The word bankruptcy comes from the Italian words "Banca Rotta" which means bench broke. There are two types of personal bankruptcies; the one you choose is based on your financial abilities and amount owed to creditors. Bankruptcy is simply explained as a person who does not have the ability or capability to pay their debts. Bankruptcy is initiated by an individual (the debtor) and is imposed by court order. In the United State bankruptcy is under the jurisdiction of the Federal Government. Even though the Federal Government has jurisdiction over bankruptcies, state laws often overrule federal bankruptcy laws, particularly in who qualifies for bankruptcy status.
The purpose of a bankruptcy is for the debtor to get relief from their creditor(s). An individual files a voluntary petition to initiate the bankruptcy process. The bankruptcy process includes filing for bankruptcy status and eventual discharge of debts. After filing for bankruptcy, there is typically a waiting period for discharge of debts. During this waiting period the court could order an assessment of the financial abilities of the household or entity. Financial education courses may also be required by the court. This may be required to minimize the risk of a future bankruptcy.
The United States Bankruptcy Code includes 2 types of personal bankruptcies. The following is a brief description of each bankruptcy type:
Chapter 7 is the most common type of bankruptcy in the United States. An individual filing for a Chapter 7 bankruptcy must meet the requirements of the "means test for eligibility". Eligibility for the chapter 7 bankruptcy allows the creditor to repossess any property used as collateral on debt that will be discharged in the bankruptcy. The bankruptcy trustee may also liquidate any non-exempt property and distribute the proceeds to any unsecured creditors. Exempt property typically includes: (1) clothes, and (2) household goods. Other assets such as: (1) social security payments, (2) unemployment compensation, (3) older automobile with little value, (4) tools used for work, and (5) books are also excluded from liquidation (may vary by state). Some debt may not be discharged by the courts. These include: (1) federal debt, (2) tax liens, (3) student loans, and (4) alimony and child support. Each state sets the limit for how much property can be exempted in a bankruptcy. The Chapter 7 bankruptcy can only be used by an individual every 8 years.
The Chapter 13 bankruptcy allows the debtor to keep all their possessions and assets, but they must accept a payment plan (based on their income) to repay their creditors. The repayment amount is based on the debtor's income, expenses, value of property, and debt being discharged. The repayment plans usually are for 3 to 5 years but can be paid off earlier if the debtor is able. The Chapter 13 bankruptcy requires proof of regular income and has income limitations. Payments under this bankruptcy type are made to a trustee. The trustee is responsible for payments to the creditors. Chapter 13 bankruptcy does not require repayment to unsecured debt and medical bills.
In a Chapter 7 bankruptcy, the debtor may lose property and assets whereas the Chapter 13 bankruptcy allows the debtor to keep all of their property and assets. The Chapter 7 bankruptcy has no repayment requirement, whereas Chapter 13 has a 3 to 5 year repayment obligation based on various factors. So, which bankruptcy option is better, the Chapter 7 or Chapter 13? It depends on many factors, which may include your employment, income, health, and age. It is always in your best interest to consult a knowledgeable attorney for bankruptcy advice.
Wednesday, March 25, 2015
Sunday, March 22, 2015
What's New for the 2015 Tax Filing Season
Tax laws undergo some minor changes every year, such as inflation adjustments, renewal of deductions, new taxes, and tax increases. As the 2015 tax filing season has started, it is important to stay informed on the latest changes to the tax code and how they can affect you. This article will explore three key areas where some of the biggest changes have been made to the Internal Revenue Code (IRC).
Affordable Care Act Changes for 2015
The Affordable Care Act is the law of the land that requires most individuals to have health insurance or risk paying a tax penalty. Per the federal health law's individual mandate, individuals above certain income thresholds should get health insurance coverage if they are not covered by public programs such as Medicare and Medicaid. If health coverage is not supplied through his or her job, an individual may choose to purchase an individual private policy or get covered under the state-operated insurance marketplace.
Those who do not have the minimum level of coverage should be wary because they will be subjected to IRS penalties at the end of the tax year. Here is a brief summary of the non-compliance penalties: the penalty for the 2014 tax year is one percent of income for both individuals and families or $95 for single adults and $285 for families, whichever is greater. This may not seem bad at all when compared to insurance premiums; however, the fact is, the penalty structure is formulated to increase over time. In 2015, the fine will rise significantly to $325 per adult and up to $975 for a family or 2% of income. In 2016, the penalty will be sky high: $695 per individual and $2,085 for a family or 2.5% of income.
Small-business owners obtaining insurance through the Small Business Health Options Program (SHOP) marketplace can qualify for tax credits and tax breaks. Businesses that employ less than 25 full-time workers and pay average annual salaries of less than $50,000 can make use of this program for group health coverage. Per ObamaCare's employer mandate, businesses with more than 100 full-time employees will have to provide health coverage to at least 70% of their workers starting in 2015. This rule does not apply to companies with 50 to 99 full-time workers until Jan 1, 2016.
