How To Make Your Own Luck With Your Finances

I used to think that luck was just – well – luck! As in, isn’t is so lucky that those people won the lottery or picked the right stock at the right time?

However, what I’ve realized over time is that you can actually create your own luck when it comes to your finances. It might not be “lottery luck,” but with a few simple steps, you can ensure that you remain lucky throughout the course of your financial life.

Here are some common phrases that I hear with respect to money and luck.

There are a lot of misconceptions about finances and how people reach their financial goals. I’m sure you’ll be able to relate to hearing some of the comments below, and hopefully you’ll be able to see the same pattern as I did, which is that those who are “lucky” in terms of money actually worked hard to get there first!


 1. Mr. Smith is SO lucky that he got to retire at 55!

No, Mr. Smith isn’t lucky.

Mr. Smith lived below his means. He probably drove an old truck, didn’t upgrade his life when he has the ability to, and invested slowly over time. People like Mr. Smith are perhaps lucky that they aren’t prone to materialism or lucky that they have a knack for saving. The truth is, though, that people don’t retire early because they are lucky. They typically retire early due a lifetime of planning and hard work. I can’t tell you how many people reach retirement age and wish they had the ability to quit working. Don’t wait for luck or envy those who are able to. Everyone has the ability to do this. It just depends on how you plan.


2. They are SO lucky they get to go on vacation! I haven’t been on one in years!

People tend to go on vacations in two ways. They either put it on a credit card and have debt problems later or they save up for it ahead of time.

Sure, many of us are fortunate to get vacation time or fortunate to have a little bit of extra income to buy a plane ticket here or there, but is that really luck? I would say that “vacation luck” is self-created. We either get a break from work because we worked hard to earn it or because we saved up for it. The people who don’t take vacations over the course of several years make conscious decisions not to take one or not to make saving for one a priority. Remember, we can make our own luck when it comes to our money because we control what we do with it!


 3.    You’re so lucky you get paid to work from home.

This is one I’ve been hearing a lot lately, ever since I started working 100% for myself.

Every time someone says it to me, I vacillate between cringing and feeling grateful that I have the ability to do what I do. However, there is nothing “lucky” about getting paid to work from home. It’s hard and scary and challenging to break out on your own and become self-employed. I didn’t just wake up one day and decide to stay in my pj’s and write from the couch just because I’m a lucky girl. It happened because I worked for it. I always like to point out that there’s no magic formula to what I do. Anyone with enough discipline can do the exact same thing. They just have to want to. Again, there’s nothing lucky about it. To be honest, though, it is kind of lucky that I don’t have to wear blazers anymore.


 4.    They’re so lucky they started investing early.

Investing is one area where you can definitely make your own luck with your finances.

Sure there are people who pick the right stocks or inherit stocks that their grandparents owned. That’s fortunate for them. However, if you don’t have any sort of trust fund, it’s up to you to make your own luck. You can do this by being conservative with your investments, starting now if you haven’t started yet, and teaching the next generation about responsible investing. The truth is, information about investing is open to anyone and everyone. Regardless of your education level, there are free seminars, books, and blogs that can teach you about investments. No one is lucky because they started investing early. They were simply willing to take the time to learn about it and took action to make sure it was a part of their lives.

Ultimately, when it comes to your money and long-term wealth, there aren’t shortcuts for most of us. Yes, there is a small sect of people who come from very wealthy families or who inherit something they weren’t expecting. However, for the average person with a normal job, it’s up to them to create their own opportunities in life and finances.

source: www.mypersonalfinancejourney.com

The Right Online Car Insurance Could Offer Protection Against Criminal Behavior

Some guy in a funny costume flags you down. Here you are a good samaritan thinking you’ll help someone out with directions or something of the like. Then lo and behold, the stranger pulls out a knife and tells you to get out of the car. He jumps in and takes off. This is the new trend for car thieves and you should prepare for this worst-case scenario with the right online car insurance.

Incredible advances in car technology make it harder for auto thieves to continue with conventional car theft methods. Break-ins are becoming less common as most new cars come with built-in theft prevention devices. Still car insurance companies say car theft has not decreased as much as it should because of the new methods criminals are using to steal new cars.


Auto Insurance Companies Say Car Thieves Have Changed their Mode of Operating

Criminals have simply compensated for the new key technology by becoming more brazen. The current approach is carjacking, the theft of parts and car cloning. While online car insurance companies agree that the “traditional” type of auto break-in is less common, criminals are still taking more vehicles by stealing them directly from the owner. Carjacking is an activity that is increasing, as well as other schemes where thieves clone keys and swap the real key with the fake key, later returning to steal the vehicle.

However, car theft is not the only problem, criminals are also taking car parts. These include catalytic converters and other expensive parts that have high scrap value. These are parts that can be swiped in a matter of minutes.

Criminals Are Now Using Technology to Aid Their Activities

technology doesn’t really deter a criminal, but instead often helps them. Many of the car parts that are easily swiped are up online in shopping forums or on websites within minutes. Many of the websites these criminals use to commercialize these parts are even well-known, such as craigslist.org, or autotraders.com. In many cases, criminals use technology to change paper documentation and vehicle identification numbers, so they can sell the car without suspicion.

What Should Car Owners Do?

Most carjacking involves a weapon, so you don’t want to confront the carjacker. In stead, your best option is to give up your car and quickly leave the scene. Your car is certainly not worth your life!

However, drivers can take precautions, suggest leading car insurance providers. They should be wary around in the gas stations, parking lots late at night, or other dark isolated areas.

Take Precautions When Buying a Car Especially Right after a Natural Disaster

Online car insurance leaders say consumers should be especially wary of buying cars just after natural disasters, as it is easier for thieves to clone vehicles at such times; a process where thieves change vehicle identification numbers for those of non-stolen vehicles which are no longer in driving conditions. Be sure to always do the following before putting money down on a car:

• Get a vehicle history report
• compare vehicle documentation to the VIN numbers on the engine, doors and dashboard. If these don’t all match then don’t go through with the deal.
• Remember, if the deal looks too good to be true, it usually is.

Bottom Line

By looking for competitive comprehensive car insurance quotes, you can get an online car insurance policy that protects you against auto theft. Besides,  you shouldn’t be too concerned as the number of stolen cars has fallen in the last decade. A statistic which is reflected in the dropping price of comprehensive car insurance coverage. Still, the size of auto insurance claims on cars that are stolen has grown. The reasons for this are:

• cars have a higher value.
• higher valued cars are targets for criminals.

So, if you feel your comprehensive auto insurance quotes are too high, you might consider asking whether the insurance provider offers any discounts for anti-theft devices; some insurance providers and state regulations require discounts for cars equipped with these devices.

source: insurancequotesfast.com

Car Insurance Discounts – Make the Most of Them

Auto insurance is one of those necessary expenses, at least, that is if, if you drive. But that doesn’t necessarily mean you need to make too large an auto insurance payment. You can actually find cheap car insurance rates if you shop smart.

Prices for car insurance vary and this difference could imply savings of more than a few hundred dollars, says The Insurance Information Institute.  Most car insurance providers offer many different opportunities for consumers to cut down on premiums. These cuts come in the way of discounts based on many different factors.  You can get discounts for good driving habits, for certain occupations, fancy high-tech devices on your car, and even on the fact that your kids excel at their school work.

Some discounts run across the board while others are specific to certain car insurance companies or premium types.  The following are some of the discounts out there that you should ask about:

Employee or Occupational Discounts

Sometimes the type of work you do can allow you to save money on your car insurance.  Some occupations are less risky than others, involve less time on the road and consequently, fewer accidents, so a car insurance company could offer discounts for certain occupations.

If you are a customer of Farmer’s insurance you could get discounts if you are a police officer, firefighter, doctor, dentist, registered nurse, educator, engineer, or scientist.

