TheFinanceBlogNetwork.com

Clunkers For Cash: Is It Even Worth It? [Amateur Asset Allocator]

Fri, 17 Jul 2009 11:00:28 +0000

In an effort to get gas-guzzling SUVs off the road, the Obama administration recently pushed the Cash For Clunkers program through congress. This $1 billion program can be worth a tax credit of up to $4,500 off the price of a new car lease or purchase. That sounds like a pretty good deal on the surface, but is it really?

Cash For Clunkers Rules

In order to qualify for the Cash For Clunkers program, certain rules must first be met.

Only drivable clunkers manufactured within the last 25 years are eligible, and must have been continuously insured for at least one year by the current owners leading up to the trade-in. That is, junkyard vehicles or used cars bought just for the purpose of taking advantage of the program are a no-go.
Only new vehicles costing less than $45,000 (sticker price) are eligible for the program
Passenger cars must get an EPA-estimated 22 mpg or more in order to qualify for the program. If the new car four more miles to the gallon than your old care, you get a $3,500 tax credit. If it gets 10 mpg more than your old car, you get the full $4,500 tax credit.
Trucks and SUVs only need an EPA-estimated 18 mpg to qualify, and the mpg improvements required for the $3,500 and $4,500 tax credits are 2 mpg and 5 mpg, respectively. I hate to ask the obvious, but if the point of the program is to get gas-guzzlers off the road, why allow trucks and SUVs to qualify at all?

Is It Worth Trading In Your Clunker For Cash?

For the most part, the answer is yes: it’s worth it, but only if you were going to buy a new car anyway. After all, a $4,500 discount is a $4,500 discount. I worry, however, that many consumers will get suckered into using this as an excuse to buy much more car than they can afford. If you use the credit to buy a $30,000 care when you would have otherwise bought a $20,000 car, you’ve actually made a poor financial decision. It may be a better car and may even make you a happy camper, but from a strictly financial standpoint it doesn’t make sense. Similarly, if you trade it an old vehicle just to get the discount when you would have otherwise driven it for a few more years, you’ll end up worse off, financially.

Sadly, I think many Americans will treat the $4,500 as free money and dig themselves further into debt for the sake of driving a shiny new depreciating asset for a few years. Will the program succeed in getting the gas guzzlers off the street? Maybe, but any success in this department is bound to be modest at best because trucks and SUVs are included. Eighteen mpg is still pretty bad for the environment.

Managing Your Finances and Your Future [Rich Credit Debt Loan]

Fri, 17 Jul 2009 10:11:34 +0000

One of the hardest things for many of us to do is to manage our finances properly. It can be hard if you’ve had no training and you’re used to just spending freely, whenever you want. There are thousands of people out there that can’t balance their checkbooks let alone plan for their future, but there is no shame in that. You just need to take that first step towards learning about how to start managing your finances and getting ready for the future.

For some, this may just not be possible, and again, there is no shame in that. If you simply cannot make sense of your money, you will need to get some help before you get into trouble. An accountant can really make a difference if you’re struggling and they usually do not cost that much money. You’ll actually be saving money in the long term and you’ll be able to spend less time worrying about your money.

But for most of us, it’s important to learn how to do this on our own. Unless you are incredibly bad at math, there is no reason that you cannot manage your finances. It’s really just basic addition and subtraction and anyone can do it. It takes a little bit of focus and you may need to learn a few terms along the way. However, you’re investing in your future when you learn how to manage your finances and it will pay off.

Let’s start off with basic financial planning. A lot of people hear that term and simply turn off. However, it’s actually pretty easy. Here’s an example – You need to ask yourself, how much money do I want to have saved five years from now. Now, divide that number by five. This is how much money you’re going to need to put aside every year to meet that goal.

If your goal isn’t reasonable, you may need to fine-tune it a little bit to bring it line with your income. Now, you’ll need to take that yearly figure and divide it by twelve. This is the amount you’ll need to put aside every single month. Set up an interest bearing savings account and make that deposit every single month. You may need to discipline yourself for the first few months, but it will get easier. If you find that your finances are a little tight, try revisiting a few of your expenses to free up some cash.

Lastly, it is important to understand how debt works. There is bad debt – which most of us are in, and then there is good debt. A simple formula to tell the difference is:

Bad debt = money spent on consumables and things that will never give you a return

Good debt = money spent on something that will create new income streams or pay off in the future.

By using good debt, you can reach your savings goals a lot faster and it won’t be so difficult.

Photo Credits: 1

Originally posted 2008-11-16 17:22:41. Republished by Old Post Promoter

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Semiconductor Buy [Buy Like Buffett]

Wed, 15 Jul 2009 12:58:51 PDT

Added shares of Fairchild Semiconductor(FCS) at $8.50 today.

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Kids and Money — July 15, 2009 [Money Hacks]

Wed, 15 Jul 2009 10:26:39 PDT

Welcome to the July 15, 2009 edition of kids and money.

Madison presents Summer Jobs for 11 Year Olds - Jobs for 11 Year Olds posted at Kids and Money.

Madison presents Student Loan Rates Will Drop to All Time Low posted at My Dollar Plan.

Finance Tips 101 presents Car Donations ? Knowing The Facts posted at Finance Tips 101.