New Limits on IRA Rollovers in 2015
Finally, some good news from the IRS! Contribution limits to 401(k), 403(b), and other qualified retirement plans have now increased by $500, bringing them to $18,000 in 2015. The catch-up contribution limit for individuals who are 50 or older has also increased by $500.
A new year ushered in a new rule from the IRS that put restrictions on the number of IRA-to-IRA rollovers. Starting in 2015, taxpayers can do only one rollover in a 12-month period, irrespective of how many IRAs the individual has. A second 60-day IRA-to-IRA rollover could result in a 10% early withdrawal penalty, and the distribution will be subject to taxation. The old rules allowed individuals to do one such rollover per year for each IRA that they owned, which created penalty-free and interest-free loans. Sadly, the new change limits taxpayers from taking such tax-free rollover provisions.
There is no reason to be alarmed, since this new rule change does not apply to traditional IRA to Roth IRA conversions or trustee-to-trustee transfers. This direct rollover transfer method lets investors transfer funds any number of times between IRA accounts without taking control of the money. This transfer is tax-free and does not trigger the 10% early withdrawal penalty. Get expert guidance if you hold multiple IRA accounts and are planning to do transfers but are not confident about whether they fall within the rollover limit or the distribution is tax-free.
2015 Tax Rates and Other Inflation Changes
For 2015, inflation-based adjustments are made for all tax brackets: the top 39.6% tax bracket, for example, will start at $413,200 for unmarried filers (up from $406,750 in 2014) and $464,850 for married joint filers (up from $457,600). The standard deduction for the 2015 tax year is $6,300 for single filers and $12,600 for married joint filers. The personal exemption gets an increase of another $50 to $4,000 in 2015. Individuals in the 25%, 33%, and 35% federal income tax brackets will pay the same 15% on capital gains, but taxpayers in the 39.6% bracket will have to pay more, as they will now be taxed at a 20% rate on long-term capital gains.
Affordable Care Act Changes for 2015
The Affordable Care Act is the law of the land that requires most individuals to have health insurance or risk paying a tax penalty. Per the federal health law's individual mandate, individuals above certain income thresholds should get health insurance coverage if they are not covered by public programs such as Medicare and Medicaid. If health coverage is not supplied through his or her job, an individual may choose to purchase an individual private policy or get covered under the state-operated insurance marketplace.
Those who do not have the minimum level of coverage should be wary because they will be subjected to IRS penalties at the end of the tax year. Here is a brief summary of the non-compliance penalties: the penalty for the 2014 tax year is one percent of income for both individuals and families or $95 for single adults and $285 for families, whichever is greater. This may not seem bad at all when compared to insurance premiums; however, the fact is, the penalty structure is formulated to increase over time. In 2015, the fine will rise significantly to $325 per adult and up to $975 for a family or 2% of income. In 2016, the penalty will be sky high: $695 per individual and $2,085 for a family or 2.5% of income.
Small-business owners obtaining insurance through the Small Business Health Options Program (SHOP) marketplace can qualify for tax credits and tax breaks. Businesses that employ less than 25 full-time workers and pay average annual salaries of less than $50,000 can make use of this program for group health coverage. Per ObamaCare's employer mandate, businesses with more than 100 full-time employees will have to provide health coverage to at least 70% of their workers starting in 2015. This rule does not apply to companies with 50 to 99 full-time workers until Jan 1, 2016.
New Limits on IRA Rollovers in 2015
Finally, some good news from the IRS! Contribution limits to 401(k), 403(b), and other qualified retirement plans have now increased by $500, bringing them to $18,000 in 2015. The catch-up contribution limit for individuals who are 50 or older has also increased by $500.
A new year ushered in a new rule from the IRS that put restrictions on the number of IRA-to-IRA rollovers. Starting in 2015, taxpayers can do only one rollover in a 12-month period, irrespective of how many IRAs the individual has. A second 60-day IRA-to-IRA rollover could result in a 10% early withdrawal penalty, and the distribution will be subject to taxation. The old rules allowed individuals to do one such rollover per year for each IRA that they owned, which created penalty-free and interest-free loans. Sadly, the new change limits taxpayers from taking such tax-free rollover provisions.
There is no reason to be alarmed, since this new rule change does not apply to traditional IRA to Roth IRA conversions or trustee-to-trustee transfers. This direct rollover transfer method lets investors transfer funds any number of times between IRA accounts without taking control of the money. This transfer is tax-free and does not trigger the 10% early withdrawal penalty. Get expert guidance if you hold multiple IRA accounts and are planning to do transfers but are not confident about whether they fall within the rollover limit or the distribution is tax-free.
