It’s a common belief that credit scores will go down as a result of too many inquiries and reduce your attractiveness as a credit seeking consumer. Down, lower, less being the key word sparking this huge myth nationwide; the myth is not that it will decrease your scores, but that it will drastically bring them down. Only occurring if you frequently inquire your credit; by that I mean obsessive applying for credit daily/weekly. As a Mortgage professional specializing in Consumer Credit and Financial Planning, I will tell you that it’s rare see a credit report without the words ‘Inquiries Impacted this score’ under a score on a credit report. These words are usually followed by “but not significantly” and a lowering of more than 1-3 points is extremely rare and minimal on a credit scoring range of 300-850.

In fact, the common inquiries of impact show up on reports that do not have an inquiry listed in the 90-180 days before the credit was pulled. The factor is normally removed completely if it’s been more than a few years since an inquiry occurred.

A spreading reason of this myth is the fact that Competing Mortgage Loan Originators have been known to over emphasize the negative effect additional inquiries may have on your scores implying a possible loan denial. This practice occurs to deter and preventing further competition for the loan for the simple but hard to accept reason that a legitimate rate quote or pre-qualification letter is not possible without having your credit viewed. To repeat, an interest rate provided for auto, home, or credit card prior to your credit being pulled is meaningless. Every applicant has to qualify with credit history, income level, and many other factors; it all begins with your credit report. You may be aware of or offered the daily rates, or through the many rates advertised on billboards, painted in neon on glass windows, on TV, in the paper, and all over the internet. They again, mean nothing without a Credit Inquiry.

Reluctance to check your credit may be hard to let go of as your parents and friends instilled it in you. It’s far more important knowing the real factors driving your credit up or down, how much a pleasant sounding lowest interest rate will cost, and overall, what the other determining factors necessary for your Credit Approval.

Basically, we see and hear that our credit is more important than ever in today’s market. Also, we know Identity Theft is the most rapidly growing crime worldwide so protecting ourselves and our credit scores is a major priority. Checking one of the 3 credit bureaus every 3 months is an excellent practice to get into. (Experian, Transunion, Equifax) It’s also good to know how to read the report and where to look for possible negative information. There are several means to obtain your report at no cost, gimmick, later sign up fee, or membership once a year per Credit Bureau. These can be online, verbal requests over the phone, or even written requests. Make sure there’s no free trial period followed by monthly fees. These can cost over $150 a year and basically serve as a notification of bad information on your credit whereby no further advice or direction is given on how to correct or repair your report.

With a common name like Chris Brown, I’ve had to request corrections for mistaken identity and incorrect accounts since I pulled my first credit report at the age of 22. These were not just other Chris Brown’s that lived near me. They were out of state, had different Social Security numbers, different birth dates, and had different spelled last names entirely. Browne and Brownlee were my first 2 collection accounts on my report. Over the years, I’ve had different additions to my report including different SSN#’s, addresses, and accounts fortunately not in my name but in bad status on my report. The mystery of skip tracing errors and erroneous reasons as to why this could happen with billion dollar corporations is unknown and I’ll leave speculation alone for this article.

The bottom line is a full name, SSN#, birth date, and address are the only thing requested and needed to pull your report; variations of those 4 can show up and be linked to you as a credit applicant.

Other than checking 1 of the 3 credit bureau reports every quarter, more steps can be taken to protect any bad information being attached to your report. A consumer statement up to 100 words can be added to all 3 of the reporting bureaus reports for free over the phone with one of the bureaus. I described my names commonality and possible confusion of other Chris Brown’s on my report, my most frequent state of residence, my SSN#, and Date of Birth. This can help a bank or lender, employer, or landlord differentiate identity and account information on your credit if such a mistake occurs when they run your credit.

I offer a credit review every 3 months at no cost as part of my service to new and existing clients. It’s good to have a second set of eyes on your report from a trusted source, if not your mortgage or financial adviser, a credit connoisseur in the family.

This article was brought to you by my guest author and friend (contact him to get your free credit report, make certain you’re getting the best mortgage rates if you’re just starting out or even if you’re considering a refinance – I’m certain it won’t be a waste of your time – Mark.

