Holiday Gift Ideas to Save Money

This is the holidays; that time of year that so many people love, a few hate and many just quietly endure. The feelings of gift giving obligation drive many people foolishly deeper into debt just so they can either feel better about giving, or avoid the embarrassment of failing to do so. While the thought may count, unfortunately too many people feel that giving an expensive gift counts so much more.
It only gets worse as you age and more relatives have even more children. The obligatory gift exchanges can push even families on the strongest financial footing toward the brink of bankruptcy if a bit of financial restraint isn't exercised. With that in mind, here are some gift giving ideas to keep you on the path toward getting debt free, while retaining that festive feeling that's so fun about the holidays.
Money Saving Holiday Gift Idea 1 -Don't give so many gifts! Too many people feel that they have to give gifts, and expensive ones at that, to every single member of their family, all their friends, and their associates at work. Think about that for a minute! All that adds up in a hurry. Exercise a bit of gift giving restraint. If you're a guy, ease up. Your friends don't expect gifts from you anyway. Hell, for most of us, if our wives didn't push the issue and remember this sort of thing, we'd forget to give anything to our immediate families for their birthday.
For those of you with young families, just give gifts for the kids. The adults will understand. If they don't, too freakin' bad. That cuts a lot of the pressure to not only give so many gifts, but spend so much time shopping for them. See, you're saving money already, and avoiding those ultra crowded parking lots.
Money Saving Holiday Gift Idea 2 -Timing is everything. Get your gifts throughout the year when ever you find a spectacular price on something. Nothing is written that you have to purchase your gifts in the 2 days immediately preceding the holiday in question. If you're shopping for a Christmas gift, you can buy it during the Labor day sale, if that's when you find it. Buy your Christmas gifts for next year at the after Christmas sale this year.
Money Saving Holiday Gift Idea 3 -Avoid the trendy gifts. Who cares if the hot pink iPOD with flames is the hottest gift this year? You don't have to be the one giving it. Those trendy gifts aren't going to be had for a discount, and you'll have to wait in line to get them. Avoid the stress altogether, and get something a bit less in demand.
Money Saving Holiday Gift Idea 4 -Make your gifts. I posted about this last year, and its still great advice this year. For those of you with more time than money, take a trip back a few hundred years, to a time when the holiday season was less a commercial shot in the arm for business, and more a time for joy and family. The time you save shopping and working to pay for presents will free up some time for you to actually make some gifts for people. No, you're not going to be able to give the cousins that latest game for their X-Box 360, but oh, well.
Money Saving Holiday Gift Idea 5 -Try giving some like a magazine subscription. Like a good version of a gift that keeps on giving, a magazine subscription will bring happiness all year long. On top of that, they'll think of you every time the latest issue shows up. There's a magazine available for every interest under the sun. Even better, they're super inexpensive gifts, with subscriptions being had for under $15.00 for nearly any type of magazine you can think of, if you shop online. To top it off, they'll know you thought about the gift a little bit, because you got something just for them.
Money Saving Holiday Gift Idea 6 -There's a trend no toward environmentally friendly, experience based gifts. While some of these aren't as environmentally friendly as those purveying them would have you believe, it's a great idea nonetheless. Why not reduce all that trash we generate during the various gift giving seasons, such as Mother's Day, Hanukkah, and, of course, Christmas? Remember that if you're giving the gift in the spirit of environmental friendliness, you have to take into account all the fuel you'll bur getting to whatever experience you've selected, and all that it will consume.
Money Saving Holiday Gift Idea 7 -Here's a novel idea. If you can afford it, but those who you're giving the gift to are finding money a bit tight, why not give them something that will save them money? If everybody gave gifts that would save the recipient money, imagine how much of their cash that would free up! Most gas saving products for the car are ineffective, and a total waste of money, but how about a new money saving appliance for the home, or a fuel saving product for the car that actually does work. I'm sure the auto enthusiast on your list would love a new intake or exhaust system for their ride. A bit rich, perhaps? Why not a reusable air filter. They'd save money on gas, and the filter would last a lifetime, saving them about $20 a year on replacement filter costs.
A programmable thermostat sure isn't what most people think of when they think “gift”, but with rising energy costs, you can save a bundle using one. According to Consumer Reports, a programmable t-stat can save well over $100 every year. That's a pretty nice gift, $100 a year.
You can give a membership to a discount store, such as Costco or Sam's Club, as a gift. If the shopper can resist the temptation to buy unnecessary items, they'll save big money on most items, such as food. It may cost you $35, but whom ever you give it to will save far more than that in most cases.
These are just a few money saving gift ideas to use this holiday season. Not just for the holiday season, you can use these for Mother's Day, Father's Day and Birthdays too. Spend less money, pay off your debt, and get that much closer to being debt free.

Government Grant Money – How to Get It

If you listen to that question mark suit guy on the late night infomercials, you’d think there was an unlimited pool of government money out there for the taking, if only you’d grab his directory. Well, there is a great deal of government (our tax) money out there that you can get, but usually it’s not just like falling off a log. The government only gives money for special purposes, and typically to specific groups of people. There are almost 1,500 government grant programs and nearly all of them are structured to allow special groups of people to benefit from the grants.
That’s great news, I don’t want just anyone grabbing their share of my share that I worked until May for. However, it also smacks of favoritism, something the Feds excel at. Perhaps the best known government grant programs are for students. If you ever went to college, there’s a good chance you were a beneficiary of a Pell grant or knew someone who was. There are also many grants available for small business; either to start or grow them. In fact, the majority of government money is used for this purpose. Nearly 60% more money is allocated for small business grants than for education grants.
The government also doles out grant money for research and development, minorities, women, and community development. Your first step is to find a grant that offers money for exactly what you’ll be using it for. There are, as I noted above, numerous examples. If you are a n actual 501(3c) non-profit you’ll have the best chance, but you can get money as a plain Joe/sephine also. The key to getting government grant money is to request the grant for a specific purpose that falls within the narrow requirements the specific grant program is looking for. The other factor is to write the grant request exactly as the bureaucrats would like to see it. You need to conform exactly to their expectations, and use the proper language, if you would like to see any money from Uncle Sam.
What goes into writing a government grant request? You’ll need to write a cover letter first. Inside the request you’ll need to demonstrate you, or your organization’s need for the funds. You’ll have to show a use plan to explain exactly how you’ll use the money as well. If you’re really lucky, the agency offering the grant will have an application form for you to fill out. Otherwise, you’ll have to remember what you learned in your creative writing classes back in college. Some of these apps can be real whoppers too, so limber up your typing fingers.
There’ll be a grant application kit you’ll have to get from the government agency offering the grant. In it will be everything they’ll require to give you the best chance of prying the money out of their clammy paws. There may be a template that will be very specific in what the agency is requesting. Some of the more common information required by the template will include who’s applying for the grant, a detailed description of the project the grant will be used for, how much grant money is being requested, a timeline for its completion, what contribution the requestor will make toward the project, how the project will benefit the grantor, and personal/contact information for key members of the team.
There will most often be a list of deliverables the granting agency will be expecting, so you’ll know just what to documents and data include, and how to organize them.
One last thing; don’t be picky. There are often multiple grants available from the same and different agencies that you may be eligible for. You should apply for every last one of them in order to maximize your chances success. It’s easy to be debt free if your money was free, just don’t waste it.

Debt Cures – How You Can Get Out of Debt

People are scared of debt. In many cases they damn well should be, while in others, debt can be your friend. By a score of 39% to 20%, a recent survey by the National Association for Business Economics found that Americans feel that excessive debt is a greater threat than to the nation than terrorism. Weather or not that's true will never be confirmed, if we have any luck (plus some great intel and a lot of hard work) at all.
If you are one of those that does have excessive debt, weather you fear it or not, a debt cure may be in order. Curing debt is easier said than done in many cases. Sure, it's simple to spout such platitudes as “Just put 10% of your pay toward your debt until it's paid off. You'll never miss the money.” Weather or not you would, in fact, miss the money is academic. To find a cure for your debt, you'll need to analyze it and determine what will be the best course of action to eliminate it.

Debt Cures – Strategy 1 - Step by Step

Debt Cure Step 1 –Get a copy of your credit report from at least one of the three credit reporting bureaus. You need this not only to establish a baseline credit score, but for debt elimination purposes, you need to be sure if all your debts are valid. Your credit report will show you if you have any debts you are unaware that may be invalid. If you have any debts you feel are in error, you can contest these while you move on to the next steps required to cure your debt problems.

Debt Cure Step 2 -List all your debts. Put down the creditor, the type of debt, the balance owed, the monthly payment, any past due balance, the interest rate, and if it is a fixed term loan, the payoff date.

Debt Cure Step 3 – Analyze your debts. Why are you in debt? Determining the root cause of your debt is absolutely essential. You can have debt from a pattern of overspending, or from an extraordinary event, such as natural disaster or medical problem. If your debt is caused by overspending, you must cure the root cause. If you’re spending beyond your income, you’ll be doomed to a life of indebtedness.

