Archive for May, 2009

Is Some Debt Good For Your Credit?

Wednesday, May 20th, 2009

Does debt improve credit?

There is no doubt about this, first of all: Getting into debt is more than capable of getting you into trouble. Although there is definitely a large downside to debt, borrowing money can also do you some good. Some debt is actually good for your credit, but only if you understand why, and how much debt is good in comparison to when your debt has become too much.

With the help of credit, you can achieve some of your financial goals. Debt allows you to take advantage of experiences and opportunities that enhance your life, like buying a car or purchasing your dream home, going to the best school or taking a cruise around the world. Getting the true value out of your credit has to do with developing a spending plan that allows you to get there in the time frame that you have set, without ruining you financially.

With the help of credit, you can send a message to potential lenders. If you have never had any debt, then you have never used credit before and will not have a credit score or a credit report to speak of. In today’s world, however, it is difficult if not completely impossible to live without credit, because credit is vital for purchasing most big ticket items, like higher education, vehicles and homes. Credit is also heavily relied upon for the purpose of preparing for life’s emergencies. For all of these reasons, having a good credit reputation is going to show potential lenders that you are a good and healthy credit risk by showing that you can handle a little bit of debt. By showing your capability to repay debt, you can put yourself in a good position to attract creditors offering favorable terms and rates.

Credit and debt are also capable of giving people a sense of how responsible you are. If you had no debt or credit history, you would find yourself being disadvantaged in other ways. Should a prospective employer check your credit record and come up empty for example, they may find this strange, and not want to hire you. Without a credit record, employers, lenders and other individuals lose out on a potential way to appraise who you are. Debt and credit are important for getting an apartment, applying for car insurance, buying a home, even sometimes renting a car. Even if you can afford to do some of these things, using debt and credit to create a history of how you handle money is an advantageous option in favor of just using cash for everything. Credit is not only a tool for extra income, but it is also a way to show lenders, employers and other individuals how responsible you are when it comes to borrowing, spending and repaying your money.

Photo Credits: 1

Originally posted 2020-01-19 05:45:46. Republished by Old Post Promoter

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Do You Ask Yourself, How Do I Plan for Retirement?

Sunday, May 17th, 2009

Start saving now!

Don’t you think that every working man and working woman is entitled to enjoying a secure and comfortable retirement once they are no longer working? Due to the fact that we have taken so many strides in health care and in medicine, many people are living longer and healthier lives, which translates to many people having longer periods of retirement. In other to attain the goal of having a secure and comfortable retirement, it is vital that we plan for retirement wisely by beginning with a solid blueprint for success.

* Save early, and save often.

The sooner you begin to save money, the longer your funds will have to grow in preparation. Putting compounding to use for you is one of the best possible ways that you can build your wealth, because the gains that you make with every new year will be added to the gains that you make with every previous year.

* Set goals that are realistic.

Rather than relying on rules of thumb to project your future retirement expenses. If your expenses are based upon your needs, you need to set realistic goals rather than simply assuming. Formulate how much money you will need based on the type of lifestyle that you intend to lead, and keep your potential future income in mind.

* Save up for retirement using a 401(k).

Why? Because making a contribution to this type of account will provide you with immediate tax deductions, employer matched contributions and even tax deferments on your retirement savings growth. This is excellent advice for anyone who is wondering “how do I plan for retirement?” without a clear cut plan.

* Another example of a way to invest for your future is IRAS.

IRAS provide large tax breaks like 401(k) accounts do, offering you an excellent level of tax advantaged aid. There are traditional IRAs with tax deferred investing, and Roth IRAs where there is tax free growth but no deductible contribution capabilities.

* Allocate your assets wisely rather than investing too largely into one investment over another.

Spread your portfolio out, and enjoy numerous types of investments rather than just relying on 401(k), or IRAs, or savings. For example, for stable long term growth in your investment portfolio, stocks may be one of the best options that you can choose to invest in. If you are looking for high returns over a long period of time, which is ideal for retirement saving, then stocks are an excellent choice for you to consider.

* Do not rely to heavily on bonds.

When you are saving for retirement, bonds should not be your primary source of investment because they are not as tax efficient as other investment vehicles when saving and investing for retirement.

* Having a part time job once you are retired may be a good bet.

It will continue to put money into your savings even after you have retired.