Some car insurance companies have long-standing relationships with certain corporations. So employees for those corporations could get discounts on their insurance policy. For instance, Geico, offers an 8% discount to employees of the Warren Buffett Berkshire Hathaway Inc, a company that has many sub corporations like Fruit of the Loom.

Even people that don’t work for anyone but themselves can qualify for discounts. If you stay at home and work from there you could be elible for a discount, especially if you don’t drive all that much.

Good Credit Scores

People with good credit can also qualify for lower traditional or online car insurance quotes. The better your credit is the lower your car insurance rate will be.  Some say a good credit score could cut your car insurance rates by as much as half.

Military Discounts

If you are in the armed forces or in a qualifying ROTC program you may qualify for a military discount. Sometimes these discounts can be as much as 15 percent for military personnel and their families, and this could even include such branches as the National Guard.

Association Discounts

Do you remember being a part of a fraternity or sorority in college? These affinities can also give you a car insurance rate discount.  Many insurance providers offer affinity discounts of up to 8 percent.  These associations could be your state’s Bar Association, Small Business Association, Alumni Association, or other type of program. Be sure to ask about car insurance discounts with both your association and your car insurance provider.

Green Discounts

There is a reason for the cheap online car insurance rates. They offer a greener solution that is ecofriendly. Cutting down on paper and business costs allows a car insurance provider to offer better discounts on policies. Some companies even give you an immediate $50 discount if you sign your policy online.

You’ll also knock down your rates when you reduce your carbon footprint. Reduce your mileage and you reduce your insurance bill.

Those who drive fuel efficient vehicles can also get reduced insurance rates. Some companies offer as much as a 10 percent discount for drivers of hybrid vehicles.

Anti-Theft Device Discounts

Those drivers that love the high tech stuff can also get better insurance rate quotes. Insurance companies offer lower premiums for drivers who use cars equipped with air bags, anti lock brakes, fuel or ignition cut off switches, alarms and tracking systems.  This could mean a savings of almost 25 percent.

The Early Bird Discount

Those who shop early for a car insurance quote can also get larger discounts. Some companies offer a 10 percent discount if you switch your contract over to them before your policy renews.

However, there are also company good-standing discounts. These are discounts offered to long standing customers, so be careful before you jump from one provider to another.

Good Grades Discount

If you have a student on your policy and he/she receives good grades, you could get a discount of up to 20 percent. This is because data shows that the better a student is in school, the less likely he is to have an accident.

Bottom Line

While car insurance discounts are great and may be substantial, and you certainly want to look into every discount available to you, there are insurance companies that still offer better rates even without the discounts.  The key to finding the best car insurance rates lies in uncovering every discount, every price drop or low insurance rate quote and then choosing the option that best fits your needs.

source: insurancequotesfast.com

Debt Collection Horror Stories

Debt collector horror stories abound: There are threats to dig up the dead relatives of those who couldn't pay their funeral bills, promises to imprison debtors or take their children into custody -- even warnings that pets will be killed.

Under the Fair Debt Collection Practices Act, collectors are prohibited from threatening violence, using profane language, calling incessantly, inflating a debt and implying they are attorneys. And they can't tell consumers they will arrest them or garnish their wages or property unless they actually plan to take that action and are legally able to do so through a court order. Many states have their own rules governing debt collector practices as well.

These are some of the latest outrageous allegations of abuse:

Threatening to take away children: Last week, the Federal Trade Commission shut down a Texas-based debt collector, Goldman Schwartz, for using deceptive and abusive scare tactics to force people to pay their payday loan debts. Among the alleged offenses: collectors called consumers incessantly, saying "we can take you to jail" or "we'll send the sheriff's department to your job and take care of this the hard way," even though they had no legal basis to do so.

Collectors went so far as to tell consumers that when they go to jail, police or child protective services would take their minor children into government custody, according to the FTC. Goldman Schwartz hasn't responded to the complaint filed by the FTC, and its attorney declined to comment on the case.

Posing as a law firm: To scare consumers into paying, Goldman Schwartz also allegedly posed as a law firm or claimed to work with law enforcement authorities -- even charging unauthorized attorney's fees that it referred to as "juice."

One consumer, who asked to remain anonymous, filed a complaint against Goldman Schwartz claiming its collectors pretended to belong to a law firm one day, and the next day said they worked for local law enforcement. After calling her incessantly over a $300 payday loan debt -- which she said she already paid -- a collector even called her workplace and told her coworkers he was going to come arrest her and they would have to pick her out of a lineup.

Pretending to have legal authority has become a popular tactic among debt collectors. In a separate lawsuit filed by the Pennsylvania Attorney General that's still pending, a debt collector, Unicredit, was charged with decorating an office to look like a courtroom and holding fake court proceedings. The attorney for Unicredit's vice president said "he was not personally involved" in the activities that the lawsuit alleges, and the president's attorney did not respond to a request for comment.

Threatening to dig up dead bodies: Another collection agency, Rumson, Bolling & Associates, was fined more than $700,000 last month for taking harassment to a whole new level. One of the worst offenses listed in the FTC's lawsuit: collectors allegedly threatened to dig up the bodies of debtors' deceased children and hang them from a tree or drop them outside their door if they failed to pay their funeral bills. The defendant's attorney, Christopher Pitet, said the company's owners did their best to ensure collectors complied with the law -- so if any wrongdoing was done, it was done by employees and was against company policy.

Promising to hurt pets: The harassment didn't stop at dead bodies, according to the FTC. Collectors at Rumson, Bolling & Associates also allegedly threatened to kill a debtor's dog. Specifically, collectors told a woman they would have her dog "arrested ... shoot him up and ... eat him," before sending the police to her house to arrest her, the FTC claimed.

Collecting debts owed to other companies: Along with all the harassment, the FTC has seen a new collection scheme pop up: scam artists are stealing customer information from payday loan websites and then disguising themselves as debt collectors and going after the loans customers take out, said Tom Pahl, an assistant director at the FTC.


 In one case, a phony California-based debt collection outfit run by a man named Kirit Patel allegedly collected more than $5.2 million in debts that were owed to payday loan companies -- or weren't owed at all, according to the FTC. The defendant's attorney, Andrew Steinheimer, said Patel was duped into opening the company by someone else and was unaware of any wrongdoing.

The case was referred to the Justice Department, and a federal grand jury indicted Patel last year. If convicted, Patel will face up to 20 years in prison or a fine of $250,000 (or both).

"[These debt collection agencies] continue to taint the professionalism of the vast majority of collectors that do it the right way -- respectfully and in compliance with federal and state laws," said Mark Schiffman, a spokesman for debt collection trade association ACA, which represents more than 3,000 debt collectors.


source: dailyfinance.com

Warren Buffett's Best Stocks of 2013 Helping Him Beat DJIA/S&P500

2013 is yet another year getting off to a great start for stocks, and Berkshire Hathaway Inc. (NYSE: BRK-A) is actually outperforming the broad stock market so far in 2013. As of Tuesday, the S&P 500-tracking SPDR S&P 500 (NYSEMKT: SPY) is up about 6% and the DJIA-tracking SPDR Dow Jones Industrial Average (NYSEMKT: DIA) is up about 7%. With a 1% gain on Tuesday, Berkshire Hathaway Inc. (NYSE: BRK-A) A shares are up 9.3% and the Berkshire Hathaway Inc. (NYSE: BRK-B) B-shares are up by about 8.7%.

We have looked at the year-to-date performance of Warren Buffett's portfolio holdings of Berkshire Hathaway Inc. (NYSE: BRK-B) to see which stocks he has that are helping to drive gains so far in 2013.  We looked through all of Warren Buffett's top stock holdings to identify the biggest winners. What is so interesting today is that the actual Berkshire Hathaway shares are outperforming about 90% of the actual stock holdings that make up the Buffett and Berkshire investment portfolio.