Debt Cure Step 4 -When you have all your debts listed and categorized, sort them by the interest rate. Now it's time to plan your debt elimination strategy. Usually you'll work on paying off the highest interest rate obligation first. There are some exceptions to this.
If you have any past due debts, you must satisfy these first. There are two reasons for this. One, they are probably charging you a late fee every month you are late. Second, past due debts devastate your credit score. Lowering your credit score can actually make the interest rate rise on some of your other debts, in addition to making sure any new credit you receive will be more expensive. The farther past due the debts are, the greater the detrimental effect they have on your credit score. So, if you do have past due debt, make sure that is taken care of first. Make the minimum payment on your other debts until you have satisfied all your past due debts.
Once you’ve taken care of any past due debt, it’s time to begin eliminating current debt. Make the minimum payment on all your debts but the one with the highest interest rate. You can use some discretion here. For example, if you have a credit card with a $12,000 balance and a 21.9% interest rate, and another card with a $1,250 balance and a 22% rate, you should probably pay off the 21.9% card first. The amount of interest you’re paying every month on the larger card far exceeds the interest you’re paying on the smaller card, so you should eliminate that debt first.
When that debt is gone, take the money you were paying on the now retired debt, and shift it toward paying off the next highest interest rate debt. You’ll have more money to use for this because you’ll have the minimum payment from the retired debt and the extra money you were using to pay for it as well. You’ll add those two amounts to the minimum payments you had already been making toward debt number 2. When number 2 is gone, you’ll repeat the process with debt number 3, and so forth, until you’re debt free. Yipee Ki Yay Motherf….

Strategy 2 –

Using strategy number one will get your debt paid off, but you will take an interest rate hit. After all, the entire time you’re paying off the debt, you’re also paying interest, and at a fairly steep interest rate. You can use another strategy to pay less in total interest if you do it correctly. There is much more risk with this strategy if you do it wrong, however. Strategy number 2 is to get a debt consolidation loan. Unlike what the shills on the radio will tell you, A DEBT CONSOLIDATION LOAN WILL NOT GET YOU OUT OF DEBT!!! You get yourself out of debt by making payments on the darn thing.

The advantages to this strategy are that you’re only making one payment, so it is much more convenient, and you’re far less likely to inadvertently miss a payment. The interest rate is typically much lower as well, so in theory you’ll pay less in total interest.
The disadvantages are that although the interest rate is lower, the term of the loan is much longer, so if you only make the minimum payment, you can actually pay more in total interest by using a debt consolidation loan, than you would have if you’d just paid the debts off using strategy 1 above. The other disadvantage is, and this one is huge, you must use collateral to get that lower interest rate. What collateral? In the vast majority of cases, it’s not your comic book collection. Typically the lender will want your house as their collateral. Now if you fall behind, you not only screw up your credit, you have to find a new place to live. If you have to do that with no money and poor credit, I imagine it’s no easy task.

The other problem with using a debt consolidation loan is that in many cases, the problem that caused the indebtedness is not fixed. You can easily find yourself in a situation where you are back in debt from credit cards, vehicles, and now, a debt consolidation loan as well. Not a pretty picture, that.

Remember there are debt cures, but no magic potions. Here’s to getting debt free.

College Consolidation Loans – You Could Be Paying Too Much For Your Education; After You’ve Been to College

How many new college graduates enter the world saddled with debt? According to some recent stats on the subject, college loans are a fact of life for most students leaving school. In the decade between 1993 and 2003, student loan debt increased 137%, and that’s adjusted for inflation! According to a study of student loans and debt by Pew Research done in 2005, the average level of debt carried by a college student upon graduation was all over the map, and varied by a number of factors, including the state where they attended college, the college they attended, and the level of education they achieved.
The study had some interesting conclusions; to wit – There isn’t a correlation between the state’s cost of living and the level of debt carried by students when they graduate. In addition, North Dakota, a state with a fairly low cost of living was number 3 in the level of student debt. Iowa, another state with a low cost of living, ended up in the number 2 spot on the list of indebted students.
You’d think that going to a state school would be less expensive and help avoid graduating with a boat load of debt, but no, that’s not always how it works. In some states, North Dakota and Iowa among them, but also Kentucky, Delaware and Tennessee, you could easily end up with greater levels of debt than those who attended private schools, according to researchers.
There is also not a direct correlation between the cost of tuition at a college or university and the debt level of its graduates. Some schools with very high tuition had relatively low levels of debt among graduates. That could be because a large number of students attend the private schools on scholarships and thus pay no tuition, or because they come from relatively wealthy families that could afford to foot most or all of the bill for the student’s education out of their own pocket. In addition, some schools and states with high tuition costs have better financial aid programs to offset some or all of the student’s costs.
Student loan provider Nellie Mae reports that the average undergraduate debt upon graduation is now up to $27,600. If you’re one of these students with crushing student loan obligations what can you do? You can just gut it out and pay off your loans, or you can default and leave your lender hanging. Okay, so you’re probably trying to avoid the second choice in this scenario. The fact remains though, that high levels of student debt can set you back substantially when it comes to building a solid retirement account, buying a home or, ironically, setting up a college account for your own kids.
One way to reduce your loan payments is to consolidate your student loans. Much like any other loan consolidation program, a student loan consolidation program allows you to use a single, large loan to pay off many smaller loans, in theory at a lower interest rate. As with consolidation loans for other types of debt, such as credit cards, you’ll substantially reduce your monthly payment by doing so. You’ll also make your life more convenient by paying a single loan, instead of a myriad of smaller ones.
The major difference between consolidating a student loan and your credit card debt is that you won’t have to put your house on the line when you consolidate a student loan, as you would with credit card debt. This holds true for federally insured student loans, but typically is not the case if you got a personal loan to help pay for your education.
There are some huge benefits to student loan consolidation, such as dramatically reduced monthly payments, but it’s a little different than rolling your credit cards into a single loan. When consolidating student loans, you have a deadline for application each year. In the last few years there have been several changes by the U.S. Department of Education regarding how you proceed with consolidation.
Student loan interest rates are determined by the 91-day T-bill auction. To receive the current year’s rates, and this is important, your completed consolidation loan application must be received by the lender, and they have to confirm the loan before July 1st. If the loan isn’t approved by July 1st, you’ll pay the following year’s rates. In years gone by, there was a grace period that would allow people to skate in past the deadline as long as their complemented application was in the lender’s hands. Now they must have completely processed the loan request and approved the loan by the deadline. You can thank the 109th Congress for that.
Unlike your credit cards, you should almost always consolidate your school loans, if they are federally insured and you can drop the aggregate interest rate. Another difference is that you won’t have to submit to much of the documentation required with other types of loans, such as credit checks or any other such nonsense. Your school's financial aid office can be a big help with your consolidation efforts. One last thing; verify if your lender will give you an interest rate reduction on your consolidation loan if you have your payment automatically withdrawn from your checking account.

Save Money on Organic Foods

More Americans are eating organic and minimally processed foods. A study from Whole Foods in 2004 found that more than half of Americans had tried organic foods, and over 10% eat them regularly. If you can count yourself among that group of eaters, you’ve doubtlessly noticed that these foods command premium prices and are traditionally found at places such as Whole Foods and other specialty markets. Since you’re probably looking to save money on food, that probably causes a bit of conflict in the ole’ melon (if not talking about the cantaloupe you’re holding, either).
Well, you can relax a bit. Recently, due to organic and minimally processed foods increased popularity, many more grocery stores have begun to stock these items. You can even get organic foods and items such as free range chicken and no cage eggs (from chickens not fed hormones or antibiotics) at warehouse stores like Costco and warehouse grocery stores such as Boise based Winco Foods.
So, just because you want to live a healthy lifestyle, and shy away from foods that contain antibiotics, hormones, chemicals, and were raised in cages full of crap, there’s no reason you should have to pay excessive prices for them. Instead of paying huge prices for premium, organic foodstuffs at specialty food markets, trot on over to your local warehouse grocer, Costso, or even check the selection at your local Safeway or Albertson’s. Chances are you can find much of what you’re looking for there, keep eating healthier, and save some money while you’re doing it.
It’s easier to get debt free if you save money any place you can, and stay out of your doctor’s office. Eating better foods, and paying less to eat them, is a big step in the right direction.

