July 26th, 2009 by sugig

Each individual has a risk tolerance that should not be ignored. Any good stock broker or financial planner knows this, and they should make the effort to help you determine what your risk tolerance is. Then, they should work with you to find investments that do not exceed your risk tolerance.

Determining one’s risk tolerance involves several different things. First, you need to know how much money you have to invest, and what your investment and financial goals are.

For instance, if you plan to retire in ten years, and you’ve not saved a single penny towards that end, you need to have a high risk tolerance – because you will need to do some aggressive – risky – investing in order to reach your financial goal.

On the other side of the coin, if you are in your early twenties and you want to start investing for your retirement, your risk tolerance will be low. You can afford to watch your money grow slowly over time.

Realize of course, that your need for a high risk tolerance or your need for a low risk tolerance really has no bearing on how you feel about risk. Again, there is a lot in determining your tolerance.

For instance, if you invested in the stock market and you watched the movement of that stock daily and saw that it was dropping slightly, what would you do?

Would you sell out or would you let your money ride? If you have a low tolerance for risk, you would want to sell out… if you have a high tolerance, you would let your money ride and see what happens. This is not based on what your financial goals are. This tolerance is based on how you feel about your money!

Again, a good financial planner or stock broker should help you determine the level of risk that you are comfortable with, and help you choose your investments accordingly.

Your risk tolerance should be based on what your financial goals are and how you feel about the possibility of losing your money. It’s all tied in together.

July 21st, 2009 by sugig

Life Insurance is something that we should all be thinking about, however very few really do. Sometimes it may be due to finances. Paying monthly premiums might not fit everyone’s budget. It might be the fact that just the thought of insurance makes some squeamish. Either it reminds them of their own mortality, or possibly that they have little faith in Insurance companies and/or insurance sales people.

However, everyone should have life insurance. It’s a fact of life that we’re not always going to be around. We will all pass on sooner or later. Not all of us will get to live to the ripe old age of 100 with a good-sized savings account.

It’s also a fact of life that circumstances can change very drastically and very unexpectedly over the course of anyone’s life. None of us can foresee the future, nor do our plans always go accordingly to what we set them out to be. There could be an unexpected illness, an accident just waiting around the corner, a sudden and unforeseen death.

Unfortunately, death doesn’t come with old age for everyone. These are events that can surely deplete one’s bank account, leaving surviving family members in a financial strain, if they are not well prepared in advance.

Many people don’t even want to think about such things as life insurance. Often, they think they’re young and healthy and don’t need to be considering old age, let alone death, just yet. They think they have plenty of time. Some might even think that life insurance is a morbid topic, so decide to just put it out of mind completely.

That aside, it’s always better to try and be prepared for life’s incidentals as best we can, and that would include having adequate life insurance. This is not to say one needs to be insured to the maximum, especially if your finances don’t allow for it. Even a small insurance policy is better than none at all, possibly just enough to cover the cost of a funeral.

ADVANTAGES TO HAVING LIFE INSURANCE

* In the event of a sudden, unexpected death, our families won’t be burdened with the added expense of a funeral. They can cost between $8,000 to $10,000, and that just includes the very basic funeral plan these days. Most families do not have that kind of extra money saved up.

* If a family does have some savings, it might have been for the children’s education fund or other important future plans. By having insurance, that money doesn’t have to be touched in order to bury a loved one, should the circumstance arise.

* Insurance can help to pay down some bills, especially if the person who just passed away was the higher income earner in the family. When that income is no longer there, the family can find themselves in a dire financial situation. The insurance is there to help the family get through the crisis until they are able to overcome the grief and get back on their feet.

* Some policies allow for dividends to build up. After several years, they can accumulate to a substantial amount. However, these dividends don’t usually pay out after the person is deceased, so they can be much like tucking money away for a rainy day. You can withdraw on them after a period of time to either help pay some bills or purchase a much needed item. Usually (depending on where you live), these dividends can be tax-free money.

DETERMINING HOW MUCH INSURANCE TO PURCHASE

How does one determine just how much insurance they should have? Many shy away from getting insurance thinking about the high cost of the premiums and whether it’s in their budget. However, no one needs to be “over” insured. Check with your insurance broker to see which policies might suit you, your family and your finances. Every insurance company usually has as a variety of policies to suit every need and income level.

Other things to consider:

* Whom is being insured? Usually a wife can be insured for much less. This is not to say that her life is less valuable, but in most cases, the husband is the higher income earner. Therefore, in the event of his untimely demise, the wife has to consider how much of his income is now lost. If there are still children at home, she will have to consider what it will cost to house, feed and educate them until they are ready to be on their own. The amount of the husband’s insurance policy should reflect those expenses.

* In the event that the wife should pass away first, the husband will have to consider her contributions to the family unit. He may now have to consider paying for the chores that his wife did for free, such as cooking, cleaning, child care and possibly to help cover the loss of her income.

* If a loved one’s death won’t set you back financially, then you might possibly only need a very basic insurance policy to cover the cost of the funeral and a few other minor expenses.