We have included the purchase or sale transaction history of each pick. We have also provided color and the implied upside to the Thomson Reuters consensus (mean) price target objective.

Phillips 66 (NYSE: PSX) remains a relatively new holding for team Buffett but was kept steady last quarter at 27.1 million shares worth more than $1.65 billion. It is also Buffett's top stock in 2013 so far with gains of more than 15%. We expect that the way Mr. Buffett talked so positively about this oil refinery that he may add to the position ahead. We expect upside to the 1.6% dividend yield and this trades with more implied upside as the $61.30 price is short of the consensus analyst price target of $66.38.

Procter & Gamble (NYSE: PG) has been on fire in 2013 and shares have been hitting new 52-week highs and this DJIA consumer products giant is up about 13.5% so far in 2013. What is interesting is that Mr. Buffett had been lowering his stake and it had fallen by nearly half of its share amount down to 52.8 million shares. That number may be even lower ahead as Buffett tends to keep selling stocks he starts selling out of. If the position is somehow static, that position would be worth more than $4 billion. This hit a 52-week high on Tuesday above $76.50 and the consensus analyst price target is $78.75 with a 3% dividend yield as of now.

We have two runner-ups which we are not formally counting as Buffett's best performing stocks even though they have been in the holdings before. United Parcel Service, Inc. (NYSE: UPS) is technically the third best position in the Team Buffett portfolio, but there is just one small problem. This had been almost entirely eliminated down to 59,400 shares from 261,900 shares last quarter and versus 1.429 million shares two quarters ago. That being said, this 9% gain year to date is almost immaterial for Berkshire's $242 billion market cap. Ingersoll-Rand (NYSE: IR) is yet another one which would have been great had Buffett remained on its side, but he has sold out of that position in late 2012 as well. That is too bad as this was up 8% year to date in 2013.

source: dailyfinance.com

Barclays to Slash 3,700 Jobs Amid Cost Cutting

Barclays is axing at least 3,700 jobs and pruning its investment bank as its new boss put his stamp on the troubled British bank by aiming to cut 1.7 billion pounds ($2.7 billion) in annual costs and raise standards after a series of scandals.

The plans form part of an overhaul which Chief Executive Antony Jenkins hopes will convince a sceptical public that he can change a bank which has been dogged by controversy, including a $450 million fine for rigging Libor interbank lending rates.

"I understand the cynics and the sceptics out there, but cynics and sceptics never built anything. It will take years before people actually change their impression of us. I'm not daunted by that at all," Jenkins told BBC radio.

Jenkins is taking a harder line on pay and Barclays said it had cut the average bonus for its investment bankers to 54,100 pounds for last year, down 17 percent on the year. It will pay 1.85 billion pounds in bonuses, down 14 percent on the year.

Barclays said the job cuts will include 1,800 in corporate and investment banking and 1,900 in its European retail and business banking. Finance Director Chris Lucas said 1,600 of the investment bank cuts had already been made.

Jenkins plans to focus investment in Britain, the United States and Africa, and reduce the bank's presence in continental Europe and Asia.

That will include a scaling back of the investment bank's equities and advisory businesses in continental Europe and Asia. It will refocus its retail businesses in Italy, Spain, Portugal and France on mass affluent customers.

Jenkins, 51, has said he expects his plan, dubbed "Project Transform", to take five to 10 years to rebuild Barclays, and has told staff they should leave if they do not want to sign up to the new standards.

Barclays shares were up 4 percent by 0930 GMT, the best performer in a flat European banking index.



DIVIDEND LIFT

Jenkins aims to cut the bank's cost base to 16.8 billion pounds in 2015, excluding one-off costs to achieve that of 2.7 billion over the next three years, and lift its dividend to achieve a 30 percent payout ratio.

The bank will pay a dividend of 6.5 pence per share for 2012 from 6p in 2011, which analysts said was encouraging given that UK regulators are telling banks to conserve capital.

"We take this as a positive for the UK banks - the fact that a bank was allowed to increase its dividend in a backdrop where the Bank of England has been talking about capital holes in the UK banks," said Chira Barua, senior analyst at Sanford Bernstein.

Jenkins, a retail banker who was picked at the end of August to run the bank after his predecessor Bob Diamond was forced to quit, will unveil more details on his plan to media and investors later on Tuesday at London's Edwardian Royal Horticultural Halls.

He will reduce the balance sheet by cutting legacy assets. Barclays held 387 billion pounds in risk-weighted assets at the end of December, but that would be equivalent to 464 billion under stricter capital rules coming into force, and Jenkins said he aims to reduce that to 440 billion by the end of 2015.



CHANGING STANDARDS

Much of his focus has been on changing standards and culture that have been criticised as too lax after the bank's Libor fine, the mis-selling of products to millions of customers and investigations into whether Barclays provided enough disclosure in fundraisings from Middle East investors.

The Financial Services Authority and Serious Fraud Office are investigating certain commercial arrangements between Barclays and Qatari investors related to two 2008 fundraisings.

The bank confirmed it will close its controversial but profitable tax advisory business.

Jenkins' plan to keep but scale back the investment bank was expected, as it contributes more than half of group earnings.

Unveiling the strategic plan alongside annual results, the bank reported a 2012 pretax profit of 246 million pounds, down from 5.9 billion in 2011 due to the cost of compensating customers and losses on the value of its own debt.

However, the bank said its adjusted pretax profit for 2012 was 7.05 billion pounds, up 26 percent on the year and in line with the average forecast by analysts.

Pretax profit at the investment bank rose by 37 percent to 4.1 billion pounds, stronger than expected. Income in the investment bank was down 2 percent from the previous quarter, but up 13 percent on a year ago, with fixed income, equities and advisory arms all up.

The bank said it had a good January. "We've had a good start to the year, pretty much across the board and all businesses so we move into the rest of 2013 with confidence," Lucas told reporters on a conference call.

source:  http://www.foxbusiness.com/industries/2013/02/12/barclays-to-slash-3700-jobs-amid-cost-cutting/

3 Ways to Get Free Insurance Leads

Are you on the lookout for insurance sales leads? Here's the deal: sales leads need not cost you a fortune, since there are free ones out there today that can help your grow your company through converting sales leads into customers. By tapping new and stagnant lead sources - and spotting the best ones through lead validation - you will be able to take your business to greater heights.
, 
Here are three simple, almost-cost-free steps to start bringing in more insurance leads to your database:

1. Use free classified ads. This generation tool is a rich vat of free insurance sales leads. When writing up your ad, be sure to include your email address, phone contact, and website that links back to your insurance site. Establish that people can get more free and detailed information when they reply with their contact information. An easy and fuss-free way to automatically generate leads, right?


2. Use insurance message boards to your advantage. Don't hesitate to visit these message boards that are relevant to the kind of sales leads you want to find and take hold of. Post ads with a link to your site. Capture users' interest by discussing a specific promo or discount that your business is having for a limited time only, and noting that they will need to email you their contact information in order to learn more about the said promo or discount. A chance to get a good discount on an insurance product is an attractive way for these individuals to contact you.


3. Join sales leads companies. Once you sign up to these companies, you are typically given free leads as a trial. These may not be an aggressive lot, but you will get a few to start with. If they happen to convert and make money for you, you may want to consider purchasing leads from the said company. If they don't, though, check out other potential ways to obtain good, revenue-generating leads.

Your insurance leads, however, are only as good as their quality. The integration of a lead validation tool provides you the tools to automatically and immediately verify lead accuracy with point-of-entry validation. A lead verification service allows you to do "lead scrubbing" before establishing contact, therefore saving you time and money by filtering out bad leads, preventing fraudulent transaction, and improving customer conversion rates.
Lead verification also maximizes lead currency by streamlining validation, improves marketing statistics by incorporating lead quality, and converts more leads with correct and enhanced data.

Automatically and instantly validate the accuracy of your leads with the help of lead validation real-time Web services.

