Credit cards in the US

Almost everyone in the US uses credit cards as a way to pay for debt. Dependency on credit has grown immensely throughout the economy, as lenders in the past were more than willing to extend funds to borrowers. Unfortunately, the recession put a damper on that freedom, when credit card companies were sent reeling by their former over-enthusiastic lending. They began using tactics like cutting people’s limits, even if they had more than that limit charged. This automatically put them in a higher interest rate bracket, and many times unjustly cost them over-limit fees. Credit card companies also began charging higher interest rates without notice to consumers, based on their “adjustable rate” clause in the contract. It was unscrupulous acts like this that pressed the Obama administration to face the credit crisis head on, making legislators step in and find ways of regulating credit card company activity.

Understanding credit cards

To understand what impact credit card companies’ actions have on credit, it’s important to understand how credit is scored. A consumer’s credit score is made up of five different components:

1. 35% is based on history of payments
2. 30% is based on debt percentage, or credit being used versus credit available
3. 15% is based on the length of time credit has been open
4. 10% is based on new credit taken out
5. 10% is based on a mixture of the overall credit a consumer has

Knowing this, the most important thing a consumer can do is pay their bills on time. This is the largest contributor to credit scoring. It’s also important to have a good mixture of all of these elements to maximize a credit score.

Also, length of credit is very important. It’s much more beneficial to have a good payment history with one credit card company than to open new cards that have no history. Consumers should always keep good-standing credit cards open to benefit the most from them.

Debt consolidation companies

Many experts advise against using debt consolidation companies because they do what consumers can do for themselves, for free. A debt consolidation company will charge large fees to negotiate. Experts say that if a consumer wants outside help they should contact the NFCC, the National Foundation for Credit Counsel. They charge a small fee, but it is much less than a debt consolidation firm. The NFCC will communicate with lenders on a consumer’s behalf to work out an affordable plan. They also will work with the consumer to create a workable budget that allows the client to pay down debt as soon as possible.

Debt questions to ask

One important issue to face is what actions led a consumer to having credit card problems. Did overcharging send the credit amount skyrocketing? Did fees due to late payments do the damage? Are credit cards too widespread? These are all questions that need to be addressed for consumers to create healthy relationships with credit. On the other hand, the credit card problems may be due to extenuating circumstances such as unmanageable medical costs. If this is the case, bankruptcy may be a more viable option for the individual. Regardless of what the solution is, it’s important to get to the root of the credit card problem and take care of it. The future after the recession is still unknown and consumers have to work hard to make sure they will be financially sound.

Understanding banks

When it comes to banking, there are some important rules to understand. Every American needs somewhere to put their money. Although grandparents may have kept it at home, in today’s world there is no need to do the same. Today’s market allows for great savings vehicles and although the savings rate is not what it used to be, it still brings in some return on investment.

• Banks and safety. For years banks have had insurance for individual accounts of up to $100,000. Due to the recession, the federal government upped that to $250,000 per account. Although after January 1st of 2010 the insurance will return to the lower number, it is still a great way to protect your savings.

• Bank fees. Remember that every service costs and that includes the service of holding your money. Banks pay lower rates on interest-bearing accounts than brokerages or mutual fund companies, but may take out hefty fees. In particular many people get caught in the “minimum required balance on deposit” trap. This is where a bank charges a fee if a balance falls below a certain predetermined level. These fees can easily add up to hundreds of dollars in a year. Be sure to understand your bank’s rules so you can avoid fees as much as possible.

• Understand interest rate at your bank. Not all banks calculate interest the same way. You want to ask your banker about each accounts’ “annual percentage yield.” Banks normally quote both interest rates and APYs, but only APYs are calculated the same way everywhere. Interest rates can vary greatly.

• Try other savings vehicles. If you don’t have the need for quick cash, try using CDs, or Certificates of Deposit, for your money. These are accounts that offer you better interest rates than just plain savings accounts. The catch here, though, is that you have to agree to leave your money untouched in the account for a specific period of time. That time can vary from 3 to 48 months. If you think you’ll need cash soon, opt for a lower lifespan for the account. On the other hand, if you won’t need the money, then take advantage of the typically higher interest rate on longer life spanning accounts.

• Watch ATM fees. ATMs are one of the most convenient advances of the decade. They are everywhere and allow you to take out money at a moment’s notice. The problem, however, is that they also charge you fees each time you enter your PIN. On average, the fee your bank charges to use another institution’s ATM is $1.50 according to BankRate.com. On top of that, you also will get hit by a fee to use the ATM and that can range anywhere from $2 to $5.

Banking in 2010

Using a bank is a great way to grow your money and protect it. Like with any contract, though, there is fine print. Be sure to understand your bank’s rules and regulations so that you are maximizing your return. You want your money to be safe, insured and in a prime position for growth.

Let’s say you are lucky enough to get a new unsecured credit card. That means that your credit has to be somewhat stable, because credit card companies are no longer handing out credit like they used to. Now there is a rigorous intake process that sorts through applicants and notes those who are most likely to pay their debt on time and those who are most likely to default.

Once you get your credit, you run to the local store to make your first purchase. It could be something as innocuous as dinner for your family, or it could be a big-ticket item that you were waiting to put on credit. It may seem well and good for a while, but then your bill comes. For a lot of people it isn’t until their bills come that they realize the true relationship they have with their credit lenders. Though there is an immediate benefit, there is a long-term payout.

Credit card trends to be wary of

Credit is necessary in today’s market. If you ever expect to get a car, house or any big-ticket item, you have to have a decent credit score. However, now that lenders have been through the recession, they are changing their rules as to how credit is managed. Here are some new characteristics of credit cards to pay attention to:

1. Credit rates will continue to rise. Surveys show that four of every five credit cards have the dreaded “variable rate.” Since the recession, those variable rates have been steadily on the rise. Coming 2010 the trend is expected to continue. Although regulators have managed to change the rules of minimum payments, it still may take consumers much longer to pay off debt if they stick to the minimum payment amount.
2. Great deals are available, but beware. The credit cards with great deals are still going to be introduced to the market, but this time they come with some startling regulations. For example, Discover card advertised a 0% balance transfer deal that requires only two purchases a month. What was hidden in the fine print, however, was a hefty minimum requirement of purchases to be eligible.
3. Fees are on the rise. In the past ten years fees for over-limit purchases and late payments have risen dramatically. It’s a chronic problem with credit cards from most major lenders. For example, Citibank’s Citi Simplicity card offers no late fees when users make purchases once a month. The catch is that if you do go over your limit, the penalty rate kicks in. That rate is well over 30%.
4. Low-rate offers are also sketchy. Sure you may find a great low-introductory rate on a card, but there are many more ways for the lender to increase the fees involved. For example, Chase removed their cap on balance transfer fees for some of its lower-rate offers. That means that if you are transferring a substantial amount, expect to get the lower interest rate, but a higher fee. That fee may just about eat up any savings you got from the lower rate.