Ishan @ ILoveFreeSoftware presents How to Setup Virtual Fax Machine for Free posted at I Love Free Software, saying, “Having a regular fax machine is expensive. The best alternative is to use Online fax services. However, most of the fax services come with a monthly fee. In this article I explain how to setup your own free online fax service completely free. No registration fee, no monthly fee, no setup charges. Totally Free.”
Yeah, not kids and money per se, but certainly a tip I wanted to pass along. FREE nowadays is a good thing (always has been, I suppose).

Pamela Parker presents Four Deaths, Four Different Reasons to Plan posted at Legacy.

Cindy Morus, The Money Mender presents Did Your Bank Flip You posted at Mend Your Money.com.

Barry presents Learn To Survive On A $100 Grocery Budget posted at Associate Money.

Steven Chang presents The Truth About Money - Money Blog - Money Making Tips and Money Management posted at Money Making Tips and Money Management, saying, “I hope this short blog post about wealth getting and preservation will benefit your readers.”

Chris McClelland presents In the long run, college will end up hurting your savings. posted at Lucrative Investing.

Chris McClelland presents The untimely death of celebrities has turned into quite a lucrative business posted at Lucrative Investing.

Jack Schmidt presents 7 Tools For Your Money Belt posted at SectorMatic Money Journal, saying, “SectorMatic Money Site - Personal Finance | Everything for the Big Spender on a Budget. Now you can live like a fat cat, even if you’re on a money diet. Laugh all the way to the bank with Jack Schmidt and SectorMatic. It’s for you!”

jim presents What is the Average Credit Score? posted at Blueprint for Financial Prosperity.

Ray @ Financial Highway presents Debt Reduction-Financial Planning Guide Step 10 posted at Financial Highway, saying, “Debt Reduction is the first step in building wealth, here are some strategies that can help you reduce your debt.”

Bobby Leong presents Tissa Godavitarne GDI Leaderboards Home Business posted at Global Domains International Tips.

Jack Schmidt presents Put A Little Passion In Your Wallet posted at SectorMatic Money Journal.

Praveen presents Students Beware! Colleges, Tuition, Loans, and Debt - Will Education Follow the Housing Bust? posted at My Simple Trading System.

Silicon Valley Blogger presents myFICO Score Watch: Equifax Credit Score Monitoring posted at The Digerati Life, saying, “Teach your kids the basics of credit and credit scores.”

Joshua presents Re-Using For The Family Budget posted at Family and Parenting, saying, “Recycling is not only good for the environment but also good for your family finances.”

Finance Tips 101 presents Tips To Help You Qualify For A Home Mortgage | Finance Tips 101 posted at Finance Tips 101.

One Family presents Southwest Airlines (LUV) – Stock Analysis posted at One Family’s Blog, saying, “An analysis of Southwest Airlines (LUV) stock.”

Nancy Miller presents The Problems of Implementing ICT in Secondary Education posted at Accredited Online PHD Universities.

josh andreson presents All Boxed Up: Types of Flash Media Packaging posted at Flash Media Packaging.
Another non-kids and money topic, but interesting nonetheless. I use flash media all the time. It’s awesome. And really cheap. I can see a day really soon where ALL your day-to-day data (including OS) is on a stick.

Jack Schmidt presents Real Estate: The Time to “Buy Low” Is Now posted at SectorMatic Money Journal.

Martin Russell presents “Conspiracy of the Rich”- A Review posted at Word of Mouth Marketing.

KCLau presents MoneyWise Interview on BFM 89.9 - The Business Station posted at KCLau’s Money Tips, saying, “was chatting with Patrick Michael on Business FM (BFM) 89.90 - The Business Station yesterday regarding some money lessons we can learn from watching the Transformers movies”

Save Money presents Revising and Simplifying My Budget (One More Time) posted at How I Save Money.net.

Chris McClelland presents Estate lessons we can all learn from Michael Jackson posted at Lucrative Investing.
It’s amazing to me how MJ’s demise has inspired all sorts of stories. I hate to think what’s going to happen to me, my stuff, and my family when I die, EVEN with a will. I guess there’s one good thing about not being rich and/or famous — nobody’s probably going to contest my will or challenge any trusts I set up…small victories…

Chris McClelland presents Your credit score may soon lead to targeted Google ads posted at Lucrative Investing.

PicktheBrain presents Top 10 Ways for Grad Students to Save Cash posted at Online Doctoral Programs.

Dan presents Kids Birthday Parties - Better at Home or Out for Theme Party? | My Dad Blog posted at My Dad Blog, saying, “This article considers the pros/cons of home birthday parties vs. themed parties like Bounce-U and Little Gym with topics spanning costs, convenience and fun.”
This is timely for me personally. I have a soon-to-be 2-year-old…last year, we had a party at a park. Happened to be the hottest day of the year (110)! It would have been nice to be able to go inside and get out of the heat. But then again, our house is too small to contain more than 6-8 people (somewhat comfortably), so our giant gathering would have had to take turns. I really like the idea of the Party Palooza type places.

Daniel Drew presents Line of Credit posted at My Business is doing well should I choose an SBA Loan?, saying, “”Lines of credit are generally paid off by opting for a permanent source of financing. In case of commercial property line of credit, the sale of the old property may help repay the line of credit”"

Ray @ Financial Highway presents Canadian Discount Brokerage Review and Comparison for TFSA and RRSP posted at Financial Highway, saying, “A look at Canadian Discount Brokers”

Brian McKay presents Flexible Spending Account (FSA) for Dependent Care posted at MonitorBankRates.com, saying, “A dependent care flexible spending Account (FSA) allows you to save money pretax to pay for dependent care in the process also lowering your taxable income.”