Article Source: http://EzineArticles.com/?expert=Peggy_J_Meeks

The Pros and Cons of Insuring your Children

You (probably) love your children and want the best for them. Does being a good parent mean insuring them too? We’ll look primarily at life insurance and critical illness insurance from the perspective of an actuary. There’s also a nifty solution below that gets overlooked.

Life Insurance

Insurance provides cash (generally tax-free) when a significant, unpredictable financial loss occurs. What financial loss does a family suffer if a child dies? Not much — unless the child is a major source of income (e.g., child star). The real loss — the devastating loss — is emotional. Money cannot compensate for the loss of someone you love.

As a parent, would you want to profit or breakeven? “Yeah, my kid died but the insurance covered the funeral and we upgraded our home theatre. Just wish we bought more.”

Having children is definitely worthwhile but expensive — easily hundreds of thousands of dollars. There are actual costs like daycare and saving for their education. There are also big opportunity costs because you have less time to do other things like sleep and upgrade your skills. My wife stayed home 9 years in total.

A child’s death is heartbreaking but eliminates future expenses. While grieving, the parents may earn less or need to borrow but that’s temporary.

We don’t like to contemplate our own deaths. Try getting a parent to think about the death of a child. That takes sales skills.

Critical Illness Insurance

Like you, your child can suffer a devastating disease at any time. You pay, in time, when you take your child to the doctor or visit them in the hospital. You pay in money if you take time off or hire someone to look after them. The biggest cost is the immeasurable mental anguish.

Canada has lengthy waiting times for treatment, even in hospital emergency wings. What if your child could get treated tomorrow in the US? All you need is money. Critical illness insurance provides a lump sum for you to use anyway you want. You reduce the need to deplete your savings or add non deductible debt.

Critical illness insurance for children is relatively rare but available from several insurers. Plans often cover child-specific diseases like cerebral palsy, cystic fibrosis and muscular dystrophy. There may be add-ons that let you get your premiums back if there’s no claim. For example, there’s Sun Critical Illness Insurance (no endorsement implied). If you’re interested, talk to an independent advisor with access to other companies rather than anyone listed on their site.

Common Pitches

Advisors use compelling techniques to convince you to buy. We’ll look at two.

1. Future Insurability


What if your child doesn’t qualify for insurance as an adult? Getting coverage now is a way to set them up for life. Perhaps, but how much insurance are you buying? Says it’s $100,000. What will that be worth after inflation? If the amount is small — say $10,000 — what is that worth even today?

If your young adult works for a company with employee benefits, they may automatically get group life insurance for 1-2x their annual salary without underwriting. If they leave, they likely have an option to convert that amount to personal coverage without underwriting. If they’re self-employed, they may be able to get insurance through the local Board of Trade or Chamber of Commerce. If they belong to an association (e.g., university alumni), they might get coverage there.

2. “Pennies a Day”


Coverage on a child may only cost pennies, nickels, dimes or quarters a day. Anyone can afford that. By extension, buy a daily coffee. Eat out. Buy, buy, buy. Each purchase is small but the total adds up unless you’re vigilant with each expense.

An Overlooked Option


If you do want insurance on your child, consider a student accident plan with 24/7/365 coverage. That’s what my parents bought when I was in primary school. Maybe yours did too. The InsureMyKids Platinum Plan costs $31/year. Industrial Alliance offers the Kids Plus Active Plan for $32/year. Both include a $20,000 death benefit among the protection.

But First

If you really want to protect your children, make sure that you and your spouse are properly insured for disability (income replacement insurance), morbidity (medical expense reimbursement, critical illness insurance) and mortality (life insurance).

As for your children, how about investing in an RESP?

article source: milliondollarjourney.com

Will Insurers Soon Pay us Not to Speed?

Would you speed if you were paid not to?

That's the thrust of a study by the National Highway Traffic Safety Administration (NHTSA) showing that motorists followed speed limits when offered financial perks.

The study, conducted by researchers from Old Dominion University in Virginia and Western Michigan University, focused on 50 people who drove cars equipped with GPS trackers designed to monitor speed. Drivers who didn't go over the limit received $25 each week.

But motorists who drove 5 to 8 mph too fast were penalized three cents each time. If they went 9 mph or more above the limit, the penalty doubled to six cents. (See: "Ticket? Uh-oh: auto insurance rate increases for common violations.")

"This had a robust effect in getting drivers to reduce their speeding," says Ian Reagan, the study's lead researcher and now a senior researcher for the Insurance Institute for Highway Safety (IIHS). "Egregious speeding, driving 9 or more mph over the limit, was just about eliminated for those that had the incentive" not to speed.

Another new driver safety technology being tested

The study sheds more light on intelligent speed adaptation (ISA) systems that determine if someone is speeding by using GPS to link a vehicle's position to digital maps that include local speed limits. In addition to GPS, some newer systems use cameras to read speed signs.

The ISAs, according to a recent report from the IIHS and the Highway Loss Data Institute, then could warn drivers that they're going too fast or even automatically slow the car.

Typically, ISAs notify drivers of speeding by one of the following:

    an audible or visual alert telling the driver to slow down
    a haptic alert via the accelerator that makes it increasingly more difficult for the driver to depress the pedal
    reducing engine throttle to automatically decelerate a vehicle

Right now ISA technology is being tested, but is not yet in use in the U.S.

Auto insurers advised to provide incentives

Insurers should consider rewarding policyholders if they obey speed limits, which would reduce traffic accidents, deaths and injuries, and the resulting auto claims and health coverage costs, says James Bliss, an Old Dominion University professor and one of the NHTSA study's key researchers.

It's too soon to tell if insurers would adopt such a plan, and if they did, how it would work. One option could be predetermined bonuses to drivers who don't speed , similar to Allstate's "Safe Driving Bonus Check" of up to 5% of premiums for every six months of accident-free driving.

Another option could be a discount on premiums, similar to how pay-as-you-go, or usage-based insurance, policies work. While pay-as-you-go (PAYG)depends on drivers plugging a device into their cars to monitor performance, ISA technology in the future would likely be installed in new model cars as a standard crash-avoidance featureDrivers would likely use either ISA technology or a usage-based system, but not both, because both monitor speed.

The pay-as-you-go roadmap

The study's results do seem to mirror the pay-as-you-go model - a hot trend in the auto insurance industry. Under PAYG, insurers give qualifying motorists premium discounts -- as much as 30 to 40% in some cases -- by installing devices in their cars that track driving habits and mileage. The safer and less you drive, the bigger the discount, according to insurers. (See: "As economy sinks, pay-as-you-go insurance soars.")

PAYG is clearly gaining traction, but it does have critics. Privacy advocates question how the gathered information will be used and some participants have complained that brake monitoring is too sensitive and reduced the amount of their promised discount.

Here's what three of the major insurers offer:

    Progressive's Snapshot: The way it works is typical:You plug in the device, which then tracks time of day and vehicle speed, miles driven and how often you brake hard. Richard Hutchinson, the company's general manager of usage-based insurance, says savings could reach 30% for the most conscientious motorists. The device must be installed for at least 30 days to create a driving profile.
    State Farm's Drive Safe & Save and In-Drive: Drive Safe & Save requires an OnStar subscription. State Farm receives odometer readings from OnStar every 30 days and, after six months, adjusts your premium to reflect the mileage. The company says discounts usually range from 10 to 50%. The insurer also offers In-Drive, which requires a plug-in to track time of day and vehicle speed, miles driven and how often you brake hard. Discounts can reach 30%, according to State Farm.
    Allstate's Drive Wise: A plug-in device records the usual motoring statistics, which are used to determine if customers qualify for a 10% discount for the first policy term. If drivers maintain safe motoring habits and low mileage during subsequent terms, savings can go as high as 30%, the company says.