The future of credit is still in the lenders favor

Overall credit is still sided to benefit the lender more than the consumer. That’s nothing new in the world of credit, but it is projected to be worse than it was pre-recession. This time lenders are focused on bringing in as much cash as possible, as many ways as possible. They are making themselves ready to act quickly should future payment problems occur. Consumers need to be aware of the fine print and understand that benefits these days are not as transparent as they once were.

Need some cash till payday? Apply HERE!

Though it may seem early to start thinking about saving quick cash for Christmas 2010, many people are already considering the cost. The recession of 2009 made people think twice about their finances. Credit card lenders proved to be unreliable throughout the economic downturn and people had to rely on their cash reserves to make their monthly expenses. Christmas 2009, overall, was a bleak one with many consumers having to cut back drastically on their spending. To avoid the crunch, many consumers are looking for saving options and starting their plans now.

Budgeting in advance

According to Alison Southwick, BBB spokesperson, “Budgeting wisely can greatly reduce the holiday hangover that many overextended families’ experience. A Christmas Club account is a great tool for gradually socking away money throughout the year to spread the financial burden of holiday spending.” The Christmas Club account is the latest tool consumers are turning to as they try to ease the pain of holiday spending.

In the past the Christmas Club account was offered at credit unions or community banks. It’s a savings account that allows holders to deposit small amounts over the year and then withdraw the funds in the fall. There are 78% of credit unions in the US that offer the accounts, according to the Credit Union National Association.

Retailers are joining in the savings plan

Retailers are now realizing that they need to keep up with the financial strain of their customers and changing their own products. Some retailers are offering their own form of the Christmas Club account. The good thing about these accounts is that they offer a place to not only place money, but they also earn interest as well. Of course the stipulation is that the money has to be spent at the retailer holding the account, but it’s proving to be a convenient way to save for the holidays.

The terms for Christmas Club accounts vary widely among retailers. Some allow withdrawals in early fall, while others require the money to be left alone until December. Some also offer higher interest rates than others, so it’s wise to do some searching. For consumers who are worried about having enough quick cash when the holidays come near, these accounts are very helpful.

Understand the fine print

It’s crucial that applicants understand the terms of an agreement when it comes to Christmas Club accounts. Some require a minimum deposit to open the accounts and require a consistent monthly deposit. This can be a good tool for those who are particularly disciplined when it comes to savings. They can treat the deposit like another expense and keep up with payments. The accounts are a lot like Certificates of Deposit that banks offer. They have an interest rate, varying deposit requirements and there is a penalty for withdrawing the money prior to the end date of the contract.

The cautions of Christmas Club accounts

The terms are the most important thing for consumers to watch when it comes to Christmas Club accounts. Also, consumers should make sure that the retailer they choose is a good fit for most of their holiday shopping. Overall, the accounts are great tools to have quick cash for spending and with a little research they can help any family make it through the expense.

Need quick cash? Apply HERE!

Single mothers in need of money now have some choices to make. It’s difficult in today’s economy for anyone to manage, but with the added stress of raising children, it can be a daunting task. There are millions of unemployed Americans in the job market and a good portion are single mothers trying to make ends meet. The hardest part of combining motherhood with work is the schedule. A single parent has to be available in the morning to get children to school, and be ready to pick them up afterwards. There are illnesses to deal with and holidays where children need supervision. Even the best employer may not always be willing or able to accommodate.

Jobs for single mothers

There are some jobs that cater to single mothers due to the schedules and responsibilities. Here are the top five:

1.) Pharmaceutical Sales Representative. Without question, being in pharmaceutical sales is not easy, but more and more companies in the industry are creating flexible policies for workers. For example, GlaxoSmithKline has an official “Flexible Working Policy” that allows home workers, part-time workers, annualized hours, and term-time working. The company also provides workers with on- or near-site daycare services and pay-for-performance incentives.

2.) Teachers. Teaching is one of the top careers for mothers because the schedule is congruent to children’s school schedules. This field is known for its family-friendliness and some professionals choose to work in the same district or school where they reside. It’s much easier for a teacher to be a parent if their child is down the hallway or a few miles away. An added benefit is that teachers can also pick up extra work with private tutoring or teaching additional classes on the side.

3.) Freelance writer. Freelance writing offers a flexibility that few other career choices provide. Some famous freelance writers are Jacquelyn G. Mitchard, author of “The Deep End of the Ocean” and J.K. Rowling, author of the Harry Potter series of books. Most professional writers have some help with childcare but due to being able to set a schedule themselves, most can get by with minimum outside assistance.

4.) Registered nurse. Becoming a registered nurse is a particularly effective way to find money now due to the many bonuses involved. The health care industry is looking for qualified workers and the job market promises to be a continuingly growing one. Americans are getting older and health care is in demand now and is projected to grow exponentially throughout coming years. In addition to high-paying positions, there are also lucrative bonuses ranging from $500 to upwards of $15,000.

5.) Part-time or Temporary Professional. Many single mothers are more prone to having part-time jobs than full-time. Companies like Adecco, Office Team and Accountemps offer a wide variety of part-time jobs that pay well and are flexible for even the most rigorous schedule. For those looking for full-time but flexible professional work, AFLAC may be a good option. Workers make their own schedules and can easily opt for a schedule with no weekends or no nights. In addition, the company offers competitive commissions, incentives and contests for all workers.

Managing parental responsibilities

Single mothers in need of money now have a good selection of options. Each one above is lucrative, but still offers the flexibility needed to parent small children. It may take some searching, but with some good research and skill, any mother can find employment that fits in with her parental responsibilities.

Need money now? Apply HERE!

It’s critical to have emergency money in today’s market, but the New York Times isn’t making it easy. Many avid readers of the New York Times Online are going to be in for a big surprise next year. Mark Zandi, economist for Moody’s Economy.com, said, “The internet is free and more and more people are getting their information directly from it. Gone are the days of paying for a newspaper, except for older generations who don’t have unlimited access to the online news world, or don’t want it.”

The New York Times has long been one of those free news websites, but that is soon to change. Starting next year, the paper is going to be implementing a “metered” system where readers will receive a certain number of news stories for free, but if they want more detailed information they will have to pay. The plan is to draw readers in with interesting articles and then show them the value of learning more about the article’s topic.

Will the plan work?

The big question is whether or not the pay-to-click option will work for The New York Times. They have tried twice before to move to this type of format unsuccessfully. Because of the two failures, executives are taking their time and giving themselves almost a full year to “build the system and figure out the details that are likely to dictate whether the gamble pays off.” The biggest issues are to gauge how much to charge and still keep readers and how many stories consumers will be allowed free access to every month.

