flexible work schedule and a smoother transition into full retirement; and employers, who are able to retain an experienced worker. Employers aren't required to offer a phased retirement program, but if yours does, it's worth at least a review to see how it might affect your plans.

Key Decision Points


Don't forget...

Eligible to tap
savings without early-


Federal income
taxes will be due on
pretax contributions
and earnings

Eligible for
early Social


Taking benefits
before full
retirement age
reduces each
monthly payment

Eligible for


Contact Medicare
3 months before
your 65th birthday

age for Social

65 to 67,
depending on
when you were

After full retirement age, earned income no longer affects
Social Security

*Age 55 for distributions from employer plans upon termination of employment

The sooner you start to plan the timing of your retirement, the more time you'll have to make adjustments that can help ensure those years are everything you hope for. If you've already made some tentative assumptions or choices, you may need to revisit them, especially if you're considering taking retirement in stages. And as you move into retirement, you'll want to monitor your retirement income plan to ensure that your initial assumptions are still valid, that new laws and regulations haven't affected your situation, and that your savings and investments are performing as you need them to.

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Is Applying for a Consumer Credit Card Online Safe?

Visa Credit Card

Surfing on the Internet there are always a lot of very good shopping deals that can be purchased on the Internet every day. That may include online services, such as credit card. Anyone can apply for a credit card without getting out of your home. There are probably frequent credit card offers in your mail box almost every day.

All the area banks may also send you offers, there are also affinity groups such as professional organizations, sports teams and political organizations. When you go shopping around don't begin signing up for the first offer that happens to be coming along at the time.

Just like any other purchase, begin comparison shopping for them all online. The easiest way to compare different cards is to go online and do a keyword research for all the available options.

It's very easy to compare the rates and features offered by the major credit cards issuers and banks, and also the many specialty credit cards which you may never have thought about before. While there might be any number of banks in your neighborhood from which you could get information about it, this could take up your valuable time - which could be used more efficiently comparing a greater number of cards online from home.

Some online banks even offer credit cards which can be used in as little as a day - even immediately in some cases! These can work if you have an emergency purchase which must be made. The terms and conditions will be listed on their site.

Make sure to find out the APR (annual percentage rate) on your balance and annual fee as well as any rewards or bonus which may be offered at that time. If the terms are satisfactory to you, go ahead and fill out the online application.

You should make sure that the page is secure (there will be a small padlock symbol in the lower right corner of your browser). Another sign is the address of the site beginning with https: instead of http.

Which is meant to be a secure site, meaning you can provide the lender with your personal information in confidence.

You are giving the credit card supplier your consent to check your credit history when you fill out the application. Just because anyone can fill out these applications, don't assume that anyone can be approved. That depends on your credit history.

You can build up your credit history by starting off with one low limit credit card . Then begin using the new card sparingly and make a habit of paying off your monthly balance on time. Doing this will begin to establish a good credit rating for you - remember to use them carefully to preserve your good credit standing.

Monday, January 5, 2009

Should You Pay Off Your Mortgage or Invest?

Owning a home outright is a dream that many Americans share. Having a mortgage can be a huge burden, and paying it off may be the first item on your financial to-do list. But competing with the desire to own your home free and clear is your need to invest for retirement, your child's college education, or some other goal. Putting extra cash toward one of these goals may mean sacrificing another. So how do you choose?

Evaluating the opportunity cost

Deciding between prepaying your mortgage and investing your extra cash isn't easy, because each option has advantages and disadvantages. But you can start by weighing what you'll gain financially by choosing one option against what you'll give up. In economic terms, this is known as evaluating the opportunity cost.

Here's an example. Let's assume that you have a $300,000 balance and 20 years remaining on your 30-year mortgage, and you're paying 6.25% interest. If you were to put an extra $400 toward your mortgage each month, you would save approximately $62,000 in interest, and pay off your loan almost 6 years early.

By making extra payments and saving all of that interest, you'll clearly be gaining a lot of financial ground. But before you opt to prepay your mortgage, you still have to consider what you might be giving up by doing so--the opportunity to potentially profit even more from investing.

To determine if you would come out ahead if you invested your extra cash, start by looking at the after-tax rate of return you can expect from prepaying your mortgage. This is generally less than the interest rate you're paying on your mortgage, once you take into account any tax deduction you receive for mortgage interest. Once you've calculated that figure, compare it to the after-tax return you could receive by investing your extra cash.

