Despite the claims made by financial advisors and planners, in reality there is no real possibility of having the perfect portfolio that performs to your expectations. Most portfolio planning today uses some variation of the mean-variance optimization process invented by Harry Markowitz, and though this system does make sense, in reality it leaves a lot to be desired. This is because mean-variance based systems are based on one very specific circumstance that is based on the exact volatility, correlation, and returns you stipulate when setting up the calculation.

Since no one can effectively guess at future volatility and performance, these calculations are invariably wrong. The subsequent performance can be well below expectations, or even worse than just taking random guesses at the proper asset allocation.

Stocks versus bonds

Historically speaking, stocks always out perform bonds over a long period of time, but stocks are also more volatile, meaning that there is a greater risk involved. Young investors, people with more fifteen years to go before they intend to retire, need active capital growth in their 401(k) plans and also have enough time that they have the time to recoup any losses from dramatic downturns or crashes.

Although it looked very bad at the time, the stock market crash of September 2008 did not amount to a permanent blow to most young investors because they still have a long time to go before they access their 401(k) funds and much of the value lost has already been regained as of November 2009. Older investors who are planning on retiring within the next fifteen years have much less time to compensate for major losses, so they should probably invest more in bonds than stocks.

What stocks should you invest in?

There are many different types of stocks to choose from, though many 401(k) plans limit their participants to investing in mutual funds holding a basket of stocks. More often than not, these mutual funds are a better idea for people lacking an intimate knowledge of the market because they are managed and operated by professionals who have an intimate understanding of the markets.

Not only do most 401(k) plans limit your stock options to mutual funds, they also tend to limit the number of mutual funds available as well. Assuming this is the case, the best idea is to research those funds that are available and trace their performance over set period of time. Do not just look at individual performance, but look at compared performance. If two or more funds tend to balance each other out – one going up when the other goes down – consider invested in both in equal amounts. Examine your options closely and look for slow, even growth as opposed to the returns made by individual funds by themselves.

What bonds should you purchase?

As is the case with stocks, most 401(k) plans also limit bond holding to funds as opposed to separate issues. Further, many 401(k) plans are tilted in favor of stocks and provide fewer bond options to choose from. By its very nature, the bond market is trickier for non-professionals to understand, so going through a bond fund is probably a better option for most 401(k) holders anyway. That being said, the core of your bond holdings should probably be a total bond market index fund as opposed to many of the more specific bond funds that might be available. One thing that should be taken into consideration in the current climate is the continuing decline of the dollar, which will likely result in increased inflation. Using a mix of foreign and high-yield bonds as well as Treasury Inflation Protected Securities (TIPS), can offset inflation related losses, but should only account for ten to twenty percent of your bond allocation.

How many funds should you hold?

Many people, especially those with a lot of funds to choose from in their 401(k) plans tend to equate holding more funds with better diversification. However, this is not really the case at all; the issue is not how many funds you hold but what those funds invest in and whether or not your funds balance each other. As a general rule of thumb it is better for most people to hold as few funds as possible because the more you hold the more complicated your planning and tracking becomes. While savvy investors with a good understanding of the markets may make more money by using many different funds, for most people using their 401(k) to save for their retirement, holding more funds just complicates the process.

Consumers are using payday loans and their tax refunds to pay necessary bills. In the past, taxpayers saw their tax refunds as additional money to do something fun with. Whether it was a vacation, a new TV or a down payment on a vehicle, people used the money for unnecessary items. This year a new poll is showing that most Americans are looking forward to paying off bills and expenses with their tax money. In fact more than 54 percent of those receiving refund money intend to either pay credit card bills, utility bills or other housing-related expenses. This is up from the 35 percent who were in the same position just one year ago.

This news is no surprise to analysts who have spent months studying the economy and the recession. They predicted long ago that people’s attitudes toward spending would be conservative at best. Michael Fortman, economist for Smartmoney.com, stated, “Even with big sales and discounts, many Americans are going to be very cautious going into the future. … They have seen the recession and what it did to many families and they don’t want to get caught up in the issue later on down the road.”

Taxpayers are trying to stretch their budgets

The Obama administration wants this year’s refund money to be fueled back into the economy. Their hope is that the added money will spur the economy out of a recession quicker. However, with the loss of more than 5 million jobs since the end of 2007,this is a difficult task. Add that to research showing the people are focusing any increase in funds to necessary bills, and the result is less discretionary spending. As Fortman concluded, “It makes sense to be frugal when the economy is in such bad shape, but it hurts the economy when everyone does it.”

Taxpayers are trying to stretch their budgets, using payday loans, extreme budgeting, thrift-store shopping and bartering to meet their everyday needs. One mother from Sarasota, Florida stated, “For the past year and a half, I have been trading clothes with other mothers at my son’s school. Without that bartering, it would have been next to impossible to keep our five children clothed.” Creativity is the new way of 2009, as consumers are eager to find new ways of saving money.

Government interventions with the stimulus plan

The question remains whether the government’s intervention with the $787 billion stimulus truly served its purpose. It’s going to be difficult to say whether it did because of the unknown.

Critics maintain that the stimulus’s mixture of government spending and tax cuts benefited large businesses, but did little for immediate relief in the lives of American families. Harvey Leven, lawyer in New York, stated, “The little guy is always down. … Sure, the government extended huge packages to corporate America, but taxpayers — the ones who in the end will pay for the stimulus — are left in the cold. They have to fend for themselves suffering through unemployment, rising interest rates and lowered home values.”

Americans wonder about the future

In the end, many Americans are wondering where the post-recession life will leave them. They are being resourceful when paying bills, using payday loans and tax refund money to cover the costs. Everyone hopes, though, that their return to normalcy will be quick. Hopefully the economy will level itself out and allow people to return to normal spending.

Apply for Payday Loans HERE!

Image from Flickr.

These days, it seems as if you can hardly turn on the TV or radio without hearing news of the current economic recession and its impact on our nation’s retirement savings accounts. And it’s true – many people’s 401K, 403(b) and IRA accounts have lost significant value as a result of declining stock values and the current credit crunch. However, don’t let these numbers scare you away from contributing to these important investment tools. Stock prices are currently at all-time lows – making it a great time to bulk up your retirement portfolio.