Billeater presents Dorm Life - Cheap College Living Tips posted at Billeater.

Silicon Valley Blogger presents Balance Transfer Credit Card Tips, Facts and Traps posted at The Digerati Life, saying, “One important area of finance to teach kids about? The use of credit cards. Here is some coverage on balance transfer cards to teach your kids.”
Credit nowadays is a necessity. But I wish it wasn’t. So easy to spend beyond your means.

The Smarter Wallet presents Best Security Software For Your Computer posted at The Smarter Wallet, saying, “We all need to protect our computers, even the ones used by our families. Here’s how to do it!”

Banker Saver presents How Safe Is Your Retirement Fund? posted at Banker Saver, saying, “Retirement is a ways away for your kids, but it’s something they should understand early on. Investing as early as possible pays off.”

Ray presents Is A Costco Executive Membership Worth It? posted at Money Blue Book.

That concludes this edition. Submit your blog article to the next edition of kids and money using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: kids and money, blog carnival.

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Seven Ways to Avoid Banks Taking Your Money in Fees and Charges [Saving to Invest]

Fri, 17 Jul 2009 04:00:00 +0000

We have all read about and surely experienced the ever increasing fees and charges that banks and other financial institutions charge us. In the US alone, $36 billion in bank fees were charged last year to consumers.

Late fees, loan-origination fees, over-the-limit and overdraft charges helped generate 53% of banking-industry income in 2008, up from 35% of income in 1995. The average bounced-check fee is $28.95, up about $1 from last year, says Bankrate.com. And it's a charge that rises every year. At $19 billion, credit-card penalties for late payments and over-limit charges were up 80% between 2003 and 2008.

While bank fees are not going to go away or lessen anytime soon, savvy consumers can avoid a number of these fees by being informed and shopping around for the best deals. Here are some of the more common bank fees/charges and tips to avoid them.

1. Monthly Account Keeping or Service Fee : The most common fee you pay for an organization to manage your bank account. Generally runs anywhere from $3 to $7 per month ($36 - $84 annually). However, you can search around and find ways to avoid this fee by finding a zero fee account or meeting some no-fee requirements like having a certain account balance or home loan with the bank. For example, I have a high yield savings account with HSBC that does not charge a monthly fee and offers a high rate of interest. I can also withdraw money for free from any ATM up to 5 times a month.

2. Internet Banking fee : A fee you may be charged for transacting over the internet (0.50c to $1 per transaction). If you are paying this, then choose another account or bank. Most banks do not charge a internet fee for transaction accounts, especially if you are already paying a monthly service fee. In fact banks are encouraging consumers to use the internet as it is the cheapest and highest returning channel for them. You may also enjoy additional rebates if you choose to receive your statements and manage all your transactions money online (I know Vanguard and other brokers do this).

3. ATM transaction fee : When using your ATM card, you may be charged a fee if you exceed the number of transactions nominated for a particular time frame (e.g. per month) or use an ATM from a different bank.The fee for this can range from $2 to $5. Again, this is an easy fee to avoid with some forward planning to use your own banks or partner ATM's. You can also select an account that allows some non-bank ATM usage or rebates you for any ATM fees incurred. There are plenty of options out there.

4. Currency Exchange Fee: One place banks rake in the money is in fees and charges related to currency related exchanges and transactions. Whether it charges for incoming or outgoing wires, travellers checks or ATM transactions, you will get charged a fee. Wire transfers range from $30 to 1% of the entire transaction, while so called "free" travellers checks fees are made up in the poor exchange rates you get. If you use an overseas ATM (or local ATM for non-US bank accounts), you may be charged $3.00 to $7.00 for withdrawals.

Avoiding foreign currency related fees is near impossible and from my experience in travelling overseas and using foreign savings accounts, the cheapest way to get money is to use an ATM withdrawal. You get the best exchange rate and even with the ATM fee, this is cheaper than any other currency exchange method out there.

5. Branch withdrawal fee : Dealing with a person face-to-face can sometimes cost you money ($5 - $10). This one is for those folks who like personalized service and are willing to pay for it. For most of us, we can avoid this by doing most of our banking on-line or via the telephone. If you do want the face-to-face interaction choose a bank account that provides a certain number of these interactions for free. I found credit unions and community banks to be the best in this department because of their lower overheads and more customer focused business model.

6. Overdraft or Insufficient funds fee: The fee you pay when the balance in your everyday transaction account goes below $0. Example: Your phone provider debits $150 for your monthly bill but you only have $100 in your bank account at the time. You may be charged anywhere from $30 to $50 in overdraft fees by your bank. I have been hit by this one - so make sure you keep a buffer (e.g. $500) in your transaction account so that you have sufficient funds to cover these situations. If you are expecting a big debit, make sure you transfer money into your account well ahead of when its due (you can schedule these online).

Another way to avoid overdrafts and late fees is to sign up for free low balance alerts. Thanks to online and telephone banking you can sign up for alerts when your bank balance falls below a certain threshold. A great feature that has saved me money on a number of occasions.

Finally, if you call the bank, they may sometimes waive overdraft fees if you have a good record with them or this was your first infraction. This method however is only likely to work once.

7. Exceeding your credit limit fee : A fee may be debited from your credit card account every time you exceed your credit limit during a statement cycle e.g. $35 per statement cycle. Another bad fee which you can avoid by watching what you spend. At worst case increase your credit limit or get multiple credit cards so that your credit limit is higher - but higher credit has its own inherent dangers.