Current subscribers to the printed paper don’t have to worry. They will get full-access to the online version with their subscription. The New York Times executives are hoping that this increases the number of print-buyers when they realize that a subscription allows them to read every story online without restriction. Subscribers will also have free access to mobile news, electronic readers and tablet computers for their New York Times content.

Does it make sense for The New York Times?

The question remains if it makes sense for The New York Times to move to this format. It’s still a down economy and most Americans are still prioritizing building their emergency money funds. Will they want to pay for the news when it is so readily available for free elsewhere? The format has worked well for other newspapers like The Financial Times. This is a specialized newspaper that caters to an upper-income set of readers primarily following the stock market, business and the economy while they are on-the-go. Some analysts are questioning whether it makes sense for newspapers that are mainstream to try to follow the same model.

It raises another question on whether or not readers who are turned away by fees will also drive away internet advertisers. Zandi added, “Online newspapers like any other online business get their value by the number of visitors they have… it is possible that The New York Times could lose internet viewers and that would be disastrous for their bottom line in terms of advertising.”

Charging for stories when they are free elsewhere

Finding emergency money in the economy isn’t easy, so charging for stories is an uncertain challenge. According to a study done by ITZ/Belden Interactive, currently about 150 US newspapers charge for internet subscriptions and their fees range from $1 to $35 per month. With a long history of award-winning reliability, The New York Times should be able to gain some online paying customers, but whether or not it will be enough has yet to be seen.

Need emergency money? Apply HERE!

Buying a home can be a challenging journey – especially if it’s your first time on the market. For this reason, many people choose to enlist the services of a qualified real estate agent to help navigate these waters. Because you’ll come to rely on this person to help you through many complicated issues, it’s important to spend some time finding the agent that best meets your needs. Don’t just choose the first person whose advertisement you see or, worse, the person whose picture is on the “For Sale” sign of the house you’ve fallen in love with.

Enlist Your Own Agent

If this is your first time buying a home, you might be wondering, “Why shouldn’t I just call up the agent that’s pictured on the For Sale sign? Wouldn’t that be easier for everyone involved?” What most people don’t realize is that there are typically two agents involved in a real estate transaction – one representing the buyer and one representing the seller. The agent listed on the For Sale sign is representing the seller, and he or she is contractually obligated to look out for the seller’s best interests.

What this means is that if you approach this person to represent you as well and you tell the agent how much you can afford to spend on your new home, the agent is required to report that back to the seller. Obviously, you want someone who’s going to look out for you in that way. You need a buyer’s agent – but how do you go about choosing one?

Look for Someone with Experience

Now, this isn’t to say that there aren’t plenty of young, up-and-coming agents out there, but if you’re a first-time homebuyer, you really need to find someone with experience – not just as a real estate agent, but also with the market where you’ll be buying. An experienced agent will know more about the different homebuyer incentive programs available today, as well as how the neighborhoods in your target city have changed over time. Experienced agents have also been through more transactions than their newer colleagues, so they’ll be better prepared to help you through any unusual situations you may experience.

Ask for Referrals

The easiest way to find a good, experienced agent is to ask friends and coworkers which agents they’ve worked with in the past and whether or not they would recommend them to you. Any agent can put together a great looking website or make bold claims in their advertising materials, so you need to go off of more than just paper. If possible, get recommendations for several different agents and then set up consultations with each agent individually. Take the time to prepare some questions ahead of time and give the agent as much information about your housing needs as possible to see what he or she can come up with. You’ll likely find that one is a better fit for your personality and your needs throughout the home buying process.

The recent government bailout of the nation’s banks, begun under former president George W. Bush and continued under current president Barack Obama, has produced considerable outrage among many Americans, particularly those facing mounting job losses, declining home prices and income, rising variable-rate mortgages and a host of other economic and financial pressures. The $700 billion plus rescue was necessary, government and bank leaders say, to save the nation’s banking and investment system from imminent collapse and to help restore failing banks to financial liquidity and ability to offer credit to America’s businesses and consumers, both large and small.

But the disclosures of large salary bonuses conferred upon bank executives, lavish spending on entertainment and the continued tightening of credit became lightning rods for the public’s anger. When this combined with persistent complaints from consumers about credit card and banking account abuse by banks, Congress finally moved in 2009 to address at least some of the industry’s more aggressive practices.

The Credit Act of 2009 Promises Relief to Consumers

The Credit Card Accountability Responsibility and Disclosure Act, or CARD, enacted by Congress in May 2009, is being called a major step forward in reining in some of the banking industry’s excessive practices. While there are undoubtedly some specific curbs that consumers can be thankful for, there are also clear limitations to what the new law is empowered to regulate. Plus, the time gaps in implementing the various measures are allowing banks to find alternate ways to charge fees and raise interest rates, actions which have raised the ire of consumers in recent years.

What the Credit Act Will Regulate

The first phase of CARD took effect back in August 2009. Since August, card issuers must announce any interest-rate increase 45 days before it takes effect, and the notice must be in writing. Cardholders have the right to refuse the increase by closing the account and are also allowed to pay off the balance within five years under the old terms. Some banks are allowing their customers to keep an account open but no new purchases may be made on the card until the balance is paid. Another change since August requires card issuers to deliver account statements at least 21 days before the due date, up from 14 days.

A second phase takes effect in February 2010. Banks will then be prohibited from raising interest rates on current balances unless a customer is at least 60 days behind on a payment. This restriction will apply as well to the widely detested practice of raising interest rates on one balance simply because the bank learned a customer was behind on another account with a different card issuer. In addition, a customer whose rate is increased for being 60 days late must be allowed to earn back the earlier rate with successive on-time payments for six months. But these protections have several exceptions: banks can still charge increases on introductory rates, temporary hardship rates and established variable rates.

Highlights of other rules to take effect in 2010 include: for balances with different rates as a result of special transfer offers, payments above the minimum payment must be allocated to the balance carrying the highest rate; banks can only charge an over-the-limit fee for a purchase if the customer authorizes the bank to allow purchases that push him or her over their credit limit; and cardholders cannot be charged for payments made over the telephone, online or by other means unless the customer requests expedited service.

Will the Act Make a Genuine Difference?

CARD thwarts several egregious practices imposed upon consumers by many banks. What shines particularly are the limitations to how rates can be increased and the manner in which excessive payments are distributed to different balances on the same account. Of course, constricting over-the-limit fees and extending notice periods are helpful as well. But what can banks still do to generate revenue and not be overruled by CARD? As Bill Hardkopf, chief executive officer of LowCards.com, a Web site that tracks the industry, says: “There are so many things that issuers can do that the Card Act doesn’t touch.”

What issuers have been doing leading up to CARD’s full implementation is to arbitrarily raise interest rates, including on fixed-rate agreements, slash credit limits and, in some cases, close accounts, all in the name of “a challenging economy.” What they will be allowed to do after implementation is to close accounts, switch fixed-rate agreements to variable-rate ones and start charging annual fees on some cards, including new cards. For these actions, the Act offers no protection.