Getting Started

For most regular, full-time employees, getting started with a 401K or 403(b) account (the 401K equivalent for public sector workers) is as simple as filling out a few forms. Check with your company’s HR officer to learn more about 401K enrollment requirements, which may include specific enrollment periods or a certain length of employment before you can begin investing. In addition, see if your company matches any portion of your contributions and at what level. If they do, try to contribute as much as necessary to earn the full match – otherwise, you’re throwing away free money!

Basic Allocation Decisions

Most retirement accounts allow you to make your own investment choices from their selected list of stocks, bonds and funds. If you do choose to allocate your 401K funds on your own from this list, you’ll need to make a few basic decisions:

Stocks versus Bonds. One of the biggest decisions you’ll need to make when it comes to allocating your retirement funds is the percentage you invest in stocks versus bonds. Stocks are riskier investment vehicles than bonds, which tend to offer steadier – if smaller – rates of return. Of course, the proper investment ratio for you will change throughout your lifetime. For example, as you get older – and closer to relying on your retirement funds as a source of income – you’ll want to minimize your exposure to risk by investing more heavily in bonds.

Domestic versus International. Another important decision you’ll need to take into account is whether to invest in domestic (US-based) stocks only or to diversify with international funds as well. In general, international stocks and funds are riskier options, although growing economies around the world may offer a higher potential for financial gain. Most investment experts recommend at least a little exposure to growing markets through international stocks; however, you’ll need to take your personal tolerance for risk into consideration.

Take the Easy Way Out with Target Date Funds

Don’t worry if choosing your 401K fund allocations sounds like too much. More and more retirement savings account providers are offering “Target Date” funds, which automatically adjust the proportion of your money in stocks versus bonds as you near your target retirement date. These funds are typically named for their target retirement year – for example, “The Target 2030 Fund” – and are managed by account executives at the 401K provider. If you’re feeling overwhelmed, they’re a great “hands-free” way to ensure your retirement investment plans stay on track.

Many consumers are worried about debt relief as they reach retirement age.  With news of Social Security and Medicare being tapped out within the next few decades, Americans are looking for other options to retire in comfort.  Fortunately, there are some jobs that still focus on pension plan guarantees.  Here are some industries that still support their retirees.

• Public-Service Sector workers.  Local, state and federal government positions are still highly attuned to retirement benefit payouts.  According to the Bureau of Labor Statistics, almost 80 percent of state and local government workers had traditional pensions last year. Olivia Mitchell, director of the Pension Research Council, stated “Police officers, firefighters, teachers and judges have always had pension plans.” She also noted that these careers are all putting more money into firming up their workers’ retirements to provide security for them.
• Large, private companies. Although pension plans are more difficult to find in the private sector, a recent study showed that 21 percent of private-sector entities had a plan for retirees. This is a huge benefit for employees who know they will have a guaranteed payout for their retirement years.  Consumers need to look for employment, but be aware of the retirement funding statistics. A recent poll showed that only 9 percent of companies with less than 100 employees and 34 percent of companies with more than 100 employees offer traditional pensions. Management and professional positions are also the most likely to offer  retirement plans, regardless of the size of the company.  Service-sector jobs are the least likely to have any retirement benefits.   Geographically, mid-Atlantic, Northeast and Pacific coastal regions are the most likely to have jobs with retirement benefits, in particular in their large metropolitan areas.
• Businesses with less than 10 employees.  Although most small businesses don’t offer retirement funding, exceptionally small offices normally do. This means offices with less than 10 employees, commonly doctors’ offices, law offices or family-owned businesses.  Author and expert on retirement Fran Hawthorne stated, “Very often, the owners of small doctor’s offices set up the pension plan because they want a tax-free way to put money aside for retirement. … The law requires that if you do this, you must provide the same pension for all your employees based on income.” This is encouraging news for Americans who want to work in the small business sector but still have a plan for retirement and debt relief in their elder years.

The key to success

Employees who are working for smaller businesses need to know that retirement funds are most beneficial when they stay with a company for an extended period of time.  Payouts are maximized based on time spent servicing a company.  It’s also beneficial to know that the sooner employees get retirement plans in place, the better they may fare at payout time.  Hawthorne added, “If you don’t get a job with a pension now, your (payout goes)  down every year because more and more pensions freeze each year.”

Planning for retirement

Planning for retirement is a number one concern of Americans today.  With unemployment running high, debt relief being sought and foreclosures increasing, people are wanting to store away money for the future.  There are still some ways to wisely handle the situation and live comfortably in the golden years.

It can take years to save money for your child's college education (photo: flickr.com)

While 529 education savings plans can’t really promise quick cash for college, in recent years they’ve gained prominence as an effective way for parents to provide for the future higher education expenses of their children. A 529 education savings plan is a tax-deferred investment, similar to an Individual Retirement Arrangement (IRA), except that the qualified withdrawals are related to higher education expenses as opposed to retirement.

Section 529 of the Internal Revenue Code sanctions two types of educational plans: prepaid and savings. The prepaid plans allow participants to buy credits for future, public, in-state education at present-day prices. The savings plans, like many standard investments, are basically mutual-fund investments and are tied to market performance.

2008 stock market crash

Because they’re subject to market trends, 529 savings plans were severely eroded in the crash of 2008, with many of them losing more than ten percent of their value almost overnight. Not surprisingly, the investors who suffered these losses have been reconsidering the wisdom and value of maintaining 529 savings plans.

State offers vs. private offers

529 education savings plans are administered by individual states rather than the federal government, although they may be bought and sold – or re-sold – across state lines throughout the country. This has led to two distinct markets for 529 savings plans: those issued by the state directly and those offered privately by brokers and financial planners.

Private offers

The plans sold by brokers and planners were particularly hard hit in 2008 because many of them were invested aggressively and included a number of additional fees and costs that were added on in the re-sale market. Additionally, the brokers and planners who offer re-sale plans almost always retain the incentives paid by the issuing state. Unless you intend to contribute a lot of money quickly and require a very aggressive investment strategy, these re-sale 529 plans are probably not a good idea.

State offers

Many of the state plans fared better in the 2008 crash than private plans did. In part this was because the state plans were invested more conservatively. But their better performance was also related to their overall expense and state-incentive structure. Many states offer their 529 plans at extremely low rates and also provide the additional incentive of state income-tax credits or deductions. Some state 529 savings plans are tied to offers made by state university systems as well, which provides an additional incentive.