2015 Tax Rates and Other Inflation Changes
For 2015, inflation-based adjustments are made for all tax brackets: the top 39.6% tax bracket, for example, will start at $413,200 for unmarried filers (up from $406,750 in 2014) and $464,850 for married joint filers (up from $457,600). The standard deduction for the 2015 tax year is $6,300 for single filers and $12,600 for married joint filers. The personal exemption gets an increase of another $50 to $4,000 in 2015. Individuals in the 25%, 33%, and 35% federal income tax brackets will pay the same 15% on capital gains, but taxpayers in the 39.6% bracket will have to pay more, as they will now be taxed at a 20% rate on long-term capital gains.
Mastering The Credit Scores
Your credit score can impact nearly every aspect of your life. It can control whether you can obtain a mortgage, auto loan, or even a job. With this said, it is vital that you understand how to improve your credit score. Federal law requires that everyone have access to one free credit report per year. The reason this law exists is to allow individuals to verify that their credit reports are accurate. If there is inaccurate information listed on your report, by law you have the right to dispute the inaccuracies; the credit bureaus have 30 days to investigate and respond to the disputed items. If the creditor who put the disputed item on your credit report cannot provide proof that you are responsible for the debt, it should be removed. To obtain a copy of your free credit report you can call 877-322-8228, or mail a request to annual credit report request service, P.O. Box 105281, Atlanta, GA 30348-5281.
After you have received a copy of your free report and have reviewed it for any inaccuracies; you will need to dispute them directly with all three credit bureaus. The bureaus include TransUnion, Experian, Equifax. Once you have verified the information on your credit report is accurate, you can then use the following suggestions to help you increase your scores.
• Make Your Payments On-Time - The single most important thing you can do to improve your credit score is to pay your bills on time. If you have had late payments in the past because you simply forgot to make the payment, you may want to set up automatic payment arrangements to pay your bills. This will ensure that your bills are paid on time.
• Credit Card Balances - Credit cards (revolving credit) account for 30% of your score. To maximize your score, you should always keep your revolving card balances below 30% of their available limit.
• Credit Availability - Your scores are calculated based on your unused available credit, how much credit is open, and the length of your credit history. The length of your credit history accounts for 15% of your score. Based on this factor, it would be in your best interest to keep your revolving cards open instead of closing them, because closing old revolving cards would significantly shorten the length of your credit history. To keep a revolving card open, you should use the card at least once every six months. This will keep them from being inactivated.
• Lack of Credit - Unfortunately, if you have very little credit because you pay cash for everything; you probably also have a low credit score. Scores are only determined by the activity reported on your credit report; cash purchases have no bearing on your current score. Therefore, you want to have at least one installment loan and two revolving accounts open at all times. If you are having trouble getting credit, you could apply for a secured card from a local bank or credit union, or you could ask a relative or significant other if you could become an authorized user on one of their revolving cards. Becoming an authorized user will give you an instant payment history. Just make sure that the account you are going to become an authorized user on does not have late payments, or has a balance near the accounts limit.
• Judgments and Collections - If you have a judgment or collection that originated years ago, when you pay or satisfy the derogatory item it may temporarily lower your credit score. Keep this in mind if you plan to apply for credit. You may want to delay paying off old collections right before applying for a mortgage or auto loan.
There are many other ways to help increase a credit score; but keeping your payments on time, managing your debt properly, and having a reasonable amount of available credit are the easiest ways to ensure an acceptable score. Just remember, derogatory credit will immediately lower your scores, whereas making your payments on time and keeping your balances low may take as long as six months to recover from one negative item reported on your credit report.
After you have received a copy of your free report and have reviewed it for any inaccuracies; you will need to dispute them directly with all three credit bureaus. The bureaus include TransUnion, Experian, Equifax. Once you have verified the information on your credit report is accurate, you can then use the following suggestions to help you increase your scores.
• Make Your Payments On-Time - The single most important thing you can do to improve your credit score is to pay your bills on time. If you have had late payments in the past because you simply forgot to make the payment, you may want to set up automatic payment arrangements to pay your bills. This will ensure that your bills are paid on time.
• Credit Card Balances - Credit cards (revolving credit) account for 30% of your score. To maximize your score, you should always keep your revolving card balances below 30% of their available limit.
• Credit Availability - Your scores are calculated based on your unused available credit, how much credit is open, and the length of your credit history. The length of your credit history accounts for 15% of your score. Based on this factor, it would be in your best interest to keep your revolving cards open instead of closing them, because closing old revolving cards would significantly shorten the length of your credit history. To keep a revolving card open, you should use the card at least once every six months. This will keep them from being inactivated.
• Lack of Credit - Unfortunately, if you have very little credit because you pay cash for everything; you probably also have a low credit score. Scores are only determined by the activity reported on your credit report; cash purchases have no bearing on your current score. Therefore, you want to have at least one installment loan and two revolving accounts open at all times. If you are having trouble getting credit, you could apply for a secured card from a local bank or credit union, or you could ask a relative or significant other if you could become an authorized user on one of their revolving cards. Becoming an authorized user will give you an instant payment history. Just make sure that the account you are going to become an authorized user on does not have late payments, or has a balance near the accounts limit.