401k Rules – What You Need to Know About Withdrawal, Distribution, and Rollover

Your 401k is one of the most powerful tools in your investing and retirement toolbox. Do you want to live well after you've left the world of the gainfully employed, but before you've left this world altogether? Make sure you max out your 401k. If you made some good employment choices along the way, your employer kicked in some matching funds and you took full advantage of their generosity.
Now it's time for you to begin living, and you need to fund your retirement so you can tool around Arizona and Nevada in the Prevost. Maybe you're still working and you've changed jobs, hopefully to a new employer that has a handsome 401k plan with contribution matching. Either of these two occurrences may cause you to have some questions about 401k rules for withdrawal, distribution or rollover. Hopefully this post can help.
401k Rules for Withdrawal and Distribution-Want to take some money out of your 401k? Here's what you can and can't do if you'd like to withdraw some funds. The first thing you'll want to look at is your age. There are strict rules regarding age for 401k withdrawals. The magic ages are 59-1/2. and 70-1/2. If you're past 59-1/2 years old you can withdraw funds from your 401k without incurring a penalty from the IRS. The IRS will withhold 20% of the total amount you withdraw, however. This will count toward your income tax due for the year. If you're lucky, an planned well, you may have a refund coming. In that case, the 20% will be basically a short term, interest free loan to the U.S. Government, and you'll get some or all of it back in the form of a refund.
The 59-1/2 and 70-1/2 ages refer to April of the calender year in which the plan participant reaches them. You must take your distribution to qualify. If you don't take a distribution in the starting year, the required distributions for 2 years must be made in the next year (one by April 1 and one by December 31).
If you are under age 59-1/2, you can still withdraw money from your 401k plan, but the IRS will ding you 10% for the privilege. The rules here state that there are actually limited circumstances where you can avoid the 10% early withdrawal penalty. These circumstances include total and permanent disability, death (also total and permanent for most of us), medical expenses that exceed 7.5% of your adjusted gross income for the year, ESOP dividends for your employer's securities (in the 401k), and the IRS levy of your plan.
If you're over 70-1/2 years old, you are required to begin taking mandatory withdrawals. You can leave the money in the plan if you have more than $5,000 (otherwise they'll usually just cut you a check), but that's cost prohibitive, as your friends at the IRS will take a full 50% of your minimum distribution. That basically means you have to begin taking that minimum distribution.
401k Rules for Rollover –If you leave the employer who sponsors a particular 401k that you have funds invested in, you may want to move your money into one of 2 other investment vehicles; another 401k (if the plan allows such transfers), or an IRA. Your funds in a 401k aren’t actually owned by you, they’re in a trust owned by your employer. An IRA, on the other hand, is really your asset. This is the reason it’s more complicated to move assets from a 401k plan than it is to transfer them from an IRA.
If you’re moving to a different employer, you may want to transfer your assets from your old employer’s 401k plan to your new employer’s plan. On the other hand, it may fit your financial plan better if you move it to an IRA. The process of transferring assets from your 401k into another one, or into an IRA, is termed “rollover”. Rollover is the financial term for moving assets from one tax protected entity into another.
In order for you to rollover a 401k, you’ll first have to set up an account for the funds to go to, if you don’t have one already. This is not created at the time of the rollover, but before. The primary rules that apply to a 401k rollover are as follows;
Rule 1 - If the money is transferred directly to you, you have a 60 day window to make sure it gets to the other tax deferred account. If you miss the 60 day window, you’ll owe a 10% penalty if you’re under age 59-1/2.
Rule 2 - You can roll it over without the 20% IRS withholding if the dollar amount is greater than $5,000. If it’s smaller than that, you’ll normally just get the distribution check sent to you, less the 20% IRS withholding.
Rule 3 – There are some changes coming for tax year 2008. After 2007, you will be able to roll over your 401k directly to a Roth IRA if you make less than $100,000, and are not married filing separately.
Rule 4 – Although the rollover is not viewed as a taxable event by the IRS, you still must report it on your federal income tax return, so don’t forget to do so.
Rule 5 – There are certain distributions that do not qualify for rollover status. These include required minimum distributions for those older than 70-1/2, hardship distributions, employer stock dividends, life expectancy based payments over a greater than 10 year period, and life insurance payments.
For more information on rules for 401k rollovers, see the IRS, here.
Have a great, Debt Free, weekend.

Rent a House to Own – What to Watch Out For

With the recent problems in the credit industry, money’s a bit tight. It can be a bit more difficult to scrape together the requisite down payment that many lenders are after, now that most of the private zero down and creative mortgages have gone the way of the dodo. Rent to own can be a way for some of you to get into a house or condo without throwing away all your hard earned cash on rent. Like anything else, rent to own houses can be a great deal (depending on your situation) or they can spell doom. The devil is in the details.
How these rent to own, also called lease to own plans typically work is that you pay rent plus a small additional surcharge that goes toward your future down payment. You’ll usually pay an option fee for the privilege of participating in the whole shebang. In most cases you’re actually not renting to own, but renting with an option to buy. You will have to exercise the purchase option by the expiration of the option period.
What to Watch Out For in a Rent to Own House 1 – Contract stipulations - As with any other legal arrangement or real estate purchase, look over the contract very carefully. It should stipulate the price of the house, the length of the option period, the option fee, the rent payments, and the rent premium the potential buyer has to pay. In addition as a buyer you should be very aware of any other stipulations and clauses that could have you out in the street. In most rent to own housing arrangements, you will forfeit the fees and premiums if you are evicted, fail to make payments or decide not to exercise your rent-to-own option. Make sure the former isn’t too easy.
What to Watch Out For in a Rent to Own House 2 – Fairness - Make sure that the renal contract isn’t too one sided. In a few instances, sellers know they have a buyer with few options due to poor credit and/or few available funds. They can use the buyer’s desire to own a home, coupled with their relative lack of ability to do so, to put them into a one side contract. Don’t let that happen to you.
What to Watch Out For in a Rent to Own House 3 – Home Price. Make sure that the premium you pay isn’t too high. One of the goals is to be able to exercise your purchase option. You’ll have a much better chance of doing so if the house appreciated by the end of the option period. Similar purchase options on stocks, purchase options on homes state that you can purchase the house for an agreed upon price at some point in the future. You are gaining equity in the house as it appreciates above your option price. The goal is to accumulate sufficient equity such that securing financing is relatively easy, even with bad credit. Obviously the lower the home’s price, the greater you’ll benefit from appreciation.
What to Watch Out For in a Rent to Own House 4– The Real Estate market - In many areas home values are down. The question is how long they will stay depressed. If values stay low throughout your option period, you may not have enough equity in the home to purchase it. Evaluate the market in your area thoroughly before committing to such an agreement.
What to Watch Out For in a Rent to Own House 5 – Problems and repairs. Another section of the contract should determine who is responsible for any needed repairs to the property. It should state which party pays for different types of repairs. You don’t want to get stuck paying for a new roof, for instance, only to either decide not to exercise your option or be forced to leave.
The bottom line is that rent to own can be a great strategy to purchase a home, if you have few other options. It beats losing money on rent and can also be a great way to try out a neighborhood or home before you buy it. Just watch out for those details that can make your life a bit rough.

Renter’s Insurance, Pay a Little, or Lose Everything?

If you look at the risk involved in renting, it’s amazing that all renters don’t have renter’s insurance. In a situation such as an apartment or condo, where everyone is together in one structure, it only takes one tenant to inadvertently leave a pan on the stove and you’ve lost everything. It would be one thing if renter’s insurance was really expensive, but in most cases, it’s relatively inexpensive. You should be able to get renter’s insurance coverage for around $15 – $50 a month, depending upon where you live and how much you want to insure.

Make sure you get replacement value coverage. With many insurance companies, it will cost you an extra 10% - 15%, but since the premiums payments are fairly small, we’re not talking about very much money here. It will be worth it if you ever need to actually use your insurance.

Another bonus is that, in the event of a fire or natural disaster, most renter’s insurance will cover the costs of temporary relocation. That really helps if you’ve got to move into a hotel and eat out for a while as you find a new place to live, or your apartment is repaired. As with homeowners insurance, renters insurance will cover the costs of someone injured on your property (subject to the limits of the policy). In today’s society, that’s not a bad idea.

To get renters insurance, try your auto insurance provider. You may even qualify for a multi line discount. You can also check with friends for a referral to a god insurance provider.
The bottom line; it’s pretty inexpensive, and unless you own nothing, a little insurance is probably a good idea.

How to Find the Best Performing Mutual Funds

If you have and IRA or other investment accounts there's a great chance you'll count among your holdings a mutual fund or two. That being the case, you'll probably want to find the best performing mutual funds to maximize the power of your retirement savings. A mutual fund is basically a group of different investments run by a fund manager, who ostensibly knows more than you do about investing, especially in one or more particular areas.

In many cases, mutual funds are made up of different securities that have some type of similarity. There are funds that are made up entirely of stocks, known as equity funds. Others are primarily composed of debt instruments, these are called, appropriately enough, bond funds. Sometimes the funds are made up of stocks of companies with particular characteristics. These are classed according to the particular attribute that loosely defines all of the stocks that make up the fund. Some examples would be growth funds or value funds. Growth funds are made up of stocks that demonstrate capital appreciation, where value funds look to count among their holdings primarily equities that investment professionals feel are undervalued and have great potential for future growth.

Some funds are defined by their market capitalization (the total value of their outstanding stock). These are typically known as large cap, small cap, mid cap, and micro cap funds. Basically large cap companies are large, and small cap companies are small. Pretty easy, huh? Large companies are usually more stable, while smaller ones are more volatile, but can offer more growth potential (but that rule definitely does not apply not all the time).

There are also income funds. These babies are composed of financial instruments that pay good dividends, which are then either reinvested if the aim is to achieve growth, or withdrawn, if the aim is to sustain a lifestyle. Stocks that pay handsome dividends are typically from solid, established companies. They don't experience the same amount of capital appreciation, but are not as likely to depreciate either. For this reason, and the aforementioned income possibilities, they are often used by older investors that seek to obtain steady income and capital preservation to serve them in their retirement years.

Some mutual funds specialize in a certain industry or group of companies. These are known as sector funds. Examples would be funds that deal primarily in energy companies, transportation, electronics, communications, computers, and so forth. These have the potential for tremendous growth, if the particular sector is rapidly expanding. However, they can be devastated if the sector takes a large hit, as happened with many tech related sectors in the early part of this decade.

There are also mutual funds that are defined as combinations of terms, such as large cap value funds, or small cap sector funds. In such cases they are just more tightly defined for investors that are looking to more narrowly invest in stocks and/or bonds with certain characteristics.
Given the huge varieties of mutual funds available to the average investor, how can you find the best performing mutual funds, without sifting through financial data for endless hours? Many of you probably don't find that all too stimulating. Keep in mind that performance should mean different things to you depending upon your requirements and where you lie in your investing life cycle. Also remember that most investment advisers (I am not one) recommend a buy and hold strategy when aiming to maximize retirement savings.