Overall benefits of 529 savings plans

As is the case with a Roth IRA, contributions to 529 savings plans are not deducted from your federal taxes, although they may be deducted from your state income taxes. However, distributions for qualified education expenses are tax-free and earnings within the plan are tax-deferred, even if they are not ultimately applied to qualified education expenses. Coupled with the easy “hands-off” nature of the plans and the maintenance of parental control, 529 plans really can’t be beat as a way to save for your child’s future college expenses.

Should you keep your 529 education savings plan?

Even if you lost a lot of money in the 2008 crash and are now hoping for quick cash to regain your financial footing, maintaining a 529 savings plan for your child’s college education is still a good idea. If your plan was purchased through a broker or planner, you should probably have it transferred to a 529 plan offered directly by your state. Even if you live in one of the few states that do not offer tax incentives, the lower administration costs and more conservative investment strategy will make the transfer worth the effort.

Many people are looking for mortgages to aid them with credit repair. The recession has left finances disheveled, and people are trying to find ways to regroup. Although recent crackdowns on mortgage lending have been put into place by the government, there are still some unscrupulous lenders trying to find their way back into the mortgage market.

Dani Babb, founder of The Babb Group, which offers real estate consulting, said, “Since early this year … a new wave of people are finding ways to scam home buyers.” Here are some of the newest programs they are advertising that are less than advantageous to the potential homeowner.

Hard money lending loans

Hard money loans may seem like a good idea, but they are not designed to be used for large purchases like homes. These types of loans disregard a borrower’s credit score and employment status. These can even be offered to consumers who have already been turned down for government-backed mortgages.

Because the loan is considered more risky due to credit, lenders may require up to a 30 percent down payment. Some may circumvent the down payment if the applicant puts up some form of collateral, such as a car. Hard money loans come in several forms, but in general it is best to stick to smaller, short-term hard money loans.

Advances to First-time homebuyers tax credit

The first-time homebuyer’s tax credit offers up to $8,000 to qualifying buyers. Last month, HUD agreed to allow FHA-approved mortgage lenders to offer eligible borrowers an “advance based on the tax credit.” Borrowers are still required to make a 3.5 percent down payment, but they can include the tax credit value to it or use the money for closing costs. Repayment can be tricky, however.

Borrowers will have to pay the loan each month and pay an additional sum when they receive the tax credit or spread their payments out over a number of years. These payments will have interest attached. The reality is that if borrowers need to rely on the tax credit to make the down payment, they most likely will have problems affording their loan payments. It may be wise to work on credit repair to open doors to better loan options before using the tax credit for this purpose.

Zero-percent down financing

Some states are creating programs that give potential homeowners the 3.5 percent down payment they need to procure an FHA-backed loan as a second loan. Piggyback loans — where the home buyer has two loans — are also becoming more popular. In a lot of cases, lenders who cannot provide the entire loan amount suggest second mortgages from another loan company. These secondary companies can carry high interest rates, some close to 25 percent.

In other cases, buyers try to step in and “lend” the money to eager homeowners, persuading them to pay back the loan over time. Piggyback and zero-down loans create two mortgage payments every month. This can be a difficult situation for homeowners to manage and studies are showing it makes “walking away” from the home more probable if financial disaster occurs.

Homeowners

In the end, potential homeowners have to be smart and do their own research. The reality is that the best idea is to have a down payment, get a traditional loan and pay it off like millions of other people do. If that isn’t possible, consumers should consider putting off their home purchase, working on their credit repair and saving money. There are dishonest lenders waiting for opportunities to strike.

Want to feel the pulse of the economy? Consider a career as an investment analyst. (Photo: Wikipedia.org)

Investment banking analysts are the professional financial consultants who carefully examine corporate balance sheets and keep their finger on what is happening across the economy. They analyze the prices of the materials a business uses in its products, the level of demands for these goods, the impact of taxation, how the company pays back its creditors and a range of other factors that are affecting, or seem likely to have an impact on that business’s profitability. The information they gather, the experience they accumulate and the intuition they develop enable them to recommend the best investments for their clients.

Investment Analysts are not Magicians

Although there is clearly a strong relationship between the skills of the analyst and the success of your investments, it is important to remember that there are always going to be unpredictable factors that can ruin the best calculations. For example, unexpected outbreaks of conflict or natural disasters can lead to steep rises in the costs of raw materials from affected areas and this in turn influences the fortunes of corporations marketing these materials or using them in their products.

The Current Economic Crisis Places a Premium on Caution

The collapse of banks and major businesses in the current world crisis provides us with a sharp reminder of the need for organizations and individuals to exercise extreme caution while investing their funds. If in the past reliance could be placed on the good name of well-established financial institutions, the solidity of these famous commercial houses can no longer be taken for granted. The complexities of international markets and the challenges of discovering the real risk and likely profit in a specific investment make it foolhardy to venture far without consulting reliable investment specialists.

Great care is also required in finding investment banking analysts worthy of your trust. While the vast majority of investment specialists are surely upright people who try their best to advance their clients’ interests, the amounts of money involved and the gambling element in investment decisions unfortunately attracts some people of dubious integrity who give a bad name to the profession.

A High-Paying Job

The earnings of senior investment banking analysts in the USA can reach over $2,000,000 per year at the top of the hierarchy; entry level positions deliver as much as $60,000 in basic salaries with bonuses more than doubling this sum. By way of comparison, in the UK salaries are a little more modest. There is an entry wage of $48,000, but with experience this salary can triple and bonuses more than double earnings to $400,000 per year or more.

Although the financial rewards of the job sound generous, it should be born in mind that bonuses become scarce in periods of recession, and that many new recruits to the business find themselves having to work in their first year as many as fifteen hours a day. It is often a high pressure job without time off for holidays, and so it is certainly not everyone’s dream occupation. If you believe you have good analytical and mathematical skills with an eye for detail, this might well be a good career to consider. However, if you lack the stamina to take the pressure or you place a high value on free time to spend with your family, think twice.

For many retirees today, the golden years may less than golden (photo: creativecommons.org)

A retired couple sells the farm and moves to town to enjoy an easier life. They plan to travel and spend their golden years doing what they love. But as fate would have it, the husband dies a month after they buy the house in town.