• Judgments and Collections - If you have a judgment or collection that originated years ago, when you pay or satisfy the derogatory item it may temporarily lower your credit score. Keep this in mind if you plan to apply for credit. You may want to delay paying off old collections right before applying for a mortgage or auto loan.
There are many other ways to help increase a credit score; but keeping your payments on time, managing your debt properly, and having a reasonable amount of available credit are the easiest ways to ensure an acceptable score. Just remember, derogatory credit will immediately lower your scores, whereas making your payments on time and keeping your balances low may take as long as six months to recover from one negative item reported on your credit report.
How to Finding the Best Online Stock Brokers
Everyone who trades online needs a reputable, reliable and trustworthy online stock broker who enables them to invest and enjoy a return on that investment. The reason so many people choose to trade online is that it gives them a chance to increase their retirement fund, boost their savings accounts and gives them complete control over their future finances.
Putting your savings in a bank will only offer you a set return on your investment, but with online trading, you can learn about various commodities, stocks and Forex and then use that knowledge to identify how the stock will move and put your money where your mouth is. Of course, this doesn't come without risk, which is another reason why online trading has grown in popularity. Online trading offers the ability to trade with a minimum deposit, reducing the risk factor on each and every investment that you make.
Anyone can trade online, with the help of the best online stock brokers. To start you should visit a Forex resource site or choose a few brokers that you can compare and review to find the one you feel is the right match to meet your needs and requirements. Not every broker is for everyone and you need to feel comfortable with your decision and have complete peace of mind when making online investments.
It is advisable once you have a number of online stock brokers lined up that you visit their site a few times during the day and night. Try this over the course of a few days, trying at different times for each site. What you are trying to do is determine their reliability and availability. There is no point choosing a broker who has a site that is down more than it's up, especially when relying on the internet to trade on a daily basis.
This single step can already help you narrow down your selection. Next you need to identify if the online stock brokers provide you with other ways to trade if the internet is down or their site is down. If you are on vacation and decide that now is the time to trade, do they offer other options, such as telephone or mobile phone trading? While this may not apply to you, there are those in poor internet connectivity areas that may require on the best online stock brokers to be more than just internet driven.
With your final selection in your hand, go online and start reviewing each broker. You want to read the current and past customer reviews to get honest feedback on their services. When you're trading with your own savings, you don't want to take any risks. This is why it's imperative that you find an online stock broker who will provide you with reliable and effective trading and will be completely trustworthy when adding and withdrawing funds from your account.
Don't make the mistake of choosing a broker and deciding they are the best online stock brokers because they charge low commission rates. Commission rates should definitely not be your only deciding factor. There are so many others things you should be considering, ensuring you have a safe and enjoyable trading experience with complete peace of mind.
Always check their deposit amounts. So many new traders make the mistake of looking at the minimum deposit amount, not realizing there is usually an initial deposit to be paid into the account. Based on your savings and how much you have to invest, this could be a deal breaker for you.
It is also worthwhile to choose the best online stock broker that offers a choice of options when it comes to trading. Do they only offer Forex? Do they also offer commodities and stocks? Also identify their customer service levels, knowing there is someone available when you need help managing their site.
Forex News Now is an online Forex trading platform providing Forex broker reviews. This well-established company has been operating since 2008 providing traders with valuable and up to date information they can trust. The articles, reviews, strategies, tips and advice are all written by seasoned traders and finance professionals helping other Forex traders. Forex News Now offer a wealth of information on their easy to use and secure website ensuring all brokers are regulated. All brokers are thoroughly examined across all areas including trading, reputation, service and interface, to name a few. The company is trusted and respected in the Forex industry and have built up a solid online reputation. To find out more, visit http://www.forexnewsnow.com.
Putting your savings in a bank will only offer you a set return on your investment, but with online trading, you can learn about various commodities, stocks and Forex and then use that knowledge to identify how the stock will move and put your money where your mouth is. Of course, this doesn't come without risk, which is another reason why online trading has grown in popularity. Online trading offers the ability to trade with a minimum deposit, reducing the risk factor on each and every investment that you make.
Anyone can trade online, with the help of the best online stock brokers. To start you should visit a Forex resource site or choose a few brokers that you can compare and review to find the one you feel is the right match to meet your needs and requirements. Not every broker is for everyone and you need to feel comfortable with your decision and have complete peace of mind when making online investments.
It is advisable once you have a number of online stock brokers lined up that you visit their site a few times during the day and night. Try this over the course of a few days, trying at different times for each site. What you are trying to do is determine their reliability and availability. There is no point choosing a broker who has a site that is down more than it's up, especially when relying on the internet to trade on a daily basis.
