Junkie's Recommendations

Cancel a card, hurt your credit score

2007-05-18T12:39:00.000-07:00

Everyone knows that your credit score is important to your financial life, affecting the rates you get for mortgages, credit cards and insurance. Improving your score may save you thousands of dollars in interest. So would it help your score if you got rid of a credit card?

"Pay your bills on time and keep your credit expenditures under control, and you won't have to worry about your credit rating," says Craig Watts, spokesman for Fair Isaac Corp., which calculates the FICO score for consumers. "If you're having trouble doing that, sometimes canceling a credit card in an effort to get your credit behavior under control is more important than your credit score."

That's the short answer. But since virtually everything that makes up your credit score depends on something else -- depends on your credit mix, the number of cards you carry, the length of your credit history, your rate of credit utilization and myriad other things -- there is a longer answer.

In most cases, canceling a credit card won't help your credit score. In fact, it may actually hurt your score. You see, your credit score depends on how you shake out in five different credit-scoring categories, each weighted differently when calculating that score.

According to Evan Hendricks, author of the book "Credit Scores and Credit Reports," canceling a credit card potentially can hurt you in at least two of the five categories -- and maybe even a third.

Credit-utilization ratio is key
First, canceling a card could upset your credit-utilization ratio, the second most heavily weighted category in Fair Isaac's credit scoring algorithms. For example, assume you have three cards with total available credit of $20,000. Assume further that your outstanding balances total no more than $6,000 of that available credit at any one time. Since creditors like to see a credit-utilization ratio of 30 percent to 35 percent or less, you're in good shape. Now, assume that you cancel a card with a zero balance and a $10,000 credit limit. Suddenly, your utilization ratio jumps to 60 percent, and your credit score drops.

As counterintuitive as that seems, that could happen. Impersonal credit-scoring systems aren't concerned so much with how much available credit you have but with how you manage that credit. And in the credit-scoring world, a 30 percent utilization rate is much better than a 60 percent one. "That's what scoring models want to see, a good utilization rate," Hendricks says.

Furthermore, he says, canceling that card could result in a double whammy to your credit score, "because each card is scored individually, and then all your cards are scored together. (If) you've just canceled the card with a zero balance, (you've) lost a great individual score." Regardless, if you still want to cancel a card, he says, "make sure to pay down your other balances to keep that rate in line."

Older credit is better
If you do cancel a card, you can compound your error even further by canceling the card that you've had the longest period of time and on which you've been making regular payments. By canceling an old card, the length of your credit history on open accounts will grow shorter. Both the FICO score and the VantageScore credit-scoring formulas take into account the credit histories of even closed accounts in assessing how long you've been managing credit. However, according to Watts, "that history will finally disappear from the formula when a credit bureau of its own accord removes old credit account information from your credit file."
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Barrett Burns, CEO and president of VantageScore Solutions (the company formed by the credit bureaus Equifax, Experian and TransUnion), agrees, but cautions that the scoring algorithm "is weighted such that if you maintain that older account, you're better off because it goes to a pattern of payment history." Nevertheless, he says, if it's an older account that you don't use, and you're paying fees on it, "you're probably better off closing it out for privacy rather than credit score reasons."

There's at least one more nuance to consider, Hendricks explains. If you're intent on canceling a card, cancel a younger card or cancel one on which the credit card issuer doesn't report the credit card limit. "Some credit card companies don't report your credit limit," he says. "You can find out which ones by getting a copy of your credit report."

Number of cards matters
Your credit report may also alert you to another reason to cancel a credit card: You can have too many credit cards. Though there is no magic number -- again, because each person's credit situation is so different -- your credit report does give so-called reason codes for your credit score.

There are more than 40 reason codes -- reasons to grant or deny credit -- and up to four are given with your credit report to show what factors affected your score. The most common reason codes, according to Equifax, are as follows.

One of the reason codes (reason No. 4) tells you if having too many cards has hurt your score. Common sense should tell you that the older you are and the better you manage your credit, the more cards you can have in your wallet before you reach the magic number that triggers the reason code (though you may be surprised to learn that 10 or more cards is not too high in some cases). "In any event, if you're in that rare category and have plenty of credit and low balances on the other cards, canceling a card may help you," Hendricks says.

Though canceling a card probably will not increase your credit score, holding on to one has a number of advantages. For one, Fair Isaac and VantageScore look for a healthy credit mix, a mix that might include a mortgage loan, a car loan, maybe a store card or two, three or four MasterCard or Visa cards and a home equity line of credit, or HELOC, for example.

HELOC effect
Of course, it's not simply a matter of having diverse sources of credit. They also want to see responsible credit usage on your part, including credit card balances in the healthy 30-percent-to-35-percent range. "That's a sign of an active and responsible credit person," Burns says. "On the other hand, if somebody consolidates their credit cards or revolving credit down to just a handful of credit sources and has high utilization rate, that will be detrimental to their score."

And this is where credit-score math gets fuzzy. Many consumers have consolidated outstanding credit card balances into a HELOC, both for the lower rate and because they thought doing so might help their credit scores. (For what it's worth, Fair Isaac's Watts wonders whether mortgage brokers, in an effort to generate more loans, first pitched the myth that canceling a credit card would help your score.) Once again, the answer is "it depends."

"Home equity lines of credit are really interesting creatures when it comes to credit scores," Watts says.

What's interesting is that it may make sense to consolidate credit card balances into a HELOC because Fair Isaac may treat the new HELOC as an installment loan rather than a revolving loan. However, Watts points out, that with Fair Isaac that only happens if the HELOC is a large line of credit. Small HELOCs are regarded as revolving lines of credit, much like your credit cards. Thus, as with credit cards, it might help your credit score in some cases to close out a HELOC.

"But in all cases, paying down a real estate-based loan like a mortgage or a HELOC is going to help your score," says Watts.

And that seems to be the key to the kingdom when it comes to credit cards and credit scores: Don't cancel your cards. Pay them off. And after you've done that, don't send them back. Cut them up.

Do that, and you have a zero balance enhancing your credit utilization rate. Do that, and you maintain your credit history on open accounts. Do that, and your credit mix looks good. Do that, and you still have the available credit on the card you cut up. All you have to do is ask for a new card when you need it.

Nevertheless, if you have a compulsion to cancel credit cards, do it the right way. First, cancel your department store cards; then cancel the newest MasterCard or Visa with the lowest credit limit, making sure to close the card from the company that doesn't report credit limits.

"And make sure to keep your credit-utilization ratio in line as you cancel, paying down balances on your other cards, if necessary, to keep it in line," says Hendricks. Score one for the consumer.

Which card is right for you?

2007-05-18T12:37:00.000-07:00

Zero-or-low interest rate
Best for: Anyone willing and able to pay down existing credit card debt relatively quickly.

Pros: Most cards offer the bargain rate on balance transfers from other cards. The lower rate can save you a bundle on your current interest costs.

Cons: The low rate usually lasts for only six to nine months, then reverts to something higher, usually around 14 percent to 16 percent. One late payment and the card will revert to the higher rate immediately. If you transfer a large balance but don't pay it off during the favorable rate period, you may end up with a higher rate than you had to begin with.

Rewards
Best for: People who make the majority of their purchases on a credit card and pay off the balance each month.

Pros: Cards offer cash back, airline miles or points toward purchasing select merchandise based on the amount you spend. Some rewards cards, for instance, currently offer as much as 5 percent cash back on select purchases with no annual fee.

Cons: Some cards have high interest rates and annual fees that cancel out the reward benefits. Other have complicated and unfavorable redemption policies. Always read the offer carefully.

Secured
Best for: Someone with has gotten into trouble with credit cards in the past.

Pros: Most secured cards report to the three credit bureaus, so using one responsibly can be a way to establish or repair your credit rating.

Cons: The secured part means you put down a deposit, usually between $200 and $250, with your application. Many secured cards have high interest rates and annual fees. Read the fine print very carefully.

Student
Best for: College students who can handle money responsibly.

Pros: Students can qualify for theses cards without an established credit rating. Many offer extra benefits such as cash back or bookstore discounts.

Cons: Some companies charge higher interest rates for students. It's easy for students who are inexperienced with handling credit cards and finances in general to rack up unmanageable debts quickly.

3 steps to boost your credit score

2007-05-18T12:36:00.001-07:00

If your credit score is below 660, take these three steps now.

1. Pay every bill on time.
A late payment will instantly drag down your score. A few months history of timely payments, however, can help boost it.

2. Pay down the cards that are maxed out first.
You'll get points deducted from your score any time you charge more than 50 percent of the limit on any kind of credit card.

3. Do not cancel any credit cards.
Counterintuitive, yes. But not when you consider that one-third of your score is based on how much of the credit available to you you're actually using. Cutting up credit cards will automatically decrease the amount of credit you have available. Better to stick the cards in a drawer until your score is back on track.

Take charge of your cards

2007-05-18T12:34:00.000-07:00

The average American carries about $5,000 in credit card debt. Does that sound familiar?
With a typical interest rate of 16 percent, it would take 12 years to pay that off, assuming the cardholder makes only the minimum payment and doesn't charge any new purchases. Worse, that person would pay an extra $2,500 in interest payments for a total bill of $7,500.

Think of what you could do with that much money. A fabulous vacation perhaps? A used car for your son in college? If you socked it away in your retirement account, you'd have an extra $24,000 in 20 years. That's a lot of greens fees.

Simply put, that money that could go toward so many bigger and better things. "You wouldn't set fire to a stack of $100 bills would you?" asks personal finance expert Jane Bryant Quinn. "Paying interest on your credit cards isn't much different."

That credit monkey on your back can affect every aspect of your financial picture from how much money you have in your wallet to whether you get the next job you apply for. That's why taking control of your credit cards -- and keeping debt at bay -- is the No. 1 ingredient for financial success. "Taming credit card debt is the first thing I do with all my clients," says Bill Driscoll, a financial planner in Boston who specializes in debt management. "Virtually everyone can learn to use credit cards better."

With the strategies outlined in the "Take Action" section of this site, you can take control starting today, no matter how deeply in debt you may be. And even if you're the type to pay off your balance every month you'll learn to make your good credit standing work even harder for you.

To make any headway, however, you've got to first understand why using credit cards wisely is so important.

Gift card trading: The secondary market

2007-05-18T12:33:00.000-07:00

For your wedding, you got four Wal-Mart gift cards and one for Barnes & Noble, but you'd like to get one big present at Pottery Barn. There are a number of Web sites that can help you turn your unwanted gift cards into gifts you want -- or cash.

"Money is money. If you have three $5 cards, you can trade them for $15," says Bob Butler, president and CEO of cardavenue.com, a 3-year-old site where people can buy, sell or trade gift cards.

The gift card market is estimated to be $60 billion, and experts say 10 percent to 15 percent of gift cards go unused. "A $25 gift card is worth $25," says Butler. "People don't think about it as money. People will have $200 in gift cards lying around. You can sell your card for cash or trade, and most people trade."

The largest market of gift cards for auction is at eBay, of course. There are so many cards available on eBay that they separate them into various categories; even by retailers. Some are also listed under the "gift certificate" heading.

Buying gift cards on a Web site can bring potential savings. It can also give you access to a store or restaurant that might not be in your area, but is in the neighborhood of someone to whom you're giving a gift. Listed recently on eBay were: a $395 Coach store gift card with a $335 bid ($2 shipping), a $466 Pottery Barn/Williams-Sonoma gift card with a $355 bid (shipping fee not specified), a $150 card for the Palace of Auburn Hills, where the Detroit Pistons play, with a $51 bid ($1 shipping) and a $400 Nike gift card with a $280 bid (free shipping).