* Try to buy insurance when you ARE fit and healthy. This will help to bring down the monthly premiums. If you’re a non-smoker and/or do not have any health issues (such as diabetes, a heart condition for example), these can bring down the premiums significantly as well.

* Never wait until the last minute, when health issues might arise later in life. This will definitely cause monthly premiums to run a lot higher, if an insurance company will agree to insure you at all.

INSURING CHILDREN

Most people would feel somewhat morbid when it comes to insuring their children, as if you might be anticipating their death. No one even wants to think about their young children passing away, but it is a good idea to consider at least a small policy, maybe even shortly after their birth. The best time TO insure your children is when they are young and healthy. Their premiums would be considerably lower. Most insurance companies cannot raise the premiums on that particular policy as the child ages, therefore, your child would be able to carry this policy well into their adulthood at the same low rates. They can later decide if they want to expand on the policy when they are older, depending upon their own responsibilities and circumstances in life. But you have at least given them a good start with a policy while they were young.

As well, if the policy you have opened for your child also carries dividends, this will be very beneficial to them as they grow older. They can withdraw on their dividends to help pay for their education, or possibly even their first vehicle.

IN CONCLUSION

It is very important for everyone to have a life insurance policy, and keep up with the premiums. We just never know when we’ll really need to rely on it. It will be there to help, especially at a time when you really don’t want to be thinking about money, finances and unforeseen expenses. A life insurance policy gives you and your family the peace of mind that they will not be burdened financially, in the event of an untimely death.

July 20th, 2009 by sugig

Most consumer advocates consider payday loans a variation of predatory lending. Proponents of payday loans say that these types of loans fulfill a need. Whichever side of the debate a person may fall in, the fact is that many people across the country are accessing payday loans without knowing exactly how they work or what they are about.

Here are ten things that any potential borrowers of payday loans should know before taking out a payday loan:

1. The most important thing that potential borrowers should keep in mind when considering taking a payday loan: PAYDAY LENDING IS NOT CHARITY. Payday lending is a lending business and the lenders are not in it to help the borrower out of a tight spot. Default on a loan and they will call and call and call to get their money.

2. Potential borrowers should look up their state’s laws on payday lending to know their rights and limitations. The National Conference of State Legislatures has a reference table available. Another good site to review is PayDay Loan Consumer Info’s State Information page. Even if the potential borrower still wants or needs to borrow the money, if the borrower has a better idea of which payday lender is operating in compliance with their state’s laws then the borrower will know who and what to look out for in a possible lender.

3. Payday loans are short term loans that operate on the premise that the borrower will pay back the amount on the next payday. Borrowers need to be aware if they cannot pay the amount in full by next payday, then they should look for another alternative.

4. Due to the highly unregulated nature of payday lending, payday lenders might stretch the limits of the interest to the point that they are skirting on the legal limits of usury laws and the borrower may not even know that they are paying far more in interest than is legally allowed.

5. Loan documents may include the Truth-in-Lending (disclosure of interest and APR) but may omit such basics as the disclosure of lender’s business location. This is very important since the loan documents may state that the Governing Law is the lender’s home state rather than the borrower’s. If the borrower does not know the lender’s home state, then it often leaves the borrower unsure of which governing law to refer to if there are questions. Again, keep in mind that payday lenders are not lending money as a charity to the borrower. They are lending money to make money so the less the borrower knows, the better 6. Loan documents will include mandatory arbitration in the event of dispute. Mandatory arbitration often favors lenders over borrowers.

7. Many Internet Payday Lenders ignore the state laws regarding payday lending in both the borrower’s and the lender’s home state. If an Internet Payday Lender includes a renewal option in the loan documents and the both the home state of the borrower and lender forbids any type of rollover or renewal, then the borrower should immediately pass on taking the loan.

If a payday lender is ignoring state laws or tells the borrower that they do not need to comply with the state law for some undefined reason, then the borrower should avoid working with that lender.

8. Payday Lenders who operate out of country who arrange the loan with verbal agreement over phone and no written contract: Avoid these payday lenders like the plague. They are operating illegally: 1) All loans, even payday loans, require a written contract; 2) contact numbers are hit and miss; 3) they often overcharge in interest and 4) contact numbers are hit and miss. Yes, point 2 and 4 are repeats because the point bears repeating as does: THEY ARE OPERATING ILLEGALLY and AVOID THEM LIKE THE PLAGUE.

9. Payday lending is not legal in all states. New York, Georgia, North Carolina and Maryland have outlawed payday lending. This includes Internet Payday lenders.

10. Not all payday lenders are evil loan sharks who are hiding behind nefarious and murky state and federal laws in order to gouge people and drive them into payday loan hell. There are payday lenders who operate in full compliance with state laws of the borrowers, but the borrower needs to look for those payday lenders so that they can consider them when applying for a payday loan. If at all possible, borrowers should look for payday lenders who use the borrower’s home state as the Governing Law and that the payday lender is complying with said state laws.

With the economy in an uncertain state, payday lending is on the rise. The situation that is pushing people to take these loans are not the same as in years past. Borrowers who take payday loans are often doing so because they feel that they have no other alternative. However, borrowers must educate themselves on this type of loan more than any other kind due to its unregulated nature and the availability of these loans via the Internet. It is not an industry that protects the borrower so borrowers need to protect themselves and the more the borrowers know, the better it is for the borrowers.