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Originally posted 2020-01-16 05:39:03. Republished by Old Post Promoter

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Defining Your Budget and Crafting Your Financial Future

Saturday, May 16th, 2009

A budget or spending plan is a specific money management tool that is designed to put you in control of your spending, keeping you out of credit trouble and other financial trouble. Your budget is vital because it is your personal plan for spending the income that you have, making good use of your credit and otherwise managing your finances in an efficient and effective way. Many people incorrectly treat budgeting like dieting, where you’re forced to suffer in order to achieve your goals, but this simply is not the case. A budget, on the other hand, is like the speedometer on your car in that it is letting you know how fast or how slowly you are going so that you can adjust accordingly. Your budget lets you know how you are doing in terms of earning and spending, so that you can make the necessary adjustments.

What are your budgeting goals?

Most people are spending out of control without realizing it, which is why a budget is so important.

Here is a short list of some of the things that a budget can do for you:

– A personal budget can help you reach your financial goals, serving as a compass that keeps you on course and helps you put money aside so that you may reach your goals.

– A personal budget can help you control your money by allocating money for all of the different facets of your daily life, allowing you to better keep track of how your money is being used.

– A personal budget can help you to live within your means by showing you how your expenses compare to your incomes so that you can adjust things accordingly.

– A personal budget can help you to free up cash. One of the biggest bonuses that comes with budgeting is that you can decide how much you intend to spend, rather than spending all of your money on things you do not want or need, a budget will grant you the power to make smarter and better informed decisions regarding how you spend your money.

– A personal budget allows you to free up cash because an effective budgeting practice will involve your entire family and will help you come up with ways to free up money and better spend the money that you have.

– A personal budget can help you prepare for the unexpected, because you can put aside money every month for emergency expenses as part of your budget, and this will help you cover a variety of expenses including emergency auto repairs, medical bills and other expenses that come up unexpectedly.

– A personal budget can help you get out of debt, and even more importantly, stay out of debt once you are there. Budgeting will bring your expenses in line with your income, so you will stop adding to your debt.

Photo Credits: 1

Originally posted 2020-01-15 05:33:43. Republished by Old Post Promoter

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Stocks a Good Investment?

Friday, May 15th, 2009

Penny Stocks

Penny stocks are often regarded as a sound investment idea, but they are especially popular during times of a recession, though many people are unaware of the “why”. The reason why penny stocks are a good investment is because the prices of penny stocks for credible companies go up nearly every day, earning you a profit of more than 50 percent over the market price of the stock. Additionally, by going for stocks that are only purchased in great values, you are following an excellent strategy because the bulk trade is something that indicates a rise in the prices, as well as a rise in the chances that the return will be good financially. You should always observe the fine print of the company’s statements when it comes to penny stocks. If you fail to look at both sides of the moon, then you may end up incurring more loss than gain in your investment endeavors.

Right now we are witnessing a real global financial crisis, and many stock brokers are experiencing what is essentially a living nightmare. The global economy is in jeopardy, and many great companies are rising and falling during what is bound to be a truly depressing recession. While many large scale companies and their once booming stocks are suddenly falling, it does not mean all stocks are a poor investment, because there are some little known investment vehicles out there that can still offer excellent returns if you are willing to ride it out and be a little patient with the market. Are stocks a good investment? Traditional stocks may not be the best investment vehicle right now, but penny stocks on the other hand may be just the ticket.

When the stock market is thrown into obvious turmoil, there are obviously some new risks to contend with when it comes to traditional stock investing. Because so many companies are coming into business and going out of business, it can be overwhelming to choose stocks that are sure things, or even stocks that are going to be remotely profitable in the coming months. Penny stocks are shares that are floated in the stock market by smaller companies at values that are less than five dollars.

These penny stocks have a chance of yielding a really huge profit within a short period of time, provided that you are careful when you choose which companies to invest in, and make wise choices accordingly. Penny stocks are often regarded as a sound investment idea, but they are especially popular during times of a recession when other stocks are not sound investment opportunities. As the market dips, predicting the values of stocks diminishes a great deal, but penny stocks are much easier to appraise, and can turn much greater profits in shorter periods of time when sound investments are made.