Other Web sites -- including cardavenue.com, plasticjungle.com and swapagift.com -- are devoted exclusively to buying, selling or trading gift cards.

Cardavenue.com has an extensive inventory of cards of all kinds. "We average 5,000 cards a month," says Butler.

If you want to trade a card, you create a "wish list" of cards you will accept. For example, a recent trader had a $162.56 Tiffany & Co. gift card and would accept a card for retailers such as Armani Exchange, Trader Joe's and Costco.

"Most people combine various gift cards to get one they want," says Butler. "Say, they'll have three Target cards and a Borders and a Starbucks, totaling $150. They can trade them on our site for one $150 card at Lowe's or someplace."

Cardavenue.com has free registration, and it charges the auction seller 3.95 percent of the auction's closing price, plus a 50-cent closing fee. Auction buyers pay no fee. For trades, both parties involved pay 3.95 percent of the value of the card, plus a 50-cent closing fee. If the value of one customer's gift card is not equal to the value of the card he or she wants to trade for, he or she can offer the other party cash for the balance. Those negotiations are between the two parties. PayPal is accepted.

How to settle with a debt collector

2007-05-18T12:31:00.000-07:00

That bill has been sitting at the bottom of your paperwork pile for a while. Despite your best effort, ignoring it hasn't made it disappear.

Now you've acquired somebody who wants to be your new best friend -- a debt collector.

You can't wait any longer to face it. In fact, many credit experts say too often consumers dodge the opportunity to resolve their money issues with the debt collector.

"If you know you lost your job and you don't have the money to pay your creditors, don't be reactive, be proactive," says Robin Holland, spokeswoman for Equifax, a credit reporting agency.

Many people don't know what to do when it comes to working out a deal with a debt collector. The following questions could help:

True or false:
An account sent to collection still can be deleted from your credit report.
That's true. A deletion is possible, but that doesn't mean all creditors will agree to it, cautions consumer credit attorney Edward Jamison of the Jamison Law Group P.C. in Los Angeles, which specializes in helping consumers get their credit ratings restored.

Even if the collection agency agrees to a deletion, it's only of limited value.

Maxine Sweet, spokeswoman for Experian, explains that if the deletion letter came from the collection agency, only the collection account would be removed. The original credit or account from the creditor would remain on the report.

"The original creditor can verify to us that the original debt was an error and should not have gone to collection and instruct us to remove both the original account and the collection account," Sweet says.

Jamison explains the creditor deletion gets rid of the account completely. This, in turn, "helps the credit score because it is like it never happened, where a paid collection means you were not creditworthy in the past."

He advises that if the consumer is able to get a deletion, have the letter faxed stating the terms. For instance, it could say: "I, ABC Collection, agree to delete John Doe's collection account with the account number 1854642 in return for John Doe paying X dollars." Make sure it's signed by someone at the company.

The consumer can't demand a deletion without reason, warns Pamela Baird, a collection attorney for Lacy Katzen LLP in Rochester, N.Y.

"If it's disputed and they investigate it and they find the debt has been reported in error or inaccurately, they delete it," she says. "They are telling the credit reporting agency they want that trade line taken off the consumer's credit report."

Craig Watts, public affairs manager at Fair Isaac Corp., says some creditors don't often provide deletions because it can be deceptive.

"One of the main reasons lenders do business with credit bureaus is because lenders want a better view of the risk involved in extending credit to any individual," he says. "Deleting a collection account from a person's history is not in the best interest of the lender because such information is important to a fair assessment of the person's credit risk."

True or false:
Paid-in-full collections are better than settled.
Depends on who you ask. If it's not possible to get the account removed from the report, Jamison suggests settling. He says this can prevent the resale of your debt, prevent a lawsuit and alleviate damage to your credit report and credit score.
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Collection agencies will act as middlemen during the deal, says Jill Jensen, director of Omnium Worldwide Inc., a collection agency. She says Omnium's clients, which include banks, credit card companies and phone companies, will define the parameters for settling.

"The client will have payment criteria, for instance, on when the account can be paid, what kind of terms can be offered and in what situations the agency can offer the settlement," she says.

For example, she says, a client may tell the debt collector, "The options we have are payment in full or no more than three payments spread over 90 days."

Jensen says the client will expect Omnium to gather enough information about the consumer to decide how much to deviate from the preferred payment in full.

"If the customers' financial situation is such that other terms might be appropriate, we would act as the conduit to the client and seek permission to set payment terms or settlement outside of that area."

If you choose to settle, do so for as little as possible, Jamison cautions.

"It's better to save 50 cents on the dollar and lose a couple points off your credit score by having a settlement as opposed to 'paid-in-full,' because the collection and the charge-off notation is what's hurting the account," he says.

Watts explains, "As far as the FICO credit risk score goes, the paid-in-full status is going to have little, if any, affect on the person's score."

True or false:
You can be sued after the statute of limitations period ends.
True, technically, says Baird, but only if you reaffirm the debt.

Generally, the statute of limitations is the amount of time the debt collector can take legal action. This action can include a lawsuit or having your wages garnished. The time period is set by individual states.

American Collectors Association International, or ACA, a trade association of third-party debt collection businesses, says the statute of limitations is longest for documents that have been notarized by a notary public, while it is shortest for actions on open or revolving accounts such as credit card debts.

The countdown begins on an accounts' last activity, according to ACA. It can restart with a partial payment or a written promise to repay, which reaffirms the debt, depending on the state law.

It's suspended if a consumer leaves the state or is sent to prison. However, the statute doesn't prohibit the collector from going after the debt, it merely prevents the collector from taking any legal action, such as filing a lawsuit or garnishing wages.

Jamison says any time the statute of limitations has expired, you probably don't want to settle.

If you choose to settle beyond the statute of limitations, Jamison says the company is more likely to agree to delete the account with payment because the company knows it can't sue.

Jensen says Omnium doesn't sue most of the debtors it deals with.

"The legal process takes time. Most of the accounts we get, we don't have the period of time to sue," she says. "We do occasionally file suit when somebody has the ability to pay, but refuses to pay."
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She says the agency can determine the person's ability to pay by seeing if he or she is employed. Or, the agency may review the person's financial situation by looking at the person's credit report.

Jamison offers this reminder: Don't verbally agree with the collector on the phone or send in a payment even for a dollar, because the statute of limitations will start all over again.

True or false:
Credit card charge-offs can't be deleted from your credit report.
False. It's possible, but that doesn't mean it will happen.

Jamison says it's unlikely to be deleted if you are dealing with a big bank, which probably won't give you a deletion letter.

"Reason being, the companies are too big and they have too much red tape that you have to circumvent to be able to get somebody that can make a judgment call to give you a deletion with payment."

Baird disagrees. "If the creditor has a reason to delete a reported debt, then they are going to delete," she says. "Saying that creditors are not deleting because it is not efficient is not accurate."

True or false:
If you have a debt in collections over $2,000, you won't be sued.
False. Jamison warns that when collections get over $2,000, the collection agency is more likely to sue before the statute of limitation expires because there's more money at stake.

Baird agrees.

"Most creditors look at the dollar amount to determine whether they will sue," she says. "They look at whether the person is working or not, whether they own a home or not, the cost of commencing a lawsuit and state-specific avenues for collection-related lawsuits and collection."

Jamison hypothetically uses the $2,000 amount because the extra money needed to pay the debt in full may not benefit the consumer as much in return.

"If the person can afford to, I suggest paying in full in return for a deletion for accounts that are $5,000," he says.

If the account is for a credit card, Jamison says the settlement will depend on how much the person intends on using the card in the future. If the consumer uses it a lot, he advises the consumer to be willing to pay a higher amount to delete. That's if the deletion can be negotiated.

When it comes to collections less than $2,000, Jamison suggests that getting a deletion is better than getting a deal. Calling the collection agency to settle for 50 cents on the dollar won't work, he says, because the agency won't agree to a deletion with payment. Instead, he advises paying the full balance in return for a deletion letter, especially if the consumer is concerned about his or her credit report and credit score.

Baird warns that if you do pay in full for an account that may have been charged-off, the creditor is under no obligation to delete the account. However, the creditor must report that it is "paid in full."

Educating teens about credit

2007-05-18T12:29:00.000-07:00

We're living on a plastic planet, where even vending machines, parking meters and Starbucks branches are now accepting credit and debit cards for everyday transactions. Small wonder that high schoolers -- who were expected to spend $195 billion in 2006, according to a study by the Harrison Group -- hanker for their own charge cards.

"Getting a credit card is a rite of passage," says Todd Mark, director of consumer relations for Consumer Credit Counseling Service of Greater Atlanta.

In fact, a 2005 study by the Jump$tart Coalition for Financial Literacy reveals that 31.8 percent of high school seniors use a credit card. About half of these students have a card in their own names and the rest use cards issued in a parent's name. And of course, college freshmen get bombarded with credit card come-ons as soon as they set foot on campus.

Facing this prospect, plenty of debt-dubious parents wonder how best to introduce kids to the temptations of swipe-and-sign. As with most child-rearing decisions, the best course of action depends on the individual child. But thanks to an ever-increasing number of credit and debit options, savvy grown-ups can choose the card best suited to a teen's temperament, financial sophistication and maturity level.

Starting out
Youngsters who already have a checking or savings account -- and that should be the first step in a kid's financial education -- are ready for a standard debit card because they're accustomed to keeping track of transactions, according to Marc Minker, a CPA and personal financial specialist at the New York City consulting firm Mahoney Cohen & Co.

Parents can rest fairly easy in this situation, since even the most acquisitive teen will find it self-limiting: Once the account balance drops to zero, theoretically, he or she has to stop spending.

And conveniently, many employers will deposit wages directly into a teen's account.

However, since a debit card is taking money from a checking or savings account, overdrafts and the resulting fees can happen. What's more, if Junior's money gets debited via fraud or error, or if there is a problem with a merchant, recouping the already-gone cash can be difficult.

The Fair Credit Billing Act has different rules for liability with debit card fraud or theft. If you report the card missing before the thief makes any transactions, the issuer can't hold you liable for any charges. If you report the loss within two business days, you will be responsible only for $50 of charges. If you don't report the loss within 60 days, you can be liable for $500 of transactions. These rules make it important to check the account regularly to be sure there are no problems. However, debit cards from a major card issuer such as Visa or MasterCard carry the same fraud protections as credit cards, with zero liability.

Single Parent

2007-05-18T12:23:00.000-07:00

Advice on Single Parent Family Finances Including Education, Disability and Retirement
Article Courtesy of Prudential Financial
http://www.prudential.com/productsAndServices

Managing your family’s affairs on your own can be challenging every day—so you may have postponed planning for the future. Yet, you have others who rely on you. You can take simple steps to ensure their financial future—as well as your own.

Since you're a single parent, it may be even more important that you take action soon. Think about how you'd afford your own care if you should suffer a disability. Have you started saving for college education?

If you'd like to buy a home, start a business, or take care of an aging relative, you can start taking steps now to ensure your finances can fulfill your goals.

