dance

investments 15

2008-08-08T23:19:00.000-07:00

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Switching your job? Retiring? Congratulations! A window of opportunity opens for you with the Rollover Individual Retirement Account or Rollover IRA.

In an era of corporate restructuring and outsourcing, Rollover IRA is among the most powerful means available for securing one's retirement. Yet, its potential to enlarge one's assets for the golden years commonly remains under-appreciated.

The Rollover IRA dramatically increases the range of choices available to you for investing your retirement savings. By offering investment choices hitherto unavailable in employer-sponsored plans such as 401k, 403b, or Section 457 plans, Rollover IRA provides you the means to have direct control of and more aggressively grow your nest egg.

This article discusses the advantages of Rollover IRA over employer-sponsored retirement plans.

So, if you are leaving your job and have accumulated assets in the employer-sponsored retirement plan, continue reading this article to learn about your options and more.

Four Options

You have four options on what you can do with your savings in your employer-sponsored plan when you are switching jobs or retiring.

1) Cash your savings.
2) Continue with the retirement plan of your previous employer.
3) Transfer your savings into the retirement plan sponsored by your new employer.
4) Set up a Rollover IRA account with a mutual fund company and move your retirement savings into that account.

Unless you have a pressing need, it is best not to cash your retirement savings. First, cash withdrawals from the retirement plan will be subject to federal and state taxes. Second, your retirement savings diminish and you will have fewer assets to grow tax-deferred.

While the three other options will not erode your retirement savings and will allow it to grow tax-deferred, they are not equal in their ability to help you boost its growth rate.

Increased Investment Choices

Most employees earn meager returns on their employer-sponsored retirement plan savings. A Dalbar study reports that the average 401k plan investor achieved an annual return of just 3.5% during a 20-year period when the S&P 500 returned 13.0% per year.

Part of the problem stems from the fact that most retirement plans offer only a limited number of investment choices. A Columbia University study finds the median number of mutual fund choices in 401k plans to be just 13. The actual number of equity mutual fund investment choices however is less, since the median number includes money market funds, fixed income funds, and balanced funds.

With fewer investment choices, employer-sponsored plans limit your ability to take advantage of different market trends and to continually position your retirement savings in mutual funds with superior risk-reward profiles.

If you set up a Rollover IRA with a large mutual fund company such as Fidelity Investments, T. Rowe Price or Vanguard Group, you will break the shackles imposed by your employer-sponsored plan and dramatically increase the number of mutual funds available for investing your retirement savings. Fidelity, for example, provides access to several thousand mutual funds besides the more than 180 mutual funds it manages.

Setting-up the Rollover IRA

Let's say you decide to move your retirement savings to a Rollover account with a mutual fund company. How do you make it happen?

Contact the mutual fund company in which you wish to open an account and ask them to send you their Rollover IRA kit. Complete the form for opening the Rollover IRA account and mail it to the mutual fund company. Next, complete any forms required by the retirement plan administrator of your previous employer and request transfer of your assets into the Rollover IRA account.

You have two choices for moving your retirement savings to your Rollover IRA account. One is to elect to have the money transferred directly from the employer-sponsored plan to the Rollover IRA account. This is called direct rollover. With the indirect rollover alternative, you take the distribution from the retirement plan and then deposit it in the Rollover IRA account. Unless exceptions apply, you have 60 days to deposit the distribution and qualify for tax-free rollover.

Boosting Your Rollover IRA Performance

You need a strategy to benefit from the wide range of investment choices available in the Rollover IRA. You can develop the strategy yourself or leverage ideas from investment newsletters such as AlphaProfit Sector Investors' Newsletter to enhance the growth rate of your nest egg.

AlphaProfit's Focus and Core model portfolios have grown at an average annual rate of 33% and 21% respectively, compared to an average annual return of 13% for the S&P 500 Index from September 30, 2003 to March 31, 2006.

Let's say you transfer $50,000 from your employer-sponsored retirement plan to the Rollover IRA and the wider range of investment choices helps you increase your annual return from 8% in the former to 12% in the Rollover IRA. At the end of 20 years, your Rollover IRA will be worth $482,315, more than double the $233,048 it would be worth had you stayed on with the employer-sponsored plan -- that too without any cash additions to your Rollover IRA.

Adding to Your Rollover IRA

You can leverage the potential of your Rollover IRA further by adding to it each time you change jobs. With the Rollover IRA already setup, all you have to do is to instruct the retirement plan administrator of your last employer to transfer assets to the Rollover IRA. There is no limit on the amount of money you can transfer.

You may also add money to your Rollover IRA through regular annual contributions. They are however subject to the annual limit for IRA contributions.

Summary

When you are switching jobs or retiring, the Rollover IRA opens a window of opportunity for you, widening the range of investment choices for your retirement assets hitherto not available in the employer-sponsored plan. The self-directed Rollover IRA empowers you to construct and manage a mutual fund portfolio to boost the growth rate of your retirement savings.

Notes: This report is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. This report does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person who may receive this report. The information contained in this report is obtained from various sources believed to be accurate and is provided without warranties of any kind. AlphaProfit Investments, LLC does not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. AlphaProfit Investments, LLC is not responsible for any errors or omissions herein. Opinions expressed herein reflect the opinion of AlphaProfit Investments, LLC and are subject to change without notice. AlphaProfit Investments, LLC disclaims any liability for any direct or incidental loss incurred by applying any of the information in this report. The third-party trademarks or service marks appearing within this report are the property of their respective owners. All other trademarks appearing herein are the property of AlphaProfit Investments, LLC. Owners and employees of AlphaProfit Investments, LLC for their own accounts invest in the Fidelity Mutual Funds included in the AlphaProfit Core and Focus model portfolios. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from Fidelity Investments or other mutual fund companies mentioned in this report. Past performance is neither an indication of nor a guarantee for future results. No part of this document may be reproduced in any manner without written permission of AlphaProfit Investments, LLC. Copyright © 2006 AlphaProfit Investments, LLC. All rights reserved.

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investments 14

2008-08-08T23:17:00.000-07:00

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Before we talk about futures commodities trading, please keep in mind that trading in these contracts has:
1) High degree of risk for financial losses
2) High leverage
3) High volatility and fluctuations
So please use only risk capital, funds that will not adversely affect your life style.

1) Get familiarized with are the contact sizes (and point value) for each commodity traded. While there are hundred of contacts around the world, maybe you should try and focus on the ones that are trading in the US, specifically in NY and Chicago.

2) Ask for the margin requirement on the different commodities. Each commodity has its requirements and that should help you determine what commodities you should have in your portfolio

3) Decide how you are going to trade: Are you going to use a mechanical trading system, technical trading system or on fundamentals. What ever you use, make sure you trade with some kind of methodology; just don't use hunches and "tips" on late night TV.

4) Determine whether you should use a full service commodities broker or a discount online broker. This depends whether you have experience in other financial instruments like stock or stock options. Typically full service brokers will charge more, but could prove to be very valuable when it comes to stopping you from making a mistake.

5) Paper Trade- Make sure that you practice either by a manual log or a simulated online trading platform. It does not cost a dime and it will give you an idea about the day to day volatility that occurs in the futures market. The period that you are trading might not give you a clear indication about a specific commodity, so you should look at past periods and see how certain commodities could fluctuate.

6) Shop around! Whether you use a full service broker or an online trading platform, you will need help. Make sure that who ever you work with is a brokerage that time, staff and patience to guide you through when you need their help.

Past performance is not indicative of future results. There is a substantial risk of loss in futures trading.

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investments 13

2008-08-08T23:13:00.000-07:00

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Had you invested in real estate (or property as it is known in the UK) over the past 30 years or so you would have done very well.However, prices have now reached such a level that it may not be such a good investment especially in the short-term. Over the long-term,prices are sure to appreciate once again. Outside of bricks and mortar, the stock market still provides the skilled individual with one of the best opportunities at capital appreciation.

With the globalization of markets now having been accomplished enabling an individual to trade in almost any market across the globe from anywhere, we will concentrate on the American market which is still the biggest and most liquid market. Having decided to concentrate on the American market, you now must decide on what sort of companies offer the best opportunities for making a profit.Small technology or biotechnology companies can sometimes offer spectacular gains in the short-term. However, your chance of picking them out of the bunch in advance of the significant move in their share price, unless you are equipped with insider knowledge, is pretty slim. Therefore concentrating on large established companies is a much safer route to profits.Concentrating on the constituent members of the S&P 500 index provides the investor with ample scope for investment in established companies. I will therefore solely turn my attention to the latter to provide the necessary fodder.

When viewing companies in an index such as the S&P 500, you have got to be aware of the different sectors within it. In order to reduce your risk, it is inadvisable to invest in more than one company in any one sector at a given time. Picking on a sector that is currently advancing, or about to advance, and then looking for the most eligible company within that sector likely to profit from the favorable tide can be very rewarding. The company chosen needn't be the market leader in that particular sector. If Xxon Mobil, for instance, dominates the Oil and Gas sector, a second or third line company in that sector such as Occidental Petroleum may give you a much better opportunity to profit from rising oil prices for example.

Ideally you are looking for an established company in a sector that is advancing, or likely to advance, that is paying increasing dividends from rising profits, and with a p/e ratio ( that is payment/earnings) less onerous than its peers.P/e ratios are only relevant when comparing companies within the same sector. Another approach to picking a company whose share price is likely to advance is to pick a large company with good prospects when it is temporarily out of favor with the market. Both AIG Group and Pfizer have been in the doghouse over the last couple of years enabling astute investors to profit from their short-term unpopularity.With the latter strategy timing is of crucial importance.

If you segregate, say, $20,000 as starting capital for investment purposes from other funds required to live from month to month, the best place to initially put it is into a high-interest bank account until such time as you are ready to invest. This account should pay 4% or better interest per year.You would then limit your investment in any one share to 15% of the total, or $3,000 including dealing expenses per investment. It is inadvisable,especially in jittery markets, to have more than 70% of the total invested at any one time.The market has moods and when everything looks black on the horizon good shares will fall back with the mediocre and bad ones giving you a chance to buy a good share at cheap prices for recovery.

If you do your own research, it is best to use and execution- only broker who are cheaper than those offering investment advice. Pick a large broker with many years service in the market. If you want a broker offering investment advice, go for one who has a proven record of offering impartial advice in the market as recommended by a friend or acquaintance.

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investments 12

2008-08-08T23:12:00.000-07:00

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Wall Street Institutions pay billions of dollars annually to convince the investing public that their Economists, Investment Managers, and Analysts can predict future price movements in specific company shares and trends in the overall Stock Market. Such predictions (often presented as "Wethinkisms" or Model Asset Allocation adjustments) make self-deprecating investors everywhere scurry about transacting with each new revelation. "Thou must heed the oracle of Wall Street"... not to be confused with the one from Omaha, who really does know something about investing. "These guys know this stuff so much better than we do" is the rationale of the fools in the street, and on the hill (sic).

What if its true, and these pinstriped super humans can actually predict the future, why do you transact the way you do in response? Why would financial professionals of every shape and size holler "sell" when prices move lower, and vice versa? Would this pitch work at the mall? Of course not. Now lets bring this phenomenon into focus. Hmmm, not one of these Institutional Gurus ever doubts the basic truth that both the Market Indices and individual issue prices will continue to move up and down, forever. So, if we were to slowly construct a diversified portfolio of value stocks (My definition: profitable, dividend paying, NYSE companies.) as they fall in price, we would be able to take profits during the following upward cycle... also forever. Hmmm.

Let's pretend for a (foolish) moment that broad market movements are somewhat predictable. Regardless of the direction, professional advice will always fuel the operative emotion: greed or fear! Wall Street's retail representatives (stock brokers), and the new, internet expert, self-directors, rarely go against the grain of the consensus opinion... particularly the one projected to them by their immediate superior (or spouse). You cannot obtain independent thinking from a Wall Street salesperson; it just doesn't fill up the Beemer. Sorry, you have to be able to think for yourself to stay in balance while pedaling on the Market Cycle. Here's some global advice that you will not hear on the street of dreams (and don't get all huffy until you understand what to buy or to sell as well as when to do so): Sell into rallies. Buy on bad news. Buy slowly; sell quickly. Always sell too soon. Always buy too soon, incrementally. Always have a plan. A plan without buying guidelines and selling targets is not a plan.

Predicting the performance of individual issues is a totally different ball game that requires an even more powerful crystal ball and a whole array of semi- legal and completely illegal relationships that are mostly self serving and useless to average investors. But, again, let's pretend that a mega million-dollar salary and industry recognition as a superstar creates Master of the Universe quality prediction capabilities... I'm sorry. I just can't even pretend that it's true! The evidence against it is just too great, and the dangers of relying on analytical opinions too real. No one can predict individual issue price movements legally, consistently, or in a timely manner.

Investing in individual issues has to be done differently, with rules, guidelines, and judgment. It has to be done unemotionally and rationally, monitored regularly, and analyzed with performance evaluation tools that are portfolio specific and without calendar time restrictions. This is not nearly as difficult as it sounds, and if you are a "shopper" looking for bargains elsewhere, you should have no trouble understanding how it works. Not a rocket scientist? Good, and if you are at all familiar with the retailing business, even better. You don't need any special education evidentiary acronyms or software programs for stock market success... just common sense and emotion control.

Wall Street sells products, and spins reality in whatever manner they feel will produce the best results for those products. The direction of the market doesn't matter to them and it wouldn't to you either if you had a properly constructed portfolio. If you learn how to deal unemotionally with Wall Street events, and shun the herd mentality, you will find yourself in the proper cyclical mode much more often: buying at lower prices and, as a result, taking profits instead of losses. Just what if...

Coming next: Developing a Value Stock Watch List and Profit Taking Targets.

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investments 11

2008-08-08T23:10:00.000-07:00

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1. You can't take more risk than you are comfortable with - emotion is the enemy of the trader. Most of us are slaves to our emotion, which is why most traders fail despite the apparent simplicity of trading. To be successful, you have to manage emotion, and the first step toward emotional mastery is to not take more risk than you are comfortable with. If you can't sleep at night over the potential of losing more than $500 on a stock trade, then you should not risk more than $500 on a stock trade. The less you care about the outcome of a trade, the smarter you will execute it.

2. Stops loss orders must be used - one big loss can wipe out the gains of five winning trades. Success requires that you don't take big losses, so utilize stop loss orders. Once you are entered in a trade, enter a stop loss order and stick to it. If your brokerage does not provide the ability to execute stop loss orders, then change brokers.

3. No one cares more about your money than you - only you really care whether you make money or not. Therefore, do not depend on others to make you money; you have to take control and know what is going on. You can use the skills of others to help you make decisions, but ultimately, your success in the market will come down to what you do.

4. Losers react, winners predict - the market does not care about what happened in the past. If you are using publicly available information to make trading decisions, then you are using old information. The stock market moves on what it expects to happen in the future, and not on what has already happened. Use what has happened in the past to provide clues to what may happen in the future, but don't make decisions on information that is widely known.

5. The stock market is not fair - Within every stock, there are a small group of investors who know more than the general public. They have an advantage, because they can better predict what a company will do in the future. To be successful, we have to figure out what the investors with better information are doing, and then do the same.

6. Information is biased - the financial industry wants you to buy stocks. The brokerages that finance the companies, the newsletters that get paid to advertise company stories, the promoters that get paid to promote stocks, the media that sell more advertising in an up market and of course, the companies themselves all benefit when stock prices go higher. The more buyers, the higher prices go. Trust no one when making investment decisions, because everyone can have a bias. Only the market can not lie (although it can seem pretty stupid sometimes), therefore, trust what the market tells you.

7. Hard work does not make money in the market - you need to work hard to learn how the stock market works. You need to work hard to learn how to manage your emotions. You need to work hard to learn discipline. However, the most money is made in a market that is trending, one where there are lots of opportunities and it seems easy to make money. When the market is not trending, it is harder to find opportunities. Working harder when the going gets tough will cause you to take marginal trades. Take the obvious trades, they are more likely to work.

8. Black boxes don't work - there are a lot of companies selling trading systems that magically spit out buy and sell recommendations. The stock market is like a flu virus; just when you think you have it figured out, it changes in to something else. Therefore, systems too must evolve with the market. A system that worked in the past may not work in the future. However, what seems to always work is understanding how humans and crowds behave. Learn that, and you can begin to pick stocks in any market condition. More importantly, learn the art of trading well, knowing that you can not always be right, that you have to limit losses and let profits run and that you have to understand what motivates people to buy and sell. Systems, indicators, and computer programs are simply tools to help you make better decisions.

9. The stock market is usually efficient - actually, stock, futures, currencies and any other market that has enough people trading them are usually efficient. That means, most of the time you can not beat the markets. To do better than the masses, you have to identify situations where market efficiency is breaking down. That occurs when the crowd is emotional or when small groups of investors are trading on private information. Usually, that is most easily found when stocks are trading abnormally in terms of price and volume. Focus your attention on abnormal behavior when looking for trading opportunities.

10. Discipline is essential - you have to manage risk effectively, you have to use stops loss orders, you have to always be looking for high probability trading opportunities, you have to avoid taking too much risk and you have to let winning positions run. The laws of trading are nothing if you don't have the discipline to follow them.

The very first sentence:

"Successful trading of the stock market requires a lot more than knowing what to buy or sell. "

In other words....

IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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investments 10

2008-08-08T23:08:00.000-07:00

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Unbeknownst to 98% of working people, the 40 year plan is over. Statistics show that by age 65 less than 2% of Americans can truly retire in comfort without the help of family members or the government. The lackluster performance of the stock market over the past 6 years has dashed many people's hopes of retiring early. It used to be that you could get a great education, get a great job and settle with a company by 25 years of age, keep your nose clean, work your way to the top, invest in your companies stock and by age 65 retire the company you sacrificed for will take care of your retirement and medical expenses for life.

For many now this is just wishful thinking and a pipe dream.

Today's norms:

The harsh reality is: Corporate down-sizing (e.g. Gillette, Ford, and GM). Corporate bankruptcies - Enron, Worldcom). Company's robbing company pension plans and judges are allowing it to happen just ask people working for the airlines, illegal insider stock trading, age discrimination, companies cannot afford to pay health insurance premiums because they have sky-rocketed and people are living longer.

Other forces: World Instability, unfettered nuclear proliferation, Sept 11th, natural disasters all cooked together.

Yes, the poor performance of the stock market, lower interest rates and the real estate boom have contributed greatly to people looking for alternative investment strategies such as self directed investing of retirement funds in real estate.

The Internet, information proliferation, people's ability to share information, online financial software, and real time stock quotes.

Benefits of investing with self directed ira funds:

Stimulates the economy... It is great for recession proofing an economy. Money from retirement funds keep construction crews working
With the ability to look outside the stock market, you may find alternative investment vehicles that are safer with higher returns which will allow you to make up for lost time.
The government and taxpayers do not have to pick up the tab in order to help someone maintain their lifestyle during retirement.
Permits true retirement diversification and wealth accumulation in tangible assets.
Global investing... With your Self Directed IRA, you can invest in international real estate.

Granted self directing your retirement portfolio is not for everyone. But what are your legitimate alternatives?

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investments 9

2008-08-08T23:02:00.000-07:00

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On January 1, 2006, a leading financial daily reported the trailing 1-year and 5-year returns of Fidelity Contrafund (Nasdaq: FCNTX), a no-load mutual fund, as 16.23% and 6.21% respectively. While the financial daily's return information is useful, there is more to mutual fund returns.

Is the performance of the fund superior or inferior?
How tax-efficient is the fund in delivering these returns?
Are the returns of the fund commensurate with the risk the fund manager has taken to achieve them?

Savvy investors will seek answers to such questions when evaluating mutual fund returns. Before getting into the nitty-gritty of mutual fund returns, it is good to understand what the data reported in the financial daily really mean.

Total Return
Fidelity Contra's reported 16.23% 1-year return is the fund's total return for the December 31, 2004 to December 31, 2005 period. In practical terms, $10,000 invested in the fund on December 31, 2004 is worth $11,623 on December 31, 2005. The total return includes more than the increase (or decrease) in the fund's share price. It also assumes reinvestment of all dividends as well as short- and long-term capital gain distributions into the fund at the price at which each distribution is made.

Compound Annual Return
The reported 6.21% 5-year return is the fund's compound annual return (also called the average annual return). The compound annual return is a calculated number that describes the rate at which the investment has grown assuming uniform year-over-year growth during the 5-year period.

A $10,000 investment in the Contrafund on December 31, 2000 has grown to $13,515.34 on December 31, 2005. The ending value of $13,515.34 = $10,000[(1 + 0.0621)^5] where 6.21% is the compound annual return. The investment in the fund grew at an implied annual growth rate of 6.21% over the 5-year period.

While total return and compound annual return are useful, they do not tell how a particular mutual fund has performed compared to its peers. They also do not provide information on the return actually earned by investors after accounting for taxes. Finally, they do not offer insight on how well the fund manager has managed risk while achieving the returns.

Relative Return
Relative return compares the performance of a mutual fund against its peers. It is the difference between the total return of the fund and the total return of an appropriate benchmark over the same period.

Fidelity Contra is a large-cap growth fund that primarily invests in U.S.-based companies. It is therefore appropriate to compare its performance with that of an average large-cap growth fund. It is also relevant to benchmark the fund against the Standard & Poor's (S&P) 500 index, comprising of large U.S.-based companies.

While Fidelity Contra has a compound annual return of 6.21% for the 5-year period ending December 31, 2005, Morningstar reports the average large-cap growth fund has an average annual loss of 8.48% over the same period. The S&P 500 index has an average annual return of 0.54% over the same period. Fidelity Contra has outperformed with a relative return of 14.69% over the average large-cap growth fund and with a relative return of 5.67% over an S&P 500 index fund.

After-Tax Return
Unlike assets held in qualified accounts such as 401k plans or individual retirement accounts (IRA), assets held in regular individual or joint accounts are not tax-deferred. For such non-qualified accounts, after-tax return is the return realized after accounting for taxes.

Short-term capital gains and short-term capital gain distributions from a mutual fund are currently taxed at the same rate as earned income. Dividends, long-term capital gain distributions and long-term capital gains realized from the sale of fund shares are currently taxed at a lower rate.

Fidelity states the compound annual return for Fidelity Contra before taxes is 6.21% for the 5-year period ending on December 31, 2005. When all distributions are taxed at the respective maximum possible federal income-tax rate, the after-tax return dips to 6.10%. The after-tax return drops further to 5.33% after accounting for the long-term capital gain tax due on sale of the fund shares.

Risk-Adjusted Return
Some fund managers take more risk than others. It is important to assess a fund's return in light of the amount of risk the fund manager takes to deliver that return.

Risk-Adjusted Return is commonly measured using the Sharpe Ratio. The ratio is calculated using the formula (mutual fund return - risk free return)/standard deviation of mutual fund return. The higher the Sharpe ratio, the better is the fund's return per unit risk.

Based on returns for the 3-year period ending on November 30, 2005, Morningstar reports Fidelity Contra's Sharpe ratio as 1.74. The fund's Sharpe Ratio may be compared with those of similar funds to determine how the fund's risk-adjusted return compares with those of its peers.

Beyond Mutual Funds
Return concepts such as relative return, after-tax return, and risk-adjusted return may also be used for evaluating separately-managed accounts, hedge funds and investment newsletter model portfolios.

The AlphaProfit Sector Investors' Newsletter, for example, tracks the total return and compounded annual return of its Core and Focus model portfolios. To provide Subscribers with a more complete picture of model portfolio returns, this newsletter also tracks the relative and risk-adjusted returns of the model portfolios. The newsletter's model portfolios are constructed and repositioned with a view to maximizing after-tax returns.

Summary
While total return and compound annual return are useful, they do not provide a complete picture of a mutual fund's performance. Metrics such as relative return and after-tax return offer insights on the fund's relative performance and tax-efficiency. Risk-adjusted returns enable investors to assess how a fund's returns stack up when risk is factored in.

Notes: This report is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. This report does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person who may receive this report. The information contained in this report is obtained from various sources believed to be accurate and is provided without warranties of any kind. AlphaProfit Investments, LLC does not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. AlphaProfit Investments, LLC is not responsible for any errors or omissions herein. Opinions expressed herein reflect the opinion of AlphaProfit Investments, LLC and are subject to change without notice. AlphaProfit Investments, LLC disclaims any liability for any direct or incidental loss incurred by applying any of the information in this report. The third-party trademarks or service marks appearing within this report are the property of their respective owners. All other trademarks appearing herein are the property of AlphaProfit Investments, LLC. Owners and employees of AlphaProfit Investments, LLC for their own accounts invest in the Fidelity Mutual Funds included in the AlphaProfit Core and Focus model portfolios. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from Fidelity Investments or other mutual fund companies mentioned in this report. Past performance is neither an indication of nor a guarantee for future results.

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investments 8

2008-08-08T23:00:00.000-07:00

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The Retirement savings plan, Roth 401(k) introduced by the Economic Growth and Tax Relief Reconciliation Act, 2001 will come into force from January 2006. Unlike a traditional 401(k) Retirement Plan, a Roth 401k plan applies to all employees but the latter requires the contributions to the plan account with after-tax dollars while a 401k plan allows for contributions with pre-tax dollars.

You may not be allowed to contribute to a Roth IRA if your income level is higher but you can certainly qualify for a Roth 401(k) plan, as there are no income specifications here. In addition, you can contribute up to $15,000 for 2006, as in a 401(k) plan and the limit reaches $20,000 for individuals turning 50 years of age or older by the end of the year. The increase in the limit is termed as the catch-up contribution which was a provision of the Economic Growth and Tax Relief Reconciliation Act of 2001.

As far as the employers' contributions are concerned, these amounts will be matching the contributions of employees but with pre-tax dollars. The employer contribution will be rolled up in a separate account and funds withdrawn from that account will be subjected to taxes on withdrawal.

The Roth 401(k) plan may not allow you to get the benefit of the contribution from pre-tax dollars but it allows you to withdraw tax-free money after retirement. You can avoid paying income tax on the cash you withdraw from your plan account after retirement. But your age should be 59 and 1/2 years and you should have held the plan account for more than 5 years or more. In case you withdraw money before retirement, you will have to pay taxes (almost 35% of the contribution) and a 10% penalty.

A Roth 401(k) plan can be helpful as it prevents you from tax payments on withdrawal after retirement. But this will help you only if your tax bracket after retirement is same or higher than what it is now. If your current tax bracket is low, then you can contribute more towards the Roth 401(k) plan account. Your savings thus increase and you get to withdraw a higher amount at retirement. You can also roll over your Roth 401(k) balance into a Roth IRA whenever you leave your employment.

You can contribute a part of the allowed limit, which is $15,000 to a Roth 401(k) plan account and the rest to a 401(k) account, and thereby reduce the tax payments. This is because a Roth 401(k) allows you to contribute after-tax dollars whereas a 401(k) plan account allows for pre-tax contributions.

With a Roth 401(k) plan contribution, you don't take home several dollars since you are allowed to accumulate after-tax dollars into the plan account. But then you don't have to pay taxes on the amounts taken out after retirement and this helps you especially if the tax bracket is higher at that time.