This single step can already help you narrow down your selection. Next you need to identify if the online stock brokers provide you with other ways to trade if the internet is down or their site is down. If you are on vacation and decide that now is the time to trade, do they offer other options, such as telephone or mobile phone trading? While this may not apply to you, there are those in poor internet connectivity areas that may require on the best online stock brokers to be more than just internet driven.
With your final selection in your hand, go online and start reviewing each broker. You want to read the current and past customer reviews to get honest feedback on their services. When you're trading with your own savings, you don't want to take any risks. This is why it's imperative that you find an online stock broker who will provide you with reliable and effective trading and will be completely trustworthy when adding and withdrawing funds from your account.
Don't make the mistake of choosing a broker and deciding they are the best online stock brokers because they charge low commission rates. Commission rates should definitely not be your only deciding factor. There are so many others things you should be considering, ensuring you have a safe and enjoyable trading experience with complete peace of mind.
Always check their deposit amounts. So many new traders make the mistake of looking at the minimum deposit amount, not realizing there is usually an initial deposit to be paid into the account. Based on your savings and how much you have to invest, this could be a deal breaker for you.
It is also worthwhile to choose the best online stock broker that offers a choice of options when it comes to trading. Do they only offer Forex? Do they also offer commodities and stocks? Also identify their customer service levels, knowing there is someone available when you need help managing their site.
Forex News Now is an online Forex trading platform providing Forex broker reviews. This well-established company has been operating since 2008 providing traders with valuable and up to date information they can trust. The articles, reviews, strategies, tips and advice are all written by seasoned traders and finance professionals helping other Forex traders. Forex News Now offer a wealth of information on their easy to use and secure website ensuring all brokers are regulated. All brokers are thoroughly examined across all areas including trading, reputation, service and interface, to name a few. The company is trusted and respected in the Forex industry and have built up a solid online reputation. To find out more, visit http://www.forexnewsnow.com.
Wednesday, March 11, 2015
Simple Way to Manage Investments
One investment criterion important to many people, and perhaps to you, is: How easy are my investments to supervise? For example, does the investment require constant care, supervision, or expense, such as the complete or partial ownership of real estate property with its rental, repair, maintenance, taxation, and other management problems?
Or does the investment require none of your time, such as your contributions to a pension fund? Some people feel confident and enjoy the time and effort that may go into managing their investments. Others have neither the skill, time, nor patience to bother with their investments. There are investments that satisfy both groups, depending on personal objectives.
The best method to manage all investments is the Investment Portfolio Evaluation Grid. It is a great chart to help organize your present portfolio, even if your investments right now are some money in a savings account, or an IRA or pension plan.
Start by creating 7 columns and input the following: Date, Cost, Present Market Value, % Total Portfolio Market, Annual Return, Yield, and % Return on Market.
Next, input all your investments on the left in rows: Savings Accounts, U.S. Savings Bonds, Treasury Securities, Certificate of Deposit, Bonds-Tax-Free, Common Shares-Dividends, Preferred Shares, Blue-Chip Shares, Real Estate, Second Mortgages & Trust Deeds, IRA & Keogh Accounts, Pension Plans, Insurance Annuities, Growth Stocks, Undeveloped Real Estate, Precious Metals, Stock Options, Commodity Contracts, Commercial Paper, Other, and Total Portfolio.
Determine the percentage of the market value of your portfolio as a whole. Divide the present market value of the individual investment by the total present market value of your portfolio. Determine the percentage of what it costs you to make an investment. This is easy to figure with interest bearing investments. A $1,000 10% bond you paid $1,000 for has a 10% yield. On stocks or real estate, estimate yield by dividing the amount of increase in value and/or dividend by the amount you paid. For example, if you paid $100 for a stock and received a $5 cash dividend, the yield would be 5%. Determine the percentage of the return on your portfolio as a whole. Divide the annual dollar return on all investments by the total present market value of your portfolio.
For each investment you now have, fill in all the information you can in the columns to the right. The last three columns (Annual Return, Yield, and % Return on Market), tell how your investments have performed for you, as well as their relative value within your portfolio. If you do not have exact numbers for everything, do not worry. At this point you are just seeking an overview of what you have. A big picture will start to form that indicates how your money is allocated. You can also see what types of investment vehicles serve your objectives.
If you are like many people who are just starting to invest, your grid is heavily weighted toward protection of principle. You may not even be aware of some of the listed investments. Before you get into the characteristics of different investments, you will benefit greatly from having a reference point with which to evaluate the various investment opportunities. Consider all the personal factors in your financial picture, including the other people affected by the decisions you will make.
Forecast as much as possible, where your current and potential income sources will take you 5-20 years from now. What standard of living is important to you now and in the future? Will you need to provide for children? Do you wish to retire early? Where do you want to allocate investment and other disposable income? To a house in the hills? In world travel? To building a business?