Start planning your financial future today:

Getting Started
Since it can be difficult to balance all of your possible financial needs and goals at the same time, try focusing on your priorities:

1. First, define and prioritize what is important to you by using our Goals Worksheet.
2. Then, you can see where your money is going and calculate how much of your income you can put aside to reach those goals. Use our Financial Analyzer.
3. To learn more about reaching your financial goals, read the sections below.
4. To get more information and to implement solutions, talk to a financial professional in your area.

Managing Your Money
Whether your concern is day-to-day money management or achieving a specific goal, we can help you reach financial well-being:

* To estimate your net worth and understand your cash flow, use our Financial Analyzer.
* To start on the path to being a savvy investor, learn investment basics.

Saving for a Major Purchase
Although it may seem impossible to save for a major purchase while you're focusing on other financial goals, it can be done. The key is to break it into more manageable steps:

1. Determine which goals you want to fund by using our Goals Worksheet.
2. Review your resources. Get started with our Major Purchase Worksheet.
3. Periodically review your situation to see if you are still on track.
4. To discuss appropriate courses of action and review alternative solutions, talk to a financial professional in your area.

Education Funding
With the rising cost of tuition, funding an education can be a challenge. That's why it is vital to understand your options and develop a practical strategy. According to the Consumer Price Index, education costs rose 5.1% in 2000 and 6.9% in 2004—which is even higher than the rate of inflation (according to the Bureau of Labor Statistics Data, U.S. Department of Labor).

Protecting the Ones You Love
The right type of life insurance and the right amount of coverage can help ensure that your loved ones will always be able to fulfill their dreams and goals. Find out more about life insurance or get a quote to estimate how much it might cost.

Disability Income Protection
How would you pay your monthly bills if you were seriously injured or ill for months or even longer? If you're like most people, you don't anticipate a circumstance that would prevent you from maintaining your current lifestyle. But, the reality is that a 35-year-old has a 41% chance of suffering at least one 90-day disability before the age of 65 (Society of Actuaries, 1995). Learn more.

Retirement Planning
How long do you think your retirement will last? Most women still working today can look forward to a period of 15, 20, or even more years of retirement or semi-retirement. Will your current plans help you realize your retirement dreams later in life? Get help with your retirement planning.

6 steps to credit card serenity

2007-05-18T12:19:00.000-07:00

We think nothing of pulling out our credit card for these and hundreds of other transactions every year. That's not necessarily a bad thing. Credit cards can be a convenient and safe alternative to cash. But too often, before you know it, credit card purchases spiral out of control (to the tune of more than $8 trillion a year) with a simple swipe of the card.

Then, with high rates, fees, penalties, continued spending and the other pitfalls that can happen with credit cards, debt accumulates much faster than your ability to pay it down.

But that all too common and sad scenario doesn't have to happen to you. Whether you're carrying a balance of a couple hundred dollars or several thousand, take the following steps to get out of debt -- fast.

1. Know where you stand
When you're feeling overwhelmed by debt it's easy to let the bills pile up, unopened like so much junk mail. But, you can't control your credit cards if you don't have a handle on how much you owe, says Bill Driscoll, a financial planner in Plymouth, Mass. Sit down at the computer screen (or with pencil and paper) and make a list of exactly how much you owe and what rate of interest you're paying on each card. Then list your cards in order of highest rate to lowest.

Use this work sheet for organizing your cards, rates and balances.

2. Pay your highest rate cards first
These cards are the ones that are costing you the most over the long run so you need to make every effort to pay more than the minimum payment each month on these bills first. Find out the fastest and cheapest strategy to use to pay down your card balances. Our calculator will automatically set up a plan of action for you to follow.

3. Get a better deal
Call the toll-free number for your highest rate cards and ask the customer service representative if she can give you a better deal. Let her know that you've been getting offers in the mail for much lower rates and you've been tempted. At most credit card companies, reps are authorized to lower your rate rather than lose you as a customer, says Robert Manning, director of the Center for Consumer Financial Services at Rochester Institute of Technology. You'll be surprised how easily this works.

If you succeed, you'll soon notice your minimum payment is lower. Don't breathe easy yet, says Jean Chatzky, author of "Pay It Down, From Debt to Wealth on $10 a Day." Instead, continue paying the old amount and you'll see your balance shrink faster without any additional squeeze on your budget.

Use this work sheet to keep track of your interest rate requests.

4. Consider using a different card
Hang on to all those zero percent and other low-interest credit card offers you've been getting in the mail. Done well, transferring your high interest balance to one of these cards can save you an enormous amount in interest and put you on a solid track to paying down debt. But these cards are filled with caveats that can end up costing you more in interest than you expected and sometimes more than if you had stayed put. Check the time limit for the low rate; where the low rate applies (balance or new purchases?) and the fee for transferring balances.

Check out these five balance transfer trip-ups.

5. Beef up your credit score
If you're having trouble getting a no- or low-interest card, it's mostly likely because your credit score is too low. This number represents how responsible you are when it comes to handling debt. So if you have a history of late payments or are already maxed out on several cards, your credit score will suffer. To find out what your score is, use this FICO calculator to get a rough idea. It's free. Or, you can purchase your credit score from any of the credit reporting agencies or FICO. If it's below 660, you'll need to spend the next six months or so trying to improve that so you can qualify for a cheaper card. If you make all your payments on time over the next six months and aggressively pay down your biggest balances first, you could improve your score as much as 50 points, says Chatzky.

6. Avoid penalties and fees.
Interest rate hikes and hefty monthly fees can ruin even the best-laid pay-back plans.
• Late payment penalties. It's not unusual for your interest rate to jump to 25 percent or even 30 percent if you make a late payment. If you have trouble keeping track of your due dates, consider setting up an automatic payment from your checking account each month.
• Penalties for late payments on any card. Even if you pay on time, some credit card companies will hike your rate if they see you've made a late payment on another card. This practice, called universal default, is waning somewhat, thanks to pressure from consumer advocates, but it can still happen.
• Credit limit fees. If you go over your credit limit it's not unusual to get hit with a $40 fee. Do it a few months in a row, add the interest payment and you're talking real money.

Good Debt vs. Bad Debt

2007-05-18T12:13:00.000-07:00

The following article is courtesy of Bankrate.com http://moneycentral.msn.com/content/Savinganddebt/Managedebt/P150813.asp

Here's how to tell the difference -- and trust us, it makes all the difference.
Debt is a concept as intricately intertwined with America these days as baseball, Mom and apple pie.

The amount of personal debt in this country is ever-increasing and a large part of the reason is that credit has never been easier to get.

But debt is a complex concept. Not all of it is good -- a fact a surprising number of Americans fail to realize until they're in the hole -- and yet not all of it is bad. When used intelligently, debt can be of tremendous assistance in building wealth.

One of the secrets, therefore, to being smart with your money is to differentiate between good debt and bad debt. While the differences often seem logical, it is a logic that is apparently missed by many Americans.

"When you buy something that goes down in value immediately, that's bad debt," says David Bach, CEO of Finish Rich Inc. and author of "The Finish Rich Workbook.”

"If it has no potential to increase in value, that's bad debt."

Good debt
"Good debt is investment debt that creates value; for example, student loans, real-estate loans, home mortgages and business loans," says Eric Gelb, CEO of Gateway Financial Advisors and author of "Getting Started in Asset Allocation.” Robert D. Manning, a professor of finance at the Rochester Institute of Technology, also recommends taking on debts that are tax-deductible and debts that produce more wealth in the long run.

"If you are talking about reducing current debt, that's where it starts to get nuanced," says Manning. "If you take a home-equity loan because you have a 17% credit card, and you go with a 6% loan that's tax-deductible, that's good debt."

These general rules of thumb set some clear delineations -- buying a home or refinancing to get rid of excessively high rates is usually good debt, as is generating debt to buy high-return stocks, bonds and other investments.

Bad debt
The concept of bad debt comes in when discussing the purchase of disposable items or durable goods using high-interest credit cards and not paying the balance in full.

"The trouble is most people are not organized enough to retire the entire balance before the due date," says Gelb.

Every month that you make a partial payment on your credit account, you are charged interest. The disposable or durable item you purchased continues to lose value, and the amount you paid for it continues to increase.

"When you buy clothes, they're probably worth less than 50% what you pay for them when you walk out the door," says Bach. "So if you borrowed to pay for them, that's bad debt."

Not to mention what that debt could potentially do to your credit rating.

"Total personal debt should not exceed 36% of your total income," says Gelb.

Keeping the debt-to-income ratio in mind, it's also important not to miss payments.

"Missed payments are trouble," he says. "A representative of Citibank said if you don't pay within 30 days, they report that to the credit bureaus."

When it comes to buying durable goods that won't contribute to wealth generation, Bach offers a basic rule of thumb.

"My grandma used to say that if you're going to buy something that doesn't go up in value, and you can't afford to pay cash, then you can't afford it."

Exacerbating the bad-debt factor is that people will apply for store credit for the savings offers that say if you open a credit card account today, you can take 10% to 20% off the cost of your purchase. What people often don't realize is how much of that savings will be destroyed by the high interest rate on the card if they fail to pay for the items immediately.

"You can open a store credit card account," says Bach, "and what they're not telling you is that after the first few months, the rate jumps to 20% or greater."

Driving into debt
Another bad-debt area is auto debt. While most people need an automobile, and the ultimate cost of an auto is higher than many people can pay in one lump sum, the way people go about it -- namely, purchasing more car than they need -- turns it into bad debt. When is it worth it?

"What we would normally consider bad debt can turn into good debt in certain circumstances," says Catie Fitzgerald, a personal-finance coach and registered investment adviser in Henderson, Nev. "If you use debt to buy a car that gets better gas mileage than your old vehicle, you could end up better off financially."

Bach considers auto debt a Catch-22.

"People borrow to buy cars before homes," says Bach, "and that's unfortunate. For most people, their first major loan is a car loan. That's guaranteed to go down in value. So you really want to borrow less. For example, instead of rushing out to borrow to buy a $50,000 BMW, you'd be better off buying a $25,000 car."

The best type of debt is debt that builds wealth over the long run, and the No. 1 example of that is mortgage debt.

"Home values have increased an average of 6.5%, per year over the past 30 years," says Bach. "So when you borrow to buy a home, chances are that's good debt. You'll build value."

Bach heavily promotes the idea of homeownership, saying that everyone needs to own where they live.

"About 40% of Americans are renters," says Bach, "and the fastest way to wealth in America is buying where you live."

Bach cites some shocking numbers to back this up.

"The average renter has a median net worth of $4,000, and the average homeowner has a median net worth of about $150,000."

Manning also emphasizes what a good time this is to build wealth through debt.

"This is the most advantageous time ever to be in debt," says Manning, "in terms of opportunities to get low-income loans or to renegotiate or refinance."

Duh, debt?
One of the reasons so many Americans seem mired in bad debt (Bach reports that the average American carries approximately $8,400 in credit card debt) is that financial education is virtually nonexistent.

"This type of common-sense stuff isn't taught in school," says Bach, "and most Americans don't realize how badly high-rate credit cards are hurting them."

Fitzgerald advises teaching your children the difference between good debt (debt that's used to buy assets that grow in value over time) and bad debt (debt that's used to buy things that will lose value) early on.

Gelb opts for a more hands-on approach. "Give your children an allowance (without strings) beginning when they're in kindergarten and offer them the opportunity to perform extra jobs around the house for money. Stop buying them everything and teach them how to make choices with their own money-buying decisions." The mistakes they make will help them learn and grow.