Where the Consumer Now Stands

Congress has acted to provide some real benefits and protections to credit-card users and it is to be praised for that. At the same time, it didn’t act on other, onerous bank practices. For instance, there is nothing in the Act that prohibits banks from charging exorbitant interest rates that have been as high as 30 percent and more, levels traditionally associated with usury. In addition, they can charge these rates retroactively after the 60-day period of being late. These actions have been taken by banks usually in response to customers missing a payment and being deemed in default of their account. Banks have shown some flexibility for one-time late customers, particularly if they have consistent payment histories. But they almost invariably impose a late charge for missing one payment. Thankfully, the Act now limits the late charge to a maximum of $39 per occurrence and at least offers the payer 60 days to mend his or her late status before major changes occur.

If and when a card user’s bank imposes severe changes on the account, the user should communicate with the bank and ask for modification of those changes. Specifically, the consumer should ask to have the credit limit raised again if drastically lowered, ask that rate increases be lowered if drastically raised and ask that a variable-rate status be returned to a fixed-rate agreement. If a large number of consumers undertook such action, the banks could be pressured if they started to see their customers leaving them for other banks offering better credit-card terms. Also, remember that being properly informed about one’s financial rights protected by law limits the opportunities to be taken advantage of. Consumers can learn more about CARD at: www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders .

Finally, consumers can always, and should, write or call their Congressperson asking him or her to work to expand the consumer protections in the Credit Card Accountability Responsibility and Disclosure Act of 2009.

Bank statements, installment loans, accounts payables and receivables are all parts of a small business that owners must be aware of. With the market as unstable as it is, a lot of people are looking into becoming entrepreneurs. Though it sounds like a good plan, experts are cautioning that it isn’t as easy a move as some are hoping. In fact, the overall assessment of entrepreneurial capability can be broken down into three different questions:

• Do you have confidence in your plan and yourself?
• What is your core motivation?
• How broad is your vision?

These three questions can tell a lot about a person’s entrepreneurial spirit, or their lack of.

Confidence in the plan

The primary focus of any successful business owner is their plan. James V. Koch, researcher and author, said that the “classic entrepreneurial personality seems to combine the self-confidence of Muhammad Ali with the sunny-eyed optimism of Little Orphan Annie.” Koch’s belief is that entrepreneurs are “born and not made.” The main distinguishing factor of a true business owner is that they are committed wholeheartedly to their plan. Koch added, “We ran into entrepreneurs who had failed four or five times in a row, and they were absolutely convinced that this next time they were going to strike gold.” The confidence a true entrepreneur has in his or her plan is resilient, determined, and focused.

The Core Motivator

Another important characteristic entrepreneurs have is their desire to do something significant with their business lives. John Down, director of the Center for Entrepreneurship at the University of Portland, said, “They don’t view what they are doing the way a lot of people may view their jobs—as a means to a paycheck that allows them to do other things outside of their work. For the entrepreneur, the work itself is the goal.”

The goal of doing the work makes the typical entrepreneur extremely focused and determined. Down added, “Whatever a business owner needs to tackle, they tackle. Whether it is a complex spreadsheet, an amortization schedule for installment loans or an in-depth contract, a business owner will tackle the issue quickly.”

How broad is the vision

Finally, experts cited the entrepreneur’s vision as a key factor to knowing if self-employment is the right choice. Koch stated true business owners tend to be “more strategic in their thinking… more big-picture oriented.” It’s this vision and ability to hold up large plans that allows owners to face the vast number of challenges that come up during any business venture. It’s this reason why most business owners studied have a good group of people surrounding them who have a talent for details. Koch added, “Entrepreneurs tend to not have time for the minute details of a plan… rather they focus the entire business entity and on staying true to the vision while others concern themselves with the everyday activities the organization needs to survive.”

Entrepreneurs in 2010

In 2010, analysts are projecting a record number of entrepreneurs entering the market. It takes a lot of determination and vision, but the true business owner seems to have similar characteristics. Studies are showing that traits are shared among entrepreneurs. Not only are they adept at managing installment loans, bank funding, hiring and firing, but they also have more intrinsic qualities that serve them well in the market.

Apply for Installment Loans HERE!

Now that Americans are getting back to buying and selling real estate, many are willing to use instant cash loans to fund various unexpected costs. One of the biggest concerns for any home seller is their appraisal. Although the price of a home can be based on the market assessment value, the appraisal can make, or break, a home price. Here is a common scenario in the world of selling real estate: A home is listed for $450,000 and the buyer offers $400,000. They eventually settle on a price of $425,000. Then just prior to closing, an appraisal is done where the maximum the mortgage company is willing to lend is $410,000. The buyer and seller are now left with a shortfall of $15,000. Walter Molony, senior public affairs specialist with the National Association of Realtors, said, “This has proven to be a fairly significant problem in today’s economy.”

What sellers can do

The question in this case is: What can sellers do to avoid the shortfall? A new problem more and more sellers are facing is the short appraisal. The recession created a decline in overall house values throughout the country. With the huge number of foreclosures in most neighborhoods, it’s difficult for appraisers to come up with comparable values that are accurate. Add to the mix the relative inexperience a lot of appraisers have with the new unstable market, and disastrous appraisals are imminent. Molony added, “Appraisers can be uneducated to begin with, but add to that the post-recession market and it’s a formula for problems.”

Buyers need to take proactive steps to protect themselves from the short appraisal. When talking with lenders, buyers can specifically request appraisers who come from their county. This can be helpful because the appraiser may have more experience in the area and have inside information on what the true neighborhood is like. Buyers can also request that the appraiser is certified. Various organizations like the Appraisal Institute’s Senior Residential Advisor or Appraisal Institute certifications can both signify a more intense education on how to appraise properties. Finally, buyers should also meet with their appraiser as they are doing the inspection so they can share information on the area. Leslie Sellers, president of the Appraisal Institute of Chicago, said, “Many appraisers are just pulling data out of MLS, or Multiple Listing Service, or off the deed at the courthouse and not checking it out. Most good appraisers will appreciate the information.”

The instant cash loan and appraisals

More homeowners are using instant cash loans to fund small house improvements. To make the process of an appraisal as simple as possible, homeowners are cautioned to do their own walk-thru of their home. Sellers added, “It can be helpful to have a few candid family friends walk through the house as if they were going to buy… let them be impartial and listen to their criticisms. Then fix the issues as quickly as possible prior to the assessment.” The key to pre-appraisal home improvements is to have the work completely finished before the assessment and to keep on budget. Small things like cleaning clutter, buying organizational tools, putting items in offsite storage and keeping things in order can make a huge difference when an appraiser comes in. Coupling affordable updates with first-hand information on the location of the property can greatly aid the appraiser in formulating their final documentation on the home.