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investments 7

2008-08-08T22:57:00.000-07:00

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nvestment Advisors (IAs) come in all different intellectual, professional, and alphabetical varieties. They range in educational qualifications from High School dropout to PhD, and can be professional Accountants, Insurance Salesmen, Stock Brokers, Investment Managers, Dentists, Lawyers, TV personalities, and Gourmet Chefs. Anyone can be an Investment Advisor! It seems reasonable that your trust should gravitate toward those who have educational credentials, hands on experience with their own money, and no direct financial benefit from the advice provided. Stay safer by finding a fee only advisor who has just one profession... and the ability to say NO.

Why do people become Investment Advisors? Call me skeptical, but I don't think it's the ethereal glow they feel after implementing your new Financial Plan. Actually (once you appreciate that IAs are the primary delivery system for Wall Street's huge collection of one-size-fits-all products), you'll realize that it's the money. No conspiracy here, just a subtle brainwashing that has convinced you that the Advisor's primary objective is to protect your family. In reality, the primary goal of commissioned advisors is to protect their own families, and they accomplish this by selling Investment Products. The Investment Advisor label has become a euphemism for product salesperson just as Financial Planner nearly always means Insurance salesperson. Stay safer by finding a fee only advisor who has just one profession... and the ability to say NO.

Serious IAs can be identified by acronyms following their names (also by dark three piece suits and facial hair), RIA and CFP being the most common. As professional as this seems, designations do not create trustworthiness, for several reasons: IAs must become RIAs to be licensed to sell investment products. Most practitioners affiliate themselves with major Wall Street Institutions to defray their start up costs and many are subsidized in return for pushing their sponsor's products. Finally, most advisors will remain in bed with one company at a time throughout their careers, constantly touting the present firm's products as "best". Hmmm. Hundreds of companies, thousands of IAs, convincing millions of shoppers (investors) that they have just purchased the one very best product to achieve their financial goals. From cradle to grave, most IAs dance to a tune that's not being played by their clients.

Over the past several years, Wall Street has managed to invade the once respected Insurance Industry by attaching Mutual Funds to life insurance and annuity products, making them far too speculative to achieve their once guaranteed objectives. But the "variable products" scam dwarfs in potential long-term impact to the more recent high crime against investors. This is the one that ignores the (in-your-face-obvious) Conflict of Interest when Accountants sell investment products! Many professionals have multiple degrees; few have multiple practices. You deserve a specialist. If your CPA/Lawyer/Doctor (who's next) can make a living in his primary practice, why sell investment products? Greed? Hubris? And why does Wall Street allow these non-professionals to push investment products? Don't be naive, the more people out there pushing Investment Products, the bigger the bonus for the Captains of the Universe. Stay safer by finding a fee only advisor who has just one profession... and the ability to say NO.

In spite of the fact that the "burn out" rate among IAs compares with that of restaurants and Mutual Fund Managers, and that the advisory business itself is a cut-throat, competitive battlefield, the Financial Institutions that employ the majority of IAs prosper, multiply, and produce more product for your "eyes wide shut" consumption... because you, your products, and the management fees remain! A caring and successful Investment Advisor makes an excellent income and should; a successful financial institution buys other financial institutions!

The hierarchy of commissions paid to IAs can exceed 10% on "private deals", limited partnerships, and a litany of speculative products and services. On the more controlled substances (sic), Annuity commissions can run above 8% with 10-year lock up provisions common and Mutual Funds provide a generous 4% to 6% whether you see them or not. New issues, odd lot Bonds, and other securities that don't show a commission, include marketing fees and mark ups that can be substantial. What ever happened to individual Equity portfolios? It's a combination of in-greed-ients... products are less work and produce more money. Stay safer by finding a fee only advisor who has just one profession, the ability to say NO, and who knows something about individual securities.

Most people need Investment Advisors. Life Insurance protection is vital; fixed annuities are helpful for people of limited means; Mutual Funds are the only option (pity) in most self-directed retirement plans. The vast majority of employed Americans are Investors, actively or passively, with little time or expertise to select securities and manage portfolios. (If the Democrats would accept this, they just might win an election.) But recent experience confirms that we all have a responsibility to our own money, a responsibility that we should only delegate to a professional if we know what the professional is supposed to know. The fact that he or she is an XYZ Fund representative just isn't enough. You need an independent advisor that has ideas rather than products and an understanding of markets, not marketing. If you are willing to ask the right questions, you can find an IA who might just be able to help you (and herself) at the same time. Try these for starters: Do you sell any products? Do you have a personal portfolio that I can review? Do you provide a "fee only" advisory service? How long have you been in the financial services business, and is it your only business? (It's not your job to educate "newbies"!) Are you affiliated with any other financial services companies? Do you have at least five non-family clients who you have been advising for at least five years... that I can contact directly? Will you be compensated for referring me to someone? Stay safer by finding a fee only advisor who has just one profession and the ability to say NO.

The ability to say NO? An advisor will tell you not to do something that he feels is inappropriate... a salesman will do what you tell him to do.

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investments 6

2008-08-08T22:45:00.000-07:00

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It matters not what lines, numbers, indices, or gurus you worship, you just can't know where the stock market is going or when it will change direction. Too much investor time and analytical effort is wasted trying to predict course corrections... even more is squandered comparing portfolio Market Values with a handful of unrelated indices and averages. If we reconcile in our minds that we can't predict the future (or change the past), we can move through the uncertainty more productively. Let's simplify portfolio performance evaluation by using information that we don't have to speculate about, and which is related to our own personal investment programs.

Every December, with visions of sugarplums dancing in their heads, investors begin to scrutinize their performance, formulate coulda's and shoulda's, and determine what to try next year. It's an annual, masochistic, right of passage. My year-end vision is different. I see a bunch of Wall Street fat cats, ROTF and LOL, while investors (and their alphabetically correct advisors) determine what to change, sell, buy, re-allocate, or adjust to make the next twelve months behave better financially than the last. What happened to that old fashioned emphasis on long-term progress toward specific goals? The use of Issue Breadth and 52-week High/Low statistics for navigation; and cyclical analysis (Peak to Peak, etc.) and economic realities as performance expectation barometers makes a lot more personal sense. And when did it become vogue to think of Investment Portfolios as sprinters in a twelve-month race with a nebulous array of indices and averages? Why are the masters of the universe rolling on the floor in laughter? They can visualize your annual performance agitation ritual producing fee generating transactions in all conceivable directions. An unhappy investor is Wall Street's best friend, and by emphasizing short-term results and creating a superbowlesque environment, they guarantee that the vast majority of investors will be unhappy about something, all of the time.

Your portfolio should be as unique as you are, and I contend that a portfolio of individual securities rather than a shopping cart full of one-size-fits-all consumer products is much easier to understand and to manage. You just need to focus on two longer-range objectives:

(1) growing productive Working Capital, and
(2) increasing Base Income

Neither objective is directly related to the market averages, interest rate movements, or the calendar year. Thus, they protect investors from short-term, anxiety causing, events or trends while facilitating objective based performance analysis that is less frantic, less competitive, and more constructive than conventional methods. Briefly, Working Capital is the total cost basis of the securities and cash in the portfolio, and Base Income is the dividends and interest the portfolio produces. Deposits and withdrawals, capital gains and losses, each directly impact the Working Capital number, and indirectly affect Base Income growth. Securities become non-productive when they fall below Investment Grade Quality (fundamentals only, please) and/or no longer produce income. Good sense management can minimize these unpleasant experiences.

Let's develop an "all you need to know" chart that will help you manage your way to investment success (goal achievement) in a low failure rate, unemotional, environment. The chart will have four data lines, and your portfolio management objective will be to keep three of them moving upward through time. Note that a separate record of deposits and withdrawals should be maintained. If you are paying fees or commissions separately from your transactions, consider them withdrawals of Working Capital. If you don't have specific selection criteria and profit taking guidelines, develop them.

Line One is labeled "Working Capital", and an average annual growth rate between 5% and 12% would be a reasonable target, depending on Asset Allocation. [An average cannot be determined until after the end of the second year, and a longer period is recommended to allow for compounding.] This upward only line (Did you raise an eyebrow?) is increased by dividends, interest, deposits, and "realized" capital gains and decreased by withdrawals and "realized" capital losses. A new look at some widely accepted year-end behaviors might be helpful at this point. Offsetting capital gains with losses on good quality companies becomes suspect because it always results in a larger deduction from Working Capital than the tax payment itself. Similarly, avoiding securities that pay dividends is at about the same level of absurdity as marching into your boss's office and demanding a pay cut. There are two basic truths at the bottom of this:

(1) You just can't make too much money, and
(2) there's no such thing as a bad profit

Don't pay anyone who recommends loss taking on high quality securities. Tell them that you are helping to reduce their tax burden.

Line Two reflects "Base Income", and it too will always move upward if you are managing your Asset Allocation properly. The only exception would be a 100% Equity Allocation, where the emphasis is on a more variable source of Base Income... the dividends on a constantly changing stock portfolio. Line Three reflects historical trading results and is labeled "Net Realized Capital Gains". This total is most important during the early years of portfolio building and it will directly reflect both the security selection criteria you use, and the profit taking rules you employ. If you build a portfolio of Investment Grade securities, and apply a 5% diversification rule (always use cost basis), you will rarely have a downturn in this monitor of both your selection criteria and your profit taking discipline. Any profit is always better than any loss and, unless your selection criteria is really too conservative, there will always be something out there worth buying with the proceeds. Three 8% singles will produce a larger number than one 25% home run, and which is easier to obtain? Obviously, the growth in Line Three should accelerate in rising markets (measured by issue breadth numbers). The Base Income just keeps growing because Asset Allocation is also based on the cost basis of each security class! (Note that an unrealized gain or loss is as meaningless as the quarter-to-quarter movement of a market index. This is a decision model, and good decisions should produce net realized income.)

One other important detail No matter how conservative your selection criteria, a security or two is bound to become a loser. Don't judge this by Wall Street popularity indicators, tealeaves, or analyst opinions. Let the fundamentals (profits, S & P rating, dividend action, etc) send up the red flags. Market Value just can't be trusted for a bite-the-bullet decision... but it can help. This brings us to Line Four, a reflection of the change in "Total Portfolio Market Value" over the course of time. This line will follow an erratic path, constantly staying below "Working Capital" (Line One). If you observe the chart after a market cycle or two, you will see that lines One through Three move steadily upward regardless of what line Four is doing! BUT, you will also notice that the "lows" of Line Four begin to occur above earlier highs. It's a nice feeling since Market Value movements are not, themselves, controllable.

Line Four will rarely be above Line One, but when it begins to close the cap, a greater movement upward in Line Three (Net Realized Capital Gains) should be expected. In 100% income portfolios, it is possible for Market Value to exceed Working Capital by a slight margin, but it is more likely that you have allowed some greed into the portfolio and that profit taking opportunities are being ignored. Don't ever let this happen. Studies show rather clearly that the vast majority of unrealized gains are brought to the Schedule D as realized losses... and this includes potential profits on income securities. And, when your portfolio hits a new high watermark, look around for a security that has fallen from grace with the S & P rating system and bite that bullet.

What's different about this approach, and why isn't it more high tech? There is no mention of an index, an average, or a comparison with anything at all, and that's the way it should be. This method of looking at things will get you where you want to be without the hype that Wall Street uses to create unproductive transactions, foolish speculations, and incurable dissatisfaction. It provides a valid use for portfolio Market Value, but far from the judgmental nature Wall Street would like. It's use in this model, as both an expectation clarifier and an action indicator for the portfolio manager, on a personal level, should illuminate your light bulb. Most investors will focus on Line Four out of habit, or because they have been brainwashed by Wall Street into thinking that a lower Market Value is always bad and a higher one always good. You need to get outside of the "Market Value vs. Anything" box if you hope to achieve your goals. Cycles rarely fit the January to December mold, and are only visible in rear view mirrors anyway... but their impact on your new Line Dance is totally your tune to name.

The Market Value Line is a valuable tool. If it rises above working capital, you are missing profit opportunities. If it falls, start looking for buying opportunities. If Base Income falls, so has:

(1) the quality of your holdings, or
(2) you have changed your asset allocation for some (possibly inappropriate) reason, etc

So Virginia, it really is OK if your Market Value falls in a weak stock market or in the face of higher interest rates. The important thing is to understand why it happened. If it's a surprise, then you don't really understand what is in your portfolio. You will also have to find a better way to gauge what is going on in the market. Neither the CNBC "talking heads" nor the "popular averages" are the answer. The best method of all is to track "Market Stats", i.e. Breadth Statistics, New Highs and New Lows. . If you need a "drug", this is a better one than the ones you've grown up with.

Have a nice change!

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(1) growing productive Working Capital, and
(2) increasing Base Income

(1) You just can't make too much money, and
(2) there's no such thing as a bad profit

(1) the quality of your holdings, or
(2) you have changed your asset allocation for some (possibly inappropriate) reason, etc

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investments 5

2008-08-04T02:07:00.001-07:00

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The reason people assume the risks of investing in the first place is the prospect of achieving a higher rate of return than is attainable in a risk free environment... i.e., an FDIC insured bank account. Risk comes in various forms, but the average investor's primary concerns are "credit" and "market" risk... particularly when it comes to investing for income. Credit risk involves the ability of corporations, government entities, and even individuals, to make good on their financial commitments; market risk refers to the certainty that there will be changes in the Market Value of the selected securities. We can minimize the former by selecting only high quality (investment grade) securities and the latter by diversifying properly, understanding that Market Value changes are normal, and by having a plan of action for dealing with such fluctuations. (What does the bank do to get the amount of interest it guarantees to depositors? What does it do in response to higher or lower market interest rate expectations?)

You don't have to be a professional Investment Manager to professionally manage your investment portfolio, but you do need to have a long term plan and know something about Asset Allocation... a portfolio organization tool that is often misunderstood and almost always improperly used within the financial community. It's important to recognize, as well, that you do not need a fancy computer program or a glossy presentation with economic scenarios, inflation estimators, and stock market projections to get yourself lined up properly with your target. You need common sense, reasonable expectations, patience, discipline, soft hands, and an oversized driver. The K. I. S. S. Principle needs to be at the foundation of your Investment Plan; an emphasis on Working Capital will help you Organize, and Control your investment portfolio.

Planning for Retirement should focus on the additional income needed from the investment portfolio, and the Asset Allocation formula [relax, 8th grade math is plenty] needed for goal achievement will depend on just three variables: (1) the amount of liquid investment assets you are starting with, (2) the amount of time until retirement, and (3) the range of interest rates currently available from Investment Grade Securities. If you don't allow the "engineer" gene to take control, this can be a fairly simple process. Even if you are young, you need to stop smoking heavily and to develop a growing stream of income... if you keep the income growing, the Market Value growth (that you are expected to worship) will take care of itself. Remember, higher Market Value may increase hat size, but it doesn't pay the bills.

First deduct any guaranteed pension income from your retirement income goal to estimate the amount needed just from the investment portfolio. Don't worry about inflation at this stage. Next, determine the total Market Value of your investment portfolios, including company plans, IRAs, H-Bonds... everything, except the house, boat, jewelry, etc. Liquid personal and retirement plan assets only. This total is then multiplied by a range of reasonable interest rates (6%, to 8% right now) and, hopefully, one of the resulting numbers will be close to the target amount you came up with a moment ago. If you are within a few years of retirement age, they better be! For certain, this process will give you a clear idea of where you stand, and that, in and of itself, is worth the effort.

Organizing the Portfolio involves deciding upon an appropriate Asset Allocation... and that requires some discussion. Asset Allocation is the most important and most frequently misunderstood concept in the investment lexicon. The most basic of the confusions is the idea that diversification and Asset Allocation are one and the same. Asset Allocation divides the investment portfolio into the two basic classes of investment securities: Stocks/Equities and Bonds/Income Securities. Most Investment Grade securities fit comfortably into one of these two classes. Diversification is a risk reduction technique that strictly controls the size of individual holdings as a percent of total assets. A second misconception describes Asset Allocation as a sophisticated technique used to soften the bottom line impact of movements in stock and bond prices, and/or a process that automatically (and foolishly) moves investment dollars from a weakening asset classification to a stronger one... a subtle "market timing" device.

Finally, the Asset Allocation Formula is often misused in an effort to superimpose a valid investment planning tool on speculative strategies that have no real merits of their own, for example: annual portfolio repositioning, market timing adjustments, and Mutual Fund shifting. The Asset Allocation formula itself is sacred, and if constructed properly, should never be altered due to conditions in either Equity or Fixed Income markets. Changes in the personal situation, goals, and objectives of the investor are the only issues that can be allowed into the Asset Allocation decision-making process.

Here are a few basic Asset Allocation Guidelines:

(1) All Asset Allocation decisions are based on the Cost Basis of the securities involved. The current Market Value may be more or less and it just doesn't matter.

(2) Any investment portfolio with a Cost Basis of $100,000 or more should have a minimum of 30% invested in Income Securities, either taxable or tax free, depending on the nature of the portfolio. Tax deferred entities (all varieties of retirement programs) should house the bulk of the Equity Investments. This rule applies from age 0 to Retirement Age - 5 years. Under age 30, it is a mistake to have too much of your portfolio in Income Securities.

(3) There are only two Asset Allocation Categories, and neither is ever described with a decimal point. All cash in the portfolio is destined for one category or the other.

(4) From Retirement Age - 5 on, the Income Allocation needs to be adjusted upward until the "reasonable interest rate test" says that you are on target or at least in range.

(5) At retirement, between 60% and 100% of your portfolio may have to be in Income Generating Securities.

Controlling, or Implementing, the Investment Plan will be accomplished best by those who are least emotional, most decisive, naturally calm, patient, generally conservative (not politically), and self actualized. Investing is a long-term, personal, goal orientated, non- competitive, hands on, decision-making process that does not require advanced degrees or a rocket scientist IQ. In fact, being too smart can be a problem if you have a tendency to over analyze things. It is helpful to establish guidelines for selecting securities, and for disposing of them. For example, limit Equity involvement to Investment Grade, NYSE, dividend paying, profitable, and widely held companies. Don't buy any stock unless it is down at least 20% from its 52 week high, and limit individual equity holdings to less than 5% of the total portfolio. Take a reasonable profit (using 10% as a target) as frequently as possible. With a 40% Income Allocation, 40% of profits and dividends would be allocated to Income Securities.

For Fixed Income, focus on Investment Grade securities, with above average but not "highest in class" yields. With Variable Income securities, avoid purchase near 52-week highs, and keep individual holdings well below 5%. Keep individual Preferred Stocks and Bonds well below 5% as well. Closed End Fund positions may be slightly higher than 5%, depending on type. Take a reasonable profit (more than one years' income for starters) as soon as possible. With a 60% Equity Allocation, 60% of profits and interest would be allocated to stocks.

Monitoring Investment Performance the Wall Street way is inappropriate and problematic for goal-orientated investors. It purposely focuses on short-term dislocations and uncontrollable cyclical changes, producing constant disappointment and encouraging inappropriate transactional responses to natural and harmless events. Coupled with a Media that thrives on sensationalizing anything outrageously positive or negative (Google and Enron, Peter Lynch and Martha Stewart, for example), it becomes difficult to stay the course with any plan, as environmental conditions change. First greed, then fear, new products replacing old, and always the promise of something better when, in fact, the boring and old fashioned basic investment principles still get the job done. Remember, your unhappiness is Wall Street's most coveted asset. Don't humor them, and protect yourself. Base your performance evaluation efforts on goal achievement... yours, not theirs. Here's how, based on the three basic objectives we've been talking about: Growth of Base Income, Profit Production from Trading, and Overall Growth in Working Capital.

Base Income includes the dividends and interest produced by your portfolio, without the realized capital gains that should actually be the larger number much of the time. No matter how you slice it, your long-range comfort demands regularly increasing income, and by using your total portfolio cost basis as the benchmark, it's easy to determine where to invest your accumulating cash. Since a portion of every dollar added to the portfolio is reallocated to income production, you are assured of increasing the total annually. If Market Value is used for this analysis, you could be pouring too much money into a falling stock market to the detriment of your long-range income objectives.

Profit Production is the happy face of the market value volatility that is a natural attribute of all securities. To realize a profit, you must be able to sell the securities that most investment strategists (and accountants) want you to marry up with! Successful investors learn to sell the ones they love, and the more frequently (yes, short term), the better. This is called trading, and it is not a four-letter word. When you can get yourself to the point where you think of the securities you own as high quality inventory on the shelves of your personal portfolio boutique, you have arrived. You won't see WalMart holding out for higher prices than their standard markup, and neither should you. Reduce the markup on slower movers, and sell damaged goods you've held too long at a loss if you have to, and, in the thick of it all, try to anticipate what your standard, Wall Street Account Statement is going to show you... a portfolio of equity securities that have not yet achieved their profit goals and are probably in negative Market Value territory because you've sold the winners and replaced them with new inventory... compounding the earning power! Similarly, you'll see a diversified group of income earners, chastised for following their natural tendencies (this year), at lower prices, which will help you increase your portfolio yield and overall cash flow. If you see big plus signs, you are not managing the portfolio properly.

Working Capital Growth (total portfolio cost basis) just happens, and at a rate that will be somewhere between the average return on the Income Securities in the portfolio and the total realized gain on the Equity portion of the portfolio. It will actually be higher with larger Equity allocations because frequent trading produces a higher rate of return than the more secure positions in the Income allocation. But, and this is too big a but to ignore as you approach retirement, trading profits are not guaranteed and the risk of loss (although minimized with a sensible selection process) is greater than it is with Income Securities. This is why the Asset Allocation moves from a greater to a lesser Equity percentage as you approach retirement.

So is there really such a thing as an Income Portfolio that needs to be managed? Or are we really just dealing with an investment portfolio that needs its Asset Allocation tweaked occasionally as we approach the time in life when it has to provide the yacht... and the gas money to run it? By using Cost Basis (Working Capital) as the number that needs growing, by accepting trading as an acceptable, even conservative, approach to portfolio management, and by focusing on growing income instead of ego, this whole retirement investing thing becomes significantly less scary. So now you can focus on changing the tax code, reducing health care costs, saving Social Security, and spoiling the grandchildren

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investments4

2008-08-04T02:06:00.000-07:00

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When is 3 percent better than 6 percent? Yeah, we all know the answer, but only until the prices of the securities we already own begin to fall. Then, logic and mathematical acumen disappear and we become susceptible to all kinds of special cures for the periodic onset of higher interest rates. We'll be told to sit in cash until rates stop rising, or to sell the securities we own now, before they lose even more of their precious Market Value. Other gurus will suggest the purchase of shorter-term bonds or CDs (ugh) to stem the tide of the perceived erosion in portfolio values. There are two important things that your mother never told you about Income Investing: (1) Higher Interest Rates are good for investors, even better than lower rates, and (2) Selecting the right securities to take advantage of the interest rate cycle is not particularly difficult.

Higher Interest Rates are the result of the Government's efforts to slow a growing economy in hopes of preventing an appearance of the three headed inflation monster. A quick glance over your shoulder might remind you of recent times when the government was trying to heal the wounds of a misguided Wall Street attack on traditional investment principles by lowering interest rates. The strategy worked, the economy rebounded, and Wall Street is trying to scramble back to where it was nearly six years ago. Think about the impact of changing interest rates on your Income Securities during the past five years. Bonds and Preferred Stocks; Government and Municipal Securities; they all moved higher in Market Value. Sure you felt wealthier, but the increase in your Annual Spendable Income got smaller and smaller. Your total income could well have decreased during the period as higher interest rate holdings were called away (at face value), and reinvestments were made at lower yields!

How many of you have mental bruises from the realization that you could have taken profits during the downward trajectory of the cycle, on the very securities that you now lament over. The nerve; falling below the price you paid for them years ago. But the income on these turncoats is the same as it was in 2004, when their prices were ten or twenty percent higher. This is the work of Mother Nature's financial twin sister. It's like acorns, snowfalls, and crocuses. You need to dress properly for seasonal changes and invest properly for cyclical changes. Remember the days of Bearer Bonds? There was never a whisper about Market Value erosian. Was it the IRS or Institutional Wall Street that took them away?

Higher rates are good for investors, particularly when retirement is a factor in your investment decisions. The more you receive for your reinvestment dollars, the more likely it is that you won't need a second job to maintain your standard of living. I know of no retail entity, from grocery store to cruise line that will accept the Market Value of your portfolio as payment for goods or services. Income pays the bills, more is always better than less, and only increased income levels can protect you from inflation! So, you say, how does a person take advantage of the cyclical nature of interest rates to garner the best possible income on investment quality securities? You might also ask why Wall Street makes such a fuss about the dismal bond market and offers more of their patented Sell Low, Buy High advisories, but that should be fairly obvious. An unhappy investor is Wall Streets best customer.

Selecting the right securities to take advantage of the interest rate cycle is not particularly difficult, but it does require a change in focus from the statement bottom line... and the use of a few security types that you may not be 100% comfortable with. I'm going to assume that you are familiar with these investments, each of which could be considered (from time to time) for a spot in the well diversified Income Portion of your Asset Allocation: (1) The traditional individual Municipal and Corporate Bonds, Treasuries, Government Agency Securities, and Preferred Stocks. (2) The eyebrow raising Unit Trust varietals, Closed End Funds, Royalty Trusts, and REITs. [Purposely excluded: CDs and Money Funds, which are not investments by definition; CMOs and Zeros, mutations developed by some sicko MBAs; and Open End Mutual Funds, which just can't work because they are really "managed by the mob"... i.e., investors.] The market rules that apply to all of these are fairly predictable, but the ability to create a safer, higher yielding, and flexible portfolio varies considerably within the security types. For example, most people who invest in Individual bonds wind up with a laundry list of odd lot positions, with short durations and low yields, designed for the benefit of that smiling guy in the big corner office. There is a better way, but you have to focus on income and be willing to trade occasionally.

The larger the portfolio, the more likely it is that you will be able to buy round lots of a diversified group of bonds, preferred stocks, etc. But regardless of size, individual securities of all kinds have liquidity problems, higher risk levels than are necessary, and lower yields spaced out over inconvenient time periods. Of the traditional types listed above, only preferred stock holdings are easily added to during upward interest rate movements, and cheap to take profits on when rates fall. The downside on all of these is their callability, in best-yield-first order. Wall Street loves these securities because they command the highest possible trading costs... costs that need not be disclosed to the consumer, particularly at issue. Unit Trusts are traditional securities set to music, a tune that generally assures the investor of a higher yield than is possible through personal portfolio creation. There are several additional advantages: instant diversification, quality, and monthly cash flow that may include principal (better in rising rate markets, ya follow?), and insulation from year-end swap scams. Unfortunately, the Unit Trusts are not managed, so there are few capital gains distributions to smile about, and once all of the securities are redeemed, the party is over. Trading opportunities, the very heart and soul of successful Portfolio Management, are practically non-existent.