"People are getting in debt before they have a job," says Manning. "Education is important. We used to encourage kids to save, and that has been missed. Students now refer to their credit cards as yuppie food stamps. They see cards as entitlement and see they will be in debt all their lives."

Fitzgerald recommends teaching by example. Treat credit cards like emergency safety nets and your children will likely learn some money-management skills. "If you have to use your credit card, immediately revise your budget, paring back on nonessential spending. Allocate the saved dollars to a payoff plan to bring your debt balance down to zero as soon as possible," she says.

FAQ (Junkies TV)

2007-05-16T01:22:00.000-07:00

1) Do I get thrown into jail for watching movies in here?

Yes, you will!! Gotcha Ya! ha ha ha just kidding. Honestly, you got nothing to worry about because this site is legal. We don’t host movies; they are only links from public sources (hosting sites). If the Chairman of YouTube (Google) gets thrown into jail, then this site will have to be closed. Big boys know how to play the game and so do we. Got to be a shark to swim with sharks.

2) This site is CRAP!! I can’t ever get to play a dam @#$%$ movie?

Cool down, take a chill pill. Most movies in here are DIVX. You need to install (into your own PC) the DIVX WEB PLAYER plug-in to play and watch movies. Get it here. Without this player your PC is CRAP! and you won’t be able to watch any @#$%$ DIVX movies. You also need to install AC3 SOUND CODEC because most DIVX movies use the AC3 sound codec. After installing these codecs, you need to restart your browser for the codecs to start working. Make sure you've installed the latest version.

We also have some movies under FLASH (FLV). You also need to install ADOBE FLASH PLAYER to watch movies and make sure you don’t have anything blocking freevideocoding.com. Go check your firewall. Please get the latest version.

Divx web player is known to use CPU usage.
- You should not have multiple browser/applications running while viewing a movie, may crash your browser.
- For general viewing problems you should clear your cache and try again.
- For more web player options right click on the video screen.

3) I love this site and I would like to kiss the maker….how?

Everyone likes to be kissed differently. We only welcome deep kissing not the regularly bullshit ones. If you're not into that, please look for the “Thank you” signs (usually located at the bottom of the movie screen) click it and visit our “recommendations sites”. Make sure you spend sometime browsing around. You only have to do this request once a day if you enjoy our services. If you dislike our services, please feel free to kick our ass so that we can improve, but don’t become an asshole by complaining like a granny and spamming our site.

4) Shit the movie can’t play….what’s going on?

There are many reasons why the movie can’t play. Let me list some down for you….

You're internet connection is CRAP, go kick the ass out of your internet provider. They might be restricting your bandwidth download speed, if you are using broadband. If you are browsing the net with "dial-up", you can just forget about watching movies in here because it will take you like 24 hours to load a movie. You also need bloody 70kB/sec consistent download speed to watch the a movie continuously without buffering. Anything below that, go take a clock and start timing the upload and wait until buffering percentage reaches an acceptable limit to star watching the movie.

Some idiot reported the movie as copyright material and the hosting site deleted and removed the links. If you come across these idiots, point them to me and I will shoot them down. All our bandwidth, time and effort goes down the drain because of these fools!

The movie is hot and too many people are watching at the same time which congests the servers.

When the movies keeps on connecting but doesn't automatically play or even play after clicking the play button, thats a great possibility the link have been deleted. Please inform us.

Restart you computer and clear your cache files. All those files stored in your cache take up space, so from time to time, you may want to clear out the files stored in your cache to free up some space.

5) What in hell name is “Buffering” and “Connecting”?

Go read it here.

6) Can I request movies?

Sure you can, but please try to limit your request because we are currently short of work force and time. If you've send us a request, please give us about 24 hours to get it for you. After 24 hours and your request aren’t posted, please remind us because we might overlooked it, but usually we will inform you or post the movie within 24 hours.

Please don’t get mad if we can’t fulfil everyone's requests on time. Like I said, our resources are limited and our dam computers are old. Help us get some new tools. Support yourself by supporting us through our FREE DONATION program. Through this program we can buy better hardwares to serve you faster, moreover FREE.

WE GOT THE MATERIALS BUT WE NEED THE TOOLS, too sad, we don’t have the juice right now.

7) What in hell is a FREE DONATION?

Go ask around or ask Micky or download this guidelines file from here.

8) It says my DIVX download folder is full what do I do?

It means you don’t have enough space on your computer so delete some stuff and free some space. If you don’t know how to do this, do a search under Google on “how to clean up my hard disk”

7) Which is the best browser to watch movies?

For us IE7 browser sucks, because there are too many unnecessary security features which prevent DIVX player to behave like normal. This is all the big boys’ doing, go ask Microsoft and Google. Since DIVX is supported by Google, Get Firefox browser because the movie will load faster and without any major issues.

8) Why my browsers keep on crashing?

You should not have multiple browser/applications running while viewing a movie; it may crash your browser. In plain English, don't watch more than 2 movies at the same time.

9) Can I download the movies?

Sure you can. Whenever you see the DOWNLOAD sign at the bottom of the movie screen, right click, and save link as. You can also watch the movie while it downloads but make sure you have a strong download speed.

10) The screen is too small, and it’s killing my eyes.

If you wish to enlarge or change the movie screen size, right click the screen and choose either "Windows Mode" or "Full Screen Mode". You need to have Divx Web Player installed to activate this function. Too bad, you have to bear with the actual size for Flash movies.

11) Can I advertise and promote my site in here?

No you can’t because this is plainly a movie site and the shout box is reserved for viewers info. They us this chat box to tell us the movies conditions, moreover place their requests. You can go to our main Movie4Junkies2 page and promote your site. There are no restrictions in there. Hope you understand.

12) I got a love letter to send, who should I contact?

Please send all your emails and personal messages to Micky at mickybull@yahoo.com.

If you need more answers to questions which are not posted above, please send an email to Micky. Cheers!

Tips On How To Apply For Personal Loans

2007-05-14T16:31:00.000-07:00

Your First Step

Look for programs that can help you to rebuild your credit. There are a number of small banks that will offer you a secured major credit card that would require you to deposit about $200.00 into there bank.

Secured Credit Cards

Use there card, pay on-time and after 6 month they will return your security deposit and offer you a unsecured credit card with a credit line of up to $2,000. They will also report your on-time payments to the credit reporting agencies. This will go a long way in rebuilding your credit history. Never pay an application fee to join a credit card program. If you are dealing directly with a bank, there is never a fee to apply.

Other Ways To Build Credit

Auto Loans

If you have a job, you can always get approved for an auto loan.
This is not one of the best ways to build your credit but it’s a start. In order for this option to work, you must always send in your auto payment in before the due date.

Retail Store Credit Cards

Retail store credit cards are a lot easier to get approved for than a major credit card. Most retail store cards will only allow you to use the card in their store. This card will help to rebuild your credit as long as you pay your payments on-time.

How To Get Personal Loans

Everybody wants a personal loan. If you do not have an A1 credit rating, do not waste your time applying for a personal loan with a major bank.
They only offer personal loans to individuals that have an A1 credit rating.

Here Are A Few Options If You Have Less Than Good Credit

Join a credit union

You have a much better chance of getting approved for loans or credit cards as a credit union member.
Get a co-signer that has an A1 credit rating.
More people would be willing to be your co-signer if you start out with a small loan amount.

Small Financial Lenders

Find a list of lenders that offer high risk personal loans. There interest rates will be higher than a bank, but this will help to improve your credit rating.

Finance A Computer System

There are a number of companies online that will allow you to purchase a new computer with no credit checks. You are guaranteed to get approved as long as you have a checking account. You would be required to pay a down payment and monthly payments. They will ship your computer out to you once they have received your down payment. You would be set up for monthly payments, that could be reported to the credit reporting agencies.

Short Term Loans

If you are employed and have a checking account, you can go online to get a payday loan of up to $2,000 with no credit check.

This loan option will not help to rebuild your credit. It is just a short term solution to pay a payment that can not wait, like monthly rent or an auto payment.

Car Insurance Facts

2007-05-14T16:30:00.004-07:00

Deciding for auto or car insurance is not an easy task in the United States. Not only understanding a few factors can change the money you spend in buying car insurance but also helps to get the best quotes and value for your money. Understanding the car insurance can be sometimes very tricky and absolutely confusing and that sometimes lets you take decisions where you end up spending more money and usually the insurance you buy actually doesn’t suit your needs.

That is why here we have tried to simplify the general insurance facts for you so that you can develop a good understanding of this dreaded but compulsive subject i.e. Car Insurance. Here are some very important facts which you should always consider before buying car insurance.

Appropriate Insurance Coverage is important
Generally the half of insurance covers the liability factor that depends on how you are going to use the vehicle. The amount you pay decreases in case for ex. If you are commuting for home to office and vice versa for work and also if your driving record is clean without a speeding ticket. If your driving record is not clean you end up paying more money as insurance premium. The second half of insurance premium covers damage or loss to your vehicle along with comprehensive and collision coverage.

Shopping around pays
Shop for insurance ad always get more than none quote. There are in fact hundred of companies competing for insurance business from you and in many cases you can save hundred of dollars because of multiple quotes. So, shop around for quotes.

Find out insurance discounts
Many companies in general offer discounts to the customers. You can avail the discount if you are buying more than one insurance policy viz. auto and home insurance. You can also get discounts on factors like air bags, anti-lock brakes, daytime running lights and anti-theft devices.

Consider higher deductibles
You could lower your insurance bill by increasing your deductible but before that just make sure you can pay the higher deductible if you file a claim.

Stacking coverage’s while you file Insurance claim
Stacking uninsured or underinsured motorist coverage’s means you can collect from more than one of your auto insurance policies. Most states prohibit this practice, but there are about 19 states that either allow stacking or don't address the issue either through legislation or litigation. Be sure to check your auto insurance contract to see if it's allowed. Probably you are likely pay a higher insurance premium if you have stacked coverage.

Car gives you benefits
Insurers depend on the model of car you buy, its sticker price, features which may reduce maintenance or accidents or theft. So consult your insurer while you finalize which car to buy.

Notify Insurer of Change
If you wish to terminate the insurance coverage notify the insurer of the same. In many states you get penalty for the number of days you go uninsured so notify your company the change in writing or through phone, terminate the insurance and change the company after that.

Go with your budget
It is always recommended that you strictly follow your budget and choose the payment which fits into your budget. You can get monthly, quarterly, half yearly or yearly mode of payments and choose which suits your pocket.

How Are Whole Life Insurance And Term Insurance Different?

2007-05-14T16:30:00.003-07:00

I've had a lot of folks ask me what the real difference is between Whole & Term Life Insurance and which is the best option for them. As much as I enjoy helping, the best that I can really do is explain the difference between the two and the pro's and con's of each type of policy. This way, the consumer, to make an informed decision before you buy.

Whole life insurance gives you insurance coverage for your whole life, as long as your policy remains in good standing. You'll have insurance coverage until the age of one hundred or until you die, whichever occurs first. Some of the pro's of a Whole Life Insurance policy are that you will also build an account that has actual cash value. It works like this. A portion of the premium payments that you make are used to buy life insurance, while the remainder is placed into a savings account that will accumulate interest. You may borrow against this account if you need to, but you have to pay it back. This gives you a bit of piece of mind in case of unexpected vehicle repairs, hospital stays, ect. or any other of life’s little emergencies.