The retirement annuity

A few days later the life-insurance agent arrives at the door with the settlement check in hand. The widow has $300,000 left in the bank after selling the farm and buying the house. The agent asks her how she plans to get by once her money runs out. Naturally, she doesn’t know, so the agent says, “What would you say if I could guarantee a lifetime income for you, tax free?”

The grieving widow welcomes the idea. She hands over her $300,000 nest egg, and the agent sells her an annuity as a means to safeguard her money. Now she now lives on $2,000 a month, and will continue to do so until she dies.

Considering the market today, that may sound like a fair deal. Or does it? Let’s take a closer look.

Annuities defined

Annuities are financial products marketed by insurance companies to provide lifetime incomes for investment or retirement purposes. Unlike whole-life insurance, annuities begin to pay out immediately, if desired. According to the insurance companies, buying an annuity is a good way to liquidate your assets.

If you are of retirement age and have accumulated a large sum of money, you can put it all into an annuity and immediately begin receiving monthly payments. If you have several years to go before retirement, you can pay into the annuity over time. Agents will tell you that you can accrue wealth this way, while being guaranteed a lifetime income once you retire.

What you really get

Agents earn larger commissions on annuities than they do on other types of insurance products, and are therefore motivated to sell them.  That self-interest leads agents to embellish the truth just a bit. They’ll tell you the truth, but they’ll also twist it, leaving you confused and leading you to believe that they are acting only in your best interest.

Am I saying that agents will lie to sell you an annuity? Not really. But I am saying that you need to look behind the curtain and see what’s really going on. Even quick payday loans can’t help you once you’ve been conned by slick marketing tactics.

Marketing vs. reality

Insurance agents tend to stress the positive features of an annuity in order to make a sale. To be fair, insurance agents aren’t the only people who do this: All marketing emphasizes positive features while minimizing negative aspects. But buying a junk financial product is a much more serious mistake than buying the wrong designer perfume. In fact, your future may depend on not getting caught up in the marketing hype of the financial industry.

The marketing ploy of annuities is that you are guaranteed to receive a lifetime income on your investment. The reality is that when you die, the checks stop coming and your heirs get nothing. You can, of course, arrange to have your heirs receive money when you die, but only if you settle for lower monthly payments.

Where’s your money?

What happened to your money? Where’s the principal you invested?

When you purchase an annuity, the insurance company invests your money in stocks and bonds. The money that will give you a lifetime of income is really just the interest and dividends paid on the stocks and bonds the insurance company bought with your money.

Your payments are not taken from the principal you invested. Your principal is never touched. After your death, unless you accepted lower monthly payments in return for a post-mortem pay-out, the insurance company does not pay the principal to your heirs. In fact, the company keeps it. And that’s why insurance companies that sell annuities make the big bucks.

Be smart with your money

How are the companies that sell annuities able to promise a lifetime income from your money without touching the principal you invested? They do something that you can do on your own: They purchase stocks and bonds, just like any other investor. If you were to invest your money yourself, you would still receive a lifetime income and you’d keep the principal for yourself and your heirs. (My next article will explain how to do this.)

Do your own investing

An annuity is nothing but another insurance product designed to take more money from you. With their obscure policy language, it’s easy for insurance companies to do just that. Your best bet is to do exactly what the insurance companies do: Invest in stocks and bonds and buy term life insurance. Don’t leave your heirs to pay for your funeral expenses with quick payday loans. Do your own investing, and leave your loved ones a true legacy.

Start planning now for your sunset years (Photo: wikimedia.org)

In this last article of the retirement series, you will learn how to create a sustainable lifetime income without having to resort to annuities or credit cards. You desire to live well and maintain your standard of living in your retirement years, but you do not know how to do it without depending on what may be shifty advice from a broker or financial advisor. It’s time to put some common sense into your retirement investing. Follow these strategies and you will be well on your way to creating the life you desire.

Start as young as possible

The younger you start investing in your retirement fund, the more you will be able to make in the long term. However, it is human nature to put this off until the last possible minute. This is not advisable…let me tell you why. Say you start investing when you are 25 years old, and you put in $10,000 in a retirement account with annual additions of $5,000. Your interest rate is a generous 6% compounded annually. In 40 years when you reach 65, you will have $923,095.60. Pretty impressive, right?

But what if you wait 10 years? At 35, you start with the same amount of principal, and the same amount of money added annually. Everything remains the same, except you only have 30 years instead of 40. Now, you would only have $476, 443.30. That is a LOSS of almost $500,000!! OUCH! And what a big loss!

The point is to start as soon as you can, so that you can save as much as you can by the time you are ready to retire, without the need to rely on credit cards consistently in your golden years.

No need for over-diversification

Warren Buffet once said about people who spread out their investments in an effort to diversify, “Only people who do not know what they are doing diversify.” And yet, financial advisors who are supposed experts tell you to diversify all the time in order to “spread out the loss”. Of course, in reality, you are spreading out the profits you could be making. The reason is that when you have more money in a stock, you own more shares. The more shares of a company that you own, the more money you can make when the share price skyrockets. Of course, the opposite can be true: The more shares you own, the less value those shares represent when the share price bottoms out.

Over-diversification means that you have a little money here, a little money there—all earning just a little money everywhere. However, if you put more money into fewer investments, your money has the potential to grow higher and faster. The key to success with this is to thoroughly research companies and hold on to your shares for the long term.

Buy low, sell high

You must buy when everyone else is selling, and sell when everyone else is buying. Basically, buy low and sell high. This is the logical way to invest.

When the market is in a downturn, you can buy more shares for less money when everyone else is losing out on a golden opportunity. When everyone else is thinking that it is the perfect time to buy shares as the market experiences its highs, this is the perfect time to sell or hang on to your shares. But never buy during this time! (You may regret it when you run out of cash and need to use your credit cards for basic survival!)

Don’t believe your broker ALL the time!

A man invested $10,000 in 1965, on the advice of his broker. Shortly after he invested, his broker suddenly dropped dead of a heart attack. Well, the man didn’t get any “advice” about when to take out his money, so he held on to his shares for about 35 years. At the end of those 35 years, his investment was worth over 2 million dollars! Imagine if his broker was still alive and told him to take out his money when the market had gone down during that time!