For example, the after-tax cost of a 6.25% mortgage would be approximately 4.5% if you were in the 28% tax bracket and were able to deduct mortgage interest on your federal income tax return (the after-tax cost might be even lower if you were also able to deduct mortgage interest on your state income tax return). Could you receive a higher after-tax rate of return if you invested your money instead of prepaying your mortgage?

Keep in mind that the rate of return you'll receive is directly related to the investments you choose. Investments with the potential for higher returns may expose you to more risk, so take this into account when making your decision.

Other points to consider

While evaluating the opportunity cost is important, you'll also need to weigh many other factors. The following list of questions may help you decide which option is best for you, also visit for more strategies.

· What's your mortgage interest rate? The lower the rate on your mortgage, the greater the potential to receive a better return through investing.

· Does your mortgage have a prepayment penalty? Most mortgages don't, but check before making extra payments.

· How long do you plan to stay in your home? The main benefit of prepaying your mortgage is the amount of interest you save over the long term; if you plan to move soon, there's less value in putting more money toward your mortgage.

· Will you have the discipline to invest your extra cash rather than spend it? If not, you might be better off making extra mortgage payments.

· Do you have an emergency account to cover unexpected expenses? It doesn't make sense to make extra mortgage payments now if you'll be forced to borrow money at a higher interest rate later. And keep in mind that if your financial circumstances change--if you lose your job or suffer a disability, for example--you may have more trouble borrowing against your home equity.

· How comfortable are you with debt? If you worry endlessly about it, give the emotional benefits of paying off your mortgage extra consideration.

· Are you saddled with high balances on credit cards or personal loans? If so, it's often better to pay off those debts first. The interest rate on consumer debt isn't tax deductible, and is often far higher than either your mortgage interest rate or the rate of return you're likely to receive on your investments.

· Are you currently paying mortgage insurance? If you are, putting extra toward your mortgage until you've gained at least 20% equity in your home may make sense.

· How will prepaying your mortgage affect your overall tax situation? For example, prepaying your mortgage (thus reducing your mortgage interest) could affect your ability to itemize deductions (this is especially true in the early years of your mortgage, when you're likely to be paying more in interest).

· Have you saved enough for retirement? If you haven't, consider contributing the maximum allowable each year to tax-advantaged retirement accounts before prepaying your mortgage. This is especially important if you are receiving a generous employer match. For example, if you save 6% of your income, an employer match of 50% of what you contribute (i.e., 3% of your income) could potentially add thousands of extra dollars to your retirement account each year. Prepaying your mortgage may not be the savviest financial move if it means forgoing that match or shortchanging your retirement fund.

The middle ground

If you need to invest for an important goal, but you also want the satisfaction of paying down your mortgage, there's no reason you can't do both. It's as simple as allocating part of your available cash toward one goal, and putting the rest toward the other. Even small adjustments can make a difference. For example, you could potentially shave years off your mortgage by consistently making biweekly, instead of monthly, mortgage payments, or by putting any year-end bonuses or tax refunds toward your mortgage principal.

And remember, no matter what you decide now, you can always re-prioritize your goals later to keep up with changes to your circumstances, market conditions, and interest rates.

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Balancing Your Investment Choices with Asset Allocation

A chocolate cake. Pasta. A pancake. They're all very different, but they generally involve flour, eggs, and perhaps a liquid. Depending on how much of each ingredient you use, you can get very different outcomes. The same is true of your investments. Balancing a portfolio means combining various types of investments using a recipe that's right for you.

Getting the right mix

The combination of investments you choose can be as important as your specific investments. The mix of various asset classes, such as stocks, bonds, and cash equivalents, accounts for most of the ups and downs of a portfolio's returns.

There's another reason to think about the mix of investments in your portfolio. Each type of investment has specific strengths and weaknesses that enable it to play a specific role in your overall investing strategy. Some investments may be chosen for their growth potential. Others may provide regular income. Still others may offer safety or simply serve as a temporary place to park your money. And some investments even try to fill more than one role. Because you probably have multiple needs and desires, you need some combination of investment types.

Balancing how much of each you should include is one of your most important tasks as an investor. That balance between growth, income, and safety is called your asset allocation. It doesn't guarantee a profit or insure against a loss, but it does help you manage the level and type of risks you face.

Balancing risk and return

Ideally, you should strive for an overall combination of investments that minimizes the risk you take in trying to achieve a targeted rate of return. This often means balancing more conservative investments against others that are designed to provide a higher return but that also involve more risk. For example, let's say you want to get a 7.5% return on your money. Your financial professional tells you that in the past, stock market returns have averaged about 10% annually, and bonds roughly 5%. One way to try to achieve your 7.5% return would be by choosing a 50-50 mix of stocks and bonds. It might not work out that way, of course. This is only a hypothetical illustration, not a real portfolio, and there's no guarantee that either stocks or bonds will perform as they have in the past. But asset allocation gives you a place to start.