Here are some ways to easily find the best performing mutual funds:

Best Performing Mutual Funds - Lesson 1 -Look at the past performance numbers. All mutual funds have published statistics to make comparing them easier. You'll be able to see how much they have gained this year to date, over the past year, five years , and since the fund's inception. Keep in mind that many excellent funds can have a down year or two, so be careful of letting poor current year performance solely determine your decision.

Best Performing Mutual Funds - Lesson 2 -Don't forget the expenses. Those fund managers have to get paid somehow. They are paid by charging the fund's shareholders a fee. The fees also cover administrative expenses incurred by the fund. This fee is often called a “load”. This fee will be subtracted from your returns, so it is definitely worth examining when making your decision. No load funds shareholders aren't charged a fee. Lower fees are better, obviously, but need to be viewed against the background of the fund's overall performance. This will be listed in the fund' prospectus as the “expense ratio”. Lower numbers translate to lower expenses. Remember that small numbers can add up to big numbers during the length of time you'll hold your investment.

Best Performing Mutual Funds - Lesson 3 -Take a deeper look inside. You wouldn't buy a car without looking under the hood, even if you aren't a mechanic. The same should be true for your mutual funds. Look at the industry the particular fund is invested in, and the companies that it holds. You don't have to perform an in-depth analysis, that what they pay the mutual fund company for. However, you should look to see if they hold anything that looks like an obvious dud. You want to stay away from any “here today, gone tomorrow” stocks, especially if you are investing with an eye towards that tomorrow.

These are just some simple rules to help you find the best performing mutual funds. Remember that a bit of caution now can pay huge dividends later (especially if you're investing in a value fund).

How to Save Money on LCD and Plasma TVs and Other Consumer Electronics

Well, it’s that time of year again. Soon there will be some fantastic day after Thanksgiving Day sales. These are known in the retail industry as “Black Friday” sales, because the Friday after Thanksgiving has long been the day that so much product was sold it transitioned many retailers from red to black on their P&L statements.

These days it is a day for stupidly low prices on may items, so if you have to buy a TV, HD-DVD or BluRay disk player, now’s the time. Here are some of the specials you can look forward to at many of the Nation’s big box retailers. These are leaked deals only; no accuracy guarantees.
Circuit City:Samsung Blu-Ray Player w/8 Free Movies -- $377.99 – once you get used to the quality of an HD-DVD or BluRay disk on a larger set, you’ll never be able to go back. Be advised, that movies are $20 - $35, however. You can rent them from NetFlix and BlockBuster though.Panasonic 42-inch Plasma HDTV -- $999.99**Polaroid 40-inch LCD flat panel HDTV -- $699.99Samsung 50-inch Plasma HDTV -- $1399.99**Samsung 50-inch Slim DLP HDTV -- $799.99Sharp 32-inch LCD flat panel HDTV -- $599.99Sharp 46-inch 1080p LCD flat panel HDTV -- $1299.99**Sharp 52-inch 1080p LCD flat panel HDTV -- $2199.99Sony Bravia 32-inch LCD flat panel HDTV -- $699.99Zenith 50-inch Plasma HDTV -- $999.99Toshiba 50-inch 1080p DLP HDTV -- $1499.99Best Buy:Mitsubishi 65-inch 1080p DLP HDTV -- $1499.99**Panasonic 42-inch 720p Plasma TV-- $899.99**Philips 32-inch 720p LCD flat panel HDTV -- $599.99Samsung 50-inch Plasma 720p HDTV -- $1399.99**Westinghouse 47-inch 1080p LCD flat panel HDTV -- $1299.99Toshiba 1080i HD-A3 HD-DVD Player -- $199.99 (Great, but WalMart had them for $100 less)Samsung 1080p Blu-Ray Disc Player -- $399.99Dynex 37-inch 720p LCD HDTV -- $629.99Dynex 32-inch LCD HDTV -- $449.99HP 42-inch 1080p LCD HDTV -- $996.99SearsPanasonic 56-inch LCD HDTV -- $1199.99Proscan 42-inch 1080p LCD flat panel HDTV -- $899LG 37-Inch LCD HDTV -- $899.99LG 42-Inch Plasma HDTV $899** (If it is the real HD version, not the 480p version)Samsung 40-inch LCD flat panel HDTV -- $1199.99Samsung 46-inch 1080p LCD flat panel -- $1999** (If it the 120Hz model)Samsung 50-inch Plasma HDTV -- $1399Samsung 61-inch DLP 1080P HDTV -- $1999Sharp 46-Inch LCD flat panel HDTV -- $999Sony 40-inch 1080p LCD flat panel HDTV -- $1999Sony 46-inch Bravia LCD flat panel HDTV -- $1499Sony 50-inch LCD 1080p Projection HDTV -- $1399Sony Bravia 32-inch LCD flat panel HDTV-- $999Sylvania 42-Inch 1080p flat panel HDTV -- $899Toshiba 42-inch 1080p LCD flat panel HDTV -- $1249** Vizio 32-Inch LCD flat panel HDTV -- $598
** = Great buy on a great set
If you are going to get away from your Debt Free quest for a major purchase, this is the time. If you don’t want to stand in line at 5 am, try looking online. Many of these stores will let you buy on-line then deliver the merchandise to your house.

Wal Mart as an Economy

Wal Mart is actually an economy within an economy. This situation exists almost nowhere else in American business. Total revenue for Wal-Mart in 2006 was about $345 Billion. To put it in context, that dollar amount exceeds the GDP ( according to World Bank figures) of the following countries: Poland, Austria, Norway, Saudi Arabia, and Denmark (not combined). It's about equal to Peru, the Philippines, and Singapore, combined. Wal-Mart also employs about the same number of people that reside in the cities of Seattle, Washington DC, and Boston combined.
Wal Mart has become a center of American life in many towns. Are they helping us sink deeper in debt to China? Definitely, but much of the blame for that can be placed squarely on the shoulders of consumers themselves. After all, if the majority of consumers would look farther than the price tag when they made their purchases, they may decide that the trade offs of buying non-Chinese produced products (if they could find them) would be worth making.
Why has Wal-Mart been so successful? A number of reasons, but two of the primary ones that stand out are their prices and the ultra efficient distribution system that allows them to be profitable at very low margins. Indeed, a 2003 study by economics professor Kenneth Stone of Iowa State University found that Wal-Mart's distribution cost per unit of sales was approximately one fourth that of Sears, and one third that of K-Mart (maybe one reason why K-Mart had to declare bankruptcy?).
Wal-Mart Super Centers can dramatically affect the economy of the entire county. Indeed, a Mississippi study in 2002 found that total sales in the counties with such stores were up over 10% beginning three years after the store opened over counties without Super Centers. Another finding cited in the Stone study was that when a building materials super center such as Wal-Mart, Home Depot or Lowe's is opened, it causes the gross sales in that town to rise by between $30 - $50 million.

Another effect of Wal-Mart on our nation's economy is cited by a 2005 study performed by economic research firm. They found that Wal-Mart made a statistically significant impact on keeping U.S. inflation at bay because of their low prices. They also found that Wal-Mart improved the entire U.S. economy's efficiency by .75 percent. Note here: The study was commissioned by Wal-Mart.

Many critics complain bitterly about the tactic used by Wal-Mart to secure such low prices, but vendors trip all over themselves in order to count themselves as one of the retail giant's customers. Perhaps it would be better to exclude them from one's customer list and avoid the pressure of succumbing to their every whim? After all, having such a large account is similar to the way taxes affect our government; once they get used to a revenue source, it is very difficult to let it go. Better to avoid it in the first place?

Prevent Credit Card Fraud – People Really Are Out to Get You

While doing some research, I discovered something pretty damn scary about credit card fraud. There are not only a few scammers here and there, and maybe some organized crime syndicates in Eastern Europe you have to worry about. There are thousands of people all over the world that are actively trying to find out how to pull credit card scams every day.

In a single day Google gets what I found to be a very surprising number of searches that pertain directly to the mechanics of perpetrating credit card fraud. For example, the search term “credit card generator downloads” got 873 searches, “credit card generator” got 407 searches, and the term “credit card reader / writer” got 1010 Google searches. This is in one, single, day! That means that on a single search engine (admittedly, the world's largest) for only three search terms on how to get the tools to perpetrate credit card fraud, there were 2,290 people actively trying to steal money from you, your credit card issuer, or from their perspective, preferably both. Perhaps I'm a bit naive, but I found that frightening.

Here are some things you can do as consumer to help prevent credit card fraud:
Sign your card card as soon as it arrives.

Don't keep your cards in your wallet. Keep them in a zippered compartment or a business card holder.

Record of your account numbers, their expiration dates, and the phone number and address of each company. Keep the record in a secure place.

Watch your credit card during a transaction, and get it back as soon as possible.
Void all incorrect receipts.