Good research is vital when it comes to choosing penny stock companies. You should always observe the fine print of the company’s statements when it comes to penny stocks. If you fail to look at both sides of the moon, then you may end up incurring more loss than gain in your investment endeavors.

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Originally posted 2020-01-14 05:29:22. Republished by Old Post Promoter

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Handling Debt Collection Phone Calls

Thursday, May 14th, 2009

How to Handle Debt Phone Calls

If you are late on a bill, or more than one bill, then you are probably beginning to receive collection calls from people who want payments from you. You may find yourself in the middle of what is essentially a recurring nightmare of callers who are absolutely insatiable and who will not go away. This does not have to be the case, however, because the FDCPA protects debtors from being harassed by creditors, especially when it comes to harassment via the telephone. Armed with your knowledge of the regulations and rules, and a plan of action, there is no reason why you cannot handle the calls before they overwhelm you.

The first step in the process is to decide whether or not you should answer the phone in the first place when your debt collectors do decide to come calling. If a collector has been trying to pursue you, you may find yourself reluctant to pick the phone up at first for a variety of reasons, or if you have already explained to the collector that you are doing your best but you are forced to have the same conversation over and over then you may feel frustrated and unproductive. Collectors can be overbearing, and as a result it can be easy for you to become overwhelmed and frustrated. You do not have to pick up the phone, but your caller ID and voice mail machine are not going to help you solve your debt, and if you want to get out under your debt you are going to need to be willing to talk to your creditors.

Learning how to handle creditor phone calls means that you need to have a script in order to have an effective conversation with your creditors. The most effective key is to have a plan figured out before you make any promises, so that you do not under deliver or over promise. You should never lose your temper, but you should also avoid tolerating any abuse. If you begin to feel overwhelmed at any point during a conversation with a creditor, seeking professional advice from a credit counseling may be a good avenue to take.

You are not the first person to be going through this, and other people have managed to get through their credit problems and debt collections. You will also get through it as well, but only if you have a plan that you can follow, and are patient and willing to work with your creditors. More often than not, if you are willing to work with your creditors, they will be willing to work with you, and this is well worth keeping in mind when your creditors phone you. If you show that you want to make things work, then they will be much more willing to work with you in most circumstances.

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Originally posted 2020-01-13 05:24:05. Republished by Old Post Promoter

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Setting Goals for Good Personal Finance

Wednesday, May 13th, 2009

What are your goals?

Setting goals is an important part of your personal finance plan. Goals can be divided into four unique categories that are relatively general in nature. These categories are short term goals, intermediate term goals, long term goals and life goals.

Short Term Personal Finance Goals –

These short term goals are most commonly the things that you want to have accomplished within a single year. These things may include taking a family vacation, beginning to invest money into your retirement plan, donating money to a charity, putting savings into your emergency fund, moving from a smaller apartment into a larger one, purchasing a sought after piece of jewelry o a new wardrobe, joining a local sports club, paring down your debt, or a number of other small, short term goals that relate in one way or another to your personal financial future.

Intermediate Term Personal Finance Goals –

The intermediate term goals in your life are the things that will take between one and five years for you to accomplish. These goals may include saving enough money to allow you to buy a brand new car, beginning a family, or paying all of your debt off completely.

Long Term Personal Finance Goals –

Long term personal finance goals are the goals that you will be accomplishing at least five years or more down the road. Some of the goals that fall into this category may include saving for your child’s education, starting up your own business, purchasing a home, purchasing a boat, or going into retirement, though there are a number of other goals that fit into this category as well.

Life Goals –

Life goals are personal finance focused goals that do not have a timeframe, primarily because you will probably never completely or fully achieve them. These are not always specifically money driven goals, but they are certainly life altering goals and relate to striving for something better. Some money driven life goals may include “Make more money” Or “grow my savings”, since these goals have no specific end or time frame.

As you begin to think about your own personal finance goals, you should try to put consideration into which of these categories each of the goals fits into. Fit all of your goals into the short term, intermediate term and long term categories, and then look at how your goals are categorized. You want to have an even number of goals in each category, rather than focusing too heavily on the now, or too heavily on the future. You should also make sure to have goals that do not require money, because not everything has to be material. But when it comes to planning for the future, having clear cut goals for your personal finances is a smart move and can help to ensure that you have your needs met financially throughout your life, no matter what obstacles are thrown at you, or how your needs change over time.