July 6th, 2009 by sugig

Times are hard. With this economic condition, it is very important to use your money wisely. Spending less money means more savings for you.

As a Senior Citizen, you can take advantage of all the discount privileges available to you. Many stores, hotels, theaters, restaurants, airlines and other establishments offer senior citizen discounts but do not advertise it. They don’t even give you the discount automatically, unless you ask for it. Make sure you ask, otherwise, you’ll miss out.

Here are important Money-Saving tips for senior citizens. Tips that can potentially save you thousands of money annually.

Shopping

1. Check the store if they have any Senior Discount Policy. This is getting popular nowadays. Some stores offer discounts on purchases made by seniors. Make sure you ask about it so you don’t miss out on any discounts. Remember, there’s no harm in asking.

2. Make a list and stick to it. Be sure to write down the things that you need before going to the grocery to avoid any unnecessary purchases. Be sure to update this list frequently.

3. Buy the store brand or the generic version. Most likely, the store brand is as good as the name brand. This will help a lot lowering your regular grocery bill.

4. Compare the price of items you buy in your local grocery with other stores in your area. You will be surprised on how much money you can save by shopping in the cheaper grocery store.

5. Do not go to the grocery when you are hungry, otherwise, you will end-up buying more than you actually need.

6. Sign-up for any free rewards program. You might not shop that much at that store, but you will accumulate points every time you do. Plus, the nice thing about this is that most likely the store would send you coupons and discounts as part of their promotions.

7. For online shopping, be sure to search the web for any online coupon codes and discounts before finalizing your order. There lots of websites out there that maintain a list of coupon and discount codes for hundreds of online stores.

8. Shop the clearance or bargain department, most online stores have this. Be sure to check if they have a free-shipping promotion (usually stores require a minimum purchase amount).

Food and Entertainment

1. Prepare meals at home instead of dining out. It’s cheaper this way plus its healthier.

2. Dine-out only during special occasions. You will be surprised on the amount of money you can save.

3. Take advantage of senior discounts. Most theaters and restaurants offer discounts for Senior Citizens so be sure to ask.

4. Check the newspaper and the Internet for any restaurant coupons.

Prescription Drugs

1. Always ask your doctor for the generic versions. It is much cheaper compared to brand name drugs.

2. Ask your doctor for several free samples.

3. Check the Internet for coupons. Some manufacturers provide coupons for their products.

4. Check with your pharmacy if they offer any Senior Citizen discounts or any discounts from organizations you belong to.

5. Pill-splitting. Most of the time prescription drugs cost almost the same regardless of the dosage. As your doctor if he can give you a prescription for twice the amount of dose you need so you can split it in half before taking it. Be very cautious when doing this. Make sure to ask your doctor and pharmacist for advice before doing this. They should be able to tell you whether or not you can cut each pill in half before taking it.

Insurance

1. Use the same insurance company for your home and car. Most Insurance Companies give a big discount when you use the same company for insuring your home(s) and car(s).

2. Before scheduling your medical visit, be sure to check if your doctor is part of the “In-network” of your insurance company and if the procedure will be covered. Most of the time if you go to an “Out of Network” Provider, you end up paying a higher deductible and more out-of-pocket expense.

3. Medicare recipients can save money by getting a Medigap Policy. This is an insurance policy sold by private insurance companies to help pay for some medical services not covered by Medicare. To read more about Medigap Policies, click here .

Vacation and Travel

1. Always check the Internet for the lowest plane fares. Sometimes, the Senior Citizen discount that airlines offer may not be the best deal.

2. Some hotels offer Senior Citizen discounts. It would be best to call and check with the hotel if they offer this kind of discount before making your reservation. It will also be wise to check the Internet for any on-going promotions for comparison purposes.

3. Take advantage of Senior Citizen discounts for car rentals and public transportation.

Banks and Credit Cards

1. Call your bank and ask them for the best program that will suit your banking needs. Most of the banks now have no fees if you maintain a certain amount.

2. Call your credit card company and ask for an interest rate reduction. Most of the time, they will give you a lower rate.

3. Negotiate with your credit card company about waiving or lowering your annual fee. Most of the time, they would accommodate you, but if not, at least you tried.

4. Pay your bills online. It’s completely free and convenient. Plus it will save you money from postage.

Home

1. Consider using fluorescent bulbs as this will save you up to 50% in lighting bills.

2. Be sure to turn-off the lights and other appliances when not in use to save money on electricity.

3. Replace your old appliances with energy efficient appliances. Look for the “Energy Star” label as you may be eligible to receive rebates, credits or sales tax exemptions just by buying qualified energy efficient appliances.

4. Have a yard sale to get rid of things you don’t need. As the popular saying goes: “Another man’s trash is another man’s treasure.”

5. Rule of thumb: Anything you haven’t used or worn for a year or so need to be given away.

6. Wash your hands thoroughly. Keeping your hands clean will prevent you from acquiring all kinds of bacteria and viruses. This will help save a lot on medical bills.