Destroy carbons created by non-electronic processing.
Compare your card receipts with billing statements.
Reconcile your card accounts monthly, just like your checking account.
Report any questionable charges promptly and in writing to the card issuer.
Notify card companies in advance when you change your address.
Merchants can help prevent credit card fraud on their end with some relatively simple strategies. As this sort of fraud is omnipresent and expensive for business owners, it's something they should be actively engaged in preventing. Here are some things that business owners can do to head off credit card fraud before it strikes.
Address Verification System (AVS) - This checks to determine if the card's billing address and the ship to address, or the address listed by the person trying to use the card match.
Checking ID – I'm always surprised by the number of employees that fail to perform this very simple step when I make a purchase. When I was a business owner this was grounds for disciplinary action. From the customer's perspective, it isn't a hassle. Most customers will be thankful that their ID was checked before their credit card was charged.
CVM – this is that extra 3 digit number on the back of the card. The trick is that this number is found nowhere in the mag strip information, so if the card is swiped by one of those fraudsters that steal your card by illicitly using a card scanner, they will not get the number. In theory, you actually have to have the card in your possession to have the code number. Most online merchants will demand it. If you aren't asked for it when you're placing an online order, shop elsewhere. If you're a business owner, you are crazy not to use this verification technique.
Payer authorization programs add an extra secret password that must match before the card will be approved. It does add an extra step in the checkout process, but if you, as a customer, don't have an extra few seconds to help prevent this growing problem, shame on you.
Hopefully these steps can help both merchants and consumers avaid credit card fraud.

Financial Misconceptions To Avoid – You Will Be Richer for It

When it comes to personal finance, a little misconception can go a long way. Here are a few that have been so oft repeated, they may as well be true, except they’re not in many cases. It can be expensive for you to fall into one of these financial traps.

Financial Misconception 1One such financial misconception that’s been spread around for years is that you have 3 days to make up your mind after you sign a contract. So, it's a bit of a legal misconception with large financial implications. If you decide you really shouldn’t have made the deal, you can cancel the contract. Well, that’s not really true, except in a few isolated cases. Where this can get really expensive is when you’re buying pricey items such as vehicles. You must check with your state AG’s office to find out what items in your state actually give you a grace period after you’ve signed a contract. In legal parlance the 3 day contract grace period is known as the “3 day right of rescission”.

In Washington for example, you have this right on certain products and services, such as health club memberships, some timeshares, and a few other select sales. In Texas, you can get a 3 day right of rescission on certain sales made at locations other than the seller’s place of business, with some exceptions, the same is true in Oregon. In fact, sales made in your home are one of the only places where the 3-day grace period applies in virtually all locations. The Federal law on the subject can be seen here:http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title16/16cfr429_main_02.tpl

In short, you should expect not to be granted any such rescission and treat it as an exception if you are lucky enough to get one. You must check your state’s laws to be sure.

Financial Misconception 2Another common financial misconception is that Social Security disbursements aren’t subject to Federal income tax. This isn’t true in many cases. It all depends on how much income you have from sources other than Social Security, and if file a single or joint tax return. If you file singly, you will have a greater chance of having to pay tax on your social security income. Look on the bright side, though; the IRS can never treat all your Social Security income as taxable, only 85% of it! Make sure you go over how you’ll be receiving all your sources of retirement income with your tax professional to ensure you get to keep as much of your hard earned SS income as possible.

Financial Misconception 3You can only contribute up to the IRS set maximum to your 401(k). For many, this is true, however, if you’re over 50 years of age, the Feds will allow you to contribute a bit extra, in the event you need to catch up to where your retirement account should be. For 2007, this catch up amount is $5,000. The amount is subject to your employer’s plan limit maximum, which can be smaller, so ask at HR to find out. There are similar catch up rules for those over 50 who have IRA’s, but the contribution limits are smaller.

Financial Misconception 4Paying the minimum payment on your credit card is enough. Hardly. Actually, even though the minimum payment percentages have recently been increased, it is still a brutally slow way to pay off your credit cards and is virtually sure to keep you in debt forever. If you want to have any chance of getting debt free, especially if you ever use your credit cards, you’ll have to pay more than the minimum.

The exception to this is if you have multiple credit cards. In that case, you should pay the minimum on all the cards except the one with the highest interest rate. That one you should pay as much extra every month as you can afford to. When it’s paid off, use the money to pay off the next highest card, and so forth, until you’re debt free.

The aforementioned scenario is about the only one where consistently paying your card’s minimum payment is the proper course of action (one exception would be a no interest card, in that case, you want to pay off the card as late as possible. This is because, assuming you pay no interest, the money you use to pay off the card in the future has less value than the money you would use to pay it off today.

4 Things to Check Before You Buy a House

If you are about to buy a new house, or are contemplating doing so at some point in the future, there are some things you should check before you sign the papers. A little judicious checking now can save you from some serious problems later. You could end up losing your house, or paying some serious money out of your pocket that could have been avoided.
Thing to Check Before You Buy a House 1 -This first thing to check before you sign the papers are the papers themselves. Have your mortgage contract looked over by a real estate attorney. In addition to that, you should peruse them yourself, even if you think it's all a bunch of legal mumbo-jumbo. Every day there are sob stories in the media about someone who claims to have been sold a bad loan by this or that lender or mortgage broker. Guess what? In many cases they got the loan due to their own greed and / or ignorance. Outright fraud or misrepresentation is one thing, but many times this never occured.

It's true that you should be able to trust your lender or broker, but far too many people were so eager to get their house or loan that they failed to even perform some basic due diligence. Come on, people! You are about to sign what is, for the majority of people, the largest contract of their lives. Before you do so, you owe it to yourself to have at least a basic knowledge about mortgages. If you don't know what an ARM is, at least find out before you agree to one! You should not only find out what it is, but you should be aware the financial implications of it.
Thing to Check Before You Buy a House 2 -Take a look at the neighborhood schools. Even if you will never avail yourself of their services, it is important to know about them for a couple reasons before you purchase your house. First of all, even if they are not important to you, they are to many people, and thus the quality of the schools in your neighborhood can have a major impact on the resale value of your house. Secondly, look at how they are financed. With many schools today, it seems to be all about the money. Where do think all that money comes from? That's right, the property taxes on your house. Some of the school's budget will come from federal and state grants, but much of it will come from your property taxes. You need to check on how they are paying for the schools, along with their levy and tax history.

Thing to Check Before You Buy a House 3 -Does your house have a propensity for flooding? Look at the FEMA flood hazard index and check the local news archives. This is vital if you think there's a chance of flooding. All houses are in a FEMA flood zone, it's just a question of the severity. If your house is in an area that has a flood history, you may get the short end of the stick when it comes to rebuilding after a flood. You can look up FEMA's flood zone info on your prospective house here:https://hazards.fema.gov/femaportal/wps/portal

After every flood there are plenty of people who lose everything who should have known better. If you build or buy a house in an area with a known flood history, you have no one to blame but yourself when the inevitable happens, and it floods again. Sadly many of these people look to the government (our tax dollars at work) for a bailout in this situation. I have absolutely no problem spending tax dollars to help rebuild a community in the event of a rare, serious flood. I do, on the other hand, object strenuously to spending our tax dollars to help someone rebuild their house, again, because they built on a lot only 5 feet above the level of river that floods every 5 – 10 years, like clockwork.

One note on FEMA flood zone data, it is being revised in some areas. Find out if your area is affected by the revision before using the data. In most cases flooding will not be covered by your homeowners insurance, so if you do sustain flood damage, the repair and property replacement will come out of your pocket. In addition, you don't want to buy a lot for your dream home, only to find out later that a home is un-insurable due to flood hazard. If this is the case, you'll probably have difficulty getting a construction loan to get the house built as well.
Thing to Check Before You Buy a House 4 -Look carefully at the CC&Rs. Many communities have CC&Rs (Covenants, Conditions, and Restrictions) dictating many things about how you can use, and what you can (and must) do with your house and property. This is legal contract you enter in to with your neighborhood's home owner's association. CC&Rs are just what some people want, because it mandates things such as lawn condition, and house color for example. They can keep you from parking your boat in the street, or limit how long vehicles are parked in front of your house.

You want to be aware of all the provisions contained therein however, because you do not want to buy a house with the intention of using it a certain way, only to discover that you desires are prohibited by the CC&Rs. This is serious stuff, so don't underestimate the importance of it. People have actually lost their homes fighting the home owner's association over CC&R provisions. It pays to be informed before you buy your prospective house.
These are just 4 of the myriad things you should be aware of before you buy a house, there are countless others, but many people never consider these 4 items.

Credit Card Bills and Autopay – Timing is Everything

One of the most important things to do when you have a credit card is to sign up for the card issuer's auto pay program. That will prevent accidental late fees that can decimate your finances by bombarding you with late fees and raising your interest rates. Upon examining one of my statements for a credit card that I recently switched to auto pay, I noticed this explanation: “The amount debited to your primary bank account will be automatically be reduced by the amount of any payment received.” What the heck??? Can you not pay any more than the minimum unless you send a check for the entire payment amount, plus any additional, thus rendering your auto pay amount zero?
Upon a brief conversation with the bank's CSR, it became a bit more clear. In order to pay extra and have your auto pay debit your bank account by the normal amount, your check for the additional amount you wish to pay must arrive at the credit card issuer after the auto pay date, but before the closing date of the credit card statement. Go that?
It's pretty important, because if you have your credit card set up to debit your account for the amount of the minimum credit card payment, and you want to pay extra, you have to ge3t your check in during the proper window. If not, you will only succeed in reducing the amount of your auto pay debit by the amount of your extra payment. If your check for the extra amount you wanted to pay was greater than the amount of the minimum payment due, you would only ending up paying the amount your check was for and nothing would be debited from your account for the auto pay.
Hope that makes it a little more clear than mud.