What if you could own common stock in companies that manage the traditional Income Securities and other recognized income producers like real estate, energy production, mortgages, etc.? Closed End Funds (CEFs), REITs, and Royalty Trusts demand your attention... and don't let the idea of "leverage" spook you. AAA + insured corporate bonds, and Utility Preferred Stocks are "leverage". The sacred 30-year Treasury Bond is "leverage". Most corporations, all governments (and most private citizens) use leverage. Without leverage, most people would be commuting to work on bicycles. Every CEF can be researched as part of your selection process to determine how much leverage is involved, and the benefits... you're not going to be happy when you realize what you've been talked out of! CEFs, and the other Investment Company securities mentioned, are managed by professionals who are not taking their direction form that mob (also mentioned earlier). They provide you the opportunity to have a properly structured portfolio with a significantly higher yield, even after the management fees that are inside.

Certainly, a REIT or Royalty Trust is more risky than a CEF comprised of Preferred Stocks or Corporate Bonds, but here you have a way to participate in the widest variety of fixed and variable income alternatives in a much more manageable form. When prices rise, profit taking is routine in a liquid market; when prices fall, you can add to your position, increasing your yield and reducing your cost basis at the same time. Now don't start to salivate about the prospect of throwing all your money into Real Estate and/or Gas and Oil Pipelines. Diversify properly as you would with any other investments, and make sure that your living expenses (actual or projected) are taken care of by the less risky CEFs in the portfolio. In bond CEFs, you can get un-leveraged portfolios, state specific and/or insured Municipal portfolios, etc. Monthly income (frequently augmented by capital gains distributions) at a level that is most often significantly better than your broker can obtain for you. I told you you'd be angry!

Another feature of Investment Company shares (and please stay away from gimmicky, passively managed, or indexed types) is somewhat surprising and difficult to explain. The price you pay for the shares frequently represents a discount from the market value of the securities contained in the managed portfolio. So instead of buying a diversified group of illiquid individual securities at a premium, you are reaping the benefit of a portfolio of (quite possibly the same) securities at a discount. Additionally, and unlike regular Mutual Funds that can issue as many shares as they like without your approval, CEFs will give you the first shot at any additional shares they intend to distribute to investors.

Stop, put down the phone. Move into these securities calmly, without taking unnecessary losses on good quality holdings, and never buy a new issue. I meant to say: absolutely never buy a new issue, for all of the usual reasons. As with individual securities, there are reasons for unusually high or low yields, like too much risk or poor management. No matter how well managed a junk bond portfolio is, it's still just junk. So do a little research and spread your dollars around the many management companies that are out there. If your advisor tells you that all of this is risky, ill-advised foolishness... well, that's Wall Street, and the baby needs shoes.

The final article in this Income Investing trilogy will be on managing the Income Portfolio using the Working Capital Model.

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investments 3

2008-08-04T02:05:00.000-07:00

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Mutual fund investors use Morningstar Rating^TM as a sign post of mutual fund performance. These ratings have proved to be a valuable tool for objectively comparing the performances of different mutual funds.

In 2003, New York Attorney General, Elliott Spitzer launched actions against some mutual fund companies for allowing their privileged clients to profit from improper activities such as late trading.

In the aftermath of these developments, investors realize that they need more than the historical performance based Morningstar Ratings to evaluate mutual funds. The Morningstar Ratings do not get at critical intangibles. How seriously does the mutual fund company take its fiduciary responsibility to mutual fund investors? How aligned are the interests of the mutual fund manager and the mutual fund company with those of the mutual fund investor?

To address this need, Morningstar has embarked on a system called the Fiduciary Grade. Morningstar has so far graded about 635 mutual funds, including 500 of the largest ones. Morningstar plans to provide Fiduciary Grades for a total of 2000 mutual funds over time.

The Morningstar Fiduciary Grade System Basics

The Morningstar Fiduciary Grade is based on the evaluation of five areas critical for mutual fund governance and mutual fund operations. Morningstar generally assigns to mutual funds points ranging from 0 (Very Poor) to 2 (Excellent) in increments of 0.5 for each of these five areas.

1. Regulatory Issues: Morningstar examines if the mutual fund company has had any regulatory issues within the past three years. If so, what corrective actions has the mutual fund company implemented? Unlike the other four areas, the minimum score here can be a minus 2.

2. Board Quality: Morningstar looks for a demonstrated track record of the mutual fund board protecting the interests of mutual fund investors. Mutual funds get kudos if their independent directors invest in the mutual funds.

3. Manager Incentives: This score is based on Morningstar's evaluation of mutual fund ownership and compensation structure. Mutual funds where the fund's manager owns a meaningful stake in the fund score high on the fund ownership dimension. A compensation structure that rewards the mutual fund manager for long-term mutual fund performance is favored.

4. Fees: Mutual funds are rewarded for having expense ratios lower than that of their peers and for effectively reducing their expense ratios with growth in their assets.

5. Corporate Culture: Morningstar looks for tangible evidence that the mutual fund company takes its fiduciary responsibility seriously. Among the factors Morningstar considers are softer issues like whether the company closes mutual funds when they get too large and whether the company starts trendy mutual funds to garner assets.

The points scored on each of the above areas are aggregated and the Fiduciary Grade is assigned based on the total: A=9-10, B=7-8.5, C=5-6.5, D=3-4.5, F=2.5 or less.

How Investors Can Use the Morningstar Fiduciary Grade

Here are some ways investors can use the Morningstar Fiduciary Grade.

1. Buy and Hold Investors: Buy and hold mutual fund investors first need to examine how mutual funds held in their portfolios stack up on the two dimensions, Morningstar Rating and Fiduciary Grade.

Mutual funds that rank favorably on both dimensions may be retained and mutual funds that rank unfavorably on both dimensions may be replaced by ones that rank favorably.

For mutual funds that rank favorably in one dimension but not in the other, the answer is not clear-cut. Retaining a fund with strong Morningstar Rating but lower Fiduciary Grade is a matter of personal choice. Conversely, a mutual fund's Fiduciary Grade may be satisfactory but the Morningstar Rating may be unfavorable. This may just be a case of the mutual fund manager going through a temporary bad patch. Investors have to weigh these factors along with tax consequences before deciding to sell a mutual fund.

Given the number of mutual funds available, investors seeking new mutual funds to add to their portfolio should in general have no trouble in finding mutual funds with favorable Morningstar Rating as well as Fiduciary Grade.

2. Tactical Asset Allocators: A tactical asset allocator uses an active investment strategy and typically invests in mutual funds such as sector funds. For example, AlphaProfit uses its ValuM investment process to periodically alter the mix of its mutual fund model portfolios to take advantage of specific trends (e.g. rising natural gas prices, introduction of new wireless technologies).

Since tactical asset allocators seek superior performance during their mutual fund holding period, factors such as superior long-term performance which determine Morningstar Ratings are less important to them. However, these investors typically seek to own mutual funds within a single family such as Fidelity Investments for purposes of administrative ease. As such, tactical asset allocators will find the Fiduciary Grade useful in evaluating and choosing mutual fund families to implement their strategies.

Our Take on the Morningstar Fiduciary Grade System

The Fiduciary Grade system is a blend of several metrics. The grading of mutual funds on regulatory issues is backward looking rather than a prognosticator of potential future trouble. The grading system includes a quantitative dimension in mutual fund fees. Also included are qualitative dimensions such as mutual fund corporate culture, manager incentives, and board quality.

The Mutual Fund Fiduciary Grade ranking provides mutual fund investors with much needed insight on the governance and operations of mutual funds. The Morningstar Fiduciary Grade System is a good first step. We believe Morningstar will refine the Mutual Fund Fiduciary Grade system over time, just as they refined the Morningstar Ratings system.

While Morningstar Ratings do an excellent job of objectively evaluating past performance, financial markets by their very nature do not allow the investor to predict future performance based on these ratings alone. Many times, funds with Morningstar Ratings of 4- or 5-star do not live up to their expectations.

The utility of the Morningstar Fiduciary Grade will be significantly enhanced if superior Fiduciary Grade either by itself or in combination with the Morningstar Rating becomes a better indicator of superior future performance. We believe the Morningstar Fiduciary Grade has the potential to become a worthy metric of mutual fund stewardship over time.

Notes: This report is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. This report does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person who may receive this report. The information contained in this report is obtained from various sources believed to be accurate and is provided without warranties of any kind. AlphaProfit Investments, LLC does not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. AlphaProfit Investments, LLC is not responsible for any errors or omissions herein. Opinions expressed herein reflect the opinion of AlphaProfit Investments, LLC and are subject to change without notice. AlphaProfit Investments, LLC disclaims any liability for any direct or incidental loss incurred by a pplying any of the information in this report. Morningstar Rating^TM is a trademark of Morningstar, Inc. The third-party trademarks or service marks appearing within this report are the property of their respective owners. All other trademarks appearing herein are the property of AlphaProfit Investments, LLC. Owners and employees of AlphaProfit Investments, LLC for their own accounts invest in the Fidelity Mutual Funds. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from Fidelity Investments. Past performance is neither an indication of nor a guarantee for future results. No part of this document may be reproduced in any manner without written permission of AlphaProfit Investments, LLC. Copyright © 2004 AlphaProfit Investments, LLC. All rights reserved.

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investments 2

2008-08-04T02:04:00.000-07:00

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Metrics such as price/earnings ratio and dividend yield on the S&P 500 index, a commonly used proxy for the U.S. stock market, are hardly at bargain levels. This has lead several market pundits to predict single digit annual returns for domestic mutual funds over the next decade.

While pursuing the search for the best mutual fund, some mutual fund investors tend to focus exclusively on fees and expense ratios. The rationale is that by choosing mutual funds with low fees, investors will have more of their capital invested. Also, no load mutual funds with low expense ratios will pass on more of the returns they earn to their shareholders.

Is shopping for the lowest fees and expense ratios a smart way to select mutual funds? Not always. The answer depends on the type of mutual fund you are evaluating, the time you can devote to evaluating and managing your mutual funds investments, and the type of cost incurred.

Investing in the Best No Load Index Mutual Funds.
If you believe markets are generally efficient and prefer to invest in an index mutual fund to achieve an index-like return, shopping for the best index mutual fund based on low fees and a low expense ratio makes good sense. The portfolio manager of an index mutual fund endeavors to invest the fund's assets to track the index as closely and cost-effectively as possible. Larger index funds have an advantage in that they can spread their operating costs over a larger asset base.

Some of the interesting index mutual fund options currently available include no load index mutual funds like E*Trade S&P 500 Index Fund (Nasdaq: ETSPX), Fidelity Spartan 500 Index Fund (Nasdaq: FSMKX), and Vanguard 500 Index Fund (Nasdaq: VFINX) with expense ratios of 0.09%, 0.10%, and 0.18%, respectively.

Investing in Actively Managed Mutual Funds and Strategies.
Mutual fund fees and expenses are just one of several important factors to consider if you believe portfolio managers can add value and out-perform the index through active management. The portfolio manager's ability and investing style are just as important. Therefore, seeking out the best mutual fund based on just low fees and a low expense ratio may not always be the right approach. It may just be a case of being 'penny-wise and pound-foolish'.

Legendary investor Peter Lynch, who managed the Fidelity Magellan Fund (Nasdaq: FMAGX) from 1977 to 1990, achieved returns well in excess of the market averages even after accounting for the fund's fees and expenses.

So too has Bill Miller who currently manages the Legg Mason Value Trust (Nasdaq: LMVTX). Even after accounting for its relatively high 1.7% expense ratio, this no load mutual fund has achieved compound annual returns of 18.6% for the 10 year period ending in 2004, well in excess of 12.0% for the Vanguard 500 Index mutual fund.

AlphaProfit, an investment research firm that specializes in active sector investing, uses the no load Fidelity Select Funds to implement its investing strategy through its Core^TM and Focus^TM model portfolios. Although not the lowest, the expense ratio of the no load Fidelity Select Funds compares favorably with that of other sector fund offerings. AlphaProfit prefers Fidelity Selects for their comprehensive coverage of sectors and industry groups. The AlphaProfit model portfolios have significantly outperformed the market averages over time.

Ensure Your Mutual Fund Puts Your Interest First.
Whether you prefer to index or take an active approach to managing your investments, ensuring that your mutual fund is putting your interests first is good investing practice.

Mutual funds charge different types of fees. By looking at some key factors pertaining to fees, you can get a sense of whether the mutual fund puts your interests first or merely seeks to line the mutual fund company's pockets.

Serving the Interests of Long-Term Shareholders.
Some mutual funds impose short-term trading fees to discourage frequent trading of mutual fund shares. Frequent
trading disrupts efficient management of the mutual fund and increases operating expenses. A short-term trading fee can therefore actually be beneficial to long-term shareholders if the fee is rightly treated by the mutual fund company.

Fidelity Spartan Total Market Index Fund (Nasdaq: FSTMX), for example, follows the practice of returning short-term trading fees collected on shares held less than 90 days to the mutual fund itself rather than passing on the benefit to the mutual fund company. By having this short-term trading fee structure, this no load mutual fund seeks to contain its operating expenses. Such fees are therefore aligned with the interests of long-term shareholders of this mutual fund.

Passing on Savings from Scale Economies.
The operating expenses incurred by a mutual fund are a combination of fixed and variable costs. As the asset of a mutual fund increases, the fixed cost gets spread over a larger asset base. Therefore, the expenses incurred to operate the mutual fund as a percentage of the fund's assets should trend lower.

A mutual fund that places the interest of shareholders first must pass on the savings from scale economies to the shareholders. The trend in a mutual fund's expense ratio therefore serves as a metric of how seriously a fund takes its fiduciary responsibility.

Key Points.
1. If you are searching for the best no load index mutual fund, shopping for one with low fees and expenses makes perfect sense.
2. If active management of investments appeals to you, fees and expenses are just one of several important factors to consider.
The ability and investing style of the portfolio manager are at least just as important as fees.
3. The types of fees a mutual fund charges and how the fund uses the fees provides clues as to how seriously a mutual fund takes its fiduciary responsibility. Mutual funds that impose fees to contain operating expenses and return fees to the mutual fund help protect the interests of long-term shareholders.
4. Mutual funds that put the shareholders' interests first typically pass on savings from scale economies to the shareholders.

Notes: This report is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. This report does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person who may receive this report. The information contained in this report is obtained from various sources believed to be accurate and is provided without warranties of any kind. AlphaProfit Investments, LLC does not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. AlphaProfit Investments, LLC is not responsible for any errors or omissions herein. Opinions expressed herein reflect the opinion of AlphaProfit Investments, LLC and are subject to change without notice. AlphaProfit Investments, LLC disclaims any liability for any direct or incidental loss incurred by applying any of the information in this report. The third-party trademarks or service marks appearing within this report are the property of their respective owners. All other trademarks appearing herein are the property of AlphaProfit Investments, LLC. Owners and employees of AlphaProfit Investments, LLC for their own accounts invest in the Fidelity Mutual Funds included in the AlphaProfit Core and Focus model portfolios. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from Fidelity Investments or other mutual fund companies mentioned in this report. Past performance is neither an indication of nor a guarantee for future results. No part of this document may be reproduced in any manner without written permission of AlphaProfit Investments, LLC. Copyright © 2005 AlphaProfit Investments, LLC. All rights reserved.

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investments 1

2008-08-04T02:03:00.000-07:00

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One of the easiest ways to make money online today is to learn e-currency trading. Many people have spent countless hours looking for the perfect program that will make them a millionaire over night. The truth is, these programs do not exist. Electronic currency exchange allows people to make a long-term investment that can yield substantial profits in years to come.

There are a number of courses available online that can help anyone get started and become successful in the currency exchange market. These courses offer essential resources and techniques that will help even the novice user make the most of their investment.

The first thing one would do if interested in getting started in e-currency trading is to open a portfolio. After the creation of their portfolio an initial investment is then made. The portfolio will receive daily gains of anywhere from 2.% to .4%. Therefore on a $1,000 investment a user can expect to profit very close to $5 per day. Over the course of a year it is not uncommon to turn an initial investment of $1,000 into a $50,000 portfolio where they will realize profits of $200 a day.

The most recent course that I have looked at has been the Mazu course. The course provides one on one phone support, conference calls, chat rooms, forums, and a beginner and advanced course on how to trade in the e-currency exchange market. After having reviewed the Mazu program it turned out to be a very helpful legitimate program.

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insurence 25

2008-08-04T01:54:00.000-07:00

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The life settlement industry was propelled into popularity by the viatical settlement industry. History has shown us that the early adopters of life settlement were those who were suffering from AIDS and who had only a couple of years to live. They sold their insurance policies assuming they would get immediate cash in return from the person who bought it. When medical breakthroughs found their way to fight the AIDS virus, these senior citizens lost out because they had to pay premiums for a long time. Some fraudulent companies also resorted to marketing this concept in order to make a fast buck by giving senior citizens the hope of further investment.

Life settlement occurs when the holder of a policy willingly sells the same for a price to the buyer, who then becomes the sole owner of the policy. The new buyer has to pay for the premiums from the date of purchase. It is common for senior citizens above the age of sixty-five to opt for life settlement, especially if there has been a negative change in their health situation. The immediate cash option is attractive because the seller is then able to fund his medical bills and take care of other responsibilities.

If you are planning a life settlement then it is best to take advise from experts who know the market. Accountants, Charitable Trust Officers, Financial Planners and Attorneys are just some of the people you can contact. Since they know the regulations and formalities involved, you will be able to make a more informed decision. The idea behind life settlement is to get a high bid for your policy. This could take a lot of work if you are working alone. A broker is sometimes arranged to find the right seller who can offer a fair market value. The benefit of hiring a broker is that you can get bids from different sellers. Thus you can choose the most favourable bid among the offerings. It sometimes becomes necessary to provide your medical history in order to secure a good bid.

Once the life settlement bid is accepted by the buyer, he then returns any confidentail papers that he might have taken for verficaiton. Change of ownership forms are then exchanged and the final deal is closed.

Some authorized life settlement agents are Action Advisors Inc, Advanced Settlements Inc, Allsettled Group Inc, Berkshire Settlements Inc, Brown & Brown Associates PC, Darrell L Tate, Don Karns Insurance Agency Inc, Fairmarket Life Settlements Corp, etc. To find an agent in your area there are several listings on the Internet. Brokers will also give you a free consultation so you can freely and confidentially discuss your financial situation.

To summarize, a life settlement is done when a person wants to sell his or her policy in return for cash. The reasons behind this could be high premiums, medical problems, employment changes, bankruptcy, etc. It is wise to be well informed about the process and even more important to find a broker or a financial advisior who can make your life settlement worth your while.

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insurence 24

2008-08-04T01:52:00.002-07:00

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We all know that women make better drivers; that's why women's car insurance is so cheap. But did you ever wonder if a woman might make a better car mechanic?

Well, chances are, no, you didn't. For the majority of women, a career in car repair is about as appealing a prospect as one in plumbing, or refuse collection. It took a Frenchman named Herve Malige to do the wondering for us, and, following that, to recruit some women and find out.

His unique project runs at the Base 34 training centre, near Montpellier. This year's intake of 15 women, all aged between 22 and 38, includes former air hostesses, beauticians and a nurse. They expect to graduate in June 2007 and hopefully found their own repair business together.

That too would be unique; there are currently no garages in Europe run by an exclusively female staff. The nearest all- female car repair business to Mr Malige is in Montreal, Canada, and he wouldn't be able to get a service there: the mechanics insist that all their customers be women as well.

Herve explained why ladies are better under the bonnet, saying, "What is needed today [in mechanics] is rigour and methodical diagnostics. Women are strong at identifying the causes of breakdowns - they methodically check everything."

Finding the bonnet release
Herve's work demonstrates that women have the potential to outdo men in the field of car repairs in just the same way as we do on the roads.

But woefully few of us are living up to that potential.

In fact, one in ten female drivers in the UK admitted she couldn't even find the bonnet release in her car, let alone check the oil or change a tyre. It's no wonder that women drivers' failure to carry out basic checks has lead to almost a million breakdowns, according to motor insurance provider InsureandGo.

The problem isn't our ability - it's perhaps because most women just aren't interested in what goes on beyond the steering wheels and pedals. The vast majority of us leave repairs and maintenance up to someone else, even if it means a trip to the garage or a call to the breakdown firm.

But consider that we spend £4 billion every year in the UK on unsatisfactory repair work - that's based on an average £125 of your money wasted every time a job is botched, done unnecessarily or overcharged for - and all of a sudden there's a good reason for getting a bit better informed!

What we can do to prevent breakdowns
All too often, women leave car repairs to the men in their lives, when, as we've proved, they're capable of doing a much better job by themselves. And when dad, brother or boyfriend isn't around, we all too readily fork out expensive call-out fees for a breakdown mechanic; generally to do a job the average woman could do with her eyes closed if she just took a little interest in her car.

For the seven million female motorists who say they know nothing whatsoever about car maintenance, femalefirst.co.uk recommends your first port of call should be an often overlooked source of info - the car's manual. This tell you all sorts of dull but vital information about tyre pressures, fuses, fuel capacity, etc - stuff that'll get a whole lot more interesting as soon as you break down!

Most manuals have a log section at the back where you can make a note of fuel consumption and mileage, and when certain engine parts are due for replacement. Keeping this up to date takes care of the majority of preventable breakdowns; it also ensures you won't get caught short with the petrol dial in the red again.

Need an oil change, fan belt, windscreen wiper blade, etc? Sounds like a nightmare, but chances are replacing everyday consumables like these is a piece of cake. If you're feeling brave, get hold of the Haynes manual for your car (http://www.haynes.com), which explains how to do it all through straightforward language and easy-to-follow diagrams. After all - men can manage it...

The trouble with garages
No matter how well you maintain your car, sooner or later you're bound to end up taking it to a garage - whether for an MOT, a service, or a repair job.

Unfortunately, most of us find visiting the auto centre about as much fun as a trip to the dentist's. 57% of the women interviewed by InsureandGo said they felt intimidated in garages, and a whopping 84% expected to be ripped-off.

Sadly, both these fears are born out by a substantial body of consumer surveys and mystery shopper research.

In 2002, the Department for Trade and Industry (DTI) carried out a mystery shopper survey that involved putting test cars in for a service at 250 UK garages. It's shocking enough that, in 40% of cases, mechanics didn't bother to give the cars a full service before handing them back; but it's particularly alarming that the figure rose to 58% when the researcher was a woman.

So, besides breaking down far more often than other drivers, the seven million women who don't know anything about their cars are leaving themselves vulnerable to the botching and overcharging of unscrupulous mechanics.

The DTI figures prove garages target women for crooked mark-ups because they know they'll away with it - and that's why four out of five women expect to be ripped off.

Once again, the obvious solution for women drivers is to find out more about their cars. That way, you've a much better chance of getting the ten-point inspection you paid for rather than the three-point one they could only be bothered to do.

What we can do at the garage
Reports by the National Consumer Council suggests that two factors, specific to the car repair industry, mean motorists are at risk of being exploited when visiting a garage.

First of all, we don't know as much about the car as the mechanic does. If he says a job or replacement part is an essential, we have no choice but to pay for it; if he misses a fault or fluffs a repair, we have no way of knowing about it.

The other reason motorists make easy targets for an unscrupulous mechanics is that we're very often in a bit of a panic. You've heard of panic buying when there's a fuel shortage or a big storm coming? Well, having our cars break down elicits a similar reaction in most drivers; we just want the thing fixed, money-no-object - at least, not until the mechanic hands over your bill.

So the best advice for female motorists visiting a garage is to work against these factors. Always try and diagnose the fault before taking your car in for a repair. Even if what you say isn't the source of the trouble, it will show the mechanic you're a lot more savvy than the woman who turns up with no idea other than 'it makes a funny rattling sound'.

Also, turn back to your trusty manual and specify what brand of replacement parts you need. If possible, ask the mechanic to show you what's broken before leaving him alone with your car. That way, if you can't identify the part yourself, you'll at least be able to see if any actual work has been done in the area when he's finished.

To take care of the panic buying factor, spend as much time as you can afford shopping around for quotes on your job. Ask the garage you choose to confirm the estimate in writing so you avoid any unpleasant price-hikes once the work is done.

Above all, try to be calm and self-assured at the garage. If you suspect you're being duped, say as much. Even if the mechanic is charging a fair price, he won't begrudge you for questioning it. And don't be afraid to walk away from a garage. After all, with 26,000 car repairing outlets in this country, there's plenty more fish in the sea.

To recap...
We all knew women make better drivers; now we know they make better mechanics, too. It doesn't mean you have to put on overalls and invest in some nice spanners, but there's no excuse not to dust off the manual and find out a bit about your car.

Just a basic knowledge of car maintenance will dramatically cut down the number of trips you make to a garage - and it'll mean you get good service and a fair price when you do visit one.

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insurence 23

2008-08-04T01:52:00.001-07:00

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Before signing an auto insurance contract, we are involved in understanding some basic terms related to the car insurance policy.The phrase "your covered auto" also applies to several other particular circumstances.

Usually, physical damage coverage will apply to newly acquired vehicles (whether additional or replacement vehicles) only if you request the coverage within 30 days of the acquisition. However, liability coverage for a replacement vehicle is automatically provided until the end of the policy period.

The liberalization clause states that if the insurance company makes a change to its policy form which provides broader coverage without a premium charge (for example, if it drops a policy exclusion), that change will automatically apply to your policy on the date the change goes into effect in the insured's state. This simply eliminates the need of the insurance company to endorse all existing policies when coverage is expanded without a change in premium.

Cancellation is an important issue. In most states, the reasons for which an insurance company is permitted to cancel a policy are limited-if the policy has been in effect for at least 60 days or is a renewal policy.

The general agreement is a very brief statement. It means simply that all of the remaining provisions of the contract (the policy terms) apply. The reason that the general agreement is so brief is that each coverage section contains a much more detailed insuring agreement.

Exclusions involve some of the most heated-and most often litigated-disputes over insurance language.Some exclusions exist simply to remove coverage for above-average risk factors which are not anticipated in average rates and premiums, and that the coverage is often available for an additional charge.

This is the case with respect to audio, visual and data equipment and the tapes, records, and other media used with such equipment. The basic policy form excludes coverage because these are items of value which have an above-average exposure to theft losses (they are easily removed and are often targets for thieves).

On the other hand, some people want specific drivers excluded from coverage. These special exclusions have become increasingly common in recent years.

Liability is probably the most important kind of automobile insurance. It covers moneys owed when one automobile driver causes bodily injury to another person or damage to another person's property.

Injury or damage suffered by a driver who causes an accident is not a matter of legal liability. Being liable means being legally responsible for damages suffered by a third party (someone other than the driver or owner of the vehicle).

If a driver who causes injury or damage suffered by another person can be shown to be at fault, that driver may be held liable for the accident.

In other words, if one driver is liable for an accident, then the other party may be entitled to compensation for injuries or damage or both. Compensation may be in the form of money paid to the injured party for tangible damages (such as a medical bill or the cost to repair a damaged vehicle) and/or money paid for intangible damages (such as pain and suffering).