Credit card reform legislation going into effect next year (Feb 2010) will put caps on some credit-card late and over-limit fees and on how they're charged against old and new balances, but until then beware the fees that financial institutions place credit cards they issue.

I am sure there are many other fees out there, but these are the most common ones consumers face. It would be interesting to hear of any adverse fee experiences you have had and/or lessons learnt by leaving a comment on this post. My worst one was paying a $30 overdraft fee when I forgot to move enough money from my savings account to my transaction/checking account before a big bill came through. That was $30 wasted, which with a bit of forward planning I could have avoided.

Financial institutions must provide information to their customers on these fees and charges. Under the Truth in Savings Act, banks are required to notify customers of any change in terms within 30 days. If you are getting charged for something you did not know about, make sure you raise this with your bank and ask for a rebate on any unexpected fees. So if you are getting charged for something you did not know about, make sure you raise this with your bank.

What is Cash for Clunkers? [The Almost Millianaire]

Fri, 17 Jul 2009 03:02:26 +0000

I’ve recently read about a crazy new government stimulus program that is offering good old folks like you and me something like $4500 for any old, piece of junk car, if we buy a new one. Now I know that there are some rules and regulations about the gas mileage of the old and new vehicles (new one must get better mileage and such) but does anyone understand this program?

It seems to me like if you drive an old clunker, you probably put pretty little value on the “looks” of your vehicle. And I’m guessing that you probably HATE the thought of spending a years salary on buying a new one when your old one is serving you just fine and is allowing you to keep putting food on the table.

I could be missing something, but WHO CAN AFFORD a new car at today’s inflated prices, without job security, with the value of your home in the tanks, with taxes going up, and with your investments a fraction of their former selves. Not to mention that wages are decreasing across the country and millions of people who do have jobs are having to take paycuts and are under employed.

Is it stupid to think that a better plan may have been to incentivize WEALTHY AMERICANS to start buying more and newer cars. They actually have the cash to do it…and they can give their old Cadillacs to their grand kids or something like that. Give the rich people a tax break for once and see how they open up their pocketbooks and jump start consumer spending.

Trickle down baby, trickle down!

Morality Needs to Increase to Replace Government Expansion [PennyJobs.com]

Thu, 16 Jul 2009 17:18:00 GMT

Morality needs to be increased by returning to Christianity so that morality can replace big government with self government.

Part of the reason that people vote for politicians who promise to expand the government is to solve cultural issues.

Many of the issues that the government has been expanded to solve have been created by the decline in morality.

If morality would not have declined, the government would not have needed to expand. But now we are in a dilemma as the deepening recession will eventually force a reduction in government. Without morality to fill its place, civil unrest is bound to follow.

Christianity teaches personal morality. Jesus taught us that each person is individually responsible for their actions and then commanded us to choose to love each other.

That foundation created a culture of self governed people who were motivated to love each other because it is pleasing to God.

As a result, crime is directly related to public morality. As the culture moved away from Christianity – as seen by the drop in percent of church goers and the removal of the Bible from public schools in 1963 - government expenses increase as jails fill up, more cops were added and more programs were needed to protect people from people.

The drop in morality has caused the government to expand in many directions over the last several decades.

Public Schools

Public school budgets have ballooned for many years, while the quality of education has decreased. Primarily because teachers spend a lot more time disciplining children, who have no moral understanding, rather than teaching them how to read and write.

Unlike parents, teachers lack the authority to discipline unruly students yet are supposed to teach them how to read and write. They should be allowed to first teach them why it is important to respect each other, from the foundation of Christian teaching.

This is what the public school system was originally designed to do. But the self-righteous have been successful at using the Legal system to remove Christian teaching from the schools. The result: today public schools are in chaos and the increasing financial burden is bankrupting the nation.

Jails

Jails have increased exponentially, burdening states with the expensive of feeding and clothing millions of people. A large portion of California’s budget increase over the last few years is due to their increase in the number of people in jails. Many other states have also had large increases in jail inmates.

This is also related to the many social programs created to address inequality. Without Christianity teaching people to help each other out of their abundance - greed, envy and selfishness has increased.

The solution has been to expand government with ‘wealth distribution’ programs like minimum wage, welfare and taxing the rich to force people to help each other. Minimum wage has eliminated a lot of low income jobs and training options for millions of workers, resulting in more crime and larger jails.

The governments' replacement of the self governance of Christian morality continues to fail and can be traced to the roots of the economic collapes.

As morality declines, the only solution that government leaders can seem to come up with is to expand the government even more. Freddie Mac and Fannie Mae are at the center of the economic meltdown and were created to solve the problem of inequality.

In a recent speech, President Obama said that he does not put his faith in religion or morality, but in the goodness of people. The problem is that there is no goodness in people, as the Bible teaches – all have gone astray.

Without addressing the decline of morality, the cost of government expansion to manage a growing immoral people will continue to increase. Europe is a prime example of how the plague of immorality leads to more and more government expansion and less and less economic growth.

Mark Steyn in his book, America Alone, points out that Europe will be bankrupt by 2020 because of its expansion of social programs. Europe is the most atheistic country in the world.

Foundation of America

The constitution of America was created for a moral people so that the government could remand limited and unburdening to the economy. The dominate economic leadership of America was built on a self governed moral people, with a limited government driven to understand God’s creation and his design patterns within nature to advance science and engineering.

This is what we need to return to and we have the history of this foundation to study as a model for economic recovery.