The US Will Lose Big With the Law of the Sea Treaty

Maybe most Americans don’t really care if we have control over our sovereignty. It seems that the 89% of congress that the American people think aren’t doing their job very well, and the President that 76% of Americans think is doing a crappy job are about to sell it down the river. They will be putting the United States in a subservient position, with little control over defense outside our borders, and other matters of international import. The Law of the Sea Treaty is one of the most dangerous documents to the continued existence of the United States of America, as we know and love it, that has ever been put forth.

Those who feel uncomfortable with unaccountable government officials in control over matters that affect them had better get used to it. Your congress and President are about to secede control of the majority of the planet to unelected, unaccountable internationalists ensconced in the corrupt, bureaucratic morass that is the UN. After experiencing the corruption that was the UN oil for food program in Iraq, or the UN “Peacekeepers” raping women and keeping sex slaves, does any among us feel the least bit comfortable allowing them to be in a position of authority over our nation in any way, shape, or form?

If you can answer yes to this question, perhaps you had better take a good, long look in the mirror. Jack booted thugs in blue armored personnel carriers rumbling through our streets? Perhaps not, but we’ll be losing precisely that control over our destiny that our forefathers fought the redcoats for over 200 years ago. Will we have any say in global events that affect us so greatly? Maybe but a whisper, if we’re fortunate, and toe the line as we’re asked. If we are signatories to this document, our time in the sun will have passed and the U.S. will cease to be the dominant force in the world.

Inasmuch as many would revel in seeing this come to pass, we should remember what we were able to accomplish for the time we held this esteemed position on the world stage. If you feel frustration with your inability to be heard by your elected officials, how will you feel when they are not only unelected, but have no interest in your opinion at all? In fact, there are many around the world, and even inside our borders that are wringing their hands with delight at the mere prospect that the U.S. will be foolish enough to sign the treaty.

For those of you that are unsure how an international treaty could possibly affect them, you should know that such a treaty is the ultimate legal document, superseding even our own Constitution. A treaty is the ultimate abridgement of our rights guaranteed us by the very Constitution, certain provisions of which a treaty would render impotent. If the prospect of yielding authority to such a legislative body frightens you, as well it should. Stipulations unfavorable to our national interests will have to be obeyed, as unpleasant as the consequences may be.

Taxes will have to be paid, treaty stipulations abided by. The U.S could easily be denied the ability to gather intelligence on foreign powers or terrorist groups that could be a threat to our citizens, either abroad or within our own borders. The UN will be a taxing authority, and yeas they will have authority to collect taxes from you. Even better, they’ll not spend your money building your neighborhood school, improving your roads, or hiring additional police officers for your community. The taxes collected by the UN would be distributed to other countries, and you’ll have no say in how or where your money goes. Will the UN be taking money out of your check or levying property taxes against you? Not yet. They have yet to figure out that angle (when they do, check your pay stub), but they will be collecting taxes from U.S companies, possibly the one your work for.

It’s very disconcerting that so many members of congress are eager to jump on such a dangerous bandwagon. By doing so they are yielding an unprecedented amount of our destiny to foreigners who definitely don’t have our best interests at heart. It seems many in our own government may not either. Write, call and / or email your member of congress at once to voice your opinion about this threat to our national future.
You can contact your senate and congressional members here:http://www.senate.gov/general/contact_information/senators_cfm.cfm
http://www.congress.org/congressorg/directory/congdir.tt

4 Things That Can Make You Free (Financially and Otherwise)

It’s sad, but true. Too many people slog through their daily existence, yearning with every fiber in their being to be freed from the constraints by which they’re bound. The greater tragedy is that many of these ties that bind are of their own making. Many of the decisions they make, for better or worse, conspire to keep them forever lashed to the pole of an ultimately unfulfilling existence. Why does this happen?

If you had a coffee with many of the same people at the beginning of their journey through life, they’d expound a fountain of ideas and dreams. Years later however, the demands and realities of daily life have pushed their dreams to the side, and most would be happy with just a few spare minutes or pennies they could call their own.

How can this tragedy of unfulfilled promise be avoided? Are the majority destined to be locked away in a prison of their own creation, forever barred from attaining their dreams and aspirations? Sadly, yes, for many that will be their reality. Only a select few will ever break free and rise to master, or create, their destiny. Why is this, and how can you be one of those that breaks free from the chains of the existence that falls sadly short of attaining much of that which you’ve been denied?

Ironically, it’s the very pursuit of the dream itself that deny many people the opportunity to achieve it. There are 4 things that can ultimately lead to a life of freedom and financial security. Many extremely successful people use these as basic tenets of their lives. If you have financial freedom, weather through needing less, or making more, many other freedoms will follow.

Key to Freedom 1 –Preparation - Lay a Foundation – You can’t only wish for success and freedom, you’ve got to plan for it. The problem is that too many people jump headlong into what they believe life should be, without ever planning on how to make it what they want. You can’t rely on decisions made on the fly to deliver the life to which you aspire. You must develop a plan that fits your goals and personality. You’ll than have a road map to follow. Few people would ever build a home, or begin any other complex project without a plan, yet with their lives, perhaps the most complex project of all, few people ever set out with such a roadmap.

Key to Freedom 2 –Timing – It’s been said that timing is everything. While this overstates things a bit, there’s no denying that timing is of the utmost importance. When the milestones in life happen, the order in which they occur can do much to determine your ultimate success.
Key to Freedom 3 –Frugality – More than almost anything else, frugality can and does impact where you end up in life financially. This is especially vital when you’re young, as many people underestimate the importance of a few dollars here and there. The other thing that frugality buys is the freedom from financial obligation that becomes so oppressive for many people.
In our consumer-centric society there is pressure to spend from every direction. It can take discipline to maintain one’s financial composure in the face of such a storm. A bit of need vs. want analysis doesn’t hurt either. Some restraint early can lead to huge returns, and the ability to relax later. It also establishes a pattern of spending less than you make, which is one of the cornerstones of not only financial success, but success in general. Many family problems stem from financial troubles.
Avoid the compulsion to spend, but yield to some wise investing, a behavior that too few young people exhibit. I was talking to someone today that was talking about buying some nice 19” chrome wheels for his car. When the subjecting of investing the $1,200 instead of buying the wheels was floated, he opined that he really had no desire to invest, as he’d just make more money later in life. The fact is that he may not, and he probably will never be able to catch up if he does. He’s 25 so figure that the $1,200 he spends today would have about 40 years of growth potential. Invested at 8%, it would grow to about $26,000. If he managed to get a 10% return, it would be worth $54,300. That’s just one exhibition of frugality, and investing the returns. You can see how one of these a year could add up substantially.
Key to Freedom 4 –Initiative – If you want it, you’ve got to do it. That is, for many, the hardest part of the journey. Far to may dreams go unfulfilled, and too many great ideas remain unrealized, because the dreamer never got around to making it into more than just a dream. Don’t make that mistake. Weather due to fear, laziness, feelings of inadequacy, or a lack of confidence in their abilities, the majority of those with the key to success in their hand, just never put it in the lock and turn the thing. It’s sad, but true.
Whatever it takes to make yourself actually get out of the blocks, just make it happen. After you’ve started you must apply perseverance until success and freedom are yours. Don’t rest until they are, but, at the same time keep your priorities in order so you don’t miss what life has to offer along the way.
Have a great, debt free weekend.