Someone living on a fixed income, whose priority is having a regular stream of money coming in, will probably need a very different asset allocation than a young, well-to-do working professional whose priority is saving for a retirement that's 30 years away. Many publications feature model investment portfolios that recommend generic asset allocations based on an investor's age. These can help jump-start your thinking about how to divide up your investments. However, because they're based on averages and hypothetical situations, they shouldn't be seen as definitive. Your asset allocation is--or should be--as unique as you are. Even if two people are the same age and have similar incomes, they may have very different needs and goals. You should make sure your asset allocation is tailored to your individual circumstances.

Many ways to diversify

When financial professionals refer to asset allocation, they're usually talking about overall classes: stocks, bonds, and cash or cash equivalents. However, there are others that also can be used to complement the major asset classes once you've got those basics covered. They include real estate and alternative investments such as hedge funds, private equity, metals, or collectibles. Because their returns don't necessarily correlate closely with returns from major asset classes, they can provide additional diversification and balance in a portfolio.

Even within an asset class, consider how your assets are allocated. For example, if you're investing in stocks, you could allocate a certain amount to large-cap stocks and a different percentage to stocks of smaller companies. Or you might allocate based on geography, putting some money in U.S. stocks and some in foreign companies. Bond investments might be allocated by various maturities, with some money in bonds that mature quickly and some in longer-term bonds. Or you might favor tax-free bonds over taxable ones, depending on your tax status and the type of account in which the bonds are held.

Asset allocation strategies

There are various approaches to calculating an asset allocation that makes the most sense for you.

The most popular approach is to look at what you're investing for and how long you have to reach each goal. Those goals get balanced against your need for money to live on. The more secure your immediate income and the longer you have to achieve your investing goals, the more aggressively you might be able to invest for them. Your asset allocation might have a greater percentage of stocks than either bonds or cash, for example. Or you might be in the opposite situation. If you're stretched financially and would have to tap your investments in an emergency, you'll need to balance that fact against your longer-term goals. In addition to establishing an emergency fund, you may need to invest more conservatively than you might otherwise want to.

Some investors believe in shifting their assets among asset classes based on which types of investments they expect will do well or poorly in the near term. However, this approach, called "market timing," is extremely difficult even for experienced investors. If you're determined to try this, you should probably get some expert advice--and recognize that no one really knows where markets are headed.

Some people try to match market returns with an overall "core" strategy for most of their portfolio. They then put a smaller portion in very targeted investments that may behave very differently from those in the core and provide greater overall diversification. These often are asset classes that an investor thinks could benefit from more active management.

Just as you allocate your assets in an overall portfolio, you can also allocate assets for a specific goal. For example, you might have one asset allocation for retirement savings and another for college tuition bills. A retired professional with a conservative overall portfolio might still be comfortable investing more aggressively with money intended to be a grandchild's inheritance. Someone who has taken the risk of starting a business might decide to be more conservative with his or her personal portfolio.

Things to think about

  • Don't forget about the impact of inflation on your savings. As time goes by, your money will probably buy less and less unless your portfolio at least keeps pace with the inflation rate. Even if you think of yourself as a conservative investor, your asset allocation should take long-term inflation into account.
  • Your asset allocation should balance your financial goals with your emotional needs. If the way your money is invested keeps you awake worrying at night, you may need to rethink your investing goals and whether the strategy you're pursuing is worth the lost sleep.
  • Your tax status might affect your asset allocation, though your decisions shouldn't be based solely on tax concerns.

Even if your asset allocation was right for you when you chose it, it may not be right for you now. It should change as your circumstances do and as new ways to invest are introduced. A piece of clothing you wore 10 years ago may not fit now; you just might need to update your asset allocation, too.

Improving Your Profitability Via Financial Management System

money management software

A good part of the success or the failure of a business has to do directly with how much profit the organization realizes from the sale of the products or services that the company provides to its customers. In order to maximize a company's profitability, it is very important to have a good and complete financial management system to handle the important aspects of money management.

One of the keys to a good business financial management structure is controlling the daily, weekly, monthly and yearly expenses of the operation. This comes down to simple math and cash management principles. Companies will not be profitable, and therefore won't stay in business long, if they spend more than is required to produce and deliver their product, and end up trimming their profit margin so that it is just too thin to make the business viable.