Chris Brown
Mortgage Banker
Midwest Mortage Capital
St. Louis, MO
cbrown@midwestmortgagecapital.com
314-744-7832

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If you were to compare their prices in say Euros, Canadian dollars, or Australian dollars for example, this would not be the case, as they peaked several months ago (back in the beginning of this year). See the graphical illustrations below.

In Euros:

In Canadian Dollars:

And in Australian Dollars:

“What is interesting is that we move from high to high every day (in dollar terms), but in euro terms, we’re still far away from the old high,” said Michael Kempinski a trader at Commerzbank.

So, what causes the weakness (or this weakness) in the US dollar and what impact does a weak dollar play on other commodities such as Oil with regards to prices in the US? Is it a good or bad thing to have a weak dollar?

First, what causes a weak dollar? There are a number of causes, but the basics are as follows:

Next,what impact does a weak dollar play on our commodity prices, or the price you pay at the pump? You probably already know the answer to this, you’re going to pay more when the dollar loses value. The same concept as above applies, it takes more dollars to purchase the same amount of oil.

Finally, what’s best, a weak dollar or a strong dollar?

I think this quote sums it up very well, “A weak dollar can be good for the U.S.   economy, because it makes American exports cheaper and, therefore, helps close the trade deficit. But over the long term, the value of a country’s currency is seen as a verdict on the overall health of its economy.” Bottom line, it’s good for the short term, but if it goes on for too long we risk losing dollar hegemony and push foreign countries to cut reserves in our currency.

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Less than half of Americans have an emergency fund, and those that have been sensible still might not have enough.  If something bad were to happen (and don’t be tricked into thinking this recession is over as companies and banks are still failing and unemployment is still on the rise) and your credit card company decided to terminate your account, would you be able to even meet your monthly needs? How well would unemployment cover your needs for the essentials like housing, food, etc.? How much money would you need to fill the gap and for how long?

A good rule of thumb is to expect it to take around one month per $10,000 you earn to find a job. So say you make $100,000 per year, you could expect it to take up to 10 months to find a comparable job. 10 months is along time without income, and could destroy your financial position that you’ve potentially accumulated over a lifetime. In Missouri, unemployment pays at most $313 per week (without taxes taken out), that amounts to between $1250- $1565 per month. Not much at all for someone trying to maintain a lifestyle they’ve become accustomed to. Not to mention ,this is unemployment for only the top earners, people who make less, will get less, much less in many circumstances.

In calculating your emergency funds needs, you must first figure out how much money you will need to fill your gap if you were laid off as it relates to finding another job and meeting your current obligations. In addition, it makes sense to stash away side money on top of that amount for other emergencies like car repairs, leaky roofs, replacing a hot water heater or A/C, or some other inevitable issue. Unemployment typically only lasts 6 months to boot.

So for our example above, a $100,000 earner with monthly bills of $3500, would want to have an emergency fund of ((3500-1200=2300)*(6=$13,800) + (3,500*4 =$14,000) + ($5000) = $32,800 if being conservative, or at minimum * (3500-1500=2000)*6=$12,000 + 3,500*4= $14,000)+$2,000 or $28,000) if considering the minimum. In essence, calculate your monthly bills, determine how long it will take you to find a job, subtract out unemployment proceeds for 6 months, add an extra fund for other emergencies that may occur in the meantime, so if something does happen your not forced to take from your other emergency (lay off) funds and figure out how much you’ll need. Open a savings account where you can earn interest on your money – and begin adding funds as fast as possible. It may take you a while, but it’s better to start now than never and you can finally get that peace of mind you’re hoping for.

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How will your kids be able to afford college if you don’t do something for them now? Will they hate you if you don’t do anything for them? Is it your responsibility to do something for them, and forget about your needs? Below, I will walk through the reasons you should consider holding off investing in your child’s education, and instead focus on your own retirement needs.

Too many people allow their emotions to control their mind, and they make poor financial decisions as a result. Just because you think and or know it’s your responsibility to fund your kids educational needs, doesn’t mean you have to do it now, and at the sacrifice of your retirement.

There are alternative means to help them down the road, instead of investing the little you can on them now, you should be putting that aside for your own retirement. Case in point, your kids can take out loans (and or you can take out parental loans on behalf of your child to pay for their education), but you can’t take out a loan to fund your retirement.