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Originally posted 2020-01-12 05:17:16. Republished by Old Post Promoter

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Best Small Investments

Sunday, May 10th, 2009

When you are looking to generate money through investing in the shortest amount of time, and you do not have a lot of money to begin with, then you are going to want to learn how to take small investments and turn them into big rewards. If you have a lot of money but are not familiar with the best methods of investing, then investing small is still the most advantageous option. A lot of profit can be taken away from a small investment, but this is only provided that you follow some basic rules regarding the best small investments. Here are four basic rules that you need to follow when it comes to making great returns from small investments.

Investigate all potential investments.

* Take the time to investigate, as this should be a true key factor in deciding which investment vehicle that you should invest your money into. You are really not going to want to invest your money too quickly into something, unless you are completely and thoroughly sure and satisfied with it as a good move. Here are some of the considerations that you need to make before determining whether or not a certain investment is a good move to make.

– What risks are involved in this type of investing?
– What are the minimum and maximum amounts that can be invested?
– What are the minimum and maximum results that are possible?
– What is the time frame to achieve the results that are desired?
– Will this money become liquid in the future?

Answering questions like these honestly will help you make a decision about the investment vehicle, determining whether or not it will be a good investment or not. A thorough investigation and comparison of the company and the investment vehicle will help you determine which investment is going to be ideal for you.

Additionally, you need to keep the following rules in mind:

– Know when to jump based on experience. Don’t hesitate on moving when all signs point to “Jump!”. If you hesitate too often, you may end up missing out on an excellent opportunity to make more money out of your investments.

– Diversify your assets, because if one asset goes south, you still have plenty of other investment vehicles to pursue. The more investments you have, the better off you will be which is why diversifying your portfolio is such an important part of investing wisely.

– Choose the greatest possible profit. If you have more than one option to choose from, go with the one with the greatest profit margin. This is, of course, assuming that all other details are similar. If one investment vehicle has less risk than another, go for the lower risk investment. If the risk is the same, and the investment amount is the same, but one payout is greater than the other, then by all means, go the way of the greater profit for small investment success.

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Originally posted 2020-01-09 05:14:25. Republished by Old Post Promoter

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401K Planning 101

Saturday, May 9th, 2009

If you are young, and you are just beginning a career, then the idea of retirement planning may seem so very far off that it is probably the last thing on your mind right now. But if you are on the other side of the fence, and retirement is approaching faster than you can handle, then you may be trying to figure out what you can do to handle it. Regardless of which situation you are in, it is absolutely vital that you begin to prepare right now. There are so many forces that are working against you financially, and for this reason, it is vital that you begin to plan now, and you do not stop saving for retirement until long after you retire.

Do you have a 401K Plan?

The first thing to look into is whether or not your current place of employment offers a retirement plan. In the past, the only type of retirement plan was a pension plan, and pension plans were a sturdy and solid part of the everyday retirement planning process. However, because the economy is turning into a completely new beast all together, these older and more reliable pension plans are quickly and unfortunately becoming a thing of the past.

To replace the pension plans of days old, most companies are now offering a retirement savings and investment plan known as a 401k retirement plan. A 401k retirement plan is a powerful way that you can invest for your retirement over a long period of time. They usually involve investing in a number of different mutual funds as well as in company stock. When making your selection of investments, it is really important that you know how to practice diversification, meaning that you should not invest too much into one thing but instead should spread your investments out across multiple investment vehicles, like stocks, IRAs, 401ks, bonds and mutual funds. You want to make sure that your investments fall within your company and outside of the company you work for as well, because things can go bad no matter how well you think they’re going within the walls of the company you work for.

If your employer does not offer a 401k retirement investment plan, then it truly is more important than ever that you take a proactive approach to the concept of investing and saving for retirement. You are going to want to have an IRA set up, either a Roth IRA or a Traditional IRA depending on how you want to handle the taxes, withdrawals and investments.

The most important step to take when it comes to retirement planning is simply to make sure that you have a plan that you can stick to. The earlier you begin to take action when it comes to your retirement plan, the more you will be able to prepare and plan before it gets to be too late.