A good financial management system for any business can help to keep the operating expenses from ballooning out of control and also to make sure that the cash flow is handled as effectively and efficiently as possible. When cash flow is not under control or when overhead gets to be too much, it becomes extremely difficult for a company to stay competitive and retain its customer base.

One of the most important people involved in good business financial management is the treasurer of the board. He or she is typically charged with the responsibility to oversee the money management for a corporation. The person in this role should come to the job with a wealth of business cash management experience, a strong level of wisdom and a firm understanding of corporate financial management. With the treasurer strongly armed with these money management skills, the corporation stands a much better chance of being strong financially and being able to ride out the storms of business and economic challenges.

Another key person on the team that oversees the entire business financial management practices for a corporation is, of course, the accountant. It is the corporate accountant and his team, depending on the size of the company, that will deal with the minute and detailed money management for the company on a daily or sometimes hourly basis.

The accounting department of a company will keep the books for the organization, will generate the various financial statements that are required both by government agencies and by the board of directors, and will conduct the financial analysis of the financial reports. This is the department that is entrusted with managing and enforcing departmental budgets, which is such an essential part of financial management systems, and essentially handles and accounts for every penny that flows in and out of the business coffers.

In this day and age, it is a given that a business that has a sophisticated and complete financial management system will likewise be using a good money management software program. Even with the best, most experienced, and skilled people on the job of managing the financial assets of a company, the computer software program they use on a daily basis is of the utmost importance and it must be selected with careful consideration and proper research.

Friday, January 2, 2009

It's Time to Refi Your Life

There are many ways that we can all reduce our monthly expenses. It may be easy to eliminate the morning coffee expense now that many Starbucks stores are closing. To be serious, it is really important to cut expenses during this downturn. This is a great time to sit down at the kitchen table and go through your monthly expenses. Analyze exactly where your money goes each month. This is a time to sacrifice some of your expenses and reduce the expenses that you cannot eliminate.

What does it mean to go through a life refinance? It is quite simple. We often don't realize how much finances have added up over time. Many of us never pause to look at all of the expenses that have been adding up. There has never been a better time. You don't have to sacrifice everything. There are expenses that cannot be eliminated. Take a deep breath, you can cut out many of your expenses and you may need to change your lifestyle a bit.

Start with your minor expenses. Is it necessary to have the newspaper delivered everyday? Can you cut back on eating out? Use this life refi to your advantage. You may be able to change your eating habits towards a healthier lifestyle, while also reducing grocery costs. Chicken instead of steak for example. Do you use your gym membership? There are many ways to exercise without going to the gym. Just put some thought into your own lifestyle and your own expenses. It is not as hard as you may think to make improvements to your expenses each month.

It will be a bit more time consuming to handle your larger expenses. Pick one day each week that you will spend on cutting your large expenses. Find out what you can do to cut insurance rates. You may not need such a low deductible if you hardly ever use your auto insurance.

Your largest expense is most likely your payment on your mortgage. Home refinancing can be used as a tool for the rest of your financial picture. There are many ways to reduce your mortgage payment or get into a loan program that makes more sense for your lifestyle than the mortgage that you are currently paying. You can use the equity in your home to pay off high interest credit card debt. Consider rolling your auto loans into your mortgage, this can drastically reduce your monthly expenses. You may realize that you can afford a shorter term mortgage once you roll your monthly payments into your mortgage. Take some extra time to search for a home refinance with low fees.

You may be surprised how easily you can turn your finances around. It is just a matter of getting started and often starting small will help. Stay focused, we often dig ourselves into a hole without even realizing it. The feeling of financial freedom is priceless. Will you be ready for this economic downturn?

How To Examine A Financial Statement

It is apparent financial statements possess lots of numbers in them and at first glimpse it can appear awkward to interpret and understand. One manner to view a fiscal report is to calculate ratios, which implies, divide a certain number in the fiscal report by some other. Financial statement ratios are also structural because they enable the reviewer to equate a business's current operation with its recent operation or with some other business's operation, regardless of whether sales revenue or net income was bigger or lesser for the some other years or the some other business. Put differently, using proportions can wipe out deviation in company sizes.

There aren't many ratios in fiscal reports. In Public owned business organizations are asked to report only one proportion (earnings per contribution, or EPS) and privately-owned businesses generally don't report any proportions. In General recognized accounting principles (GAAP) do not necessitate that any ratios be reportable, except EPS for publicly owned companies.