Here are several quotes from the creators of our nation, which say that without governing ourselves, the government is not adequate. The expansion of our government does not lead to more freedom, but to more slavery. Corruption will eventually set in and the expansion of powers will be used against the public much like a communist nation.

James Madison, the father of our constitution wrote,

“We have staked the whole future of America civilization, not upon the power of government, far from it. We have staked the future of all of our political institutions upon the capacity of each and all of us to govern ourselves, to control ourselves, to sustain ourselves according to the Ten Commandments of God.”

Samuel Adams, another founding father of our nation said,

“We have no government armed with power capable of contending with human passions unbridled by morality and religion. Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.”

Another founding father, Benjamin Rush said,

“By removing the Bible from schools we would be wasting so much time and money in punishing criminals. Take the Bible out of our schools and there would be an explosion in crime”.

America needs to return to its foundation of morality and replace the expansion of government with self-governing morality. We need to learn why is was so important for our fathers to put ‘In God We Trust’ on our money.

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Creating Reusable Affiliate Link Titles [Passive Family Income]

Wed, 15 Jul 2009 12:05:59 +0000

As I continue to clean up hundreds of my affiliate links after losing my Amazon Associates account, I am using new methods to update and add new links. The first step that I am taking is to start an affiliate link journal to track all of the various links that I have published. This journal (using Microsoft Access) will allow me to see where I have placed all of my links and help me keep my internet marketing campaigns organized.

The next step that I am taking to improve my affiliate links is to start updating the titles of my links. Whether it be an affiliate link placed in some of my eHow articles, niche sites, or other various online content - creating reusable titles will help reduce the amount of time required to maintain these links in the future. In order to make internet marketing a viable passive income stream, I believe this is a necessary step that will payoff in the future.

So what exactly do I mean by creating reusable affiliate link titles?

Create Reusable Affiliate Link Titles

Creating reusable titles in your affiliate links will allow you to quickly change out the url that is behind the link with little impact to your content. For example, if I were promoting a new eBook, I would make the title generic enough that it is not directly specific to the product. Here is an example of what an old title may have looked liked compared to a new generic title for selling a new eBook on how to make money from eHow.

Old Title - “How to Make Money on eHow - A step by step guide to making $1,000 per month”
New Title - “Earn over $1,000 per month on eHow!”

The titles above are fictitious examples of promoting an eBook on making money from eHow. The Old Title was an example using the the fictitious eBook title. If I ever decided to change out this product, I would need to go back in to the link and change the title. Using a generic title would allow me to simply change the link. Obviously the title is still specific to ways to earn money on eHow, but I can now quickly switch out the product or service in the link with no impact to the title.

Exceptions to the Rule

Obviously there are exceptions to this technique depending on the situation. If I were promoting the Amazon Kindle Reader for example, I would probably use the name of the product in that case. In the case of selling a specific product or service, I would continue to use specific affiliate link titles.

Don’t Overdue your Reusable Titles

While I believe it is important to create reusable titles on my affiliate links - I don’t want to overdue it. After all, a very generic title is not going to help me generate any money if nobody clicks on the link and makes a purchase. Be sure the link still reflects the product or service you are trying to sell and appeals to your target audience.

Final Thoughts

Updating the titles on your affiliate links may not seem like a big deal. In some cases, it may not even make sense to use a reusable title in your links. However, I believe it is important and necessary to complete this step. Creating passive income requires you to eliminate waste. Using affiliate link titles that can appeal to multiple products is just one small way to help reduce wasted maintenance time.

What do your affiliate link titles look like? Are they very specific to the product you are trying to sell?

Dealing with Redundancy [Money Dashboard]

Wed, 15 Jul 2009 12:01:28 +0000

Official figures show that unemployment in the UK is now at 2.38m, the highest level since 1995. As every day passes, further announcements are made of redundancies in virtually every sector. If you haven't been affected yet, you may be in the future and it's vital that you understand your rights. Here are 10 ways to help you deal with redundancy.

1. Know Your Rights Read more »

Investing For Income In 2009 [Amateur Asset Allocator]

Wed, 15 Jul 2009 11:00:12 +0000

Coming on the heels of massive losses over the past 18 months, income investing is back in vogue and probably here to stay for a while. Most investors have learned the value of patience, at least temporarily, and are extremely keen on being “paid while you wait.” That is, if you can’t count on 15% capital gains year after year, you can at least rely on steady investment income to tide you over.

To that end, I’ve put together a short list of mutual funds ideally positioned to yield attractive cash returns going forward. They may not be the top-performing funds in any given year, but if passive income in the form of cash flow from your investments is what you’re in the market for, these funds will deliver. All of these funds have significantly below-average expense ratios (investment costs matter, after all) and where possible, I’ve stuck to index funds.

You can research all the mutual funds mentioned here for yourself in detail by signing up for a free Morningstar account and entering their ticker symbols into the search box at the top of Morningstar’s site. I highly advise you to do your own homework before making any investment decision.

All figures are current as of 7/15/2009.

Top Income-Producing Funds

Vanguard Equity Income (VEIPX) - The Vanguard Equity Income fund currently yields 4.36%, which is extremely impressive for an unleveraged, all-equity mutual fund. Though actively managed, Equity Income sports an expense ratio of only 0.30%, in typical Vanguard style. Over the last three years, Equity Income has been a bit less volatile than the broad stock market and lost only 31% of its value in 2008. That may sound like a lot, but remember this is a value-oriented fund and most value funds traditionally invest heavily in the financial sector. Compared to its peers, this fund performed admirably. Going forward, this fund should benefit from any economic rebound nicely and pay a handsome income in the meantime.