Parents should first focus on building their own nest egg, only when they feel comfortable that their needs for retirement have been met should they move to funding educational accounts for their children, such as 529 plans, or Coverdell Savings Accounts. It’s not that you don’t care about them, it’s the smarter financial decision.

A better idea would be to take the opportunity to fund these investments for them instead of buying them toys or other crap for birthday gifts or Christmas or other holidays.

Just because something seems like the best thing to do, it doesn’t mean it always is – you must weight the pros and cons and determine what is the best possible financial decision you can make – and stick to it.

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You don’t have much time?

Don’t worry – the process literally took me about 2 minutes to create an custodial account for each child. So, instead of jumping in the car, driving to the mall or store, dealing with the crowds, waiting in line to checkout – you can do this all in your underwear at home. What’s more you ask? Each birthday or special occasion, you can simply deposit more in their account with a simple click. They can watch their investment savings grow before their eyes.

Note: There is a waiting period until the account is approved, but with Tradeking, my account was approved in under 10 minutes. In addition, if you choose to fund your account via check – you’ll have to send them a copy of a voided check and a copy of your license. After they recieve this by fax or mail, it takes them 2-3 business days to allow you free transfer of your money from your bank account to your investment account.

What’s so great about this gift?

Not only is this gift something that will help the kid well into their future, it also helps teach them something most parents have a hard time doing, money management. By providing them the account, they can take future birthday or holiday money and deposit it in their account, and share responsibility in creating a plan for their future. They will also develop an understanding at a very young age in the power of saving and investing. It’s the perfect way to teach the children you care about how to prepare for life financially. Too often, kids don’t learn until it’s too late. This will help propel you to take the time with them to explain the importance of being smart with their money – and how a penny saved is a penny earned. Moreover, you can teach them about goals and the value of money. Too often kids don’t understand why it’s better to save than spend. You can take the opportunity now to not only buy them the best gift ever, but to invest in their mind and teach them financial independence.

You don’t even know about investing so how can you teach them?

The great thing about this gift too is that maybe you’ve no clue where you’re going yourself. Tradeking offers easy to understand investment lessons to help you get started in very little reading (you could also start with my basic investment lessons – shown above too on the main toolbar). You could take this opportunity to kick start a plan for yourself. But back to helping your child with investing, they offer plenty of advice in making simple selections for the child based upon the kids age, etc. So have no fear, you need to know nothing to pick something for the kid or even yourself if you choose to get something going for yourself.

Give them a $75 gift for only $25!

Not to mention, Tradeking is offering a free $50 right now through the end of November just for signing up! You could deposit $25 in the child’s account and they would have $75 to start. Say you did nothing else for them on this account ever and the child was one year old now, by 21 that money would be worth over $500! (Using $75 principal, 10% average annual return)

You’d be silly to not get started now, don’t wait until this offer expires!

.

HSBC Direct Online Savings 1.35% APY*. No fees and no minimums. Access your account anytime.

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Many people have very large trees that dump massive amounts of leaves and so they go to the store and purchase multiple paper yard waste bags to fill and dump.

• Instead of buying paper yard waste bags (at $2-3 per 5-bag pack), use an old trash can (make certain it’s clean of trash before filling).
• Before going back to the stores to buy more pants or winter shirts, do a fall recount – reorganize and re-evaluate all your current clothes. Too often people waste money on things they already have because they’ve forgotten about them. Why buy another pair of blue slacks when you already have some in the box in the basement?
• Start planning your Thanksgiving meal plans now, and clip coupons ahead of time. Planning for this occasion now can help you prevent from over spending when you get to the store and help you find some great deals that will save you money.
• It’s not too early to watch out for Christmas deals either. Start your list of people you need to buy for, and watch out for great deals. Maybe you’re looking for something unique for a child or someone special this year – instead of piling on to the toys they already have or jewelry or sweaters – consider setting them up a HSBC Direct Online Savings Account. No fees and no minimums. or a custodial investment account- ( – but it ends this month). Now that’s a gift they will be reminded of for a long time.

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The talk on the street is that since the US government has gone bonkers in printing money that we should expect hefty inflation in the very near future, some are even going far enough to say we can expect hyperinflation. Should you believe them or not?