Proportions do not allow for explicit answers, nonetheless, they're useful indexes, but are not the single element in gauging the profitability and strength of a company.

One proportion that is a usable indicant of a company's lucrativeness is the gross margin proportion. This is the gross margin divided by the sales revenue. Businesses don't disclose margin information in their external financial reports. This data is considered to be proprietary in nature and is maintained confidential to shield it from competitors.

The profit proportion is very important in studying the bottom-line of a company. It shows how much net profit income was gained on every $100 of gross sales revenue. A net profit ratio of 5 to 10 percent is standard in most industries, although some highly price-competitive industries, such as retailers or grocery stores will indicate profit proportions of only 1 to 2 percent.

Is The Millionaire Mind Seminar Worth It?

Millionaire Mind Seminar

If you've only just run into the Millionaire Mind Seminar, you might not be sure if this product can live up to all its press. After all, that's how I felt then I first encountered it. There are plenty of programs out there that don't deliver on their promises, but there's more to this seminar than that.

All the enthusiastic positive thinking material at the beginning made me feel like I'd made a big mistake. After all, I'm not usually interested in that sort of thing - I want real information about how market, how to make money and how to prosper. This sort of presentation feels like an evangelical session, not a seminar on how to be a success.

However, once you get through the beginning, you'll find that what looks like a tirade actually helps us change how we think. After all, the way our brains process facts about money can have a big influence on our success. That's why learning to think the way a millionaire does is the best way to become one.

T. Harv Eker is the creator of the Millionaire Mind Seminar, and he tells us how to break out of the negative thinking patterns that keep us poor. His teachings are sometimes uncomfortable, but they tell us how to break out of old traps and achieve what we were meant to. The biggest obstacle is the way we approach money.

Now, if you're not the kind of person who's willing to deal with the mental and emotional discomfort of rearranging your worldview, the Millionaire Mind Seminar is not for you. It's going to take work and dedication to get to the point where you want to be. However, if you're willing to put in the effort and change how you, think, this seminar can help you break free of the thought patterns that are holding you back.

We have to learn to dream big, and admire the successful instead of resenting them. After all, if we start out from fear and resentment, we have nowhere to go. Instead, it's time to learn how we can take opportunities for success, and to give up our egos in favor of happiness.

Not sure about the Millionaire Mind Seminar yet? Well, it takes a lot to convince me as well. So, decide on your own - check out all the information you can find and see what this amazing seminar can do for you.

You'll be amazed by everything you find, and there's a good chance you'll change how you think. You can never know until you take a look. The Millionaire Mind Seminar could be your perfect opportunity.

Secrets of the Millionaire Mind - What You Should Know

Secrets of the Millionaire Mind Book

The Secrets of the Millionaire Mind book offers some pretty big promises, which could cause you to start off feeling fairly dubious about whether or not it can deliver. T. Harv Eker claims that he needs just five minutes to predict the financial future of anyone for a life time. That might sound like a tall order, but closer examination of this book and what it can offer might make a significant difference.

You see, all of us have certain attitudes about money and success that either hold us back or allow us to go forward. That's the biggest thing that Secrets of the Millionaire Mind has to teach us. Every one of us has picked up a personal money blueprint that determines how we behave towards money and how our financial stories progress.

This means that even with the knowledge I have about stocks, finances, sales, marketing and real estate, without the right money blueprint, I'll have a lot more trouble succeeding. The good news is that every one of us can change our internal money blueprint to one that can make us a lot more successful. That's what Secrets of the Millionaire Mind can do for us - teach us to fix our blueprints.

We've been programmed to either be rich or poor, and for most of us, that programming has caused us to be poor. However, I've managed to change the way I think about money recently, and so can you. If you want to be a millionaire, first you have to think like a millionaire.

This book spends a great deal of time talking about our financial blueprint, telling us what we believe about money and why. However, you shouldn't worry that the blueprint metaphor gets in the way of the real message. It can be hard to see what's keeping us back, and checking out Secrets of the Millionaire Mind can be a big help.

This process might seem like it takes a long time, but the reality is that changes are going on each and every time we open up the book. You'll see results right away, even though the journey to success is a bit longer. This million dollar advice is available for a lot less.

Not sure if you should take a look at Secrets of the Millionaire Mind to see what it can do for you? Well, if you're not willing to deal with having your mind changed, thinking about things in a while new way, and the mental discomfort that comes with being told you've been wrong, stay away. It takes dedication and endurance to learn a whole new way of thinking about money.

