Top Notch Investing Tips

An economic recession is the best time to invest because companies are hurting for business and are eager to get new clients. In addition, stock prices are lower so you will get more for your buck by purchasing shares at lower prices.

You will need at least 70-80% of your income during retirement so contribute as much as you can each year. It is never too late to start investing, it’s better to have a small amount than nothing at all. Here are 9 beginner investing tips.

1. Sign up for your employer's retirement plan and use the matching contributions benefit.
2. Setup a separate IRA using automatic paycheck deduction to help reduce taxes and in the event your employer goes bankrupt. Invest with an established investment company or brokerage company such as Charles Schwab or Price Waterhouse Coopers and ask questions about your investments.
3. Invest in mutual funds if you are not knowledgeable about investing.
4. If you have some extra money to play around with you can invest in companies that never go out of business: grocery stores, oil companies, car repair shops, pharmaceutical companies, information technology companies, etc.
5. Diversify your portfolio to minimize losses. Put a portion of your money in stocks/mutual funds, a portion in low risk investments such as bonds and a portion in medium risk investments such as large cap funds, etc.
6. Review your retirement statement to check for any errors.
7. Educate yourself and know at least the basics about investing so you will know whether your financial advisor is providing you with correct advice.
8. Find an investing mentor or role model. Ask questions and get advice on investing and how to grow you money in the stock market.
9. Gain additional knowledge by reading books by investing experts and watching financial television shows or reading articles on financial websites.

Extraordinary Ways to Pay Off Debt

The recession is not over. Unemployment is still at 9.1%. Over 1,000,000 Americans have foreclosed on their homes last year. If you employed and are in debt, get out of debt as soon as possible. The future is unknown. Americans have to plan for their future which includes eliminating debt, saving and investing. It took a long time to get into debt and will take a long time to get out of debt – but with patience, sacrifice and dedication you can live a debt free life.

A budget is a critical component of paying down debt and determining how much money you earn, you owe and you spend. This can be done using a tool or pen and paper either daily, weekly or monthly. One critical component of getting out of and staying out of debt is creating an emergency fund.

A unique way to get out of debt is to follow the Voluntary Simplicity Movement which only allows for purchasing basic necessities. Pay down debt using online banking or automatic paycheck deductions. Here are 13 ways to pay down debt.

Car Loans

1. Shorten time. Get a car loan for 4 years or less. Then pay off the loan before the payoff date. Cars depreciate quickly and lose most of their value for loans that are extended beyond 5 years.
2. Interest. If your interest rate is higher than 6%, after six months refinance to get a lower interest rate.
3. Maintenance. Keep your car well maintained and visit a mechanic using the factory suggestions which helps saves money. Keep your car for at least 7 years instead of trading it in to get a new one.
4. Insurance. Keep your car properly insured with affordable deductibles. Paying high deductibles saves you money upfront but causes you to spend more money on accident repairs and delays getting much needed repairs.

Mortgage

1. ARMs. Avoid getting ARMs or balloon payments. These are risky options. If you must get an ARM or balloon payment get mortgage insurance that pays your mortgage payment if you become disabled or lose your job.
2. Refinance. If your interest rate is higher than 6%, after six months refinance to get a lower interest rate. This will reduce your monthly payment and save you money over the life of the loan.
3. Pay off. Send extra money towards your principal to pay your mortgage off faster. Don’t retire until your home is paid off. Once you have at least 20% equity in your home under a conventional loan you no longer have to pay PMI so ask your lender to re-assess your home to have it removed. This will save you money on your monthly payment.
4. Avoid borrowing equity. Avoid borrowing equity against your home to pay down credit card or other debt, go on vacation or pay for home repairs. If you default on the home equity loan or home line or credit you risk losing your home and this will lower your credit score.