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insurence 23

2008-08-04T01:51:00.000-07:00

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insurence 22

2008-08-04T01:47:00.000-07:00

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WHY WOULD I BUY LIFE INSURANCE OVER THE TELEPHONE?
Buying life insurance will never be exciting; however, it is becoming much easier and more convenient now that many companies are willing to allow their lowest cost products to be sold over the telephone. As a consumer you have the opportunity to deal with a real, and normally knowledgeable, representative who can provide you rates and information within minutes.

There is no longer the need to have an agent come to your home and spend hours trying to sell you something that won't fit into your budget. If you choose an agency that uses software designed to compare most the products available in your state, you will combine convenience with the lowest possible rate you are eligible for.

IS IT SAFE?
Yes, if you use common sense.

Applying for life insurance requires you to provide sensitive and personal information to the insurance company that will issue your policy. Use common sense in deciding with whom you share your Social Security Number, Date of Birth, and Driver's License Number with.

Here are some indicators that you are dealing with professionals:

• Have the people you have spoken with acted in a knowledgeable and professional manner?
• Have they asked you about your medical and personal habits history before they quoted you a rate?
• Have they clearly explained the application process and the procedures you must follow to obtain a policy at or near the rate you were quoted?
• Have they clearly explained that your policy may not pay a claim if you do not provide accurate answers on the application?

If the answer to all of the questions above is yes, then you have reason to be confident that you have made the right choice; however, if you have any lingering doubts there are a few more qualifiers you can look for:

• Have you been instructed to make your check payable to the insurance company and NOT the agent or agency?
• Have you contacted your state insurance department to confirm that the insurance company (NOT the agent or agency) is licensed to do business in your state?
• How did you find this company? Did they send you something in the mail; did you find their web site?

Again, if the answers are yes then you have found a winner. Let's face it: Very few crooks act like professionals.

HOW DO I FIND INSURANCE OVER THE TELEPHONE?
The internet has become the choice of many for fast and easy information. Type "Insurance by Telephone" or similar key words in the search field of your Internet Browser and you will get many pages of links to chose from. Look for toll free or other telephone numbers and begin calling. Ignore the sites that have only forms to submit your information. Most of them will have insurance calling you in an attempt to set up a visit to your home.

HOW DO I GET THE BEST RATE?
Finding the lowest rate that you qualify for is more about what you shouldn't do than what you should. Here is a list of things you should not do if you want to pay the lowest arte you are eligible for:

DO NOT provide false information about your health or personal habits during the quote or application process. Life and disability insurance rates are based on your actual health and personal habits, not on what you would like them to be. State insurance regulations require insurance companies to issue a policy at the rate you qualify for. There are no exceptions! This means you cannot negotiate, ask for a discount, or provide false information in the hope that you will get a better rate. Be honest during the process and you will receive the best rate offered by that company.

DO NOT deal with any agency that does not use rate comparison software to develop a quote. This new technology allows for the comparison of literally hundreds of different companies in order to provide you the best rate you are eligible for as long as you answer each qualifying question as accurately as possible. For example: five (5) pounds of weight might make the difference whether Company A or Company B is the cheapest. Give the representative the truth and they will find you the lowest rate.

DO NOT believe you are entitled to, or will receive, a discount or special price from anyone. Any licensed agent making such an offer is violating state insurance law. YOU ARE NOT AN EXCEPTION! Consider this: normally only greedy people get conned.

DO NOT delude yourself into thinking that a referral from your CPA, broker, lawyer, tax person, or a friend will get you the lowest rate. Remember, the object is to pay the lowest rate, not subsidize someone's drinking buddy. As previously stated, there are no discounts. You will have to decide whether to do business with anyone that considers violating the law to be an acceptable business practice. If you want to do business with a referral, use the qualifiers detailed earlier in this article. If the referred agent passes those standards, you should receive a competitive quote.

SUMMARY
It is now possible to make an unpleasant task easier and less expensive. If you combine the tools listed above and a little common sense, you have reason to be confident that you have paid the lowest rate you are eligible for.

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insurence 21

2008-08-04T01:46:00.000-07:00

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The word 'viatical' originates from the word 'viaticum' which was part of the last rites performed on a dying Catholic in order to prepare him for his destiny. History shows us that its early beginnings can also be found in Greece.

Viatical settlements are offered by dozens of companies around the world. Why? To aid senior citizens (viators) in their poor financial situation. Viatical settlements provide a way out of crisis scenarios by giving terminally or chronically ill patients the option of selling their life insurance policy for a premium amount. Naturally, the higher the bid, the more profit you make. Although this form of instant cash has a sad tone, it has been highly beneficial to people who have high medical bills and other critical emergencies. If your policy is a Term, Universal Life, Whole Life, Joint/Survivor or a Group contract, then the good news is that you are eligible for a viatical quote.

The person who buys the policy is called an investor. An investor can be the final third party who is interested in the policy or a viatical company that holds it as an investment. If it is a company that is buying the policy they can resell it at a profit. When buying a life policy of another person you to have complete knowledge of the viator's medical history. You can either buy the whole policy or a part of it. Usually a policy will state the life expectancy of the individual because the quote will depend on how long the seller is expected to live. Once you buy the policy, you gain if the seller dies before the expectancy date but your return will be lower if he lives longer. In some cases you might loose a little form your principal amount if the seller lives a long life!

Due to this risk factor, viatical settlements and quotes need to be regularized and controlled. Thus, the State Insurance Commission gives out licenses to selected companies who are capable of handling this intricate business. However, in some US states the viatical industry is not regulated at all. Companies often buy the policies and then offer it to prospective buyers at higher rates. The National Association of Insurance Commissioners and Federal Trade Commission are two legal bodies that offer information with regard to viatical quotes and settlements.

If you are a Viator, then you have two choices. Either you can sell your life insurance policy directly to another person or you can use the services of a broker. Viators generally hire a broker because they know the market and can negotiate for a better viatical quote. The quote depends of many variables such as the state, age and medical condition of the viator. Prior to suggesting a bid, the investor, broker and viator will meet to highlight details of the case. The investor will want to know the medical prognosis so he can offer a more realistic quote. Once the quote has been offered and the bid accepted, the life insurance policy is transferred to the new holder. This completes the process and the viator is given a lump sum payment.

In conclusion, viatical quotes will differ from state to state and can be settled upon only after reviewing all the factors involved in the case. The viator and the investor have to come to an agreement is which mutually beneficial. While being a perfect avenue for the viator, he should also be wise to make sure the sale is worth his while.

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insurence 20

2008-08-04T01:45:00.000-07:00

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Most young people ignore the fact that they will grow old one day. It is the wise ones who not only think about it but also provide for their future. Statistics show us that almost one out of two Americans require long term care when they grow old. Due to immobility and illness people become dependant on families and institutions to carry out normal daily activities such as dressing and bathing.

Long-term care refers to a system where this can be taken care of in your own home, a hospital, a home center or an assisted living facility. It could be a reality to many who have led a strong and active life earlier. This is why its importance is growing each day. Most Medicare programs and State Medicaid programs do not provide the necessary facilities for payment. Some only cater to those who fall below the poverty line. Therefore, it is prudent to consider applying for a Long Term Care Insurance policy early in life.

If you have worked all your life and have made a substantial saving, then perhaps you can fund your own long-term care. Unfortunately, not everyone is so lucky and therefore long-term care insurance is very vital to secure a safe future especially for those who have a history of health problem in the family.

Like for any other policy, it is best that you know all the details prior to buying one. Often times, people forget that premiums for life insurance policies increase over time. This makes it difficult to pay especially when there is no enhancement of the financial situation. Thus, policies are cancelled when they are needed most because policyholders cannot continue to pay high premiums. It is easy to get drawn into buying a policy because market savvy sales executives make it sound so easy. But, it is up to the individual and insurance advisors to properly instruct prospective customers.

One sure way of protecting yourself is to be sure of all the terms and conditions given in the long term care insurance policy document. If the insurance sector is not your cup of tea; you could hire an agent or a broker who will act on your behalf. They will be experts on quotes, claims, processes and other issues. You need to also be careful on selecting the right broker at the right cost. Long-term care insurance not only provides security for you, but for the entire family. So you can take their advice before buying a policy. Remember, to choose an insurance company that is reputable and trustworthy. You can take it for granted that sales people will only state the benefits of a policy. They will not tell you the flip side of the story. Do not rely on brochures and other sales oriented literature to make your decision.

To summarize, a long-term care insurance policy can be used for different types of long term care such as skilled nursing, intermediate nursing and custodial care. The kind of care you choose largely depends on your physical health and situation. This kind of insurance is definitely worthwhile and affordable when you think of life beyond 65 years of age.

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insurence 19

2008-08-04T01:42:00.000-07:00

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More and more people are buying life insurance online and the numbers seem to be doubling every two years. The reasons are clear. Prices are lower on the Internet and life insurance is fundamentally a simple insurance product.

Despite the underlying simplicity of life insurance, most web sites channel their online clients through a telephone based help and advice service manned by experienced personnel. They represent your safety net so if a little technical knowledge is called for, help is at hand.

But it's always a good idea to have a few Top Tips in your back pocket when you're shopping online for life insurance. They'll help you ask the right questions and find the best policy.

1. Always have your Life Insurance policy "Written in Trust".

This means that in the event of a claim, the money goes directly and immediately to the person(s) you nominate when you first take the policy out. It also avoids all possibility of your estate having to pay Inheritance Tax on the proceeds of your policy and that could represent a 40% tax saving !

All you have to do is tell the online brokerage organising your policy that you want your policy "Written in Trust" and the names of the people who the life insurance company pay in the event of a claim. They will then sort it all out for you. The extra good news is that this service is invariably free of charge. So it's a win win situation and there aren't many of those around these days !

2. In the early years a Reviewable Life Insurance Policy will be cheaper but a Guaranteed Policy will work out a better buy in the longer term.

With a "Guaranteed Policy" the insurance company guarantees never to increase your policy's premium.

With a "Reviewable Policy" you agree that your insurance company can review the cost of your policy at regular intervals. But don't be kidded - in our experience a "review" is just another word for a price increase. After all, who's ever heard of an insurance company passing up a chance to charge you more! The review intervals are usually between 2 to 5 years but this does vary between insurance companies. You will find the details of the review intervals on the documents sent to you before you accept the insurance - these are called The Key Features Documents.

So, comparing otherwise like for like policies, in the early years the premiums for a "Reviewable Policy" will undoubtedly be lower than the premiums for a "Guaranteed Policy". Thereafter, the premiums for a Reviewable Policy increase eventually catching up with and overtaking, the premium for a "Guaranteed Policy".

In our experience, you can expect the monthly premiums for a Reviewable Policy to exceed those of a Guaranteed policy in about 7 to 10 years and then within the following 10 years, more than double again. If your budget is currently tight then by all means choose a Reviewable Policy - after all your salary may increase in coming years and ease the strain. On the other hand, if the premiums for a Guaranteed Policy are affordable, we think they represent your best buy.

A footnote. Many insurance companies have stopped offering "Guaranteed" rates for standalone critical illness insurance policies. This because they have experienced much higher claim rates than they initially expected. However, you may still find a Guaranteed life insurance policy that also provides critical illness cover. As we have explained, "Guaranteed" rates are especially good value and if you can get a quote for a Guaranteed life policy that includes critical illness cover, you may have a real bargain.

3. Thinking about a Joint Life Insurance Policy?

A Joint Life Insurance policy is usually written on a first death basis. This means that the policy will pay out on the death of the first policyholder, subject to the policy being in force at the time. This leaves the second person uninsured and older. Older people can struggle to get life insurance at an affordable premium, so rather than a Joint Policy consider taking out separate policies now. Overall it will work out a little dearer - but you get twice the cover and double the peace of mind.

4. Taking out a Life Insurance Policy? Now would be an ideal time to include Critical Illness cover.

Are you likely to need Critical Illness Insurance in the future? Yes? Then consider adding it now to the life insurance policy you're arranging. Why? There are three reasons.

Firstly, a Life Insurance policy combined with Critical Illness cover will work out significantly cheaper than buying two separate policies. Secondly, as we have already explained in the footnote to Tip 2, you may be able to buy a combined Life and Critical Illness policy with a guaranteed premium. That could be a real bargain. Finally, premiums for critical illness cover increase rapidly as you get older - so the sooner you take it out, the cheaper it will be.

5. Don't confuse Terminal Illness cover with Critical Illness cover.

There's world of difference between Terminal Illness and Critical Illness cover so it's important to understand the difference.

Terminal Illness cover pays out the insured lump sum if a Medical Doctor diagnoses you with an illness from which the Doctor expects you to die within 12 months. Most good life policies automatically include Terminal Illness cover at no extra cost. It's basically an early, and welcome policy payout.

A Critical Illness policy pays out the insured lump sum if you are diagnosed with one of a wide range chronic illness and there is no life expectancy criteria. Indeed, with many of the insured illnesses you could expect to survive for many years. For example: certain cancers, heart disease, stroke, multiple sclerosis, loss of speech, sight or hearing, onset of Parkinsons or Alzheimers disease, third degree burns etc. Say you were an engineer aged 40 and you lost your sight. A Critical Illness policy would pay out immediately and that money could well be vital in helping you and your family through many difficult financial years ahead. If you just had Terminal Illness cover there'd be no chance of a payout.

So as you can see, Critical Illness cover is far more comprehensive than simple Terminal Illness cover and for that reason critical illness cover always costs you extra.

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finance 18

2008-07-25T10:09:00.000-07:00

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If your joints and bones are flexible and strong, they move freely. And that means life can be fun and appreciated to its' full. But for one in seven people, movement is hindered by a musculoskeletal problem - back pain, arthritis, osteoporosis, fracture, or sports trauma. Faced with such pain you may be delighted to pay £4,000 for orthopaedic surgery to get those painful joints flexible again. But would you be so willing to spend the same money on your pet Basset Hound?

Veterinary care has moved quickly over the last ten years and as pets get older they are increasingly liable to suffer illness that can be expensive and lengthy to treat. Take diabetes for example. Diabetes is relatively common in dogs and whilst it can be successfully treated, the management of the condition is ongoing and expensive - one vet estimated that typically, treatment cost around £2,500 per year. Eczema is yet another of many conditions that require an extended period of treatment.

But as with humans, your pet can need emergency treatment at any time. According to research company Mintel, one in three pets make an unplanned visit to the vet every year. Boxers and Spaniels are susceptible to dodgy hearts, Labradors and Golden Retrievers are prone to progressive retinal atrophy, Setters' can get canine leucocyte adhesion deficiency and Alsations, hip dysplasia. And then there are always scrapes in which our pets are so likely to become involved. Your cat may have nine lives but you may well land yourself with nine vets' bills! With a series of x-rays costing £400 and an MRI scan putting you back £1,500 the case for insurance cover becomes convincing.

Against this backdrop, pet insurance is now the fastest growing form of insurance in the UK. Petwise, Petplan, Pet Protect, PDSA, E&L, Animal Friends, and Marks and Spencer are all names in the market. Indeed, competition for your business is fierce with over 60 insurers offering over 220 different policies. With so much choice, the task of choosing a policy becomes somewhat complicated.

So lets try and keep things simple. Pet insurance falls into three basic groups. The first and usually the cheapest form, limits the claim to per condition per 12 months - suitable for one-off emergencies but not too good for diabetes! The second limits the total paid annually whilst the third limits the amount paid per condition.

Faced with all this choice what features do you need to look out for? Here are 10 key questions to ask:

Are claims subject to a maximum annual limit or on a "per condition" basis?
If the insurance is limited "per condition", what is the time limit?
What is the excess per claim? Sometimes the excess will be a set sum, sometimes a percentage of the cost and more often, a combination of both.
Is there a limit on vets' fees? If so, what is it?
Find out if your pet is prone to any hereditary conditions and whether the plan will cover those. For cats you'll find information about hereditary conditions at www.petplanet.co.uk/petplanet/breeds/cats-breeds and for dogs you'll get the answers at www.the-kennel-club.org.uk
Is your dog covered for third party liability? Remember, if your dog causes injury or damage you could be liable for damages.
Does the pet insurance cover the cost of advertising and a finders' reward if you pet is lost or stolen?
If you pet undergoes urgent surgery shortly before you're due to go on holiday, will your pet insurance meet the holiday cancellation costs?
If you go in hospital, does the policy cover kennel or cattery fees? Some policies will payout after the owner has been in hospital for a certain number of days.
Does the plan make a payout when your pet dies? If so, how much?

How can you get answers to all these questions? Surprisingly, vets are not particularly well clued up. They normally have details of one or two plans in their waiting rooms but are rarely up to date with what else is available in the market. Perhaps not surprising with all the developments in veterinary care to keep abreast of!

No, you've already found the best source of information - the Internet! Search for pet, dog or cat insurance and you'll find all the information you'll ever need. It might take you an hour to complete your research, and remember to make notes, but it will be worth it in the end.

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finance 16

2008-07-25T10:07:00.000-07:00

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At last you've retired. It's now time to relax and experience a slower pace of life. Even enjoy spot of gardening. But not all of today's modern over 65's have heard the message! Retirement is taking a new twist.

Less of the slower pace of life and substitute jetting around the world! International travel for the retired is here and booming!

It's all the result of a increased sense of adventure and willingness to experiment, combined with more money in the pocket. Cheaper air tickets have also helped! Even cruises, once the territory of the seriously rich and famous, have become affordable. An escape to Antigua and a fortnight in the Canaries or a weekend in Stockholm are now firmly on the over 65's travelling schedule.

Then a fly sticks in the ointment. Finding economical travel insurance when you're over 65 is not easy. Insurance companies recognise that people have healthier lives and are living longer, and in recognition the insurers are offering far more products for the older market. But with travel insurance, the over 65's are still faced with exorbitant premiums.

Premiums rocket as you get older and if you're looking for an annual policy for an extended holiday or a series of holidays, the problem becomes finding a policy at all rather than simply finding the cheapest price.

The dilemma revolves around the costs of medical claims experienced by the insurers. Over 65's are much more liable to make a medical claim and the claim size is well above average too. Against this, older travellers reportedly lose less luggage - but these savings are counter-balanced by the fact their belongings are liable to be worth more.

The result is that even if you are fit, the lowest priced annual policy for the over 65's could cost £1,000 per person - that could be more than the cost of the holiday itself. Faced with these charges, the solution is to buy a separate policy for each trip. But even with a good medical history, the cost of insuring a 3-week holiday in the South of France starts around £65, and rises enormously for destinations in America and further a-field.

What's the solution? You're recommended to shop around. Your travel agent may offer a quotation but don't snap his hand off until you've got competitive prices. You'll almost certainly find a much cheaper alternative through surfing the Internet and buying online.

But don't make your final decision simply on the basis of cost. Always examine the small print. Some travel policies will insure you for up to 21 days, others up to 31 days or 45 days. Some policies will only cover you if you're staying in booked accommodation rather than staying with friends or relatives. No good for visiting family in New South Wales! Then you need to ensure that you've got adequate cover for medical and hospital expenses and don't spare the horses - think of a high figure and triple it! You'll be amazed how expensive quality medical attention can be whilst you're abroad. Incidentally, it's important that your insurer will fly you home to the UK if your medical condition demands. And don't overlook comparing the excesses you have to pay per claim. Finally, check that the policy pays medical costs direct to the hospital rather than you paying first and having to reclaim.

And now comes the really good bit - jet off and ENJOY yourself!

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finance 16

2008-07-25T10:05:00.000-07:00

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finance 15

2008-07-25T10:03:00.000-07:00

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finance 14

2008-07-25T10:01:00.000-07:00

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The life insurance industry is becoming tougher on smokers and those of us who are overweight.

When an insurance company calculates its premiums, it has to work out the risk of you dying whilst the policy is in force. (Or with Critical Illness Insurance, the risk that you will become critically or seriously ill during the policy's term.) In this context, smoking and obesity have become increasingly important issues.

The life insurance industry pointedly ignores the views of some Pro Smoking Pressure Groups which argue that smokers under the age of 40 have around the same probability of dieing as non smokers. David Pickett, Life Insurance Manager at Sainsbury's spoke for the insurance industry when he confirmed "Health risks associated with smoking can have a big effect on life cover costs. It is vital for those who have kicked the habit to review their policies".

Just how big an effect smoking has on life insurance costs was highlighted in a recent snapshot study by www.express-life-insurance.co.uk. This found that the average smoker paid 56% more than a non-smoker. The study was based on nine of the UK's top insurance companies and examined the premiums quoted for two men aged 30 asking for £100,000 cover over 25 years. The only difference between the application details was that one was a smoker and the other wasn't.

The life insurance industry has also recently tightened its belt on the overweight members of society. Previously, only people with a Body Mass Index of 33 or more were considered as overweight. This level has now been reduced by 16%. Now anyone with a BMI of 28 or more is likely to face premiums loaded by 50%. If you're anxious to know whether that includes you, you'll need a calculator! BMI is calculated by dividing your weight in kilos by your height in meters and the result squared.

So if you're intending to apply for life insurance is may be as well to loose a few pounds first - oops kilos - and they're much harder to lose than pounds!

It's not quite so straightforward for smokers. To qualify as a non-smoker, most insurance companies insist that you must not have "smoked or otherwise consumed any form of nicotine products during the previous 12 months." Indeed, some companies go further and extend the qualifying period to 5 years!

Because premiums for smokers and chubbies are so high, it becomes even more important to seek out the cheapest possible prices. As you're an internet surfer, the odds are you'll land a good discount. Just search for cheap life insurance and let your fingers do the walking!! You'll still pay more but the discount will soften the impact on the wallet. Expect online savings of 10% - 15%.

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finance 13

2008-07-25T10:00:00.000-07:00

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Sorry to remind all you died in the wool smokers but November was Lung Cancer Awareness month. But no don't click away - spare a few moments of your time, please...

If hard words on packets wash over you, let me put the financial case to you for quitting. As well as feeling healthier I can offer you a holiday for two on Paradise Island in the Maldives, for two, for every year of your longer life!

OK, I know you don't believe me. Let's explain.

Say the average smoker is 40 and smokes 20 a day. With cigarettes at £5 a packet that's £1,800 a year. Then you'll save loads on the cost of your your life, critical illness and medical insurance. Just how much was highlighted in a recent snapshot study by www.express-life-insurance.co.uk. This found that the average smoker paid 56% more for life insurance than a non-smoker. Therefore, giving up could easily save you £50 per month on your various insurance premiums.

So as a non-smoker you could be £2,400 per year better off. Wearing a financial hat I can show you that if a 40 year old man put those savings into a personal pension plan with NFU, then at 5% per annum growth, he'll have a healthy retirement fund of £97,860. On retirement that could give an in the pocket tax-free sum of £24,465, plus an annual lifetime income of £3,830 (or £5,100 per year if the tax-free cash was left in the pension).

On the other hand let's have more fun!

For £2,400 you can have a 5 star 10 day holiday for two on Paradise Island in the Maldives. Give up smoking forever and you could afford to go back to Paradise Island every year!

QED - makes you think doesn't it?

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finance 12

2008-07-25T09:57:00.000-07:00

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Last month I had to drive down to London. I don't like driving at the best of times but the rain, spray and heavy traffic on the M1 made conditions difficult. Radio 2 kept me company and the heater kept me warm. Then I hit that queue - six miles solid and I was soon an hour behind schedule.

They were still clearing up the accident when I got there. It was nasty. A lorry and what was left of two cars. Made me think, after all that could have been me. Yep, my life insurance is up to date and my Will was renewed only last month. The family would be well cared for and the mortgage repaid. Had I missed anything?

The business. What would happen to that? We have two directors, 7 employees, an overdraft and lots of insurance. Public Liability, professional indemnity, vehicles and stock are all insured. We even have legal protection insurance. Had I missed anything? I got to thinking.

Thank goodness it wasn't George in that accident. A great guy and he's been with us five years. He's our top salesman. There again what if it had been my co-director who also owns 50% of the business? What would be the repercussions on the business?

Sales down, profits down, bank phoning all too politely to ask about the Directors guarantee on the overdraft. Then I'd have to try and buy his shares. I wouldn't want someone else to get hold of those. At some stage I'd have to recruit someone of his calibre to continue the company going forward - that wouldn't be easy! And recruiting top people doesn't come cheap. That's more time and more money. The personal problems... the repercussions... the extra work... the extra stress...

Oh heck, I don't want to think about it all. Quickly, switch over to Radio 1.

Does all this ring alarm bells with you? 95.2% of UK businesses employ less than 10 people and these are precisely the organisations most at risk from the impact of severe illness or death of a key person. The risks of a key person being stuck down with a long term illness or death are real. 1 in 5 men suffer a critical illness before their normal retirement age. Then there's the M1. The fact that it hasn't happened so far might just mean your business has just been lucky.

Now to those actuarial boffins in insurance companies, risk and luck are flip sides of the same coin. And they can provide insurance cover for most risks. After all they too want to increase sales. But they're scratching their heads about Keyman Insurance. Most of Britain's 4.1million small businesses should have it but few do. What can it do? It can be structured to:

Provide an income stream to the company whilst the key person is incapacitated (compensation for the lost contribution from the Keyman)
Provide a lump sum to the business in the event of death (pay off the overdraft or simply bolster cash flow?)
Provide money for remaining shareholders to buy the shares from the original shareholder or their estate

You'll need to talk to a Financial Adviser about these issues but they are all insurable. Can your business afford to take a risk it doesn't need to?

Memo to myself - get Keyman Insurance!

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finance 11

2008-07-25T09:55:00.000-07:00

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As a businessman you might have public liability insurance and you insure your buildings, stock and vehicles. You may even have professional indemnity insurance and legal cost insurance. Is that all? What about your other primary assets - your key staff?

Key staff represent the heart of every businesses but no more so than the UK's 3.9 million small, often family, businesses that have up to 4 employees. Prolonged absence through serious illness or even death can be terminal for some of these enterprises. The risks are the same for limited companies, a partnerships and sole traders.

In this context Keyman Insurance is a must. Keyman Insurance represents a group of insurance plans all designed to financially protect business from the affects of prolonged illness or even death of staff who are central to the prosperity of the business. The insurance can't replace people but it can provide cash to buy time and cover the costs of temporary staff, recruitment, loss of profits or provide a cash injection.

The insurance falls into four categories - insurance to help your business recover during the extended period when your key personnel are unable to work or to train or recruit a replacement, insurance to protect profits, insurance to protect shareholders or partnership interests, and insurance for anyone involved in guaranteeing businesses loans or banking facilities.

Keyman Insurance on those who are central to your business.
Who are your key people? They are the ones who steer, create and drive your business. The people without whom your business would lose sales and profits or without whom even the basic viability of your business would be shaken. Look at the Directors, Partners, owners and beyond. Consider the roles of senior managers in sales, technical development and operations - the roles will change in every business but the candidates are sure to jump out at you.

Insuring these people will provide the extra cash needed to take on temporary staff or recruit and train a replacement.

Keyman Insurance to protect your Profits.
The effect of losing key staff goes well beyond simply the cost of their salaries and the cost of replacement. As they're central to the businesses prosperity, their loss will knock on to the bottom line. You can insure for loss of profits too!

Keyman Insurance to protect Shareholders or Partners.
Here we are talking about insurance to protect interests in the event of long-term illness or death. Families may want to sell their stake in the business but the remaining members in the business may not want those stakes held by newcomers. Keyman insurance schemes can be implemented which provide the necessary finance to buy the shares from the original shareholders or their estate.