Other insurers with some version of PAYG include The Hartford, Travelers, Esurance, Safeco and GMAC Insurance.

source: foxbusiness.com

Calculating Your Net Worth

Your own personal net worth is something that can serve as a truly useful tool in measuring the financial progress that you have made from one year to the next. What your net worth is, is essentially just a grand total of all of your assets, with liabilities subtracted. There is no magical number when it comes to net worth because everyone is different. Just make sure that you are using your own personal net worth in order to track your financial progress from one year to the next, and hopefully you will see some improvements in the process.

Calculating your own personal net worth is not difficult at all, and it only really requires a little bit of financial information regarding what you own, how much money you have and how much debt you owe.

Step #1 - You should begin this process by listing out all of your largest assets, such as your home and any vehicles that you may owe. Make sure that you are using accurate estimates in the current amount of dollars.

Step #2 - Next what you are going to want to do is to gather all of your latest financial statements for the assets that you have that are more liquid in nature. This is going to include your checking accounts, savings accounts, cash, investments, CDs and retirement accounts for example.

Step #3 - Third, what you are going to want to do is to consider listing any personal items that you have, that have some kind of value to them, such as jewelry, collections, musical instruments and so on and so forth. You do not have to itemize absolutely everything that you own, but you should definitely be listing any items worth more than $500.00.

Step #4 - Now what you are going to want to do is add all of your assets together from the first three steps, creating your "total assets".

Step #5 - Now you want to look at your liabilities. Again, you should be beginning with the major outstanding liabilities, including the balance on your loans or your mortgage.

Step #6 - Now, you should list other personal liabilities such as student loans, credit cards and any debt that you have to pay off.

Step #7 - Add up all of your liabilities, coming to a "total liabilities" number.

Step #8 - Now what you should do is to subtract the total liabilities from your total assets in order to come up with your net worth number. It does not matter what your net worth is, it just matters that you work on improving it from this point on. Repeat this process every year, comparing the new number with last year's number to find out if you are moving in the right direction or not financially.

source: richcreditdebtloan.com

Purchase Mortgage Market Share Shrinks to 15-month Low

The market share of purchase mortgages that closed in October reached its lowest level since August 2011.  Only 31 percent of all mortgages that closed last month were used to purchase a house versus 69 percent to refinance, according to the latest origination report from Ellie Mae released today.

The FHA loan market share also reached the lowest level since Ellis Mae began issuing the report 15 months ago.  Only about 19 percent of all mortgages closed in the month were FHA loans and 74 percent were conventional.  The decline in FHA market share, which was 24 percent a year ago, comes as FHA announced it will raise its annual premium an average cost of about $13 per month per borrower next year in order to reduce a $16.3 billion net worth deficit uncovered in the agency’s annual audit.

The closing rate for all loans jumped four points in October, rising to 54.5 percent of all applications, the highest closing rate in a year.  The closing rate for refinancing was 51.3 percent and for purchase loans rose to 61.2 percent, slightly higher than the September rate and a sign that borrowers are in better shape with credit, down payments and documentation.

Average FICO scores, loan-to-value ratios and debt-to-income ratios for all types of loans didn’t vary much from September, suggesting that lenders are not loosening standards.

Average time to close increased from 50 to 54 days from September for October for all loans.  All of the increase came from refinancings, which increased from 53 to 57 days.

The Ellie Mae Origination Insight Report provides monthly data and insights from a robust sampling of closed loan applications that flow through Ellie Mae’s mortgage management software and Ellie Mae Network™. In 2011, the total volume of mortgages that ran through Ellie Mae’s Encompass360 mortgage management software was approximately two million loan applications, or 20 percent of all U.S. mortgage originations.

source: thenichereport.com

Euro zone likely to reach deal on Greek aid payment

BRUSSELS - Euro zone finance ministers are likely to approve the next tranche of loans to Greece on Tuesday although the money is unlikely to be disbursed before December and a deal on debt reduction may need further talks.

Officials familiar with preparations for the finance ministers' meeting expect a "political endorsement in principle" on unfreezing loans to Athens, after Greece completed almost all the reforms that were required.

"It is clear that Greece has delivered," the chairman of the euro zone finance ministers, Jean-Claude Juncker, told reporters before the meeting.

"We must still reach an understanding on several details and I would expect that the chances are good that we will come to a final and joint solution this evening. But I'm not entirely certain... about the matter," he said.

Hours before the meeting, set to start at 1600 GMT, views on the outcome were still quite far apart among the individual ministers, but a compromise was possible, officials said.
"I hope, I believe and I want to a find a solution tonight," French Finance Minister Pierre Moscovici said in Paris.

But Finnish Finance Minister Jutta Urpilainen was less optimistic.

"I'm not at all sure that it will happen. More information is needed before a decision can be made, so the situation is very much open," she said after briefing parliament in Helsinki.

Greece got a second financing programme from the euro zone and the International Monetary Fund in February, but two subsequent parliamentary elections and a deep depression threw its reforms and fiscal consolidation off course.

Lending was frozen in June and to get it going again Greece had to show it was fully committed to a detailed package of economic reforms or "prior actions".

But the euro zone and the IMF also want to be sure that Greek debt, expected to be almost 190 percent of GDP next year, will fall at some point to a more sustainable 120 percent, so that they will not have to keep financing Athens.

The IMF and the euro zone are at odds on whether to shift the original target date for Greece to do that from 2020 to 2022, torn between the need to retain market confidence and allowing the Greek economy some breathing space.

Reducing the debt

The ministers will also discuss how to reduce debt in a country where the economy is expected to contract for a sixth year running in 2013.

The talks will be based on a debt sustainability analysis prepared by the IMF, the European Commission and the European Central Bank.

Options include halving the interest on existing, bilateral loans to Greece from the current 150 basis points above financing costs, lengthening their maturities, lowering fees charged by the temporary bailout fund EFSF and a debt buy-back.

Germany has floated an idea that Greece could buy back half of its 60 billion euros in bonds remaining in private hands, offering 25 cents per euro.

Euro zone officials have asked for a legal analysis of a debt buy-back and a more operational description for the Tuesday talks. A senior French official said a decision on the buy-back could even be taken on Tuesday.

"It's possible as soon as tonight, it's an option on the menu," the official said.

German Deputy Finance Minister Steffen Kampeter said that if a deal on cutting Greek debt eluded euro zone finance ministers on Tuesday, work would continue this week.

Once a deal is done, proposals on how to cut Greek debt and provide additional financing can be sent to national parliaments for approval, a step expected to be completed by Nov. 30.

This will give Athens time to complete the few outstanding "prior actions". International lenders will check if the remaining reforms are in place on Nov. 28 and euro zone finance ministers will make a final decision to pay the next tranche to Athens on Dec. 3, according to the schedule seen by Reuters.

Greece and the European Commission would then sign a revised memorandum of understanding on Dec. 4 and Greece would get the money on Dec. 5.

Having missed two tranche payments because of the suspension of the programme, Greece should now get a total of 44 billion euros if the next tranche, due in December, is paid out together with the overdue ones.

More than half of that total is cash to recapitalize Greek banks after Greece's debt restructuring hurt their capital base. But some officials said incomplete data on the recapitalization might result in the payout of 31 billion euros, rather than the full 44 billion.

The ministers will also have to decide how to finance two extra years, until 2016, they gave Greece to reach the target of a primary surplus that would allow the country to start cutting its debt pile in a sustainable way.

The troika estimated that such an extension would entail almost 33 billion euros more in financing for Athens, which is politically difficult because of growing opposition to bailouts in many euro zone countries, notably Germany and Finland.

European Central Bank policymaker Joerg Asmussen said on Sunday the euro zone should agree on just two years of funding for Greece and leave further help to be decided later, a view likely to irk the IMF, which wants a permanent solution. — Reuters

source: gmanetwork.com

Should You Be Scared Of Inflation?