Credit Cards

1. Pay more. Pay more than the minimum monthly payment. Pay the balance in full each month or pay multiple times a month by sending a payment each week or during each pay period.
2. Stay low. Keep credit card balances at 20% or less of the credit limit to keep debt low. Debt should be no more than 15% of your total monthly budget after taxes. Credit cards with balances at 30% or above the limit will lower your credit score.
3. Stop spending. Skip using your credit card like a debit card. Charges can add up quickly. Leave your credit cards at home. Use credit card for emergencies only. Pay for items with cash. If you don’t have the money to pay for it, don’t buy it.
4. Avoid quick fixes. Avoid getting a cash advance or balance transfers. Interest rates on cash advances are higher than the regular credit card interest rate and can cause your credit card balance to quickly increase. A balance transfer is just a band-aid solution and can cause you to go deeper into debt once the promotion expires.
5. Waive fees. If your account is in good standing call the credit card company and ask them to waive any late fees or other fees.

Why You Still Need Insurance

September is Life Insurance Awareness Month which reminds consumers of the benefits of having life insurance. The recent earthquakes and hurricanes that the east coast experienced last month are another reminder why consumers need insurance. Many homeowners and auto owners suffered loss or damages due to the earthquake and hurricanes. For those who did not have insurance, repairs will be costly.

Insurance is a form of protection against loss, damage or theft. Insurance should not be used as a form of investment or to get extra money. Insurance should provide enough to reimburse for loss or damages. Three benefits to having insurance are:

a. Can be used to reimburse for a loss that occurs
b. Protects against harm to something or someone
c. Saves you money in the future

There are several types of insurance available: life, health, auto, fire, home, dental, flood, disability (short-term and long-term), and many more. The three most important types of insurance everyone should have are: disability, life and health.

Get a free analysis of your existing coverage to see if you have enough or too little coverage. Many consumers have more coverage than needed. Many consumers get the coverage suggested by their insurance agent and don’t bother to answer questions or comparison shop.

When you purchase a new car, it is wise to get collision and comprehensive coverage but as your car gets older you may only need to have collision coverage. This step could save you anywhere from $50 to $200 a month. Collision coverage should be adjusted annually or every two years and should be based on the value of your car. Also, verify your liability coverage and adjust as needed. Here are 10 ways to save money on insurance.

1. Increase deductibles. Increase deductibles to lower your monthly premium. This will save you money and prevent you from filing minor claims which can increase your premium.
2. Assess. Assess the assess the replacement value of your insured items – car, home, health, etc. If you house is worth $200,000 or the cost to rebuild you home is $200,000 but you only have coverage for $100,000, you need to adjust.
3. Reputation. Research the insurance company on the Better Business Bureau website or the internet to gather information on any complaints or the quality of customer service.
4. Home. Consider waving payment of your homeowner’s insurance by your mortgage company and pay it on your own. This can save you anywhere from $50 to $300 a year.
5. Health. Many consumers file bankruptcy or have bad credit due to medical bills. The increasing high cost of health care services and prescriptions is the main reason why everyone should have health insurance including dental and vision insurance if you wear glasses.
6. Life. Adjust your life insurance policy as home environment changes. Update every 5 years and when your children become adults, your spouse retires, etc.
7. If you have multiple insurance products with different companies contact each company and get a quote for bundling your products to help you save money.
8. Companies always provide discounts or specials but do not always advertise them. Every 3-6 months call each service provider and ask if they are offering any specials and what discounts they have available for the services you currently have.
9. What If. List different scenarios that could happen and make sure you have enough insurance coverage for each scenario, i.e. job loss, sickness, death, new baby, loss of health insurance or other benefits, car repair, etc.
10. Research. Comparison shop for insurance with sites such as Bankrate, Progressive, AARP or ehealthinsurance.com to find the best insurance coverage.

Getting the right coverage will save you money in the future and help you get over any financial crisis you may experience.

NBA Players Welcome to the Real World

NBA Players make more than 90% of the U.S. population. They get to travel across the country for free by the NBA. You get paid for doing a job you love. Most Americans work a job that they hate and have no other options.

Many times players are lured into the NBA and believe that their lifestyle will last forever so they aren’t concerned with how much money they spend – but nothing lasts forever. Americans learned the hard lesson that nothing in life is guaranteed and that life can be hard.