Keyman Insurance insuring those who provide personal guarantees.
When a business takes out a loan or raises bank finance the lender is quite likely to require a personal guarantee or a charge on their personal property. This especially applies to small and new businesses. So what happens if these guarantors become seriously ill or die? The lenders may well be in a position to call in the loan. What happens then? Again, Keyman Insurance is the answer. Insurance can be structured to pay-off the loan and thus free the business and the guarantor's family, from major worry.

Most of the UK's leading insurance companies offer Keyman Insurance as a development of their Life and Critical Illness Insurance interests. They have all the necessary paperwork available to implement the cover you need and ensure the taxman is kept at bay.

So, can your business afford to ignore Keyman Insurance? You'll be either a brave or foolish man to say NO!

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finance 10

2008-07-25T09:42:00.000-07:00

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There are different kinds of Insurance that pertain to moving:

Released Value Insurance, the most basic coverage provided by moving companies. Estimated by weight it covers US$0.60 per pound of objects.
Declared Value Insurance offers coverage of US $ 1.25 per pound, coverage is on the total weight of your movables. If any objects are damaged, the insurance is based on the depreciated value of the object to the maximum value of items shipped.
Lump Sum Value, this insures based on the actual value of goods shipped and not by weight. The specific value of items must be declared on the bill of landing.
Full Value Protection, covers all damage or losses. Objects will be replaced, repaired, or cash for value of object will be offered.

Tips:

Decide which objects are to be moved and which are to be stored.
Prepare a detailed list of objects to be moved along with weight and value.
It is advisable to take insurance over and above that offered by the movers.
Ask for advice on which insurance would benefit you the most.
Get estimates from insurers.
Remember a customer has to file a complaint within nine months of the move.
A mover is legally obliged to acknowledge a claim within 30 days and offer settlement within 120 days.
Even if there is damage a customer is obligated by law to pay for the move. After which the customer should address the claim procedure to receive compensation.
Ask the mover to explain clearly the insurance cover offered by them, the exclusions, and limits.
Always read carefully the small print on the mover's contract and insurance papers.
List antiques and valuables separately and take extra coverage for them. Extra premium is generally charged for fine china, paintings, and so on.
If any goods are damaged, never unpack/remove them from their boxes until all procedures for claims are completed.

Check whether your homeowners insurance covers moving. Purchase an insurance that best covers the value of the property being transported.

Find out what can be insured. Normally, jewellery, cash, as well as items not packed by movers are not covered. Goods like fuels, fertilizers, acids, ammunitions, paints, aerosol cans, corrosives, as well as flammable substances will invalidate insurance and should not be moved.

It is important to know the laws of the state or country where you live and the place you are moving to.

Experts recommend transit insurance as a good supplement to moving insurance. It will generally cover the gaps left by the insurance policy.

Clever coverage can save hundreds of thousands of dollars and insurance is available on the net, through the mover, a move-it-yourself company, or homeowner's insurance companies.

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finance 9

2008-07-25T09:40:00.000-07:00

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There are no laws in the UK that require a person to have life insurance. It's an entirely voluntary insurance. About 40% of the UK's working population are covered by life insurance either through their own policy or via an arrangement through their employer.

So the simple things first. You have to be a UK resident in order to buy a life insurance policy from a UK based insurance company. This is not a requirement laid down in UK law, but UK laws and tax arrangements make it impossible for a UK based insurance company to offer insurance to anyone other than a UK resident. But be aware that if, having taken out life insurance, you later live abroad, your policy will be invalidated. Naturally, invalidation does not apply if you are on holiday but if you have a short-term work assignment abroad you are well advised to inform your insurance company before you go.

All UK Insurance Companies are subject to UK Corporate Laws. However, there are special regulations that only apply to insurance companies. These control the value of the risks the companies take on in relation to their financial reserves. These regulations are designed to ensure that your insurance company will be in a position to pay if you claim.

The Data Protection Act 1998 is concerned with way all UK businesses store, safeguard and use the data they collect about people. This is particularly important within the life insurance industry as the companies store significant amounts of very personal information about you - including your age, health record and life style. One of the key provisions of the Data Protection Act says that if a business wishes to pass on your information for marketing purposes, the business collecting the data must tell you of its intention and give you the opportunity of refusing permission for your data be used in that way. Incidentally, all reputable web sites selling life insurance will have a "Privacy Statement" which tells you how they handle your information and how it is used.

The Financial Services and Markets Act (2000) is the most important piece of legislation affecting the promotion of financial services in the UK including life insurance. The Act is highly complex but is primarily concerned with protecting you the customer. The implementations of the Act is overseen by the Financial Services Authority (FSA). The FSA regulates all forms of the promotion of financial products and services including the activities of financial and mortgage advisors in the UK. Their aim is to ensure you receive clear professional advice that reflects your personal circumstances. They also ensure you have a route to compensation should it be proved that you received inadequate or poor advice.

For the layman, the FSA's biggest impact is reflected in the advisors they talk to. The FSA seeks to ensure that all financial advisors are trustworthy and competent which includes being well supervised and well trained, and that any advice is given in your best interests. The FSA also ensures that you are given full and accurate information about the products you are being advised to buy both before and after you have bought them. They also closely oversee the organisations that actually create the financial products.

In fact everyone and every organisation giving financial advice in the UK must be authorised by the Financial Services Authority.

However, the Act makes a distinction between financial products bought as a result of a recommendation from a Financial Adviser and "Execution Only" business. Execution Only is where a customer is wholly responsible for the selection of the investment and therefore the financial advisers' sole responsibility is to process the purchase efficiently. Under Execution Only, the Adviser bears no responsibility for the products suitability for the clients needs.

You should be aware that many of the web sites promoting life insurance operate on this Execution Only basis. However, most web site operators provide extensive information to enable the client to make an informed choice. Sometimes the information is published on the web site and sometimes provided during a follow-up telephone call. Either way, within their Terms of Business the web site will have to tell you on what basis they provide financial services and as part of your application, you will normally be required to confirm that you have read those Terms.

Those Terms of Business will always include details of a complaints procedure. In outline, if a customer wishes to complain, then the customer must detail the complaint in writing and send it to the Compliance Officer for the business employing the advisor. That business then has to investigate the complaint and reply to the customer in writing. If the Compliance Officer upholds the complaint, and the customer has suffered a financial loss as a result, then the business must agree a financial settlement with the customer. Ultimately, if the customer has suffered financial loss and cannot accept either the organisations' conclusions or their proposed financial settlement, then the situation can be referred to the Financial Ombudsman. The Financial Ombudsman's service is free to the customer and they are wholly independent. The Financial Ombudsman's decision is usually binding on both parties.

The other central piece of protection for the customer is the Financial Services Compensation Scheme. This provides the customer with a level of protection if a financial organisation regulated by the FSA becomes insolvent and cannot properly meet its financial responsibilities to its clients.

Postscript
The above information represents the legal aspects we think you will have found most useful. The information is neither definitive nor exhaustive but is simply an introduction for the layman.

If you would like more detailed information relating to the regulation of life insurance companies, insurance brokers, or financial advisers you should visit the Financial Services Authority's web site at:
www.fsa.gov.uk

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finance 8

2008-07-25T09:33:00.000-07:00

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The average man in the street assumes that Life Insurance and Life Assurance are names for the same form of insurance. How wrong they are! But don't hang your head in shame, many financial commentators get it wrong too! Life Insurance and Life Assurance perform different financial roles and are poles apart in cost - so it helps to surf for the correct product.

Life Insurance provides you with insurance cover for a specific period of time (known as the policy's "term"). Then, if you were to die whilst the policy is in force, the insurance company pays out a tax-free sum. If you survive to the end of the term, the policy is finished and has no residual value whatsoever. It only has a value if there is a claim - in that context it's just like your car insurance!

Life Assurance is different. It is a hybrid mix of investment and insurance. A Life Assurance policy pays out a sum equal to the higher of either a guaranteed minimum underwritten by the policy's insurance provisions or its investment valuation. The value of the investment element is then a reliant on the Insurance Company's investment performance and length of time you have been paying the premiums.

Each year the insurance company adds an annual bonus to the guaranteed value of your life assurance policy and there is normally an extra "terminal bonus" at the end. Therefore, as the years go by your life assurance policy increases in value as the investment bonuses accumulate. The value of these bonuses are then determined by the insurance company's investment performance. Once investment value has been assigned to the policy, you can cash it in with the insurance company. However, most people get a far better price for their life assurance policy by selling it to a specialist investment broker rather than cashing it in with the insurance company.

If you were to die during a Life Assurance policy's term, the policy pays out the higher of either the guaranteed minimum sum or the accumulated value of the annual investment bonuses. However, if you are still living when the policy terminates, you usually get a bigger payout. This is because with most insurance companies, an additional terminal bonus is awarded.

There is a also a specialised form of life assurance called "Whole of Life". These policies remain in force for as long as you live and as such, have no preset term.

There is also a practical difference for the internet user. Whereas you can buy life insurance online, the Financial Services Authority view life assurance as fundamentally an investment product. As such they believe it is best suited to being sold by a Financial Adviser with advice based on the Advisors full understanding of your personal details. Therefore, you will be unable to buy life assurance online. However, you can use the internet to find a suitable financial adviser with whom you can meet and discuss your requirements.

What are Life Insurance polices and Life Assurance policies used for?

Life Insurance is usually a focal point of the family's financial protection. It is ideally suited to ensure that known debts such as a mortgage, are repaid in full in the event of the policyholders death.

When it comes to providing a lump sum for general use in the event that the policyholder were to die whilst the policy was in force, either life insurance or life assurance can be used. The differences are that with life insurance the size of payout would be preset whereas with life assurance it would depend on the guaranteed minimum and the insurance company's investment performance. But remember, at the end of the policy's term life insurance is worthless, whereas life assurance should payout a sizeable investment sum. In this context Life Assurance seems far more worthwhile but in practice more people elect for life insurance. Why? It's a matter of cost. Life Insurance is considerably cheaper than Life Assurance. Furthermore, in recent years, investment returns on Life Assurance policies have fallen significantly and many insurance companies have placed penalties for cashing in policies early. This has adversely affected the resale value of Life Assurance policies.

Finally, if you want a product to provide a lump sum on your death whenever that is with a minimum payout guaranteed, you'll probably elect for Whole of Life insurance. It's really a form of lifetime investment with the benefit of a guaranteed minimum. They're particularly useful for Inheritance Tax Planning.

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finance 7

2008-07-25T09:31:00.000-07:00

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Many factors influence the premium for your Motor insurance policy. Your insurer will have asked you many questions whilst producing your quote - some of which will affect your premium and some will not. Below we discuss the key variables that are within the policyholder's control.

Consolidating policies
By insuring a number of vehicles with the same insurer, or by trying to take out home and life insurance through your car insurer, you may be able to secure a 'bulk buy' discount.

Location
A big influence on the cost of your car insurance is where you live. The chance of your car being broken into or stolen is a key concern for the insurer. More urban areas traditionally facing greater risk of theft and therefore tend to be more expensive than countryside locations.

Excess
By agreeing to pay a greater excess on each claim you can reduce your car insurance premiums. This is because you are reducing the liability of the insurer and therefore in return they are able to offer you a lower premium.

Your Vehicle
The cheaper and slower your vehicle the lower your premiums are likely to be. If you are looking to buy a new vehicle make sure you fully consider the cost of insurance - you may be able to buy the car but can you afford to run it?

Mileage
You can control your insurance premiums by restricting your annual mileage. However, be aware that if you exceed the restricted number of miles you'll then become uninsured!

Parking
Where you park your vehicle overnight is also very important to the insurers. If it is kept in a locked garage, you should be offered a lower premium than if you leave it unattended in the street.

Security
Security devices that prevent or hinder theft may also reduce your premium. Common examples include alarms and immobilisers, however, be aware that as we improve the quality of our security devices the thieves just become better at bypassing them.

No Claims Discount
Save up your no claims discount by avoiding making small claims upon your policy. After a set number of years, 4 or 5 typically, you'll often be offered the option to pay an additional small premium to protect your no claims bonus. This can prove very helpful if you subsequently end up having an accident.

Advanced driving skills
By taking an advanced driving course you may also be able to reduce your premiums. The Institute for Advanced Motorists and the Royal Society for Prevention of Accidents each offer membership which provides you with discounts for both the cost of driving courses and your car insurance premiums.

Two key variables NOT within the policyholder's control.

Your Sex
Women are statistically less likely to have an accident and, if they do, it's less likely to be serious. Because of these statistics women benefit from lower premiums. It is also worth noting that if you represent one half of a couple you should consider having the female as the primary driver with the male as the second driver.

Your Age
The older you are, the less likely you are to make a claim. As a result insurance companies charge lower premiums for more mature drivers.

One final piece of advice.
A large percentage of car insurance is now sold on the Internet. That's because it's convenient and cheap. Many insurers now give a further 10%-15% discount if you buy online.

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finance 6

2008-07-25T09:30:00.000-07:00

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There are two main types of life insurance that are available to everyone; there is whole life insurance and term life insurance. Many people are unaware even of the existence of term life insurance, which is a shame because term life insurance is usually much cheaper than the whole life insurance equivalent. If you are a shrewd investor then term life insurance could be just the option you are looking for. It can work out thousands of dollars cheaper every year giving you that extra money to invest yourself. Insurance companies are normally very conservative when investing your money; some people like this while others prefer a more risky but greater return investment opportunity.

Cost
The obvious advantage of taking a term life insurance policy over a whole life insurance policy is the cost. Often a term life insurance policy will cost you hundreds of dollars a year but a similar whole life insurance policy can cost as much as thousands. In fact, there are some term life insurance policies that will cover you to the value of $100,000 over a ten year term that cost less than ten dollars a month. Obviously, similar factors are taking into consideration when applying for term life insurance as they are when applying for whole life insurance; factors such as health, family history, lifestyle and age.

Flexibility
Term life insurance offers you a greater level of flexibility over it's whole life insurance counterpart. For less money you are able to take out short 10, 20 or 30 year plans and you are able to determine the exact level of cover that this offers. You may have a 4-year-old son and a partner who has opted to stay at home and look after him. Right now he is dependant on your earning money to feed, clothe and care for him but in twenty years he will have finished school, finished college and hopefully got himself a job. This means he is no longer your dependant and you may not need to make financial allowances for him in your life insurance. Alternatively, your mortgage may expire in ten years. You won't need to pay to cover your mortgage once it has been fully paid up.

Investment
A term life insurance policy costs you hundreds, even thousands, of dollars a year less than a whole life insurance policy. This means that you can invest your money yourself instead of relying on the insurance company to do so. Insurers are typically very conservative when investing your money, so by taking a term life insurance policy you are able to be a little less strict over the type of investment you choose affording you a greater potential to make more money.

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forex 5

2008-07-25T09:29:00.000-07:00

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Your life insurance quote is primarily dependant on a number of personal factors, namely your health, family history, lifestyle and age. It's not possible to physically change any of these factors and you definitely shouldn't lie about any of them when applying for a life insurance quote. However, there are ways you can ensure that you get the best deal out of your life insurance quote. It is important to remember, though, that we aren't talking about the cheapest life insurance quote. This is because the easiest way to get the cheapest life insurance quote is to exclude a number of factors from your policy. This may not give you the coverage you require so you should be aiming to combine the best price with the best coverage for you.

What coverage do I require?
This is a very important question and that you shouldn't answer on the spare of the moment or without careful consideration for your circumstances. By taking out a cheap life insurance policy that offers you very little in the way of coverage you are putting your family and their livelihoods at risk. Of course, nobody can answer the question properly except you. You know, or can work out, how much money your family will need to bury you and to replace your lost income. You know how much money your family needs to live on and how much the mortgage and bills cost. You should carefully consider all of these before deciding how much coverage you really need.

Getting your life insurance quote.
By this point you should have all the information you need regarding the level of coverage and other factors. This information is what your life insurance quote will be based on so you need to double check everything to make sure you are going to get exactly what you want and exactly what your family need. If you aren't the money earner, or one of the money earners in your house and you don't have young children then you only really need to cover the cost of being buried whereas being the carer of young children of being the principle wage earner will necessitate a much larger level of coverage and, therefore, a more substantial payout.

When you have the answer to all of these questions you should shop around as much as possible. Clearly express exactly what you want from your policy and make sure that this is what is being offered. If it isn't then the life insurance quote you are getting is not for the life insurance policy you need. Always compare your quotes on a like for like basis or you are unlikely to be getting the best deal you can.

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forex 4

2008-07-25T09:27:00.000-07:00

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Knowledge is power
When you are looking to make any major purchase or take out any long term insurance the first thing you should do is arm yourself with all the facts you need and this is by no means any different with your home owners insurance. Work out the value of your home and write up a list of the personal items in your home. This list should include absolutely everything that you would need to replace in the event of it being damaged beyond repair, stolen or broken. This itinerary will not only prove useful for calculating the level of cover you require but also for making a claim should the need arise.

Calculating your cover
Home owners insurance is a little different to other insurance. Car insurance uses book value of your car, the insurance company being safe in the knowledge that you will be able to replace your car should the unthinkable happen. Going out and buying a house is a little ! different to this. There isn't a set value on a house and you can't just buy the house itself. In order to come up with a value on your home you need to find out the market value for similar houses in a similar area. In order to reduce the cost of your monthly premium you should seriously consider excluding a small amount of the money because while you need to insure the building and outbuildings you don't to insure the surrounding or housing land.

Shopping around
This is the key aspect to gaining cheaper home owners insurance and is a step that has been made much easier with the introduction of the Internet. Comparison sites are regularly available that will allow you to get quotes from a large number of home owners insurance companies. This will give you a much better picture of the type of price you should expect to be paying and will let you decide which policy has the best cover combined with the cheapest price.

Selecting your home owners insurance policy
Once you've got your list of quotes in you should be able to tell pretty quickly which of the offers appears the best. Check it over to make sure it offers exactly what you are looking for and if it does you are onto a winner. If there are a couple of quotes around the same price look them all over to see if any have outstanding extra services that may make you give them slight preference over the others.

Renewal time
You will need to renew your policy or change insurance provider on an annual basis and when this time comes you should check that the policy you are applying for still has everything you need. By doing this you will be able to stay on top of the prices you are paying and the coverage you are receiving.

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forex 3

2008-07-25T09:25:00.001-07:00

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It's simple, always have your Life Insurance policy "Written in Trust". This may sound technical but it is easy to understand and it's so easy to organise.

"Written in Trust" ensures that in the event of a claim, the policy will pay directly to the beneficiaries you name on the policy when you first take it out. If you do not do this, the policy will payout to your legal estate and this inevitably means that the money stays in your solicitor's hands for some time.

Yes, that implies legal delays and, of course, your solicitor takes a small cut!

Then, if the value of your taxable estate exceeds £275,000, and remember your home can easily account for the lion's share of the £275,000 limit without much difficulty, your estate will have to pay Inheritance Tax. This represents 40% of the estate's taxable value in excess of £275,000. So, if your estate has to pay Inheritance Tax and the proceeds of your life policy go to your estate, the taxman gets his hands on 40% of your life policy!

But it's so easy to avoid all these problems.

Simply get your policy "Written in Trust". Then the life insurance company pays out immediately, directly, and totally tax-free, to the persons you have named on your policy. All you have to do is tell the online brokerage organising your policy that you want your policy "Written in Trust" and they will automatically sort it out for you.

This advice remains sound even if the Life Insurance policy is designed to pay off your mortgage. Rather than your estate using the insurance payout to pay off your mortgage, the policy can be written in trust and paid to your partner and then he or she can use that money to pay of the mortgage. The benefit? Well if your taxable estate exceeds the IHT threshold the mortgage is effectively paid off tax-free.

The extra good news is that all the brokers we've met will arrange for your policy to be "Written in Trust" as a free of charge service. So it's a win win situation and there aren't many of those around these days!

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finance 2

2008-07-25T09:21:00.000-07:00

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The advent of the internet has opened up the possibility of cheaper life insurance for all.

In years gone by, if you were considering life insurance you would probably have invited an insurance salesman from your favourite insurance company to meet you or alternatively gone to your local insurance broker. But rarely would you have been courageous enough to get competitive quotations. It just wasn't done. You trusted the salesman to do the best for you and surely you thought, life insurance is somewhat technical and requires specialised knowledge. All very cosy. All very expensive. How life has changed!

People now realise that life insurance is not that complicated. If on a scale of 1 to 10, buying car insurance online rates 9, life insurance must be a 7 or 8. This has opened up the Internet as a prime arena for cut-price life insurance. That's not to imply that life policies bought on the Internet are in any way substandard. No, you're most likely to end up with a policy from one of the UK 's big insurers like Norwich Union or Legal & General and they'll be exactly the same policies as you could buy anywhere else. It's just that the intense competition on the internet and efficiency and simplicity of the system, means that most online brokers decide to cut the commission and roll back the savings into lower prices.

Ah yes I hear you saying, 7 or 8 implies that life insurance is more complicated than car insurance. Yes it is - but that doesn't mean that it represents a problem. The companies selling life insurance online recognise that many clients feel that some level of personal advice is useful and indeed, necessary. They accommodate this with a mix of useful information on the web site and more often than not, with a short telephone conversation with a life insurance adviser prior to you buying. This provides reassurance and helps to ensure you really do get the policy options you need all at rock bottom prices.

Buying online certainly is a good idea.

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finance 1

2008-07-25T09:18:00.000-07:00

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forex 15

2008-07-25T09:17:00.000-07:00

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FOREX is the abbreviation for the Foreign Exchange market. The main principle of Forex is converting one currency into another. As far as the freedom from any external control and free competition are concerned, FOREX is a perfect market and is also the world's biggest financial market. In many investment portfolios, you will find FOREX more and more since the currency exchange realm has opened up to the small investor. In its simplest form, Forex is transaction of monetary funds from one government to another or business associates of different countries. There are substantial earnings to be made in the foreign currency market, but trading in the Forex is for the well-informed. In addition, forecasting Forex is not easy, as Forex is a fast moving market where several changes occur in the fraction of seconds.

Trading Forex works remarkably easy and is convenient since the currency exchange market is open 24 hours a day 7 days a week, providing plenty of trading opportunities. You can get started trading the (spot) FOREX with little money and there are many brokers on the internet that will allow you to make paper practice trades for up to 30 days, free of charge, to see if Forex is for you. They have guides that show techniques for day trading as well as mid-term Forex trading (one to seven days). Trading currency with tighter spreads can improve your trading profits, and you can see for yourself how taking short-term trading positions can be exciting. Low spreads and high volatility is a very popular way of trading on Forex, and is known as day trading.

The foreign exchange (currency or Forex or FX) market exists wherever one currency is traded for another. Trading Foreign Exchange currency in the global Forex trading system market can make you money. Very often currency pairs are closely related to one another - and this is something that can be used to the Forex Traders advantage. There are Consumer Alerts, however, and you should beware of Foreign Currency Trading Frauds. You should educate yourself first in all areas relating to currency trading. It's a great way to get comfortable with a currency trading system and to develop a successful Forex trading strategy. Use the currency forecasts to set profit points and maximize your return. You can make significant earnings in the foreign currency market, but trading in the Forex is for the well-informed and you should take advantage of advice from a reputable broker.

A broker is any person or firm that charges a fee in exchange for executing trades for a trader. When it is time to find a broker, there are several factors to consider. Assuming you are dealing with a reputable broker, there are still risks to FOREX trading. But inexperience is not the only broker reason to consider using a Forex broker to trade in the high risk international currencies market. Most traders find that it is necessary to utilize a broker when making transactions on the FOREX exchange and this has created a market demand for an online Forex broker, Forex dealers and a currency exchange service. As an example, your Forex currency broker is able to purchase $100,000 with only a deposit of $1,000, as the rest of the amount is leveraged to you by your Forex broker. With this type of account, your broker/dealer basically trades your money on the Forex market for you, and will always show the highest bid and the lowest offer.

In simplest terms Forex can be as simple as you would want it to be. Managed Forex is an area of Forex trading that's continuing to grow. FOREX is a somewhat unique market for a number of reasons... Forex is maximum liquidity; FOREX is real trade, in term of business. Basically, Forex is transaction of monetary funds from one government to another or business associates of different countries. For the astute investor, Forex is better than the stock market and every other money-making opportunity. Since Forex is entirely electronic and the liquidity and size is so much larger, it tends to be easier and more efficient to do a Forex transaction.

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forex 14

2008-07-25T09:16:00.001-07:00

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The foreign exchange market, or forex, being the largest financial market in the World has been the domain of government central banks as well as for commercial and investment banks in a scandalous manner and it exists wherever one currency is traded for another. But recently more numbers of individuals are handling the forex market as it offers trading 24-hours a day, five days a week, and the daily dollar volume of currencies traded in the currency market that exceeds $1.9 trillion daily, making it the largest liquid market in the world.

"Foreign Exchange" is the place where the money of one nation is traded with the other nation. The most popular pair of exchange in the forex market is "Euro Dollar". You can view these pairs in all forex display screens as "EUR/USD". Forex trading strategies are the key to triumphant forex trading or online currency trading. The management team of One World Capital Group bid proficiency in both Forex trading and internet technologies and proven track records that deals with large, global trading and brokerage operations as well. Forex made easy is as simple as you would want it to be.

Forex trading is different from trading in stocks entirely and it uses Forex trading strategies that will give you lot of advantages as well as help you to comprehend greater profits in the short term. There are wide ranges of forex trading strategies that are available to investors. It is one of the most useful of these forex trading strategies called as leverage. Knowledge of these Forex trading strategies can imply the difference between profits along with a loss and so it is essential that you fully grasp the strategies that are being used in Forex trading. The world of Forex trading is highly complicated and success requires education and familiarity with terms, charts, signals and indicators.

As you can be able to access it from home or office from any parts of the country, Global Forex trading is the most profitable and attractive internet income opportunity. And you do not need to do anything or there is no need of internet promotion for getting succeeded. Forex Capital Markets are nothing but foreign exchange markets where the currencies are been bought and sold continuously for profits. These capital markets of forex are present globally and their transactions are always non-stop in this forex cash market. A managed Forex account is forex made easy. Many different companies offer these accounts to their clients. The foreign exchange market is a worldwide market and as per to some estimates is almost as big as thirty times the turnover of the US Equity markets.

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forex 13

2008-07-25T09:14:00.000-07:00

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forex 13

2008-07-25T09:13:00.000-07:00

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The foreign exchange market (the forex) can be a treacherous market to trade especially if you are not properly equipped for the job. You will need to give attention to the following: the equipment and type of internet connection you have; the overall amount of capital you can put at risk on this enterprise, as well as the amount of capital you are prepared to risk on any one trade;your broker and the reliability of the trading platform; charts and technical analysis; good entry and exit signals; being aware of news releases affecting this market; the need to use a stop loss on each trade to protect your position; the cutting of losses if a trade goes against you; and the compounding of profits.