Types of Student Loans – How to Compare Student Loans

How many types of student loans are there? Well, it can seem like thousands, but in reality there are only 3 main types of federally guaranteed student loans. Federally guaranteed loans are the type you'll want, for many reasons, not the least of which is because they can be consolidated in the future without providing complicated documentation or putting up any collateral. In addition, they are easier to get if you have few resources, and really, why else would you be trying to get a loan in the first place? Here are the types of student loans and how you can compare them.
If you felt like you spent more time in you college's financial aid office than in class, you're not alone. Federal spending on student loans has increased by over 40% since the start of the decade. It now sits at $23,000 per U.S. household. Think about that the next time you think the feds are spending nothing on education. Sadly, that has barely kept pace with the increased costs of getting a college education. But federal spending for student aid of all types for parents of students, including loans, has jumped by, now sit down, 400% since 2001! If you're looking to help increase these numbers, here are the types of loans you'll be going after.
The 3 types of federally guaranteed student loans are the following: Stafford Loans, PLUS loans, and Perkins loans. Here's how they stack up.
Types of Student Loans
PLUS Loans - These loans are for the parents of eligible, dependent, students. Who are exactly are these eligible students? To be eligible for such a loan, you must be enrolled at an approved institution of higher learning, in an approved program, on at least a half time basis. The exception to this rule are that Graduate student are now eligible to receive PLUS loans. PLUS loans are provided through both the Family Friendly Education Loan (FFEL) program and the Federal Direct Student Loan program. As the name suggests, direct loans are available directly through the U.S. Department of Education, while FFEL loans are obtained from an approved private lender, such as bank. The parents will need to submit to a credit check to receive PLUS loans through either program. If the parents have marginal credit, they can use a cosigner to help get the loan approved.
A student can get up to the cost of school attendance, less other financial aid less other financial aid received for the term. It's easy to apply, simply submit the appropriate application. These are available from your college's financial aid office, or in the case of an FFEL loan, they can also be picked up at the lender's location. A completed FFEL application and promissory note will need to be returned to the school, who is also responsible for filling out a portion of the application. Once approved, there will be a check sent directly to the student's school.
The responsible parties are required to begin repayment of PLUS loans within 60 days of the time the check is sent to the school. Sorry no grace period, those responsible have to begin paying of the loan long before the efficacy of said payments are determined. The interest on these loans is fixed for new loans, although it was variable in the past. Currently, the rate sits at 7.9% for direct and 8.5% for FFEL loans. Prior to 2006, the interest rate was variable and re-indexed each July1st.
Perkins Loans – Perkins loans are for both undergrads and graduate students who can demonstrate exceptional financial need. (Really, don't all students have an exceptional need for money?) Perkins loans are made by, and repaid to, the student's school. Unlike with PLUS loans, there is no half time enrollment requirement for Federally guaranteed Perkins loans. Undergraduate students are eligible for up to $4,000 per year, while graduate students can get up to $6,000. The total available for the student's academic career is $40,000. Not all institutions of higher learning participate in the Perkins Loan program. You'll have to check with your particular school to verify their participation. Currently the interest rate for Perkins loans is 5% and they can be repaid over a 10 year period (the repayment period is subject to the total loan amount).
Stafford Loans – Loans de Stafford are also available in two flavors, like PLUS loans. As in the case of PLUS loans, both are available through either the U.S. Dept. of Education (direct) or private lending institutions (FFEL) and are available for students attending school at least half time. The difference is that Stafford loans are for the students themselves, not their parents. As with PLUS loans, there is a 10 to 30 year repayment period for direct Stafford loans, but it's possible to get Stafford loans in either subsidized or unsubsidized varieties.
Subsidized loans are for students that can demonstrate financial need. On these loans the government pays the interest until either 6 months after the student graduates or until 9 months after the student drops below half time enrollment status. It is also possible to request a payment deferment for Stafford loans, if a student feels they are currently unable to begin repayment of their loan obligation.
Unsubsidized loans are available to students without the requirement to demonstrate financial need. However with an unsubsidized loan, the government will not pay the interest. If a student takes out loans in excess of their determined financial need, the loans beyond the amount of financial need must be unsubsidized loans. Effective on July 1st, 2007 the limits on Federally guaranteed Stafford loans are $20,500 ($8,500 subsidized) for grad students. For undergrads, the limits differ for dependent students and independent students. Independent students are eligible for $7,500, $8,500, and $10,500 in their 1st, 2nd and 3rd - 5th years, respectively. For dependent students, Stafford limits are $3,500, $4,500, and $5,500.

Hire a Lawyer for Your Real Estate Transactions – or Pay the Price

When engaging in real estate (and other large, comlex) transactions, too many people feel that they really don’t need a lawyer. They might have their real estate agent look over the documents, and they might possibly use a stock, one-size-fits-all contract. You know, one of those fill in the blank, downloadable contracts you can find on the web. You will save a few bucks on the front end of the deal, there’s no question about it.

You can try to console yourself with all the money you saved by not hiring a lawyer to draw up or examine your contract while you’re grieving aver how you got taken to the cleaners. You may think you can just take this stuff lightly, and far too many people do, despite the advice of experts. However, failure to take this simple precaution can be fraught with peril. I have a neighbor who is selling their home and an adjoining vacant lot. They had listed their home and the lot as a package deal, with the lot at a $20,000 discount over its price if purchased separately.

A prospective buyer made an offer on both, but subsequently had their financing on the home denied. The financing on the lot however, was approved. The way the two properties were listed, and the way the contract was written, the purchaser was able to purchase the property for the discounted price, although they didn’t buy the home along with the lot. Needless to say (although I will anyway) my neighbor is a bit miffed over the whole situation, being out $20,000.

Paying a lawyer a few hundred or a thousand dollars to draw up the contract could have avoided this unfortunate situation, and my neighbor would have an extra $19,000 in the bank today because of it. Think about it the next time you’re tempted to bypass the important step of having your real estate lawyer examine a contract when you’re a buyer, or draw up a contract if you’re the seller. The money you save will be your own.

There’s nothing wrong with using a stock form for some things, or having one of those discount, on-line legal form services create your documents for you. They work well, and can save you substantial money for certain things. Real estate transactions are not one of them however. For that, you need the real thing. There’s nothing like witnessing something like that up close to drive the point home.Have a great Halloween. If you’re taking your little ones out and about to get their haul tonight, be careful.

What Happens When Companies Will No Longer Accept Cash?

Apple, in an apparent bid to deny product shortages and hacking for the holidays, said yesterday that they'd not allow more than 2 iPhone sales per customer. More interesting is that they will not be allowing customers to use greenbacks to make their iPhone purchases, only credit cards. One assumes that a debit card with a credit card logo may be used as well. It brings up an interesting point. Are we on our way to the all cash society that so many have suspected?
There are already many things that you can't buy with actual cash, and I'm sure that Uncle Sam would love to rid themselves of the hassle and expense of printing money. Of course we'd get no kind of tax relief even if they were saving money, they'd just find somewhere else to spend it, I'm sure. Many government officials would love to rid the world of cash for the law enforcement benefits it would provide. It would be much harder to launder money (but the really large Criminal enterprises would still do it), make illegal drug and weapons transactions, not report income for tax purposes, and so on. And you can just forget about that extra $50 your wife doesn't know about...

Many banks would love to only make electronic transactions and take their little electronic cut from each. That would streamline their operations, minimize their labor costs, allow smaller branch offices, and reduce product (money) handling and distribution expenses. The cash machine wouldn't be, a cash machine, that is. When visiting the bank, you'd just bring in your pay check, if you don't have electronic deposit, and they'd fill your debit card, just as they do now. There would be no option for getting cash back.

The reality is that most companies will never want to get rid of cash unless they have no choice. Businesses, Apple and a few other companies (Macy's) notwithstanding, will want to maximize their payment options in order to maximize revenue. The exception to this is when it costs more to make the transaction than the incremental revenue the added transaction generates for the business. In most cases, maximizing payment options will allow the business to appeal to the widest range of customers, and thus generate the maximum amount of total revenue. So, if it's only up to the business community, don't count on cash going away any time soon, unless cash transactions are rendered prohibitively expensive. If that day ever comes, look out, dodos will be using cash to line their nests.

How Federal Taxes Affect Your Retirement Accounts

With luck you're going to retire one day. With careful planning you're going to retire with substantial amounts of money in your retirement accounts. One of the things that will impact the ultimate success of those retirement accounts is how taxes will affect them. They can take a substantial chunk out of your nest egg, or a much smaller nibble, it's all up to how you, and your tax adviser choose to allocate your resources.

From a tax perspective, there are three broad classes of retirement vehicles; taxable, tax deferred, and tax exempt. Why wouldn't you just stick to tax exempt vehicles and avoid the whole tax issue altogether? Well, you could, and some have, but that limits your choice, and your probable investment return, in the name of federal tax savings. Vehicles such as tax exempt municipal bonds (munis) can offer an attractive option for investors, but typically the level attractiveness rises with the investor's tax bracket. Investors in higher tax brackets will avoid comparatively higher levels of taxation than lower income investors. For these investors, the avoidance of federal taxes may swing the pendulum more in favor of tax exempt investments. In many cases though, tax exempt investments offer substantially lower yield than other choices, and the reduced yield is not sufficiently compensated for by their exempt status.

Many more retirement accounts consist of tax deferred retirement instruments. These include traditional IRAs, 401(k) plans, 403(b) plans (403b plans are for public employees and non-profit private organizations), and Roth IRAs. There are tax differences between these three. The Roth IRA is taxed when the money is earned, but not when it is withdrawn, assuming you withdraw the funds after you turn 59-1/2 years of age. Prior to that age, you'll incur the wrath of the IRS in the form of a 10% penalty, in addition to any taxes you may owe.
Traditional IRAs and 401(k)s are similar in that they use pretax income to fund the plan, and then the retiree / investor is taxed when the money is withdrawn. If you are in lower tax bracket after retirement it is most advantageous to use a traditional IRA. Most people are in lower tax bracket after they retire, because the years immediately preceding retirement are usually the peak earning years. Most people will find that their situation warrants using a Roth IRA plan at the beginning, especially for the first 20 years or so of their contributions, when they are in comparatively lower tax bracket. If your federal income tax rate is the same at contribution and withdrawal, it does not matter when you are taxed. The results will be the same if pay taxes before you contribute, or when you withdraw. If you don't believe me, consider the following:Traditional: Your 1st year $7,500 pretax contribution, invested for 40 years at 8% yield = grows to $162,934. You pay taxes at your income tax rate, as dictated by your taxable income. If you are in the 28% tax bracket (for 2007 = 28% on marginal income between $64,250 - $97,925) and we assume your actual tax rate works out to 22%, you'll lose $36,505 in income taxes on this portion of your distribution, bringing your after-tax distribution amount to $127,088.

Make the same assumptions for a Roth plan and you'll get the following:$7500 – 22% taxes paid before contribution = $5,850 net contribution. $5,850 invested for 40 years at 8% = $127,088. See, I told you so. When it gets murky is when your tax rates are not the same, as is usually the case as your life progresses. You'll want to see a very competent tax and retirement adviser to assist you with your retirement planning so you can maximize your retirement assets and minimize your tax consequences.

NOTE: If you control how much money you take as distributions you can control not only your income tax, but have a very significant effect on how much taxes you on your social security benefits as well.