These and dozens of other personal questions should get some serious thought at this point. Do not be rigid. Expect your priorities and goals to change. But better a mutable plan for the future than none at all. Allow yourself to dream and get excited about the possibilities. Though it is difficult, even dangerous, to generalize about what investment objectives are most important to different groups, the following information will give you broad guidelines to consider, if you are:
a) Single, with low to average working income, with a savings-oriented temperament, seek investments that produce income but that also provides some long-term capital growth.
b) Single, with an average to high working income, and/or an aggressive temperament, seek investments with strong total return (the sum of the current yield and the capital-gain yield), concentrating on long-term, and high-growth vehicles.
c) Married, with no dependents earning an average to high income growth-oriented but aggressive, look at safe income-producing investments, such as bonds and money-market mutual funds.
d) Married, with dependents, a low to average income and a conservative temperament, seek secure investments with long-term growth in both capital and income, perhaps blue-chip stocks.
e) An older person, with income from Social Security and some savings, and a goal of more income while preserving current capital, seek a conservative income fund that pays dividends and has appreciation value, or a money-market fund with a satisfactory yield.
Take a look at your new chart and you will see Percentage of Portfolio typically allocated to investments goals. You can use this as a guideline when considering how to allocate your investment money. However, at a younger age, safety and capital gain has greater weight. In later years the need for income and safety of principle tends to increase.
Or does the investment require none of your time, such as your contributions to a pension fund? Some people feel confident and enjoy the time and effort that may go into managing their investments. Others have neither the skill, time, nor patience to bother with their investments. There are investments that satisfy both groups, depending on personal objectives.
The best method to manage all investments is the Investment Portfolio Evaluation Grid. It is a great chart to help organize your present portfolio, even if your investments right now are some money in a savings account, or an IRA or pension plan.
Start by creating 7 columns and input the following: Date, Cost, Present Market Value, % Total Portfolio Market, Annual Return, Yield, and % Return on Market.
Next, input all your investments on the left in rows: Savings Accounts, U.S. Savings Bonds, Treasury Securities, Certificate of Deposit, Bonds-Tax-Free, Common Shares-Dividends, Preferred Shares, Blue-Chip Shares, Real Estate, Second Mortgages & Trust Deeds, IRA & Keogh Accounts, Pension Plans, Insurance Annuities, Growth Stocks, Undeveloped Real Estate, Precious Metals, Stock Options, Commodity Contracts, Commercial Paper, Other, and Total Portfolio.
Determine the percentage of the market value of your portfolio as a whole. Divide the present market value of the individual investment by the total present market value of your portfolio. Determine the percentage of what it costs you to make an investment. This is easy to figure with interest bearing investments. A $1,000 10% bond you paid $1,000 for has a 10% yield. On stocks or real estate, estimate yield by dividing the amount of increase in value and/or dividend by the amount you paid. For example, if you paid $100 for a stock and received a $5 cash dividend, the yield would be 5%. Determine the percentage of the return on your portfolio as a whole. Divide the annual dollar return on all investments by the total present market value of your portfolio.
For each investment you now have, fill in all the information you can in the columns to the right. The last three columns (Annual Return, Yield, and % Return on Market), tell how your investments have performed for you, as well as their relative value within your portfolio. If you do not have exact numbers for everything, do not worry. At this point you are just seeking an overview of what you have. A big picture will start to form that indicates how your money is allocated. You can also see what types of investment vehicles serve your objectives.
If you are like many people who are just starting to invest, your grid is heavily weighted toward protection of principle. You may not even be aware of some of the listed investments. Before you get into the characteristics of different investments, you will benefit greatly from having a reference point with which to evaluate the various investment opportunities. Consider all the personal factors in your financial picture, including the other people affected by the decisions you will make.
Forecast as much as possible, where your current and potential income sources will take you 5-20 years from now. What standard of living is important to you now and in the future? Will you need to provide for children? Do you wish to retire early? Where do you want to allocate investment and other disposable income? To a house in the hills? In world travel? To building a business?
These and dozens of other personal questions should get some serious thought at this point. Do not be rigid. Expect your priorities and goals to change. But better a mutable plan for the future than none at all. Allow yourself to dream and get excited about the possibilities. Though it is difficult, even dangerous, to generalize about what investment objectives are most important to different groups, the following information will give you broad guidelines to consider, if you are:
a) Single, with low to average working income, with a savings-oriented temperament, seek investments that produce income but that also provides some long-term capital growth.
b) Single, with an average to high working income, and/or an aggressive temperament, seek investments with strong total return (the sum of the current yield and the capital-gain yield), concentrating on long-term, and high-growth vehicles.
c) Married, with no dependents earning an average to high income growth-oriented but aggressive, look at safe income-producing investments, such as bonds and money-market mutual funds.
d) Married, with dependents, a low to average income and a conservative temperament, seek secure investments with long-term growth in both capital and income, perhaps blue-chip stocks.
e) An older person, with income from Social Security and some savings, and a goal of more income while preserving current capital, seek a conservative income fund that pays dividends and has appreciation value, or a money-market fund with a satisfactory yield.