Help the appraiser all you can

In the end, selling a house can be difficult in today’s market. If you are looking to sell, remember that there are some wise things you can do to help your appraiser target an accurate sales figure. The number he or she comes up with will dictate how much of a loan will be needed to get the property sold. For this reason, it is always best to try to offer as much information on the home as you can. If you can get as fair a price as possible, it may mean the difference between having to eat a large loss and needing small instant cash loans to handle the shortfall.

(Image from Emilio Labrador, Flickr.com)

Every year, rental car agencies sell the older vehicles in their rental fleets and restock with the newest models. Larry Lovejoy of Automobile Consumer Services Corp (ACS) states, “These cars can be a great deal for the average buyer. They have been well-maintained, so in essence you are buying a nearly-new car with no worries about mechanical problems. Furthermore, (if you buy a rental car from a car dealership) some dealers might extend the warranty for the full term or you can drive it under the balance of the warranty.” This means that every year rental car agents sell thousands of cars in great condition which are to be replaced by newer cars, either to private citizens or to dealerships that re-market the cars as “program” or “fleet” vehicles.

Rental Car Reliability

In order to keep customer satisfaction high and ensure repeat rentals from customers, a rental car agency must maintain their vehicles in optimal condition, both mechanically and physically. This means the drive train, interior and exterior are very well maintained on rental vehicles; after all, no agent wants to have a client stranded on the road with a break down or be unhappy because the power seats do not operate properly.

Each time a rental vehicle is returned to the agent, it is checked over with care and cared for with attention to detail to prepare it for rental by the next client. The engine and transmission are checked and any noises or noted problems are repaired. Periodic maintenance is performed on schedule including oil changes, transmissions fluid changes, radiator flushes and fills, wiper blade replacements, belt and tire replacements, windshield wiper fluid refills, antifreeze checks and fills, and brake adjustments or replacements. This quality of maintenance may not be performed by a private vehicle owner, resulting in a used car on the market which is in much poorer condition.

Interior and Exterior Maintenance

Often, private citizens fail to perform much-needed maintenance on the inside and outside of their vehicles. Rental agencies can’t afford this neglect. Their vehicles must appear as nearly new as possible so that people will want to rent them. This means that after each and every rental, a vehicle is detailed inside and checked for any wear and tear on seats and carpet. When problems appear, they are repaired before the minor damage becomes noticeable. Exterior dings are quickly repaired and the paint job is maintained by washing and waxing the vehicle in order to maintain a shiny, like-new appearance.

Where to Buy Rental Cars

Now that you understand why former rental cars are great buys, where do you locate those which are available for purchase? Lovejoy of ACS said, “(Used car) dealers like these cars because they can get them at low prices and sell them at a good profits.” Often you will find advertisements in the newspaper indicating special sales prices on “program” or “fleet” cars at a new car dealership’s used car lot or even at a dealership selling only used cars. The CarFax.com report on the vehicle will indicate that it was formerly a rental car. You can also contact rental car agencies directly to learn of any vehicles they have available for purchase. Some rental agencies advertise their available vehicles in newspapers and sell them directly to private buyers; often you can get the very best price by going directly to the rental car agency.

Unsecured personal loans saved a hefty portion of consumers throughout the 2008-2009 recession. Many people who believed that they were safe financially got a wake up call when the economy took a turn for the worse. They realized that financial tools they used in the past quickly became irrelevant. Lenders closed their doors to everyone except their premiere customers. Home values declined severely putting people in even more debt. It was a difficult time and it is first now that consumers are seeing some hope that the market will return to normal. One thing that many people recognized, however, was the need to educate themselves and their children on how to manage money. With an unstable economy, it’s imperative for people to be ready with tools to manage and pass those tools onto the next generation of consumers.

Things to teach children regarding money

The next generation of savers and investors need to be taught the general rules of managing money. It’s no doubt that the global market is shifting and it will be critical for young people to be able to make wise decisions. Here are some tips to follow:

1) Educate children on the value of the dollar. When children are in school they learn about reading, writing, and arithmetic. Most of their schooling is centered on the basics of maneuvering value, but unless they delve deeper into the field of finance when they get older, that’s the only education they will get on the topic. “It’s sad how we teach children about binomial functions, something few will ever carry into their adult lives, but neglect finance, something they will need every day for the rest of their lives,” said Mike Mooney, of BankRate.com. It’s up to parents to education children on life’s fiscal challenges.

2) The sooner the better. Anyone who has seen a retirement savings schedule knows how time is key to maximizing money. If children can be taught that value of saving, they can also be taught the value of starting a savings account early. Mooney also said, “Children need to be taught to develop strong saving habits, learn how to make smart purchases, begin to understand the true meaning of ‘investment’ and why delayed gratification is number one when it comes to money.” Education should begin with simple topics like how to save, but then move on to more complex issues as a child ages. Things like payday loans, car loans and investments need to be addressed when children are ready.

3) Mom, dad, and money. Most children think that money comes from their parents. It isn’t until they push too far with buying that they get an explanation of the hard work involved in earning money. It’s best to teach children right away that work means compensation. Small chores are the best way to teach value. As a child grows, bigger compensations can be given for bigger responsibilities.

4) Saving is exciting. One of the best tools to use is teaching children that saving money is a good thing. Piggy banks, shoe boxes and all the old tools are the most appropriate for young children. Older children and young teens can use bank accounts to be introduced to financial institutions and how they work.

Making sense of money

Mixing money with a recession is a formula for financial confusion. No one knows the future or what the economy will be like when today’s children are adults. It’s best to teach children from the beginning about saving, investing, unsecured personal loans, mortgage loans, stocks, and credit. Taking their training step by step as they age is the easiest way to empower them financially for the future.

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Last September, Sadie Frankel of Pasadena, Calif., had to use payday loans consistently throughout the month to cover her bills. She said, “When I got to the point where I needed that extra money to pay for necessities, I knew I needed to do something quickly.” Frankel did do something quickly—she downsized. “It’s just a better life. It really is,” she said.

More and more consumers are letting go of their mortgage payments and renting. Shana Richey, of Palmdale, Calif., also moved to renting status. Her home declined in value more than 50 percent since she purchased it in 2004. Her decision was to get rid of her $3,700 mortgage payment and rent a larger home for $2,200. She said, “I don’t have to worry about paying property tax, homeowners’ insurance, the landscaping, cleaning the pool or any repairs.”

Time to rent

Experts say the most important warning signs that indicated it was time for Richey to make the  move were:

• Having purchased the home with a no-down-payment loan
• Paying $430,000 for the property, well over the market value
• The 50 percent decline in value

The other sign was when her negotiation efforts with the mortgage company didn’t work. The fact that her home was valued at $200,000 post-recession left her with a loss of $230,000. When she requested a mortgage modification from her lender, she was offered a monthly payment of $3,300, just$400 less than her old payment. In the end, she ended up short-selling the property for $195,000.