The point is, many financial advisers and brokers tend to go with the emotional flow of the popular sentiment, rather than applying logic to investing. Their clients then adopt this viewpoint. Not every adviser or broker does this, and you can get some pretty good advice from them occasionally. However, do not believe your adviser or broker all the time. Instead, take control of your future!

Couples need to make debt relief a priority discussion when considering marriage. A new national survey for Fidelity Investments is showing some interesting results. Many couples aren’t in agreement on basic financial issues and don’t even discuss finances in any depth. Here are some of the topics those questioned stated they didn’t cover with their significant other:

• When is each person planning on retiring?
• How much money do they need to save to retire on time?
• What types of debt will be considered priorities to pay off?
• How much insurance coverage is each expecting to have?
• What budget will they follow and for how long?

Oddly enough the same poll was given two years ago and there has been a general decline in communication, although the economy has drastically turned for the worse. For example, two years ago 79percent of couples stated they didn’t agree on retirement plans, including the time to retire or if they would continue to work after retirement.  This year’s survey showed that same number is up to 82 percent. Other numbers in the most recent survey follow suit.

An expert predicted the results

Nicholas Yrizarry, a financial adviser in Virginia, stated that he thinks the results of the most recent survey are accurate and logical. His belief is that the recession has pushed people to focus on “putting out fires, dealing with debt relief, worrying about interest rates, credit card debt, over-mortgaged homes and job insecurity.”

Although reason suggests they should be making financial discussions a priority, most aren’t. Yrizarry added, “You’d think it should raise some eyebrows, and they would say we’d better start thinking about this, but actually they just shelve it even further, defer the inevitable.”

The survey

The 2009 survey shows that only  45 percent of couples make decisions together on daily household management of finances like budgeting and expense payments.  The norm is for one person to take the helm at finances.  Amy Gunnerson of Pittsburgh, Penn., a agreed with her husband that she would pay bills. “My husband doesn’t want a part in the daily decision making. He’d rather focus on work, while I decide what the priorities are. …It works for us.”

President of Barber Financial Dean Barber said this is typical of families because normally one spouse is “adamant” about finances while the other “really could care less. … It makes it very difficult, though, and puts a lot of stress on a marriage.” Experts agree that this isn’t the most beneficial way to handle life because when one person has different expectations, there could be potential problems.   Also, if the family dynamic changes, say with divorce or death, the financially passive spouse is left in the dark.

Discussions about retirement are also put on hold by 62 percent of couples.  Again, this could potentially cause problems if one plans on retiring early, but there aren’t enough finances to maintain their lifestyles.  Financial Planner David Summerhill of Summerhill & Franke stated, “Retirement planning isn’t just about an amount of money. It’s about having an age when the retirement is going to happen for each person, having a plan to make it happen and having a contingency plan if it doesn’t.”

Financial discussions

One of the most surprising results of this year’s survey is that only 15 percent of all couples believe they could handle full responsibility for household finances if necessary.  With these kinds of numbers it’s imperative couples begin having dialogues about finances.  Retirement planning, debt relief, savings goals and investing options are all topics that need to be discussed and decided up on periodically throughout a marriage.

Thanksgiving is just around the corner. But do you know what the next best thing that comes after Thanksgiving is? That’s right, it’s Black Friday! It’s the biggest shopping day of the year!

Black Friday is the day to go out and buy the things you have always wanted but couldn’t because those discount tags never showed up as you planned. I mean, people are even willing to take out a cash advance to fund this nationwide shopping event. However, it seems this yearly shopping ritual is only getting better with time. Ever heard of Cyber Monday? Well, I just did and, as a shopper and an online marketer, I’m pretty stoked.

What is Cyber Monday?

Cyber Monday was invented by the National Retail Federation, the world’s largest retail trade association. According to Wikipedia, the term Cyber Monday refers to the Monday immediately following Black Friday, which unofficially marks the beginning of the Christmas online shopping season. So what this basically means is if you miss the Black Friday shopping hustle, you still have a chance to make it up on Monday. Cyber Monday is the Monday you will actually enjoy.

Great tip for Online Merchants

Photo: http://www.flickr.com/photos/autumnal_hedge/ / CC BY-NC 2.0

A recent Yahoo! Insights team research revealed that the number of sales during last year’s Black Friday were actually not too far from the overall sales that took place the Monday following. Click-through rates were down 27% on both days compared to the rest of the month. However, online traffic and conversions went up significantly. Black Friday showed an increase in conversions by 147%, while Cyber Monday had a 73% increase in conversions.

What does this mean for me?

This study lays out a great opportunity for online marketers. You have about 1½ months before the biggest shopping days of the year. I suggest you start promoting and investing throughout the month to create attraction. Get a head-start and take advantage of the holiday traffic now. You will witness flourishing conversions not just for Black Friday and Cyber Monday, but for the rest of the holiday season.

For all you holiday shoppers on the other hand, start saving now! You are already aware of how busy and expensive holiday shopping can be. You have enough time to save a sufficient amount of money for your holiday expenses, which will prevent the need of a cash advance at the last minute.

Don't let the stormy economy wash away your credit.

Payday loans could save you from the horrible economic environment that we currently live in. The economic crisis is affecting every single one of us, including many major businesses.

It was once thought impossible for high-end shops and even banks to get themselves into difficulty. However, this recent crisis has taken its toll on everybody in the economy. Even the large incumbent businesses are starting to feel the downturn that the economy is experiencing.

Credit Score

Your credit score is a very important number calculated by the credit scoring agencies. This number is calculated depending on the amount of credit you have available to you, the amount you have borrowed and most importantly your risk.

They determine risk by looking at how many times you have been late making payments or received default notices. It’s vital that you understand your credit score because it has a lot of implications for the whole of your life. If you want to live life to the fullest, it’s important that you maintain a good credit score.

Borrowing money

Thanks to the crisis, banks are much less likely to hand out money to people. That’s why it is so important to find a way to protect your payment history.

Credit scores are more important than they have ever been, and they are used for much more than borrowing money. Even if you’re not borrowing money, it’s still important that your credit score is good because it affects other aspects of your life.

Employment

Your credit score will also be used by employers to decide whether or not to employ you. With there being so few jobs around, it is vital that you cling onto your credit score with all your life.