Some of the cons of Whole Life Insurance are that it's not cheap. The premium payments for whole life will be much higher than a Term Life policy would be. Another concern is that as you get older the savings account feature becomes less attractive For a younger person or couple, this makes more sense because they have their entire lives ahead of them, but for someone middle aged or above, I'd buy Term and invest elsewhere.

Term Life Insurance is what it sounds like "Term". This means that it covers you for a specific period of time or a Term. You could buy a Recurring Term, "20 Year Term", Guaranteed Term, ect. Did I explain this well enough?

Term Life Insurance coverage is also known as "pure life insurance" because that's all you're buying. Here are some more differences between Term And Whole Life unlike Whole Life policies, there's no savings account that accumulates or to borrow against. You only pay for insurance coverage.

Another con is that, as stated above, A few Term Policies such as Guaranteed Term, can be rolled over, but that's another story. You need to visit my website below and I explain it there.

Most Term policies are only for certain time frames. An example of how this can be used would be for the "breadwinner" of the household who is middle aged, the kids are grown, but still in college, he or she has been paying on their major assets, like their home, ect. for several years and they need some security to make certain that if anything happened, everything would be taken care so that the family could go on without any issues, other than the loss of their loved one. A 10 or 20 Year Term Policy might be a good option for the fictional example above, depending on their living arrangements.

My hopes are, you understand now why it's difficult to give financial planning advice to people without knowing their specific circumstances. Just learning the differences between these two more popular types of insurance policies should put ahead in the game of life insurance. Best to you!

Bad Credit Loans For Borrowers With Imperfect Credit History

2007-05-14T16:30:00.001-07:00

If you think that your poor credit score will not let you procure finances from the financial market, then you are absolutely wrong. Today, financial market has introduced such loans, which are especially formulated for bad credit scorers. And, they are known as bad credit loans.

In present scenario, bad credit loans are easily available in the financial market. Most of the lenders that are banks, financial institutions and various building societies provide bad credit loans on competitive rate of interest.

Bad credit loans can be used for financing a car, wedding, home improvements and many more. There are different types of bad credit loans available in the financial market that are bad credit car loan, bad credit personal loan etc, that can be availed as per the needs and requirements.

Interest rate and repayment period varies from borrower to borrower. The lender determines the rate of interest by considering certain factors, which are as follows:

•Rates prevailing in the market

•Financial status

•Credit worthiness

Like other initial loans, bad credit loans can be availed in two ways that are secured (by placing collateral) and unsecured (without placing collateral). Both the ways are good in their way. This doesn’t matter that the borrower avails secured bad credit loans or unsecured bad credit loans, but he must make timely repayments. Timely repayments will help him in improving credit score.

The fastest and easiest way of availing bad credit loans is through online mode. Online mode simplifies the overall task of applying for loan. Along that, it is regarded as cheapest mode as it involves no processing fees and low overhead costs.

Before finalizing loan deal, the borrower must not forget to consider terms and conditions of the loan deal. Thorough comparison must be made on the basis of annual percentage rate involved. And, finally that offer must be accepted that embrace of low annual percentage rate and favourable terms.

Avail Unsecured Loans For Borrowing A Smaller Loan Amount

2007-05-14T16:29:00.001-07:00

Those who are looking for a smaller loan amount with a shorter repayment term can easily gratify their needs with unsecured loans. Many homeowners in the UK prefer this loan type, because they don’t want to put their home as collateral. Thus, they can avoid the threat of repossession of their home with this loan type. The lenders offer a loan amount from £500 to £25000. The repayment term is shorter as compared a secured loan. The eligibility criteria for the borrowers are that he should be more than 18 years of age and should be employed. Though, the loan criteria depend from lender to lender. Each and every lender has their specific loan criteria. Unsecured loans can be procured faster as compared to a secured loan option. The basic reason is that the turnaround time for the whole loan process gets reduced. Above all, less paper work is involved with this loan type, which makes it easier for the borrowers. Usually, the lenders prefer to offer a loan amount to the people having a good credit score. Since unsecured loans don’t necessitate the presence of collateral, lenders prefer to offer loans to people with a perfect credit history. They don’t have the right to repossess your home or any other valuable asset. Though, they can take legal steps against the borrowers. So, it is advisable to take PPI (Payment Protection Insurance) to mitigate the risk against any unforeseen circumstances during the loan tenure. You can approach different lending institutions like high-street banks, building societies and private lenders for availing this loan type. Before going for an unsecured loan, you should compare the interest rates with different lending institutions. After doing proper research work, you should choose the loan from the lender who is offering it at better terms and conditions.

Short Term Holiday Loans: A Perfect Holiday Deal

2007-05-14T16:28:00.000-07:00

You might have made promises to your family for taking them to a holiday destination. But what becomes the hurdle, is the insufficiency of funds to meet the holiday expenses. In such a state, short term holiday loans are always ready to assist you in fulfilling your promises.

Short term holiday loans provide people with appropriate finance to enjoy their holiday. Borrower can borrow money without placing any collateral against the amount to the lenders with the help of such loans. The expenses of food, accommodation, travel; shopping will be financed by short term holiday loans.

Every sort of credit holders is eligible for short term holiday loans. People having CCJs, defaults, late payments can also avail the loans and visit their favourite holiday destination.

The amount of short term holiday loans is available between £ 1,000 and £25,000. As the term short term indicates that amount is approved for shorter durations, basically from 6 months to 10 years from date of approval.

The rate of interest in short term loans is little bit higher. Borrowers can deal with a reasonable rate if they collect and compare the various loan quotes of different lenders. To get a reasonable rate of interest borrowers can collect quotes through internet.

The short term holiday loans are approved in less time as no paper work is to be followed in evaluating property. Such loans also raise no fear of property repossession to the borrowers, as no collateral is being used by them. But it does not signify that lenders cannot claim their money. Creditors and lending institutions can obtain money by using legal steps if borrowers falter from repayments.

All the required information of a loan and approval is possible through online process. The online process will provide every detail concerning to loans in less time and conveniently.

So, dreams of taking your dear ones to one of the favourite holiday destinations can easily be realized with short term holiday loans.

The Mortgage Calculators

2007-05-14T16:27:00.000-07:00

To buy or purchase a home remains a tough and important decision in our life. Almost all of us will buy or refinance a home. Here is a list of important calculators to help you make the decisions. Calculators provides a way to pay off mortgage earlier, build equity faster, understand financial options, compare interest rate, and optimize the mortgage.

Monthly Payment

Homeowners usually pay a single mortgage payment for a month. This calculator computes how much is the monthly mortgage payments. Since mortgage lender offers different interest rates, homeowner tries the different interest rate to see the advantage over the other. As a safety precaution, many homeowners try to go below 40% of their monthly income.

Bi-weekly Payment

The homeowners with this option pay off the mortgage around 7 to 15 years earlier without refinancing. Since the homeowners pays off the mortgage every two weeks, more money pays off the principal.

Additional or Extra Payment

Mortgage Lender gives you a chance to pay a certain percentage of the principal as additional or extra mortgage payment once or twice per year. Usually, the mortgage lender lets homeowners pay 20% of the principal as additional or extra payment.

Interest Only Payment

This mortgage option lets the homeowner only pays the interest of the mortgage for a specific or certain period of the mortgage term. With the right property, the homeowners build equity really fast. If the homeowners use the savings of paying interest only, this option delivers huge benefits to the home owner.

Affordability

It figures out how much the home buyer can borrow. There are three factors that determine home buyers qualifications to be able to afford the mortgage and home. First, Loan to Value Ratio aims the appraisal value of the property does not exceed the loan. Secondly, the Gross Debt Service Ratio aims the percentage of gross income does not exceed mortgage payment. Finally, the Total Debt Service Ratio aims the percentage of gross income does not exceed mortgage payment, home expenses, and total debt.

Income Requirement

This answers the big question. Can you afford to pay the mortgage with your current income? Using the principal amount, mortgage term, interest rate, property taxes, and monthly obligations, the home buyers are able to know the income that is requirement to facilitate the mortgage.

Tax Deduction

Mortgage Interest and Discount Points delivers a huge tax benefits for the home owners. Internal Revenue Services (IRS) allows the home owners to deduct the mortgage interest and discount points. Keep up to date with IRS and tax advisor for the current laws and regulations.

Annual Percentage Rate

Naturally, the home buyers just shop for the lowest interest rate without paying attention to the annual percentage rate. It is the true cost of borrowing. The lowest interest rate does not necessarily translate to lowest mortgage payment. By law, the mortgage lender must disclose the annual percentage rate to the home buyer.

Refinance

Depending on how much the annual percentage rate or interest rate of the new mortgage, the home owners may or may not find an advantage to switch interest rate. Sometimes, mortgage lender gives timely promotions or specials. And, the home owners switch interest rate. At the end of the mortgage term, the home owner is force to switch interest rate. The home buyers often shops for a better interest rate before the end of the mortgage term.

Home owners have options to save on mortgage, but they give up so soon. Mortgage covers a broad range of subject. Without tools, resources, and calculators, homeowners bound to give up.

101 Reasons Why Managing Your Own Money Is The Only Way To Build Wealth

2007-05-14T16:26:00.000-07:00

Building Wealth – Millions of people all over the world seek the key to building wealth, yet it remains an ever elusive achievement to even those that have more resources than the average Joe and Jane. In fact, it doesn’t matter if your black, white, Latino, Asian, Christian, Buddhist, Muslim, Brazilian, Japanese, Kuwaiti, British, German, Spanish, Italian, Cuban, Chilean, American, or Canadian, the key to building wealth is the same no matter your nationality, ethnicity, race, or religion. Yet so many people seek so many different solutions such as skipping from Merrill Lynch to Goldman Sachs to J.P. Morgan, to seeking out independent financial consultants, to speculating in assets they don’t understand, to buying investment newsletters to do their research for them. And the great majority of people that have been searching in this manner to build wealth are still searching today.

Why?

The answer is quite simple. All of these investors have a common denominator of failure and one lacking common denominator that is highly predictive of success. Their common denominator of failure that binds them together is the fact that all of their searches to build wealth were motivated by the desire to find the easy way out to build wealth. The placement of their money in someone else’s hands to manage, the purchase of newsletters to provide their stock picks for them, and the greed driven behaviour of gambling in speculative assets. Their common missing ingredient and their reason for lack of success, is their refusal to seize personal responsibility for learning how to manage their own money.

So the million dollar question is literally this: What is the fastest way to build wealth?

The Answer: Take the time to learn a proper investing system, seize responsibility for your financial future, and manage your own money.

Unfortunately there are truly not any viable alternatives to this answer. We’re here to show you why. Below we provide 101 Reasons Why Managing Your Own Money is the Quickest Way to Build Wealth

(1)
No financial consultant or investment firm will ever care more about the performance of your portfolio than you. Reasons (2) and (3) are quite lengthy because they help clarify reason (1).

(2)
This is perhaps the second most important reason. Most people realize that most financial consultants are nothing more than glorified salesmen and saleswomen, even if they do work for a prestigious investment firm. I’m not sure what the statistics regarding this are, but the next time you speak to the branch manager of your brokerage house, ask him to see the annual returns of the top five best-paid financial consultants in his office for the last five years. Then ask him which financial consultants in the office have earned the best returns for their clients over the last five years and ask to see these returns. Don’t let the branch manager answer your questions by giving you the annual returns of the best five internal or external money managers that the investment firm utilizes. This response does not answer your question. First of all, it is highly unlikely that the top producers hire the top five best performing money managers year after year as any major global investment firm utilizes hundreds of money managers.