You will ideally need a Pentium 4 desktop computer running Windows XP with a processor speed of 2.5GHZ and 512MB of RAM. The monitor needs to be at least 17", but 19" or bigger is better. You could get away with a 56K dial-up connection but broadband is usually far better in terms of stability.Some people have been known to trade this market successfully from a laptop which gives them mobility.

YOu will need a minimum of $20,000 risk capital to trade this market. "Risk capital" means that it doesn't include money you require for living from month to month, and therefore you can employ it in the market for speculative purposes. The reason for the entry figure being so high is that it is inadvisable to risk more than 3% of your total risk capital on any one trade. On this basis, the most you should be putting at risk on any one trade is $600 ( that is $20,000 X 3%) using full lots. You could start with a lesser amount of risk capital by using mini lots and still maintain the maximum 3% loss any one trade.

You will need to choose a broker wisely for two reasons: his financial stability; and the stability of the platform he provides. It is best to chose a broker with a proven record in the forex market operating from a well-regulated country such as the USA, UK or Switzerland.This market was only opened up to speculators in 1997, so forex brokers haven't got as long a history as stockbrokers.It is therefore best to chose on the basis of size -you are looking a broker with at least 10,000 clients operating from one of the aforementioned countries. The functionality of the platform the broker provides is important for the execution and tracking of live trades. What you don't want is a platform that always keeps going down at crucial moments in your trading day. In my experience, the platforms belonging the the major brokers are now very reliable although there might be a problem with the continuity of data displayed from time to time.

People who trade the forex market off fundamental analysis have been known to stay in the positions taken for multiple days, weeks, months or even years. If you are daytrading this market, however, you haven't got much choice but to use technical analysis as the basis of your decisions. Therefore charts become vitally important in the decision making process. candlestick charts are the easiest to follow on the screen as it simple to distinguish a bull candle from a bear one just by viewing the different colors. With charts,especially at the start of your trading day, it is best to use the top-down approach.Even though your entry and exits may be made off the 15 minute chart, you should start the day by looking at the daily chart to get the big picture. Then the 4 hour chart, the hour chart and 30 minute can each in turn be consulted prior to your regular chart (the 15 minute) in order to get the top-down perspective on the market.

Breakouts from support or resistance offer good entry points for trades. A support line can be drawn by joining the bottoms of two candles that stand lower than their immediate neighbors remembering that the support line must be tilted upwards therefore the nearest candle the line is connected to must be higher than the further away one. If this line is then extended into the future and is confirmed by a third candle touching the line you have a solid support line. When a candle breaks this support line and a 15 minute candle closes below it and subsequent candles go 5 pips (or points) beyond the bottom of the candle which broke the support line, you have a valid entry point for a short trade (thatis selling the currency pair being traded). Resistance lines are done on the same basis except that the initial line drawn must have a downward slope which when broken, and the the other criteria for entry is met, gives you a valid long entry (that is buying the currency pair being traded).

Before you start your trading day, it is imperative that the daytrader knows when economic news affecting the currency pairs being traded is scheduled to be released.There are various websites that do this but the best one that I have found is http//www.dailyfx.com. If you go to their Home Page, and click on the Calendar tab at the top, a page will open with the words "Weekly Economic Calender for ....." on the top left hand side on which you click to take you to the page where all the scheduled news for the world's major currency pairs are listed on a daily basis. The times of the news releases are given in both GMT and EST so you may have to compensate depending on which time zone you happen to be in the world.Knowing when the news is going to be released is crucial, because depending on its strength is may be sensible if you are in a trade that is making a profit. to take profits before the news hits the wire, or at least tighten up your stop.

It is also sensible never to trade without a stop. For daytrading a stop in the region of 20 - 30 pips is sensible. This is the loss you are prepared to take on the trade if it goes against you. It is also sensible to set your profit objective higher than your loss by 25% -50% dependent upon the quality of the signal generated. Only risk 3% of your risk capital on any one trade. If you start off with $20,000 risk capital and after 4 months or so you have found that it has grown to $40,000, now use 2 lots per trade and thereby employ compounding.When you capital grows to $60,000, you would employ 3 lots and so forth. If your selection criteria is good your capital can build at a surprising rate using this technique.

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forex 12

2008-07-25T09:12:00.000-07:00

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If you're wondering why there seems to be so much buzz these days about forex trading, you're not alone. There are a number of reasons why forex trading is one of the hottest "new" investment opportunities for average folks. Fortunately, more and more information is surfacing about forex, making it a great time to start doing your research.

The purpose of this short article is to present a basic overview of key aspects which differentiate forex from other investment vehicles with which most of us are more familiar.

Today, the average person has a home computer with an internet connection. In addition, the number of people with a hi-speed broadband connection is rapidly increasing. This places a power and control in our hands that we've never before experienced. It's no longer necessary to have to rely upon the technical infrastructure of banks, brokerage firms and mutual fund advisors. This is incredibly significant. The internet represents more and more independence and choice for the individual to handle investing activities.

The nature of forex fits right in with the independence and freedom of having your internet connection. You can trade anytime from anywhere, starting with a very low investment; under $1000. There are no fees to pay and although the currency market is very liquid, it's also very predictable. You can also make money whether markets are up or down. That's why it works. The really fun thing is that you can get online and practice by paper trading and learn without any risk. Then, after gaining a better understanding of how it works, you can begin with a small amount and make it grow.

Previously, only the "big boys" and financial institutions were in-the-know about forex trading and very active in it as well. Seasoned investors have also been involved over the last few years. Experienced stocks and commodities traders have discovered the power of forex trading. The daily forex trading volume is said to be somewhere in the neighborhood of 1.5 trillion dollars, which is 30 times the combined volume of all the US equity markets. That's some pretty tall talking, but certainly worthy of your investigation. Now, because of certain regulatory changes that occurred in the late '90's and the explosion of home computing & internet technology, forex has become an investment opportunity that most people can be involved with in the comfort of their home as they control their own investment strategies.

Like I said, this is really just a light overview, but I urge you to give some attention to forex trading and discovering more about it. You may find it quite rewarding.

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forex 11

2008-07-25T09:10:00.000-07:00

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forex 10

2008-07-25T09:03:00.000-07:00

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So what is is Forex trading you may ask? Forex is the exchange you can buy and sell currencies. For example, you might buy British pounds (by exchanging them to the dollars you had), then, after pounds / dollar ratio goes up, you sell pounds and buy dollars again. At the end of this operation you are going to have more dollars, then you had at the beginning.

The Forex market has much higher liquidity, then the stock market, as much more money is being exchanged. Forex is spread between banks all over the planet and as a result it means 24 hour trading.

Unlike stocks, Forex trades are performed with high leverage, usually it is 100. It means that by investing $1000 you can control $100,000, and increase potential profits accordingly. Some brokers provide also so called mini-Forex, where the size of minimum deposit equals $100. It makes possible for individuals to enter this market easily.

The name convention. In Forex, the name of a "symbol" is composed of two parts - one for first currency, and another for the second currency. For example, the symbol usdjpy stands for US dollars (usd) to Japanese yen (jpy).

As with stocks, you can apply tools of the technical analysis to Forex charts. Trader's indexes can be optimized for Forex "symbols", allowing you to find winning strategy.

Example Forex transaction

Assume you have a trading account of $25,000 and you are trading with a 1% margin requirement. The current quote for EUR/USD is 1.3225/28 and you place a market order to buy 1 lot of 100,000 Euros at 1.3228, expecting the euro to rise against the dollar. At the same time you place a stop-loss order at 1.3178 representing a maximum loss of 2% of your account equity if the trade goes against you, 50 pips below your order price, and a limit order at 1.3378, 150 pips above your order price. For this trade, you are risking 50 pips to gain 150 pips, giving you a risk/reward ratio of 1 part risk to 3 parts reward. This means that you only need to be right one third of the time to remain profitable.

The notional value of this trade is $132,280 (100,000 * 1.3228). Your required margin deposit is 1% of the total, which is equal to $1322.80 ($132,280 * 0.01).

As you expected, the Euro strengthens against the dollar and your limit order is reached at 1.3378. The position is closed. Your total profit for this trade is $1500, each pip being worth $10.

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forex 9

2008-07-24T04:38:00.000-07:00

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With the amazing growth of the forex market, you are going to see an astounding amount of traders lose all their money. Unfortunately, they haven't followed the simple steps I have laid out for you. Go through these steps and give yourself the greatest opportunity to achieve your goals.

1. Have Faith In Yourself

To reach the level of elite forex trader, you must trust in yourself and your forex trading education. You must be willing to make all your trading decisions, instead of relying on someone else's thoughts or ability (or lack of). Of course, you will prepare yourself fully before every risking any money.

2. Accept Your Learning Curve

Unless you are a veteran trader, you will lose money trading the Forex market. This is a near certainty. I don't say this to talk you out of trading. In fact, quite the opposite. You will be trading against others that fall to this reality day in and day out. You, however, will not risk a dime until you have learned the skills you need to make money trading the forex.

3. Decide What Type of Trader You Are

There are many ways to trade the forex. They range from very active to very patient. You must decide which style suits you best. The best time to learn this about yourself is while you are trading a demo account. There is no need to allow your learning curve to cost you money.

4. Get Educated

Education is the shortest path to elite forex trading. Regardless of your ultimate goals, you will reach them quicker with a great forex trading education. Take some time to review different options before deciding on who to trust with your forex trading education needs. A forex seminar will help shorten your learning curve drastically.

5. Continue to Get Educated

In order to achieve and retain elite forex trading skills, you must constantly be adding to you knowledge base. Your education should never end. In fact, one of the key points to look for in an elite forex trading course is ongoing education. It's nice to have an ongoing relationship with the person/people helping you to achieve your goals.

What separates an elite forex trader from all others is their desire and ability to be independent. Many traders are willing to follow signals, systems, strategies, or anything else you may call them. By taking this approach, however, these traders are only as good as the people they follow.

An elite forex trader will lead. Their decisions will be calculated and analyzed to near perfection. They will make decisions with no hesitation, and handle the growth of their account in a predetermined, intelligent fashion. Take your trading to their level and you will never look back.

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forex 8

2008-07-24T04:36:00.000-07:00

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Foreign exchange is the largest financial market and everyday new investors plan to jump in when they learn of the benefits, that is, high returns on investment which is as high as 20% per month a month. However, inexperience and over enthusiasm can only do bad and bring in losses so, you'll need an experienced forex broker to help you put your money in the right place at the right time.

A forex broker with a cool head, preferably with a long list of satisfied clients and experience is the right guy. Once you've found the right forex broker, all that's to be done is, keep a regular check on your investments and it is advised to do it independently to avoid scams, because one can never know. So, how to find the right forex broker, is that the question? Well, good news, this article was written just for you.

In a market where cash flows faster than the F1 circuit, scams should come as no surprise even with reputed names and it's your responsibility to be aware of where the money is and keep a check on the movement and earnings. Different people prefer different levels of risk and depending on that factor you might like to check how different forex broker work and then select the one from them.

Even before you start the search, remember to strike down brokers promising windfalls, they are scams without doubt and same for brokers who are promising huge profits or no risk. Trading always involves some form of risk because of the nature of the market which you must be prepared to incur.

Make sure to check the spread of the forex broker as that's where they earn their money, read their terms of service carefully and check the services offered. There might be a lot of services being offered upfront at no cost but you might be billed for them later on, so make sure to sign up only for the services that are required.

A forex broker is a long term partner for financial success so, make sure to research their background well. All that's to be done is put in a little effort by checking the credibility of the forex broker or company upfront for peace of mind in long term.

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forex 7

2008-07-24T04:28:00.000-07:00

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forex 6

2008-07-20T09:52:00.000-07:00

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Sound familiar? Well, it should. Every time you read about a managed fund, or FOREX trading system, this is exactly what your are buying into. Obviously, you would never give your money to a fund if they can't provide consistent profits, and in most cases a "detailed" view of historical results.

O.k. I am getting ahead of myself. Let me take a step back and explain the question I am trying to answer.

Who should I let manage my account?

To me, there is a very simple answer to this question. YOU SHOULD MANAGE YOUR ACCOUNT. No other individual in this world understands your strengths, weaknesses, and tolerances better than you.

Yet there seems to be a never ending growth of funds and/or trading systems available online. Every one of them, of course, show substantial profits in the past. The question, then, is this.

Why are they sharing this great fortune with us? Why not just invest more of their own money, which they have just recently earned, and increase their profits?

There is a relatively limitless amount of money available in the FOREX. Why would someone want to earn 25% of your profit as a management fee instead of 100% of theirs. Because both of those things can not happen at the same time.

Every FOREX broker offers guaranteed fills on your orders under normal market conditions. This means that a $1 order is treated the same as a $1,000,000 order (whatever the maximum is with your FOREX broker). So, as long as your trade is accurate, you will have no problem getting as much currency as you like.

So what does that mean? Well, every FOREX broker has a maximum size order for which you are guaranteed your fill. This is important to understand for a very simple reason.

If the fund manager is only guaranteed his fill for $1,000,000, why wouldn't he want to capture maximum profit on his entire alloted amount.

In fairness, I would understand if he didn't have the capital to invest, but then I wouldn't trust the claims of his previous successes.

With a consistently successful trading strategy, and a conservative compounding strategy; you could turn a $5,000 account into a $1,000,000 account in just over 1 year. Let me explain before you all go running to open a FOREX Trading Account and lose all your money.

By investing 10% of your account on a daily basis, and averaging 20 pips/day in profit your account would increase by 2% on a daily basis. For those of you familiar with compounding, you understand how this can lead to such a major growth in your account.

So, here is another obvious question. If the fund has been averaging such astounding results over the past year, why can't they invest enough money to reach their limit? And, if they can, why aren't they?

Here is the answer to all of the questions. If they were that good, you would never know about them. It's just that simple. The greatest traders are growing their accounts and reaching their limit day after day.

I promise you this - they are not using anyone else's trading strategy, they are using their own. That's right, to become a truly great FOREX trader, you have to learn what works best for you, not someone else.

The most efficient way to reach the pinnacle of your trading skills is through an elite Forex trading course.

Are you still thinking about letting someone else handle your trading for you?

Here is one more reason for skepticism. Many spreads charge you a per trade transaction. This is an absolute no no. In this arrangement, they are guaranteed to make money on every trade. You, on the other hand are not. Avoid dealings with anyone who will make money on your losses.

Take your future in your own hands. Learn to trade the forex markets on your own.

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forex 5

2008-07-20T09:48:00.000-07:00

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Most people are looking for the perfect way to invest their money. No one will argue against the fact that your money is only going to grow by any reasonable amount if you have invested in some type of market. The first piece of advice usually given is that they should take advantage of whatever is offered by their employer's 401k plan, if that is an option for them. This is good, sound and advice and should be followed if at all possible.

However, many people either don't have the option of investing in a 401k, or they have maxed out their 401k contributions and are looking for a good place to invest their additional funds for maximum growth. For obvious reasons (ie - terrible perfomance), traditional savings accounts and CDs are out of the question. These people are usually advised that investing in mutual funds is the only practical, "safe" alternative to a 401k.

Many people hold the belief that a mutual fund is the only "safe" way for an individual to invest beyond the typical savings accounts and CD's offered by their local bank. This belief is no doubt due to the success enjoyed by mutual funds throughout the 1990's, when all of the stock market benefited from the huge bull market that was driven by the tech sector. Ironically, though, just as mutual funds have soared in popularity, they have also peaked in performance, and over the last few years most have seen an astonishing lack of overall success.

So the intrepid investor goes off in search of the perfect mutual fund, only to find that there is a bewildering array of funds to choose from, and an overwhelming number of factors to consider when making that decision. Some people will forge ahead and make a decision on a mutual fund, while others will decide to go to the next level and start looking for investments that give them more control, and hopefully greater returns.

The next level for most investors is usually the stock market, where they hope to achieve phenomenal returns. But most people are not prepared for the reality of investing in stocks, which presents them with an array of choices that is several orders of magnitude greater than that offered by mutual funds. The natural question is: Which is a good stock to invest in? How do you select the one or two rising stars out of all the thousands of stocks there are to choose from?

So just like in the search for a mutual fund, the investor is stuck with the problem of how to pick which investment is the best place for his funds. At this point many people give up, which is a shame, because there are some other options available to them besides mutual funds and stocks.

The most common option considered besides stocks would be commodities. The lure of commodities is that they are able provide tremendous returns for your investment dollars due to leveraging. Leveraging simply means that for every dollar invested you are able to control more than a dollar's worth of commodity. This can lead to tremendous returns, but unfortunately commodities come with a huge downside. One of the disadvantages of commodities are broker's fees, which can be quite high per trade. Another disadvantage is market liquidity... sometimes the markets being traded don't offer enough buyers and sellers to ensure that your order can be executed in a timely manner. This can lead to unexpected losses during times of extreme market volatility.

Another disadvantage endured by commodities traders is the advantage enjoyed by the floor traders in the exchanges. These traders have a huge advantage over the retail trader because they trade with much lower commissions, and also since they have such an intimate knowledge of their market, they know what are the most likely stop and limit targets that have been set by the retail traders through their brokers. This means that they can "flush out" the retail trader by gunning for their stops and taking small incremental profits from the market. Once the small traders have been flushed out of the markets by having their stops hit, the market can continue to move in its original direction. Sadly, many of the retail traders may have been right in their opinion of the direction the market was headed, but they are now out of the market because their stops have been hit.

An alternative to consider to all of the above investment options is to trade the Forex market. The Forex market is the global, electronic, decentralized trading of the world's major currencies. In the past, only major banks government institutions were able to trade on the Forex. But recently the Forex market was opened up to retail traders who are able to trade through retail brokers.

The advantages of trading the Forex are numerous when compared to all the other investment methods. The most obvious advantage is that, unlike stocks, you don't have to search through thousands of different investment types to find a likely candidate. There are a very limited number of currencies that are traded, and most Forex traders only trade in one of the four major currencies: The British Pound, the Euro, the US Dollar, and the Japanese Yen. Each market gives enough volatility to offer plenty of trade opportunities each day. So while the stock trader is busy looking for which stock to trade, the Forex trader is already busy analyzing the market and setting up his trades.

Another advantage of the Forex is that there is no one single "common place" or exchange where the trades are made. The Forex is an electronic market that is traded globally among a network of computers, and is not centralized to any one location. This means that there are no floor traders to compete with, and no one who can "flush out" the retail trader by gunning for his stops.

Yet another advantage of the Forex market is that it is traded 24 hours a day, 5 days a week. This offers the extraordinary opportunity for traders all over the world to trade when it is convenient for them, and not be confined to trading a market that is only open during hours that would impossible or inconvenient.

One thing the Forex offers is identical to what is offered by the futures markets: leverage. Like commodities traders, the individual trading the Forex market can make fantastic returns compared to stocks, mutual funds. But unlike commodities traders the Forex market trades with much lower commissions. Instead of standard commissions, the Forex trader pays a small spread on each trade.

There are a lot of details about the Forex market, and trading the Forex market, that have been left out of this article. This is just a very quick introduction to some of the problems with traditional investing and to the advantages to be had by trading the Forex.

Be sure to check out our free ebook for more info on getting started with the Forex.

Til next time... Success to you!

-Ted

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forex 4

2008-07-20T09:45:00.000-07:00

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What are the advantages of Forex over other types of investments? LOW RISK - HIGH YIELD is the first thing that comes to mind. Forex Trading can be risky and the general rule for investing is: When the return is high the risk is high, but with correct planning and strategy combined with a certain amount of self discipline you can bring the risk factor down to a level that is quite low. It is even possible to strategically plan your market entry and exit levels and control exactly how much you profit or lose.

This can be done in a way that allows the investor to still profit even when they misjudge the market 50% of the time! Compare that to other types of investments.

GEARING, is another area that stands out as a major advantage; this also substantially reduces the risk to you the investor. When you trade 1 forex "Mini lot" you will be trading a parcel of money valued at $10,000 USD And you only need $100 USD of your own money! If you trade a regular "Lot" you only need $1,000 USD to trade $100,000 USD. How's that for gearing? Try and do that with other kinds of investments!

LOW CAPITAL REQUIRED, many investments require a substantial amount of capital before you can take advantage of a particular investment opportunity, with Forex You only need $300 USD to "get into the market", and only need to have $100 USD in order to trade your $10,000 "Mini Lot".

CONVIENIENCE, if you have a laptop and an internet connection you can make a trade in 5- 10 minutes! Depending on how long your computer takes to start up, and the speed of your connection.

LIQUIDITY, many other forms of investing require tying your money up for long periods of time, and if you need to use the capital it can be difficult or impossible to access to it without taking a huge loss (Real Estate). Not so with Forex trading. With Forex Trading you have full control of your capital.

CAN PROFIT IN BULLISH OR BEARISH MARKETS
Stock market traders need stock prices to rise in order to take a profit, Real Estate prices must go up in order to make a capital gain.
However, The Forex investor can make a profit in both situations, a rising or falling market.

The Forex Market is open 24 hrs a day.

Can anyone do it or do you need to be some kind of super genius?
Forex Trading isn't for the faint hearted so be warned, while you can get yourself a "Demo Account" and practice as you learn in real time in the real market.
You can't experience the emotions that come with putting your real money on the line.

You can however prepare yourself well by using one of the many Forex Trading courses that are available online today.

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forex 3

2008-07-20T09:42:00.000-07:00

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My purpose for writing this article is to demonstrate to you the advantages of trading on the FOREX market. However, there is one myth that I want to dispel before I go further. The myth is that there is a difference between trading and investing. To dispel that myth I quote from Al Thomas, President of Williamsburg Investment Company, who wrote "If It Doesn't Go Up, Don't Buy It". He said "Everyone who invests is a trader, only the time period is different." It is a lesson that I took seriously after taking a beating in the stock market in 2000.

So now, let's compare features of currency trading to those of stock and commodity trading.

Liquidity
The FOREX market is the most liquid financial market in the world around 1.9 trillion dollars traded everyday. The commodities market trades around 440 billion dollars a day, and the US stock market trades around 200 billion dollars a day. This ensures better trade execution and prevents market manipulation. It also ensures easily executable trading.

Trading Times
The FOREX market is open 24 hours a day (except weekends) which means that in the US it opens at 3:00 pm Sunday (EST) and closes Friday at 5:00 (EST), allowing active traders to choose the times they want to trade. Commodities trading hours are all over the board depending on which commodity you are trading. Including extended trading times US stocks can be traded from 8:30 am to 6:30 pm (ET) on weekdays.

Leverage
Depending on your FOREX account size, your leverage may be 100:1, although there are FOREX brokers that offer leverage of up to 400:1 (not that I would ever recommend that kind of leverage). Leverage in the stock market can be as high as 4:1, and in the commodities market, leverage varies with the commodity traded but it can be quite high. Because the commodity markets are not as liquid as the FOREX market, its leverage is inherently riskier. Although I was never shut out of a commodity trade by the day limit, the fear was always in the back of my mind.

Trading costs
Transaction costs in the FOREX market is the difference between the buy and sell price of each currency pair. There are no brokerage fees. For both the stock and the commodity markets, there are transaction costs and brokerage fees. Even when you use discount brokers, those fees add up.

Minimum investment
You can open a FOREX trading account for as little as $300.00. It took $5,000 for me to open my futures trading account.

Focus
85% of all trading transactions are made on 7 major currencies. In the US stock market alone there are 40,000 stocks. There are just over 200 commodity markets, although quite a few are so illiquid that they are not traded except by hedgers. As you can see, the fewer number of instruments allows us to study each one more closely.

Trade execution
In the FOREX market, trade execution is almost instantaneous. In both the equity and commodity markets, you count on a broker to execute your trades and their results are sometimes inconsistent.

While all of these features make trading the FOREX market very attractive, it still requires a lot of education, discipline, commitment and patience. All trading can be risky.

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forex 2

2008-07-20T09:39:00.000-07:00

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Foreign Exchange or FOREX is the financial market where a nation's currency is exchanged for that of another. The foreign exchange market is the largest financial market in the world, with the equivalent of over $1.7 trillion changing hands daily; more than three times the aggregate amount of the US equity and bond and commodity markets combined.

Unlike the other financial markets mentioned, the Forex market has no physical location and no central exchange; this makes the Forex market an OTC or over-the counter market. It operates through a global network of banks, corporations and market makers trading one currency for another.

The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one time zone to another in all the major financial centres of the world.

Traditionally, private traders only means of gaining access to the foreign exchange market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has increased rapidly over time, especially after exchange rates were allowed to float freely in 1971.

Over resent years the way the interbank currency market operates has changed dramatically. The Forex market has become accessible to private traders. The market makers have achieved this through a combination of low margin and high leverage and providing the professional tools and services needed to trade effectively in an independent atmosphere.

For the active trader, foreign exchange should be no different than other investments or financial instruments such as equities, commodities, bonds, notes, bills, etc.

In fact because of the globalisation of the economic world and the consolidation of whole economic regions such as the European Union, having currencies as part of a diversified portfolio simply makes sound portfolio and investment sense.

Just like these other investment alternatives mentioned, foreign exchange offers private traders and investors a market where they can buy and sell an investment product. In this case it is a specific Currency Pairs.

The currency pair may be the Euro versus the US Dollar, the US Dollar versus the Japanese Yen, the British Pound versus the US Dollar, the Euro versus British Pound, or a number of other currency combinations.

The different currency combinations represent nothing more than the value of one currency versus the value of another. That relationship is represented by a single price.

In foreign exchange, the price of a currency pair is the markets expectations at that time of the value of that currency vis-a-vis another currency given the current and expected economic and political situation of the two countries. In equity terms, it would be the price of the stock.

If for example, a country's inflation and interest rates are low and stable. If it's economy is strong and politics are stable and the expectations are for more of the same, then one can expect "in general" for that country's currency to remain strong versus a less fundamentally favourable currency. Keeping in mind that all comparisons are relative to that of other economic regions.

Contrasting that with equity, if the domestic and global economy is strong and inflation is not running away. If competition is not taking away market share or eating into margins as well product demand and growth are strong.

If the companies internal "politics" are such that the workers are happy and productive, and expectations are for more of the same, then you can expect that companies stock to remain strong versus a company with less favourable fundamentals within the same sector.

Like equities there are other factors that determine the short-term value of a product including technical analysis, short-term supply and demand, seasonal capital flow patterns, the current price of the instrument, etc.

By analysing the pricing dynamics and combining that with sound money management discipline like stop loss orders, the trader can insure greater success in his foreign exchange trading.

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forex 1

2008-07-20T09:36:00.000-07:00

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finance credit 38

2008-07-20T09:30:00.001-07:00

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Banks and their marketing associates and divisions are vying with one another to capture a thick slice of the "credit card pie." Offers by phone and mail of free credit cards, pre-approved credit cards, cards with special bonanzas, money back schemes, low introductory rates, and umpteen other perks pour in tempting you everyday.

A credit card is just a form of borrowing that does not come free. Credit terms, interest rates, fees and more can lay a stress on your bank balance. Credit cards are a temptation to spend now and pay later. What invariably happens is that people spend more than they can handle.

Informed consumers must always weigh carefully the pros and cons and compare different options before deciding on a credit card.