Vanguard Wellesley Income (VWINX) - The Vanguard Wellesley Income fund is one of the most successful balanced mutual funds of all time. Founded in 1970, it has to crank out average annualized returns of 9.94% despite an extremely conservative asset allocation consisting of only 40% stocks and 60% bonds and it’s done so with volatility less than half that of the overall market . It currently yields a healthy 5.13% and costs only 0.25%, which is a bargain for management of this caliber (it’s managed by legendary Wellington Management). It’s also one of the few funds around with 10-year returns averaging over 5% per year and lost less than 10% of its value in 2008. Expect steadily-rising payouts and relatively smooth sailing with this one.

Vanguard REIT Index (VGSIX) - This is bound to be a controversial recommendation considering the recent debacle in the real estate market, but real estate has been and always will be an attractive asset class for the income-oriented investor. The Vanguard REIT Index fund currently yields 6.06% and despite recent troubles, sports a solid 10-year average annual return of 5.31%. Do I recommend you invest the majority of your portfolio in real estate? No. But a 10-20% allocation seems prudent. Historically, few asset classes will yield as much current income as real estate.

Vanguard High-Yield Tax-Exempt Municipal Bond (VWAHX) - This is the only bond fund on the list because it exhibits an extremely attractive risk-reward profile going forward, which is tough to find among bond funds right now. It currently yields 5.03%, which is the equivalent of 8.15% for investors in the 35% federal tax bracket, 6.98% for investors in the 28% tax bracket, and 6.7% for investors in the 25% tax bracket. And the fund didn’t have to take on too much risk to get these yields, either: its average credit quality is A, which is just below the middle of the investment-grade rating band. True, the fund will be a bit interest-rate sensitive due to its 7.43 year effective duration, but that’s not something that should concern most income-oriented investors. After all, we’re after steady income here, not capital gains.

As mentioned before, you can and should research all the mutual funds mentioned here for yourself in detail by signing up for a free Morningstar account and entering their ticker symbols into the search box at the top of Morningstar’s site. I invite you to do so before making any investment decision.

7 Steps To Dig Your Way Out of Debt [PennyJobs.com]

Wed, 15 Jul 2009 13:45:00 GMT

The only good news about being up to your eyeballs in debt is that the coming inflation will reduce the burden of debt.

Everything else about debt is bad news and the sooner you get out of debt the better.

I usually don’t write much about debt because I’m not in debt and therefore I don’t have a lot of stories to write about how I’m getting out of debt. Some of the best stories about debt are written by personal finance bloggers that are going through the process of getting out of debt.

The reason that I’m not in debt is because I cannot stand it. I avoid debt like it’s a plague that could kill me. The only time I dipped my toes into debt was when I attended collage ten years ago and I got out as fast as I could.

If I was in debt, this is how I would get out.

1: Identify how deep of a hole you’re in

The first thing to do is to take a realistic look at how much money to owe and what are the terms of each loan, including who you owe the money to.

The best way to do that is to create a list of debts with details about each one including terms like interest rates, monthly payments and length of each loan.

2: Create a short-term plan to get a handle on the situation

If the situation is out of control and you are in a downward spiral, then you need to act quickly to get a handle on the situation before you end up in bankruptcy count. More than likely, your plan will include liquidating unprofitable assets or branches of your business or lifestyle changes that are draining the most money from your pocket.

3: Find help from somewhere or someone

Find help from somewhere, talk to your bankers, your parents, your friends and God about how to get out of the situation. Collect as many ideas as you can and be open about your financial situation so that you can get more practical, creative and useful ideas.

4: Take drastic action to jump start your way out

Take drastic actions to jump start your way out of the situation. Before you even get started, set your mind on making desperate changes that could have major impacts on your life – at least in the short term - in order to one day get back to a stable financial foundation that you can rebuild on top of. Realize that your finances cannot be built on sand and you need to rebuild the foundation before you can rebuild your house.

5: Invest in a new education and change your mind

Invest in a new education by realizing that your old financial education is obviously wrong and begin re-educating yourself about the changing economy and come to the understanding that the boom is not likely to return anytime soon.

Read new books and new ideas about how the economy may change and stop reading and listening to the main stream financial media with economists that didn't see the recession coming. They are clueless. There lack of understanding about how the econonmy got into the mess cannot lead us out.

Start reading Peter Schiff, Ron Paul and Thomas Woods to get a new education about what realy happen and what is in store for the future.

6: Adapt your lifestyle to fit your plan

Change your lifestyle to fit the new economy, based on real consumer demand. If business sales are down 40% or your wages are down 30%, then consider that you’re new level of income to adjust your budget to.

Get your expenses well under your adjusted income and if your income has not been adjusted down yet, save even more so that you are prepared for a downward adjustment. Look at your debt list everyday and create a schedule to pay off each debt – one at a one.

7: Count your money every week

Every financial successful person that I have read about or know counts their money regularly. It doesn’t matter if you calculate your net worth or balance your checkbook or tally your assets versus liabilities – the act of counting your money on a daily or weekly base – makes you conscious of where your money is going, which leads to increasing your money.

If you are new to counting your money, I suggest you start counting on a daily bases and after some time moving to a system of counting your money on a weekly based. Money is moving all the time and it takes a lot of planning and creative thinking to find ways to tally your money and to know without a doubt how much money you have at any given day. Longer than a week become too long to keep track of how money is coming and going. Even the billionaires make counting their money on a regular base a priority.