That’s where payday loans come in, when you use one of these short term loans you will be able to make ends meet without incurring financial penalties.

Utilities

Your credit score will also be used to determine whether or not utility companies want to provide services to you. This is especially important if you are considering taking out a mobile phone contract.

Your credit score will always be used to determine your risk, which is why it’s so important. Short term loans can be a real help with this issue.

Insurance

When you take out insurance policies, the insurance company may use your credit score to assess your risk. This means that by using short term loans now you will be able to protect your credit score and pay less on your insurance in the future.

Easy

Using short term loans is really easy because you can apply online without having to visit any offices or hit the streets looking for money. They are also short term loans, which means you can repay them once you get paid so there’s no need to worry about interest rates. These loans are much easier to understand.

Applying

One of the nicest things about short term loans is that they are much easier to apply for than a normal personal loan. Because they are a shorter term, the costs are fixed, which makes budgeting for them much easier.

You can use a payday loan to save your credit history because they will prevent you from going overdrawn at your bank. Payday loans will give you the money that you need to survive without annoying your bank or adversely affecting your credit score.

Would it be smart to lease a SmartCar? Image from Flikr.

Many consumers are using personal loans to fund car leasing. But do they really understand the terms?  It’s important to understand what car leasing is, as opposed to purchasing.

Leasing a car is to buying a car what renting an apartment is to owning a property.  For a certain period of time — two, four, even five years — the customer will make payments to use the car, but never own it throughout the leasing period. There can be an option to buy the car at the end of the lease, but this needs to be understood clearly by the potential buyer.

Deciding factors

The length of the lease is very important.  Normally a car lease will last anywhere from 24 to 60 months, and that adds up to a large amount of money. Be sure to calculate out how much money is actually going to go into this vehicle and whether it’s worth it to lease instead of buy.

Also, consumers should know how many miles they are going to put on the car on average.  Companies can offer low-mile leases, standard-mile leases and high-mile leases.  Customers need to be pretty accurate when it comes to estimating how many miles they anticipate using because overages can come with heavy charges.

Normally companies charge anywhere from 7-10¢ per mile over the limit. While this doesn’t sound like much, the charges can add up to significant amounts if the overage is substantial.  For example, a low-mile lease will have a lower payment, but the mileage will be limited.  In the end, if a customer opts for this type of lease but then goes over on mileage, any savings they would have had can quickly be eaten up by the extra mile charges.  Be careful when estimating the amount of mileage used and be sure to include miles to work and back and recreational time driving into the total.

Other laws to be aware of

Any leasing company should give a detailed, written statement that cites the total consumers will be paying.  This document should cover any down payment information, registration fees and security deposits. Customers need to be sure to have a specific total so they can apply for personal loan that covers the complete amount.

Another law is that the leasing office must tell the consumer what insurance requirements are for the vehicle. Again, this amount needs to be factored into the loan amount the customer applies for.  There are also warranties to understand. Consumers need to ask about the warranty and find out exactly what it covers, and what it doesn’t cover.  They need to know who is responsible for servicing the vehicle in different scenarios.

There will also be a wear-and-tear assessment to understand. This is how a consumer knows the acceptable amount of damage the vehicle will be returned with.  Companies know that cars have normal  wear and tear issues, but they need to specify what the stipulations are.  The law states that wear and tear must be “reasonable”, but it’s up to the consumer to understand what the leasing company’s definition of reasonable is.

Car leasing made simple

Car leasing can be a solution for people who opt to not purchase.  If drivers are able to calculate how much they drive and want to change cars frequently, leasing maybe the most viable option.

Consumers have to be aware, though, that estimating the full payments is a detailed process.  If they are using a personal loan to fund the cost, this is particularly important. Leasing a car can be beneficial to drivers if they are detail-oriented and precise with  estimating cost and mileage.

Get your Personal Loans HERE!

If you are looking for a low rate personal loan and you need cash fast, you have come to the right place. Let me tell you about the type of low rate personal loans Personal Money Store can offer you. We can connect you with lenders who will give you short-term loans, and you can have your cash in just a couple of hours, if approved.

You can get a short-term loan for up to $1,500 or as little as $100, as long as you qualify and you’re prepared to repay it with your next paycheck. The process is quick and easy, and as long as you pay back your low rate personal loan on time, it can make your life easier and ease your burden when you’re under financial stress.

Personal Money Store speeds up the process

When you fill out an application for a low rate personal loan at Personal Money Store, we contact all of the top lenders in your area and find the best loan for you. You don’t have to pay any money up front, and Personal Money Store will find a lender for you that can get you the most cash the quickest and for the lowest fees.

So instead of shopping around, checking rates with a bunch of different lenders and spending a bunch of time, you can submit your application to Personal Money Store, and we’ll find a lender for you in just a few minutes. You can complete your the entire process online in a short amount of time, and, if approved, your money will be automatically transferred to your bank account.

Paying back your low rate personal loan

You should plan to repay your low rate personal loan as soon as you can — usually lenders seek loan agreements that have terms of about two weeks. You will need to pay back the total amount of your loan, plus your lender’s one-time fee, on your loan’s due date.

Just as your lender can transfer money electronically into your bank account, so that you have access to it in a couple of hours, you can electronically pay back your loan online, without ever leaving the comfort of your home.

To get all of the details and start your application for a low rate personal loan, click APPLY NOW! Don’t worry, we’ll walk you through the whole process step by step.

Bad credit is easy to come by

Don't pay outlandish bank overdraft fees. Get an installment loan for bad credit before you overdraw your bank account.

A lot of different people can use installment loans for bad credit. Many people from many different backgrounds have bad credit. I know many people who have bad credit because of medical bills or other large expenses that came to them through an accident. Even people who are very careful and good with money can end up with bad credit because of unexpected events.

For others, bad credit happens slowly. Once you start building up a balance on a credit card, it’s easy to keep using it. It is easy for credit card balances to get out of hand and destroy your credit. If you already have bad credit, what are you to do when another emergency comes along? You can get installment loans for bad credit through Personal Money Store to alleviate your money worries.

What is an installment loan for bad credit?

Getting an installment loan for bad credit means that regardless of your credit score, you can apply for a short-term loan. You can get amounts up to $1,500 and have access to your cash as quickly as two hours after you apply for your loan.