NBA Players suffer from the Instant Gratification Syndrome, you want everything right now. You spend money that you earn in the future to buy things in the present. You have no right to complain that you can’t pay your bills. No one made you buy a multi-millionaire dollar home; spend money on partying, women, designer clothes, jewelry, and things that have no value. You made those choices.

You decided that living that lifestyle was what you wanted and more important than planning for your future. Don’t be like Chris McAlister of the Ravens.

Immigrants that were brought to this country or migrated to this country knew the value of hard work; they did whatever they had to do to make a living even if it meant making sacrifices or working multiple jobs. Americans are spoiled and have forgotten how to survive. If one option stops working, find another option.

Yes you should be treated fairly by your employer but you should always look for other options. You can use your celebrity status to create a radio show, a television show, a clothing line, a sneaker line, sunglasses, hats, become a speaker, become a board member or advisory committee member for a national company or start a business. So many options are available to you and are easier for you to attain because of your celebrity status and the people you have at your disposal.

NBA owners are denying players adequate pension plans and requesting stricter salary caps. You can’t have it both ways. You have to provide one option or other. This will continue to lead to future lockouts until owners realize they are nothing without the players. Here are 7 tips to plan for your future.

1. Save. Save. Save. Save at least 30-50% of your income each month.
2. Retirement. Sign up for the NBA Retirement Association. You only get a small amount of income but if you combine it with additional steams of income through endorsements or businesses you should be able to retire comfortably.
3. Downsize. Downsize your lifestyle. Who are you trying to impress with your ferrari, maybach, diamond watches, and millionaire dollar home. People may be fascinated by the things you have but no one really cares. When you retire what do you want people to remember about you, that you lived in a million dollar home that you couldn’t afford or that you helped your community.
4. Think About Tomorrow. You can get traded, released or hurt at any time. Plan for your future so that you don’t have to file for bankruptcy or foreclosure.
5. Role Model. Be the best person you can be and serve as a role model for youth and younger players to prevent them from making the mistakes you made.
6. Give. Donate to charities or start your own foundation. This helps to reduce your tax liability and provides greatly needed assistance to social organizations that have been affected by the recession.
7. Say No. Learn how to say no to friends, strangers, relatives who ask to borrow money or ask you to buy something. If you always lend money you only enable that person to be dependent on you forever. Show them how to earn their own money so they don’t have to ask you for money.

You determined your self-worth by the things you own instead of realizing that your self-worth comes from within. No matter how much money you have it cannot make you happy and cannot fill a void in your life.

Think how different your life would be during the lockout if you saved at least one year’s salary, if you only bought one car or if you lived in smaller house. When you experience a financial crisis, your true character is tested. You either become a winner or loser.

Determine that you will always be a winner. Don’t let anyone determine your destiny, determine your own destiny. Money can generate wealth or generate debt you make the choice.

Are Debit Cards Dead

The Credit CARD Act of 2009, as well as the Dodd-Frank Act Financial Reform Act and interchange and overdraft fee reform, have reduced revenue banks earned from the credit and debit cards consumers. Banks have responded by reducing or eliminating rewards programs and other perks and increasing ATM fees to $5 and increasing other bank fees.

Some reward cards program will be funded by retailers where you use your card instead of the banks. If frequently shop at specific businesses your bank may request that the retailer offer discounts.

This however can work against consumers because it will force consumers to spend more money to get fewer discounts. Retailer claims consumers will get more discounts and offers based on their shopping history. Consumers can still get rewards with airlines, hotels and credit cards.

Wells Fargo ended it's debit rewards card program and is currently testing a $3 monthly fee for debit card users in four states. Chase, SunTrust, Continental and United ended their debit card rewards program in July 2011. Free checking at some banks such as Bank of America will also be eliminated. TD Bank still offer debit cards.

Ally Bank offers a debit card reward program that puts cash into a consumer’s account. However, consumers do not earn points or miles with every purchase. The cash is used for making purchases through partner retailers.

Perk Street Financial offers an online checking account that provides rewards for any checkcard card credit transactions. You can earn 2% cash back if your balance is over $5,000 up to 90 days.