Take a look at your new chart and you will see Percentage of Portfolio typically allocated to investments goals. You can use this as a guideline when considering how to allocate your investment money. However, at a younger age, safety and capital gain has greater weight. In later years the need for income and safety of principle tends to increase.
Tuesday, March 10, 2015
Personal Loans Tips
These days, there are a lot of companies that specialize in personal loans. These loans, which are typically small, are worked out directly between the lender and the borrower. The borrower simply borrows a needed amount and then pays it back on his or her next payday. If the loan amount is large, however, some lenders will work out longer term payment plans to make repayment easier on the borrower. Unfortunately, however, the longer it takes to pay off a loan, the higher the interest charges that will accrue. It is always best to not borrow unless absolutely necessary, and make certain you are confident you have the means to repay the loan with the agreed upon terms.
Because interest rates for payday or personal loans are high, no matter how quickly you pay them back, you should avoid taking out a personal loan "just because." If you want to do something fun like taking a vacation, a payday loan is not the right choice. These are also not large loans, like for buying a car or a house, so don't set your sights too high. Just treat payday loans as what they are- a way to survive an emergency situation or to get by until that next paycheck comes through. Consider these types of loans crisis cash. If you are in a crisis, then this is a simple, quick and easy way to de-stress.
It's also important for you to avoid applying for multiple loans from multiple lenders at the same time. Know the maximum amount you may borrow from different lenders and then choose the one lender that is best able to meet your needs. Having small loans from multiple lenders out at a given time can not only damage your credit, but it can also get you turned down for future loans. Lenders tend to be pretty closely connected and are usually well aware of who has bitten off more than they can chew. Don't damage your credit or your ability to get cash when you need it by being reckless or greedy.
Because simply applying for a payday loan can negatively impact your credit, be aware of each lender's eligibility requirements and don't waste your time applying if you know you can't meet those requirements. You will likely have trouble getting approved by any lender if you don't have a verifiable job that you have worked at for at least three months, a checking or savings account, and an income that is above the poverty line. Lenders only want to lend to those they know will be able to pay back the loan. Do yourself and your lender a huge favor by being honest and forthright. Also have verifiable information and documentation available to speed the processing of your loan.
Also bear in mind that your bank account will typically be used to provide you with your borrowed funds and to collect repayments. As such, your checking or savings account should be in good standing without any overdrafts posted or pending. Payments will not be made into an account that's "in the negative," so payday loans are definitely not a way to fix your banking mistakes. Do your best to have your financial house in order as best as it can be. Proving to be a new customer that is reliable and trustworthy will help you build this business relationship as well as guarantee a speedy transaction. Payday loans should not become a habit. As long as you understand this information and do your best to handle payday loans responsibly, your experience with these little lifesavers should be a positive one.
Because interest rates for payday or personal loans are high, no matter how quickly you pay them back, you should avoid taking out a personal loan "just because." If you want to do something fun like taking a vacation, a payday loan is not the right choice. These are also not large loans, like for buying a car or a house, so don't set your sights too high. Just treat payday loans as what they are- a way to survive an emergency situation or to get by until that next paycheck comes through. Consider these types of loans crisis cash. If you are in a crisis, then this is a simple, quick and easy way to de-stress.
It's also important for you to avoid applying for multiple loans from multiple lenders at the same time. Know the maximum amount you may borrow from different lenders and then choose the one lender that is best able to meet your needs. Having small loans from multiple lenders out at a given time can not only damage your credit, but it can also get you turned down for future loans. Lenders tend to be pretty closely connected and are usually well aware of who has bitten off more than they can chew. Don't damage your credit or your ability to get cash when you need it by being reckless or greedy.
Because simply applying for a payday loan can negatively impact your credit, be aware of each lender's eligibility requirements and don't waste your time applying if you know you can't meet those requirements. You will likely have trouble getting approved by any lender if you don't have a verifiable job that you have worked at for at least three months, a checking or savings account, and an income that is above the poverty line. Lenders only want to lend to those they know will be able to pay back the loan. Do yourself and your lender a huge favor by being honest and forthright. Also have verifiable information and documentation available to speed the processing of your loan.
Also bear in mind that your bank account will typically be used to provide you with your borrowed funds and to collect repayments. As such, your checking or savings account should be in good standing without any overdrafts posted or pending. Payments will not be made into an account that's "in the negative," so payday loans are definitely not a way to fix your banking mistakes. Do your best to have your financial house in order as best as it can be. Proving to be a new customer that is reliable and trustworthy will help you build this business relationship as well as guarantee a speedy transaction. Payday loans should not become a habit. As long as you understand this information and do your best to handle payday loans responsibly, your experience with these little lifesavers should be a positive one.