Which of these is best for you depends upon your specific situation.401(k) plans are company sponsored, while IRAs are private. The big advantages of a 401(k) is that the funding is automatic and comes right out of your paycheck. This can be a huge advantage for discipline challenged savers. The biggest advantage from an investment perspective is that many companies offer to match all, or portion of the employee's contribution. The power of this almost cannot be underestimated. It's really quite powerful, and can contribute substantially to a comfortable retirement. A traditional IRA is similar to a 401(k) for most practical purposes, except that the investor self funds the account and their employer has nothing to do with it.
Traditional IRAs and company sponsored retirement plans have another age requirement. You must begin to take minimum withdrawals (distributions) when you reach 70-1/2 years of age. Roth plans do not have this age restriction, so if you plan on bequeathing one of these to someone, this may be the way to go, as it can sit there, growing, after you're deceased. When the lucky recipient does begin withdrawing the money when the so desire, and pay income taxes on it with no additional penalties.

Traditional and on-line brokerage accounts are examples of non-tax deferred investment accounts. There also are some automatic pans such as Dividend ReInvestment Plans (DRIPs) where the dividends form a company's stock are automatically reinvested in purchasing more stock. With a DRIP, you will pay income tax on the dividends you receive in the year they are received, even if they are immediately reinvested. That is something to keep in mind when considering dividend paying investments that aren't tax deferred.

Was Facebooks Valuation Too High?

Just a word about company valuations, and the amount paid my Microsoft yesterday for a small, 1.6% share of web 2.0 pioneer Facebook; $240 MILLION?? That sets the valuation of Facebook at an astounding $15 billion. As a way of comparison, that sets the value of Facebook higher than the market cap of the following Fortune 1000 companies: Weyerhaeuser ($14.89B), Heinz ($14.8B), Marriot ($14.73B), CIGNA ($14.4B), Safeway ($13.89B), Campbell Soup ($13.7B), and Macy’s ($13.66B). Now, I am unsure how the rest of the world feels, but that seems a bit high to me by way of comparison. Microsoft’s (NASDAQ: MSFT)market this morning was a little over $292B, with an EBITDA last year of over $20B.

Looking at Facebook's 50 million registered users, many analysts and investors apparently disagreed with me, as MSFT rose on the news of the acquisition. Microsoft has been looking to more effectively gain market share and monitize Google's cash cow, the online advertising market. It seems that investors are looking at this as just the way for Redmond to make that happen. Most analysts conotinued to maintain positive outlooks for the software giant's stock.

How to Save Money on Car Insurance

Car insurance is possibly one of the largest bills you have to pay, after housing, food, and the paying for the car itself. What you pay for car insurance is determined by many things, and thankfully most of them are within your control. There are the usual suspects, such as the type of car you drive. Teams of actuaries at the insurance providers have determined that your Porsche 997 turbo should be much more expensive to insure than your wife’s 2004 Corolla, and both will cost more if you live in New York City, than if you live in Billings.
So, short of moving and trading in your prized sports car in for a family econo-box, what can you do to save money on car insurance? There are some things that go for almost any kind of insurance, be it car, home, boat or anything else. Then there are some savings tips that are more specific to car insurance.
General ways to same money on car insurance –Keep your deductibles as high as you can stomach. After all you’re not going to turn in a claim unless it’s probably over $1,000 anyway, so keep your deductibles for your different coverages at $1,000 or higher if you have a policy that allows it. If not, well, see section 2. You’re not going to turn in a claim for less than $1,000 because that is another strategy for saving money on car insurance; don’t use it unless you absolutely have to. It’s pretty common knowledge that most insurance companies use a claim as an excuse to raise your rates, so don’t make one.
Way to Save Money on Your Car Insurance -1Review your coverage to make sure you’re not paying for anything you shouldn’t be. I’ve seen people pay premiums for months on cars they had already sold, for example. Then evaluate the level of coverage you have in each area. Some may be lowered or eliminated entirely. For example, do you really need collision insurance on that ’85 Dodge Colt? Probably not. It will end up costing you more for the insurance than the car’s worth, so if it gets hit in the parking lot (or you hit something), the loss will probably exceed the value of the car. The company will declare it a total loss (where the term “totaled” originates). You’ll collect a check for the retail value of the car, in most cases. Since, on the car in question, that’s about $900, you can see how paying $45 a month for collision insurance would be a bad deal.
Way to Save Money on Your Car Insurance -2There are some other things that insurance companies look at to determine how much you’ll pay for their services, fair or not. One such item is your credit score. The insurance providers have determined that there is a link between your credit rating and the risk you present as one of their insured. As such, as your credit score falls, the price of your car insurance rises. So, not only will you save money on a mortgage, auto loan and credit card by keeping your credit score high, you’ll save on your car insurance as well.
Way to Save Money on Your Car Insurance -3Bundle your insurances together and you’ll likely get a muti-policy discount. If you have your homeowners, auto, life and business insurance with the same provider, they typically reward you with a bit of savings on all your policies. The exact amount you’ll save is influenced by too many factors to count. You’ll also save money if you insure more than one car with the same provider. I’m not advocating you rush down to Bill’s Bargains on Wheels and drive off in another car so you can save money on insurance, but if you have multiple vehicles in your family, insure them all at the same place.
Way to Save Money on Your Car Insurance -4There are many lifestyle choices you can make that will impact your insurance. Weather you buy your home or rent, married or single, your highest level of education, your job (or lack thereof) and if you have kids can all influence how much you’ll have to pay for car insurance. Some companies offer discounts for how you pay as well. If you have your payment automatically deducted every year, you’ll pay less than if you send a check every month, for example.
Way to Save Money on Your Car Insurance -5Get your discounts. All should, but many people don’t. Get their insurance discounts, that is. It’s possible that you could qualify for one or more discounts and not even know it. Discounts are offered for many different reasons. There are policy discounts for professional association memberships, senior citizens, multi-car (as mentioned above), club membership discounts (car clubs, travel clubs, AAA, and other clubs will offer discounts as benefits to their members).
Way to Save Money on Your Insurance -6Properly equip your vehicle and you can earn lower insurance rates as well. Get the important safety features, such as extra air bags, stability control, amiable headlights, etc. and some companies will reward you for your interest in safety by giving you a cheaper rate on your insurance.

Credit Card Practices to Watch Out For

If you are one of the majority of Americans (and citizens of just about any other industrialized country) who has and uses credit cards on a regular basis, there are some things that your card issuer does that you should know about. They could be costing you serious money every year. With competition for credit card customers so fierce these days, you have little excuse for not getting the best credit card deals you can find, and leaving the less favorable cards in the waste basket (properly shredded, of course).

Credit Card Practice to Watch For #1 –Foreign exchange fees – These fees are charged any time you purchase something on your card from another country. The exception to this is Capital One, who currently does not charge it’s customers a currency conversion fee. The conversion fee averages a little less than 3%, so they can add up in a hurry. Weather you’re traveling or ordering something online from a company whose e-commerce website is set up outside the U.S., or wherever your credit card account is based, these fees will be added to your purchases. The bank charges you a fee for currency conversion, and you pay handsomely for the service. If your account is U.S. based, the fee is based on the U.S. dollar value of the purchase, after conversion.

To avoid this you can use your card as little as possible when traveling overseas. Exchange your currency at your bank and use traveler’s checks. For some travelers, the fee is worth the added convenience and protection offered by using their credit card. If you are one of these consumers, you should be aware that you are paying for the privilege.

Credit Card Practice to Watch For #2 –High priced credit card insurance and monitoring – With the high instance of large credit card balances, credit fraud, and identity theft a large market has been created for customers that are looking to protect their good names, and more importantly, bank accounts. This has given rise to a huge number of products offered by credit card issuers to guard against loss in the event of credit card fraud, ID theft or the card holders inability to pay their credit card bill due to some unexpected problem, like stepping in front of the #17. The operator from your credit card company can be pretty persuasive on the phone when they are seeking your enrollment in one of their credit protection services, so hold your ground and at least make sure that the one they are offering is the best choice for the job.
While these services can have undeniable value, they can also be fairly expensive, especially if the benefits are limited to the issuing company’s products. Many credit card companies charge between $7.00 and 10.00 a month, or a percentage of your outstanding balance for the service. There are a variety of independent services available that guard against such losses, but are effective for all a consumer’s credit products. Look into one of these if you are of a mind to secure some protection.

Credit Card Practice to Watch For #3 –Changing interest rates – many times a credit card issuer will change the rate their customers pay on their cards, and do so with no warning, explanation or special indication. They’re sure as hell not going to send you a letter calling your attention to their little profit increasing tactic. In fact, many consumers, typically not as vigilant in these matters as they should be, will fail to notice for months, if at all. This is a practice you need to watch for.

Look at the interest rate for both purchases and cash advances (don’t get one of these from your credit card company, unless you need it for life saving surgery) on every statement. If you see the rate rise for no apparent reason, you need to call their customer service department and find the reason for it ASAP. In many cases you can get them to reverse it, and maybe even get the rate reduced to lower than it was before. In order to make this happen, you obviously must have had no late payments and be in good standing on your account.
Credit card companies are a business and are looking to maximize their profit. With the increasing number of people in credit distress, they are looking to make money from those that do pay every month in order to maximize their revenue. If you’re one of those that pay, make sure you’re only paying your fair share.