More than anything else, the financial markets are driven by fear.  Investors fear large, unexpected moves in the markets.  They fear missing out on opportunities.  And, most of all, they fear losing money.

Of course, fear becomes a real factor in the financial markets when a major crisis occurs, such as the bank bailouts in 2008.  Fortunately, these types of events don’t happen all that often.

On a more consistent basis, nothing generates investor fear like the threat of inflation.  Year after year, analysts and experts of all kinds warn of the adverse effects inflation can have on an investment portfolio.

Basically, inflation means the costs of goods and services are rising over a period of time.  As such, each dollar you earn can purchase less and less of those goods and services.

So what makes inflation such a big deal?

Well, if your income level doesn’t keep up with the pace of inflation, you’re essentially taking a pay cut when inflation occurs.  On a limited basis, it’s not a major concern. However, over a long period of time or in large amounts, inflation can be a real issue.

What’s more, severe inflation can lead to social unrest and other major sociopolitical issues.  Clearly, that’s the kind of stuff no one wants to deal with.

With that in mind, you might be wondering if the recent Fed stimulus is a reason to worry about inflation.  After all, many of those critical of the Fed have been citing inflation concerns.  Their argument is that with the Fed “printing” so much money, it will devalue the dollar to the point of significantly eroding our purchasing power.

Here’s the deal with the recent round of quantitative easing (QE3): yes, it should result in some inflation.  However, it’s actually supposed to create inflation.  You see, a certain amount of inflation is actually good for the economy – especially during a recession.

Let me explain…

There are actually several positive benefits to inflation when it is sits at a reasonable level (from 2% to 4% depending on overall economic conditions).

First off, reasonable inflation levels benefit the labor market.  The thing is, companies don’t like lowering wages because it upsets the workforce.  Instead, they can let inflation do their work for them.

Without getting too technical, companies can leave wages flat in tougher periods and inflation will function as a sort of pay cut.  Eventually, this means companies can hire more workers sooner than if inflation wasn’t occurring.

Second, inflation means money sitting in the bank is losing its purchasing power.  So, it makes sense for companies to go spend that money on capital investments, such as plants and equipment.  This capital spending then leads to economic growth.

Finally, when inflation is occurring, it means deflation is being avoiding. Deflation is very bad, even worse than high levels of inflation.  Just think of the Great Depression versus the high inflation of the 1970’s.  Everyone agrees the Great Depression was far worse than the 70’s.

What’s more, the Fed has a good track record of dealing with high inflation – particularly over the last 25 years.  On the other hand, a deflationary spiral is much harder to recover from.

Here’s why this is important to investors…

The first two reasons I mentioned about how inflation can be good are also good for your portfolio.  If a company is doing well enough to hire more workers or purchase capital goods, it should also be posting higher earnings.  And of course, that should translate to a higher stock price.

Let me break that down a bit further.

Suppose we’re in a recession or slow growth period with inflation running a modest 2%.  A company that makes widgets will raise the price of their widgets in line with inflation.  However, they’re holding labor costs steady due to the recession.  That means higher revenues with roughly stable costs (yes, materials costs will also rise, but in most cases labor is the far greater expense).

So what does higher revenue mean if costs stay the same?  Bigger profits.

Now, let’s say our widget company also has $100 million in the bank just sitting there.  If inflation is at 2% and short-term interest rates are paying 1%, then the company is effectively losing money.

So what will they do?  Well, they could buy another widget factory, buy more advanced equipment, acquire another company, expand into a new product, and more.  The payoff from these types of activities is almost certainly higher than what they’d earn saving the money.

Of course, any sort of expansion or addition to the company should result in higher revenues – and likely higher profits as well.  And, that’s exactly what investors are looking for when they buy stocks – in other words, higher stock prices.

Keep in mind, the benefits of inflation have an overarching effect on a portfolio as a whole.  Over time, it will benefit a cross section of companies.  It’s not necessarily the sort of reasoning investor use when purchasing one specific stock.  However, since most investors’ portfolios contain multiple stocks or mutual funds, healthy inflation is a positive for a vast majority of investors.

Bottom line, inflation isn’t nearly as bad as many investors think, especially during a recession.  Just keep an eye on inflation expectations.  As long as the number doesn’t exceed 3% to 4%, there’s nothing to worry about.  Even better, it should actually benefit your portfolio over time.

source: excessreturn.net

Foreclosure cancellations surge in Golden State

The number of foreclosures canceled by banks surged 62% across California last month, the same month major mortgage servicers were required to comply with new rules outlined by this year’s National Mortgage Settlement.

Banks in the Golden State canceled 15,539 scheduled auctions last month, according to a report by website ForeclosureRadar.com. That was a 36.7% drop from the same month last year.

Sean O'Toole, founder of ForeclosureRadar, wrote in the October report that the increase was most likely due to the effective banning of dual tracking in the state. Dual tracking refers to the practice by banks of pushing a borrower through the foreclosure process while at the same time negotiating a loan modification.

“This is another example of where changes in foreclosure trends are driven by government intervention, and not necessarily economic recovery. While the impacts are still unclear, the elimination of dual tracking may avoid some unnecessary foreclosures, but will lengthen the foreclosure process and delay ultimate recovery. Expect further impacts to foreclosure trends in the months ahead.”

There has not been a comparable spike in California foreclosure cancellations since December 2011, when banks were under heavy scrutiny by state and federal regulators for improperly foreclosing on troubled borrowers. That scrutiny resulted in the big mortgage settlement earlier this year — of which California was the biggest beneficiary.

The settlement, and a series of California laws backed by State Atty. Gen. Kamala D. Harris, resulted in effectively banning dual tracking. O’Toole said banks are probably canceling foreclosure sales so that they will not be in violation of any laws.

Before the ban on dual tracking, a bank would often give a homeowner a trial loan modification and continue to postpone the foreclosure auction. By keeping the trustee sale in place, but postponing it, the bank could foreclose immediately if a trial modification did not work out.

But consumer activists railed against this practice, saying that it confused homeowners, strung them along and in some instances resulted in unnecessary foreclosures. Consumer activists had tried to pass legislation banning the practice in California, but the measures had failed until Harris put her weight behind them.

source: latimes.com

5 Smart Ways to Avoid a Cash Crisis

Here’s an interesting puzzler. How is it possible for a profitable business to be growing and failing at the same time? The all important answer to this conundrum lies in the company’s cash flow.

Hot product companies that experience rapid sales growth have to purchase and assemble inventory months in advance of shipment to retailers and distribution partners. This eats up a company’s cash. And, just when customers get around to paying for last month’s product shipments the company has to invest its available cash in the next inventory production run. This is how too much success can quickly lead to an empty bank account.

If a commercial bank doesn’t step in to help a company catch up, the company may have to lay off workers, cut back production or face bankruptcy. This scenario is the living nightmare of American business today.

Here are five easy ways to protect your company’s precious cash life line.

No. 1: Limit exposure to high risk customers.  Are your largest customers also your company’s slowest paying customers?  If so, take immediate steps to diversify the customer mix to favor faster paying customers.  Sales commission payments should be tied to the timing of customer collections too.

No. 2: Bill frequently.  Most service-oriented businesses bill on a monthly basis or at the end of a project.  Why not bill customers every week or every two weeks in the form of progress payments?  The faster companies invoice customers, the faster they get paid.

No. 3: Reduce dependence on a single funding source.  As too many entrepreneurs have learned, it’s relatively easy for banks to pull credit lines when companies can least afford it.  To minimize the risks of sudden cash shortfalls, smart entrepreneurs set aside one or two credit cards for emergencies.

The first time a bank lending officer learns about your company should not be the day you are desperate for cash.  If you don’t know the names of at least four bank credit officers, ask your business colleagues for referrals now!  Smart business owners are always eager to meet credit officers from big and small community lenders.