The application process is simple and quick. The lenders who work with Personal Money Store do not do credit checks, which not only means that you can be approved for a loan regardless of your credit history, it makes the process much quicker. Applying for installment loans for bad credit only takes a few minutes.

How short-term loans work

To start the application for installment loans for bad credit, simply click the “apply now” button and follow the step-by-step instructions. With an installment loan, you’ll get your cash electronically deposited in your account right away, but you can pay back your loan using a few separate payments.

With a traditional payday loan, you must repay the loan all at once with your next paycheck. When you get installment loans for bad credit you can pay back your loan using a portion of your next few paychecks. Installment loans can also help you maintain and improve your credit score and protect it from getting worse by allowing you to make a payment on time or keep a bill from going to a collection agency.

If you want to get installment loans for bad credit, apply now!

Before I begin to describe how payday loans can help us during this credit crunch, let us first see what exactly a credit crunch is.

• It basically means that there is no credit to be had in the market. This in turn means that the traditional lenders like banks, etc., have no money to lend you, as there is no liquidity in the markets, forget about personal loans.
• And even if they have money they will still not lend–why? Because they are looking for ‘safe’ parties to lend to, common people like you and me are not in that category anymore. Additionally, if you have a bad credit rating, like so many of us in these times, then they will not even consider your personal loan application.

What are the implications of this credit crunch for you?

• The result here is that the commoners, i.e. us, who are already grappling with job cuts and pay cuts now have an additional monster to fight. Your trusted bank, to which you have given regular business for so many years doesn’t care what your situation is! Sad, very sad state of affairs indeed!
• The net effect being that, due to your urgent needs you are forced to go for alternative means like over drafting your account, cash advances on credit cards, late fees, etc.
• All these methods are not just expensive and affect your credit ratings, trapping you into a vicious circle but they also magnify and perpetuate the problem of the credit crunch.

Now, on to the brighter side of the ‘credit crunch’ i.e. the payday loan

• A payday lender acts in exactly the opposite manner to the big institutional lenders. A payday lender would not look at how ‘safe’ you are, nor do they have anything to do with your credit rating.
• This is essentially because a payday loan is a short term cash advance that needs to be paid with your next paycheck.

How payday loans beat the credit crunch

• So, unlike the banks, a payday lender works independent of the markets. Credit crunch or no credit crunch, the payday lender is always there to fulfill your needs.
• In that sense, when markets are struggling with liquidity shortage, payday loans are a great way to put money in people’s (i.e. your) pockets for you to spend on your needs and hence that infuses some liquidity and confidence.

The additional benefits

• Besides all the advantages listed above, payday loans are also incredibly easy and fast to secure. Just an online application and, if you are approved, voila, the cash is in your account, sometimes in less than 2 hours, thanks to direct deposit.
• Typically, no need to fax anything and no credit rating checks. It does seem incredibly good when everything around seems to be dark and dreary. Incredible but trustworthy!

So, remember next time you need some cash urgently, don’t waste your time at the bank, running around in circles for nothing. Instead, maybe you should get in touch with a short term loan lender and apply for a payday loan.

It’s a universally accepted fact that payday loans have come to represent easy and fast cash, whenever you need it. At the same time, it’s also true that the human psyche is such that anything which is easily available tends to lose its importance, which at times leads to misuse and abuse of such products.

Something on a similar note happens with payday loans; their relative abundance sometimes results in their abuse and when the effects of this abuse raises their head, some end up blaming the payday loans and lenders for the misuse. Hence, what follows is a brief set of guidelines/precautions to keep in mind while using the payday loan cash.

Assess and monetize your needs

• Once you are sure that you need a payday loan, the next step is to sit down with a pen and paper and carefully list your special/urgent needs for which you need the loan. Be careful, the emphasis here is on ‘needs’ and not ‘wants’. So anything which is not necessary and can be put off should not be included in this list.
• Next, make an estimate of how much you will need to spend on each of these needs. Again, be as conservative as possible, even though you are getting fast cash with no credit checks, still you have to be able to pay it back at the end of the month.

Dynamic Budgeting

• In this recessionary environment, you never know when you might have to face another unforeseen expense, after you have already obtained the payday loan. The key is not to panic and make suitable changes to your budget.
• Look carefully and trim your ‘avoidable’ expenses even more, keeping in mind the goal is to be able to pay back the payday loan at the month end. Tough times call for tough measures.

Stick to the original estimates

Once you get a whole load of cash in your hands, it is quite possible that you are tempted to deviate from the original plan of action. Think twice before going on any spending spree, it’s like digging the ground around you and setting up your own grave. The key is self discipline. So if you took the payday loan to pay off your gas bill, then do it as soon as you get the cash, rather than falling into the temptation to spend it on something else.

Save and pay on time

• If you find out that you overestimated your needs and you have a surplus of cash from your payday loan, that’s great. But save that money and use it to pay back the loan, instead of splurging on things you don’t really need. It might save you from applying for a payday loan again next month.
• As far as possible, pay your payday loan on time, however, if you feel that you will be unable to pay back the amount, then contact your payday loan company and request an extension.

Following a few simple guidelines, can help you make the most of your short term loan. As with all other good things in life, payday loans are a double edged sword. They are a great tool for your well being, but only if you use them responsibly.

Payday loans could be of great help during the current phase of the economic recession. When recession hits the economy, chances are that your source of income may start shrinking, making it difficult for you to manage your monthly expenses. During these bad times, you have reasons to feel worried because sources of financing from most avenues also dry up and you may land up in an acute financial crisis. But don’t panic – history tells us that any economic downturn in the United States lasts for a limited period due to the cyclical nature of economy. To handle the crisis during this brief period, you can go for a payday loan.

Take what you can pay back

It is easy to get this loan, but this is a loan that you have to pay back on your next payment day. You would certainly like to use this option to your advantage, not to get into a debt trap, wherein you cannot pay back what you have borrowed on the next pay day. The bottom line is – you have to be careful if you decide to go ahead with this option. You need to assess your repayment capacity and limit yourself within this boundary. You have to carefully evaluate how many times you are likely to renew it, before you think you can manage without this loan.

How about cutting expenses?