Know the signs

Analysts are coming to the conclusion that the key to avoiding further financial disaster and starting economic recovery is to know when to walk away. Christopher Thomberg of Beacon Economics consulting firm said, “It’s a stealth stimulus. The quicker these people shed their debts, the faster the economy is going to heal and move forward again.”

For anyone having difficulties, it is important to know the warning signs and act on them. Studies by First American Core Logic are showing that about 25 percent of all U.S. homeowners now owe more on their mortgage than their home is worth. And in the most precarious states — Florida, Arizona, California, Michigan and Nevada — about 40 percent of homeowners are paying loans larger than their homes’ worth. Thomberg added, “These are the consumers who continue to struggle, and it gets to the point where it’s like beating a dead horse. … How far are they going to get?” If consumers are consistently having problems funding necessary bills and having to turn to payday loans or family help, then it may be time to turn things around proactively.

Avoiding disaster

It’s important for consumers to avoid disaster. Andres Duque, hotel worker in Miami, was struggling to pay his mortgage on a $125,000 condo. He purchased his home in 2005, but since the recession condos in his building were selling for just $35,000.

He eventually decided to let the property go into foreclosure and said, “I was able to pay off all my credit cards.” He added, “In a way it was the best thing that happened to me because all my income is not being consumed by this freaking monster of a debt.” One thing experts are noting is that there is no longer the stigma of “home foreclosure” to deal with. Many homeowners have fallen to financial problems and are seeing foreclosure as a way to rid themselves of huge debt.

Some analysts are critical of the government

Law professor Brent T. White wrote a thesis on government action regarding the real estate industry. He said:

“I question why banks that made bad loans are getting a federal bailout but homeowners are pressured to do everything they can to keep paying those loans. The government was encouraging people to buy, telling people that it was a good investment to buy. Real estate agents pushing people to buy, banks pushing people to buy … and then when the market collapses, the homeowner alone is left holding the bag and forced to bear the burden. And so I think we need to talk about the disproportionate burden that is falling on homeowners.”

Regardless of the burden, experts are noting that cash-strapped people are seeing ridding themselves of a large mortgage as a positive move. They are becoming renters and shedding the responsibilities of homeownership. For anyone having to use payday loans or other borrowing consistently, moving to renter status may be the wisest option.

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Check out where the jobs will be.

Specialists in short term loans, finances and money in general, are set for the next decade, or so says a recent study of the hottest jobs around. According to the study, Financial Examiners and Compliance Officers should be the nation’s two hottest career choices in the next 10 years.

The Labor Department reported the information this past week. Although financial analysts were high on the list pre-recession, now they have fallen totally off the top 30 list. Robert Johnson, Senior Managing Director at the CFA Institute said, “The finance industry grew so rapidly that people were attracted for the wrong reasons. People were buying and selling assets they didn’t understand.”

The Financial Examiner position

The Labor Department is projecting that Financial Examiner positions should grow throughout the next decade by 40 percent. Banks, insurance companies and financial firms need Financial Examiners and so do government agencies, by the way.

For anyone looking to start a new career, it’s a great option to look into. Johnson added, “In particular targeting a career towards government agencies can be highly beneficial to a worker. These are the types of jobs that will be needed and most likely won’t go away any time soon.”

The Compliance Officer position

The Compliance Officer is similar to a Financial Examiner but they are mostly employed by the government and financial firms. The job forecast for this career is set to increase by 30 percent by 2018, reported the Labor Department.

The total need will be for about 341,000 Compliance Officers able to handle the detailed work of maintaining legal conformance to new government protocols regarding finances. Because of the new model of lenders, there will be a wide variety of needs for these positions. Governmental involvement with a wide variety of money-handling corporations will call for a Compliance Officer’s aid.

Other jobs set to grow

In addition to Financial Examiners and Compliance Officers, there are other career choices set to be in demand. Accountants and auditors are needed. Over the next 10 years, these two markets are projected to add 279,000 jobs.

According to the Labor Department, the two professions “will benefit from an increasingly complex regulatory environment.” Congress is contemplating sweeping legislation to govern Wall Street and its financial dealings in the future. Companies will need experts in the field of short term loans, financial rules, and government protocols on tax filings to help them sort through the new legislation.

The future of job seekers

It’s clear where the future is headed. After the recession almost every company will need financial experts to maneuver the way through hefty changes in rules. In particular financial institutions will need both Financial Examiners and Compliance Officers to help them stay current with all laws.

In addition, the Labor Department projected the usual need for continued growth in the health care industry. The aging population is creating a bigger demand for nurses, physician assistants and home health aides. For example, physician assistants are expected to jump by 50 percent and create 1.4 million jobs by 2018. Part of their popularity is because they normally can offer the same care that doctors do, but at a much more cost efficient rate.

The Labor Department

The Labor Department releases its job projections every two years, and it predicts how many jobs the economy is expected to generate over the following decade. Financial specialists who understand short term loans, long term asset management, financial projections and investments are going to be in high demand. So will Compliance Officers who can maintain a company’s legalities, and as usual, nursing and health care are high on the list, too. For any consumer looking for the next career move, these are telling signs of where the economy will be heading.

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Millie Benger, 73, of Toledo, Ohio, needed to take out installment loans to help her stranded granddaughter. She received a call in the middle of the night. The caller claimed to be her granddaughter and said her car broke down in Montreal. The solution? She requested that Benger Western Union her $4,000 so she could get home safe.

Benger used a combination of quick loans to come up with the funds. When she went to her local Western Union office, she luckily ran into some opposition. A particularly shrewd Western Union agent started asking questions. First of all, Montreal is known to have a reputation for fraud. When the agent asked if her granddaughter had any credit cards, Benger recalled that the woman on the phone said her card wasn’t accepted in Montreal. The agent asked more questions and Benger realized she had most likely been duped.

Using Western Union to Wire money

More and more thieves are using Western Union and an elderly target to make money. In fact, it’s estimated that the “grandparents scam” has already taken the elderly for more than $3.5 million nationwide. It’s a scam where a fake grandson or daughter calls an unsuspecting and concerned grandparent and asks for emergency money. The amount could be small, or it could be a large chunk of money. The scammers normally say that their credit cards aren’t accepted in the country they are visiting, and they usually fail to give their name. A worried grandparent does everything they can to find the money quickly.

The “grandparents scam” is a routine

The way thieves dupe the elderly with the “grandparents scam” is pretty routine. Here are the warning signs:

• A distressed young person calls in the middle of the night
• He/she has an emergency that needs immediate funds
• They rarely are forthcoming with their name, but rely on the elderly, who out of hasty concern, divulge their relative’s name first
• They suggest Western Union for immediate funds — they have an “emergency” after all!
• The grandparent looks for immediate solutions like installment loans, savings or credit to provide the cash

If you or a loved one are the victim, be smart. Ask questions. Sergeant Carl Pouley, detective for the Middleton, Ariz., police department, said, “It’s pretty easy to take a thief off guard because they have a routine. If their scam is up, they quickly move to another person. …Asking for the name of a pet or childhood toy is not unheard of. Most likely your crook will give up.” Pouley added that most of these scammers have “hundreds of names” to get through daily and if they think you are onto them, they will end the call pretty quickly.