Before you decide find out

The advantages of a credit card are that it is a safe alternative to cash. Prevents loss as well as theft of cash. Using a card wisely can build a good credit history which helps when you need a loan or subsidy. It is useful in emergencies like accidents, urgent hospitalization, and unavoidable circumstances like natural calamities and so on. It grants a breather and gives you time to pay the bill. Some memberships offer travel or accident insurance to the card owners at no cost. They also offer privileges like discounts at restaurants, shopping malls, and holiday packages.

The other side is that you can get carried away and live beyond your means, ultimately falling into debt.

To be eligible you need:

To be at least 18 years old.
Have some income or the backing of credit worthy parents.
Have an operational bank account.
A telephone.
A good credit rating. Your monthly expenses must not equal or exceed your income. Ideal expenses must account for approximately 50% of your income.
To get a Visa or Master card your income must exceed US$ 12,000 a year. Or, you need to apply for a secured credit card where you pay upfront a certain amount of money as security deposit.

There are many kinds of credit cards to choose from. Unsecured standard and classic cards are those with a credit limit of US$ 2000 and generally charge higher interest rates and offer lower or less favorable terms than the platinum and gold cards. Unsecured platinum and gold cards are for people with high credit ratings, and the limits for these cards are between US$ 2000 to US$ 100,000.

Here are a few links that will give information and opportunities to apply for cards online:

Visa at www.usa.visa.com/?country=us&ep=v_gg_new provides information, gives tips, and has listed a number of financial institutions that offer Visa cards and a wide range of services. One can apply for a card online.
MasterCard International at www.mastercard.com/index.html is comprehensive with information, advice, and options of choosing and applying for a card online. They have an online form which when filled will give information of which card would be ideal and a channel which provides instant comparison of various card options.
CreditCards.com at http://www.creditcards.com/ has articles, FAQs, a site map, and online application channels.

Tips:

Pick a card because it has the lowest APR.
Pick a card because all its terms and conditions have been carefully vetted by you. Read the fine print.
Never pick a card because it is free for a year or life.
Do not choose a card because it offers a low introductory rate.
Do not choose a card because it has a cash back policy or great rewards programs.

Choose wisely and live debt free.

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finance credit 38

2008-07-20T09:30:00.000-07:00

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To be at least 18 years old.
Have some income or the backing of credit worthy parents.
Have an operational bank account.
A telephone.
A good credit rating. Your monthly expenses must not equal or exceed your income. Ideal expenses must account for approximately 50% of your income.
To get a Visa or Master card your income must exceed US$ 12,000 a year. Or, you need to apply for a secured credit card where you pay upfront a certain amount of money as security deposit.

Visa at www.usa.visa.com/?country=us&ep=v_gg_new provides information, gives tips, and has listed a number of financial institutions that offer Visa cards and a wide range of services. One can apply for a card online.
MasterCard International at www.mastercard.com/index.html is comprehensive with information, advice, and options of choosing and applying for a card online. They have an online form which when filled will give information of which card would be ideal and a channel which provides instant comparison of various card options.
CreditCards.com at http://www.creditcards.com/ has articles, FAQs, a site map, and online application channels.

Tips:

Pick a card because it has the lowest APR.
Pick a card because all its terms and conditions have been carefully vetted by you. Read the fine print.
Never pick a card because it is free for a year or life.
Do not choose a card because it offers a low introductory rate.
Do not choose a card because it has a cash back policy or great rewards programs.

Choose wisely and live debt free.

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finance credit 37

2008-07-20T09:28:00.000-07:00

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Almost all of us are fond of overspending! We buy things we don't really need. Once we see something that catches our eyes, we automatically buy it - often without even thinking if we still have money or not.

People usually do this in order to please themselves. And lots of them have their own credit cards as a reserve once they run out of cash. They tend to spend a large amount of money in order to serve their caprices or to make them feel better about themselves. Unfortunately, this never really works, and it causes more damage than it cures.

Almost everybody has a credit file, maintained by a credit reference agency. Many people have bad credit facts on their files, such as defaults and bad payment history. This means that when these people apply for credit, such as loans, mortgages, credit cards, car finance or even for a simple bank account, they may be turned away.

Sometimes these people are not even aware of their credit information and credit files, which cause them to have a bad credit.

Having bad credit can adversely affect every aspect of your life. A low credit score means severe financial limitations and difficulties. As if this is not enough, you will also have handfuls of credit councilors and other so called money managers trying to take even more from you with their debt consolidation plans that promise to "cut your payments in half", "save you thousands", or our personal favorite - "get you out of debt with the click of a mouse".

If only our computer mouse had the debt relief magic that those bad credit spam emails promise. Although getting out of debt can't be done with a click of a mouse button, it's probably not as difficult as you think.

If you are in this kind of predicament, it is imperative for your financial stability that you do everything you can to repair it.

Now, you might be thinking exactly what is bad credit repair?

"Bad Credit repair" is a common term often used to describe a systematic process of rehabilitating an individual's creditworthiness, or financial credit reputation.

It is a process that you can carry out yourself, and sometimes the steps you can take are simple. However many people find credit repair a difficult and discouraging procedure.

This process is usually initiated by obtaining copies of your credit report, reviewing the credit report for errors, omissions, and misleading information, and requesting corrections to such information by means of a formal dispute.

If you are worrying too much about your credit, conquer that feeling! No matter how bad your credit is, you can take the following steps to make it better:

1. Pay all of your bills on time. Decide if you have the income to meet all of your obligations. Remember, late payments (payments that are 30 days late or more) have a negative effect on your credit rating.

2. Lessen the number of credit cards that you have. This will reduce the tendency to overspend. Contact your creditors about your plan and close your other accounts.

3. Avoid bankruptcies. Bankruptcy may not the end of the world but it will be with you for years. It will stay in your credit report for at least years and hamper your ability to get credit in the future.

4. Request in writing that your creditors reduce the credit limits on your accounts to lower your amount of available credit.

5. Monitor results and stick to your plan. Review your file every few months to make sure that any errors that you have disputed have been corrected. After a period of time inquiries will no longer count against you provided you haven't been applying for credit.

These steps can help anywone with bad credit. If you are in that situation, don't be troubled. Bad credit can almost always be improved or corrected. JUST:

avoid overspending
establish a realistic budget
get out of debt now
build a financial cushion
read and understand your credit report
get mistakes on your credit report fixed
get positive information added to your credit report
negotiate with creditors

Set up your plan and stick with it!

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finance credit 36

2008-07-20T09:26:00.000-07:00

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A Debt consolidation loan is a loan used to repay several other loans or other debts. A Debt Consolidation Loan is a low cost loan secured on collateral in the form of any securable property, your home, your vehicle or any valuable asset. Debt consolidation loans consolidate all debts incurred through personal loans, credit cards, overdrafts, or any number of unpaid bills that have built up over time. These loans can give you a fresh start, allowing you to consolidate all of your loans into one - giving you one easy to manage payment, and in most cases, at a lower rate of interest. A debt consolidation loan can reduce both your interest costs and your monthly repayments, putting you back in control of your life.

Debt consolidation solutions are practical means for eliminating credit card and other high interest debts, and getting your financial health and future back on track. Being concerned about debt 24 x 7 is extremely stressful, both on you and your family. So take a few minutes right now and educate yourself about your options.

1. Go with a debt consolidation company that has a good reputation.
Don't assume that every non-profit company is necessarily going to look out for your interests more than for a profit. Shopping around will give you the means to decide on the one that best suits your circumstances and your budget. Spend time researching different lenders and get quotes from a handful before deciding on one.

2. Do the math yourself.
Take the time to work through the expenses yourself and see how much you will be paying, how long it will take to pay off the loan, etc. Look for hidden costs, creditor charges, etc. Many lenders add payment protection insurance to their loans without the borrowers' knowledge, which is often more expensive than those available elsewhere. People keen to consolidate their debts, take the first opportunity available, unaware of lower rates and other available options.

3. Is it cost effective in the long run?
Paying off an existing debt may incur charges for early settlement and there may also be a fee for arranging your consolidation loan. A debt consolidation loan should be cheaper than the individual loans and debts since that's its purpose. Otherwise how is it different from any other secured loan? Also, by taking a new debt consolidation loan, you will be extending the period in which you are paying off debts - and that might mean a greater interest cost in the long run. So read the fine print on your credit agreement statement before signing it.

5. Interest rates:
Make sure you understand the difference between variable and fixed rate loans. If you sign up for a variable rate loan, you may get a lower rate initially, but within a few years it may go up. On the contrary, a fixed rate option does not fluctuate with any changes in rates. However, you do not gain when the interest drops either.

6. Debt Consolidation counselling:
Debt consolidation with debt counselling can provide you with expert debt advice for financial planning. This would help you sort out your present debts as well as prevent you from getting into future debt. Debt counselling services can talk to your creditors about reducing your interest rate, eliminating late fees, altering repayment options and extending your loan term. Look up an agency that is the member of the National Foundation for Credit Counselling (NFCC) or the Association of Independent Consumer Credit Counselling Agencies (AICCCA).

Secured on your collateral low interest debt consolidation loans can sweep away the pile of repayments to your credit and store cards, loans and replace them with one, low cost, monthly payment - one calculated to be well within your means. Never take a loan that is over the top, take something that suits your needs.

It has been found that a significant number of residents are not aware of the benefits of the debt consolidation options and are suspicious about how it works. There is a need to increase the awareness of the debt consolidation solutions and evolve new varieties and features for debt consolidation loans. There is a great potential to increase the benefits of debt consolidation loans.

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finance credit 35

2008-07-20T09:23:00.000-07:00

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Loans are one of the best sources to finance your cash needs. UK loan market is filled with infinite number of loan options that aim to meet the diverse needs of borrowers. You too must have taken a number of loans or used credit cards at many occasions. It's good if you have used them wisely and paid them on time. But, if you have defaulted on loan or missed a credit card payment, then your credit report will reveal that you have an adverse credit. An adverse credit is an evil if you don't know how to get out of it. An adverse credit debt consolidation can help in managing your debts effectively and ensures freedom from debts.

First of all, you need to understand the fact that you are not the only one who has an adverse credit. It is estimated that one in four people in the UK would be turned down by a mainstream, high-street lender just because they have adverse credit. Accept the reality that you have an adverse credit but don't get drowned by the fact, try to find the solution. The best way to tackle a solution is to face it boldly and not to run away from it. In such cases, an adverse credit debt consolidation can do wonders for a debtor.

Adverse or bad credit with whatever name you may call it connotes a poor credit rating. The term adverse credit embrace mortgage arrears, defaults, County Court Judgments (CCJs), bankruptcy, Individual Voluntary Agreements (IVAs) and house repossession. A borrower can get his/her credit report from any of the credit rating agencies namely Experian, Equifax and Transunion. Credit report is a report containing details relating to the credit history and current status of a borrower's credit standing. A FICO score of 620 or below is considered to be bad by the lenders. There is risk involved in lending money to people with adverse credit history, because they may make default on payments in future too.

But, the increasing number of default and bankruptcy cases shows that more and more people are getting trapped in the vicious circle of adverse credit. Loan providers now understand the fact that to err is human; a person may miss to make a payment due to some personal financial crisis. Thus, keeping this in mind, lenders offer adverse credit debt consolidation loan to borrowers to keep them away from the stress involved in dealing with a number of lenders.

A borrower can apply for either a secured or an unsecured adverse credit debt consolidation loan. Usually, adverse credit debt consolidation loans are secured loans, which are secured by a borrower's collateral such as a property or a home.

An adverse credit debt consolidation loan works as an effective management tool; it is designed specifically for people with bad credit rating. An adverse credit debt consolidation loan will consolidate all your debts into one manageable and affordable loan at better rates. The lender will deal with all your creditors and you will be accountable to only one low monthly payment on the single loan. You can also look for debt consolidation help and debt counseling services offered by several adverse debt consolidation loan providers. Loan advisors can give you useful advice to help you get out of debts as soon as possible. A borrower with an adverse debt consolidation loan can borrow any amount ranging from £5,000 to £250,000.

Online lenders can offer you better deal than traditional lenders. The process of applying for an online loan is simple and fast. Borrower just needs to fill up a small application form and then the lenders analyse the application form to find the appropriate loan for the loan applicant.

Don't choose the very first loan offer you get. Search for the various lenders and collect loan quotes from them which are available for free or for nominal charges. Loan quotes can be compared on the basis of interest rate, loan term, repayment options, loan amount and the fees charged by the lenders. Thus, predefine the features you are looking for in the loan, this will help you in making smart decision which will prove to be fruitful in the future.

A financial crisis can happen in anybody's life. One may fail to make loan repayments in such circumstances and this may lead to your name getting listed in the books of bad credit. An adverse credit debt consolidation can help you get out of the debt trap. But, what is important is to learn from past mistakes otherwise you will remain ensnared in the vicious circle of debts your whole life.

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finance credit 34

2008-07-20T09:21:00.000-07:00

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Are you tired of attending untimely harassing calls from your creditors reminding you about the due payments? Is making huge monthly payments becoming tough for you? If your answer to the above question is "yes", then you are facing Debt problem. Debts become a problem when you don't know how to manage it and the way out of it.

Human desires are unlimited, there is no saturation point for the satisfaction level. Desires keep on growing day by day and vary from time to time. An individual has limited funds with him and to meet all the desires at one time is impossible. Thus, to fulfill all the desires, one tends to borrow money from the market it could be in the form of loans or using credit cards. It is good that you want to meet all the needs and requirements of your family members to the best. But, it is always advised to keep one's expenses in limit and don't let it exceed your income. One should borrow money only for the amount he or she will be able to repay easily.

However, the picture in real life is totally opposite we tend to spend more than what we earn by borrowing money from outside. And one day, these debts become a big problem for you and you feel bewildered. You don't know what to do. You need not fuss over it; firstly understand the fact that you are not the only one who is trapped in such a situation. It may be tough for you to cope up with debts.

Debt is a serious problem. It is easy to run away or to ignore a problem. But, a wise man will face this problem boldly and will try to find a remedy for it. It is always best to deal with debt problems from its developing stage. The longer you ignore your debts the situation will get worse. So the first job you need to do is to sort out how much do you owe and to whom. This will help you in finding out what exactly do you owe.

The next step you need to do is to find the solution to this problem. There may be a lot of solution to this problem but, you should look for the best assistance. Do a thorough analysis; right assistance will help you get rid of all the debt problems. The foremost thing you need to do is to change your attitude towards debt and spending. Never spend more than what you earn and keep your expense in control. Debt is a significant tool to finance your personal loans but never misuse it. Debt carries a charge on it in the form of interest and repayment of the loan amount. So, even if you borrow money or use credit card do it wisely.

If you really want to get rid of the debt problem keep the above points in consideration and you can opt for a debt consolidation loan or for debt settlement. Consolidation of debts is done to make it easier for the borrower to manage debts effectively. The purpose of debt consolidation loan is to make the monthly payment affordable at better terms. The loan provider will deal with all the creditors on your behalf. A borrower becomes accountable to only one lower monthly payment on a single loan. It can help a borrower in improving his credit rating by making the payment on the loan in full and on time.

Debt settlement is an effective solution to long term debts. Under this option, the debt management companies negotiate with the creditors to reduce the contractual payments or to lower the interest rate. Thus, a borrower can choose any of the option. It is advised to go for a debt consolidation loan, as debt negotiation can make a negative mark on your credit rating, if the debt negotiating company does not take proper step.

You can apply for a debt consolidation loan or you can seek for debt settlement services from online lenders to find loan at better rates with improved terms and conditions. The process of applying for an online loan is easy and simple, one just needs to fill up a small online application form which hardly takes few minutes and the rest will be done by the company to find the appropriate loan for you. In case, you are looking to get the best deal you need to work for it. Search for lenders who offer the loan, collect loan quotes from them and then make a comparison among them to find the loan which perfectly matches your needs and requirements.

Most of the online lending websites have a team of professional loan advisors who can offer useful credit counseling to borrowers. Thus, you can seek for their advice to find out which option is best for you.

Shop around! A little effort today will help you save heaps of pounds in future. Whatever option you may choose, to get out of the debt problem, make sure you abide by the rules of consolidation, negotiation or settlement. It is always better to keep the expense in limits to keep yourself away from problems debts can cause.

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finance credit 33

2008-07-20T09:19:00.000-07:00

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Tired of reading review after review about 0% APR intro rate credit cards? Having no luck when it comes to finding an all-in-one-review about 0% APR intro rate credit cards? Confused with what you've read so far about 0% APR intro rate credit cards because everything seems to be contradictory? Well, look no more because this article is indeed what you're looking for.

In here, you'll learn everything you want to know about 0% APR intro rate credit cards. In this article, you may also discover more than you bargained about 0% APR intro rate credit cards - in a good way, of course. Ready for Lesson Number One about 0% APR intro rate credit cards? Well, here goes.

It's True - Yes, 0% APR intro rate credit cards do exist and if we have our way about it, you'll be one of the lucky people to qualify for a 0% APR intro rate credit cards.

The Application Process - Applying for any credit card, whether it's for 0% APR intro rate credit cards or for credit cards offering reward points is always a tad difficult so don't expect overnight success, especially since you're angling for 0% APR intro rates.

The application process for a 0% APR intro rate credit card starts with submitting the necessary documents - this is SOP for all credit card applications - that would substantiate your contact details and give them an overview about your present financial status. Upon submission of the usual documents, depending on your income level and credit reputation, you may be contacted by the credit company and asked to submit additional documents.

The Qualifications for 0% APR intro rate credit cards - Basically, if you want to have 0% APR intro rate, you must have a squeaky clean credit reputation. That means having a reputation of paying debts promptly, not owing too much from the bank, not having high balances on your other credit cards, not having too much mortgages under your name and not having so many people requiring a credit check on you.

If you're not sure whether you qualify for a 0% APR intro rate credit card, simply approach the nearest credit bureau and request for a copy of your credit report. The details in your credit report can easily tell you if you've a good shot of owning a 0% APR intro rate credit card or not. People with FICO scores equal to 650 or more are more or less guaranteed of having their application approved.

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finance credit 32

2008-07-20T09:17:00.000-07:00

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Now that we're over half way through our first decade of the new millennium, it is interesting to look back and see how our attitude to debt has changed. It seemed that many of us had an invincible view towards our debt, brushing it under the carpet, extending our credit line further and secretly hoping that our numbers would come up on the Lotto.

Now that we're all a little older with perhaps more responsibilities, we've decided that it is hard time we addressed the little problem of our credit card debt, head on. One of the most affective ways to do this is by taking out a home equity loan. In many cases, the equity in our home represents the only form of savings we have. It is important to reduce debt as quickly as possible in order to start saving money.

It is always good advice to shop around when looking for a home equity loan; this is because lenders will have different criteria. Some lenders are only in the poor credit home equity loan business as this allows them to charge more interest on the loan, while other lenders are more interested in the quality of the equity at stake.

A very good piece of advice when you have completed your home equity loan is to cut up or close the credit cards that contributed to your high debt. The worst possible situation is for you to start using the credit cards again. If you think you are at risk of doing this, cut them up immediately, your house is now at risk.

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finance debitcard 22

2008-07-16T10:07:00.000-07:00

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Keeping your credit clean is a matter of due diligence and you should make it a priority to give yourself a "credit checkup" every year, much like you would make it a priority to get a medical or dental checkup.

Even if you don't think you have credit problems, you should get copies of your credit report. You can get them from TransUnion, Equifax, and Experian. Check these to make sure everything on there is correct. If you find errors on your credit report, clear these up immediately.

If you apply for a credit card or loan, then you can get all 3-credit reports for free. Additionally, if you receive a letter that denies you credit, make a copy of it and enclose it with your written request for a copy of your credit report.

Most debts that are over 7 years old may not appear on your credit report, if this is the case, don't open up old wounds by going looking for them! Many creditors after 7 years of having no contact will write off the debt. In some cases they will continue their efforts to locate you, either way, don't open Pandora's box if the debt isn't listed on your credit report.

Be aware that when you apply for a loan or any type of credit, the lenders will request copies of your credit report, this will add points to your credit score and this inquiry stays on your report for about 3 years.

Nowadays almost everyone will check your credit report so if you are buying a car do not allowing the sales person to check your credit until you know this is what you want.

Keep tabs on your credit report periodically and if you have notice charges on your report that appear suspicious contact the three credit bureaus immediately.

When you do have credit card bills or loans, try to pay them off in full but if you don't have the money to pay the bill in full, make sure you pay as much as you can (at least the minimum on the bill to avoid bad credit reports. Also, if you have any debts that have not yet gone to collection, find a solution for getting those bills up to date before you get a bad mark on your credit.

If you do get into trouble with your credit, you might want to find someone that you trust who can help guide you through the process of repairing your credit. If you don't know someone personally, try finding a Debt Counselor that is qualified to assist you.

No matter whether you clear your debt yourself or use professional help, one good way to get started is with budgeting.

Come up with out a budget that includes your monthly installments. Then make another budget that comes as close to your debts as you can. Finally make a budget that satisfies your demands for survival after you have cut back funds.

If you come up with ways to save money by cutting back, finding some way to earn more money, and having a budget then you will have a guaranteed strategy for getting yourself out of debt. Plus once you are out of debt you will also notice an increase in your income.

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finance debitcard 21

2008-07-16T10:06:00.000-07:00

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If your debt is out of control you must take some time to seriously think about your situation. Think before you charge anything and stay alert to the charges on your credit report.

Don't stop paying your debt all together - paying something toward your bill is better than avoiding your obligations. If you take review your bills and compare to your funds and decide that you do not have enough to pay the entire amount of the bill, you might be able to pay the minimal balance temporarily.

If you have a bill and the money to make payment tell the creditor that you intent to send the money via regular mail immediately - and do so. Creditors prefer that you phone them to negotiate payment schedules and sometimes creditors will even lower your monthly payments, or even your bill.

Ignoring your bills will only make things worse and does nothing to help repair your credit.

If you are obligated to income tax be aware, the IRS can take your money. This means each year that you miss payments are at default the IRS will deduct your entire tax refund to repay the debt.

If you miss payments on Insurance Policies and you have conditions stipulated on that policy you may be at risk of loosing your property.

There are two types of debts that eat away at our money, and understanding these debts is important to repairing your credit.

Some Department Store Credit Cards are secured, in that they ask you to put up collateral if you miss payments on the merchandise purchased.

If you have a Mortgage and feel that you can't make ends meet, you might want to check into some of the options available from your lenders.

Again, the most important tool for getting out of debt is to keep close watch over your bills, payoff any secure bill first, and work through each bill as you go.

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finance debitcard 20

2008-07-16T10:05:00.000-07:00

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When you start to get behind in your bills, your creditors often wait a several weeks before notifying collection agencies. During this time, it might be smart to write your creditors and request an extension or a reduction on what you owe so that you can pay the debt off slowly.

Since most creditors want the money they will extend your time to repay the debt. This is to their benefit too as it is a big hassle for them to go through the motions of reporting you. Most creditors want their clients to come back and believe that if given a chance you will pay off your debt and start a new account.

After you have talked to each creditor, set up a budget plan that will help you through eliminate your debts. The first thing you must do is add up your monthly living expenses - rent or mortgage, heat, lights, groceries etc.. These are the bills that MUST be payed for you to survive. Then subtract this from the money your salary pays and the difference is what you can budget to pay down your debt each month.

If you don't have anything left over at the end of the month for debt reduction you might have to find a job that pays more, move to a cheaper place or use less utilities per month.

If you have two cars and can do without one, it is smart to sell one of the them and apply the balance toward your debt.

Another thing you can do is sell off some of your personal items to pay the debt. While this may seem harsh, you can think long-term and know that you can eventually replace your items after your debts are repaid.

You might try getting rid of all that stuff in the garage or attack at a yard sale, or piece out some of the nicer stuff on eBay. Consignment stores are also a good place to turn unused items into much needed cash.

Another thing you can do is cut back on expenses - really take a look at what you spend and where you can cut back.

Do you buy products or groceries on sale, or are you paying the high fees for name brands?

Do you buy groceries in bulk, or go to the store every other day buying only a few items?

Do you spend more on gas simply because you haven't tuned up your vehicle?

Use coupons and buy items on sale then apply the savings to your credit bills.

If you like to read books or magazines get them at the library instead of paying for subscriptions or buying expensive books new.

Try buying clothing or household goods at consignment shops, shopping at yard sales, and spending less money on gifts and vacations.

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finance debitcard 19

2008-07-16T10:04:00.000-07:00

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finance debitcard 19

2008-07-16T10:03:00.000-07:00

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Credit cards are fast becoming a blight on the American economy, but they also help stimulate growth. The problem comes when users are forced to (or voluntarily) overspend and begin the never ending cycle of paying less than the full balance on the credit card. At this point you officially have credit card debt.

When we got married we had over $34,000 in outstanding debts, much of it on credit cards. After sitting down to have a good cry I got things into perspective. With a solid plan and the determination to stick with it, we could have those debts completely paid off within a couple of years.

The time it takes to clear those debts depends on your income and ability to trim other expenses in order to funnel as much money as possible toward those debts. It does NOT mean that you will have no life and no fun. You will have to make tough choices so your life should be different, but you can always make it fun.

There are several ways to play the credit card game and win. You can consolidate your balances into a lower interest loan, you could refinance your mortgage and roll those debts into your home loan, or you could play the game of transferring higher interest balances to low or zero interest credit cards. I chose the latter option, you will need to consider which option is best for you based on your own credit rating, your ability to secure low interest loans, your ability to repay and most importantly, your level of discipline.

If you have no discipline when it comes to money, then the process of transferring balances could be hard for you, as it requires you to pay attention to when your zero interest credit card offer expires and move that balance to the next card at the right time. If this is too time consuming for you, then you'll definitely want to look into refinancing your mortgage or getting a consolidation loan to cover all your credit cards.

I love numbers, I love math, and playing with money like this is a game for me not a chore. So transferring balances to new credit cards every few months was fun. Watching those balances shrink as I paid ZERO interest the entire time was a thrill. I felt victorious over the credit card companies... and over my debt. As a result we paid off over $34,000 in debts in about 18 months. When you're not paying any interest and you don't stray from the plan it can work. It really can. You don't have to love the game in order to win it. You just have to keep playing and don't lose sight of the goal. Pay off the debt.

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finance debitcard 18

2008-07-16T10:02:00.000-07:00

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Considering soliciting the services of a debt consolidator is a good idea if you have massive debts, and are struggling to stay afloat. The economy is such at this present time that even many middle class families are having a difficult time. Housing is a big issue - homes are not selling, big reductions in the price of a home is seen, and new building construction is down. The evening news has many stories about people unable to pay rent, pay an ever-increasing heating bill, and unable to pay the high price of gasoline to even go out and look for work. We are a nation in deep economic trouble.

People today are more and more turning to debt consolidation services to help bail them out of an unstable financial position. Services provided can help you to bring down your rate of interest and your amount of repayment on a scheduled basis. It will also help to decrease the stress your heavy debt load has caused you.