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Obama's 2009 Robin Hood Health Care Reform Plan - What's in it for You and How Much Will it Cost Tax Payers [Saving to Invest]

Wed, 15 Jul 2009 03:44:00 +0000

One of President Obama’s biggest campaign promises was to reform health care, and it looks like the first steps towards delivering on that promise are underway with the introduction of a far reaching and very expensive health care reform bill. Many an administration has fallen into the deep abyss of health care reform, but none have had the political capital and forces that support the Obama administration. Whether or not you think the early plans (proposed by House democrat members) are fair or not, it looks like the US health care system is in for a major overhaul and more likely than not, you will be directly impacted.

President Obama has set an August deadline for both chambers to pass the final versions of the reform bill, and to get it to his desk by the end of the year. With that time frame in mind there will be many twists, change and debates on this key national issue.

Details are still coming out on the health care reform bill, with a lot of changes to take place over the next 6 months. I will continue to provide easy to understand updates on key aspects of the health care reform and encourage you to subscribe (free) via RSS or Email to get the latest articles. If you have any questions or need more information, just leave a comment below.

The current proposal and how it will be funded

The proposed house legislation would fund a landmark and far reaching health-care expansion primarily by raising taxes on medical providers, corporations and the wealthiest Americans, including a 5.4 percent surtax on couples earning more than $1 million - becoming known as the “millionaire” health care tax. Couples making $350,000 and individuals earning $280,000, would pay a 1% tax, which would ramp up to 1.5% for those above $500,000 of income until they hit the millionaire tax bracket. Democrats estimate the income tax increase would apply only to the top 1.2% of households, those who earn about one-quarter of all income and will raise $540 billion over 10 years - about half the cost of the health care overhaul - and calls for the taxes to increase if the measure doesn’t hit a target for cost savings. Capital gains (currently taxed at a 15%) as well as earned income would be subject to the surtax.

The legislation would also raise taxes on corporations. Among other things, it would make it easier for the IRS to prosecute tax shelters, and deny certain cross-border deductions that some companies are able to claim through tax treaties. The plan would also slow Medicare and Medicaid payments to medical providers.

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The bill would prohibit insurance companies from establishing any lifetime or annual ceiling on benefits and limit companies from charging higher rates due to health status, gender or other reasons. Premiums would only be allowed to vary based on age, geography and family size. Medicare would be overhauled to reward the efficiency of health-care services, not the volume, as is the case now. The government would provide subsidies to make coverage more affordable for households with incomes up to four times the federal poverty level, or $88,000 for a family of four and $43,000 for an individual. Medicaid — the federal-state health program for the poor — would be expanded to individuals and families up to 133% of the poverty line.

Health care providers would also be held to account for quality care, not just ordering up tests and procedures. Insurance companies would be prohibited from denying coverage to the sick and the industry would face stiff competition from a new government plan designed along the lines of Medicare.

“This proposal controls the skyrocketing cost of health care by rooting out waste and fraud and promoting quality and accountability,” the president said in a statement about the House plan today. “Its savings of more than $500 billion over 10 years will strengthen Medicare and contribute to our goal of reforming health care in a fiscally responsible way.”

The House bill would change the way individuals and many employees get health insurance. It would set up a new national purchasing pool, called an exchange. The exchange would offer a menu of plans, with different levels of coverage. A government plan would be among the options, and the exchange would eventually be open to most employers. Insurers say that combination would drive many of them out of business since the public plan would be able to offer lower premiums to virtually all Americans. But backers of a public plan - including Obama - say it would instead provide healthy competition for the insurance industry.

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The federal government would ultimately be responsible for ensuring that every person, regardless of income or the state of their health, has access to an affordable insurance plan (target is to have 97% of Americans covered by 2019.). Individuals and employers would have new obligations to get coverage, or face hefty penalties. Employers who don't provide coverage would be hit with a penalty equal to 8% of workers' wages with an exemption for small businesses. People (employees) would also be penalized as much as 2.5 percent of their income for failure to buy health insurance.

The plan would cost between $1 to $1.5 trillion over the next 10 years and reduce the number of uninsured by roughly 37 million Americans (currently 46 million uninsured), according to a preliminary analysis by the Congressional Budget Office and other reputable sources.

As with any legislation of this magnitude and impact, they are many stumbling blocks and there will a number of public and private discussions that take place before the bill is finalized. Business groups and the insurance industry immediately assailed the legislation. In a letter to lawmakers, major business organizations branded the 1,000-page bill a job-killer. Its coverage mandate would automatically raise the cost of hiring a new worker, they said. Efforts to reach a bipartisan compromise in the Senate have failed so far as well, with most republicans opposed to the plan (without really having a viable alternative themselves). And in the House, the Democrats’ plan is considered too costly by dozens of their own members - which means that the final version of the health care reform bill is far from finalized.

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~ Health Care Plans: 10 Tips on Choosing the Right Option
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~ COBRA Health Care Premium Reductions (Subsidy) in Obama Economic Stimulus Package
~ Obama's 2010 - $3.6 Trillion - Budget and My Money from Taxes to Health Care

Lessons from Economic Recession [Millionaire Acts]

Sun, 12 Jul 2009 09:15:58 +0000

We are all experiencing economic recession. There are low demands of products as consumers cut spending. Companies cut costs thereby closing some of their plant operations and laying off thousand of is workforce.