Protect yourself against thievery

People need to be wise. Rather than getting emotional and distressed when a loved one calls, the elderly are cautioned to be calm and think rationally. Would loved ones really turn to their grandparents for emergency funding via savings, credit or installment loans? Most likely a grandchild in distress would first turn to parents and friends for aid. Sergeant Pouley added, “Grandparents these days are on fixed incomes so the likelihood of asking them for cash just isn’t that great.”

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During the recession, payday loans replaced credit card spending. Consumers have always used credit and have become growingly dependent on it for purchases. In particular big-ticket items were always bought with credit. In late 2007, credit problems began. Lenders pushed more and more credit onto the consumer and paid no attention to whether or not they had the ability to pay the money back. It caused many people to go into default on their loans and sent credit card companies reeling with outstanding debt.

Credit lenders started using tactics of their own to mitigate their losses. Some credit companies cut people’s spending limits drastically. For example, Mara Lindley, consumer in Toledo, Ohio, said, “Our credit card limit was $30,000 pre-recession. Then our credit card company cut that limit in half, even though we had $16,000 in charges on the account. … Then they started charging us huge over-limit fees, but we didn’t have anything to do with being over our limit!” Lindley is not alone. Many consumers saw credit card companies get aggressive.

Post-recession: what can consumers expect

Now that the recession is deemed “over” by some experts, what can consumers expect from their credit companies? It seems that most credit card companies are still trying to manage huge losses but are ready to start offering consumers services and specials again. Here are some benefits of credit cards that people should take advantage of:

• Credit card companies will arbitrate discrepancies. One of the biggest advantages of having and using credit is that if there are problems, companies will go to bat for the consumer. For example, if a consumer finds a charge on their statement he or she can call customer service, but say that gets them no where. Or, say the company insists they pay the charge regardless of their argument. The buyer can still turn to their credit card company and file a formal dispute. The company then contacts the party that charged the account and they hash it out. A lot of times a credit company has more power to sort issues out on the behalf of their clients than individuals do.
• Automatic bill pay is invaluable. Let’s face it: today’s world is a busy one. Who has the time to remember when every utility bill is due or when every payment is sent out? The best way to handle finances these days is to use the auto-bill-pay option credit card companies offer. Consumers can sign up and let the credit card company automatically issue payments. This is a great tool for anyone with a busy life. It can help a consumer avoid having to use savings, payday loans or family lending to cover expensive late fees.
• Protection against identity theft. Finally, using credit cards can be a great way to thwart identity thieves. For the most part, consumers will have a said amount of time to dispute a charge, normally 60 to 90 days. Once they do, the credit card company will investigate, issue them another card if necessary and the matter is taken care of. It’s invaluable to have a large company working alongside a consumer to protect their personal information and bank account.

Payday loans still viable options

Although credit cards are becoming a reliable tool for consumers to manage their debt, payday loans are still on the table as a good option for immediate cash needs. These short term loans are a great way for consumers to find extra money for emergency medical bills, car repairs or other surprise expenses. While credit cards may not work in all situations, payday loans are secondary funding options that prove their worth time and time again.

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Christmas this year may have to still be funded by cash advance loans. Though pessimists claim this is bad news, some new studies show that it may not be as bad as they think. The pessimist looks at data and claims that it’s a sign that things are not returning to normal. The recession is over, but its aftermath is weighing heavily on the economy. People who are still wary of using credit cards or do not have cash to spend, and are turning to payday loans. With all due respect to the pessimists, a recent survey has revealed a brighter side to the story.

The survey

In a recent survey, Context-Based Research Group and Carton D’Onofrio Partners were the two companies that held the survey found that 43% of Americans believe the recession forced them to make healthy changes to their financial habits. One analyst summarized the apparent feelings of citizens as “less work, but more time with family” and “less credit, but smaller spending.” These two sentiments also seem to be the most prevalent among those surveyed. It is somewhat surprising for analysts who believed that most consumers would be more negative about in their reflections about the recession and its affects.

The results

Contrary to analysts’ predictions, the survey had a lot of positive results. With people being more aware of their spending habits and learning that they really can get by with less, there is a there is a new resilience evidence among Americans. Carton D’Onofrio analyst Stephen Dobbs said, “People realized that a financial catastrophe can happen, and things can be difficult, but they have the power to maneuver…and when they come out of the problems, they are not as critically damaged financially as they thought they would be.”

Case in point

One family used cash advance loans to get them meet monthly obligations and surprise medical bills. As a result, they now believe that they “know how to budget, to make up for a shortfall with short term loans, and then get back on track quickly.” Though plenty of experts predicted that people would collapse under the financial pressure of the recession, relatively few did. Yes, many went through foreclosures, repossessions and credit issues, but in the aftermath there are resources available to help them recover more quickly. They also are more capable of handling problems now that the immediacy of the financial disaster has passed.

New consumer view

In the end it seems that most consumers have a new healthier view of managing their finances. They are more frugal and more vigilant, but they are also open to various methods of obtaining credit. For example, cash advance loans are now being used as a staple in many people’s budgeting, rather than as only an emergency option. This shows that people are more open to various alternatives of getting through difficult financial times. The recession has taught people that flexibility is key when maneuvering the tumultuous waters of managing money in a difficult economy.

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Americans are still keeping a tight hold on their cash.

Warren Buffet seems to believe that, despite what other experts are saying, consumers won’t find debt relief any time in the near future.

“Everything I see about the economy is that we have had no bounce,” says Buffet. “There were a lot of excesses to be wrung out and that process is still underway and it looks to me that it will be underway for quite a while. In the annual report I said that that economy would be in shambles this year and probably well beyond, and I think that is true.”

Buffet claims the biggest contributor to the lagging economy will be unemployment. Buffet believes that this unemployment spike will continue to “depress consumer demand for everything from energy to cars and homes.” Unfortunately, much of the economy’s turnaround is dependent on consumers getting back into spending. The signs are showing that this is unlikely to happen.

The economic turnaround

Ben Bernanke, chairman of the Federal Reserve, has cited nascent signs of economic recovery abounding throughout the market. He has been a strong proponent of consumer anticipation of better times on the horizon. However, Buffet’s argument is based on some telling facts about the market. The decline in home building dashed many hopes that the economy and credit industry turned around enough to once again push people to start buying big ticket items.

Buffet claims that debt relief for the masses is a long way off because of the seemingly unstoppable unemployment rate. “It looks like we’re going to need more medicine, not less,” he stated recently, implying that the country will need a second stimulus if it is ever to recover.