No. 4: Streamline product lines.  Entrepreneurs who don’t have a lot of loose cash should avoid producing too many products in too many styles to sell to too many different types of customers.  The more complex a company’s product line, the more cash that is required to produce, store, advertise and deliver goods to customers.

No. 5: Set high profitability standards.  The companies that are most vulnerable to financial heartaches during a recession or credit crisis are low profit margin businesses.  Simply stated, low margin businesses have no margin for error.  Don’t be shy about axing products or services that don’t match or exceed your industry’s average gross profit margins.

There is another reward for entrepreneurs who emphasize cautious cash management in their day-to-day business operations.  Lenders and investors compete to fund them.

source: foxbusiness.com

Here’s an interesting puzzler. How is it possible for a profitable business to be growing and failing at the same time? The all important answer to this conundrum lies in the company’s cash flow.
Hot product companies that experience rapid sales growth have to purchase and assemble inventory months in advance of shipment to retailers and distribution partners. This eats up a company’s cash. And, just when customers get around to paying for last month’s product shipments the company has to invest its available cash in the next inventory production run. This is how too much success can quickly lead to an empty bank account.
If a commercial bank doesn’t step in to help a company catch up, the company may have to lay off workers, cut back production or face bankruptcy. This scenario is the living nightmare of American business today.
Here are five easy ways to protect your company’s precious cash life line.
No. 1: Limit exposure to high risk customers.  Are your largest customers also your company’s slowest paying customers?  If so, take immediate steps to diversify the customer mix to favor faster paying customers.  Sales commission payments should be tied to the timing of customer collections too.
No. 2: Bill frequently.  Most service-oriented businesses bill on a monthly basis or at the end of a project.  Why not bill customers every week or every two weeks in the form of progress payments?  The faster companies invoice customers, the faster they get paid.
No. 3: Reduce dependence on a single funding source.  As too many entrepreneurs have learned, it’s relatively easy for banks to pull credit lines when companies can least afford it.  To minimize the risks of sudden cash shortfalls, smart entrepreneurs set aside one or two credit cards for emergencies.
The first time a bank lending officer learns about your company should not be the day you are desperate for cash.  If you don’t know the names of at least four bank credit officers, ask your business colleagues for referrals now!  Smart business owners are always eager to meet credit officers from big and small community lenders.
No. 4: Streamline product lines.  Entrepreneurs who don’t have a lot of loose cash should avoid producing too many products in too many styles to sell to too many different types of customers.  The more complex a company’s product line, the more cash that is required to produce, store, advertise and deliver goods to customers.
No. 5: Set high profitability standards.  The companies that are most vulnerable to financial heartaches during a recession or credit crisis are low profit margin businesses.  Simply stated, low margin businesses have no margin for error.  Don’t be shy about axing products or services that don’t match or exceed your industry’s average gross profit margins.
There is another reward for entrepreneurs who emphasize cautious cash management in their day-to-day business operations.  Lenders and investors compete to fund them.


Read more: http://smallbusiness.foxbusiness.com/finance-accounting/2012/11/15/5-smart-ways-to-avoid-cash-crisis/#ixzz2COXjczLv

Here’s an interesting puzzler. How is it possible for a profitable business to be growing and failing at the same time? The all important answer to this conundrum lies in the company’s cash flow.
Hot product companies that experience rapid sales growth have to purchase and assemble inventory months in advance of shipment to retailers and distribution partners. This eats up a company’s cash. And, just when customers get around to paying for last month’s product shipments the company has to invest its available cash in the next inventory production run. This is how too much success can quickly lead to an empty bank account.
If a commercial bank doesn’t step in to help a company catch up, the company may have to lay off workers, cut back production or face bankruptcy. This scenario is the living nightmare of American business today.
Here are five easy ways to protect your company’s precious cash life line.
No. 1: Limit exposure to high risk customers.  Are your largest customers also your company’s slowest paying customers?  If so, take immediate steps to diversify the customer mix to favor faster paying customers.  Sales commission payments should be tied to the timing of customer collections too.
No. 2: Bill frequently.  Most service-oriented businesses bill on a monthly basis or at the end of a project.  Why not bill customers every week or every two weeks in the form of progress payments?  The faster companies invoice customers, the faster they get paid.
No. 3: Reduce dependence on a single funding source.  As too many entrepreneurs have learned, it’s relatively easy for banks to pull credit lines when companies can least afford it.  To minimize the risks of sudden cash shortfalls, smart entrepreneurs set aside one or two credit cards for emergencies.
The first time a bank lending officer learns about your company should not be the day you are desperate for cash.  If you don’t know the names of at least four bank credit officers, ask your business colleagues for referrals now!  Smart business owners are always eager to meet credit officers from big and small community lenders.
No. 4: Streamline product lines.  Entrepreneurs who don’t have a lot of loose cash should avoid producing too many products in too many styles to sell to too many different types of customers.  The more complex a company’s product line, the more cash that is required to produce, store, advertise and deliver goods to customers.
No. 5: Set high profitability standards.  The companies that are most vulnerable to financial heartaches during a recession or credit crisis are low profit margin businesses.  Simply stated, low margin businesses have no margin for error.  Don’t be shy about axing products or services that don’t match or exceed your industry’s average gross profit margins.
There is another reward for entrepreneurs who emphasize cautious cash management in their day-to-day business operations.  Lenders and investors compete to fund them.


Read more: http://smallbusiness.foxbusiness.com/finance-accounting/2012/11/15/5-smart-ways-to-avoid-cash-crisis/#ixzz2COXjczLv

For dentist with student debt, repaying is like pulling teeth

VACAVILLE, Calif. — His jaw clenched beneath a blue surgeon's mask, Opanin Gyaami jerks his right arm and pulls out a prize: the decayed tooth of patient Larry Butler, also known as state prison inmate J22312.

By the time he is done, Gyaami's smock and mask are spotted with the inmate's blood. He gently pats Butler on the shoulder and wishes him well.

The 71-year-old dentist reports to the state prison in Vacaville day after day, long past retirement age. He wishes he could have hung up his drill and forceps years ago, but he's still paying off a student loan.

After borrowing $50,000 in the 1980s and ignoring payment notices, Gyaami owes more than $500,000 with penalties and interest. The Justice Department took him to court and is seizing $3,000 from his paycheck each month.

Gyaami doesn't expect any sympathy; he knows he's at fault and has added to his problems by falling behind on his income tax. He acknowledges he made some bad decisions along the way.

"I don't want to sound like I'm blaming someone else for my woes," he said. "If you take a loan and don't pay it, you're responsible. It became so overwhelming. I got scared, and it didn't go away."

Student-loan debt in the United States has surpassed $1 trillion. A record number of loans are in default, according to several recent reports, and lawmakers in Washington are pushing for reform to make it easier to discharge some of the debt in bankruptcy.

Although economists' concerns about this debt are typically focused on the young and newly employed, about 2.2 million Americans over age 60 collectively owe more than $43 billion in student loans, according to the Federal Reserve Bank of New York. Many of those loans are in default.

"People think they're kids, but I'd say half the people who come here are over 40, and we have a lot over 60 and some over 70," said Elena Ackel, a senior attorney with Legal Aid Foundation of Los Angeles, which often advises people with student loan debt. "It just doesn't end because of all the fees and everything."


By the time Gyaami graduated from Loma Linda University in 1983 with a degree in dentistry, he had taken out five loans to pay for his education, including $50,000 from the federally guaranteed Health Education Assistance Loan program.

The special loan program, offered from 1978 to 1998, lent $4 billion to 157,000 aspiring doctors, dentists, podiatrists, chiropractors and other health professionals. The Department of Health and Human Services, which oversaw the loan program, reports that 935 of the borrowers are in default, owing $115 million collectively.

After graduation, Gyaami owed about $100,000 and made monthly payments to Loma Linda, none of which was applied to the $50,000 loan. Those payments, he later discovered, should have gone directly to the bank that issued the loan.