If your balance is under $5,000 after the 90 days introductory period, you will earn 1% rewards. The bank doesn’t charge monthly maintenance fees and offer 5% cash back with partner vendors which change each month. Use financial site like bankrate.com to comparison shop for debit card reward programs to find the best deal.

Self Publishing Seminar

Self Publish Your Way to the Top Seminar on 9/29/11 in Silver Spring, MD.

If you always wanted to write a book but don't know how or if you already wrote a book and want to know how to get it into bookstores, this seminar is for you. Registration is required http://selfpublishyourway.eventbrite.com/.

Learn how to:
1. Get Started
2. Titles That Sell
3. Editing
4. Marketing
5. Booking Interviews
6. Organizing Your Book
7. Cover Design Tips
8. Pricing
and more!

Beware of Prepaid Cards

Prepaid cards are reloadable and can be used for purchases at businesses that accept credit cards and can sometimes be used for ATM withdrawals. A prepaid card should be used in addition to having a traditional bank account but should not solely for money transactions.

There are many advantages to using prepaid cards but there are also many disadvantages. Prepaid cards work similar to debit cards for making payments or purchasing items.

Prepaid cards are helpful for those who cannot get a credit card or open a bank account due to bad credit. Prepaid cards are also helpful if you don’t want to carry large amounts of cash but should only be used as a temporary measure until your financial situation improves.

Prepaid cards have activation fees, monthly fees and other hidden fees. Some prepaid cards have activation fees up to $39.95 but most fees range from $2.95 - $9.95. They also have less protection against loss or theft. Be sure that the bank prepaid card you use is FDIC insured. Prepaid cards are not reported on your credit report and cannot help rebuild your credit.

Some consumers have been scammed by companies regarding prepaid cards. Over 100,000 consumers who paid for payday loans online were tricked into paying for prepaid cards instead. Consumers signed up for payday loans but were tricked into signing up for prepaid cards with a zero balance. Consumers paid up to $54.95 for the cards. However, the Federal Trade Commission sued the company Epiq Systems and required a refund of $1.9 million dollars for refunds ranging from $10-$15 each.

Many non-financial companies also offer prepaid cards such as Facebook which is available at Target and Wal-Mart. The cards can be used to purchase Facebook credits which are applied to purchase games or other applications. Comparison shop and read all the fine print before choosing a prepaid card.

Homeowner Refinance Proposal

A new proposal by federal regulators will require homeowners who want to refinance a home provide a 10-20% down payment or have 25-30% in equity. This rule was developed to comply with the Dodd-Frank Bill to overhaul the mortgage industry.

Unfortunately, this requirement will prevent many homeowners from refinancing their homes that have ARMs, balloon payment or high interest rates. This requirement would affect 25 million homeowners who will have to pay higher costs to refinance. Due to the recession many homeowners have less than 25% equity in their homes or no equity at all.

Homeowners who do not meet the requirements will have to pay 0.8 – 1.85% more in the interest rate. This proposed requirement also penalizes homeowners who have good credit who will be forced into less than favorable refinancing options.

This new proposal ignores the benefit of homeowners refinancing which would reduce the number of foreclosures and mortgage default rate. This will also slow the growth of the economy and middle class by stalling the housing market and reducing additional revenue that could be generated for mortgage industry companies.
Write your congressman to submit your comments about this proposed legislation.

The Debt Ceiling and Student Loans

The passage of the debt ceiling includes a $17 billion increase in spending for Pell grants and scholarships for low-income undergraduate college students and would protect cuts from the programs until 2013. Approximately 19 million students are eligible for the funds.

However, it would eliminate federally subsidized student loans for graduate and professional students (doctors, lawyers, dentists, etc.) which would affect approximately 6 million students seeking advanced degrees. It also eliminates usage of Pell grants for summer undergraduate programs.

The maximum amount of money a graduate student can borrow from the federal government is $20,500 a year, including $8,500 from subsidized loans. Currently students don't have to start paying interest on subsidized student loan loans until six months after graduation. During that time the government pays the interest.