Soliciting the help of a "free" debt consolidation service could be an even greater benefit to you. Even though it is not actually "free" to solicit these services, it is almost always far cheaper than it would to get the same service from a company that proivides this service to make a profit. The or-profit debt consolidators generally charge a flat every month for services provided, whereas free debt consolidators are subsidized in part by the actual creditors themselves. Consequently the no-profit debt consolidation servicest only need to charge the flat monthly fee, which means that in the long run, debtors will end up with lower rates.

Not only do free debt consolidation services provide free debt consolidation, they also are not restricted to mere debt consolidation loans. In this country, are also a large number of credit counseling agencies that are non-profit. These agencies help individuals get their credit under control through education and credit counseling.

It is the general opinion that people with poor credit prefer free debt consolidation service. On the other hand, for-profit services prefer clients who have relatively good credit, as they are more likely to be able to gain the full repayment. Because free debt consolidation services enjoy healthy subsidies from the creditors, they can afford to take the risk of helping people with poor credit who want to set their finances right.

Since free debt consolidation services are more attractive, people will generally prefer it to for-profit services. However, the consumer needs to beware of scam companies that have been quick to exploit this preference and proclaim themselves as free services. It is always important to confirm the credibility of any organization you deal with, especially if they claim to be a free debt consolidation. If not, you could end up with even more massive debts.

Visit www.liabilityrelief.com for more information on bad credit debt consolidation, credit card debt consolidation and debt consolidation counseling.

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finance debitcard 17

2008-07-16T09:59:00.002-07:00

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I want you to take a good long look at your debt. Do you really know what it costs you to be in debt? Are you thinking that you can handle it or is it getting you down?

Once you start really analyzing your debt position and the cost (to yourself) of having the debt, the results can be mind-numbingly shocking.

I've found that debt is a lot like smoking. When you start out, you believe you're in control and you can quit at any time. As the months and the years roll past, this initial belief does not fade away. With every debt you incur, the mantra "I can afford this", repeats itself in your subconscious until you wake up one morning and realize that you're in over your head.

Debt has well and truly caught you in its trap. Debt has become a bad habit.

And just like any bad habit, debt requires as much hard work and discipline to shake. The first step in the process is to acknowledge that you have a problem - instead of turning a blind eye, hoping it will go away or thinking that you'll get around to it some day in the future.

One of the motivators to setting your feet on the path to debt free living is to look at the real cost of that debt. What is it doing to you? Where does it hurt the most?

Most debts (the ones that make you cry into your morning coffee anyway) are the ones that are incurred for a period exceeding one year. You've probably seen or heard advertisements that go something like this:

Buy your 'Wiggly Snoogle' for this special one time limited offer today - 24 easy monthly installments.

Beware - this is where you can fall into the deadliest trap of them all. The interest rates are usually above average and you're stuck into a long term contract. Yes, getting your Wiggly Snoogle with the 25,000 features sounds like a good idea because of the easy monthly payments; especially if you compare it to the one time lump sum payment. (By the way, using the 'lump sum' to 'monthly payment' comparison is a well known sales technique to separate you from your hard earned cash.)

Let's take this out of the realm of philosophy with a real world example:

You borrow $ 10,000 to buy a new car. Over a 48 month period - that's 4 years of monthly payments - you will be paying an additional $ 2,000 in interest. So, your $ 10,000 vehicle is actually costing you $ 12,000. The cost of that debt is a whopping $ 2,000. If you had taken that $ 2,000 and invested it over the same period, it could have grown to $ 3,000. Instead, it has disappeared into someone else's pocket - never to be seen again.

This is where the lenders make their money. The longer they can have you in their clutches, the longer they can smile all the way to the bank and you groaning on the way to work.

Now I'm not saying that you shouldn't have a car - it's just an example of the REAL cost of debt. Sometimes debt is unavoidable, but as a species we've become too complacent about debt and we jump into it without thinking.

Your Magic Plastic (a.k.a. Credit Card) is another one of those fiendishly sneaky evils the banks developed to rid you of your money. If - and that's a big if - you manage your credit card correctly and pay off the full amount at the end of each month, they can be great to have and smooth the little rough patches in life. But most of us only pay the minimum amount required each month - and that's exactly what the banks want. It leaves you in the red and owing them money. Which gives them ample opportunity to apply the thumb screws. Remember, every month you're in the red, you're paying interest on the outstanding amount which gets added to your bill.

The big mistake we all make is to look at our monthly statement and say: "Hey, that's not too bad. I can still afford my repayments. And I have some credit available to buy that wiggly snoogle as well!" The problem arises when you battle to make your income stretch through the month because of the various different repayments you have to make.

It's critically important that you start looking at the TOTAL COST of your debt over your lifetime. Once you're over the shock and horror of how much of your hard earned cash is going up in smoke, you'll be in a position to tackle the problem head on and take the path to debt free living.

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finance debitcard 16

2008-07-16T09:59:00.001-07:00

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Where large sums of money are concerned, it is advisable to trust nobody. Agatha Christie (1890-1976)

You notice I called credit cards by their real name. Make no mistake, the outcome of using a credit card is to create debt. It would be a lot more difficult to market a "Debt" card but that is what they are. In case you weren't aware of it, Federal regulators are pressuring banks into raising the minimum credit card payment from 2% to 4% to "help" consumers get out of debt quickly but somehow failed to address the usury interest rates charged by these companies.

Here are a few things you might not know about the credit card industry.

Credit Card Industry Facts:

The credit card industry earned $1,200,000,000,000 last year. That is $1.2 TRILLION in profits.

In 2004 consumers were charged $14.8 BILLION dollars in late fees.

Here's a cute little tactic used often by our credit card brethren. Not posting your payment on the day it is received so that they can charge you the late fee. They made millions using this technique last year.

Changing the due date or mailing the bill so that it is difficult at best to meet the deadline and there by charging another late fee. With two late charges on your 'record' your interest rate goes up as much as 10 points. This can be done without notifying you, by the way.

These companies have even resorted to not mailing out statements so that you will pay late and therefore be charged at least $29 in late fees and sometimes more.

Signing you up without your permission for credit insurance that virtually never pays out.

Checking your credit reports to see if you are charging on other cards and if it is 'deemed excessive', raising your interest rate by as much as twice your current rate.

Charging you a $25 fee for NOT USING your credit card.

Capital One has been sued because their customers mailed in the checks a full two weeks before the due date but were deemed late, charged the late fee and the interest rate was hiked to double digits.

Citibank paid a $45 million dollar settlement because they improperly assessed late fees and raised the interest rate up to 24% if the customer was late on any payments to other creditors, even if you are current on every payment to them.

The largest settlement by far against a credit card provider was against Providian for $300 Million dollars! Why? For improperly assessing late fees and charging customers for things they never ordered like credit insurance. The amount of the fine was proportional to the amount of abuse.

Sometimes because of the stress associated with these fees and abuses, people go out and try to borrow their way out of trouble with debt consolidation loans. This only adds to the problem if they don't tear up the cards.

Credit card debt has gotten to the point that it is not like owing the general store and not paying off the bill at the end of the month or when you get your next pay check. This is loan sharking at its worst and some say the rights of individuals were taken away by the changes in the bankruptcy laws made recently due to the efforts of lobbyists from the credit card companies. I think the little guy needs help and that is why I wrote this book. There is a term used often in Real Estate: "Operating from a position of superior knowledge". One can get sued for taking advantage of another for just this reason. Seems to me, the credit card companies mentioned above along with many others, are operating from a position of superior knowledge.

According to Robert Hinsley, a Houston attorney, "Being a good customer is not going to protect you," says Hinsley. "Nor will paying your bill on time each month protect you. Many of the major cards -- First USA, Chase, Capital One, Providian, Citibank, Penney's -- have been sued over practices regarding unfair billing practices and blatantly using tactics to cheat you out of your money. There is plenty of evidence that indicates most credit card companies think you are dumb and helpless and will not take any action. So they can easily use dirty tricks to cheat you out of your money."

Now are you ready to fight back and negotiate a settlement with these people? Don't be discouraged because the good news is, you can fight back. You can negotiate and you can reach a settlement advantageous to you! Pull yourself up to your full height, take a deep breath, know you are not alone and let's get started!

*This is an excerpt from "The Negotiate Your Way To Financial Freedom From Credit Card Debt Ebook" found on www.iwantafreecreditreport.com.

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finance debitcard 15

2008-07-16T09:58:00.001-07:00

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Executives at Debt Shield, Inc., a Maryland-based debt settlement firm, said that the increased minimum monthly payments on credit card balances will most likely not double, as it is widely reported, but that the increase might push financially struggling cardholders into bankruptcy or bankruptcy alternatives, like debt settlement.

"While credit industry experts and the media claim that credit card companies are doubling their minimum monthly payments from 2% of the outstanding balance to 4%, the actual minimum payment increase is more complicated and less drastic for most cardholders," explains Mark Baylis, President of Debt Shield. "The new rules require credit card banks to set their minimum payments to cover all interest and fees plus 1% of the outstanding balance, which will result in significant increases for high-interest accounts."

Baylis said that a cardholder with $10,000 on a credit card at 18% Annual Percentage Rate (1.5% monthly) pays $200 under the 2% minimum requirement. Out of that $200 payment, $150 (1.5%) goes towards interest and only $50 (0.5%) goes towards the outstanding balance. Under the new rule, the minimum payment will increase so that the amount applied to the outstanding balance in this example is at least $100 (1%), so the minimum monthly payment must increase by $50 (0.5%) to $250 (2.5%).

The average APR is currently just under 14% (1.17% monthly), but credit card companies increase the APR to 27% or higher if the cardholder makes one late payment. This means that the reality of the new rule will punish low- to medium-income families struggling with credit card debt more than high-income families who are able to avoid paying late. Baylis said that even a small increase can have drastic consequences for families struggling to make the existing payments and manage inflation combined with stagnating income.

The MMP (minimum monthly payment) on a credit card debt with the above-average 18% APR will increase by $50 while the same $10,000 debt with a 27% penalty APR will increase by $75. Also, the 27% APR charges $75 more in monthly interest than the 18% APR. Baylis said that this clearly demonstrates the financially destructive power of high interest rates.

"The increased minimums will be good in the long term because it should encourage less debt," Baylis continued. "But if the credit card companies want to help consumers, they need to stop punishing cardholders with outrageously high interest rates."

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finance debitcard 14

2008-07-16T09:57:00.001-07:00

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Your online credit report is a collection of files and records pertaining to your credit history. It is often referenced for hiring, renting, mortgages, loans, background checks and many other situations which may require an involvement of a larger sum of your income or a need for your personal services. Your online credit report contains the good the bad and yes, the ugly, within its pages. There are 3 major credit report bureaus from which the information comes from: TransUnion, Equifax and Experian. For the most they are similar, but between the three bureaus there may be some different items listed.

What If!?

What if your online credit report was only full of positive, correct and up to date items? This would be like a fantasy credit report. You could use it like a tool for certain things like getting a low interest loan or the mortgage you actually wanted. You could use it as a weapon against those creditors who automatically assume that your credit sucks and turn the whole finance game around on them. This fantasy credit report would be like a report card with all A's (something most of us have never experienced right?). Imagine not having to worry about what the results are going to be when the phone rings from the bank because you have total peace of mind that your credit report is not only clean but also free of errors and mishaps. The anxiety of waiting for the results of your credit standing concerning a major purchase can cause equal or more mental tension than a doctor walking in the room with his results for a major medical test.

Making the Fantasy a Reality

Okay, so this whole fantasy credit report thing is exactly just that right? A fantasy. Well... not necessarily. See, you are the only one that can ultimately control what happens to your credit report. Yes, of course there are those 'unknown factors' - BUT, the good news is there is a big first step you can take to help start achieving your own personal fantasy credit report. You can obtain a free copy of your credit report and see what negative items are sitting on your file. More than 70% of all U.S. citizens with credit reports have false or out of date items on their credit file. By spotting these items early and taking the appropriate steps to remove them you can improve your credit rating. What else can you do? Develop a personalized budget. It will take a couple months of re-adjusting but will help you to see where your money is going and begin to mature your spending habits. Also, think about your major purchases before you make them. Too often in our society, consumers buy things without a second thought and "paint themselves into a corner" financially. When you take on more payments than you can afford you have set up your credit report for long term damage. Here is a saying to think about regarding this type of situation: "If your outgo exceeds your income, eventually your upkeep will become your downfall." Remember that the fantasy credit report is waiting to evolve before your very eyes - you just have to make it happen.

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finance debitcard 13

2008-07-16T09:56:00.000-07:00

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Debt is a Product in America
The #1 sickness in America concerning finances right now is debt. Debt is a product in our culture and it is vigorously aimed at you and me everyday, everywhere. As a society, we borrow more money than the last two generations times two and your online credit report reflects these habits! Some companies like Sears make more profit from their credit department than from all the physical products they sell.

But It's the Norm Isn't It?
We are programmed from childhood to make automatic decisions regarding our personal spending habits thus negatively affecting our online credit report. A few 'real world' examples are listed below:

leasing a car instead of paying for it in cash (unheard of right?)
90 days same as cash (NOT... really the same in more than 75% of the cases)
rent-to-own (translation = paying 2, 3, 4 times the actual value of the product)
30 year vs. 15 year mortgages (an accepted lengthy and very costly way of purchasing a house)

What to do? Well, I hate to give the obvious answer here but how about saving money! Try saving money in a money market account for a couple years and then paying for a slightly used car in cash or with a 50 to 75% down payment. Wow, imagine having that extra money every month that most people dump into their lease or high rate loan. Try saving money for 3-6 months interest and risk free for that thing that you needed and you might find that you can get it cheaper with hundreds OR even that you want to use your hard-earned money for something more practical. Your credit report will thank you as well.

Penny Pinching is Boring!
Most people today think that to be frugal one must live out of a shack and only make purchases when they are on clearance (or if it's life or death). Well they're only half right. Have you heard the expression "It's the little things that count"? This holds very true when dealing with financial decisions. While large purchases definitely have great effect on one's online credit report as well as their overall situation, it is often the everyday spending habits that accumulate and hold them back from attaining wealth of any sort. What many people fail to realize is that the majority of true millionaires in America (those with net worths exceeding 1 million dollars) got rich from thinking outside the box and not following the crowd. Try thinking a little more about how you handle your money and you might find that you know more than you think you do.

Summing Up the Debt Sickness Fiasco
A decision as simple as using a debit credit card instead of a credit card shows discipline. Report that paying with cash instead of credit shows that you have properly budgeted your money and it just feels better to own something the day you walk away with it. Your credit report will also reflect these positive actions. Since the average consumer has little control over their own spending habits, the credit report picks up the slack and in turn there are more negative items to show for it. Even statistics show that using cash when making purchases will greatly reduce spending thus causing you to think harder as a consumer before swiping that credit card. Get off to a good start by seeing what is on your online credit report. By removing negative items from your online credit report you can improve your credit rating.

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finance debitcard 12

2008-07-16T09:55:00.000-07:00

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The Debt

In America, it is not only accepted that the majority of us are knee-deep in credit card debt, it is normal. Two generations ago it was just flat out wrong - a sin, to have any kind of debt at all. Today it is quite a different story and credit card debt is a mega, multi-billion dollar a year industry. The major credit card companies are eating it up like hotcakes and our credit reports are taking a lot of the heat. More than 75% of all college students are in credit card debt within their first year of school. From Sears to Visa to Diner's Club, people are adding to the debt stock pile that the distributors thrive off of. There are tens of thousands of websites that support and offer more to this enormous problem and it has got to stop! We have to draw the line individually, because there are no boundaries on the excessive spending in America.

What's Really Happening

It's even stated in the Bible - "The borrower is slave to the lender." In any case, where you have taken out credit on something; be it a car, mortgage, student loan, credit card, etc..., you are borrowing money. Not only that, but you are borrowing more money than you need. The average APR (annual percentage rate) on a credit card is 19%! In many cases, when a credit card is "maxed out" you will pay only interest with the minimum payment. As if this wasn't enough stress, the creditors harass you like their life depends on it and you begin to feel uneasy about even answering the phone.

Is Debt Consolidation the Answer?

Many consumers are drawn in by debt consolidation loans. It feels like instant relief and the monthly payments go down. Suddenly you feel like life is getting better by the minute. Oh and what's this, there is left over money from the loan - PERFECT! You needed this for that yard project or supplies or something that you've been waiting to have the extra money for. Why not reward yourself, you have taken a big step and your financial future is improving. Or is it? The fact is that you have fallen into another trap. You are now borrowing more money with an interest rate and you most likely got more than you needed. Statistics show that even though the math often works for a consolidation loan, the consumer ends up with his ears nailed to the wall.

What to do Now

STOP BORROWING MONEY! This would be a good first step. Stop right now. Do not borrow a dime. If you don't have it - don't spend it. You can build up an emergency savings account to pick up any negative events that may occur. This emergency savings account is of course another article but you get the basic idea right? Oh, you still feel you need plastic in your wallet? Get a debit credit card. At least with a debit card you can only spend what is in your bank account. You can also use most credit card debit cards just like a credit card for purchases. Your credit report will begin to reflect this positive behavior because there will be no more credit card bills piling up. Here is a saying to ponder before you think of making another large purchase - "If you can't afford it, don't buy it. If you can afford it, sleep on it."

To read more about how you can get your online credit report free with no obligations and get a prepaid Mastercard debit card with no immediate debt, go to www.cleancreditonline.com

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finance debitcard 11

2008-07-16T09:54:00.000-07:00

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Too many people are being confused, mislead and taken advantage of by tem, "Free Credit Report". We set the record straight so that won't happen. Text How many of us have looked at anything offered to us for "free"? Not me? Of course I have. In this day in age when gas prices are listed as "Arm" and "Leg", providing health insurance for your family costs more than some mortgage payments and the cost of raising kids looks like a hockey stick pasted onto a graph, you bet I look at offers to save money.

Therein lie's the problem. It seems like the vast majority of American consumers are desperate to cut costs, any costs, and will jump too soon at offers promising to do just that. Sometimes when you combine a cost cutting mentality with the importance of credit, not only to purchase the big ticket items important to us, but more and more to simply survive in this economy, desperation happens. Unfortunately, the marketers know this too. So, without a little education anyone can get confused and the likelihood of being taken advantage of increases significantly. The good news is that just a little education will save you plenty.

Take for example, the term "Free Credit Report". It now ranks right up there with the ubiquitous, "new" and "improved". "Free Credit Report" has become part of that lexicon of advertising buzz words that are absolutely meaningless to me. But for many, there is much confusion over this term. Why? I think mainly because it has been announced that federal law dictates we are all entitled to a free credit report on the front page of all the newspapers.

We know everyone wants a free credit report, which is why we started our site. People naturally want something that is mandated by law to be at no cost, is front page news and is so incredibly important to each of us if we want to purchase just about anything. We know people want their free credit report and because most all of us work so hard for our money, we think people deserve hearing the truth about the subject. That is why we even put a section on our page entitled, "The Truth About Free Credit Reports".

So, is it not true? Yes, it is true, it's just that the devil is in the details and the resulting confusion has been a bonanza for those seeking to cash in on the confusion. In fact, each of us in the good ole U. S. of A. is entitled to a free credit report. But, how do you get it? Where do you get it? Who is giving it to you? Why is it being offered for free? And most importantly, who cannot offer you one for free?

Who cannot offer a free credit report? Let's start with the last one first because it shines a lot of light on the rest of the questions. Any company, web site or service that is in business for a profit and is not named Experian, Trans Union or Equifax is not able to provide anyone at any time with anything remotely resembling a credit report free of cost. Period. End of story. Got that? Further, there is one place set up on the web to get free copies of credit reports at no cost and it is: www.annualcreditreport.com . We'll talk more about this site a little later but, other wise, caveat emptor, let the buyer beware.

How then are these offers being made? Look closely, the "Free" report is usually offered initially upon signing up for a service that charges your credit card each month for monitoring your credit. If you cancel the service just in the nick of time, before the charge is made to your card, you will get it at no cost. What a hassle! And the bet is you will wake up at least one, if not a couple or more months later with several charges to your card. You think these guys make foolish bets?!

Then what caused a free credit report to be offered on the front page of newspapers, who is providing them and how and where do I get one? Due to the importance of consumer credit history, identity theft and complaints from consumer rights groups about having to purchase a credit report in order to gain knowledge about the contents shown on individual consumer reports, even if it was reported inaccurately, a change was mandated.

The Fair and Accurate Consumer Trade Act (FACTA), a revision of the Fair Credit Reporting Act, provided for one credit report free of charge from the reporting agencies (Experian, Trans Union and Equifax) every twelve months, if and only if, you haven't received a credit report in the previous twelve months. The consumer, by either mailing a written request to the three major credit reporting agencies or going to www.annualcreditreport.com one can obtain the free report if they meet the criteria. This program was and is being phased in to sections of the U.S. by the credit reporting agencies starting in the western states, with the northeastern states at the time of this writing still to come.

However, Pamela Yip of The Dallas Morning News writes that even this has not been without its problems.

"The Federal Trade Commission said Experian Information Solutions Inc., one of the three major credit bureaus, settled complaints that it "deceptively marketed 'free credit reports' by not adequately disclosing that consumers automatically would be signed up for a credit report monitoring service and charged $79.95 if they didn't cancel within 30 days... . With the help of the Federal Trade Commission, the bureaus established www.annualcreditreport.com as the only authorized online source for consumers to get a free report under federal law.

While many consumers haven't had any problem getting their reports, others say they've been hit with sales pitches for products and services from the credit bureaus or were diverted to imposter sites. The FTC said the company led consumers to its www.freecredit report.com and www.consumer info.com Web sites. Radio, TV, e-mail and Web ads promised free reports and "a bonus - free trials of a credit-monitoring service."

The FTC said consumers "were assured that: 'Your card will not be charged during the free trial period. However, valid credit card information is required to establish your account.' "

What the Web sites didn't adequately disclose is that consumers would be charged the $79.95 annual fee if they didn't cancel within 30 days, the FTC said.

"ConsumerInfo billed the credit cards that it had told consumers were 'required only to establish your account,' and, in some cases, automatically renewed memberships by rebilling consumers without notice," the agency said.

As part of the settlement, the FTC required ConsumerInfo.com, an Experian company, to "give up $950,000 in ill-gotten gains."

Experian also has agreed to provide refunds to consumers who purchased credit-monitoring products and ordered a free credit report between Nov. 1, 2000, and Sept. 15, 2003.

"It's unfair and deceptive to promise consumers something for free and then trick them into paying for products they didn't want in the first place," said Lydia Parnes, director of the FTC's Bureau of Consumer Protection.

"It wasn't an attempt to mislead at all," said Peg Smith, an Experian executive vice president. "We absolutely deny any wrongdoing." She does acknowledge that consumers may have been confused.

"To the effect that our product offering has caused that confusion, we certainly regret that," Ms. Smith said. "We encourage consumers to read the language in any disclosure on any Web site, including our own."

The FTC also requires ConsumerInfo.com to state clearly that its free credit report offer isn't related to the federal program." http://nl.newsbank.com/nl-search/we/Archives?p_action=list&p_topdoc=21

The reality is that no one credit report or combination of three credit reports by and of themselves is sufficient to educate oneself about where you stand as a consumer in the eyes of a lender. Imagine a high speed race boat zooming across a lake at top speed without a steering wheel. Where it is going is a complete mystery but one thing is for sure, it will crash and crash quickly unless you get control. That's right, you. Because without your credit scores and the knowledge about what they mean, how they were calculated or how a lender views them, you are headed for a crash.

No bank, credit card issuer, mortgage company, retail store or any other credit provider will grant you any item, service or product without looking almost exclusively at your credit scores and the average person has no idea what their scores are and even if they did, many if not most, wouldn't know what they mean.

For example, most people don't even know that repeated "pulling" of your credit reports by potential credit grantors lowers your scores by as much as four points per "pull". You start "shopping" around for the best rate on a credit card by allowing each credit issuer to run a credit report on you and your score will take a dive. The difference between a 699 score and a 700 represents thousands and thousands of dollars in interest.

Often, credit issuers don't make it perfectly clear that your credit history is being accessed when you respond to their offer for a new card over the phone. The call center sales representative also doesn't explain and state clearly to you, that your credit history will show an "official inquiry" which counts against your scores whether you are accepted or rejected.

Most people don't know that a maxed out credit card lowers their scores even if they pay on time every month. Many don't know until it is too late that one late payment on one credit card will cause the interest rate charged to skyrocket not only on that card but any other cards that have a balance! Most also don't know that a credit card balance showing less than thirty per cent of the available balance improves the score. Most don't know that in calculating credit scores, your payment history counts as 35% of the score, amounts owed count 30% of the score, length of your credit history counts 15% of the score, new credit is 10% of the score and types of credit in use is 10%.

What is the truth about free credit reports? The truth, is that consumers need to read the fine print very, very carefully and get educated. The truth about credit reports in general is that only part of the story is being told by one. The truth, is that knowledge is power and without it your money is being taken from you, your buying power and therefore your future is being dictated to you rather than by you and that the cost of everything including insurance is based on your scores.

If asked for my advice to the average consumer? Worry less about getting a "free" report and more about the real cost of being ignorant regarding credit. Worry more about the immediate and long term costs of not taking control of what is reported on your credit report both the correct and incorrect. Gain some credit knowledge. It is easy to do and will literally save you a fortune. One thing is absolutely for sure, your money and future and your children's future will be severely impacted by your credit. How, is up to you.

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2008-07-16T09:53:00.000-07:00

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Having a blemish on your credit report can lead people to believe that it will be impossible for them to obtain a mortgage or refinance their current one.

Although having less than perfect credit can be a challenge, all hope is not lost.

There are lenders out there, and many of them, who specialize in doing mortgages for people with challenged credit. These lenders are known as sub prime lenders.

You may not be familiar with sub prime lenders because they are not the type of institution to set up shop on every street corner like the banks.

Sub prime lenders deal with all kinds of special and unique situations. Whatever your situation may be, there is a good chance that there is a lender out there with a program for you.

For instance, sub prime lenders have programs for people with poor payment history, people who have had bankruptcies, people who are in foreclosure and are looking to be bought out, etc. Over all if your credit history is poor, you will most likely have to go with a sub prime lender.

My suggestion to you would be to find a broker to shop around for the best possible program for you.

A broker is not a lender, their job is to guide and educate you through the loan process. Most brokers have a contact list too literally hundreds of lenders across the country including sub prime lenders. Allow for the broker to assess your financial situation, than fit you into a program that you both can agree on.

The down side to dealing with a sub prime lender is the interest rate. You can count on it being high. If you have bad credit, the lender will see you as a risk, and the penalty you pay for being considered a risk is in the interest rate.

The point is this, regardless of your credit issues, there most likely is a lender out there who will deal with you, just make sure the deal you agree on is in your best interest and not in the best interest of the broker or the lender.

When deciding to purchase a home or refinance your existing one, always do your homework. Continue to educate yourself so you know what to expect going forward, and don't be afraid to shop around for the best deal out there. Just because your credit isn't the greatest doesn't mean lenders won't be competing for your business because they will.

Your credit can be repaired over time if you pay your bills on time, so make this a goal and work toward it.

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