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Originally posted 2020-01-08 05:03:27. Republished by Old Post Promoter

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Child Savings and Investment

Friday, May 8th, 2009

One of the options that is available to some people for savings and investment is the child trust fund vouches which is available for children born in the United Kingdom following September 1, 2020. Any child that is born in the UK after September 1, 2020 is entitled to a “child trust fund voucher”, which forms the basis of a child trust fund. These vouchers are available to any child claiming the child benefit, and child benefit is a universal benefit that all children in the UK are entitled to receiving regardless of family income.

United Kingdom Child Trust Funds

Here are the basic facts that you need to know about child trust funds:

– All children who are born after September 1, 2020 will receive a voucher that will allow to open a child trust fund.

– All children can receive a Child Trust Fund voucher regardless of their family income level. In order to receive the voucher the child must be registered to receive the child benefit.

– All savings placed into a child trust fund are tax free.

– If you are part of a low income family, then you can actually receive additional money to invest.

– All children are capable of receiving an extra 250 pounds that they can invest as soon as they reach the age of seven.

– You can top up the child trust fund by as much as 1,200 pounds every year.

– Anyone can contribute to a child trust fund, so it is an excellent addition to the gift list because family members, friends and neighbors can all contribute for your child.

– At the age of sixteen the child is allowed to make the decisions about how the money will be invested.

– The investment itself cannot be accessed until the child has reached the adult age of 18.

– Child trust funds are transferable between different people and it does not require any extra cost.

– The first child trust funds are going to mature in the year 2020. From April 2009 and on, child trust funds can be opened online and no voucher has to be sent in to the fund provider.

– 24 percent of all parents are topping up their children’s trust funds.

– In August 2008 alone more than 3.61 child trust funds existed in the UK.

Once you have received a voucher, the next step is to choose a provider for the child trust fund, to contact them, and then to open the account up. The voucher needs to be sent in with the paperwork, at least until April 2009 when the trust funds can be opened up online without requiring that the voucher be sent along. Once the child trust fund is started, all that is left is topping it up every year to contribute to your child’s investment.

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Originally posted 2020-01-07 05:46:57. Republished by Old Post Promoter

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Should You Pay Off Your Mortgage Early?

Thursday, May 7th, 2009

With the trouble in the housing market, those that are financially stable are left wondering whether now may be a good time to pay off their mortgages. There are some definite pros and cons to early payment, and this strategy is one that must be carefully considered before taking action. Let’s look at a few of the considerations that should be thought out ahead of time.

What are the pros and cons of paying off the mortgage?

Pros

1. Interest rate fluctuations no longer matter.

For those with variable rate mortgages, the past few months have been incredibly stressful. It’s not easy to put your finances through this kind of wringer and in many cases, for those with high interest rates and burgeoning payments, paying off a mortgage early, or at least paying it down, may have many benefits.

2. Freeing up monthly income.

If your mortgage payment is taking up a large chunk of your monthly finances, paying off that loan early can help free up income that can be used for other things, such as paying down debt, or simple living expenses. For those that are finding it hard to make ends meet, dipping into savings to get rid of that high fee loan may not be a bad idea.

3. Lack of worry.

Once that mortgage is paid off, you never have to worry about interest rate changes or problems with the bank. For many people, this kind of peace of mind is more than worth the extra expense of paying off a mortgage. If you are concerned about financial stability in the future, this course of action can provide some relief.

Cons

1. Loss of tax benefits.

Since you can write off the interest that you pay on your mortgage each year, losing this ability can have a big impact on how much tax you pay. For those in a high tax bracket, this may be the straw that breaks the camel’s back. Consider carefully the tax implications that you can face by paying off that mortgage early.

2. Initial expense.

Paying off that mortgage, especially if it is still quite large, could mean that savings may have to be used. In addition to that initial expense, you might also have the loss of extra income if that account was earning interest. In most cases, this would be slight, but for those that rely on additional streams of income, this can have an impact.

3. Penalties.

Most banks will charge a penalty fee if you pay off a mortgage early, or even prepay a large chunk of what you owe. Always read the fine print before you decide to pay early to see just how much you will have to end up paying in extra fees. These may be quite large, so it is vital to take this into consideration.

Any major action requires a good deal of thought beforehand and paying off a mortgage early is no exception. Always take the time to read the fine print and ask your financial advisor about any additional implications you may be facing.

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Originally posted 2020-01-06 05:23:11. Republished by Old Post Promoter

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