By this, I mean that most financial consultants make zero decisions about what stocks are purchased with the money that you give them. They hire either internal or external money managers to do this for you. You want to find out what returns the top five best-paid producers in your office earn annually for their clients based upon the mix of money managers they hire for their clients. If a branch manager refuses to divulge this information, you have to wonder why? If they tell you they do not know, why would it be of so little significance to the firm what kinds of returns the top producers earn for their clients that they don’t even track this information?

And if they know, but won’t tell you, why would they not release this information? Shouldn’t the best paid financial consultants in any office be earning their clients the best returns year after year after year over any other financial consultant by a very wide margin. And if not, why are they being compensated so highly? The answers to these questions, if you receive honest answers, should reveal that great salesmen are compensated very handsomely by their firms while almost zero premiums is put on the ability of a financial consultant to earn great returns for their clients.

(3)
Building on point (2), many investors will then say, OK. I’ll find myself the financial consultant, the one that falls in the top 0.5% of all consultants that really know what they are doing, and I’ll hire him or her. Here is why they are wrong again. Because most people never take the time to properly learn how to invest themselves, they never can understand the investment strategies of those that truly know what they are doing. This lack of understanding, despite any efforts on behalf of the consultant to educate the client, inevitably leads to incessant questioning of this consultant’s actions, strategies, etc. which can grow very tiresome very quickly.

I have dropped large accounts in the past because of such meddling, sophomoric behaviour from clients that had a lot of money. Consultants that truly know what they are doing, despite their efforts, can not educate you fully in 3-4 hours time if you have been conditioned for years to believe the nonsense that global investment firms have taught you. Furthermore, because great consultants realize that so many widely believed concepts about investing are nonsense, and have achieved their great performance by realizing this, they will constantly be fighting an uphill battle against clients that believe this nonsense. Therefore the chances that they would keep these clients in the long run are slim to none.

Even if one finds the rare consultant that truly knows what he or she is doing, and truly has outperformed the markets significantly year in and year out, because these types of consultants invest so differently than the status quo, any lack of exposure to such intelligent investment strategies will undoubtedly cause fear. It is human nature that ignorance leads to fear. In turn, fear causes incessant badgering and questioning, behaviour that 100% of the time will cause a great financial consultant to terminate a relationship with a client.

Because great consultants achieve their out performance by making decisions that go against the grain of what 99% of other financial consultants do, a great level of understanding of how to invest properly is necessary for one to even to maintain a relationship with a great consultant. In the end, even if one doesn’t wish to manage his or her own money AND even if one is able to find that rare 1 in 1,000 financial consultant that really knows what he or she is doing, one still needs to learn a comprehensive investment system just to maintain a healthy relationship with their knowledgeable consultant. Ultimately, this is why you should learn to manage your own money!

(4)
Global investment firms always tout a message of trust in their commercials. But where is the historical performance that merits that trust? 6% to 10% a year?

(5)
6% to 10% will never help you build wealth. You must learn to at least earn 15% to 25% or more every year. At 8% a year, it will take you 9 years to grow $250,000 to $500,000 and 18 years to grow $250,000 to $1,000,000 in a non-taxable account, not considering the erosion in purchasing power due to inflation. At 25% a year, it will take you less than 7 years to grow $250,000 into a $1,000,000 in a non-taxable account. That’s the difference between building wealth and preserving wealth. 6% to 10% a year helps you preserve wealth, not build it.

(6)
Major global firms will NEVER find the best stocks in the global market and hold them in your portfolio.

(7)
Reason (4) is true because major firm’s coverage of small and micro cap stocks is appallingly light. Firms must provide extensive coverage of large cap stocks, the Genentechs, the IBMs, the McDonalds, the General Electrics of the world to appease their clients. However, the Microsoft’s of the future are small and micro cap stocks now. You can’t build wealth buying and holding the IBMS of the global stock world.

(8)
Information technology and the flattening of the information world now makes it easier for you to be much more knowledgeable than any financial consultant employed by any of the major investment firms.

(9)
Financial consultants, because of the payout grid that dictates their salaries, are often motivated by selling you the highest commission based products, not necessarily what is in your best interest.

(10)
Investors that have actually built wealth through investing like Warren Buffet, George Soros, even Mark Cuban, have all managed their own money. Investors that have already amassed great wealth employ money managers. That should tell you something about what’s necessary to build wealth.

(11)
Even large global investment houses only have the resources to track about 1,500 stocks. There are estimated to be over 75,000 stocks that trade globally. Investors want coverage of the most popular stocks in their country which means that the great majority of stocks that firms’ analysts cover are large cap domestic stocks. When I worked for a large Wall Street investment house, many times stocks I wanted to buy that were traded in China, stocks that returned triple digit returns in less than a year, had zero coverage at this firm. You want to own the best stocks in the world, you have to manage your own money. Give your money to someone else to manage, and chances are very very high that you will never own the best stocks and opportunities in the world.

(12)
There is a reason why you consistently hear statistics like 3% of individuals own 95% of the wealth, no matter what country you visit. The reason is that these 3% of people took the time to learn how to manage their money themselves and thus have truly built wealth. If you don’t believe that your returns should be limited to the knowledge of your financial consultant, then manage your own money. For example, how many times have you asked your financial consultant, I’d like to invest in gold, or I’d like to invest in dollar declining funds, or I’d like to invest in Chinese markets, only to have your financial consultant stare at you blankly and say, “the safest way to invest is what I’m doing for you now.”

(13)
Financial consultants, because of the payout grid that dictates their salaries, are often motivated by selling you the highest commission based products, not necessarily what is in your best interest.

(14)
Investors that have actually built wealth through investing like Warren Buffet, George Soros, even Mark Cuban, have all managed their own money. Investors that have already amassed great wealth employ money managers. That should tell you something about what’s necessary to build wealth.

(15)
Even large global investment houses only have the resources to track about 1,500 stocks. There are estimated to be over 75,000 stocks that trade globally. Investors want coverage of the most popular stocks in their country which means that the great majority of stocks that firms’ analysts cover are large cap domestic stocks. When I worked for a large Wall Street investment house, many times stocks I wanted to buy that were traded in China, stocks that returned triple digit returns in less than a year, had zero coverage at this firm. You want to own the best stocks in the world, you have to manage your own money. Give your money to someone else to manage, and chances are very very high that you will never own the best stocks and opportunities in the world.

(16)
When was the last time you heard a truly unique approach to investing from a financial consultant anywhere? If you have spoken to 10 different consultants at 5 different firms, most likely their pitches will sound like broken records. Now think about this? How can it be that in an arena as creative as investing, that different financial consultants from different firms that live on different continents all apply the same principles and strategies when managing your money if these similar approaches are not sales driven but return driven?

(17)
If you utilize a money manager to handle your money, the great majority of financial consultants don’t understand anything more than you do about investing. Most people don’t realize this because they don’t know the proper questions to ask their financial consulants. Take care to learn the proper questions and you will reveal their weaknesses.

(18)
The great majority of financial consultants can be summed up in one word. Salesman. Enough said.

(19)
Investment firms convince you to do so many things that are not in your best interest. We’ll list these things now.

(20)
If you don’t want to buy in bull markets, buy in bear markets, buy during corrections, and buy during market tops, learn to manage your own money.

(21)
If you don’t want to be cashed out during times of market volatility and pay fees on cash because your consultant doesn’t know how to make you money during poor markets, then manage your own money.

(22)
Perform a Google Search as follows: “SEC fines, Citigroup, Merrill Lynch, UBS Paine Webber, Morgan Stanley, J.P. Morgan” and read all the articles that are returned. The SEC stands for the Securities Exchange Commission, and they impose fines on investment houses when they engage in illegal or unethical behavior. Do you still believe that these firms have your best interest at heart after performing this search?

(23)
Henry Blodget, once Merrill Lynch’s top internet securities analyst, and other Merrill analysts once wrote in private emails that the internet stocks Merrill Lynch analysts were touting were “crap” and “junk” and that the only thing special about them were the investment banking fees these companies were paying to Merrill. (Source: The Washington Post, April 24, 2002). Though many firms have claimed to have separated investment banking from their brokerage houses today, do you really believe that a huge investment banking client that has paid massive fees to an investment firm will not pressure top management to tone down negative ratings regarding their company or to amplify otherwise already positive reports? Remember, Warren Buffet says he reads analysts’ reports only when he needs a good laugh. How do most stock pickers at firms choose stocks for you? By reading their firm’s analysts reports.

(24)
It doesn’t really make a difference in 99 cases out of 100 if an absolutely green financial consultant straight out of college manages your money or a 20 year veteran with silver hair manages your money. You’ll receive roughly the same results because internal systems that guide consultants to choose money managers or firm developed asset allocation models don’t change whether a consultant is 25 years-old or 65 years-old. If this doesn’t scream sales optimization strategies over portfolio return optimization strategies, then I don’t know what does.

Individuals that say they have tried managing their own money but have failed have never implemented a realistic or proper system to do so.

(25)
There is now a course to learn a comprehensive investment system for the first time ever called SmartKnowledgeU™ that not only teaches never before revealed secrets regarding how to identify the best stocks in the world but also teaches how and when to buy and sell stocks. (okay, a little shameless promotion here but since it’s not even in the top 20 on this list you can’t call it that shameless right?)

(26)
There is a global investment crisis aka the Peak Investment Crisis that is brewing and inevitable though the vast majority of investors are unaware of it ( and this is NOT a reference to any global market correction that may have happened recently). If you learn how to invest your own money now, which means learning a comprehensive investment system, you are highly unlikely to be caught unprepared when this crisis hits and destroys trillions of dollars in the stock market.

We are not saying that this investment crisis will happen tomorrow. But there are many undeniable facts, not theories, about the global economy that presage an economic disaster that will happen most likely sometime within the next five years. It may start this year or it may not really muster enough momentum to precipitate a global reaction until two or three years from now. But the probabilities are very high that it will happen soon. Learn a proper investment system that teaches you to understand the global economy to guide your investment decisions and you will profit tremendously from this crisis.

(27)
Most people that try to do it themselves and fail have no system. They buy stocks that are plastered all over the financial media, which more times than not, means that the stock has already had a fantastic run. After all, stocks that are languishing will not attract so much media attention. So they do the worst thing possible. They buy high and when the stock corrects, they sell out low.

(28)
Individuals often say they can’t manage their own money because they have lost money when trying to do so. However, the majority of individuals that say this never learned a proper investment system before commencing the management of their own money. So if you are among this subset of investors, below are many more reasons why anyone absolutely can learn to manage their own money.

(29)
In the past, learning how to invest was all about number crunching, Dry and boring. Today long tail investment strategies have introduced a lot of creativity into investment strategies and actually made learning how to invest fun.

(30)
Your neighbor told you he had a hot tip for a can’t miss stock. You bought and you lost big. You vow to leave investing to the experts. Sorry, but this is hardly qualifies for an attempt to manage your own money. Foolishness, yes. Serious go at managing your own money? Hardly.

(31)
You mistake years of investing for years of investing experience. If you’ve been investing for 30 years but have never managed your own money, you have zero years of investment experience when it comes to being able to do it own your own. Most people don’t realize this, think they’ve learned enough by speaking with their investment advisor over the years, embark on their own and lose money. Learn an investment system first and this won’t happen.