However, if you're determined to succeed, this is the book for you. Changing your mind won't be one series of affirmations after another - you'll probably find some of the things you learn downright uncomfortable to hear. However, once you hear them, you'll know that they're true, and your internal money blueprint has been holding you back.

If it was possible for me to change my mind about finances, you can too. Secrets of the Millionaire Mind could be the perfect path to financial success. Find out what this book can offer you, and get started on the road to financial fulfillment.

Top Year-End Investment Tips

Just what you need, right? One more time-consuming task to be taken care of between now and the end of the year. But taking a little time out from the holiday chores to make some strategic saving and investing decisions before December 31 can affect not only your long-term ability to meet your financial goals but also the amount of taxes you'll owe next April.

Look at the forest, not just the trees

The first step in your year-end investment planning process should be a review of your overall portfolio. That review can tell you whether you need to rebalance. If one type of investment has done well--for example, large-cap stocks--it might now represent a greater percentage of your portfolio than you originally intended. To rebalance, you would sell some of that asset class and use that money to buy other types of investments to bring your overall allocation back to an appropriate balance. Your overall review should also help you decide whether that rebalancing should be done before or after Dec. 31 for tax reasons.

Also, make sure your asset allocation is still appropriate for your time horizon and goals. You might consider being a bit more aggressive if you're not meeting your financial targets, or more conservative if you're getting closer to retirement. If you want greater diversification, you might consider adding an asset class that tends to react to market conditions differently than your existing investments do. Or you might look into an investment that you have avoided in the past because of its high valuation if it's now selling at a more attractive price. Diversification and asset allocation don't guarantee a profit or insure against a possible loss, of course, but they're worth reviewing at least once a year.

Know when to hold 'em

When contemplating a change in your portfolio, don't forget to consider how long you've owned each investment. Assets held for a year or less generate short-term capital gains, which are taxed as ordinary income. Depending on your tax bracket, that rate could be as high as 35%, not including state taxes. Long-term capital gains on the sale of assets held for more than a year are taxed at lower rates: 15% for most investors, 0% (through tax year 2010) for anyone in the two lowest tax brackets. (Long-term gains on collectibles are slightly different; those are taxed at 28%.)

Your holding period can also affect the treatment of qualified stock dividends, which are taxed at the more favorable long-term capital gains rates if you have held the stock at least 61 days. (Those days must occur within the 121-day period that starts 60 days before the stock's ex-dividend date; preferred stock must be held for 91 days within a 181-day window.) The lower rate also depends on when and whether your shares were hedged or optioned during those 61 days. Check with your tax professional to make sure you don't inadvertently incur unnecessary taxes by selling or buying at the wrong time.

Make lemonade from lemons

Now is the time to consider the tax consequences of any capital gains or losses you've experienced this year. Though tax considerations shouldn't be the primary driver of your investing decisions, there are steps you can take before the end of the year to minimize any tax impact of your investing decisions.

If you have realized capital gains from selling securities at a profit (congratulations!) and you have no tax losses carried forward from previous years, you can sell losing positions to avoid being taxed on some or all of those gains. Any losses over and above the amount of your gains can be used to offset up to $3,000 of ordinary income ($1,500 for a married person filing separately) or carried forward to reduce your taxes in future years. Selling losing positions for the tax benefit they will provide next April is a common financial practice known as "harvesting your losses."

Example: You sold stock in ABC company this year for $2,500 more than you paid when you bought it four years ago. You decide to sell the XYZ stock that you bought six years ago because it seems unlikely to regain the $20,000 you paid for it. You sell your XYZ shares at a $7,000 loss. You offset your $2,500 capital gain, offset $3,000 of ordinary income tax this year, and carry forward the remaining $1,500 to be applied in future tax years.

Time any trades appropriately

If you're selling to harvest losses in a stock or mutual fund and intend to repurchase the same security, make sure you wait at least 31 days before buying it again. Otherwise, the trade is considered a "wash sale," and the tax loss will be disallowed. The wash sale rule also applies if you buy an option on the stock, sell it short, or buy it through your spouse within 30 days before or after the sale.

If you have unrealized losses that you want to capture but still believe in a specific investment, there are a couple of strategies you might think about. If you want to sell but don't want to be out of the market for even a short period, you could sell your position at a loss, then buy a similar exchange-traded fund (ETF) that invests in the same asset class or industry. Or you could double your holdings, then sell your original shares at a loss after 31 days. You'd end up with the same position, but would have captured the tax loss.