When late notices started to arrive, Gyaami ignored them. "There was nothing I could do about it," he said. "I was behind with my business."

Gyaami admits he's better at dentistry than business. He didn't realize how dire the situation had become even after hearing from the Justice Department, which sues borrowers who default on federally insured student loans. Gyaami's $50,000 loan had grown to $195,000 with penalties, interest and fees.

He continued to discard the collection notices. He said he couldn't afford to pay. By June 2010, the $195,000 debt had jumped to $522,214.

The dentist offered to pay $150,000 to settle the suit and close the loan — the money would come from taking a second mortgage against the family's house — but the Justice Department rejected it. A department representative declined to comment on Gyaami's case.

In December 2010, the government reduced the debt to $400,000 and agreed to collect $3,000 a month from his monthly checks, Gyaami said. He thinks it will take more than 10 years to pay it off.

"It's not easy to deal with," Gyaami said. "It looks like I'll have to work until the day I drop off and die."




Born and raised in Ghana, Gyaami was one of 12 children. He studied theology in Nigeria before moving to the United States in 1970. At Andrews University in Michigan, he met his wife, Elizabeth, and they moved to California. He earned a master's degree in public health at Loma Linda University and entered dental school.

Gyaami thought that his dental career would be lucrative and that he wouldn't have trouble paying off his student loans. He opened his practice in Grand Terrace, near San Bernardino.

But he struggled to turn a profit, netting an average $15,000 a year after payroll, rent, supplies and a loan for dental equipment, which was eventually repossessed. Then an employee embezzled about $15,000, which he didn't report to the police.


"She had two children. I couldn't bring myself to prosecute her and let her go to jail," he said.

In 1994, he closed the practice and took a job in the state prison system, first in Blythe and then in Vacaville at the California Medical Facility, where he's worked more than 15 years.

Even though his income increased at the prisons, he still struggled. He and his wife, who worked at the Vacaville prison as a dietitian, put their five children through private schools. Each month they tithed 10% of their income to their church.

He and Elizabeth are devoted members of a Seventh-day Adventist church, where he serves as an elder. "I've been able to get through all of this because of God," he said.

Gyaami treats 30 to 40 prisoners a week, under the watchful eye of uniformed guards. Many of his patients are violent felons serving time for rape, robbery or murder.

As an experienced dentist, Gyaami is among the highest-paid state employees in California, making about $275,000 per year.

"I'm completely broke, even though I make all that money," he said. "The good news is I'm strong enough to practice. And I love doing dentistry, even in the prison."

Since 2008, Gyaami has fallen behind about $120,000 in federal taxes and pays $6,000 a month to the Internal Revenue Service on top of the $3,000 to the Justice Department. His monthly paycheck, after deductions, is barely enough to live on, he said.

Other medical professions have tried to address this problem among its members. The Osteopathic Medical Board of California, for instance, has suspended the licenses of osteopaths who fail to repay their student loans. Donald Krpan, executive director of the board, defends the policy.

"When they don't pay the loan, the federal government comes in and pays the loan. At that point, you and I as taxpayers pay the loan," Krpan said. "It's an aggravation to those of us who borrowed money and paid our loans."

Despite the lingering debt, Gyaami and his wife live a comfortable lifestyle. One year ago they took a two-week cruise in the Caribbean that cost about $4,000, said Gyaami, who called it the most luxurious vacation they had ever taken.

"We forgot about everything and relaxed," Gyaami said, "even though in the back of our heads we knew we were coming back to pay for it."

They live in a 4,000-square-foot home in Vacaville, which Elizabeth purchased new in 2001 for $429,500, according to property records. In 2010, she took efforts to make the home more difficult for creditors to seize by transferring its deed to a corporation she started, Eternal Enterprise Corp.

Gyaami and Elizabeth have been married 41 years. Four of their children are doctors, and each graduated with college debt. He said he hopes they learned from his mistakes.

One of his sons recently negotiated a good deal before he took a new job. His employer paid off his student loans.

source: latimes.com

How Your Course Load Affects College Financial Aid and Student Loan Help

If you are using college financial aid to pay for your education, you need to understand how your course load affects financing. Being approved for loans depends on several factors, including financial need, your performance/progress as a student, your expected family contribution, and the number of credit hours for which you are enrolled. See how your course load will impact your borrowing, whether it’s federal or private.

Course load and federal college financial aid

Your federal college financial aid assumes you will be attending school at least part-time. In fact, some college financial aid is given in direct proportion to the number of credit hours you are taking. The amount of a Federal Pell grant award, for example, is awarded after taking into account your expected family contribution and whether you are enrolled in school full-time, part-time or even less than that. To understand how your specific financial aid package will be affected by altering your enrollment hours, it is best to sit down with your college loan advisor.

Course load and private college loans

Many private lenders will also require you to be enrolled in school at least part-time to be eligible for student loan help. If you are borrowing private student loans, be sure to work with your lender to fully understand the borrowing terms. Carrying too few credits can cause you to become ineligible for private college loans. Additionally, dropping below the part-time status requirement means you’ll have to start repaying your loans sooner than you expected.

Leaving school and college financial aid

If you decide part way through your education to withdraw from classes, you immediately enter the six-month grace period that precedes required payments on your college loans. This is also true if you drop below part-time status. Talk with you financial aid advisor before withdrawing from classes to see how it will impact the student aid package you received. In some cases, you may even have to repay federal grants if you do not complete a required number of credit hours, and scheduled future loan distribution may be impacted.

Be an informed borrower

Even if you have no intention of dropping below full-time status as a student, it’s important to understand the terms of your federal and private college loans in the event that your plans change. Understanding the full obligation of your loans can help you make smarter decisions about your future and maintain a positive credit score.

source: 20smoney.com

Getting a Loan With Bad Credit

In today’s struggling economy, a lot of people have low credit scores and loans are more difficult to get. Your credit score is based on payment history, outstanding debt, credit age, and new credit. To keep your credit score up it is important to pay bills on time and keep your credit card balances low. Your credit score determines how much your can borrow for a loan. If you have bad credit, you can still get a loan, it is just tougher with limited options. Websites like www.badcreditloans.com make it easy for people to get loans regardless of their credit history.




Personal loans are usually considered to be a bad way to borrow money, primarily because of the very high interest rate that comes with them. However, personal loans are a reliable and affordable option for many people, particularly those with limited savings and credit options.

Before taking out a loan it is important to be educated on the loan process. The Bad Credit Loans website has a large selection of resources to help borrowers make the best loan decisions. There are informational articles including tips on when to take out a loan, spending a loan responsible, repaying a loan, budgeting, and more.

In order to be eligible to apply for a personal loan, you must be at least 18 years old, a United States citizen or legal resident, have a steady income of at least $1,000/month after taxes, and have a checking account in your name.

To apply for a loan, you just need to fill out a short application online. Once approved, you will be presented with a number of competitive loan offers from local vendors. Bad Credit Loans has a network of trusted lenders for a variety of loan types including personal, business, mortgage, home, student, and auto loans.

Comparing loans can be quite time consuming, but by using an online service like Bad Credit Loans you will save hours of valuable time by being able to review multiple offers within minutes.

If you decide to take out a loan only borrow what you can afford to pay back, avoid borrowing from more than one lender, repay the loan on time, and set up a realistic budget to help avoid the need to borrow in the future.

Once you decide on a particular loan offer, you are guaranteed to get the money directly deposited into your bank account within no more than one business day. To repay the loan, your lender will withdraw the loan amount, plus any fees and interest charges, directly from the bank account in which the money was deposited on the set repayment date, which is usually your next payday.

There is no fee to apply for a loan on the Bad Credit Loans site and there is no obligation to actually take out a loan. To learn more, go to www.badcreditloans.com.

source: 20smoney.com