Cautions for the future

Despite some changes and government intercession, Buffet claims that more is needed. He also believes that the stimulus and programs the government has already introduced will impact the economy in adverse ways. “We have done things that raise the probability of high rates of inflation at some point,” he added. He stated that some of the government’s movements have been necessary, but could push the value of cash to record lows.

People’s futures

So people are left to wait it out and see what results the stimulus really will bring. Many people have seen the fall of large corporations and bankruptcy filings by huge companies. They take this as signs that they must continue to be cautious about their own finances and make due, rather than go out and start buying again. However, everyone agrees that consumer buying is key to true economic resurgence. Without some confidence in the market, however, that buying seems to be an impossibility. Consumers are opting to do without rather than stretch their budgets in an unknown economy.

Despite Buffet’s words

Despite what Warren Buffet is professing to the public, people are going to have to make their own judgments on what their future holds. They will have to be vigilant with their finances to find debt relief and still be able to save for retirement, college and emergencies. In the end, only time will tell how well the economy will bounce back and what state it will be in once it does.

Businesses are still looking to short term loans as a way to fund debt. Debt has always been around and most likely, always will be. Just ask John Paulson—he’s a hedge fund manager in New York. Back in 2006 his company was like a lot of other investment companies. It was mired in debt with a reasonable amount of income. Its ROI was moderately healthy and its expenses were manageable. Then the recession hit.
While a lot of businesses had a sob story to tell after the recession, Paulson’s never did. Here are his company statistics: His company earned about $20 billion between 2007 and 2009 and he personally earned about $4 billion, which averaged out to $10 million daily. So what was his secret? While other businesses didn’t even make it through the recession, he found a gold mine.

Paulson’s secret

Part of Paulson’s secret was to predict the market correctly. At the onset of 2006 he theorized that the housing market was on the verge of a collapse so he started buying insurance. In fact, he spent more than $1 billion in 2006 to buy insurance on “risky mortgage investments.” That put him in a prime position to recoup his losses, and then some. In fact, one of his funds brought him more than a 500% return in 2006 alone. In retrospect, Paulson noted a few key lessons investors should stick to:

1.   Don’t rely on financial analysts and experts. Back in 2006 bankers were pushing people towards investing. Wall Street directed millions of people into the risky market, knowing full well it was dodgy at best. Paulson knew that analysts and experts were looking in the wrong direction for their indicators and went the opposite route with his investments.

2.  Be aware of debt markets. Paulson and his team knew there was going to be a market crash because they were closely watching smaller issues like the subprime-mortgage bond market. These “little” markets can indicate what’s coming in the near future and give some insight into what the next move should be. Real estate investors need to know what is going on in the short term loan market, the mortgage bond market and the stock price index to adequately predict where bigger chunks of the market are headed.

3.  Insurance works. Paulson used insurance to build his fortune. Although many investors were becoming more and more concerned about the market, few were proactive about managing their futures. That’s where Paulson’s team differed—they used insurance to protect their assets and investments. When the recession hit, they were not only protected, they were able to recoup any losses over and over again.

These are just some of the methods of managing investments. Paulson also noted that good old luck was a big factor to his success. Sure he did what he could, but did he really have any control over the big picture? Probably not, but he did learn to not “risk too much” on any one investment regardless of believing it to be a “sure fire” hit.

Lessons learned

The biggest lesson to learn when looking at John Paulson’s story is to think about investments with a combination of ingenuity, experience and research. For example, his company did its own research into short term loan popularity and subprime-mortgage bond market growth before making the decision to move forward with investments. They were well-versed on their own, so relying on industry experts and analysts wasn’t necessary. Paulson added, “We were never following. We never listened to anyone. We were proactively doing our own research and creating our own indicators to live and invest by…it all paid off in the end.”

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Online resources can provide financial education.

Our modern economy is extremely complex, and there are many ways that you can use your money beyond simply exchanging it for goods and services. In fact, learning about all the options and opportunities that are available can be an incredibly daunting task. However, taking the time to acquire a financial education can – and frequently does – pay very real, tangible rewards to those who go to the trouble.

Knowing how to use you money for maximum benefit and how to make it grow is truly one of the primary differentiating factors between successful people and others. The old maxim “knowledge is power” is fully applicable to money management regardless of your financial situation. Effective money management and taking advantage of the opportunities available can benefit people in any financial position, from someone making minimum wage to the extremely wealthy.

Where to look to get financial education

Many people get their first introduction to the concept of money management from school. Both high schools and colleges usually offer a wide array of courses that focus on various aspects of how the economy works and how you can both manage and invest your money to achieve desirable results. However, this is just an introduction to the concept. Students who go on to major in business or finance obviously learn a lot more about financial opportunities than other students do, but this is not the only way to acquire a financial education. Today there are many resources available to help anyone and everyone learn more about how money works and how to use your money more effectively, whether or not you have a background in business or finance. This is even more common today, in the current economic climate, where many people are looking for ways to make every dollar go further.

Government resources

There is an enormous number of government resources available to the general public that can help people learn about various aspects of money management as well as various opportunities and government programs that might be helpful. In fact, virtually every government agency – both federal and state – that deals with financial matters offer consumer tips and resources to the general public. There are so many resources available from the government that frequently they have to create special divisions that serve as a portal to educational resources. For example, the federal government has the U.S. Financial Literacy and Education Commission (mymoney.gov) that attempts to put many of the federal government’s education resources under a single umbrella. Further, if there are specific ideas or concerns – for example, taxes or securities – one can look at the websites of the government agency that oversees these topics and one is bound to find a lot of educational resources available.

Non-profit organizations

Beyond government resources, there are also many local, state, regional, and national level non-profit organizations that specialize in helping average Americans acquire financial literacy. Some of these focus on broad, general topics such as the National Endowment for Financial Education or the Foundation for Financial Planning. There are also many more specialized non-profits that help people learn more about particular aspects of financial literacy, such as issues related to buying a home or credit card debt. Almost every metropolitan area in the United States has one or more of these non-profit organizations and local ones are particularly helpful because they have a better understanding of local conditions and local opportunities that may not be available to people living elsewhere. Many of these non-profits have brick and mortar offices that you can visit and even run free – or inexpensive – classes and seminars for people wanting to learn more about effective money management.

Online resources

Both the government and non-profit organizations provide much of their information to the public via the Internet, but there are also many other resources to be found online. Many of these include free tools and resources that you can use to help make more prudent financial decisions, such as the famous mint.com. You can also find a lot of interactive resources online that you can use to get very specific information about various topics related to money management and prudent financial decision making. However, when looking online one has to be careful about the information that you find. There is a lot of mistaken, outdated, or outright false information online, so if you come across resources or advice that you would like to use, it is essential that you take the time to determine whether this material is valid or not.