The debt ceiling eliminates this and eliminates a credit on the origination loan fee provided to students who make 12 months of on-time payment. Students currently get half of the money paid for the origination loan fee which is 1% of the loan back. These changes go into effect beginning July 1, 2012. At that time graduate students would begin accruing interest on student loans while in school. Students have the option to pay on the interest while in school but don’t have to make payments until after graduation.

Student can use the Income Based Repayment (IBR) plan which does not require students to make payments on the federal loans until their incomes exceed 150% of the poverty line and payments are a percentage of the amount their incomes exceed this level. This protects students if their incomes are not enough to make the loan payments. The 2011 poverty line for one person is $10,830 except for Alaska and Hawaii where the poverty lines are slightly higher.

Under the new laws starting July 1, 2012, if a student with no children has an income of $30,000 per year and has monthly loan payments of $350, their $30,000 income exceeds 150% of the poverty line (($10,830 x 150% )+ $10, 830) = $27,075. The student would be required to pay no more than 10% of the amount their income exceeds the poverty line $2,925 ($30,000 - $27,075 x 10%) or $292.50. Currently the student has to pay no more than 15%.

Students who are voter age must voice their concerns with their congressman and during elections to preserve funding for undergraduate and graduate grant and scholarship programs.

9 Ways to Save on Back to School Supplies

This is the time of year that children become sad because summer is coming to an end. Children can no longer stay up late at night watching television or playing games. Parents have to plan their weeks sometimes having to be in two places at once. Parents have to buy school supplies and clothes.

Buying clothes and school supplies for your children can be a stressful and pricey task. Children want the latest electronics, gadgets and fads their friends have so they don't feel left out. Don't let your children pressure you into buying the latest fads or things they don't really need. Stick to your guns and only buy things that they absolutely need for school. This will save you money which we all need these days because the future in unknown.

Talk with your children before going clothes and school shopping and set expectations. Let them know about your finances and what you are going to buy and what you are not going to buy. Explain to them about needs and wants, designer clothes are not needs.

Ask your children to create a list of mandatory supplies they need for school. Determine what clothes your children can still fit comfortably and make a list of things they need. Prioritize the list in four categories: Need Now, Need in 2-4 months, Need in 5-7 months, Need When School Ends. This will also help budget and stretch your money if you don't have the cash to get everything you need. Here are 9 tips to save money when shopping for back to school supplies and clothing.

1. Plan Ahead. Don’t wait until the last minute to buy school supplies. The best store sales start early so plan ahead to take advantage of them and get the best choices.
2. Barter. If you know a parent who provides services that you need and you have clothes or toys your kids are not using consider bartering.
3. Sales. Go to yard sales and dollar stores to find great bargains on school supplies.
4. Clothes. You can buy clothes from a thrift store, consignment shop or discount store such as Old Navy, Kmart, Wal-Mart or Target. Kids grow quickly and their clothes generally don't last or fit them throughout the entire school year. This will save you money and you kids will still remain fashionable. Buy clothes and shoes if possible at least one size too big so your kids can get more wear out of them.
5. Network. Mention to family, friends, co-workers and neighbors that you are going school shopping. They may be able to provide money savings tips for buying school supplies or may have extra supplies they can give to you for free.
6. Comparison Shop. Search the internet for reputable website that sells school supplies at a discount price and purchase items before school starts to get the best deals. Every few minutes of comparison shopping can save you $1-$9. Also shop at stores that honor competitor prices and coupons.
7. Budget. Create a budget for necessary school supplies (pens, paper, pencils, erasers, notebooks, composition notebooks, rulers, compass, etc.) and save some additional money for unexpected school expenses that may pop-up after school starts such as additional supplies need for classes, school trips, additional school supplies, etc. Buy only what you need if you don’t have enough money to buy extra supplies. Look around the house to see if you have any leftover supplies from the previous school year.
8. Internet. Search the internet for reputable websites that sell school supplies at a discount price.
9. Gather Information. Towards the end of the school year ask the teacher for a list of required school supplies that will be needed and buy supplies throughout the summer. This will spread the costs out over a period of time and ensure that you budget will not be greatly affected by waiting until the last minute to go back to school shopping. This will prevent rushing to buy unnecessary items because you didn't create a list to buy only the things needed.