While inflation is in part due to an increase in the overall money supply, many people forget the other critical components or ingredients in the recipe for inflation, the velocity of money.  In other words, it doesn’t necessarily matter how much money has been printed, if it’s not in circulation and being spent. Moreover, it’s also important to not forget what people are doing with the money that they already have.

The fact is, we’re currently experiencing deflation, similar to what happened in the 20’s and 30’s following the great depression, and also in the early 50’s. With unemployment numbers soaring (around 16% nationwide) and people saving more, prices are coming down to encourage spending as demand falls.

Check out the last 10 years of inflation and how recently we’ve been experiencing deflation.

Now, let’s get to the details about the velocity of money and why printing more doesn’t necessarily mean we’ll experience inflation anytime soon.

Below, the Chart is showing the log of US M2 money velocity (green), calculated by dividing nominal GDP by M2 stock, M1 plus time deposits. M2 velocity is not stable and correlates with the Employment-Population ratio (blue), an indicator of economic vitality. Both M2 velocity and the Employment-Population Ratio decline in periods of recession (represented with gray bars). The pattern conflicts with the quantity theory of money, which assumes that money velocity will be stable and only loosely correlated with economic conditions.[1]

An interesting note to this discussion would be “There has been no extended deflationary period (longer than 3 years) in the US since the 1870-1892 deflation, when the East Coast banking interests controlled Congress and set up a gold standard which caused a slow, two decade deflation.”[2]

So, if history has anything to say- don’t count on this deflation to last incredibly long. More important, don’t count on the increase in the money supply to spark inflation alone. There are various factors that will affect inflation in the next year or two – the more important factor being capital flowing back into business and employment picking back up. Only when people begin to spend will we see inflation creep back and take away our purchasing power.

Also, Seeking Alpha had numerous other points worth mentioning that will drive inflation in the next few years:

Signals to Watch for a Turning Point

We will spend much more time dissecting signals in the future. In short, we believe the following are some signals on when deflation will turn into inflation are:

• Total bank lending and consumer credit
• US Fed aggregate reserves and the velocity of money
• Unemployment rate and employment claims
• Commodity prices (oil, gold, metals, agricultural stock, etc.) and the Baltic Dry Good Index
• Industrial capacity and the ISM index
• Freight car loadings, car sales, and retail sales
• Pricing of options on US Treasury rates (especially volatility prices, like Move), the breakeven rate, and 30-year fixed-rate mortgage rates
• Actual observable prices in department stores and grocery stores (these help to set inflation expectations)

By the time inflation comes and registers on the CPI, it will be too late to re-position your portfolio or hedge for it. That’s why the signals above are important.

Notes

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Good financial planning advice in your 40s is to not panic, remember that you still have around 20-30 years to reorient your finances and optimize your retirement fund. If retirement saving has not been topmost on your agenda till now you need to consider maximizing your contributions to the top limits on any 401k or IRAs that you do have, and consider pumping up as much as possible with the catch-up contributions.

It is good to not rely solely on employer-sponsored pension type plans and buy into at least one private retirement fund plan. Your 40s are the ideal life stage to review and adjust your financial assets or to get going if you’ve procrastinated til now, remember, you still have a bunch of time to make up. Look at the big picture when it comes to your whole financial position. If you have been investing aggressively in the more volatile investments such as stocks and mutual funds then now is the time to move toward consolidation. Scale back on those stock options to around three quarters of your total assets, and move that cash into saver options such as bonds and or certificates of deposit.

As you enter your 40s, you will probably be at or around the peak of your earning power. You need to review your financial portfolio so the mix of funds can move from growth-oriented investments to wealth consolidation funds, while re balancing your holdings towards those in money market and bond funds. Your late 40s may even be the time to consider buying an annuity for early retirement. Annuities can be a good way to make good a shortfall between your projected income and your life expectancy.

A necessary piece of financial advice in your 40s is to make the best possible ‘guesstimate’ of how long you will live and to set financial goals accordingly if you haven’t done so already. If you want to leave a maximum of assets to the beneficiaries of your estate, then you will require a different investment strategy to a situation where you simply want a good income for the whole of your life and leaving nothing ‘on the table’ when you die. If your best estimate of life expectancy is say 85 and your investments only give a target income to 80 then an annuity can provide the extra five years of income and will cost you less if you buy it in your 40s. Consider a living will too, if you already haven’t done so.