(32)
You believe that all the cumulative knowledge you’ve gained from being a client of a well-respected brokerage house of financial consultant should be enough to allow you to manage your money successfully. None of this information you’ve learned will help you build wealth. If you’ve built wealth through them, you wouldn’t be trying to learn how to do it yourself. Forget about all these strategies and principles and seek out an investment system that doesn’t have as its number one goal closing a sale.

(33)
In this ever increasing age of immediate gratification, you’ve never given yourself proper time to learn a real investment system. You may have tried something for three months, and after questionable or poor results, discarded it. Ever try learning anything worthwhile within 3 months with great success? Learning how to invest and how to build wealth is not difficult yet it demands a certain level of commitment and time. Too many people these days expect a lot for nothing. They want a secret formula that will give them explosive growth. They jump from one foolish spam email that screams “I’m almost positive this stock will give you 1,580% returns in six months” to the next $10,000 software program that promises to have cracked the "secret patterns and codes" that predict every single upleg in the markets in chase of quick profits. This is not learning a system. This is foolishness. There are secrets to building wealth, but they all involve learning proper systems of investing that won't make you rich overnight but will make you rich only when you assume a proper commitment to learning.

(34)
You actually spend an adequate investment of time learning a system, but you spent time learning the wrong things. You invest with these strategies but never build any wealth and declare that you’re better off letting the “pros” handle it. Modern portfolio theory of diversification is over half a century old. There is nothing modern about it. Learn the long tail of investment strategies that have updated yesterday’s outdated strategies and you will finally learn the secrets about building wealth.

(35)
You start an investment club with industry experts. Experts in nanotechnology, in biotechnology, in pharmaceuticals, in precious metals, but still your investment club has not made you rich. Industry experts are a great place to start. In fact, they will be able to shed more light on companies than the average person. Still if no one in your investment club has learned a proper system of investing, all that insight is useless. You must have the framework available to take advantage of all that insight. That framework is a solid system of investing, and all members of your investment club should possess this.

(36)
Most people misunderstand what a solid investment system is. This is not something that you gain from reading a $39.99 book and not something that you can learn from “dabbling” in investing. Just as you would not expect to be able to solve complex algebra algorithms or problems without a comprehensive structured course, you need a comprehensive structured course to truly learn a system. Find one and learn it.

(37)
Most people don’t utilize leverage when learning an investment system. If your strength is not independent learning, then find a tutor to aid you. Understanding your personal strengths and weaknesses are paramount to investing success. If you have learned a great investment system but don’t have time to apply it properly, form an investment club and leverage the ideas of others to save time or bounce ideas off of.

(38)
A talking, or screaming, head on some financial news channel on TV told you about a can’t miss stock. You bought and you lost again. See Reason #(33). This is not a serious attempt to manage your money but mere foolishness.

(39)
You paid lots of money for an investment newsletter subscription. You bought everything they recommended but didn’t really earn much money beyond what you earned before you bought the subscription. To build wealth, it’s not good enough to know just what to buy. You must know when to buy, how to buy, when to sell, and how to sell as well. This is a complete investment system. Furthermore, newsletters that provide coverage on 100 stocks will never provide any utility to you unless you have already learned an investment system that allows you to filter down that list of 100 to only the best ones.

(40)
You purchased books on value investing, how to invest like Warren Buffet, technical investing, and so on, but you still have not had huge successes with your investments. These are the wrong types of books to consult in learning an investment system and thus, the reason for failure. Traditional decades old strategies should not be applied today. Mimicking someone else’s style does not work. I’m sure basketball players would like to elevate their game to the level of Michael Jordan’s game, but mimicking his style won’t make them play like Jordan.

(41)
You’ve tried managing your own money and have had years of great success but also years of huge losses. You decide that a steady 8% a year, just like the investment firms have been telling you for so many years, is the way to go. Sounds like you’ve been speculating versus having learned a solid investment system. While you are going to have some years that are much more spectacular than others when investing you shouldn’t have years where you gained 40% and years where you lost 50%. That can only happen because you've been speculating and still have not learned a proper investment system.

(42)
You only buy stocks on tips from “experts” already in the investment industry. You figure this is the quick, painless way to find the best stocks in the world to invest in. However, it seems to be hit or miss with the stocks you have bought. Again, this is not learning an investment system.

(43)
The reason all the instances above are NOT justifications for why you can’t manage your own money is because in none of the above instances was a systematic method of investing ever utilized. Would you ever read a book about how to fly a plane, even as detailed as it may be, and think you could really fly a plane. Would you ever just take the recommendation of a friend that Island XYZ is the best island in the world and blindly fly there for your honeymoon without performing any research yourself? Would you ever just quite your job and start a construction business tomorrow because your neighbor is making a killing in the construction industry? These are the exact fly-by-the-seat-of-your-pants decisions that investors make when managing their own money, and then when struck with failure, conclude that they can’t manage their money.

(44)
Become a member of an elite group, the less than 5% of individual investors that actually learn how to invest for themselves. There is a reason that so few investors actually build great wealth through investing. I’m not talking about the investors that made $25 million from real estate and then grow that amount through investing in the stock markets. I’m talking about the investors that started with very little and amassed a fortune through investing. The reason that so few investors amass a fortune through investing is that so few are willing to truly learn an investment system that teaches them how to invest themselves.

(45)
There is a reason why you consistently hear statistics like 3% of individuals own 95% of the wealth, no matter what country you visit. The reason is that these 3% of people took the time to learn how to manage their money themselves and thus have truly built wealth.

(46)
Like attracts like. Of all the investors I’ve met in my life, less than 1% actually learned how to do it themselves. However, the best ideas outside of my own that I’ve ever had have come from discussions with these 1% of investors. If you have something to offer to someone else, they will freely offer their views to you as well. There's something about human nature, unless you are a great philanthropist, that makes people dislike others that are not willing to put in the work themselves and instead only look for free handouts (advice) from the people that have put in the work.

You say you don't have time to manage your own money? Guess what? Your financial consultant has even less time.

(47)
The only excuse that you have for not building wealth is not taking the time to learn an investment system. Given that this is potentially the most important pursuit regarding your financial security, there really is no excuse for not learning how to invest yourself.

(48)
If you don’t believe that your returns should be limited to the knowledge of your financial consultant, then manage your own money. For example, how many times have you asked your financial consultant, I’d like to invest in gold, or I’d like to invest in dollar declining funds, or I’d like to invest in Chinese markets, only to have your financial consultant stare at you blankly and say, “the safest way to invest is what I’m doing for you now.”

I once heard this anecdotal story. A wealthy individual asked his financial consultant, one of the top producers at his firm, why he didn’t own any stocks in the Chinese stock market. The consultant said just give me some time and I’ll get you a list of stocks that we can buy. When he produced the list, the list contained the American-based Chinese restaurant chain P.F. Changs. If this is the kind of advice a top producer gives, you may think how can he be a top producer? Just read this entire list, and you’ll realize how easy it is for these types of situations to exist at top investment firms. You want to know how a top producer at a prestigious global firm can give such shoddy advice? It's because he's not paid to produce great returns for you. He's paid to close sales. You want to duplicate this experiment today? If you live outside of Canada, then go to your financial consultant and ask him what he thinks are a couple of the best Canadian junior gold mining stocks and why? Ask him or her to answer on the spot.

(49)
If you believe that diversification is the pathway to mediocrity because even a 2000% gain isn’t going to help you much if it constitutes 1.5% of your entire portfolio, then manage your own money.

(50)
In my many years working for global investment firms, I once heard one of the top producers call a client and tell the client to urgently sell shares of a specific stock and then immediately call another client and tell this client to buy the shares of the same stock. There are plenty of people like this working for global investment firms that are rewarded by these firms for such actions (because these actions earn the firm money as well as of course the consultant). Do you really want someone like this managing your money?

(51)
The reason that the only excuse for not learning an investment system is laziness is the following: even if you work full time, it will take no longer that a few hours a week for one year to master an investment system with the proper course. That is one year of sacrifice of perhaps missing your favorite TV shows. That is not a lot of sacrifice for a lifetime of building wealth and security for your family. Again the only excuse is laziness.

(52)
So you don’t care that your financial consultant knows nothing about stock picking. You only care that he utilizes expert money managers on your behalf. Wrong again. Most all institutional managers, an estimated 98% track the domestic indexes in their own country. You still won’t own the best stocks in the world even if your financial consultant employs money managers to manage your money.

(53)
Financial consultants have hundreds of clients. How much personal attention do you think your account is receiving, especially if it is less than USD $5 million in size? If you have no time to manage your own money, that is still more time than your financial consultant spends managing your money.

(54)
To save time, financial consultants often gain exposure in foreign markets for you by buying mutual funds. Mutual funds, because of all the fees associated with them, are horrible investment vehicles. Furthermore, mutual finds diversify away the performance of any great individual stocks they hold.

(55)
Mutual funds were invented to allow investment firms to sell more product in less time. Selling a mutual fund requires a fraction of the time that would be required if financial consultants had to search and find the best companies in the world. It also allows financial consultants to invest you in asset classes, regional markets and so on, with zero knowledge of how to invest intelligently. When it comes to investing, knowledge equals power, and power builds wealth. You want knowledge, there is no alternative but to learn to invest yourself. If your financial consultant purchases mutual funds for you, it is because he/she has not time to find individual stocks for you.

(56)
Mutual funds, due to their institutional nature, will often tank during global market corrections as massive amounts of money are redeemed. Yet so many firms push mutual funds. Furthermore, to be able to meet redemptions, mutual fund managers must hold a certain portion of their fund in cash and manage liquidity in the fund. Do you really want to pay for inefficiency because when you buy a mutual fund you pay for inefficiency. !00,000 times out of a 100,000 times, a great individual stock is better to own that a great mutual fund.

(57)
Time is the one commodity that financial consultants do not have. Is this good if they are managing your money?

(58)
Here is the typical breakdown of management directives for financial consultants. 70% of all time spent marketing and meeting new prospects. 30% of all time spent with accounts, including routine account maintenance. Is this the equation you want for the management of your money?

(59)
If time is the commodity you say that you lack, and this is why you employ a financial consultant instead of managing your own money, this is also a poor excuse for the following reason. Most people work so hard to have a nest egg to invest and then spend no time whatsoever in protecting and growing that nest egg (In essence, handing your money to someone else to manage it IS spending NO TIME protecting and growing it).

(60)
You should make two to three to eight times the returns from managing your own money than you do by handing it to someone else. If time is the commodity you lack to manage your own money, do you see how this is a circular argument? You lack time because you don’t earn enough returns on your investments. But if you made much greater returns you would CREATE MUCH MORE FREE TIME for yourself, because you would not have to work so hard at your job or you would have the luxury of being able to turn down a promotion in exchange for having a better quality of life.

(61)
Being wealthy is NOT just about having more money than your neighbor. It's also about having the leisure time you desire to enjoy life. By committing more time NOW to learn an investment system, you will free up much more time in your FUTURE. Everything has an initial period of sacrifice. Learning how to invest however, yields great rewards down the road, and is very much worth the initial period of sacrifice.

(62)
Finally if you are RETIRED, then you absolutely have ZERO excuse for not learning how to manage your own money!

Traditional education offers very little utility in building wealth in the real world. Because of this, you must seek investment courses outside of traditional education that will teach you how to truly build wealth.