If you're buying a mutual fund in a taxable account, find out when it will distribute any dividends or capital gains. Consider delaying your purchase until after that date, which often is near year-end. If you buy just before the distribution, you'll owe taxes this year on that money, even if your own shares haven't appreciated. And if you plan to sell a fund anyway, you may minimize taxes by selling before the distribution date.

Know where to hold 'em

Think about which investments make sense to hold in a tax-advantaged account and which might be better for taxable accounts. For example, it's generally not a good idea to hold tax-free investments, such as municipal bonds, in a tax-deferred account (e.g., a 401(k), IRA, or SEP). Doing so provides no additional tax advantage to compensate you for tax-free investments' typically lower returns. Similarly, if you have mutual funds that trade actively and therefore generate a lot of short-term capital gains, it may make sense to hold them in a tax-advantaged account to defer taxes on those gains, which can occur even if the fund itself has a loss. Finally, when deciding where to hold specific investments, keep in mind that distributions from a tax-deferred retirement plan don't qualify for the lower tax rate on capital gains and dividends.

Be selective about selling shares

If you own a stock, fund, or ETF and decide to unload some shares, you may be able to maximize your tax advantage. For a mutual fund, the most common way to calculate cost basis is to use the average cost per share. However, you can also request that specific shares be sold--for example, those bought at a certain price. Which shares you choose depends on whether you want to book capital losses to offset gains, or keep gains to a minimum to reduce the tax bite. (This only applies to shares held in a taxable account.) Be aware that you must use the same method when you sell the rest of those shares.

Example: You have invested periodically in a stock for five years, paying a different price each time. You now want to sell some shares. To minimize the capital gains tax you'll pay on them, you could decide to sell the least profitable shares, perhaps those that were only slightly lower when purchased. Or if you wanted losses to offset capital gains, you could specify shares bought above the current price.

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Protecting Yourself From Identity Theft

Whether they're snatching your purse, diving into your dumpster, stealing your mail, or hacking into your computer, they're out to get you. Who are they? Identity thieves.

Identity thieves can empty your bank account, max out your credit cards, open new accounts in your name, and purchase furniture, cars, and even homes on the basis of your credit history. If they give your personal information to the police during an arrest and then don't show up for a court date, you may be subsequently arrested and jailed.

And what will you get for their efforts? You'll get the headache and expense of cleaning up the mess they leave behind. You may never be able to completely prevent your identity from being stolen, but here are some steps you can take to help protect yourself from becoming a victim.

Check yourself out

It's important to review your credit report periodically. Check to make sure that all the information contained in it is correct, and be on the lookout for any fraudulent activity.

You may get your credit report for free once a year. To do so, contact the Annual Credit Report Request Service online at or call (877) 322-8228. If you need to correct any information or dispute any entries, contact the three national credit reporting agencies:

  1. Equifax:
    (800) 685-1111
  2. Experian:
    (888) 397-3742
  3. TransUnion:
    (800) 916-8800

Secure your number

Your most important personal identifier is your Social Security number (SSN). Guard it carefully. Never carry your Social Security card with you unless you'll need it. The same goes for other forms of identification (for example, health insurance cards) that display your SSN. If your state uses your SSN as your driver's license number, request an alternate number.

Don't have your SSN preprinted on your checks, and don't let merchants write it on your checks. Don't give it out over the phone unless you initiate the call to an organization you trust. Ask the three major credit reporting agencies to truncate it on your credit reports. Try to avoid listing it on employment applications; offer instead to provide it during a job interview.

Don't leave home with it

Most of us carry our checkbooks and all of our credit cards, debit cards, and telephone cards with us all the time. That's a bad idea; if your wallet or purse is stolen, the thief will have a treasure chest of new toys to play with.

Carry only the cards and/or checks you'll need for any one trip. And keep a written record of all your account numbers, credit card expiration dates, and the telephone numbers of the customer service and fraud departments in a secure place--at home.

Keep your receipts

When you make a purchase with a credit or debit card, you're given a receipt. Don't throw it away or leave it behind; it may contain your credit or debit card number. And don't leave it in the shopping bag inside your car while you continue shopping; if your car is broken into and the item you bought is stolen, your identity may be as well.

Save your receipts until you can check them against your monthly credit card and bank statements, and watch your statements for purchases you didn't make.

When you toss it, shred it

Before you throw out any financial records such as credit or debit card receipts and statements, cancelled checks, or even offers for credit you receive in the mail, shred the documents, preferably with a cross-cut shredder. If you don't, you may find the panhandler going through your dumpster was looking for more than discarded leftovers.