The bad times are certainly not going to be permanent, but you do not know when things are going to turn around. In such uncertain times, it’s not a bad idea to cut on your expenses, even if temporarily. Think before you buy – things that are not very essential at present had better wait, rather than being financed by a payday loan. If you carefully look at your monthly expenses, there will be many items that you can cut down during these tough times.

Turn it to your advantage!

In bad times, you don’t necessarily have to feel let down because of the financial crisis you are going through. There could be many ways you can actually take advantage of the situation and come out better equipped to face it in the future. How about spending a part of your payday loan to acquire skills that can improve your chances of staying unaffected during the next round of economic slowdown? You can think of diversifying into areas that have always fascinated you, but you never had the time to pursue.

Can you start something of your own?

You may even think of starting something of your own, if you can see an opportunity around you. Don’t keep your eyes and ears closed – the opportunities may be knocking at your door for a number of years, but probably you had been so busy in your life that you could not hear or see, if anything of that kind was possible in your own life. You will certainly survive this tough phase, but try to take advantage of these challenging and trying times by getting into some small venture using a part of the payday loan.

A cash advance in times of an emergency helps us to sleep better and keep a clear thinking mind. Our health depends on the way we think and react to situations. When we have an emergency that arises without warning, a cash advance often helps us to overcome financial obstacles giving us a more secure feeling. A clear mind helps you to sleep and waken with the ability to make decisions.

In the world of recession, many problems attack our thoughts which can lead to the inability to get a good night’s rest. The problem many of us face is not what our circumstances are but what they may end up becoming in the future. When we wake up well refreshed, then we are able to make decisions on a daily basis that leads to our capability of having an abundant life.

We are all seeking an abundant life and we deserve the best that life has to offer. We should relax before we go to bed each night and perhaps go over our daily deeds making plans to improve on what we can do when we wake up the next day.

A healthy body is important when it comes to balancing our life

It is very important that we maintain a healthy body in order to keep balance in our life. We need to eat the proper foods, exercise and get enough rest in order to remain healthy. It is not always easy to take the time to eat the proper foods but we should attempt everyday to eat foods that will provide good nutrition for the nourishment of our body and our souls. When we are able to provide proper nutrition for our body and souls, then we find that our mind remains clear helping our balance in life.

Even though we are attempting to do all the things that we should to have a well balanced lifestyle, emergencies do arise such as your vehicle breaking down, emergency room treatment, or perhaps you need a little extra cash in order to entertain some out of town visitors. No matter the situation, a cash advance is there for the asking.

A Cash Advance helps keep balance in times of need

We work to have a clear mind and a healthy body but there are times that situations happen that cause us distress, so in order to maintain our balance, a cash advance is needed. Emergencies cause stress that is upsetting to the mind and to the body. You will find that it is very easy to get a cash advance on your payday through a payday loan company. You can go online, answer a few questions and, if you qualify, in most cases you can get your money deposited into your bank account within a twenty-four hour time period.

It is easy to obtain a small loan if you are employed and capable of paying it back on your next payday. Unlike other loan types, you do not have to pay interest on the loan or an annual membership fee; instead there is a standard fee for the payday loan. Keep your mind and body in balance use a cash advance whenever the need arises.

1. The application process is quick and effortless;
2. There are typically no credit checks (i.e., you are not put through the “harrowing” experience of submitting your bank statement in order to receive an approval);
3. The Payday loan lender will not ask for specific employment references for verification in order to qualify you for the payday loan;
4. Repayment of the loan is a very simple process.

In order to qualify for a Direct Deposit Payday loan three items are usually essential

1. You will need a checking account that is active;
2. You need to be at least eighteen years of age; and,
3. You will need current contact information.

Of course these are general requirements and other requirements may be necessary with regard to the (individual) lender. Direct deposit payday loans are limited as to the amount you may borrow. Keep in mind the range you may borrow with regard to a direct deposit payday loan is typically between $500 and $1,500. The period of the loan usually extends from a two week to a four week period.

The direct deposit payday loan is the ideal solution with regard to the following circumstances:

1. Short-term emergencies when cash is not readily available; and,
2. When you are between paychecks, yet gainfully employed.

Therefore, if you need emergency cash and are able to fulfill the terms of a payday loan agreement, all that is necessary is for you to apply online or over the phone. The process of application is simple and convenient and usually takes a matter of a few minutes.

Also it is important that you repay your payday loan back on time and in accordance with your agreement as it may be a remedy for you whenever you need emergency cash. Paying your payday loan back in a timely fashion gives the lender confidence you will do so in the future and thus he or she is much more likely to extend to you an additional loan whenever you may need one.

Faxless Payday loans are great for those who prefer “no-doc” short term loans

Another form of payday loan is the faxless payday loan. Generally, when using the faxless payday loan option, the borrower does not need to provide the payday loan lender with any of the following documents:

1. A driver’s license;
2. A birth certificate; or
3. A Pay stub.

Additionally the Faxless payday loan offers a very quick approval process—sometimes within an hour of application.

How the Faxless Payday Loan Option works

An individual without access to a fax machine may find the direct deposit payday loan option inconvenient or time-consuming: meaning the borrower may need to drive to another location in order to fax paperwork.

The Faxless payday loan removes the additional step of faxing documents.

Following are basic requirements when applying for a faxless payday loan. Upon the loan application the borrower will need to answer questions with regard to:

1. Citizenship;
2. Age;
3. Residence;
4. Employment and Income; and,
5. Acknowledge the existence of an active bank account.

The faxless payday loan lender will not “employ” credit checking as a form of verification in regard to loan approval. The borrower will need to apply for a faxless payday loan within the country he or she is a resident. The benefits of a faxless payday loan are numerous.

A faxless payday loan allows the borrower:

1. Ease of application as the necessity to fax documentation is eliminated;
2. The use of the money is not defined by the payday loan lender; and,
3. It is a venue of which a borrower may rely in resolving a short-tem financial crisis or emergency

In conclusion, for individuals needing almost instantaneous access to cash funds without the additional step of faxing, certainly faxless payday loans are a worthwhile payday loan option.

The direct deposit cash payday loan is also a good consideration and may be just as readily attainable as the faxless payday loan when access to a fax machine is not an issue (in receiving the payday loan).

Whatever your set of financial circumstances or reasons for applying for a payday loan, it is always good to know you have options.