(63)
It’s truly not difficult to manage your own money. The reason so many people don’t know how to do it is that there are very few good courses that teach people how to do this. The scarcity of such classes is purposeful as the institutions that control stock markets in this world don’t want people to know what they know. By this, I mean that they take a much different approach to managing their own institutional accounts than they do when managing private individual accounts. This is the information they closely guard, that if the average investor knew, would make their existence moot.

(64)
Perhaps the most important class that could be taught in secondary education classes is one called “How to invest money”. However, this class is not taught in traditional forums of education. Therefore it’s up to you to learn how to do it yourself outside the realm of traditional educational.

(65)
People that try and fail, fail not because they aren’t capable. They fail because they seek the wrong information about investing. The information age has made the long tail of investment strategies the best way to easily invest and make lots of money. Forget about fundamental investing and learn the long tail of investment strategies.

(66)
Saying you can’t do something is a poor excuse for not even trying. Managing your money in the global stock market is no more complicated than an 8th grade level mathematics class. It just takes commitment and the patience to learn BEFORE entering the stock markets.

(67)
Investment firms spread tons of misinformation trying to tell investors that investing is complex so consequently you must use them. Of course they want you to believe this. If you didn’t, they would be out of business. If you ever wondered why you have never made tons of money while your money was being managed by an investment firm, stop believing their myths.

Most people that seek to manage their own money give up if they don't achieve immediate results. Immediate gratification and taking shortcuts is a mindset that will lead to failure.

(68)
You must get over the immediate gratification aspect of managing your money. This is a lifetime pursuit. In the beginning it will require more time. Down the road, doing so will CREATE MORE LEISURE TIME as your returns flourish.

(69)
Learning to manage your own money will create a legacy for your children. Since your children will never learn how to do so within the confines of traditional education, after you learn, you can teach your children and give them a head start in building wealth that will place them 10 steps ahead of all their peers.

(70)
Seizing control of this significant part of your life will teach you how to seize control of other part s of your life as well.

(71)
Learning how to manage your own money will give you a greater appreciation for the movie “The Wizard of Oz”. Everytime you watch it you’ll realize that in the past you were the tin man or the lion or Dorothy and that investment firms were the man behind the curtain.

If you don't seek out a proper investment system to learn now, and you are beginning your investment life, you will inflict significant harm on the mindset required to build wealth by internalizing mainstream advice. Learning a proper investment system now allows your to filter out all the white noise of the investment world.

(72)
Most money managers have a very nationalistic slant in the management of portfolios, tracking the major indexes in your country. Or if you do not live in a country that has one of the major developed markets in the world, then they tend to have a very regional bias. For example, if you live in Indonesia, perhaps the manager is heavily invested in China. The problem with this is that even great markets, especially fast growing ones, became overbought and overheated, and a narrow regional or domestic focus exposes your portfolio to a lot of risk. If you want a global portfolio that will capitalize on the fastest growing countries in the world while capturing other assets in more developed markets for an element of stability, you simply must learn to do it yourself.

(73)
Building on the above, managers that seek out foreign markets primarily do this by purchasing emerging or developing market mutual funds. In major foreign markets, you want to own the best individual stocks, not mutual funds.

(74)
You’ll be fed years of junk by establishing a relationship with a global investment firm. Not being fed years of junk that may take you years to “unlearn” is worth the price of learning how to do it yourself.

(75)
For example, diversification, asset allocation, volatility equals risk. These concepts are all junk. Making money in stock markets is about picking the right stocks in the right markets at the right time. Learn to do this and you’ll become wealthy.

(76)
No money managers at global investment firms currently utilize the proper filters to find the best stocks in the world. You need to learn yourself if you ever want to apply the best investment systems in the world.

(77)
The reason (38) is true is that investment firms goals are very different than yours. Their goal is to gather as many assets as possible and earn as many client fees as possible. This goal leads to strategies that do not maximize the returns on your portfolios.

(78)
Even if you take shortcuts to managing your money, like paying for investment newsletter subscriptions, the only way you can build wealth is if you learn a proper investment system that allows you to leverage the information of top-tier investment newsletters. Notice again that we say top-tier investment newsletters, because just like financial consultants, perhaps less than 1% of investment newsletters are actually worth your money. However, even for the information of the best investment newsletters in the world to be worth anything to you, you must have learned an investment system that allows you to invest in their stock picks with efficiency and at low risk/high reward entry points.

(79)
You just can’t mimic what successful investors buy or buy what a newsletter tells you to buy if you want to build wealth. If this was the case, there would be a million other Warren Buffets out there who just inspect the Berkeshire Hathaway annual reports every year and copy the Berkeshire portfolio. Besides knowing what to buy, you also have to know how much to buy, when to buy, when to sell among other things as important determinants of building wealth. Thus you must learn an investment system that you will trust.

(80)
Learning how to invest yourself is a much more important determinant of wealth than other things, like obtaining a CFP, a CFA or other advanced degrees that people choose to invest in instead of learning how to invest. Get a degree in learning how to invest instead.

(81)
The stocks that will make you wealthy over time are the ones nobody knows about. Therefore you can’t depend on Bloomberg, CNBC, Jim Cramer, or Reuters to tell you about them. You must learn a system that helps you identify them.

(82)
Once you learn to invest, you can employ a domino effect to really quicken the pace of your wealth building. Once you convince some of your friends to learn how to invest, form an investment club. I guarantee you that if you have a group of five to ten or even 20 people that have truly learned an investment system, the ideas generated by this group will be 100 times better than a 100,000 financial consultants.

(83)
Most people that believe that learning a system is not worthwhile believe so because they have read stories similar to the following: We conducted an experiment to test the randomness of the stock market by having a monkey with painted feet dance around on a stock page. We built a portfolio out of those 20 stocks and it outperformed the 10 top money managers in our country. Most recently, in 2006, five Playboy playmates outperformed a well-known U.S. mutual fund, the Legg Mason Value Fund. They point to this as proof that investing in the stock markets is random and a crap shoot. Maybe it says more about the quality of people in the investment profession, but read below for a better explanation.

(84)
Several things make the above argument highly flawed. Number one, playing make believe with an imaginary portfolio can not mimic reality. Tell the Playboy playmates or the person managing a portfolio with a monkey selecting stocks to actually invest large sums of their own money and see if the results are the same at the end of the year. For example, the Playboy playmates were asked to choose a portfolio consisting of only five stocks. At a million dollars, every position would have $200,000 to start. However, own $200,000 in a stock that all of a sudden loses $50,000 and see if they would really hold on to it to see the 30% gain at the end of the year. Or see if they have a system two years out where they protected their profits at the end of year one or lost them all. Imaginary contests can be played with no investment system whatsoever and therefore do not mimic reality.

(85)
If you are a baby boomer just starting a family, with skyrocketing education costs that now may even outpace inflation (and real inflation costs versus the bogus numbers often released by governments), it is estimated that tuition at the top schools could cost half a million to a million dollars by the time your children are ready to enter college. If you don’t want the cost of your children’s education to bankrupt you, you better learn how to build real wealth now.

(86)
By building a legacy for your children as well as teaching them something they will never learn in school, you will ensure that they won’t still be draining your resources and living at home when they are 25 years old.

(87)
You’ll never have to utter these 3 questions again, “What stock(s) should I buy?”, “What stock(s) should I sell?”; and “What markets should I invest in?”

(88)
You’ll never have to utter this question again, “Where is the best place to invest my money?”

(89)
You’ll never have to utter this question again, “How do I handle the global market corrections?”

(90)
You’ll never have to utter this phrase again, “Your fees seem really high for the returns you’ve been earning me lately.”

Learning a proper investment system will drastically decrease the mistakes you make in investing your money, the inefficiencies that currently plague your returns, and the amount of fees you pay over your lifetime while dramatically increasing your returns and your leisure time. That is a payoff that is worth the initial investment of time and money to do so.

(91)
Your returns will never be plagued again by consultants that keep you fully invested in traditional stocks through global market corrections and having to hear “your best off staying fully invested through this time.”

(92)
Markets are not efficient. Just think of how many major news stories have recently been scooped by blogs instead of the major media outlets. Financial information is the same. Learn how, why, when, where, and what to look for and your investment system will yield stock picks with low risk-high return set ups.

(93)
A certain amount of volatility in your portfolio is necessary to build wealth quickly. However, volatility does not equate to risk though investment firms lead you to believe this. Do you think Warren Buffet and George Soros built their fortunes without investing in a proportion of assets that were volatile? However, intelligently investing in volatile assets requires that one learns a solid investment system. The overwhelming number of financial consultants never learn an investment system. They learn investment theories and strategies, and most of all, sales strategies, but NOT an investment system. Diversification is NOT an investment system. Asset allocation is NOT an investment system. Learning a solid investment system requires more time. Therefore it is up to you to learn a wise investment system.

(94)
The overwhelming curriculum of global investment firms’ financial consultant training courses are spent on sales strategies. Ask a graduate of a big time firm’s financial training course to pick the best gold and uranium stocks for you and the overwhelming majority of them will be clueless. But he or she will be adept at selling the hell out of you and convincing you to entrust them with the management of your money. This should tell you something.

(95)
Financial and fundamental analysis are dinosaur investment strategies when it comes to utilizing the best predictive information for stock appreciation. Modern Portfolio Theory was invented in the early 1950’s. Does that sound “modern” to you? Do you want to be a dinosaur or move into the modern world of investment strategies?

(96)
A one time $10,000 investment in learning an intelligent investment system primed to take advantage of the explosive growth in top-tier investment information is worth 1,000 times more than $20,000 annual fees paid every year to an investment firm.

(97)
Learning how to invest yourself, even if you have a large account domiciled at a global investment firm already, will save you loads of money over time. Say you have a $5,000,000 account and pay 1.5% annual management fees (the truth is if you have been sold hedge funds, your fees are probably much higher than this because hedge funds typically charge you 20% of your profits AND 2% management fees), then your annual fees amount to $75,000. In ten years, you have paid a firm more than $750,000 in management fees (presuming you account is growing). For a fraction of that money, you can learn a comprehensive investment system, manage your own accounts, and never have to pay management fees again.

(98)
How many times in your life when it was absolutely 100% necessary for something to be done right, did you decide to do it yourself? Isn’t your financial future something that is worthy of being placed in this category?

(99)
How many times a year do you sit down with your financial consultant face to face to have a serious discussion about your stock portfolio? How many times a year do you take your car in for routine maintenance, including oil changes and car washes? Which is more important to maintain, your car or your financial livelihood?

(100)
Learning a comprehensive investment system and how to invest your own money will lead you to learning about many non-traditional asset classes, i.e., the asset classes that the institutional divisions of global investment houses invest in but rarely purchase for high net worth individuals. These non-traditional asset classes may very well provide some of the best returns in the markets over the next five years.

And finally....REASON 101

(101)
We’re not saying that all financial consultants stink. Just the great majority of them. There are great ones out there. Most of them are probably independent. And I do recall one financial consultant that told me he avoided the firm’s top ten stock picks like the plague. So they do exist. It’s just that the energy expended to find one would probably be better spent investing in yourself and learning how to invest yourself.

Other recommended resources to help you understand why it is 100% necessary to learn an investment system to build wealth through investing is the SmartKnowledgeU™ free e-book that can be found on our free educational resources page and the blog articles categorized under the "Down the Rabbit Hole" category. We're not saying you have to learn our system. Just learn a system. If it's a good one, you'll be taking the first step to finally building wealth!"