Keep a low profile

The more your personal information is available to others, the more likely you are to be victimized by identity theft. While you don't need to become a hermit in a cave, there are steps you can take to help minimize your exposure

  • To stop telephone calls from national telemarketers, list your telephone number with the Federal Trade Commission's National Do Not Call Registry by calling (888) 382-1222 or registering online at
  • To remove your name from most national mailing and e-mailing lists, as well as most telemarketing lists, write the Direct Marketing Association at 1120 Avenue of the Americas, New York, NY 10036-6700, or register online at
  • To remove your name from marketing lists prepared by the three national consumer reporting agencies, call (888) 567-8688 or register online at
  • When given the opportunity to do so by your bank, investment firm, insurance company, and credit card companies, opt out of allowing them to share your financial information with other organizations
  • You may even want to consider having your name and address removed from the telephone book and reverse directories

Be diligent

As the grizzled duty sergeant used to say on a televised police drama, "Be careful out there." The identity you save may be your own.

Pay off credit card debt once and for all

Defaulted loans can contribute to a very bad credit standing since every late payment is reported accordingly to the credit monitoring authorities. More so, a defaulted loan is another grave misconduct for every borrower and will appear without further ado on your record.

Truly, there are times when unfortunate financial situations can surface in the middle of the repayment period, and though we would want to repay in full as soon as possible, there are not much resources to get from. Some lenders will understand this situation, while some will not. Some lenders will keep on calling you day by day and remind you of your debts while some will simply sue you in court without warning. In these times, you are most likely left at the brink of struggle to clear your debts.

If you are left with little choices, and the situation is at is worst, there are only two options, file for bankruptcy or settle your debts with your creditor.

Filing For Bankruptcy

For many anxious debtors, this can be the foremost option that they consider at the height of stressing debt collector calls every single day. They file for bankruptcy to get rid of all that, and simply shy away with a damaged credit reputation and a disheartened disposition. Though this can be relieving for a while, you must also consider the long term effects of it. A declaration of bankruptcy can do more damage to your credit report more than you think. This, of course, discounts the possibilities of getting a good loan deal in the future, or getting a loan, at all.

Settling your debts Through Debt Negotiation

This is another option which you can consider. You can hire a debt settlement company to negotiate with your creditors for a reduced repayment amount and better yet, you don’t have to file for bankruptcy. With debt settlement, you also have the option to pay gradually whatever you owe them. This is if the lenders come into agreement with your presented resolution. If you plan to hire a debt negotiation company, you can be rest assured that you can pay in installment until you pay them in full.

These are the last options that you can think about right now, and since you have little left choices with your stern lenders, you might as well weigh these options and decide soon.

Your Debt Management Through A Budget

If you can manage to create your own budget, you will be in far better control of your finances. It is not just about writing expenses down and making a list.

Budget and Debt Reduction

Creating your own budget is more than that. You have to take into consideration what you really require, plus include what you have to pay for, for example your expenses and debts. You have to make sure that when you create your budget, it should focus in reducing your expenses so you can save for the future. For you to establish an idea on how you can create your own budget effectively, consider the four major factors indicated below:

  1. Fixed Expenses
  2. Your Variable Expenses
  3. Debt Reduction
  4. Your Savings Fund

First, you have to know what your fixed expenses are and track down which ones you can afford to take out. Fixed expenses are those goods and services that you are obliged to pay for every month, such as utility bills, credit card bills, monthly subscriptions, etc

Manage Your Expenses

Then you have to manage your variable expenses accordingly. You need to examine these irregular expenditures and work out how much money you are spending on them. If a variable expense is unnecessary, like eating out every night, you have to take it out of your budget.

It is important to make a list of the goods and services you owe, and to write the date due, so that these expenses are paid for in due time. You have to be able to evaluate when you are required to settle your debts either with the minimum amount due or in full, and pay them on time.

You also need to formulate a plan on saving enough money for the rainy days. If it doesn't look like your budget is balanced, you'll have to cut down expenses somewhere. Your variable expenses are where you'll most likely need to cut down your expenses. How many times for instance would you eat out? If you eat out twice a week, perhaps you can try eating out less, for example just twice a month. How often do you go clothes shopping?

It is necessary that you spend your money wisely by setting a strict budget so you can save money for the future. It just takes a little time investment on your end and a lot of discipline to manage your debt.

*All Articles pertaining to Financial Matters are Offered by a third party unrelated to my services. Please ensure you seek-out the advice of your own financial expert. The rule of thumb is to get the advice and rates of three separate companies or professionals*