As your retirement approaches, the balance should shift further from wealth consolidation to bonds that yield a regular income stream but without reversing your capital growth rate. You should still hold on to some growth funds in your portfolio to ensure that your assets will be sufficient to see you through the remainder of your retirement in the lifestyle that you want.

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When you are 30 something you are probably beginning to reap the rewards of your study and hard work with a bigger salary. If you started a retirement fund in your 20s, then good financial planning advice in your 30s is to keep it up. Add to your 401k and IRA accounts with contributions through your 30s. Most experts agree that you should be investing around 10% of earnings by this stage in your life. As important as cash investment is, investment in learning about investment. By proactively learning to control your own investments you can avoid being scammed and save a great deal of money on brokerage fees and financial advisers.

If you are in your 30s and have not yet started to save and invest for your future then the only good financial planning advice is to start NOW! You will have to save more than 10% to make up for lost time. Most Americans change jobs several times over the course of their working lives. Do not waste time and money by allowing periods of non-contribution to your 401k to occur with new employers.

Good financial planning advice in your 30s has the following three aspects in priority order.

* First – pay off any outstanding debts and live within your income. Unsecured debt such as credit card balances that carry over from month to month are very expensive. The interest rate that you pay on debt far exceeds the interest that you earn on savings. So pay it up as soon as you can and avoid it from then on.
* Second – maximize your retirement fund savings in your 401k or IRA. The tax deferment benefits are excellent so time spent without contributing or contributing less than the maximum is like refusing to take free money.
* Third – add to your home equity balance whenever possible. This saves you large amounts of interest on your mortgage.

Most Americans buy their first homes when in their 30s. They also probably see this real estate as an investment that will appreciate in value and contribute to their retirement income when that time comes. For your home to be a good investment you need to think in terms of the equity you have in it. This is the actual amount of money in your home value that is yours and not a mortgage. It is best to minimize your mortgage when you first take it on by maximizing your deposit and paying cash for the set-up and administration costs. A good idea is to then take any salary increase you get and increase your mortgage repayments or continue with repayments at high interest levels even when the interest rate goes down.

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If you are in the second decade of your life you are just beginning your economically productive period. Your income is at the bottom of its (hopefully) upward curve while your economic needs are at their greatest. Here are four pieces of financial planning advice that, if heeded will enable you to have an effective financial life.

1. Save at least 10% of your income. This is very difficult because the human psyche tends to discount the future. We all seem to feel that having things today is two or three times as valuable as having them in ten years time. But also be aware that there will be lean times in your life and it is up to you to carry some fat over to help you through those times. When you finish working you must have sufficient savings to have the lifestyle of your choice. Save 10% for a minimum standard of lifestyle, 15% for a good standard, 20% for affluent choices. This rule of thumb will work for you only if you start saving for retirement early in your 20s.

2. Live within your means and this includes 10% saving from your current income. It really isn’t optional! Save money to buy the things you want in the short term. They can often be bought for a discount when you negotiate with cash. Avoid getting into debt if at all possible but if it is too late for you, work towards becoming debt free as soon as possible. Invest early and aggressively to get the benefits of compound interest. The only way to survive lean times is to have savings set-up that help you to manage your finances.

3. Time is your greatest asset when you think of financial planning in your 20’s. At this time in 2009 the economy is at the bottom of the business cycle. Looking ahead you can expect a number of booms to be followed by a number of busts. So plan for the worst and hope for the best. Don’t invest at the top of the market and be proactive in converting stocks and higher risk investments to bonds and certificates of deposit before stock market bubbles burst.

4. Unfortunately, you can no longer rely on Social Security to carry you through your retirement years. Investing is not just for people with a large capital sum. Start now and choose safe, long-term investments that put your principal out of reach. This prevents temptation for short term spending. Options to explore are Individual Retirement Accounts that provide valuable tax deferments as well as compounding interest on your investment. Spending temptation can be removed if you go for a 401k. This is a savings plan that automatically deducts from your paycheck and can give you a healthy nest egg later in life.

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