Thursday, March 5, 2015
Best First Time Car-Buying Tips
Buying your first car is an exciting step - but it can also be overwhelming and stressful and is never filled with as much uncertainty as it is the first time. If you take the time to do a little research before visiting the dealerships, your first car-buying experience can be a lot less stressful and a lot more fun! Being a good first-time buyer won't be easy, but if it's worth doing - and it is - it's worth doing well. We've come up with some tips to help with the process.
Establish a realistic budget. This figure is generally based on what you can afford per month. Look at your cost of living - mortgage or rent payments, food, insurance, social activities. Once those are calculated, the remainder could be spent on a car payment, fuel, car insurance and maintenance.
Visit your credit union to get pre-approved for financing. Before you fall in love with a car you may not be able to afford, go to your local credit union. Their lenders can get you pre-approved for financing at a great rate that fits your lifestyle and budget. You'll also know exactly how much you can spend, which will give you added negotiating power at the dealership.
Do your research. Informed shoppers are smart shoppers, so gather some information before you start shopping. Resources like Consumer Reports, Edmunds and Kelley Blue Book offer helpful vehicle reviews and pricing information that can help you determine a fair price for the car you want.
Take a test drive. Nothing is more important in your decision process than how you feel behind the wheel. Take at least half an hour on your test drive, while trying stop-and-go, freeway merging and freeway speeds. If the sales person does not have time then take the time to find another dealership.
Bring a wingman or woman to the dealership. It's always best to work with a partner. They can help you decide what car to buy and what to pay.
Negotiate your price. Price negotiation is probably the most overwhelming part of the car-buying process, but it is important for you to stick to your strategy. If you've done your research, you'll have a good idea whether the dealer's offer is fair. Keep in mind that the dealer's first price is rarely their best price, so don't be afraid to reject the initial offer. If the dealer can't meet your target price, walk away. Buying a car is a big step and the transaction has to be right for you.
Buyer beware. Before signing the final contract, ask the dealer to explain each item. Dealers have been known to include extra charges for items like "fabric protection," "paint sealant" or "rust proofing" that may not be necessary. If there are charges you're not comfortable with, don't be afraid to point them out.
First-time buyers should also be wary of financing deals that sound too good to be true. Offers like "0% dealer financing" may sound good, but as a first-time buyer you may not qualify for these attractive specials.
Most importantly, enjoy the process. We know the tips referenced above can make buying a car seem daunting, but with low financing rates, and hundred of cars and trucks to choose from, your options are amazing (especially in the first-time buyer category). So take your time as you move through the process and you'll be astounded with the outcome.
With a little advanced planning, a solid negotiating strategy and appropriate financing, buying your first car can be a fun and a stress-free experience!
Establish a realistic budget. This figure is generally based on what you can afford per month. Look at your cost of living - mortgage or rent payments, food, insurance, social activities. Once those are calculated, the remainder could be spent on a car payment, fuel, car insurance and maintenance.
Visit your credit union to get pre-approved for financing. Before you fall in love with a car you may not be able to afford, go to your local credit union. Their lenders can get you pre-approved for financing at a great rate that fits your lifestyle and budget. You'll also know exactly how much you can spend, which will give you added negotiating power at the dealership.
Do your research. Informed shoppers are smart shoppers, so gather some information before you start shopping. Resources like Consumer Reports, Edmunds and Kelley Blue Book offer helpful vehicle reviews and pricing information that can help you determine a fair price for the car you want.
Take a test drive. Nothing is more important in your decision process than how you feel behind the wheel. Take at least half an hour on your test drive, while trying stop-and-go, freeway merging and freeway speeds. If the sales person does not have time then take the time to find another dealership.
Bring a wingman or woman to the dealership. It's always best to work with a partner. They can help you decide what car to buy and what to pay.
Negotiate your price. Price negotiation is probably the most overwhelming part of the car-buying process, but it is important for you to stick to your strategy. If you've done your research, you'll have a good idea whether the dealer's offer is fair. Keep in mind that the dealer's first price is rarely their best price, so don't be afraid to reject the initial offer. If the dealer can't meet your target price, walk away. Buying a car is a big step and the transaction has to be right for you.
Buyer beware. Before signing the final contract, ask the dealer to explain each item. Dealers have been known to include extra charges for items like "fabric protection," "paint sealant" or "rust proofing" that may not be necessary. If there are charges you're not comfortable with, don't be afraid to point them out.
First-time buyers should also be wary of financing deals that sound too good to be true. Offers like "0% dealer financing" may sound good, but as a first-time buyer you may not qualify for these attractive specials.
Most importantly, enjoy the process. We know the tips referenced above can make buying a car seem daunting, but with low financing rates, and hundred of cars and trucks to choose from, your options are amazing (especially in the first-time buyer category). So take your time as you move through the process and you'll be astounded with the outcome.
With a little advanced planning, a solid negotiating strategy and appropriate financing, buying your first car can be a fun and a stress-free experience!
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