What lessons have you learned so far in this economic recession? What are the things will you do just in case another deep recession comes into our economy in the near future? It is better to be prepared and arm yourself with a weapon to survive an economic crisis.

Save for the future. You will never know when you will get laid off in your job and you have thousands of financial obligations that are aligned in your list (i.e. credit card debts, house mortgage, car mortgage, etc.) With or without an economic recession, you should always save for your future. Always make it a habit to save and budget so that when an economic recession hits like a typhoon, you can survive it even if you lose your job. I always believe in the saying “ubus-ubos biyaya, bukas ay nakatunganga”.

Take advantage of stocks. For the young investors in their 20s, they should take advantage of stock investments. In an economic recession, as profits of companies decline, stock values tend to be lower because investors dump riskier investments as they flee into a safer haven bonds. This is a time to buy sound companies’ stocks especially when they hit rock bottom values. You will be surprised as how much you could earn from increased share value when the economy starts to kick off aside from the dividends that these stocks might have.

Young investors have a lot of time before they retire and they can definitely ride the volatility of the stock market. Always remember though that you should only invest what you can afford to lose.

Take advantage of low value properties. For the cash-rich investors, now is the time to buy houses most especially in the US. By law of supply and demand, since there are low demands for houses in times of an economic recession, house values tend to decline. Shop for bargain homes and develop it.

Participate in bargain bazaars. If you are a business minded person and have great things that you can sell in a bazaar, I guess this is one of the perfect timing as consumers tend to go to bargain stores and bazaars in search of cheap items during times of economic recession. Alternatively, you can set your garage into a bargain store with your neighbors as potential customers.

Do you have other lessons learned from this economic recession? Share them below.

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MUTUAL FUND SCORECARD: The S&P 500 index fund [The UpSide of Money]

Sun, 05 Jul 2009 03:18:21 +0000

A low-cost mutual fund that’s one-size-fits-all? Yes, it can happen. It is possible to pay the SAME fund fees as institutional investors, if you shop around.

San Francisco-based Charles Schwab recently announced it has cut fund fees on its equity index funds. And that means for everyone, big or small. According to the CEO, Walt Bettinger, “… by reducing our fund expenses and simplifying the fees, more all investors of all sizes and types can plan for a brighter future.” I researched popular index funds, using S&P index funds as a guide at other brokers to see if the announcement holds water. I believe it does.

I looked at over 20 finds and checked the minimum investment and the expense ratio (or ER) as factors in judging the funds.

Get the full SF Examiner.com article here.

Get Results with Incentives [The Strump]

Thu, 11 Jun 2009 20:33:53 -0500

Well, I'm back (sort of) after taking a bit of a break this past week. I have to say, I feel refreshed after not writing for a week - good to do this every once in a while.

The following is a guest post from one of my Colleagues, a local web designer, Shannon Chiarenza.

What's in it for me? Get better results with incentives

Incentives are enticements that encourage one into action, a reward for participating. It gives people a reason to read your flyer, visit your website, click on that link, sign up for your newsletter or fill out your survey. How many flyers and brochures do you get in your mailbox that you don’t even look at, just toss into the recycle bin? It’s just more background noise in our lives, more clutter we have to deal with.

Give people a reason to act so you don't lose sales.

Our time is valuable, no incentive means I have no time for you

I recently received a letter in my mailbox from a back treatment clinic I've used before. Their treatments are effective and did help my back pain significantly however at $75 a visit it adds up quick, so I can’t go as often as I’d like. When I received this letter saying I was chosen to participate in a survey to help improve their treatments I was happy, I read it front to back looking for my incentive, quickly realizing there was nothing in it for me.

Into the recycle bin it went and a shame to, they spent a lot of money on stamps for their return envelopes and printing, not to mention all the waste of paper. In addition I felt somewhat insulted, they assumed that my being chosen should be reason enough.

What would have made me take time out of my day to spend half an hour on the phone for an interview? A free treatment, that’s it…one free treatment and I would participate. Maybe that’s selfish but my time is valuable to me and that seems like too much work when I get nothing in return. If they offered a free treatment in return for my participation I would've been happy to do it, they get the information they need to improve their service and I get to have a visit to help my back, we both win.

They probably got some people to participate however I wonder how many more they would have if they just offered an incentive? It’s more than just what my time is worth it’s the appreciation for my efforts, a thank you not only for helping their business but a thank you for having spent so much money on them in the past.

What's your incentive?

This is one thing that is hugely overlooked by business owners, not too many people are going to take time out of their day to do anything for you if you don’t offer something in return. If your going to spend the money on mailouts make sure in bold front and centre is your incentive, like " $10 off coupon inside", "free shipping" or "mention this brochure and receive XYZ for free" something that will stop people in their tracks and open that brochure, visit your store or call you up. Make it easy to do and worth the effort, same goes for your website, give people a reason to sign up for your newsletter, bookmark your site or fill out your survey.

Incentives are more than just a way to get people to do what you want, they act as a thank you for doing it, it shows appreciation and that is worth our time.

Shannon Chiarenza is a web-designer here in Vancouver, BC, Canada.

Finally, one of my articles was featured at the Carnival of Finance over at Funny About Money last week,

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The Rogue Investor [The Stock Talk]

Wed, 22 Apr 2009 16:17:59 +0000

All of my attention will now be focused on The Rogue Investor. Check it out to strengthen your investing through alternative investing strategies and disciplined portfolio management. Also, you can follow me on twitter o become a fan on facebook.

-Alex Stewart
The Rogue Investor